Exhibit 10.1

  

TWIN DISC, INCORPORATED

NON-EMPLOYEE DIRECTOR

RESTRICTED STOCK AGREEMENT

 

 

This RESTRICTED STOCK AGREEMENT (the “Agreement”), by and between TWIN DISC,
INCORPORATED (the “Company”) and _____________________ (the “Director”) is dated
this ___ day of __________, 20___, to memorialize awards of restricted stock
under Twin Disc, Incorporated 2020 Stock Incentive Plan for Non-Employee
Directors (the “Plan”). Capitalized terms not otherwise defined in this
Agreement shall have the definition ascribed to those terms by the Plan.

 

WHEREAS, the Company has adopted, and the shareholders of the Company have
approved, the Plan, pursuant to which non-employee directors of the Company may
receive a portion of their annual retainer in the form of restricted stock as of
the day of each annual shareholders meeting, and pursuant to which non-employee
directors of the Company may elect to receive all or a portion of the annual
retainer they would otherwise receive in cash in the form of restricted stock;
and

 

WHEREAS, the Director and the Company wish to memorialize their agreement with
respect to awards of restricted stock to the Director under the Plan.

 

NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements herein set forth, the parties hereto agree as follows:

 

1.          Restricted Stock Awards. Subject to the terms of the Plan, a copy of
which has been provided to the Director and is incorporated herein by reference,
and subject to the terms and conditions and restrictions set forth below, the
Company agrees to grant to the Director the following number of shares of the
common stock (“Restricted Stock”) of the Company:

 

 

a.

The portion of the Director’s annual retainer (exclusive of Board chair or
meeting fees) that the Board determines shall be paid in the form of Restricted
Stock. The number of shares of Restricted Stock shall be determined by dividing
the dollar value of the portion of such annual retainer designated as payable in
Restricted Stock by the Fair Market Value per share of Common Stock as of the
date of the annual meeting of the Company’s shareholders, and rounding down to
the nearest whole share.

 

 

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b.

The portion of the Director’s annual retainer (exclusive of Board chair or
committee fees) that would otherwise be paid in cash that the Director elects to
receive in the form of Restricted Stock pursuant to a timely-filed and valid
election delivered to the Company pursuant to the terms of the Plan. Any such
retainer fee that the Director elects to receive in the form of Restricted Stock
in lieu of cash shall be converted to a fixed number of shares of Restricted
Stock by dividing the dollar value of the cash that would otherwise have been
paid to the Director by the Fair Market Value per share of Common Stock as of
the date such payment would have been made, and rounding down to the nearest
whole share.

 

2.          Fair Market Value.  The Fair Market Value per share of Common Stock
on the dates shares of Restricted Stock are granted shall be determined pursuant
to the terms of the Plan, and shall be communicated to the Director by the
Company.

 

3.          Restrictions on Transferability. Except as otherwise provided in
Section 4, the shares granted shall not be subject to sale, assignment, pledge
or other transfer or disposition by the Director, except by reason of an
exchange or conversion of such shares because of merger, consolidation,
reorganization or other corporate action. Any shares into which the granted
shares may be converted or for which the granted shares may be exchanged in a
merger, consolidation, reorganization or other corporate action shall be subject
to the same transferability restrictions as the granted shares.

 

 

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4.          Lapse of Restrictions on Transferability. The shares of Restricted
Stock awarded under the Plan in accordance with Section 1(a) of this Agreement
shall become freely transferable as of the date of the annual meeting of the
Company’s shareholders that is subsequent to the date the Restricted Stock was
awarded if the Director continues to serve on the Board of Directors of the
Company up to such meeting, and the shares of Restricted Stock awarded under the
Plan in accordance with Section 1(b) of this Agreement shall become freely
transferable on the first anniversary of the date that the cash would have
otherwise been paid to the Director; provided, however, that all Restricted
Stock held by the Director shall become freely transferable upon the death or
disability of the Director, as provided in Section 9.3 of the Plan.

 

5.          Forfeitability. Notwithstanding Section 4 of this Agreement:

 

 

a.

If the Director’s service as a member of the Board ends prior to the date the
transfer restrictions lapse;

 

 

b.

If the Director is recommended by the Company to be re-elected to the Board and
fails to be re-elected by the shareholders of the Company to the Board in that
election; or

 

 

c.

If the Director is prohibited from serving on the Board by any court of
competent jurisdiction or other government authority, or in the discretion of
the Board is no longer competent to serve on the Board due to the Director’s
violation of state or federal securities law or other rule of the NASDAQ Stock
Market (or such other listing standards then applicable to the Company),

 

 

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then any Restricted Stock held by the Director that remains subject to the
transfer restrictions set forth in Section 3 shall be immediately forfeited.

 

6.          Rights of Shareholder. Except for the restrictions on transfer and
risk of forfeiture, the Director shall have, with respect to shares of
Restricted Stock, all of the rights of a shareholder of Common Stock, including,
if applicable, the right to vote the shares and the right to receive any cash or
stock dividends. Notwithstanding the foregoing, cash or stock dividends on
shares of Restricted Stock shall be automatically deferred, and shall be paid to
the Director only if and to the extent the underlying shares of Restricted Stock
vest. Cash or stock dividends payable with respect to shares of Restricted Stock
that are forfeited shall also be forfeited. Cash or stock dividends payable
under this paragraph shall be paid within 30 days after the restrictions on the
shares of Restricted Stock to which such dividends relate lapse. Cash dividends
shall be paid with an appropriate rate of interest, as determined by the Board.

 

7.          Section 83(b) Election. The Director acknowledges that: (1) the
stock granted pursuant to the Plan and this Agreement is restricted property for
purposes of Section 83(b) of the Internal Revenue Code and that the shares
granted are subject to a substantial risk of forfeiture as therein defined until
the year in which such shares are no longer subject to a substantial risk of
forfeiture; and (2) the Director may make an election to include the fair market
value of the shares in income in the year of the grant in which case no income
is included in the year the shares are no longer subject to a substantial risk
of forfeiture. Responsibility for determining whether or not to make such an
election and compliance with the necessary requirements is the sole
responsibility of the Director.

 

 

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8.          Restrictions on Transfer. The Director agrees for himself or
herself, and his or her heirs, legatees and legal representatives, with respect
to all shares granted hereunder (or any securities issued in lieu of or in
substitution or exchange therefore) that such shares will not be sold or
transferred except pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or pursuant to an applicable exemption from
registration (such as SEC Rule 144). The Director represents that such shares
are being acquired for the Director’s own account and for purposes of
investment, and not with a view to, or for sale in connection with, the
distribution of such shares, nor with any present intention of distributing such
shares.

 

 

 

TWIN DISC, INCORPORATED

 

By:     ____________________________________

Its:      ____________________________________

 

DIRECTOR:

 

__________________________________________