CHANGE OF CONTROL SEVERANCE AGREEMENT

     THIS AGREEMENT is executed and entered into as of this ___ day of July,
2007, by and between Twin Disc, Incorporated, a Wisconsin corporation, with its
principal offices located at 1328 Racine Street, Racine, Wisconsin
("Corporation"), and Michael E. Batten ("Employee").

WITNESSETH:

     WHEREAS, the Board of Directors of the Corporation is aware of the
uncertainties created by the current business environment in which tender offers
for publicly-held corporations are increasingly frequent, is aware that the
possibility of a change in control of the Corporation raises questions and
uncertainties, and is aware that these questions and uncertainties are cause for
legitimate concern among key Corporation employees about their future with the
Corporation; and WHEREAS, the Board of Directors of the Corporation recognizes
that the efforts of those employees identified by the Board as key management
employees have contributed and will continue to contribute to the growth and
success of the Corporation; and WHEREAS, the Board of Directors of the
Corporation is concerned that the uncertainties associated with the current
business environment may adversely affect the morale of key management employees
of the Corporation, undermine the confidence of such key management employees in
the ability of the Corporation to remain a viable and competitive entity and
jeopardize the ability of the Corporation to attract and retain the services of
key management employees in the future; and WHEREAS, the Board of Directors of
the Corporation believes that in the best interests of the Corporation, it is
essential that key management employees, including Employee, be retained and
that the Corporation be in a position to rely on their ongoing dedication and
commitment to render services to the Corporation, irrespective of whether the
Corporation is or may be acquired or merged with or into another corporation;
WHEREAS, the Corporation previously entered into a Change in Control Severance
Agreement with Employee that provided for payments upon a change in control to
the Employee if the change in control occurred before the Employee’s normal
retirement age; and WHEREAS, the Corporation wishes to continue the terms of the
Change in Control Severance Agreement beyond Employee’s normal retirement age;
and

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     WHEREAS, the Corporation wishes to further modify the Change in Control
Severance Agreement to formally comply with the final regulations issued under
section 409A of the Internal Revenue Code.

     NOW, THEREFORE, in consideration of, and as a specific inducement for, the
continued services of Employee, the parties hereto agree as follows:

     1. Term of Agreement; Replacement of Prior Agreement. This Agreement shall
commence as of the date hereof and shall continue in effect until November 1st,
2007; provided, however, that commencing on November 1, 2007, and each November
1st thereafter, the term of this Agreement shall automatically be extended for
one additional year unless, not later than August 1 of that year, the
Corporation shall have given notice that it does not wish to extend this
Agreement; provided, further, if a Change in Control (as defined in Section 2
below) of the Corporation shall have occurred during the original or extended
term of this Agreement, this Agreement shall continue in effect for a period of
twenty-four (24) months beyond the month in which such Change in Control of the
Corporation occurred.

     The prior Change in Control Severance Agreement entered into between the
Corporation and Employee, dated as of July ___, 2005,, is hereby terminated and
replaced with this Agreement.

     2. Change in Control of the Corporation.

     (a) No benefits shall be payable hereunder unless there shall have been a
Change in Control of the Corporation, as set forth below. For purposes of this
Agreement, a "Change in Control of the Corporation" shall mean a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") whether or not the Corporation is
then subject to such reporting requirement; provided that without limitation,
such a change in control shall be deemed to have occurred if:

     (i) any "person" (as defined in Sections 13(d) and 14(d) of the Exchange
Act) other than Michael Batten or any member of his family (the "Batten
Family"), is or becomes the "beneficial owner' (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Corporation
representing thirty percent (30%) or more of the combined voting power of the
Corporation's then outstanding securities;

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     (ii) during any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement) there shall cease to be a
majority of the Board comprised as follows: individuals who at the beginning of
such period constitute the Board and any new director(s) whose election by the
Board or nomination for election by the Corporation's shareholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved; or

     (iii) the shareholders of the Corporation approve a merger or consolidation
of the Corporation with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Corporation or such surviving entity outstanding immediately
after such merger or consolidation, or the shareholders of the Corporation
approve a plan of complete liquidation of the Corporation or an agreement for
the sale or disposition by the Corporation of all or substantially all the
Corporation's assets.

     (b) For purposes of this Agreement a "Potential Change in Control of the
Corporation" shall be deemed to have occurred if (i) the Corporation enters into
an agreement, the consummation of which would result in the occurrence of a
Change in Control of the Corporation, (ii) any person (including the
Corporation) publicly announces an intention to take or to consider taking
actions which if consummated would constitute a Change in Control of the
Corporation, (iii) any person, other than a member of the Batten Family or a
trustee or other fiduciary holding securities under an employee benefit plan of
the Corporation or a corporation owned, directly or indirectly, by the
shareholders of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation, who is or becomes the beneficial owner,
directly or indirectly, of securities of the Corporation representing 9.5% or
more of the combined voting power of the Corporation's then outstanding
securities, increases his beneficial ownership of such securities by 5% or more
over the percentage so owned by such person on the date hereof; or (iv) the
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control of the Corporation has occurred. Employee agrees
that, subject to the terms and

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conditions of this Agreement, in the event of a Potential Change in Control of
the Corporation, Employee shall not terminate his employment with the
Corporation until the earliest of (i) a date which is six (6) months from the
occurrence of such Potential Change in Control of the Corporation, (ii) the
termination by Employee of his employment by reason of Disability, as defined in
Subsection 3(a) hereof, or (iii) the occurrence of a Change in Control of the
Corporation.

     3. Termination Following a Change in Control of the Corporation. If any of
the events described in Section 2 hereof constituting a change in control of the
Corporation shall have occurred, Employee shall be entitled to the benefits
provided in Subsection 4(d) hereof immediately upon a termination of his
employment which occurs during the term of this Agreement unless such
termination is (i) due to Employee's death; (ii) due to Employee’s Disability as
defined in Section 3(a) below, (iii) by the Corporation for Cause, as that term
is defined in Section 3(b) below, or (iv) by Employee other than for Good
Reason, as that term is defined in Section 3(c) below.

     (a) Disability. If, as a result of Employee's incapacity due to physical or
mental illness, Employee shall have been absent from the full-time performance
of his duties with the Corporation for six (6) consecutive months, and within
thirty (30) days after written notice of termination is given, Employee shall
not have returned to the full-time performance of his duties, the Corporation
may terminate Employee's employment for "Disability."

     (b) Cause. Termination by the Corporation of Employee's employment for
"Cause" shall mean termination upon (i) the willful and continued failure by
Employee to substantially perform his duties with the Corporation (other than
any such failure resulting from termination for Good Reason) after a demand for
substantial performance is delivered to Employee that specifically identifies
the manner in which the Corporation believes that Employee has not substantially
performed his duties, and Employee has failed to resume substantial performance
of his duties on a continuous basis within fourteen (14) days of receiving such
demand, (ii) the willful engaging by Employee in conduct which is demonstrably
and materially injurious to the Corporation, monetarily or otherwise or (iii)
Employee's conviction of a felony or conviction of a misdemeanor which
materially impairs Employee's ability substantially to perform his duties with
the Corporation or (iv) commission of an act of fraud or material dishonesty
involving the Corporation. For purposes of this Subsection, no act or failure to
act, on Employee's part shall be

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deemed "willful" unless done, or omitted to be done, by Employee not in good
faith and without reasonable belief that his action or omission was in the best
interest of the Corporation.

     (c) Good Reason. Employee shall be entitled to terminate his employment for
Good Reason. For purposes of this Agreement, "Good Reason" shall mean, without
Employee's express written consent, the occurrence after a Change in Control of
the Corporation of any one or more of the following:

     (i) the assignment to Employee of duties, responsibilities or status
inconsistent with his present duties, responsibilities and status as Chief
Executive Officer of the Corporation or a reduction or alteration in the nature
or status of Employee's duties and responsibilities from those in effect as of
the date hereof;

     (ii) a reduction by the Corporation in Employee's base salary as in effect
on the date hereof or as the same shall be increased from time to time ("Base
Salary");

     (iii) the Corporation's requiring Employee to be based at an office
location other than in southeastern Wisconsin;

     (iv) the failure by the Corporation to continue in effect the Corporation's
Salaried Retirement Plan, Supplemental Retirement Plan, Choice Plan (Cafeteria
plan under section 125 for qualified group insurance benefits), Incentive Bonus
Program, The Accelerator 401(k) Savings Plan, Executive Life Insurance Program,
Travel Accident Insurance, Qualified and Non-Qualified Stock Option Plans or any
other of the Corporation's employee benefit plans, policies, practices or
arrangements in which Employee participates or the failure by the Corporation to
continue Employee's participation therein on substantially the same basis, both
in terms of the amount of benefits provided and the level of Employee's
participation relative to other participants, as existed as of the date hereof;

     (v) the failure of the Corporation to obtain a satisfactory agreement from
any successor to the Corporation to assume and agree to perform this Agreement
as contemplated in Section 5 hereof; and

     (vi) any purported termination by the Corporation of Employee's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Subsection (d) below, and for purposes of this Agreement, no
such purported termination shall be effective. Employee's right to terminate his
employment pursuant to this Subsection shall not be

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affected by his incapacity due to physical or mental illness. Employee's
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.

     (d) Notice of Termination. Any termination by the Corporation for Cause or
by Employee for Good Reason shall be communicated by Notice of Termination to
the other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee's employment under the provision so indicated.

     (e) Date of Termination. "Date of Termination" shall mean the date as of
which Employee’s expected services permanently decrease to no more than 20
percent of the average level of bona fide services performed over the
immediately-preceding 36-month period.

     4. Compensation Upon Termination or During Disability. Following a Change
in Control of the Corporation, as defined in Section 2 hereof, upon termination
of Employee's employment or during a period of disability Employee shall be
entitled to the following benefits: (a) During any period that Employee fails to
perform his full-time duties with the Corporation as a result of incapacity due
to Disability as that term is defined in Section 3(a) herein, Employee shall
continue to receive his Base Salary at the rate in effect at the commencement of
any such period, until Employee's employment is terminated pursuant to
Subsection 3(a) hereof. Thereafter, Employee's benefits shall be determined in
accordance with the Corporation's retirement, insurance and other applicable
programs and plans then in effect.

     (b) If Employee's employment shall be terminated by the Corporation for
Cause or by Employee other than for Good Reason, the Corporation shall pay
Employee his full Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given or on the Date of Termination
if no Notice of Termination is required hereunder, plus all other amounts to
which Employee is entitled under any compensation plan of the Corporation at the
time such payments are due, and the Corporation shall have no further
obligations to Employee under this Agreement.

     (c) If Employee's employment terminates by reason of his death, then
Employee's benefits shall be determined in accordance with the Corporation's
Supplemental

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Retirement Plans, and its retirement, survivor's benefits, insurance, and/or
such other applicable programs and plans then in effect.

     (d) If Employee's employment by the Corporation shall be terminated (i) by
the Corporation other than for Cause or Disability or (ii) by Employee for Good
Reason, Employee shall be entitled to the benefits (the "Severance Payments")
provided below:

          (A) the Corporation shall pay Employee his full Base Salary through
the Date of Termination at the rate in effect at the time Notice of Termination
is given, or the Date of Termination where no Notice of Termination is required
hereunder;

          (B) the Corporation shall pay as severance benefits to Employee, on
the date specified in Subsection (g) below, a lump sum severance payment equal
to the product of 2.50 times the sum of (I) Employee's annual Base Salary in
effect immediately prior to the occurrence of the circumstances giving rise to
such termination, and (II) the most recent annual bonus awarded to Employee;

          (C) in lieu of shares of common stock of the Corporation ("Option
Shares") issuable upon exercise of outstanding options ("Options"), if any,
granted to Employee under the Corporation's 1988 Incentive Stock Option Plan and
1988 Non-Qualified Stock Option Plan, the 1998 Incentive Compensation Plan, and
the 2004 Stock Incentive Plan, together with any additional, substitute or
successor option program or plan as may be in effect from time to time, (which
Options shall be canceled upon the making of the payment referred to below),
Employee shall receive, on the date specified in Subsection (g) below, an amount
in cash equal to the product of (i) the higher of the closing price of shares
reported on the NASDAQ Stock Market on the Date of Termination or the highest
per share price for Option Shares actually paid in connection with any Change in
Control of the Corporation, over the per share exercise price of each Option
held by Employee, times (ii) the number of Option Shares covered by each such
Option;

          (D) for a twenty-four (24) month period after such termination, the
Corporation will arrange to provide Employee, at the Corporation's expense, with
benefits under the Corporation's applicable employee fringe benefit plans, which
benefits shall be the same or substantially similar to the benefits Employee was
receiving immediately prior to the Notice of Termination; provided that benefits
otherwise receivable by Employee pursuant to this Subsection (D) shall be
reduced to the extent comparable benefits are actually received by Employee
during the

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twenty-four (24) month period following Employee's termination and any such
benefits actually received by Employee shall be reported to the Corporation.

     (e) in the event that Employee becomes entitled to the Severance Payments,
if it is determined that any of the Severance Payments will be subject to the
tax (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of
1986 ("Code") (or any similar tax that may hereafter be imposed), the Severance
Payments to which Employee is entitled hereunder shall be reduced to the extent
necessary to avoid the imposition of any Excise Tax upon such Severance
Payments. In the event Severance Payments shall have previously been made to
Employee which are or would be subject to the Excise Tax, Employee shall
immediately repay to the Corporation that portion of the Severance Payments
determined to be subject to such Excise Tax. For purposes of determining whether
any of the Severance Payments will be subject to the Excise Tax and the amount
of such Excise Tax, (i) any other payments or benefits received or to be
received by Employee in connection with a Change in Control of the Corporation
or Employee's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Corporation, any
person whose actions result in a Change in Control of the Corporation or any
person affiliated with the Corporation or such person) shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2) of the Code, and
all "excess parachute payments" within the meaning of Section 280G(b)(1) shall
be treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Corporation's independent auditors and acceptable to Employee
such other payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the base amount within
the meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to
the Excise Tax, (ii) the amount of the Severance Payments which shall be treated
as subject to the Excise Tax shall be equal to the lesser of (A) the total
amount of the Severance Payments or (B) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) (after applying clause (i) above), and
(iii) the value of any non-cash benefits or any deferred payment or benefits
shall be determined by the Corporation's independent auditors in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code. In the event that the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at

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the time of termination of Employee's employment, the Corporation shall repay to
the Employee at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the Severance Payments previously repaid by
Employee to the Corporation hereunder attributable to such reduction plus
interest on the amount of such repayment at the rate provided in section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time of the termination of
Employee's employment, Employee shall repay to the Corporation such further
excess portion of the Severance Payments as would be subject to the Excise Tax
(plus any interest payable with respect to such excess) at the time that the
amount of such excess is finally determined.

     (f) In the event the amount of Severance Payments that Employee would be
entitled to receive hereunder, following a Change in Control of the Corporation,
upon termination of Employee's employment, would, under any applicable provision
of law, render the validity, legality or enforceability of this Agreement and
the Severance Payments made hereunder contingent upon this Agreement having
first been approved by the affirmative vote of a majority of the aggregate
outstanding voting securities of the Corporation, (i) the Severance Payments due
Employee hereunder shall be reduced to the extent necessary to avoid rendering
this Agreement subject, under any applicable provision of law, to prior
shareholder approval as specified above; or (ii) if Severance Payments have
previously been made to Employee hereunder, the amount of which Severance
Payments would render this Agreement subject to prior shareholder approval, as
specified above, as a condition precedent to its validity, legality or
enforceability, Employee shall immediately repay to the Corporation that portion
of the Severance Payments which served to render this Agreement subject to said
prior shareholder approval.

     (g) The payments provided for in Subsection (d)(B) and (C) above, together
with interest on such amounts from the Date of Termination until the date such
amounts are paid at the rate provided in Section 1274(b)(2)(B) of the Internal
Revenue Code, shall be made on the date that is 6 months after the Date of
Termination of Employment; provided, that if a bona fide dispute exists
regarding Employee’s right to payment on such date, payments (if any) shall be
made in accordance with the provisions of Treasury Regulation 1.409A -3(g),
which generally requires that (1) Employee accept the portion of the payment
that the Corporation is willing to pay (unless such acceptance would result in a
relinquishment of Employee’s claim to payment of the remaining

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amount); (2) Employee make good faith efforts to collect the remaining portion
of the payment; and (3) any further payment is made no later than the end of the
first taxable year of Employee in which: (i) Employee and the Corporation settle
the dispute, (ii) the Corporation concedes the disputed amount is payable; or
(iii) the Corporation is required to make such payment pursuant to a final and
nonappealable judgment or other binding decision.

     (h) The Corporation shall also pay to Employee all legal fees and expenses
incurred by Employee as a result of such termination of employment (including
all such fees and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit provided by
this Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to any payment or
benefit provided hereunder). No such payments shall be made prior to the date
which is 6 months after the Date of Termination of Employment. On the date that
is 6 months after the Date of Termination of Employment, the Corporation shall
make a lump sum payment of all legal fees and expenses (if any) that accrued
during such six month period, along with interest on such amounts from the date
incurred by Employee to the date of payment at the rate provided in Section
1274(b)(2)(B) of the Code.

     (i) Employee shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this Section 4 be reduced by any
compensation earned by Employee as the result of employment by another employer
after the Date of Termination, or otherwise.

     (j) The Severance Payments to be paid pursuant to Subsection (d) above are
not intended as stipulated or liquidated damages for breach of any promise of a
term of employment, no such promise being made herein, but are payments which
shall be fully earned as of the Date of Termination, and shall be compensation
for: Employee's continued services rendered to the Corporation after the date
hereof and prior to such Date of Termination; the foregoing of other possibly
more secure employment; consequential losses which may result from such
termination, including, but not limited to, permanent injury to reputation, loss
of career development opportunities, and emotional stress; and actual losses
which may result from such termination including, but not limited to, lost wages
and expenses of securing other employment.

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     (k) The Corporation shall have no obligation to provide or cause to be
provided to Employee the benefits described in this Agreement if the Corporation
or Employee shall terminate Employee's employment prior to a Change of Control.
This Agreement is not and nothing contained herein shall be deemed to create a
contract of employment between the Employee and the Corporation.

5. Successors; Binding Agreement.

     (a) The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation or of any
division or subsidiary thereof employing Employee to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that
the Corporation would be required to perform it if no such succession had taken
place. Failure of the Corporation to obtain such assumption and agreement prior
to the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Employee to terminate employment and receive compensation from
the Corporation in the same amount and on the same terms as Employee would be
entitled hereunder if Employee terminated his employment for Good Reason. 

     (b) This Agreement shall inure to the benefit of and be enforceable
by Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Employee should die
while any amount would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Employee's devisee, legatee or
other designees or, if there is no such designee, to Employee's estate. 

6. Administration of Agreement; Claims Procedures.

     (a) This Agreement shall be administered by the Compensation Committee
ofthe Corporation’s Board of Directors, which has been given complete and
discretionary authority by the Board of Directors to administer and interpret
this Plan.

     (b) The Committee shall notify Employee in writing, within 90 days of his
written application for benefits, of his eligibility or ineligibility for
benefits under this Agreement. If the Committee determines that Employee is not
eligible for benefits or full benefits, the notice shall set forth (a) the
specific reasons for such denial, (b) a specific reference to the provisions of
this Agreement on which the denial is based, (c) a description of any

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additional information or material necessary for the Employee to perfect his
claim, and a description of why it is needed, (d) an explanation of this
Agreement’s claims review procedure and other appropriate information as to the
steps to be taken if the Employee wishes to have the claim reviewed (including
the applicable time limits, a statement that the Employee is entitled to receive
upon request, free of charge, access to and copies of all documents and other
information relevant to the claim, and a statement regarding the Employee’s
right to bring a civil action if the Employee’s review is denied), and (e) in
the case of claims where the Committee determines that the Employee’s
termination of employment was due to disability, copies of or the right to
request free of charge any internal rule, guideline or protocol that was relied
upon in denying the claim. If the Committee determines that there are special
circumstances requiring additional time to make a decision, the Committee shall
notify the Employee of the special circumstances and of the date by which a
decision is expected to be made, and may extend the time for up to an additional
90-day period.

     If the Committee determines that Employee is ineligible for benefits, or if
the Employee believes that he is entitled to greater or different benefits, the
Employee shall have the opportunity to have such claim reviewed by the Committee
by filing a petition for review with the Committee within 60 days after receipt
of the notice issued by the Committee. Said petition shall state the specific
reasons why the Employee believes that he is entitled to benefits, greater
benefits, or different benefits. Within 60 days after receipt by the Committee
of said petition, the Committee shall afford the Employee (and counsel, if any)
an opportunity to present his position to the committee orally or in writing,
and the Employee (or counsel, if any) an opportunity to present his position to
the Committee orally or in writing, ad the Employee (or counsel) shall have the
right to review the pertinent documents. Within the 60-day period, the Committee
shall notify the Employee of its decision in writing. The Committee’s written
notice to the Employee shall set forth specifically the basis of the Committee’s
decision and the specific provisions of this Agreement on which the decision is
based and shall be written in a manner calculated to be understood by the
Employee. If, because of the need for a hearing, the 60-day period is not
sufficient, the decision may be deferred for up to another 60-day period at the
election of the Committee, but notice of this deferral shall be given to the
Employee. In the event of the death of Employee, the same procedure shall be
applicable to the Employee’s beneficiaries.

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     Special procedures apply if a claim or claim denial is based upon an
assertion that the Employee is disabled. In such cases, the Committee must
furnish the Employee with a written notice of this denial no later than 45 days
after the receipt of the claim. However, the Committee may request up to two
extensions of up to 30 days each to process the claim by providing notice of the
extension within the original 45 day period or within the initial 30 day
extension period (whichever applies). Each notice must state the special
circumstances requiring the extension of time, the standards on which the
determination of disability are based, and the date by which the Committee
expects to render a decision on the claim. If additional information is needed
to process the claim, the Employee will be given at least 45 days to provide
such information.

     If the Committee determines that the Employee terminated employment due to
disability, and the Employee wishes to submit the claim for a hearing and
review, the Employee must file the claim for review no later than 180 days after
receiving written notification of the denial of his claim for benefits. The
Employee may submit written documents and other information relating to the
claim. The review will be conducted by an appropriate named fiduciary of this
Agreement who is neither the person who denied the initial claim nor a
subordinate of that person, and no deference will be given to the initial
decision of the claim. If the claim is based on a medical judgment, the person
conducting the review will consult with an appropriate health care professional
(but not the same professional who was consulted in connection with the original
denial of the claim, or his or her subordinate), and will, upon the request of
the Employee, provide the Employee with the names of all medical or vocational
experts whose advice was obtained in connection with the original denial of the
claim. A hearing on the claim will be conducted within 45 days. At the hearing,
or prior to the hearing upon 5 business days' written notice to the Committee,
the Employee may review all pertinent documents relating to the denial of the
claim. If the review of the claim is denied, the Employee will be provided with
written notice of this denial within 45 days after the Committee’s receipt of
the written claim for review. There may be times when this 45 day period may be
extended. This extension may only be made, however, where there are special
circumstances that are communicated to the Employee in writing within the 45 day
period. If the decision on review is not furnished to the Employee within the
time limitations described above, the claim shall be deemed denied on review.

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     If the review of a claim is denied, the Committee will provide the Employee
with a notice containing the specific reasons for the denial, a reference to
this Agreement provisions on which the denial is based, a statement that the
Employee is entitled to receive upon request, free of charge, access to and
copies of all documents and other information relevant to the claim, a statement
of the Employee’s right to bring a civil action under federal law, and, in the
case of claims based on disability, copies of or the right to request free of
charge any internal rule, guideline or protocol that was relied upon in denying
the claim.

     No person or entity claiming Plan benefits may bring legal action against
the Committee or its members, the Corporation, any affiliate of the Corporation,
the Board of Directors of the Corporation or its members, or any employee of the
Corporation based upon this Agreement before exhausting the claim and appeal
procedures set forth in the preceding paragraphs of this Section 6. No person or
entity claiming benefits under this Agreement may commence legal action with
respect to this Agreement more than 120 days after receiving notice of the
Committee’s final decision on the claim appeal of such person or entity.

     7. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:

                                                             (a) If to the
Corporation:

                                                                            
Twin Disc Incorporated
                                                                             1328
Racine Street
                                                                            
Racine, Wisconsin 53403

                                                              (b) If to
Employee:

                                                                           
Michael E. Batten
                                                                           Twin
Disc Incorporated
                                                                           1328
Racine Street
                                                                           Racine,
Wisconsin 53403

     8. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Employee and such officer as may be specifically designated by the
Board. The validity,

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interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Wisconsin.

     9. Validity. The invalidity or unenforceability of any provision of this
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

     10. Compliance with Code Section 409A Notwithstanding anything in this
Agreement to the contrary, to the extent any payments paid or payable to
Employee are subject to Section 409A of the Internal Revenue Code, as amended,
(a) this Agreement shall be interpreted in a manner that complies with Code
Section 409A and any related regulations or guidance, and (b) all such payments
shall comply with Code Section 409A and any related regulations or guidance.

     11. Interpretation. All terms used herein in the singular shall be
construed to include the plural and all terms used herein in the masculine
gender shall be construed to include the feminine gender as may be required by
the context in which the terms are used.

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     12. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby.

     IN WITNESS WHEREOF, the parties have executed this Agreement in the City
and County of Racine, Wisconsin, effective as of the date first set forth above.

TWIN DISC, INCORPORATED

By: ______________________________________________

Attest: ____________________________________________

EMPLOYEE: ________________________________________

                                   Michael E. Batten

 

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