Document:

Q1 2012 Ex 10.2

Exhibit 10.2

AVON PRODUCTS, INC.
2010 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

1.Grant of Restricted Stock Unit Award.  Pursuant to the provisions of its 2010 Stock Incentive Plan (the “Plan”), Avon Products, Inc. (the “Company”) has awarded you (the “Grantee”) Restricted Stock Units (the “RSUs”), representing the right to receive in the future shares of Stock (the “Shares”) as set forth in the Grantee's grant notification.  These RSUs are subject to the terms and conditions set forth below, as well as those terms and conditions set forth in the Plan, all of which are hereby incorporated by this reference.  All capitalized terms used in this Restricted Stock Unit Award Agreement (this “Agreement”) shall have the meaning set forth in the Plan unless otherwise defined herein.

2.Nature of RSUs; Issuance of Shares.  These RSUs represent a right to receive Shares on the Vesting Date (as defined below) but do not represent a current interest in the Shares.  If all the terms and conditions hereof and of the Plan are met, then the Grantee shall be issued Shares on the Vesting Date (or earlier as provided in this Agreement).  In lieu of issuance of Shares, the Company reserves the right to instead make a cash payment to the Grantee equal to the Fair Market Value of the Shares determined as of the Vesting Date (or earlier as provided in this Agreement).  The Company is not liable for any decrease of value of the Company's Shares.

3.    Restrictions on Transfer of RSUs.  These RSUs may not be sold, tendered, assigned, transferred, pledged or otherwise encumbered. 
4.    Vesting of RSUs; Voting; Dividends 

(a)    Subject to Section 5, vesting and settlement of the RSUs shall occur on the date set forth in the Grantee's grant notification (such date the “Vesting Date”).
(b)    The Grantee does not have the right to vote any of the Shares or the right to receive dividends on them prior to the date such Shares are issued to the Grantee (or if such RSUs are settled in cash, prior to the date the Grantee receives the Fair Market Value of the Shares) pursuant to the terms hereof.  However, unless otherwise determined by the Committee, the Grantee shall be entitled to “Dividend Equivalent Rights” so that the Grantee will receive a cash payment in respect of the Shares in amounts that would otherwise be payable as dividends with respect to such number of Shares, when and as dividends are paid.

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5.    Separation from Service 

(a)    Involuntary Separation from Service by the Company Other Than For Cause
(i)   At Any Time, Where Grantee is Not at Retirement or Would Not Attain Retirement By End of Salary Continuation Period.  If:  (1) regardless of the date of the Separation from Service the Grantee incurs an involuntary Separation from Service by the Company (and, if applicable, by any Subsidiary for whom the Grantee is employed) other than for Cause; and (2) the Grantee has not attained Retirement and will not be eligible for Retirement at the end of the salary continuation period for which the Grantee is eligible under a severance pay plan of the Company or any Subsidiary or some other agreement between the Grantee and the Company or any Subsidiary (as if the Grantee made any available election under such plan or agreement to extend the salary continuation period by the maximum period available to such Grantee), in either case as in effect on the date hereof (disregarding any actual election made by the Grantee under such plan or agreement), then a pro-rata portion of the RSUs referred to in Section 4(a) above shall become vested and the pro-rata number of such vested Shares shall be issued to the Grantee within sixty (60) days after such Separation from Service, unless such Grantee is a “specified employee” on the date of Separation from Service, as defined in Code Section 409A and determined pursuant to procedures and elections made by the Company from time to time, in which case, the Shares shall be issued on the date which is six months after the Separation from Service.  The number of Shares that vest shall be determined by multiplying the full number of Shares subject to the RSU by a fraction, which shall be the number of complete months of employment from the date of grant (the “Grant Date”) to the date of the Separation from Service (typically the last day of active employment), divided by the number of months from the Grant Date to the Vesting Date. 
(ii)   Separation from Service Occurs Prior to January 1 of the Year Following the Grant Date, Where Grantee Either At Retirement or Will Attain Retirement By End of Salary Continuation Period.  If:  (1) the date of the Separation from Service occurs prior to January 1 of the year following the Grant Date; (2) the Grantee incurs an involuntary Separation from Service by the Company (and, if applicable, by any Subsidiary for whom the Grantee is employed) other than for Cause; and (3) either:  (A) the Grantee is eligible for Retirement at the time of the date of the Separation from Service; or (B) the Grantee will be eligible for Retirement at the end of the salary continuation period for which the Grantee is eligible under a severance pay plan of the Company or any Subsidiary or some other agreement between the Grantee and the Company or any Subsidiary (as if the Grantee made any available election under such plan or agreement to extend the salary continuation period by the maximum period available to such Grantee), in either case as in effect on the date hereof (disregarding any actual election made by the Grantee under such plan or agreement), then a pro-rata portion of the RSUs referred to in Section 4(a) above shall become vested and the pro-rata number of such vested Shares shall be issued to the Grantee within sixty (60) days after such Separation from Service, unless such Grantee is a “specified employee” on the date of Separation from Service, as defined in Code Section 409A and determined pursuant to procedures and elections made by the Company from time to time, in which case, the Shares shall be issued on the date which is six months after the Separation from 

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Service.  The number of Shares that vest shall be determined by multiplying the full number of Shares subject to the RSU by a fraction, which shall be the number of complete months of employment from the Grant Date to the date of the Separation from Service (typically the last day of active employment), divided by the number of months from the Grant Date to the Vesting Date. 
(iii)   Separation From Service Occurs on or after January 1 of the Year Following the Grant Date, Where Grantee Either At Retirement or Will Attain Retirement By End of  Salary Continuation Period.  If:  (1) the date of the Separation from Service occurs on or after January 1 of the year following the Grant Date; (2) the Grantee incurs an involuntary Separation from Service by the Company (and, if applicable, by any Subsidiary for whom the Grantee is employed) other than for Cause on or after the January 1 of the year following the Grant Date; and (3) either (A) the Grantee is eligible for Retirement at the time of the date of the Separation from Service; or (B) the Grantee will be eligible for Retirement at the end of the salary continuation period for which the Grantee is eligible under a severance pay plan of the Company or any Subsidiary or some other agreement between the Grantee and the Company or any Subsidiary (as if the Grantee made any available election under such plan or agreement to extend the salary continuation period by the maximum period available to such Grantee), in either case as in effect on the date hereof (disregarding any actual election made by the Grantee under such plan or agreement), then all of the RSUs referred to in Section 4(a) above shall become vested and such vested Shares shall continue to be issued to the Grantee on the Vesting Date.  
 (b)    Voluntary Separation from Service Due to Retirement
      (i)   Separation From Service Prior to January 1 of the Year Following the Grant Date.  If:  (1) the date of the Separation from Service occurs prior to January 1 of the year following the Grant Date; and (2) the Grantee incurs a voluntary Separation from Service due to Retirement, then a pro-rata portion of the RSUs referred to in Section 4(a) above shall become vested and the pro-rata number of such vested Shares shall be issued to the Grantee within sixty (60) days after such Separation from Service, unless such Grantee is a “specified employee” on the date of Separation from Service, as defined in Code Section 409A and determined pursuant to procedures and elections made by the Company from time to time, in which case, the Shares shall be issued on the date which is six months after the Separation from Service.  The number of Shares that vest shall be determined by multiplying the full number of Shares subject to the RSU by a fraction, which shall be the number of complete months of employment from the Grant Date to the date of the Separation from Service (typically the last day of active employment), divided by the number of months from the Grant Date to the Vesting Date. 
(ii)    Separation From Service On or After January 1 of the Year Following the Grant Date.  If:  (1) the date of the Separation from Service occurs on or after January 1 of the year following the Grant Date; and (2) the Grantee incurs a voluntary Separation from Service due to Retirement, then all of the RSUs referred to in Section 4(a) above shall become vested and such vested Shares shall continue to be issued to the Grantee on the Vesting Date.  

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(c)    Separation from Service due to Disability.  If the Grantee incurs a Separation from Service due to Disability, then all of the RSUs referred to in Section 4(a) above shall become vested and such vested Shares shall continue to be issued to the Grantee on the Vesting Date.
(d)    Death.  If the Grantee dies before otherwise incurring a Separation from Service, then all of the RSUs referred to in Section 4(a) above shall become vested and such vested Shares shall be issued to the Grantee's designated beneficiary (or if none, the Grantee's estate) within sixty (60) days after such death.
(e)    Separations from Service Causing Forfeiture.  All RSUs are forfeited if the Grantee incurs a Separation from Service from the Company (and, if applicable, from any Subsidiary by whom the Grantee is employed) under any of the following conditions:  (i) an involuntary Separation from Service by the Company or any Subsidiary for Cause prior to the Vesting Date; or (ii) a voluntary Separation from Service (excluding Retirement or Disability) prior to the Vesting Date.   
(f)    Change in Control.  Notwithstanding any other provision of this Agreement, in the event of a Change in Control, the vesting and payment of the RSUs shall be governed by the provisions of the Plan regarding a Change in Control, which are incorporated herein by reference.
(g)    Paid or Unpaid Leave of Absence or Change in Subsidiary Status for Subsidiary Employing Grantee.  For purposes of determining the vesting of RSUs under this Agreement, a paid or unpaid leave of absence of the Grantee shall not constitute a Separation from Service of the Grantee, except to the extent that such leave of absence constitutes a “separation from service” (as defined in Code Section 409A).  During a paid or unpaid leave of absence, until a “separation from service” occurs, the RSUs shall continue to vest as set forth in this Agreement and the grant notification referred to in Section 4(a) of this Agreement.  For purposes of determining the vesting of RSUs under this Agreement, the Grantee's employment by a Subsidiary shall be considered a Separation from Service on the date on which such Subsidiary ceases to be a Subsidiary, provided that payment shall continue to be made in accordance with this Agreement.  
6.    Non-Competition/Non-Solicitation/Non-Disclosure

The Grantee agrees that, during the Grantee's employment, beginning on the Grant Date, and for a period of one year after the Grantee's Separation from Service with the Company (and, if applicable, a Subsidiary) for any reason whatsoever (including Retirement or Disability), he or she shall not, without the prior written consent of the Committee, engage in either of the following activities:
(a)    the Grantee shall not directly or indirectly engage or otherwise participate in any business which is competitive with any significant business of the Company or any Subsidiary, including without limitation, the Grantee's acceptance of employment with, entrance into a consulting or advisory arrangement with, rendering services to or otherwise facilitating the business of Amway Corp./Alticor Inc., Beiersdorf (Nivea), 

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De Millus S.A., Ebel Int'l/Belcorp Corp., Faberlic, Forever Living Products LLC USA, Gryphon Development/Limited Brands Inc., Herbalife Ltd., Hermès, Lady Racine/LR Health & Beauty Systems GmbH, L'Oréal Group/Cosmair Inc., Mary Kay Inc., Mistine/Better Way (Thailand) Co. Ltd., Natura Cosmetics S.A., Neways Int'l, NuSkin Enterprises Inc., O Boticário, Oriflame Cosmetics S.A., Reckitt Benckiser PLC, Revlon Inc., Sara Lee Corporation, Shaklee Corp., The Body Shop Int'l PLC, The Estée Lauder Companies Inc., The Procter & Gamble Company, Tupperware Corp., Unilever Group (N.V. and PLC), VirginVie, Virgin Ware, Vorwerk & Co. KG/Jafra Worldwide Holdings (Lux) S.à.R.L. Inc., Yanbal Int'l (Yanbal, Unique), or any of their affiliates; and
(b)    the Grantee shall not solicit or aid in the solicitation of any employees of the Company or any Subsidiary to leave their employment.

In addition, the Grantee shall not, unless compelled pursuant to an order of a court or other body having jurisdiction over such matter, communicate or divulge any secret or confidential information, knowledge or data, including without limitation any trade secrets, relating to the Company or a Subsidiary, and their respective businesses, obtained by the Grantee during his or her employment by the Company or a Subsidiary and which is not otherwise publicly known (other than by reason of an unauthorized act by the Grantee), to anyone other than the Company and those designated by it.
In the event the Company determines that the Grantee has breached any term of this Section 6 or any non-disclosure, non-compete or non-solicitation covenant set forth in his or her severance agreement, employment contract or any Company policy, in addition to any other remedies the Company may have available to it, unless otherwise determined by the Committee:  (x) all unvested RSUs granted hereunder shall be forfeited; (y) if Shares have been issued to the Grantee in respect of vested RSUs hereunder, then, the Grantee shall forfeit all such Shares so issued to the Grantee hereunder; and (z) if cash has been paid to the Grantee in lieu of Shares in respect of vested RSUs hereunder, the Grantee shall pay to the Company all such cash so paid in lieu of Shares to the Grantee hereunder; provided, however, that if the Grantee no longer holds Shares issued to the Grantee hereunder, then, the Grantee shall pay to the Company in cash the Fair Market Value of any such Shares on the date such Shares were issued to the Grantee hereunder.
7    Compensation Recoupment Policy.  For those Grantees who are subject to the Company's Compensation Recoupment Policy, the RSUs and the Shares issued (or the cash payment if the Company elected, instead of Shares, to make a cash payment equal to the Fair Market of the Shares determined as of the Vesting Date (or earlier as provided in this Agreement) to the Grantee in respect of vested RSUs hereunder are subject to the Company's Compensation Recoupment Policy, as it is amended from time to time.

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8    Service Acknowledgments
The Grantee acknowledges and agrees as follows:
(a)    The execution and delivery of this Agreement and the granting of the RSUs hereunder shall not constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company or its Subsidiaries to employ the Grantee for any specific period.  Moreover the RSUs do not become part of the contract of employment or any other employment relationship with the Grantee's employer.
(b)    The award of the RSUs hereunder does not entitle the Grantee to any benefit other than that specifically granted under this Agreement and under the Plan, nor to any future grants or other benefits under the Plan or any similar plan.  Any benefits granted under this Agreement and under the Plan are not part of the Grantee's ordinary or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, end-of-service payments, bonuses, long-service awards, pension, welfare or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any of its Subsidiaries.  The Grantee understands and accepts that the benefits granted under the Plan are entirely at the grace and discretion of the Company and that the Company retains the right to amend or terminate the Plan, and/or the Grantee's participation therein, at any time, at the Company's sole discretion and without notice.
(c)    Nothing in this Agreement shall confer upon the Grantee any right to continue in the service of the Company or a Subsidiary or interfere in any way with any right of the Company or a Subsidiary to terminate the employment of the Grantee at any time, subject to applicable law.
(d)    The Grantee is voluntarily participating in the Plan.
(e)    The future value of the underlying Shares is unknown and cannot be predicted with certainty.  
(f)    Neither the Company nor any Subsidiary is providing any tax, legal or financial advice or making any recommendations regarding the Grantee's participation in the Plan.
(g)    In consideration of the grant of the RSUs, no claim or entitlement to compensation or damages arises from termination of the RSUs or diminution in value of the RSUs or payments made upon settlement of the RSUs resulting from termination of the Grantee's service (for any reason whether or not in breach of local law) and the Grantee irrevocably releases the Company and its Subsidiaries from any such claim that may arise.  If, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen then, by accepting the RSUs, the Grantee shall be deemed irrevocably to have waived the Grantee's entitlement to pursue such a claim.

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9.    Application of Laws.  The granting of these RSUs and the delivery of Shares hereunder shall be subject to all applicable laws, rules and regulations.

10.    Taxes
By accepting this grant, the Grantee hereby irrevocably elects to satisfy any taxes and social contribution withholding required to be withheld by the Company or its subsidiaries on the date of grant or vesting of the RSUs or the date of delivery of any Shares hereunder or on any earlier date on which such taxes or social insurance contribution withholding may be due  (“Tax Liability”) by authorizing the Company and any of its Subsidiaries to withhold a sufficient number of Shares or cash in lieu thereof from the RSUs or Grantee's wages or other compensation to fully satisfy the Tax Liability. Furthermore, the Grantee agrees to pay the Company or its Subsidiaries any amount of the Tax Liability that cannot be satisfied through one of the foregoing methods.  
Notwithstanding the foregoing, if, on the applicable Vesting Date or on any earlier date on which the Tax Liability may be due, the delivery of Shares is not made because of Code Section 409A requirements or because the Grantee elects pursuant to the Company's Deferred Compensation Plan to defer the delivery of any Shares payable hereunder or for some other reason, the Grantee hereby irrevocably elects to satisfy the Tax Liability due on the applicable Vesting Date or on any earlier date on which such taxes may be due with respect to such Shares for which delivery is being deferred by delivering cash to the Company in an amount sufficient to fully satisfy all the Tax Liability.
Apart from any withholding obligations that may apply to the Company and/or its Subsidiaries, the Grantee acknowledges and agrees that the ultimate responsibility for the Tax Liability is and remains with the Grantee.  The Grantee further acknowledges that:  (x) the Company and its Subsidiaries make no representations or undertakings regarding the Tax Liability or the receipt of any dividends; (y) the Company and its Subsidiaries do not commit to structure the terms of the grant or any other aspect of the RSUs to reduce or eliminate the Tax Liability; and (z) the Grantee should consult a tax adviser regarding the Tax Liability.
The Grantee acknowledges that he or she may not participate in the Plan and the Company and its Subsidiaries shall have no obligation to deliver Shares until the Tax Liability has been fully satisfied by the Grantee.
11.    Code Section 409A.  This Agreement will be interpreted in a manner to comply with the requirements of Code Section 409A, including delaying payments to a “specified employee” during the six-month period following a Separation from Service to the extent such payment is being made on account of such Separation from Service, but only to the extend required by Code Section 409A.  In no event shall the Company, any of its affiliates, any of its agents, or any member of the Board have any liability for any taxes imposed in connection with a failure of the Plan to comply with Code Section 409A. 

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12.    Acknowledgment.   The Company and the Grantee agree that the RSUs are granted under and governed by the Grantee's grant notification, this Agreement and by the provisions of the Plan (incorporated herein by reference).  The Grantee: (x) acknowledges receipt of a copy of each of the foregoing documents; (y) represents that the Grantee has carefully read and is familiar with their provisions; and (z) hereby accepts the RSUs subject to all of the terms and conditions set forth herein and those set forth in the Plan and the Grantee's grant notification.  The Grantee also acknowledges receipt of the Plan prospectus.
13.    Compliance with Laws and Regulations.  The issuance of Shares will be subject to and conditioned upon compliance by the Company and the Grantee with all applicable laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company's Shares may be listed or quoted at the time of such issuance or transfer.  
14.    Electronic Delivery.   The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

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IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the Grantee have executed this Agreement as of the Grant Date.
By the Grantee's acceptance of the RSU, the Grantee and the Company agree that the RSUs are granted under and governed by the terms and conditions of the Plan, the Plan prospectus, the Grantee's grant notification and this Agreement.  The Grantee has reviewed the Plan, the Plan prospectus, the Grantee's grant notification and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all provisions of the Plan, the Plan prospectus, the Grantee's grant notification and this Agreement.  The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan, the Plan prospectus, the Grantee's grant notification and this Agreement.  The Grantee further agrees to notify the Company upon any change in Grantee's residence address.  

	
			
	AVON PRODUCTS, INC.
	 
	GRANTEE

	 
	 
	 

	Chief Executive Officer
	 
	Name:

9td8k05012012ex41.htm

FIRST AMENDMENT TO RIGHTS AGREEMENT

This First Amendment to Rights Agreement (“Amendment”) is made this 1st day of May, 2012, by and between Twin Disc, Incorporated (the “Company”) and Computershare Shareowner Services LLC (f/k/a Mellon Investor Services, LLC), as rights agent (“Rights Agent”).

WHEREAS, the Company and the Rights Agent are parties to that certain Rights Agreement, dated as of December 20, 2007 (the “Rights Agreement”); and

WHEREAS, the Rights Agreement contains terms defining “Acquiring Person;” and

WHEREAS, pursuant to Section 27 of the Rights Agreement, the Rights Agreement may be amended as set forth herein without the approval of the holders of the Rights prior to the date that any person becomes an Acquiring Person; and

WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company to amend the Rights Agreement to change such terms as set forth herein.

NOW, THEREFORE, in consideration of the agreements and covenants contained herein and in the Rights Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:

1.      Amendment of Rights Agreement.  The parties hereto agree that the Rights Agreement is hereby amended as follows:

  A.      Section 1(a) of the Rights Agreement is amended in its entirety to read as follows:

(a)           “Acquiring Person” shall mean any Person (as hereinafter defined) who or which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as hereinafter defined) of 20% or more of the Common Shares then outstanding, but shall not include the Company, any Subsidiary (as hereinafter defined) of the Company, any employee benefit plan of the Company or any Subsidiary of the Company, or any Person holding Common Shares for or pursuant to the terms of any such plan. Notwithstanding the foregoing:

(i)           the term “Acquiring Person” shall not include any Person (an “Existing Holder”) who, at the Record Date, together with all Affiliates and Associates of such Existing Holder, was the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding or who, after the Record Date, shall become the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding as a result of any transfer by reason of the death of or by gift from any other Person who is an Affiliate or Associate of such Existing Holder or by succeeding such a Person as trustee of a
trust existing on the Record Date, until such time as such Existing Holder or any Affiliate or Associate of such Existing Holder shall become the Beneficial Owner of any additional shares of Common Stock other than as aforesaid or any other Person who is the Beneficial Owner of any shares of Common Stock shall become an Affiliate or Associate of such Existing Holder, if after giving effect to such additional shares of the shares beneficially owned by such other Person, such Existing Holder, together with all Affiliates and Associates of such Existing Holder, shall be the Beneficial Owner of 30% of more of the shares of Common Stock then outstanding; and

(ii)           no Person shall become an “Acquiring Person” as the result of an acquisition of Common Shares by the Company which, by reducing the number of Common Shares outstanding, increases the proportionate number of Common Shares Beneficially Owned by such Person to 20% or more (30% or more in the case of an Existing Holder) of the Common Shares then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 20% or more (30% or more in the case of an Existing Holder) of the Common Shares then outstanding by reason of
acquisition of Common Shares by the Company and shall, after such acquisition by the Company, become the Beneficial Owner of any additional Common Shares, then such Person shall be deemed to be an “Acquiring Person”.

Notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an “Acquiring Person”, as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be or have ever been an “Acquiring Person” for any purposes of this Agreement.

  B.      Section 3(c) of the Rights Agreement is amended in its entirety to read as follows

(c)           The Company shall cause certificates for Common Shares which become outstanding (including, without limitation, reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date, to bear the following (or substantially similar) legend:

This certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between Twin Disc, Incorporated and Mellon Investor Services LLC (now known as Computershare Shareowner Services LLC), Rights Agent, dated as of December 20, 2007 and amended as of May 1, 2012 (as amended, the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of Twin Disc, Incorporated. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. Twin Disc,
Incorporated will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, as set forth in the Rights Agreement, Rights issued to any Person who becomes an Acquiring Person or any Affiliate or Associate thereof (as defined in the Rights Agreement), or the transferees thereof, may become null and void.

With respect to such certificates containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Shares represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the Common Shares represented thereby. In the event that the Company purchases or acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares which are no longer
outstanding.

  C.      Section 26 of the Rights Agreement is amended in its entirety to read as follows:

Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if in writing and sent by overnight delivery service or first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

Twin Disc, Incorporated

1328 Racine Street

Racine, WI  53403

Attention: Michael E. Batten

Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:

Computershare Shareowner Services LLC

2 North LaSalle Street – 3rd Floor

Chicago, IL 60602

Attention: Georg Drake

 

with a copy to:

 

Computershare Shareowner Services LLC

480 Washington Boulevard

Jersey City, New Jersey 07310

Attention: General Counsel

 

 

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if in writing and sent by overnight delivery service or by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

  D.      The Summary of Rights to Purchase Preferred Shares (Exhibit C to the Rights Agreement) is amended to read as attached hereto.

2.      No Other Modification.   Other than as set forth in this Amendment, the terms and conditions of the Rights Agreement remain in full force and effect without modification thereto.

3.      Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

4.      Certification of the Company.  The undersigned officer of the Company, on behalf of the Company, certifies to the Rights Agent that this Amendment is in compliance with the terms of Section 27 of the Rights Agreement, that the Board of Directors of the Company has taken all steps necessary to authorize this Amendment, and that the Rights Agent is entitled to rely upon such certification.

[Signature Page Follows]

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and attested, all as of the day and year first above written.

TWIN DISC, INCORPORATED

By: /s/  Michael E. Batten                                                      

Name: Michael E. Batten

Title: Chairman, Chief Executive Officer

COMPUTERSHARE SHAREOWNER SERVICES LLC, as Rights Agent

By: /s/  Georg Drake                                                                

Name: Georg Drake

Title:           Relationship Manager

  

  

  

EXHIBIT C

SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES

 

On December 20, 2007, the Board of Directors of Twin Disc, Incorporated (the "Company") declared a dividend of one Right for each outstanding Common Share of the Company to shareholders of record at the Close of Business on June 30, 2008.  Each Right entitles the registered holder to purchase from the Company one four-hundredth of a share of Series A Junior Preferred Stock, without par value (the "Preferred Stock") at a Purchase Price of $125.00, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement") between the Company and Mellon Investor Services, LLC (now known as Computershare
Shareowner Services LLC), as Rights Agent, as amended by the First Amendment to the Rights Agreement dated May 1, 2012.

 

Initially, the Rights will be attached to the certificates representing outstanding Common Stock, and no separate Rights Certificates will be distributed. The Rights will separate from the Common Stock and a Distribution Date will occur upon the earlier of (i) ten days following a public announcement that a person or group of affiliated or associated persons has acquired, or obtained the right to acquire from shareholders, beneficial ownership of 20 percent or more of the outstanding Common Stock (or 30% in the case of any Person or group which owned 20% or more of the shares as of June 30, 2008 or who shall become the Beneficial Owner of 20% or more of the shares
as a result of any transfer by reason of the death of or by gift from any other Person who is an Affiliate or an Associate of such existing holder or by succeeding such a Person as trustee of a trust existing on the Record Date ("Existing Holder")) or (ii) ten days following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 20 percent or more of such outstanding Common Stock, as such periods may be extended pursuant to the Rights Agreement.

 

Until the Distribution Date, (i) the Rights will be evidenced by and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates issued after June 30, 2008 will contain a legend incorporating the Rights Agreement by reference, and (iii) the surrender for transfer of any certificates for Common Stock will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate.

 

The Rights are not exercisable until the Distribution Date and will expire at the Close of Business on June 30, 2018, unless earlier redeemed by the Company as described below.

 

As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of the Common Stock as of the Close of Business on the Distribution Date, and thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board of Directors, only Common Stock issued prior to the time the Rights become exercisable or issued upon exercise or conversion of rights, warrants, options or convertible securities issued prior to the time the Rights become exercisable will be issued with Rights.

 

In the event that any person becomes an Acquiring Person, each holder of a Right shall thereafter have the right to receive, upon exercise, in lieu of Preferred Stock, Common Stock of the Company having a value equal to two times the exercise price of the Right. However, rights are not exercisable as described in this paragraph until such time as the Rights are no longer redeemable by the Company as set forth below. Notwithstanding any of the foregoing, if any person becomes an Acquiring Person all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by an Acquiring
Person will become null and void.

 

For example, at an exercise price of $125.00 per Right, each Right not owned by the Acquiring Person (or by certain related parties or transferees) following the event set forth in the preceding paragraph would entitle its holder to purchase $250.00 worth of Common Stock (or other consideration, as noted above) for $125.00. Assuming that the Common Stock had a per share value of $25.00 at such time, the holder of each valid Right would be entitled to purchase ten shares of Common Stock for $125.00.

 

In the event that, at any time following the Distribution Date, (i) the Company is acquired in a merger or other business combination transaction in which the Company is not the surviving corporation or in which the Common Stock is exchanged for stock or other securities or property, or (ii) 50 percent or more of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided as set forth above) shall thereafter have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right.

 

The Purchase Price payable, and the number of one four-hundredths of a share of Preferred Stock or other securities or property issuable upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock or the Common Stock, (ii) if holders of the Preferred Stock are granted certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than the current market price of the Preferred Stock, (iii) if holders of Common Stock are granted certain rights or warrants to subscribe for Common Stock or
convertible securities at less than the current market price of the Common Stock, or (iv) upon the distribution to holders of Preferred Stock or Common Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above).

 

With certain exceptions, no adjustment in the Purchase Price or the number of shares of Preferred Stock issuable upon exercise of a Right will be required until cumulative adjustments would require an increase or decrease of at least 1 percent. No fractional shares of Preferred Stock will be issued (other than fractions which are integral multiples of one four-hundredth of a share of Preferred Stock) and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise.

 

At any time before a person becomes an Acquiring Person, the Company may redeem the Rights in whole, but not in part, at a price of $0.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof.

 

Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $.01 redemption price.

 

At any time after a person becomes an Acquiring Person, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which have become null and void), in whole or in part at an exchange ratio of one share of Common Stock, or one four-hundredth of a share of Preferred Stock, per Right (subject to adjustment).

 

Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. While the distribution of the Rights will not be taxable to shareholders or to the Company, shareholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Common Stock (or other consideration) of the Company or for common stock of the acquiring company as set forth above.

 

Under the terms of the Company's Restated Articles of Incorporation, after taking into account the two 2-for-1 stock splits of the Company's Common Stock, each one four-hundredth of a share of Preferred Stock, if issued, will entitle holders to quarterly dividend payments of $.05, or an amount equal to the dividend paid on one share of common stock, whichever is greater. Each one four-hundredth of a share of Preferred Stock, if issued, will entitle holders upon liquidation to receive a liquidation preference of $.25 plus an amount equal to accrued and unpaid dividends and distributions thereon, plus liquidation amounts equal to the amounts received on each share of
the Company’s Common Stock after payment of a $.25 liquidation amount with respect to each share of the Company’s Common Stock. If shares of the Company’s Common Stock are exchanged via merger, consolidation, or a similar transaction, each one four-hundredth of a share of Preferred Stock will entitle holders to a per share payment equal to the payment made on one share of the Company’s Common Stock. The Company may redeem each one four-hundredth of a share of Preferred Stock at a price equal to the then-current per share market price of the Company’s Common Stock. Each full share of Preferred Stock will have the same voting power as one share of the Company’s Common Stock.

 

Any of the provisions of the Rights Agreement may be amended by the Board of Directors of the Company prior to the time that a person becomes an Acquiring Person. From and after the time that a person becomes an Acquiring Person, the provisions of the Rights Agreement may be amended by the Board in order to cure any ambiguity or to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person).

 

A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an exhibit to a Current Report on Form 8-K dated December 20, 2007.  A copy of the First Amendment to the Rights Agreement (which increased from 15% to 20% the amount of common stock of the Company that a person (other than an “Existing Holder” as defined in the Rights Agreement) must own before becoming an “Acquiring Person”) has been filed with the Securities and Exchange Commission as an exhibit to a Current Report of Form 8-K dated May 1, 2012. Copies of the Rights Agreement and the First Amendment to the Rights Agreement are available
free of charge from the Rights Agent. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is incorporated herein by reference.

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