1
======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) July 28, 2005
------------------
Twin Disc, Incorporated
--------------------------------------
(exact name of registrant as specified in its charter)
WISCONSIN 001-7635 39-0667110
--------- -------- -----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1328 Racine Street Racine, Wisconsin 53403
--------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (262)638-4000
-------------
=============================================================================
=============================================================================
Item 1.01 Entry into Material Definitive Agreements
At its meeting on July 28, 2005, the Compensation Committee of the Board
of Directors of Twin Disc, Incorporated (the "Company") increased the base
salary of the executive officers of the Company who will be the "named
executive officers" for purposes of the Compnay's proxy statement for the 2005
annual meeting of shareholders. That base salaries of the named executive
officers for 2005, effective October 1, 2005, are as follows:
Michael E. Batten Chairman, Chief Executive Officer $434,000
Michael H. Joyce President - Chief Operating Officer $314,000
Christopher J. Eperjesy Vice President and Chief Financial Officer $245,000
James E. Feiertag Executive Vice President $245,000
John H. Batten Executive Vice President $190,000
On July 28, 2005 , the Compensation Committee also issued performance
stock awards to various employees of the Company, including executive officers.
A total of 32,850 performance shares were awarded, with 28,800 of those
performance shares being awarded to executive officers of the Company. The
stock will be awarded if the Company achieves a specified consolidated gross
revenue objective in the fiscal year ending June 30, 2008. A copy of the form
of the Performance Stock Award agreements is attached hereto as Exhibit 10.1
and is incorporated herein by reference.
At its July 28, 2005, meeting, the Compensation Committee also approved a
Corporate Incentive Plan for various executive officers of the Company. The
Corporate Incentive Plan may result in cash bonuses of up to a certain
percentage of base salary to executive officers for the fiscal year that will
end on June 30, 2006, based on the following factors and relative weights for
each factor: corporate economic profit (70%), reduction in cost of quality
(15%) and sales growth (15%).
Also on July 28, 2005, the Compensation Commitee amended and restated the
Twin Disc, Incorporated, Supplemental Retirement Plan (the "SRP"). The purpose
of the amendment was to bring the SRP into compliance with section 409A of the
Internal Revenue Code, which was enacted in late 2004 as part of the American
Jobs Creation Act. A copy of the amended SRP is attached hereto as Exhibit
10.1 and is incorporated herein by reference.
Also on July 28, 2005, the Compensation Committee approved the
participation of the following executive officers in the SRP: John H. Batten,
Executive Vice President; Dean Bratel, Vice President of Engineering;
Christopher J. Eperjesy, Vice President - Finance, Treasurer, and Chief
Financial Officer; James Feiertag, Executive Vice President; and Denise L.
2
Wilcox, Vice President of Human Resources. A copy of the SRP benefits schedule
for each of these participants in included in Exhibit 10.1.
On July 29, 2005, the Company entered into Change in Control Severance
Agreements with the following executive officers: John H. Batten; Dean Bratel;
H. Claude Fabry, Vice President of Global Distribution; James Feiertag, and
Denise L. Wilcox. In addition, the Company entered into Indemnity Agreements
with the following executive officers: Dean J. Bratel and Denise L. Wilcox.
A copy of the form of Change in Control Severance Agreement entered into with
Mr. Batten, Mr. Bratel, Mr. Feiertag and Ms. Wilcox is attached hereto as
Exhibit 10.2 and is incorporated herein by reference. A copy of the Change in
Control Agreement entered into with Mr. Fabry is attached hereto as Exhibit
10.3 and is incorporated herein by reference. A copy of the form of Indemnity
Agreement is attached hereto as Exhibit 10.4 and is incorporated herein by
reference.
On July 29, 2005, the Company also replaced its existing Change in Control
Severance Agreements that it previously entered into with Messrs. Eperjesy and
Timm, as well as with Michael E. Batten, Chief Executive Officer, and Michael
H. Joyce, President and Chief Operating Officer, solely to comply with the
newly enacted section 409A of the Internal Revenue Code. The form of the new
Change in Control Severance Agreements entered into with Messrs. Eperjesy and
Timm is the same as attached hereto as Exhibit 10.2. The form of the new
Change in Control Severance Agreements entered into with Messrs. Batten and
Joyce is attached hereto as Exhibit 10.5 and is incorporated herein by
reference.
The disclosure contained in Item 5.02 is incorporated herein by reference.
Item 2.02 Results of Operations and Financial Condition
The Company has reported its fiscal 2005 4th quarter and annual financial
results. The Company's press release dated August 2, 2005 announcing the
results is attached hereto as Exhibit 99.1 and is incorporated herein in its
entirety by reference.
The information set forth in this Item 2.02 of Form 8-K, including Exhibit
99.1, is furnished pursuant to Item 2.02 and shall not be deemed "filed" for
the purposes of Section 18 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or otherwise subject to the liabilities of that section,
nor shall such information be deemed incorporated by reference in any filing
under the Securities Act of 1933 or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers
On July 29, 2005, the Company entered into a letter agreement with
Mr. Fred H. Timm, Chief Accounting Officer, Vice President, Administration,
and Secretary of the Company, confirming Mr. Timm's retirement effective
October 1, 2005, and providing for Mr. Timm's transition and severance
benefits. In order to receive such benefits, Mr. Timm will be required to
sign a Waiver and Release Agreement shortly after his retirement. A copy of
the letter agreement and the Waiver and Release Agreement is attached hereto as
Exhibit 10.6 and is incorporated herein by reference. Because the letter
agreement requires Mr. Timm to sign and keep in place the Waiver and Release
Agreement, there is the possibility that the severance benefits set forth
therein may be subsequently forfeited.
Item 7.01 Regulation FD Disclosure
The information set forth under Item 2.02 of this report is incorporated
herein by reference solely for the purposes of this Item 7.01.
The information set forth in this Item 7.01 of Form 8-K is furnished
pursuant to Item 7.01 and shall not be deemed "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section, nor shall such
information be deemed incorporated by reference in any filing under the
Securities Act of 1933 or the Exchange Act, except as shall be expressly set
forth by specific reference in such a filing.
FORWARD LOOKING STATEMENTS
The disclosures in this report on Form 8-K and in the documents
incorporated herein by reference contain or may contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The words "believes," "expects," "intends," "plans," "anticipates,"
"hopes," "likely," "will," and similar expressions identify such
3
forward-looking statements. Such forward-looking statements involve known
and unknown risks, uncertainties and other important factors that could cause
the actual results, performance or achievements of the Company (or entities in
which the Company has interests), or industry results, to differ materially
from future results, performance or achievements expressed or implied by such
forward-looking statements. Certain factors that could cause the Company's
actual future results to differ materially from those discussed are noted in
connection with such statements, but other unanticipated factors could arise.
Readers are cautioned not to place undue reliance on these forward-looking
statements which reflect management's view only as of the date of this Form
8-K. The Company undertakes no obligation to publicly release any revisions to
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events, conditions or
circumstances.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits.
EXHIBIT NUMBER DESCRIPTION
10.1 Form of Performance Stock Award Agreement for performance shares awarded
by Compensation Committee on July 28, 2005.
10.2 Twin Disc, Incorporated, Supplemental Retirement Plan, as amended and
restated on July 28, 2005
10.3 Form of Change in Control Severance Agreement entered into between Twin
Disc, Incorporated, and John H. Batten, Dean Bratel, Denise L. Wilcox,
Christopher J. Eperjesy, James Feiertag and Fred H. Timm
10.4 Form of Change in Control Severance Agreement entered into between Twin
Disc, Incorporated, and H. Claude Fabry
10.5 Form of Indemnity Agreement entered into between Twin Disc,
Incorporated, and its executive officers
10.6 Form of Change in Control Severance Agreement entered into between Twin
Disc, Incorporated, and Michael E. Batten and Michael H. Joyce
10.7 Letter Agreement between Twin Disc, Incorporated and Fred H. Timm, dated
July 29, 2005, and related Waiver and Release Agreement
99.1 Press Release announcing 4th quarter 2005 financial results.
=============================================================================
=============================================================================
SIGNATURE
Pursuant to the requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: August 2, 2005 Twin Disc, Inc.
/s/ Fred H. Timm
-------------------------------
Fred H. Timm
Chief Accounting Officer