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CHANGE OF CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT is executed and entered into as of this ___ day of July,
2005, by and between Twin Disc, Incorporated, a Wisconsin corporation, with
its principal offices located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
("Corporation"), and ________________ ("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; and
WHEREAS, the Corporation previously entered into a Change in Control
Severance Agreement with Employee, but due to the enactment of section 409A of
the Internal Revenue Code, the Corporation and Employee desire to terminate
that agreement and replace it with the existing Agreement.
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, 2005; provided, however, that commencing on November 1, 2005,
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 _______________, 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or any member of his family
(the "▇▇▇▇▇▇ 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
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of the combined voting power of the Corporation's then outstanding
securities;
(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
▇▇▇▇▇▇ 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 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 or Retirement (at Employee's normal retirement age),
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, Disability or Retirement as those
terms are defined in Section 3(a) below, (ii) by the Corporation for Cause, as
that term is defined in Section 3(b) below, or (iii) by Employee other than for
Good Reason, as that term is defined in Section 3(c) below.
(a) Disability; Retirement. 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." Termination by the Corporation or by Employee
of Employee's employment by reason of "Retirement" shall mean termination
on or after Employee's "Normal Retirement Date" as defined in Section 4.1
of Twin Disc Incorporated Supplemental Retirement Plan, Approved June 21,
1984 and Amended July 28, 2005 (the "Supplemental Retirement Plans"), as
applicable to Employee, as of the date hereof, or in accordance with any
retirement arrangement established with Employee's consent, with respect
to Employee.
(b) Cause. Termination by the Corporation of Employee's employment for
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"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 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
_______________________ 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 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
specified in the Notice of Termination where required or in any other case
the date upon which Employee ceases to perform services to the
Corporation; provided that if within thirty (30) days after any Notice of
Termination one party notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date
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finally determined to be the Date of Termination, either by mutual written
agreement of the parties or by the final nonappealable determination of a
court of competent jurisdiction.
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 Retirement or
by reason of his death, then Employee's benefits shall be determined in
accordance with the Corporation's Supplemental 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, Retirement 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, not
later than the date specified in Subsection (g) below, a lump sum
severance payment equal to the product of (i) 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; times (ii) the lesser of (I) 2.50 or
(II) the number of whole and fractional years occurring between
Employee's Date of Termination and his Normal Retirement Date as set
forth in the Supplemental Retirement Plans;
(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 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; but in no event shall Employee be provided the
benefits described herein after his Normal Retirement Date; and
provided further 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 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) above shall be made no
later than the tenth (10th) day following the Date of Termination;
provided; however, that if the amounts of such payments cannot be finally
determined on or before such day, the Corporation shall pay to Employee on
such day an estimate as determined in good faith by the Corporation of the
minimum amount of such payments and shall pay the remainder of such
payments (together with interest at the rate provided in Section 1274(b)
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(2)(B) of the Code) as soon as the amount thereof can be determined but in
no event later than the thirtieth (30th) day after the Date of
Termination; and provided further that if Employee is a "Key Employee" as
defined in Section 409A of the Internal Revenue Code, as amended, such
payments, to the extent they constitute deferred compensation under
Section 409A pursuant to guidance issued by the Internal Revenue Service,
shall be made on the date which is 6 months after the date of Termination
of Employment. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess
shall constitute a loan by the Corporation to Employee payable on the
tenth (l0th) day after demand by the Corporation (together with interest
at the rate provided in Section 1274(b)(2)(B) of the Code).
(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).
(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.
(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
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, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall
be deemed the Date of Termination.
(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
of the Corporation's Board of Directors, which has been given complete and
discretionary authority by the Board of Directors to administer and
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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 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.
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
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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.
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
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) If to Employee:
_______________________
_______________________
_______________________
_______________________
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, 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
Severance 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, 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.
12. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby.
9
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:
(Name)
__________________________________