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UNITED STATES
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) April 10, 2006
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Twin Disc, Incorporated
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(Exact name of registrant as specified in its charter)
Wisconsin 1-7635 39-0667110
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(State or other jurisdiction (Commission file (IRS Employer
of incorporation) number) Identification No.)
1328 Racine Street, Racine, Wisconsin 53403
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (262) 638-4000
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 24014d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
On April 10, 2006, Twin Disc, Incorporated ("Twin Disc") entered into a
Note Agreement (the "Note Agreement") with The Prudential Insurance Company of
America and certain other entities (collectively, "Purchasers"). Pursuant to
the Note Agreement, Purchasers acquired, in the aggregate, $25,000,000 in 6.05%
Senior Notes due April 10, 2016 (the "Notes").
The Notes mature and become due and payable in full on April 10, 2016 (the
"Payment Date"). Prior to the Payment Date, Twin Disc is obligated to make
quarterly payments of interest during the term of the Notes, plus prepayments
of principal of $3,571,428.58 on April 10 of each year from 2010 to 2015,
inclusive. Twin Disc also has the option of making additional prepayments
subject to certain limitations, including the payment of a Yield-Maintenance
Amount as defined in the Note Agreement. In addition, Twin Disc will be
required to make an offer to purchase the Notes upon a Change of Control, and
any such offer must include the payment of a Yield-Maintenance Amount.
The Note Agreement includes certain financial covenants regarding minimum
net worth, minimum EBITDA and a maximum Total Funded Debt to EBITDA ratio. The
Note Agreement also includes certain restrictive covenants that limit, among
other things, the incurrence of additional indebtedness, the disposition of
assets outside the ordinary course of business, the payment of dividends or
other distributions or the making of certain other restricted payments, and the
amount of capital expenditures made by Twin Disc in any fiscal year; however,
the Company may pay cash dividends of up to $3,000,000.00 in any rolling
four-quarter period, and may purchase or redeem up to $2,500,000.00 of
outstanding capital stock in any rolling four-quarter period, so long as no
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Default or Event of Default (as defined in the Note Agreement) exists or would
be created by such payments. The Note Agreement provides that it shall
automatically include any covenants or events of default not previously
included in the Note Agreement to the extent such covenants or events of
default are granted to any other lender of an amount in excess of $1,000,000.
Following an Event of Default, each Purchaser may accelerate all amounts
outstanding under the Notes held by such party.
As a condition to the acquisition of the Notes, Twin Disc entered into
an amendment to that certain Loan Agreement, dated as of December 19, 2002,
between Twin Disc and M&I Marshall & Ilsley Bank ("M&I"), as amended, in which
amendment M&I consented to Twin Disc entering into the Note Agreement.
A copy of the Note Agreement is attached to this report as Exhibit 4.1 and
is incorporated herein by reference. The description of the Note Agreement is
qualified in its entirety by reference to Exhibit 4.1.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under
an Off-Balance Sheet Arrangement of a Registrant
See Item 1.01, which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
4.1 Note Agreement for $25,000,000 of 6.05% Senior Notes due April 10, 2016
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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.
April 11, 2006 Twin Disc, Inc.
/s/ Christopher J. Eperjesy
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Christopher J. Eperjesy
VP-Finance, CFO and Secretary