<PAGE> 1
                            TWIN DISC, INCORPORATED
                  1328 Racine Street, Racine, Wisconsin 53403

                               OCTOBER 19, 2001


     The Annual Meeting of Shareholders of Twin Disc, Incorporated, a
Wisconsin corporation will be held at 2 P.M. (Central Daylight Time) on
Friday, October 19, 2001 at the Corporate Offices, 1328 Racine Street, Racine,
Wisconsin for the following purposes:

     1. Election of three Directors to serve until the Annual Meeting in 2004.

     2. To transact any other business that may properly come before the       

     Only holders of record of shares of common stock of the Corporation at
the close Of business on August 31, 2001, shall be entitled to vote at the

     A proxy appointment and proxy statement are enclosed herewith. The proxy
appointment shows the form in which your shares are registered. Your signature
should be in the same form.

                                                FRED H. TIMM
eptember 18, 2001



<PAGE> 2
                             2001 Proxy Statement
                           TWIN DISC, INCORPORATED
                              September 18, 2001


     This proxy statement is furnished in connection with the solicitation by
the Board of Directors of the Corporation of proxies for use at the Annual
Meeting of Shareholders to be held at 2 P.M. (Central Daylight Time), at the
Corporate Offices, 1328 Racine Street, Racine, Wisconsin on Friday, October
19, 2001, or any adjournment thereof. Holders of common stock of record at the
close of business on the 31st day of August 2001, are entitled to vote at the
meeting and each shareholder shall have one vote for each share of common
stock registered in the shareholder's name. Shares represented by a signed
proxy appointment will be voted in the manner specified in the form of proxy
or, if no specification is made, in favor of each of the propositions
mentioned therein. The presence of a majority of the outstanding shares of
common stock of the Corporation, either in person or represented by a signed
proxy appointment, will constitute a quorum at the meeting. The Corporation
intends to mail this statement to shareholders on or before September 18,

     The enclosed proxy appointment form must be signed and delivered to the
Secretary either in person, by mail, or by messenger. Appointment forms
transmitted by facsimile, telex, telegram, or electronic means will not be
accepted. Furthermore, appointment forms must be received by the Secretary not
less than 48 hours prior to the date of the meeting. PROXY APPOINTMENT FORMS

     The proxy appointment form must be signed in handwriting. The signature
must be sufficiently legible to allow the inspector to distinguish it as
representing the name of the registered shareholder, or must be accompanied by
a rubber stamp facsimile or hand-printed name, including the shareholders
surname and either the shareholders first or middle name as represented on the
corporate records, and any titles, offices or words indicating agency which
appear in the Corporate records.

     The person giving the proxy may revoke it before it is exercised, either
in person, by mail, or by messenger, by submitting a later dated proxy
appointment form to the Secretary at least forty-eight (48) hours prior to the
date of the meeting. The person giving the proxy may also revoke it by openly
stating the revocation at the meeting, by voting at the meeting in person, or
by delivering a signed written statement revoking the proxy to the Secretary
prior to the date of the meeting. Appointment forms or revocations transmitted
by facsimile, telex, telegram, or electronic means will not be accepted. ANY

     The record date with respect to this solicitation is August 31, 2001. On
August 31, 2001, there were outstanding 2,807,832 shares of common stock of
the Corporation entitled to vote at the Annual Meeting.  There also are
200,000 shares of no-par preferred stock authorized, of which 50,000 shares
have been designated Series A Junior Preferred Stock, but none are


     If a shareholder wishes to present a proposal for consideration for
inclusion in the Notice of the Meeting and Proxy Statement for the 2002 Annual
Meeting, the proposal must be received at the Corporation's principal
executive offices no later than May 21, 2002. Shareholder proposals received
later than August 4, 2002 will be considered untimely, and will not be
considered at the Corporation's 2002 Annual Meeting. 

<PAGE> 3

     The proxy is being solicited by the Corporation's Board of Directors and
will be voted in favor of the Directors' recommendations on each and all
matters properly brought before the meeting, unless the undersigned
shareholder specifically instructs the holder or holders of the proxy to the
contrary. With regard to the election of directors, votes may be cast in favor
or withheld; votes that are withheld will be excluded entirely from the vote
and will have no effect. Abstentions may be specified on all proposals
submitted to shareholders (other than the election of directors). Abstentions
and "broker non-votes" are counted for purposes of determining the presence or
absence of a quorum for the transaction of business. Under the rules of the
New York Stock Exchange, Inc., brokers who hold shares in street name for
customers may have authority to vote on certain items when they have not
received instructions from beneficial owners.  A "broker non-vote" occurs on
an item submitted for shareholder approval when the broker does not have
authority to vote on the item in the absence of instructions from the
beneficial owner. Such "broker non-votes" will have no effect on the outcome
of the election of directors. The approval of a majority of the votes cast on
a particular matter shall be an act of the shareholders.


     Based upon the records of the Corporation and filings with the Securities
and Exchange Commission as of July 31, 2001, the following table sets forth
the persons or group of persons having beneficial ownership (as defined by the
Securities and Exchange Commission) of more than 5% of the issued and
outstanding common stock of the Corporation.
                                          Nature of
                                           Beneficial      Amount   Percent of
Name                      Address          Ownership       Owned      Class
- - - - - - - - - -    - - - - - - - -    - - - - - -     - - - -   - - - - -
<S>                  <C>                 <C>              <C>       <C>  
Michael E. Batten    3419 Michigan Blvd. Power to vote    540,489<F1> 19.2%
                     Racine, WI          Beneficial       140,213<F2>  5.0%

Fidelity Management  82 Devonshire St.   Power to vote &  265,800      9.5%
  and Research Corp. Boston, MA          dispose of stock

Dimensional Fund     1299 Ocean Ave.     Power to vote &  213,500      7.6%
  Advisors           Santa Monica, CA    dispose of stock

Artisan Partners     1000 N. Water St.   Power to vote &  192,400      6.9%
  Limited            Milwaukee, WI       dispose of stock

Shufro Rose          745 Fifth Ave.      Power to vote &  190,700      6.8%
 & Co. LLC           New York, NY        Dispose of stock
<F1> Held as trustee under various trusts.
<F2> Includes 2,600 shares owned by the wife of Michael E. Batten and 59,500
subject to currently exercisable stock options.

<PAGE> 4

     Based upon the records of the Corporation and filings with the Securities
and Exchange Commission as of July 31, 2001, the following table sets forth
the number of shares of common stock of the Corporation beneficially owned by
each of the Directors of the Corporation, each of the executive officers named
in the Summary Compensation Table and the number of shares beneficially owned
by all Directors and executive officers of the Corporation as a group.

                                 Amount and Nature
      Name of                      of Beneficial                 Percent of
  Beneficial Owner                 Ownership <F4>                   Class
 - - - - - - - - -               - - - - - - - - -               - - - - - - 
<S>                              <C>                               <C> 
Michael E. Batten                678,644 <F5>                       24.2%

Michael H. Joyce                  41,200 <F6>                        1.5%

James E. Feiertag                  5,000 <F6>                         *<F3>
John A. Mellowes                   3,000 <F6>                         *<F3>

James O. Parrish                  29,743 <F6>                        1.0%

Paul A. Pelligrino                9,006  <F6>                         *<F3>

Paul J. Powers                    7,200  <F6>                         *<F3>

David B. Rayburn                  1,000  <F6>                         *<F3>

David L. Swift                    4,700  <F6>                         *<F3>

George E. Wardeberg               3,400  <F6>                         *<F3>

David R. Zimmer                   5,578  <F6>                         *<F3>
All Directors and
Executive Officers
as a group (14 persons)         832,493  <F6>                       29.2%

<F3> * Denotes ownership of less than one percent of shares outstanding.

<F4> Shares listed include any shares owned by a spouse, minor children and
immediate relatives who share the same household as a Director or officer.
Inclusion of any such shares is not to be considered an admission of
beneficial ownership.

<F5> Includes 2,600 shares held by Mr. Batten's wife, 538,431 shares held by
him as trustee under various family trusts, and 59,500 shares subject to
presently exercisable stock options.

<F6> Shares subject to currently exercisable stock options included in the
above are as follows: Mr. Parrish 22,300, Mr. Powers 6,900, Mr. Joyce 36,500,
Mr. Rayburn 1,000, Mr. Swift 4,500, Mr. Zimmer 4,500, Mr. Pelligrino 9,000,
Mr. Feiertag 5,000, Mr. Mellowes 3,000, Mr. Wardeberg 3,200, and all Directors
and executive officers as a group 186,450.

<PAGE> 5
                            ELECTION OF DIRECTORS

     Three directors are to be elected for a term to expire at the annual
meeting following the fiscal year ended June 30, 2004. Shares of common stock
represented by properly executed proxy appointments in the accompanying form
will be voted for the nominees listed for the term indicated unless authority
to do so is withheld.

     The nominees for the Board of Directors and the Directors whose terms
will continue and the class to which he has been or is to be elected are as
set forth below.  Each nominee and each Director was elected to his present
term of office by a vote of shareholders at a meeting for which proxies were

                                                                   Served as
                             Principal Occupation                   Director
 Name of Director              and other Public                   Continuously
and Current Age              Company Directorships                   Since
 - - - - - - - - -           - - - - - - - - - - -                - - - - - - 
<S>                          <C>                               <C>

James O. Parrish . . . . . . Vice President-Finance            December 1982
  Age 61                     & Treasurer
                             Twin Disc, Incorporated

Paul J. Powers . . . . . . . Retired Chairman, President and       July 1992
  Age 66                     Chief Executive Officer,
                             Commercial Intertech, Corp.,
                             Youngstown, Ohio
                             (A leading manufacturer of hydraulic
                             components, pre-engineered buildings
                             and stamped metal products)
                             Director of Global Marine Incorporated,
                             First Energy Corporation, and 
                             York International Corporation

John A. Mellowes . . . . . . Chairman and                      October, 1999
   Age 63                    Chief Executive Officer,
                             Charter Manufacturing Co.,
                             Mequon, Wisconsin
                             (A privately held producer of bar,
                             rod wire and wire parts)

<PAGE> 6


Michael H. Joyce . . . . . . President and                       October 1991
   Age 60                    Chief Operating Officer,
                             Twin Disc, Incorporated

David B. Rayburn . . . . . . Executive Vice President - Operations  July 2000
   Age 53                    Modine Manufacturing Company,
                             Racine, Wisconsin
                             (A manufacturer of heat 
                             exchange equipment)

George E. Wardeberg . . . .  Vice Chairman                         July 1997
   Age 66                    Wisconsin Energy Corporation
                             Milwaukee, Wisconsin
                             (A holding company with subsidiaries in 
                             utility and non-utility businesses)
                             Also Director,
                             Marshall & Ilsley Corporation


Michael E. Batten . . . . .  Chairman and Chief Executive Officer,  May 1974
   Age 61                    Twin Disc, Incorporated
                             Also Director, 
                             Briggs & Stratton Corporation,
                             Sensient Technologies Corporation

David L. Swift . . . . . . . Former Chairman, President and        July 1995
   Age 64                    Chief Executive Officer,
                             Acme-Cleveland Corporation,
                             Pepper Pike, Ohio
                             (A manufacturer of diversified
                             industrial products)
                             Also Director,
                             Alltrista Corporation, LESCO, Inc. and
                             Cuno Incorporated

David R. Zimmer. . . . . . . Chief Executive Officer,              July 1995
   Age 55                    Twitchell Corporation,
                             Dothan, AL
                             (A privately held manufacturer 
                             and marketer of highly engineered, 
                             synthetic yarns, fabrics, extrusions, 
                             and coatings)
                             Also Director,
                             Detrex Corporation

<PAGE> 7

     The Corporation's Board of Directors met 6 times during the year ended
June 30, 2001. There were two absences from these meetings.

     The Executive Selection and Salary and Audit Committees met 1 and 3 times
respectively, during the year. The Director Nominating and Board Affairs
Committee did not meet during the year. The Pension and Finance Committees met
2 times during the year. Each Director attended at least 75% of the meetings
requiring his attendance. 

Audit Committee
     The Audit Committee reviews with the Corporation's Internal Auditor and
Independent Public Accountants their activities, reports and comments, and
recommends to the Board any action which it deems appropriate. The Committee
recommends to the Board the selection of auditors.

Finance Committee
     The Finance Committee considers management's proposed financial policies
and actions, and makes appropriate recommendations to the Board regarding:
Debt and capital structure, acquisitions, capital budgets, dividend policy and
other financial matters. 

Nominating and Board Affairs Committee
     The Nominating and Board Affairs Committee recommends nominees for the
Board to the Board of Directors. The Committee will consider nominees
recommended by shareholders in writing to the Secretary. In addition, the
Committee reviews proposed changes in corporate structure and governance,
committee structure and function, and meeting schedules, making
recommendations to the Board as appropriate. 

Executive Selection and Salary Committee
     The Executive Selection and Salary Committee reviews nominees for
Corporate offices and related compensation levels, making recommendations to
the Board of Directors as considered necessary. 

Pension Committee
     The Pension Committee reviews and recommends to the Board for approval
the pension funds' professional advisors and auditors. The Committee annually
reviews actuarial assumptions, actuarial valuations, investment performance,
funding policies and investment policies.

Committee Membership
     The Directors' committees are currently comprised of the following
Directors; the Chairman of the Committee is listed first:
                                           Selection             Nominating
                                              and                   and
Audit       Finance       Pension           Salary              Board Affairs
- - -       - - - -       - - - -          - - - - -            - - - - - - -
Swift       Wardeberg     Zimmer           Powers               Mellowes
Mellowes    Powers        Mellowes         Swift                Powers
Rayburn     Rayburn       Rayburn          Zimmer               Zimmer
Wardeberg   Swift         Wardeberg

<PAGE> 8

     The following table sets forth the compensation received by the
Corporation's Chief Executive Officer and the 4 most highly paid executive
officers for the 3 fiscal years ended June 30, 1999, 2000, and 2001,

                           SUMMARY COMPENSATION TABLE
                                 Annual             Long-Term
                              Compensation         Compensation
                              - - - - - - -        - - - - - - -
Name and                                              Stock        All Other
Principal Position   Year    Salary      Bonus <F7>  Options  Compensation<F8>
- - - - - - - - -    - -     - - - -     - - - - -   - - - -  - - - - - - - -
<S>                  <C>    <C>          <C>         <C>      <C> 
Michael E. Batten    2001   $358,721     $174,141      6,000      $17,366
  Chairman and       2000    345,000      119,800      6,000       12,503
  Chief Executive    1999    345,000       -           9,000       21,539

Michael H. Joyce     2001   $267,107     $103,785      3,000      $ 8,665
  President and      2000    263,154       59,400      3,000        5,921
  Chief Operating    1999    259,100       -           4,500        7,532

James O. Parrish     2001   $180,312     $ 52,553      2,500      $ 9,454
  Vice President     2000    171,600       35,700      2,000        9,720
  Finance &          1999    169,425       -           2,500        8,878

Paul A. Pelligrino   2001   $141,949     $ 34,446      2,000      $ 6,220
  Vice President     2000    134,846       24,400      2,000        6,068 
  Engineering        1999    129,615       -           2,500        6,728

James E. Feiertag    2001   $135,404     $ 39,645      5,000      $59,184
  Vice President     2000     -            -           -            -
  Manufacturing      1999     -            -           -            -
<F7> Represents annual incentive bonuses determined by the Board of Directors.
See"Board Executive Selection and Salary Committee Report on Executive
Compensation-Annual Incentives". Bonuses represent amounts earned during the
fiscal year and are paid in the subsequent fiscal year.

<F8> Amounts are comprised of Corporation's 401(k) matching contributions and
Corporation paid life insurance includible in income, included for Mr.
Feiertag is a one-time bonus and upon commencement of employment.

Stock Options
     The following table summarizes option grants during fiscal year 2001 to
the executive officers named in the Summary Compensation Table above, and the
potential realizable values at assumed annual rates of stock price
appreciation for the applicable 5 or 10 year option term.

<PAGE> 9


                                                    Potential Realizable Value
                                                      at Assumed Annual Rates
                                                   of Stock Price Appreciation
                       Individual Grants                   or Option Term
             ----------------------------------  -----------------------------
                          % of Total   
               Options    Granted to  Exercise  Expiration
    Name      Granted<F9> Employees    Price<F10>  Date        5%         10%
-----------   ----------  ---------   --------  ----------  --------  --------
<S>           <C>         <C>         <C>       <C>         <C>       <C>
M. Batten       3,000        8.4%     $17.8125   8/04/05    $ 14,764  $ 85,166
M. Batten       3,000        8.4%      19.5937   8/04/10      36,968    93,683
M. Joyce        3,000        8.4%      17.8125   8/04/10      33,607    85,166
J. Parrish      2,500        7.0%      17.8125   8/04/10      28,005    70,971
P. Pelligrino   2,000        5.6%      17.8125   8/04/10      22,404    56,777
J. Feiertag     5,000       14.1%      17.8125  10/23/10      49,132   124,511

<F9> During the fiscal year ended June 30, 2001, a total of 42,550 options
were granted to officers, key employees and directors, with 35,550 granted
under the 1998 Incentive Compensation Plan, and 7,000 options granted under
the 1998 Stock Option Plan for Non-Employee Directors.

<F10> The exercise price is the fair market value on the date of grant, except
for incentive stock options granted to Mr. Batten which are exercisable at
110% of the fair market value at date of grant.

                         AGGREGATED OPTION EXERCISES IN

     The following table provides information on option exercises in fiscal
2001 by the named executive officers and the value of such officers'
unexercised options at June 30, 2001.

                                 Total Number             Total Value 
                                of Unexercised           of Unexercised,
                                 Options Held          In-the-Money Options
             Shares    Value   at Fiscal Year End     Held at Fiscal Year End
          Acquired on  Real-   Exer-      Unexer-     Exer-        Unexer-
Name       Exercise    ized    cisable    cisable     cisable      cisable
----      -----------  -----  ---------  ---------   ---------    -----------
<S>       <C>          <C>    <C>        <C>         <C>          <C>
M. Batten         0      N/A     59,500       0       $  0           $ 0
M. Joyce          0      N/A     36,500       0          0             0
J. Parrish        0      N/A     22,300       0          925           0
P. Pelligrino     0      N/A      9,000       0          0             0
L. Feiertag       0      N/A      5,000       0        1,125           0

Retirement Income Plan
     The Twin Disc, Inc., Retirement Plan for Salaried Employees provides non-
contributory benefits based upon both years of service and the employees'
highest consecutive 5-year average annual compensation during the last 10
calendar years of service. The non-contributory benefits were frozen as of
December 31, 1996.  The Plan is integrated with Social Security. The following
table presents the non-contributory benefits payable for life under the Plan
to employees assuming normal retirement in the current year.
COMPENSATION     10 YEARS     20 YEARS      25 YEARS     30 YEARS     40 YEARS
<S>              <C>          <C>           <C>          <C>          <C>
$ 50,000         $ 9,469      $18,939       $20,984       $22,214     $25,166
  75,000          14,669       29,338        32,639        34,717      39,230
 100,000          19,869       39,738        44,294        47,219      53,293
 150,000          30,270       60,538        67,604        72,225      81,420

     The values reflected in the table represent the application of the Plan
formula to the appropriate amounts of compensation and years of service.
Benefits payable under the Plan, however, must be in compliance with the
applicable guidelines or maximum prescribed in the Internal Revenue Code and
in the Employee Retirement Income Security Act of 1974 (ERISA), as currently
stated or as adjusted from time to time.  As of December 31, 1996, the
credited years of service for each of the Corporation's executive officers
named in the Summary Compensation Table is as follows: Mr. Batten 27 years;
Mr. Joyce 6 years; Mr. Parrish 23 years; and Mr. Pelligrino 30 years.  Mr.
Feiertag was not an employee as of December 31, 1996, therefore has no accrued
benefit under the Plan.

<PAGE> 10 
Effective January 1, 1997, the Plan was amended to add a cash balance formula
for post-January 1, 1997, accruals.  Benefits under the Plan are generally
equal to the sum of the benefits as frozen on December 31, 1996, plus benefits
that accumulate under the cash balance formula beginning on January 1, 1997. 
Benefits under the cash balance formula are generally stated as a lump sum
amount, but may be distributed as a lump sum or an annuity.  Accruals under
the cash balance formula are based on a percentage of compensation, from 4.5%
to 6.5% based on years of service, with interest credits at the thirty year
U.S. Treasury Bond rate with a minimum guaranty of 3%.  To record these pay
credits and interest credits, a hypothetical account balance is maintained for
each participant.  The hypothetical account balance for each named executive
as of June 30, 2001, is as follows: Mr. Batten $70,393; Mr. Joyce $50,602; Mr.
Parrish $65,272; Mr. Pelligrino $60,053; and Mr. Feiertag $9,015.  If the
named executives continue in their respective positions and retire at the
normal retirement age of 65, their estimated annual pension amount under cash
balance portion of the Plan would be: Mr. Batten $10,682; Mr. Joyce $8,913;
Mr. Parrish $11,010; Mr. Pelligrino $7,227; and Mr. Feiertag $21,778.

Supplemental Retirement Benefit Plan
     A supplemental retirement benefit is extended to qualified management.
The supplemental retirement benefit is calculated as a single life annuity at
an amount approximating 50% of the highest rate of pay attained during a
specified period. The benefit is payable in the form of a single life annuity,
contingent annuity, 10-year temporary annuity, a single lump sum payment, or
two payments.  The contingent annuity provides for payments to continue to the
surviving spouse at a rate equal to 50% of the rate previously paid to the
participant. In the event of death of a plan member after attaining a
retirement age but prior to retirement, the surviving spouse will receive a
lump sum benefit.

Compensation of Directors
     Outside Directors of the Corporation (non-corporation employees) are paid
an annual retainer of $10,000. In addition, outside Directors receive a $1,300
fee for each board meeting and each committee meeting attended. Directors who
are officers do not receive any fees in addition to their remuneration as

     Outside Directors (non-Corporation employees) are eligible to participate
in the 1988 Non-Qualified Stock Option Plan for Officers, Key Employees and
Directors and the 1998 Stock Option Plan for Non-Employee Directors.

     Outside Directors (non-Corporation employees) who reach the age of 68 or
who retire from full-time employment are required to retire from the Board of
Directors effective as of the completion of their current term. Retired
outside directors are entitled to a retirement benefit for a limited period
equal to the sum of:

     a) The annual retainer at the time of retirement.
     b) 6 monthly fees for Director Meetings at the rate prevailing at the     
        time of retirement.

Employment Contracts
     The Corporation has entered into agreements with certain of its key
executives, including Messrs. Batten, Joyce, Parrish, Pelligrino and Feiertag.
The agreements provide for severance benefits to be paid to the executive
following a change in control of the Corporation (as defined in those
agreements) and a termination (as defined in those agreements) of the
employment of the executive. Upon the occurrence of the events, as specified
in the agreements, which would entitle the executive to the payment of
severance benefits, the maximum contingent liability of the Corporation for
the payment of such severance benefits would be approximately $2,902,000.
Severance benefits for an executive officer would generally consist of the sum
of the executive's highest annual base salary between the change in control
and the date of termination plus the executive's most recent annual bonus
times the lesser of 1.50 (2.75 for Messrs. Batten, Joyce and Parrish) or the
number of whole and fractional years between the termination date and his
normal retirement date. In addition, the executive would be entitled to the
cash value of any shares of common stock subject to unexercised stock options
held by the executive and a continuance of fringe benefits for 24 months
following termination. The agreements are specifically designed to assure that
benefits will not exceed the limitations and provisions of Sec. 280(g) of the
Internal Revenue Code.

<PAGE> 11
             Board Executive Selection and Salary Committee Report
                          on Executive Compensation

Compensation Philosophy
     The Corporation's primary business objective is to maximize shareholder
value over the long term. To accomplish this objective, the Corporation has
developed a comprehensive business strategy that emphasizes maximizing
long-term cash flow and earnings, maintaining leadership or becoming the
leader in its markets, and providing products of the highest quality.
     The Executive Selection and Salary Committee of the Board of Directors
(the "Committee") is comprised of 3 independent directors, none of whom has
interlocking or other relationships which might be considered conflicts of
interest. The Committee establishes compensation programs which are designed
to foster the Corporation's business objectives. The Committee approves the
design of, assesses the effectiveness of, and administers executive
compensation programs in support of compensation policies.

     Committee members believe that the compensation program should target
compensation levels at rates that are reflective of current market practices.
Offering market-comparable pay opportunities allows the Corporation to
maintain a stable, successful management team.

     Competitive market data is provided by an independent compensation
consultant. The data provided compares the Corporation's compensation
practices to a group of comparative companies. The Corporation's market for
compensation comparison purposes is comprised of a group of companies that
have national and international business operations and similar sales volumes,
market capitalizations, employment levels, and lines of business. In
establishing a comparative group for compensation purposes, the Committee
exercises its judgment and makes its decision after considering the factors it
deems relevant.

     The companies chosen for the comparative group used for compensation
purposes are not necessarily the same companies which comprise the peer group
index in the Performance Graph included in this proxy statement. The Committee
believes that the Corporation's most direct competitors for executive talent
include many companies in geographical areas in which the Corporation operates
as well as many of the companies that are included in the peer group
established for comparing shareholders returns.

     The key elements of the Corporation's executive compensation are base
salary, annual incentives, long-term compensation, and benefits. These key
elements are addressed separately below. In determining compensation, the
Committee considers all elements of an executive's total compensation package,
including severance plans, insurance, and other benefits, with the objective
of being competitive but not trend setting.

Base Salaries
     The Committee regularly reviews each executive's base salary. Base
salaries are targeted at market levels, based upon the Committee's analysis of
marketplace practices. Base salaries for executives are initially determined
by evaluating executives' levels of responsibility, prior experience, breadth
of knowledge, internal equity issues, and external pay practices.

     Base salaries offer stability to executives and allow the Corporation to
attract competent executive talent and maintain an effective management team.
They also allow executives to be rewarded for individual performance based on
the Corporation's evaluation process which encourages the development of
executives.  Pay for individual performance rewards executives for achieving
goals which may not be immediately evident in common financial measurement.

     Increases to base salaries are driven primarily by individual
performance.  Individual performance is evaluated based on sustained levels of
individual contribution to the Corporation. When evaluating individual
performance, the Committee considers the executive's effort in promoting 
Corporate values; improving product quality; developing relationships with
customers, suppliers, and employees; demonstrating leadership abilities among
coworkers; and other goals. Overall, executive salaries were increased at
rates comparable to the increases provided at other companies and are near
market levels.

<PAGE> 12
     As reflected in the Summary Compensation Table on page 8, Mr. Batten's
base salary was increased in fiscal year 2001 by $13,721.  In determining Mr.
Batten's base salary in 2001, the Committee considered the Company's financial
performance for the year, Mr. Batten's individual performance, and his
long-term contributions to the success of the Corporation.  The Committee also
compared Mr. Batten's base salary to the base salaries of CEOs at comparative

Annual Incentives
     The Twin Disc Incentive Bonus Program (the "Annual Plan") promotes the
Corporation's pay-for-performance philosophy by providing executives with
direct financial incentives in the form of annual cash bonuses to achieve
corporate, business unit, and individual performance goals. Annual bonus
opportunities allow the Corporation to communicate specific goals that are of
primary importance during the coming year and motivate executives to achieve
these goals.

     Eligibility to participate in the Annual Plan, as well as the individual
payout percentages assigned to each eligible executive's position, are
determined annually by Mr. Batten, as chief executive officer, subject to the
approval of the Committee.

     Each year, the Committee approves specific goals relating to each
executive's bonus opportunity. Eligible executives are assigned threshold and
target bonus levels based on a percentage of base salary. Executives earn
bonuses to the extent to which preestablished goals are achieved.

     In fiscal year 2001 bonus awards were granted as earnings targets were
attained indicating prior long-term decisions are providing favorable results. 
Corporate goals in 2001 were based on target earnings and return on net assets

     Target bonus awards are established at levels approximating marketplace
practices for each executive. Targets are considered by the Committee to be
achievable, but to require above average performance from each of the

     In fiscal year 2001, Mr. Batten received a bonus under the Annual Plan of
$174,141.  This reflects achievements towards the Corporation's goals relating
to earnings and return on net assets employed in fiscal year 2001.

Long-Term Incentives
     Long-term incentives are provided pursuant to the Corporation's 1988 Non-
Qualified Stock Option Plan for Officers, Key Employees and Directors, the
1988 Incentive Stock Option Plan, the 1998 Incentive Compensation Plan and the
1998 Stock Option Plan for Non-Employee Directors.

     In keeping with the Corporation's commitment to provide a total
compensation package which includes at-risk components of pay, the Committee
makes annual decisions regarding appropriate stock option grants for each
executive. When awarding stock options, the Committee considers executives'
levels of responsibility, prior experience, historical award data, various
performance criteria, and compensation practices at comparator companies.
Consistent with the above stated goals, Mr. Batten received options to
purchase 6,000 shares in fiscal year 2001.

     Stock options are granted at an option price not less than the fair
market value of the Corporation's common stock on the date of grant.
Accordingly, stock options have value only if the stock price appreciates from
the date the options are granted. This design focuses executives on the
creation of shareholder value over the long term and encourages equity
ownership in the Corporation.

     Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the Company's CEO and four other most highly compensated executive
officers. Qualifying performance-based compensation will not be subject to the
deduction limit if certain requirements are met. The compensation of the
Corporation's CEO and the four other most highly compensated executive
officers currently does not approach the disqualifying threshold.  In the
future, in the event the disqualifying threshold becomes an issue, the
Committee will weigh all the facts and circumstances in existence at the time.

                                      Executive Selection and Salary Committee
                                               Paul J. Powers, Chairman
                                               David L. Swift    
                                               David R. Zimmer
                                      July 26, 2001

<PAGE> 13
                    Audit Committee Report

     The Audit Committee of the Board of Directors has developed an updated
charter for the Committee, which is reproduced as an appendix to this proxy
statement.  The charter reflects standards set forth in new SEC regulations
and New York Stock Exchange rules.  All members of the Audit Committee are
independent, as defined in Sections 303.01(B)(2)(a) of the listing standards
of the New York Stock Exchange.

     The Committee has implemented procedures to ensure that during the course
of each fiscal year it devotes the attention that it deems necessary or
appropriate to each of the matters assigned to it under the Committee's
charter.  To carry out its responsibilities, the Committee met three times
during fiscal 2000-2001.

     As part of its responsibilities, and as set forth in its charter, the
Audit Committee met with both management and the Corporation's independent
accountants to review and discuss the audited financial statements prior to
their issuance and to discuss significant accounting issues.  Management
advised the Committee that all financial statements were prepared in
accordance with generally accepted accounting principles, and the Committee
discussed the statements with both management and the independent accountants. 
The Committee's review included discussion with the independent accountants of
matters required to be discussed pursuant to Statement on Auditing Standards
No. 61 (Communication with Audit Committee).  

     The Committee received the written disclosures and the letter required
from the independent accountants as required by the Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committee).  The
Committee also discussed with PricewaterhouseCoopers LLP matters relating to
its independence.

     On the basis of these reviews and discussions, the Committee recommended
to the Board of Directors that the Board approve the inclusion of the
Corporation's audited financial statements in the Corporation's Annual Report
on Form 10-K for the fiscal year ended June 30, 2001, for filing with the
Securities and Exchange Commission.

                                      Audit Committee

                                               David L. Swift, Chairman
                                               John A. Mellowes 
                                               David B. Rayburn
                                               George E. Wardeberg
                                      July 26, 2001


    The firm of PricewaterhouseCoopers LLP has audited the Corporation's books
annually since 1928. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the meeting and, while no formal statement will be
made by them, they will be available to respond to appropriate questions.

<PAGE> 14

     The following table compares total shareholder return over the last 5
fiscal years to the Standard & Poor's Diversified Machinery Index and the
Russell 2000 index. The S&P Diversified Machinery Index consists of a broad
range of manufacturers. The Russell 2000 Index consists of a broad range of
2,000 Companies. The Corporation believes, because of the similarity of its
business with those companies contained in the S&P Diversified Machinery
Index, that comparison of shareholder return with this index is appropriate.
Total return values for the Corporation's common stock, the S&P Diversified
Machinery Index and the Russell 2000 Index were calculated based upon an
assumption of a $100 investment on June 30, 1996 and based upon cumulative
total return values assuming reinvestment of dividends on a quarterly basis.

                  Comparison of Five-Year Cumulative Total Return
            Twin Disc, Inc.; S&P Diversified Machinery; and Russell 2000

                 06/30/96  06/30/97  06/30/98  06/30/99  06/30/00  06/30/01
                 --------  --------  --------  --------  --------  --------

  Twin Disc       100.00    126.79    136.68     94.17     83.60     81.12
  S&P Div. Mach.  145.19    209.12    209.39    214.32    129.52    132.28
  Russell 2000    100.00    116.34    135.54    137.57    157.28    158.31

     Based solely on a review of the copies of such forms furnished to the
Corporation and representations from executive officers and Directors, the
Corporation believes that during the period from July 1, 2000 to June 30,
2001, all Section 16(a) filing requirements applicable to its executive
officers, Directors and greater than ten (10%) beneficial owners were complied


     Aggregate fees, including out-of-pocket expenses, for professional
services rendered by PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") in
connection with (i) the audit of the Company's consolidated financial
statements as of and for the year ended June 30, 2001, including statutory
audits of the financial statements of the Company's affiliates that are relied
on in performance of the audit of the Company's consolidated financial
statements, and (ii) the limited reviews of the Company's quarterly financial
statements were $246,000.


     During the year ended June 30,2001, PricewaterhouseCoopers rendered no
professional services to the Company in connection with the design and
implementation of financial information systems.

<PAGE> 15


     In addition to the other fees described above, aggregate fees, including
out-of-pocket expenses, of $459,000 were paid to PricewaterhouseCoopers during
the year ended June 30, 2001, primarily for the following professional
services:  tax-related services, due diligence for acquisitions, and other
non-recurring audit services. 

     The Audit Committee has determined that the provision of services for (a)
financial information systems design and implementation fees listed above, if
any, and (b) all other fees listed above, is compatible with maintaining
PricewaterhouseCoopers LLP's independence.


     The Corporation will bear the cost of the solicitation of proxies. The
firm of Georgeson Shareholder Communications Inc., New York, NY has been
retained to assist in solicitation of proxies for the Annual Meeting at a fee
not to exceed $7,000 plus expenses.

     Management does not know of any other business to come before the
meeting.  However, if any other matters properly come before the meeting, it
is the intention of the persons named in the accompanying form of proxy to
vote upon such matters in their discretion in accordance with the
authorization of the proxy.

     If you do not contemplate attending in person, we respectfully request
that you fill in, sign and return the accompanying proxy at your early
convenience.  However, remember that in order to have your proxy validated, it
must be delivered to the Secretary either in person, by mail, or by messenger,
and it must be received by the Secretary not less than forty-eight (48) hours
prior to the date of the meeting.

                           TWIN DISC, INCORPORATED
                           AUDIT COMMITTEE CHARTER

The audit committee shall be comprised of only independent directors. An
independent director is free of any relationship that could influence his or
her judgment as a committee member. When there is any doubt about independence
the director should recuse themselves from any decisions that might be
influenced by that relationship.

The primary function of the audit committee is to assist the board in
fulfilling its oversight responsibilities by reviewing  published financial
information, the systems of internal controls, and all audit processes.
General responsibilities

     1.   The audit committee provides open avenues of communication among the 
          internal auditor, the independent accountants and the board of       

     2.   The audit committee must report committee actions to the full board  
          of directors and may make appropriate recommendations.

     3.   The audit committee has the power to conduct or authorize 
          investigations into matters within the committee's scope of          
          responsibilities. The committee is authorized to retain independent  
          counsel, accountants or others it needs to assist in an 

     4.   The committee will meet at least three times each year. The audit
          committee chairman has the power to call a committee meeting         
          whenever he or she thinks there is a need. The committee may ask
          members of management or others to attend the meeting and is
          authorized to receive all pertinent information from management.

Responsibilities for engaging independent accountants and appointing the
internal auditor

     1.   The audit committee will select the independent accountants for      
          company audits.  The committee's selection is subject to approval by 
          the full board of directors and the shareholders. The audit 
          committee also will review and set fees paid to the independent
          accountants and review and approve dismissal of the independent

     2.   The audit committee will review and have veto power over the         
          appointment, replacement, reassignment or dismissal of the internal  

     3.   The audit committee will confirm and assure the independence of the
          internal auditor and the independent accountants, including a review 
          of management consulting services provided by the independent
          accountants and the fees paid for them.

<PAGE> 16
     4.   The audit committee will consider, in consultation with the          
          independent accountants and the internal auditor, their audit scope 
          and procedural plans.

     5.   The audit committee will consider recommendations by management or
          the independent accountants to engage additional accountants. The
          audit committee will decide which firm, if any, is to be engaged.

     6.   The audit committee will make sure that the  internal auditor and
          the independent accountants coordinate the internal and external
          audits. The purpose of coordinating these efforts is to assure
          completeness of coverage, reduce redundancy and use audit resources

Responsibilities for reviewing internal audits, the annual external audit and
the review of quarterly and annual financial statements

     1.   The audit committee will ensure that the independent accountants
          view the board of directors as their client, that they will be
          available to the full board of directors at least annually and that
          they will provide the audit committee with a timely analysis of
          significant financial reporting issues.

     2.   The audit committee will require management, the internal auditor
          and the independent accountants to report significant risks and
          exposures and will assess management's steps to minimize them.

     3.   The audit committee will review the following with the independent
          accountants and the internal auditor:

          a. The adequacy of the company's internal controls, including
             computerized information system controls and security.
          b. Significant findings and recommendations made by the independent
             accountants or internal auditor, together with management's 
             responses to them.

     4.   Shortly after the annual examination is completed, the audit
          committee will review the following with management and the
          independent accountants:

          a. The company's annual financial statements and related footnotes.

          b. The independent accountant's audit of and report on the
             financial statements.

          c. The independent accountant's qualitative judgments about the
             appropriateness, not just the acceptability, of accounting
             principles and financial disclosures and how aggressive (or
             conservative) the accounting principles and underlying estimates  

          d. Any serious difficulties or disputes with management encountered  
             during the course of the audit.

          e. Other findings that GAAS requires the independent accountants to  
             discuss with the committee.

     5.   The audit committee will consider and review with management and the 
          internal auditor:

          a. Any difficulties the internal auditor encountered while
             conducting audits, including any restrictions on the scope of
             their work or access to required information.

          b. Any changes to the planned scope of management's internal audit
             plan considered advisable.

          c. The internal audit department's budget and staffing.

Periodic responsibilities

     1.   Review and update the committee's charter annually.

     2.   Review policies and procedures covering officers' expense accounts
          and perquisites, including their use of corporate assets, and
          consider the results of any review of those areas by the internal
          auditor and the independent accountants.

     3.   Review, with the internal auditor and the independent accountants,
          the results of their examination of compliance with the company's
          guidelines for business conduct.

     4.   Review legal and regulatory matters that may have a material effect
          on the organization's financial statements, compliance policies and
          programs and reports from regulators.

     5.   Meet with the internal auditor, the independent accountants and
          management in separate executive sessions to discuss any matters the 
          committee or these groups believe should be discussed privately.

                                                   Audit Committee Charter