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

                               OCTOBER 17, 2003


     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 17, 2003 at the Corporate Offices, 1328 Racine Street, Racine, 
Wisconsin, 53403, for the following purposes:

     1. Election of three Directors to serve until the Annual Meeting in 2006.

     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 29, 2003, 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, 2003



<PAGE> 2
                            2003 Proxy Statement
                           TWIN DISC, INCORPORATED
                              September 18, 2003


     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
17, 2003, or any adjournment thereof. Holders of common stock of record at
the close of business on the 29th day of August 2003, 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, 2003.

     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 shareholder's 
surname and either the shareholder's 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 29, 2003. On 
August 29, 2003, there were outstanding 2,806,842 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 2004 Annual
Meeting, the proposal must be received at the Corporation's principal 
executive offices no later than May 21, 2004. Shareholder proposals received
later than August 4, 2004 will be considered untimely, and will not be 
considered at the Corporation's 2004 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, 2003, 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
- - - - - - - - - -  B - - - - - - - -    - - - - - -     - - - -   - - - - -
<S>                  <C>                 <C>              <C>       <C> 
Michael E. Batten    3419 Michigan Blvd. Power to vote    538,431<F1> 19.2%
                     Racine, WI          Beneficial       145,713<F2>  5.2%

Shufro Rose          745 Fifth Ave.      Power to vote &  257,900      9.2%
 & Co. LLC           New York, NY        Dispose of stock

Dimensional Fund     1299 Ocean Ave.     Power to vote &  168,300      6.0%
  Advisors           Santa Monica, CA    dispose of stock
<F1> Held as trustee under various trusts.
<F2> Includes 2,600 shares owned by the wife of Michael E. Batten and 65,000
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, 2003, 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                684,144 <F5>                       24.5%

Michael H. Joyce                  46,128 <F6>                        1.6%

James E. Feiertag                  9,500 <F6>                         * <F3>
Lance J. Melik                    10,320 <F6>                         * <F3>

H. Claude Fabry                    8,900 <F6>                         * <F3>

John H. Batten                     3,395 <F6>                         * <F3>

John A. Mellowes                   5,500 <F6>                         * <F3>

Paul J. Powers                     9,200 <F6>                         * <F3>

David B. Rayburn                   3,600 <F6>                         * <F3>

David L. Swift                     6,700 <F6>                         * <F3>

George E. Wardeberg                5,400 <F6>                         * <F3>

David R. Zimmer                    7,645 <F6>                         * <F3>
All Directors and
Executive Officers
as a group (15 persons)          813,666 <F6>                       30.3%
<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 65,000 shares subject to 
presently exercisable stock options.

<F6> Shares subject to currently exercisable stock options included in the 
above are as follows: Mr. Powers 8,900, Mr. Joyce 40,500, Mr. Rayburn 3,600, 
Mr. Swift 6,500, Mr. Zimmer 6,500, Mr. Fabry 8,900, Mr. Melik 10,250, 
Mr. Feiertag 9,500, Mr. Mellowes 5,000, Mr. Wardeberg 5,200, Mr. J. Batten 3,000,
and all Directors and executive officers as a group 189,850.

<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, 2006. 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, except for John H. Batten,
was elected to his present term of office by a vote of shareholders at a 
meeting for which proxies were solicited. John H. Batten is the son of 
Michael E. Batten.

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

Michael H. Joyce . . . . . . President and                        October 1991
   Age 62                    Chief Operating Officer,
                             Twin Disc, Incorporated
                             Also Director, Woodward
                             Governor Company and
                             Oil Gear Company

David B. Rayburn . . . . . . President and                           July 2000
   Age 55                    Chief Executive Officer, 
                             Modine Manufacturing Company,
                             Racine, Wisconsin
                             (A manufacturer of heat 
                             exchange equipment)

George E. Wardeberg . . . .  Retired Vice Chairman,                  July 1997
   Age 68                    Wisconsin Energy Corporation
                             Milwaukee, Wisconsin
                             (A holding company with subsidiaries in 
                             utility and non-utility businesses)
                             Also Director,
                             Marshall & Ilsley Corporation

<PAGE> 6


Michael E. Batten . . . . .  Chairman and Chief Executive Officer,  May 1974
   Age 63                    Twin Disc, Incorporated
                             Also Director, 
                             Briggs & Stratton Corporation,
                             Sensient Technologies Corporation

David L. Swift . . . . . . . Former Chairman, President and        July 1995
   Age 66                    Chief Executive Officer,
                             Acme-Cleveland Corporation,
                             Pepper Pike, Ohio
                             (A manufacturer of diversified
                             industrial products)
                             Also Director,
                             Jarden Corporation and
                             Cuno Incorporated

David R. Zimmer. . . . . . . Chief Executive Officer,              July 1995
   Age 57                    Twitchell Corporation,
                             Dothan, AL
                             (A privately held manufacturer 
                             and marketer of highly engineered, 
                             synthetic yarns, fabrics, extrusions, 
                             and coatings)
                             Also Director,
                             Detrex Corporation


John H. Batten . . . . . . . Vice President and General Manager-    December 2002
  Age 38                     Marine & Propulsion since October
                             2001; formerly Commercial Manager
                             Marine Propulsion since 1998;
                             Formerly Application Engineer
                             Since 1997  
                             Twin Disc, Incorporated

Paul J. Powers . . . . . . . Retired Chairman, President and       July 1992
  Age 68                     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 65                    Chief Executive Officer,
                             Charter Manufacturing Co.,
                             Mequon, Wisconsin
                             (A privately held producer of bar,
                             rod wire and wire parts)
				     Also Director,
                             Marshall & Ilsley Corporation

<PAGE> 7

     The Corporation's Board of Directors met 6 times during the year ended
June 30, 2003. There were two absences from these meetings.

     The Compensation and Audit Committees met 1 and 4 times respectively,
during the year. The Director Nominating and Board Affairs Committee met
once during the year. The Pension and Finance Committees met 3 and 1 time,
respectively, during the year. Each Director attended at least 75% of the
meetings requiring his attendance. 

Audit Committee
     The Audit Committee is to assist the Board in fulfilling its oversight
responsibilities with respect to: (i) the Company's systems of internal
controls; (ii) the Company's auditing, accounting and financial reporting
processes; (iii) the Company's financial statements and other financial
information provided by the Company; and (iv) the performance of the
Company's corporate Audit Department and independent 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 and risk management matters. 

Nominating and Corporate Governance Committee
     The Nominating and Corporate Governance 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. 

Compensation Committee
The Compensation Committee reviews nominees for Corporate offices and
related compensation levels, making recommendations to the Board of
Directors as considered necessary. The Committee approves the design of,
assesses the effectiveness of, and administers executive compensation 
programs in support of compensation policies of the Company.

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

Committee Membership
     The Directors' committees are currently comprised of the
following Directors; the  Chairman of the Committee is listed first:
Audit       Finance       Pension        Compensation       Corporate Governance
- - -       - - - -       - - - -        - - - - - - -      - - - - - - - - -
Zimmer      Mellowes      Wardeberg      Swift              Powers
Powers      Powers        Mellowes       Mellowes           Rayburn
Rayburn     Swift         Rayburn        Wardeberg          Zimmer
Wardeberg   Zimmer        Swift   

<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, 2001, 2002,
and 2003, respectively.

                           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    2003   $393,309     $   -         8,000      $23,957
  Chairman and       2002    376,792      172,429      8,000       18,041
  Chief Executive    2001    358,721      174,141      6,000       17,366

Michael H. Joyce     2003   $295,802     $   -         4,000      $13,674
  President and      2002    282,074      106,873      4,000        8,245
  Chief Operating    2001    267,107      103,785      3,000        8,665

James E. Feiertag    2003   $229,198     $   -         3,000      $40,862
  Vice President     2002    216,451       63,310      4,000        8,452
  Manufacturing      2001    135,404       39,645      5,000       59,184

Lance J. Melik       2003   $159,219     $   -         2,000      $ 6,462
  Vice President and 2002    149,747       40,788      2,500        6,182 
  General Manager,   2001    140,663       34,202      2,000        7,707
  Industrial and 

H. Claude Fabry      2003   $142,920     $   -         2,000      $12,618
  Vice President     2002    123,684       29,726      2,000       10,584
  Distribution       2001    118,929       27,149      2,000        9,659
<F7> Represents annual incentive bonuses determined by the Board of 
Directors. See "Board Compensation 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, and for Mr. Feiertag a signing bonus.  Mr. Fabry's
other compensation is primarily automobile leasing costs.

Stock Options
     The following table summarizes option grants during fiscal year 2003 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 10-year option term.

<PAGE> 9


                                                    Potential Realizable Value
                                                      at Assumed Annual Rates
                                                   of Stock Price Appreciation
                       Individual Grants                   for Option Term
             ----------------------------------  -----------------------------
                # of
              Securities  % of Total   
              Underlying   Options
               Options    Granted to  Exercise  Expiration
    Name      Granted<F9> Employees    Price<F10>  Date        5%         10%
-----------   ----------  ---------   --------  ----------  --------  --------
<S>           <C>        <C>          <C>       <C>         <C>       <C>
M. Batten       8,000       19.0%      14.4500   8/02/12      72,700   184,237
M. Joyce        4,000        9.5%      14.4500   8/02/12      36,350    92,118
J. Feiertag     3,000        7.1%      14.4500   8/02/12      27,263    69,089
H. Fabry        2,000        4.7%      14.4500   8/02/12      18,175    46,059
L. Melik        2,000        4.7%      14.4500   8/02/12      18,175    46,059
<F9> During the fiscal year ended June 30, 2003 total of 48,200 options were
granted to officers, key employees and directors, with 42,200 granted under
the 1998 Incentive Compensation Plan, and 6,000 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.

                         AGGREGATED OPTION EXERCISES IN

     The following table provides information on option exercises in fiscal
2003 by the named executive officers and the value of such officers'
unexercised options at June 30, 2003.

                                 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     65,000       0       $  0           $ 0
M. Joyce          0      N/A     40,500       0          0             0
H. Fabry          0      N/A      8,900       0          0             0
J. Feiertag       0      N/A      9,500       0          0             0
L. Melik          0      N/A     10,250       0          0             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         $ 9,346      $17,537       $19,100       $20,620     $23,856
  75,000          14,546       27,359        29,967        32,425      37,354
 100,000          19,746       37,181        40,834        44,231      50,852
 150,000          30,146       56,825        62,568        67,841      77,847

     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; and Mr. Melik 29 years. Mr. Feiertag and
Mr. Fabry are not eligible for an 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, 2003, is as follows:  Mr. Batten $90,553; Mr. Joyce $67,776;
Mr. Melik $78,789; and Mr. Feiertag $24,461. 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 $3,059; Mr. Joyce $8,176;
Mr. Melik $12,042; and Mr. Feiertag $25,176.

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 $1,500 fee for each board meeting and each committee meeting
attended and $3,000 per year for serving as a committee chairman. Directors
who are officers do not receive any fees in addition to their remuneration
as officers.

     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.  Under the 1998 Plan, each outside Director
receives 1,000 options upon election or re-election at an annual meeting
and 600 options if appointed to the Board between annual meetings.

     Outside Directors (non-Corporation employees) who reach the age of
68 or who retire from full-time employment maybe required to retire from
the Board of Directors effective as of the completion of their current
term. Retired outside directors are entitled to an annual retirement 
benefit 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.

The benefit is payable for a term equal to the Director's years of
service or life, whichever is shorter.

Employment Contracts
     The Corporation has entered into agreements with certain of its
key executives, including Messrs. Batten, Joyce, Melik 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 $3,187,000. 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 and  Joyce) 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
Retention and Non-Compete Agreement
     During fiscal 2003, Mr. Joyce and the Company entered into a
Retention and Non-Compete Agreement.  Under the agreement, Mr. Joyce
agrees to continue as President and Chief Operating Officer until age
65 or earlier with consent of the Chief Executive Officer. In 
consideration for the above, Twin Disc, Incorporated will pay Mr. Joyce
a retention bonus of $300,000 upon his attaining the age of 65. The
entire bonus is payable in the event of an involuntary termination
and a pro-rated retention bonus is payable in the event of death or
disability. In addition, Mr. Joyce has agreed to a three-year
non-disclosure and non-compete agreement. 

                    Board Compensation 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 Compensation 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 salary
ranges 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.

<PAGE> 12
     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.

     As reflected in the Summary Compensation Table on page 8, Mr. Batten's base
salary was increased in fiscal year 2003 by 4.1% or $16,507. It was later
reduced by 10% or $39,500, effective for fiscal 2004, as part of a corporate-
wide cost reduction program.   In determining Mr. Batten's base salary in 2003,
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 companies.

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

     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,
target, and maximum bonus levels based on a percentage of base salary.
Executives earn bonuses to the extent to which pre-established performance goals
are achieved.

     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

Corporate performance goals in 2003 were based on target earnings and return on
net assets employed.  There were no bonus awards in fiscal year 2003 as
performance goals were not attained.

Long-Term Incentives
     Long-term incentive opportunities 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 8,000 options to
purchase shares in fiscal year 2003.

     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.

                                     Compensation Committee
                                               David L. Swift, Chairman
                                               John A. Mellowes	
                                               George E. Wardeberg
                                      July 25, 2003

<PAGE> 13
The following Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into
any other Company filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent the Company specifically incorporates
this report by reference therein.

Audit Committee Report
     The charter reflects standards set forth in 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) and (3) 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 four times during fiscal

     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

     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, 2003, for filing with the Securities and
Exchange Commission.

                                      Audit Committee

                                               David R. Zimmer, Chairman
                                               Paul J. Powers 
                                               David B. Rayburn
                                               George E. Wardeberg
                                      July 25, 2003


    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 Machinery Index and the Russell 2000
index. The S&P 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 Machinery Index, that comparison of shareholder return with
this index is appropriate. Total return values for the Corporation's common
stock, the S&P Machinery Index and the Russell 2000 Index were calculated based
upon an assumption of a $100 investment on June 30, 1998 and based upon
cumulative total return values assuming reinvestment of dividends on a quarterly

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

                 06/30/98  06/30/99  06/30/00  06/30/01  06/30/02  06/30/03
                 --------  --------  --------  --------  --------  --------

  Twin Disc       100.00     68.90     61.17     59.35     58.13     58.68
  S&P Machinery   100.00    109.55     80.90     85.40     93.77     98.09
  Russell 2000    100.00    101.50    116.04    116.70    106.67    104.92

     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, 2002 to June 30, 2003,
all Section 16(a) filing requirements applicable to its executive officers,
Directors and greater than ten percent (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 years ended June 30, 2003 and June 30, 2002, 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
$303,488 and $299,792, respectively.


	Aggregate fees, for professional services rendered by 
PricewaterhouseCoopers for assurance and services reasonably related to the
performance of the audit or review of the Company's financial statements not
included in audit fees above were $20,860 and $408,273 in 2003 and 2002,

<PAGE> 15

In addition to the fees described above, aggregate fees, including out-of-pocket
expenses, of $204,665 and $241,483 were paid to PricewaterhouseCoopers during
the years ended June 30, 2003 and 2002, 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.


     During the years ended June 30, 2003 and 2002, PricewaterhouseCoopers
rendered no professional services to the Company other than those listed under
audit fees, audit related fees and tax fees.


	The Audit Committee annually pre-approves known or anticipated audit and
non-audit services and fees.  Additional non-audit services and fees not
included in the annual pre-approval are submitted to a designated committee
member for approval.  For the year ended June 30, 2003, 97% of audit and
non-audit fees were pre-approved.


     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

     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.