PERSONAL & CONFIDENTIAL

December 12, 2006

Mr. Dan Malone
15 Pecan Gorge Court
Sugar Land, TX  77479

Dear Dan,

We appreciate the interest and patience shown in Alamo Group during the recent
interview process.  I am pleased to offer you the position of Executive Vice
President & Chief Financial Officer of Alamo Group Inc.  The details of this
offer are as follows:

 1. Monthly salary of $17,500.00 per month, annualized to $210,000. 

 2. A $25,000 sign on bonus payable 30 days after employment.

 3. Participation in the Alamo Group Inc. Incentive Stock Option Plan with
    25,000 shares, subject to Compensation Committee of the Board's approval,
    within 90 days of employment.

 4. Eligible to participate in the Alamo Group Incentive Compensation Plan,
    according to its terms, at 30% level.  This bonus is payable annually in
    March of the following year.

 5. Eligible to participate in Alamo Group (USA) 401K Savings and Retirement
    Plan after three months of continuous employment with the next entry date of
    April 1, 2007 if start date is on or before January 1, 2007. 

 6. Eligible to participate in the Alamo Group (USA) Medical Plan, according to
    its terms and conditions, after 30 days of continuous employment.

 7. The Company will engage a relocation company to coordinate a simultaneous
    closing on the sale of your home in Houston.  Closing costs will be paid by
    the Company.  In addition, reasonable relocation expenses as per attached
    Relocation Expense Policy. The employee will be responsible for all federal
    and state income taxes on any moving expense payment or reimbursement that
    is not considered a 'qualified moving expense' per the Internal Revenue
    Service (see definitions in Relocation Expense Policy attachment).

 8. In lieu of temporary living expenses, the Company will pay $2,500 per month
    for a maximum of six months or until the home is sold, whichever occurs
    first.

 9. Start date to be mutually agreed upon.

 

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 10. This offer is contingent upon completing pre-employment physical and drug
     screen. The post offer drug screen and physical examination, education
     verification and background investigation should be completed within two
     weeks of acceptance of our offer of employment.

This offer is not, nor is intended to be a contract of employment.  In addition,
the benefits discussed are abbreviated and all reference to benefits are more
specifically provided in our current policies and procedures, which are subject
to change without prior notice.  We would appreciate your response to this offer
by Monday, December 11, 2006.

Sincerely,

 

 

R.A. Robinson
President and CEO

cc:  Brad Emerson

 ______________________________________
Acknowledgement
 

 

 

 

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