PROPRIETARY/NON-COMPETE
AGREEMENT

I.  Introduction

            This Agreement is entered into and is effective this 15th day of
January 2007, by and between ALAMO GROUP INC. ("ALAMO"), a Delaware corporation,
and Daniel E. Malone, (EMPLOYEE).

            WHEREAS, a major portion of ALAMO and its Affiliates (separately and
collectively referred to as "COMPANY") business consists principally of the
design, development, engineering, manufacture, assembly, promotion, advertising,
marketing, merchandising, sales and distribution of tractor and truck mounted
mowing and other vegetation maintenance equipment, excavators, street sweepers,
vacuum trucks, agricultural implements, front-end loaders, backhoe and related
after market parts (the "Business"); and

            WHEREAS, the COMPANY agrees to provide to EMPLOYEE, special training
and instruction relating to COMPANY business methods and access to confidential
proprietary information and materials belonging to COMPANY, its affiliates as
described in more detail in Paragraph III herein;

            WHEREAS, in consideration of EMPLOYEE'S employment by COMPANY, the
compensation to be paid EMPLOYEE by COMPANY and the proprietary information and
special training to be provided to EMPLOYEE set forth in this Agreement, the
EMLOYEE provides the consideration or return promise to honor the Company's
restriction against competition (as more fully described in Paragraph V herein)
during the period of employment, this Agreement being a condition thereof and
ancillary thereto and not purporting to set forth the terms of such employment,
except for those specifically referred to herein, it is agreed as follow:

II.    Employment

            COMPANY hereby agrees to employ, or if EMPLOYEE is already employed
by COMPANY, to continue to employ EMPLOYEE for the time, at the salary or wage,
from time to time agreed upon by COMPANY and EMPLOYEE and EMPLOYEE agrees to
perform the duties from time to time designated by COMPANY.  EMPLOYEE is an
at-will employee of COMPANY.  Nothing contained in this Agreement is to be
construed as altering EMPLOYEE's status as an at-will employee.  It is
understood and agreed by EMPLOYEE that COMPANY shall have the right to terminate
EMPLOYEE'S services at any time, with or without cause, and without remuneration
other than that which has accrued at the time of termination.

 

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III.       Proprietary Information

 A. EMPLOYEE agrees that he or she will not at any time either while employed
    by  ALAMO, it affiliates, divisions, or subsidiaries, or afterwards, make
    any independent use of, or disclose to any other person or organization,
    except as authorized in writing by ALAMO, any of the proprietary information
    of ALAMO, its affiliates, divisions, or subsidiaries.

 B. Proprietary information shall include but not be limited to:  any
    information made available to EMPLOYEE during the course of EMPLOYEE's
    employment relating to inventions, ideas, technical data, product
    specifications, services, processes, procedures, machinery, apparatus,
    prices, discounts, manufacturing costs, computer information systems
    (including software which shall encompass, for example, source code, object
    code, documentation, diagrams, and flow charts), unpublished works of any
    nature whether or not copyrightable, future plans, policies, and all other
    information and knowledge used in management, engineering, manufacturing,
    marketing, purchasing, finance, operations, or otherwise, concerning the
    business of COMPANY, which is of a secret or confidential nature (whether or
    not acquired, originated or developed in whole or part by EMPLOYEE).

 C. On termination of such employment, EMPLOYEE shall promptly deliver to
    COMPANY all drawings, blueprints, or manuals, letters, notes, notebooks,
    reports and copies thereof, customer information, electronically stored
    data, and all other proprietary information (collectively referred to as
    "documents") relating in any way to COMPANY business or customers in the
    possession or under the control of EMPLOYEE.  All such documents made or
    produced by  EMPLOYEE or those under EMPLOYEE'S control shall remain the
    sole property of COMPANY.  All such documents produced by EMPLOYEE will be
    works for hire produced for COMPANY and COMPANY will own all rights in such
    documents, including copyright, patents, etc.

IV.       Conflict of Interest

 A. EMPLOYEE agrees that during the term of his/her employment with COMPANY,
    he/she will not engage in any business interest or activities which,
    conflict or compete with the business or interests of COMPANY.  EMPLOYEE
    agrees that during the term of his/her employment with the COMPANY, he/she
    will promptly report to his/her supervisor any current and future outside
    business activity.

V.        Competition

 A. In exchange for the consideration exchanged between the COMPANY and EMPLOYEE
    as referenced in the Introduction of this Agreement, the EMPLOYEE agrees
    that when and if his/her employment by the COMPANY is terminated for any
    reason whatsoever, he or she shall not for a period of twelve (12) months
    thereafter, (1) engage in any business competitive with COMPANY, (2) enter
    the employ of any other persons or other entity engaged in activities
    relating to the sale or manufacture of heavy duty mowing and ditching
    equipment and spare parts, or (3) accept or seek any interest directly in or
    with, any other persons or other entities engaged in the Business.

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 B. EMPLOYEE recognizes that in the highly competitive industry in which COMPANY
    is engaged, personal contact is of primary importance in securing new
    customers and in retaining the accounts of present customers.  Accordingly,
    and in exchange for the consideration as referenced in the Introduction of
    this Agreement between the EMPLOYEE and the COMPANY, EMPLOYEE agrees that at
    no time during the term of his/her employment, or for a period of twelve
    (12) months immediately following the termination of his/her employment,
    will he or she for himself or herself,  or on behalf of any other persons or
    other entity, directly or indirectly, solicit the sale or purchase of
    products or services related to the Business from any customer or former
    customer of COMPANY who EMPLOYEE had personal contact, developed business
    relationships and/or provided services during the term of said EMPLOYEE'S
    employment with the COMPANY.  Nor will he or she in any way, directly or
    indirectly, for himself or herself, or on behalf of or in conjunction with
    any other persons or other entity solicit, divert, or take away during the
    aforesaid time, any such customers of  COMPANY who EMPLOYEE had personal
    contact, developed business relationships and/or provided services during
    the term of said EMPLOYEE's employment with the COMPANY.

 C. EMPLOYEE agrees that during the term of his/her employment by COMPANY and
    for a period of twelve (12) months after termination of his/her employment
    with COMPANY (regardless of whether such termination is voluntary or
    involuntary) he/she will not solicit or entice any other employee of COMPANY
    to leave COMPANY to go to work for any other business organization which is
    in direct or indirect competition with  COMPANY.

 D. The restrictions on EMPLOYEE contained in this Section V are limited to
    areas the COMPANY is engaged in the Business which the EMPLOYEE and COMPANY
    agree is at least all of North America.

VI.       Inventions

 A. EMPLOYEE will disclose promptly to COMPANY any and all inventions now or
    hereafter conceived by EMPLOYEE singly or jointly, whether on COMPANY time
    or on EMPLOYEE's time, during the entire period of EMPLOYEE's employment or
    within six (6) months afterward, which inventions are capable of being used
    by COMPANY to its advantage.  For the purposes of this Section, "inventions"
    includes, but is not limited to:  machinery, apparatus, products, processes,
    computer hardware, information systems, computer software (including without
    limitation, source code, object code, documentation, diagrams, and flow
    charts)  and any other discoveries, concepts, and ideas, whether patentable,
    copyrightable, or otherwise protectable or not (including without
    limitation, processes, methods, formulas, and techniques, as well as
    improvements thereof or know-how related thereto concerning any present or
    prospective activities of COMPANY).

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 B. Employee will assign all of EMPLOYEE's interest in such inventions and
    patents as COMPANY may request, including both domestic and foreign patent
    and copyrights rights, to COMPANY, subject to the terms of this Section. 
    EMPLOYEE will sign all applications for and assignments of patents,
    copyrights, or interest therein, required by COMPANY in connection
    therewith.  EMPLOYEE will sign all other writings and perform all other acts
    necessary or convenient to carry out the terms of this Section.

 C. EMPLOYEE understands that COMPANY will not require EMPLOYEE to assign, and
    that EMPLOYEE will not be under any obligation to assign, to COMPANY any
    rights in an invention for which no equipment, supplies, facility or trade
    secret information of COMPANY was used and which was developed entirely on
    EMPLOYEE's own time, and (1) which does not relate directly to the business
    of the COMPANY, or the COMPANY's actual or demonstrably anticipated research
    or development, or (2) which does not result from any work performed by
    EMPLOYEE for COMPANY.

 D. EMPLOYEE understands that all patents, copyrights, inventions or interest
    therein that EMPLOYEE may assign to COMPANY by this Section shall be held
    for the benefit of COMPANY.  EMPLOYEE understands that nothing in this
    Section shall require COMPANY to accept EMPLOYEE's assignment or other
    conveyance in any interest in any patent, copyright or invention or to
    prosecute any patent or copyright application or other proceeding than as
    COMPANY may desire.

VII.      Miscellaneous

 A. In case any one or more of the provisions contained in this Agreement shall,
    for any reason, be held to be invalid, illegal or unenforceable in any
    respect, such invalidity, illegality or unenforceability shall not affect
    any other provision of this Agreement; this Agreement shall be construed as
    if such invalid, illegal or unenforceable provision had never been contained
    herein.  If, moreover, any one or more of the provisions contained in this
    Agreement shall for any reason be held to be excessively broad as to time,
    duration, geographical scope, activity or subject, it shall be construed by
    limiting and reducing it so as to be enforceable to the extent compatible
    with the applicable laws as they shall then appear.

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 B. COMPANY and the EMPLOYEE, jointly and severally, acknowledge that it would
    be impossible to calculate or ascertain accurately and definitely the
    damages COMPANY would sustain from a breach by EMPLOYEE of the provisions of
    this Agreement and that no adequate remedy at law exists.  Accordingly, in
    the event of a threatened breach by EMPLOYEE of said provisions, COMPANY 
    shall be entitled to an injunction restraining such prohibited activity. 
    Nothing herein, however, shall be construed as prohibiting COMPANY from
    pursuing any other remedies available to COMPANY for such breach or
    threatened breach, including the recovery of damages from EMPLOYEE.  If
    EMPLOYEE violates any agreement contained in the Agreement and COMPANY
    brings legal action for injunctive or other relief, COMPANY shall not, as a
    result of time involved in obtaining the relief, be deprived of the benefit
    of the full period of any such agreement.  Accordingly, the agreements of
    EMPLOYEE contained in the Agreement shall have the durations specified
    above, which periods shall begin upon the later date of:  (i) the date of
    this Agreement;  (ii) the date that employment ends in the case of Section V
    of this Agreement;  (iii) the date of entry by a court of competent
    jurisdiction of a final judgment enforcing the agreements of EMPLOYEE in
    this Agreement.  If EMPLOYEE violates the terms of the Agreement and COMPANY
    retains any attorney to enforce the terms of this Agreement, to negotiate a
    settlement or to otherwise uphold COMPANY's rights, COMPANY shall recover
    from EMPLOYEE, reasonable attorney's fees and costs incurred by reason of
    EMPLOYEE's violation of this Agreement.

 C. This Agreement shall be construed in accordance with and governed for all
    purposes by the laws of the State of Texas (other than conflicts of laws
    provisions) unless the COMPANY waives such jurisdiction or unless prohibited
    or mandated elsewhere by law. Venue for any lawsuits shall be in Guadalupe
    County, Texas unless that venue is waived by Company or prohibited or
    mandated elsewhere by law.  EMPLOYEE and COMPANY relinquish and waive the
    jurisdiction of the courts of the United States and right or removal thereto
    except as to appeals from the highest appellate court in Texas or appeals
    from the highest appellate court of any other state where enforcement of
    this Agreement is sought to the United States Supreme Court, unless
    exclusive jurisdiction lies in the courts of the United States.

 D. This Agreement, complete with Exhibits, if any, constitutes the entire
    agreement between EMPLOYEE and COMPANY with respect to the subject matter
    hereof and there are no other agreements of any kind affecting it.  Neither
    EMPLOYEE nor COMPANY has made or relied upon any oral representations
    contrary hereto.  In the event EMPLOYEE has previously entered into a
    contract with COMPANY of the same general nature as this Agreement, this
    Agreement supersedes and replaces said previous contract as of the effective
    date of this Agreement.

This Agreement may not be changed or terminated orally, and no change,
termination or waiver of this Agreement or of any of the provisions herein
contained shall be binding unless made in writing and signed by the party
against whom the same is sought to be enforced, and in case of COMPANY, by an
authorized officer of COMPANY.  Any change or changes, from time to time, in
EMPLOYEE's salary and/or duties shall not be, nor deemed to be, a change,
termination or waiver of this Agreement or of any of the provisions herein
contained.

 E. EMPLOYEE agrees that this Agreement is not a promise of future employment. 
    There are no previous or simultaneous written or oral representations,
    understandings, or agreements with COMPANY or any of its officers or
    representatives covering the same subject matter.

 F. Affiliates.  As used herein, the term "affiliates" of COMPANY refers to any
    corporation, partnership, or other entity that controls or is controlled by,
    or is under common control with COMPANY, or any successor or assignee of
    COMPANY.

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 G. The representations and covenants contained in this Agreement on the part of
    EMPLOYEE will be construed as ancillary and independent of other provision
    of this Agreement.  The existence of any claim or cause of action of
    EMPLOYEE against COMPANY or any employee or agent of COMPANY shall not
    constitute a defense to enforcement by COMPANY of the covenants of the
    EMPLOYEE contained in this Agreement.

This Agreement will inure to the benefit of COMPANY and its successor and
assigns.

EMPLOYEE acknowledges receipt of a copy of this Agreement.

 

EMPLOYEE:  

ALAMO GROUP INC.:

       

by:    

 

Daniel E. Malone  

 

Robert H. George
Vice President

      Date: January 15, 2007  

Date: January 15, 2007

 

 

 

 

 

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