EMPLOYMENT AGREEMENT


         EMPLOYMENT AGREEMENT (this "Agreement"), dated January 27, 1999, by and
between Morris Material Handling,  Inc., a Delaware corporation (the "Company"),
and Jack F. Stinnett,  an individual  residing at 33028 Allenbury Drive,  Solon,
Ohio 44139 ("Executive").

                              W I T N E S S E T H:

         WHEREAS,  the Company  wishes to secure the services of Executive,  and
Executive wishes to furnish such services to the Company,  pursuant to the terms
and provisions of this Agreement.

         NOW,  THEREFORE,  for  and in  consideration  of the  mutual  promises,
covenants and obligations  contained herein,  the Company and Executive agree as
follows:

ARTICLE I:          EMPLOYMENT, TERM AND DUTIES

Section 1.1. Term.  Unless  terminated  sooner  pursuant to the occurrence of an
"Employment  Related Event" or a  "Termination  Event" (both terms as defined in
Article III) and subject to the other terms and  provisions  of this  Agreement,
the Company  agrees to employ  Executive and Executive  agrees to be employed by
the Company, for the period beginning as of March 2, 1999 (the "Effective Date")
and continuing until the third  anniversary of the Effective Date. The Agreement
will be extended for one year on the third anniversary of the Effective Date and
on each anniversary thereafter unless either party gives 60 days' written notice
of failure to renew or termination prior to any such anniversary date; provided,
however,  that any such  non-renewal  by the Company shall void the  Executive's
post-employment  obligations contained in the Non-Competition Agreement referred
to in  Article  V of  this  Agreement.  The  Executive  may  voluntarily  resign
employment at any time upon  providing 60 days' written  notice to the Company's
Board of Directors;  provided,  however,  that the  obligations of the Executive
under Article IV  (Confidential  Information)  hereof,  and the  post-employment
obligations  of Executive  contained in the separate  Non-Competition  Agreement
referred to in Article V hereof shall survive such resignation.  The Executive's
entitlement  to any  severance  benefits or payments  following  termination  of
employment  shall be governed solely by Article III of this  Agreement,  and the
Executive  shall have no entitlement to any such benefits or payments other than
as set forth in Article III of this Agreement,  or as required to be provided to
the Executive by operation of law.

Section 1.2. Title.  From and after the Effective Date, the Company shall employ
Executive in the  position of President  and Chief  Executive  Officer,  or such
other title as mutually agreed upon by the Company and the Executive.

Section 1.3. Duties.  Executive  agrees to serve in the position  referred to in
Section  1.2 and to  perform  diligently  and to the best of his  abilities  the
duties and services pertaining to such office, as well as such additional duties
and services appropriate to such office as the Board of Directors of the Company
("Board of Directors") may reasonably assign to Executive from time to time.

Section 1.4. Business Time and Efforts.  Executive agrees,  during the period of
employment by the Company,  to devote all of his business time,  energy and best
efforts to the business and affairs of the Company and its affiliates and not to
engage, directly or indirectly, in any other business or businesses,  whether or
not similar to that of the Company, except with the prior written consent of the
Board of Directors.

Section 1.5. Board Seat. By its execution of this  Agreement,  MHE  Investments,
Inc.  agrees to take all necessary  actions to cause Executive to be elected and
maintained as a member of the Board of Directors of the Company and the board of
directors of MMH Holdings, Inc. ("MMH") for so long as the Executive is employed
pursuant to this Agreement.  Executive shall receive no additional  compensation
for his service on the Board of Directors.

ARTICLE II:       COMPENSATION AND BENEFITS

     Section 2.1.  Base  Salary.  During the term of this  Agreement,  Executive
shall receive an annual base salary of $400,000,  subject to review by the Board
of Directors.

Section 2.2. Bonus. Executive shall be eligible to receive a target bonus of 50%
of Base Salary (prorated for 1999 in proportion that the number of days from and
including  the  Effective  Date bears to 365) upon the  achievement  of annually
established  performance-based targets established for Executive by the Board of
Directors;  provided,  that,  Executive  shall be entitled to a minimum bonus of
$100,000 for the 1999 fiscal year. It is anticipated  that, for fiscal year 1999
and after the  performance-based  targets will be based on EBITDA according to a
plan as  mutually  agreed  upon  with the  Board  of  Directors  for all  senior
executives of the Company. Bonuses will be earned over the Company's fiscal year
ending  October 31, and shall be paid by the Company to the Executive as soon as
practicable in accordance with the Company's bonus payment procedures.

Section 2.3.      Equity.

(a) Options.  Executive  shall be eligible to receive an initial option grant of
MMH  "Equity  Units".  Such grant will be for 2% of the Company in the form of A
Options, 1% of the Company in the form of B Options and 1% of the Company in the
form of C Options pursuant to the terms of Schedule A, attached hereto.

                  (b) Equity.  Executive  shall  purchase  an initial  amount of
equity  in  Niles  L.L.C.  in the  amount  of  $200,000  within  120 days of the
Effective Date. In addition,  upon Executive's election, the Company will make a
loan to Executive of up to $300,000 to purchase equity in Niles L.L.C., $150,000
of such loan may be used to satisfy  Executive's  obligation in the  immediately
preceding  sentence.  The  Company  loan  will be  fully  recourse  against  the
Executive and will have a ten-year term, with principal and accrued interest due
upon the tenth  anniversary of the loan date;  provided,  that, such loan may be
repaid,  without penalty, and any time during the loan term; provided,  further,
that,  such loan will  immediately  become due and  payable  (including  accrued
interest)  upon  Executive's  termination of employment or upon a disposition of
the purchased  equity in Niles L.L.C.  The loan will have an interest rate equal
to the then current  prime rate.  Notwithstanding  the  foregoing,  in the event
Executive is terminated by the Company without Cause (as defined below),  by the
Executive for Good Reason (as defined below),  or the Company provides notice to
Executive such that the Term will expire as provided in Section 1.1 hereof,  the
loan will remain  outstanding under its original terms until the earlier of such
loan's due date or the disposition of the equity in Niles L.L.C. by Executive.

Section 2.4. Other Perquisites. During his employment hereunder, Executive shall
be afforded the following incidental benefits:

(a)      Expenses.  Executive  shall  be  entitled  to  be  reimbursed  for  all
         customary  and  reasonable   expenses  incurred  by  Executive  in  the
         performance  of  his  duties  and  responsibilities,  subject  to  such
         reasonable  substantiation  and documentation as may be required by the
         Company in accordance with its normal policies.

(b)      Other Company Benefits.  Subject to the terms of each plan,  program or
         arrangement  as  the  case  may  be,   Executive  and,  to  the  extent
         applicable,  Executive's family, dependents and beneficiaries, shall be
         allowed  to  participate  in  the  Company's  medical,   dental,   life
         insurance,  retirement  and all other  benefits,  plans  and  programs,
         including  improvements or modifications of the same, which are now, or
         may  hereafter  be,  available to similarly  situated  employees of the
         Company  generally.  The Company shall not, however,  by reason of this
         paragraph  be  obligated  to  institute,   maintain,  or  refrain  from
         changing, amending or discontinuing,  any such benefit plan or program,
         so long as such changes are  similarly  applicable  to employees of the
         Company generally.

(c)      Vacation.  Executive  shall  be  entitled  to four  (4)  weeks of paid
         vacation during each year of the Term.

(d)      Automobile.   Executive  shall  be  entitled  to  a  Company   provided
         automobile or a reasonable  allowance for an automobile during the Term
         in accordance with Company policy for other senior executive officers.

(e) Relocation Expenses.  Executive shall be entitled to the relocation expenses
as set forth on Schedule B hereto.

Section 2.5. Withholding of Taxes. The Company may withhold from any benefits or
compensation  payable  under this  Agreement all federal,  state,  city or other
taxes as may be  required  pursuant  to any law or  governmental  regulation  or
ruling.

ARTICLE III:      TERMINATION OF EMPLOYMENT

Section 3.1.  Employment-Related Event. An "Employment-Related  Event" means any
of the  following:  (a)  Executive's  resignation  for Good  Reason (as  defined
below),  (b)  Executive's  termination by the Company  without Cause (as defined
below), (c) Executive's death or permanent disability (as defined below), or (d)
either party providing  notice to the other party such that the Term will expire
as provided in Section 1.1 hereof. Should an Employment Related Event occur, the
Executive  shall only be entitled to the  benefits and payments set forth below,
and  Executive  specifically  agrees to sign a Release as drafted by the Company
under which the Executive  shall agree to waive and release all other rights and
entitlement,  whether  legal,  contractual or equitable  (including  waiving and
releasing any claims alleging  discrimination  and/or  harassment to the maximum
extent allowed by law) in order to be entitled to such benefits and payments.

(a) Good Reason.  Within sixty days after Executive has knowledge of an event of
Good Reason,  Executive may terminate his  employment  under this  Agreement for
Good Reason, after having given the Company written notice specifying the reason
the Executive is terminating  his employment and having given the Company thirty
days after such  notice  within  which to cure the  condition  specified.  "Good
Reason" means any of the following:  (i) a material reduction of the Executive's
duties or  authority as provided in the  Agreement or as later  increased by the
Board of  Directors;  (ii) a  substantial  change  in work  conditions;  (iii) a
material decrease in compensation or benefits;  (iv) relocation of his principal
workplace over 50 miles from his initial workplace without Executive's  consent;
(v) the breach of any material  provision of this Agreement by the Company or an
affiliate of the Company;  (vi) a termination of employment by Executive for any
reason or no reason within ninety (90) days following the first anniversary of a
change in control of the Company (as defined in Schedule D hereto); or (vii) the
failure  by the  Company  to obtain  the  assumption  of this  Agreement  by any
successor  to or assignee of the Company or any  purported  termination  of this
Agreement which does not satisfy the  requirements of this Agreement.  If at the
end of such notice period, the Company has not cured such condition, the written
notice shall take effect,  and the Executive  will be entitled to the following:
(A)  continuation  of his then current Base Salary (prior to any reduction  that
constitutes Good Reason) for twelve months from the date of termination  payable
in accordance with Company payroll practice; (B) continuation of health and life
insurance  benefits for twenty-four  months at the Company's  expense subject to
applicable  cost-sharing  arrangements,  co-payments,  and  deductibles in place
immediately  prior the Executive's  termination  (provided,  however,  that such
health  benefits shall not be counted  toward the  Executive's  entitlement  for
COBRA,  and  that  such  health  and life  insurance  benefits  shall  terminate
immediately  upon  Executive  obtaining  employment  with a  third  party  which
provides health and life insurance  benefits);  (C) a "pro-rated  bonus" for the
fiscal year in which the  termination  occurs which shall be payable at the time
the  Company  customarily  pays  bonuses;  (D)  the  continuation  of all  other
perquisites  for six months;  (E)  reasonable  outplacement  assistance  for six
months  (including  out of pocket  expenses of the Executive to search for a job
not to exceed $5000);  and (F) payment,  if requested by the Executive,  for all
equity in MMH or the Company owned by the Executive or his family (including but
not limited to Equity Units),  payable in equal quarterly  installments over the
thirty-six month period following termination,  provided,  however, that if this
option is requested, the equity shall be valued as of the date of termination at
its fair market  value by the  Compensation  Committee of the Board of Directors
and shall be repurchased  so long as permitted  under the terms of any financing
documents, including but not limited to indentures or loan agreements applicable
to the  Company or any direct or indirect  parent  entity of the Company at such
time. For purposes of this Agreement,  a "pro-rated  bonus" means the portion of
the bonus  that is  arrived  at by using the  number of days the  Executive  was
employed  by the  Company  in the  year of  termination  as the  numerator  of a
fraction  of which 365 is the  denominator  and then  multiplying  the bonus the
Executive was otherwise eligible to receive by such fraction.

     (b)  Termination by the Company  without Cause.  If the Company  terminates
          the Executive's  employment  under this Agreement  without Cause,  the
          Executive  shall be entitled to the following:  (i) a lump sum payment
          equal to 1-1/2 times his then current annual Base Salary, and (ii) the
          same  benefits  and  compensation  and  payable  at the  same  time as
          provided in clauses (B) through (F) of Section  3.1(a).  "Cause" means
          any of the following acts by the Executive which, if curable, have not
          been cured by Executive  within 30 days' written notice  thereof:  (i)
          willful failure to substantially and materially  perform his duties as
          assigned to him by Board of  Directors  (other  than any such  failure
          resulting  from  the  Executive's   reasonable  business  judgment  or
          incapacity due to physical or mental  illness);  (ii)  commission of a
          fraud  on the  Company;  (iii)  breach  of  fiduciary  duty  involving
          material  personal  gain; or (iv) willful  misconduct  materially  and
          demonstrably   injurious  or   detrimental   to  the  Company  or  its
          affiliates.

     (c)  Death  or  Permanent   Disability.   This  Agreement  shall  terminate
          immediately  upon  the  Executive's  Death  or  Permanent  Disability.
          Permanent  Disability  shall have the same meaning as set forth in the
          Company's long term disability  policy.  Upon termination for Death or
          Permanent Disability,  the Executive, or his estate, shall receive the
          following:  (i) all accrued Base Salary and other accrued entitlements
          earned through the date of termination,  (ii) the continuation of Base
          Salary for 90 days after such termination,  and (iii) the compensation
          and  benefits  set forth in clauses  (B),  (C), (D) and (F) of Section
          3.1(a).

     (d)  Failure to Renew.  This  Agreement  shall  terminate 60 days following
          either  party  providing  notice to the other party such that the Term
          will  expire as  provided  in Section  1.1  hereof.  In the event of a
          termination  under this paragraph (d), the Executive shall receive his
          accrued  Base  Salary and  accrued  entitlements  through  the date of
          termination.

Section  3.2.  Termination  Event.  "Termination  Event"  means the  Executive's
resignation  without Good Reason or termination by the Company for Cause. In the
event of a termination due to a Termination  Event,  the Executive shall receive
his  accrued  Base  Salary  and  accrued   entitlements   through  the  date  of
termination.  In the event the Executive  resigns from the Company  without Good
Reason,  such resignation only becomes effective upon 60 days' written notice to
the Company.

Section 3.3.  Resignation from the Board of Directors and Offices.  In the event
of Executive's  termination of employment for any reason  (including the failure
of the Company to renew the Agreement),  such  termination or non-renewal  shall
also be  considered  a  resignation  as a member  of the Board of  Directors,  a
resignation from the board of directors of any affiliates or subsidiaries of the
Company  and a  resignation  from any  offices  held by the  Executive  with the
Company or with any of its affiliates or subsidiaries.

ARTICLE IV:       MISCONDUCT AND CONFIDENTIAL INFORMATION

         Executive  agrees  to be  bound by the  provisions  of the  World  Wide
Business Conduct Policy and the Employee  Proprietary Rights and Confidentiality
Agreement  attached  hereto as Schedule E. The  provisions of such documents are
incorporated into this Agreement.

ARTICLE V:        NON-COMPETITION; NON-SOLICITATION; INJUNCTIVE RELIEF

         Simultaneously  with the execution of this  Agreement,  Executive shall
execute  and  deliver to the  Company a  non-competition  agreement  in the form
attached  hereto as Schedule C (the  "Non-Competition  Agreement"),  which shall
become  effective when this Agreement  becomes  effective as provided in Section
1.1 hereof.

ARTICLE VI:       INDEMNIFICATION

         The Company shall,  to the fullest  extent  permitted by applicable law
indemnify  and hold harmless  Executive  from all claims or expenses that may be
asserted  against the Company and affiliates  thereof due to his employment,  or
that may otherwise derive from Executive's employment as contemplated under this
Agreement,  in  accordance  with the Company's  charter and bylaws.  The Company
shall  purchase  and  maintain  for the benefit of  Executive a  director's  and
officer's liability policy.

ARTICLE VII:      MISCELLANEOUS

Section  7.1.  Notices.  For purposes of this  Agreement,  notices and all other
communications  provided  for herein  shall be in writing and shall be deemed to
have been duly given when personally delivered, sent by facsimile or when mailed
by United States registered or certified mail, return receipt requested, postage
prepaid,  addressed  to such  address or sent to such  facsimile  number as each
party may  furnish to the other in writing  from time to time.  Unless  notified
otherwise  by  Executive,  copies of  notices  or other  communications  sent to
Executive  shall be sent to the address  noted on the  signature  page  attached
hereto.

Section 7.2.  Applicable Law,  Jurisdiction and Venue. This Agreement is entered
into under,  and shall be governed for all purposes by, the laws of the State of
New York.  The parties agree to submit any dispute under this  Agreement  and/or
arising  out of  Executive's  employment  or  termination  thereof,  to  binding
arbitration  in New York,  New York under the then existing rules for commercial
arbitration as established by the American  Arbitration  Association;  provided,
that, to the extent that it is necessary  for the  protection of either party to
obtain  injunctive  relief,  either  party may  proceed to a court of  competent
jurisdiction  for purposes of obtaining the necessary  equitable relief until an
arbitration proceeding can be conducted.

Section  7.3. No Waiver.  No failure by either  party hereto at any time to give
notice of any breach by the other party of, or to require  compliance  with, any
condition or provision of this Agreement shall (i) be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or subsequent
time or (ii) preclude insistence upon strict compliance in the future.

Section 7.4. Severability.  If a court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then the invalidity
or  unenforceability  of  that  provision  shall  not  affect  the  validity  or
enforceability  of  any  other  provision  of  this  Agreement,  and  all  other
provisions shall remain in full force and effect.

Section  7.5.  Counterparts.  This  Agreement  may be  executed  in one or  more
counterparts,  each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.

Section 7.6. Headings. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.

Section 7.7. Gender and Plurals. Wherever the context so requires, the masculine
gender  includes the feminine or neuter,  and the singular  number  includes the
plural and conversely.

Section 7.8. Affiliate.  As used in this Agreement,  unless otherwise indicated,
"affiliate" shall mean any person or entity which directly or indirectly through
any one or more intermediaries  owns or controls,  is owned or controlled by, or
is under common ownership or control with the Company.

Section 7.9.  Successors and Assignment.  This Agreement is binding on Executive
and the Company and their successors and assigns;  provided,  however,  that the
rights and  obligations of the Company under this Agreement may be assigned to a
successor  entity which assumes  (either by operation of law or  otherwise)  the
Company's obligations hereunder. No rights or obligations of Executive hereunder
may be assigned by Executive to any other person or entity.

Section 7.10. Effects of Termination of Employment. Except as otherwise provided
herein or under any benefit plan or other agreement  between the Company and the
Executive,  termination of Executive's employment under this Agreement shall not
affect any right or obligation of either party hereto which is accrued or vested
prior to or upon  such  termination  or the  rights  and  obligations  set forth
herein.

Section 7.11. Entire Agreement.  This Agreement constitutes the entire agreement
of the parties  with  regard to the  subject  matter  hereof,  contains  all the
covenants,  promises,  representations,  warranties and  agreements  between the
parties with respect to employment of Executive by the Company,  and  supersedes
all prior employment  agreements between the Executive and the Company or any of
its   predecessors.   Each  party  to  this  Agreement   acknowledges   that  no
representation, inducement, promise or agreement, oral or written, has been made
by either party,  or by anyone  acting on behalf of either  party,  which is not
embodied herein,  and that no agreement,  statement,  or promise relating to the
employment  of  Executive  by the  Company,  which  is  not  contained  in  this
Agreement, shall be valid or binding. Any modification of this Agreement will be
effective only if it is in writing and signed by the party to be charged.

Section 7.12.  Attorney's Fees. Executive shall be entitled to be reimbursed for
reasonable  attorney's  fees  incurred  in the  negotiation  of this  Agreement;
provided, that, such fees do not exceed $5,000.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date first written above.

                                                 MORRIS MATERIAL HANDLING, INC.
                                                 By: /s/Todd Berman
                                                 Name:
                                                 Title:


                                                 Acknowledged by
                                                 MHE INVESTMENTS, INC.
                                                 By: /s/Todd Berman
                                                 Name:
                                                 Title:


                                                 /s/Jack F. Stinnett
                                                 Jack F. Stinnett