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Execution Version




RETENTION AGREEMENT




     This Retention Agreement (the “Agreement”), dated as of January 13, 2008 is made and
entered into by and between Thomas R. Karges (the “Employee”), Terex Corporation, a
Delaware corporation (the “Parent”) and A.S.V., Inc., a Minnesota corporation (the
“Company”).



     WHEREAS, by reason of the consummation of the transactions contemplated by the Agreement and
Plan of Merger (the “Merger Agreement”), dated as of January 13, 2008, by and between the
Parent, the Company and Terex Minnesota, Inc., a Minnesota corporation and a wholly owned
subsidiary of the Parent, the Parent will own all of the outstanding shares of common stock of the
Company;



     WHEREAS, the Employee is currently employed by the Company;



     WHEREAS, the Parent wishes to ensure that the Employee’s services are retained following the
closing of the Merger, under the terms and conditions set forth in this Agreement, and the Employee
wishes to obtain the benefits of those terms and conditions and remain employed by the Company
following the Effective Time;



     WHEREAS, in the event that the Merger Agreement is terminated prior to the Effective Time,
this Agreement shall be void ab initio and of no force and effect; and



     WHEREAS, all capitalized terms used but not defined herein shall have the meaning set forth in
the Merger Agreement.



     NOW, THEREFORE, in consideration of the promises and covenants hereinafter set forth, the
continued employment by the Company of the Employee, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Employee, the parties agree as
follows.




	1.	 	Retention Bonus.






	 	1.1.	 	The Employee is eligible to receive a retention bonus (the “Retention Bonus”)
equal to $275,625, which shall be payable upon the terms and conditions set forth in
Section 1.2 and as otherwise provided herein.
	 
	 	1.2.	 	Payment of the Retention Bonus shall be made as follows: The Employee shall be paid,
as soon as practicable after the Closing Date, (a) an amount in cash representing a
portion of the Retention Bonus equal to $50,000, less applicable withholding taxes, and
(b) the balance of the Retention Bonus in restricted shares of common stock, par value
$.01 per share, of the Parent (the “Common Stock”) (the “Restricted Stock
Award”), provided that the Employee (x) is
employed by the Company on the Closing Date, and (y) executes (i) on the Closing Date, the
release attached hereto as Exhibit A and (ii) on





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	 	 	 	the date of grant, a restricted stock agreement and/or any other documents required
pursuant to the Parent plan under which the Restricted Stock Award is made. The
Restricted Stock Award shall vest in equal installments on each of the first four
anniversaries of the Closing Date (each such date, a “Vesting Date”), provided
that the Employee is employed by the Company on the Vesting Date. The number of shares of
the Common Stock subject to the Restricted Stock Award shall be based on the closing price
of a share of the Common Stock on the Closing Date. In the event that (a) the Company
terminates the Employee’s employment with the Company without Cause (as defined below) or
(b) the Employee terminates the Employee’s employment with the Company for Good Reason (as
defined below), then an additional number of shares of the Common Stock subject to the
Restricted Stock Award (such additional shares, the “Fractional Vesting Number”)
shall vest, and no additional shares shall vest following termination. The Fractional
Vesting Number shall be an amount, rounded up or down to the nearest whole number, that is
equal to (a) the total number of shares of the Common Stock subject to the Restricted
Stock Award, multiplied by (b) a fraction, the numerator of which is the total number of
days which have elapsed between the immediately prior Vesting Date and the date of
termination, and the denominator of which is 1460. The Employee understands and agrees
that the Retention Bonus does not constitute eligible compensation under any pension or
savings plan of the Parent or any of its subsidiaries or affiliates, including the
Company.






	2.	 	Termination of Employment.






	 	2.1.	 	If the Employee’s employment with the Company is terminated without Cause or the
Employee terminates the Employee’s employment with the Company for Good Reason on a date
(the “Termination Date”) prior to the second anniversary of the Closing Date, the
Company shall pay to the Employee (a) any unpaid base salary earned by the Employee
through the Termination Date, (b) any unpaid annual bonus amount with respect to the
fiscal year preceding the fiscal year in which the Termination Date occurs, (c) an amount
representing credit for any unpaid vacation time accrued but unused by the Employee as of
the Termination Date, and (d) the Severance Payment (as defined below); provided that the
Employee (x) executes the release attached hereto as Exhibit A following the Termination
Date and (y) has not violated Section 3 of this Agreement.






	 	 	 	“Severance Payment” means a lump sum cash payment equal to the sum of: (a) an amount
equal to (i) the annual bonus paid to the Employee with respect to the fiscal year
preceding the fiscal year in which the Termination Date occurs, multiplied by (ii) a
fraction, the numerator of which is equal to the number of full months that have elapsed
in the year of termination as of the Termination Date and the denominator of which is
twelve (12), plus (b) the Employee’s monthly base salary for the month prior to the
Termination Date, multiplied by twenty-four (24).






	 	2.2.	 	For purposes of this Agreement, “Cause” means (i) the willful and continued
failure by





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	 	 	 	the Employee to substantially perform the Employee’s duties with the Company (other than
any such failure resulting from the Employee’s temporary incapacity due to disability or
physical or mental illness); (ii) willful and substantial misconduct on the part of the
Employee in connection with the performance of such duties; (iii) the Employee’s
conviction of a felony, or a misdemeanor involving moral turpitude; or (iv) the Employee
engaging in conduct which is materially injurious to the Company or its affiliates
including, without limitation, violating or breaching the Company’s code of ethics and
conduct.






	 	2.3.	 	For purposes of this Agreement, “Good Reason” means a reduction of the
Employee’s base salary by twenty-five percent (25%) or more, unless in connection with a
similar reduction for similarly situated employees of the Company.
	 
	 	2.4.	 	All payments made to the Employee pursuant to Section 2.1 shall be subject to
withholding for any applicable income, payroll, or other taxes as required by law.
	 
	 	2.5.	 	Notwithstanding any other provision of this Agreement, if the Employee is a
“specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations and interpretative guidance thereunder
at the time of the Employee’s Termination Date, the payments provided pursuant to Section
2.1 of this Agreement shall not be made or commenced until the date that is six (6) months
and one (1) day after the Termination Date. If the payments
under this Agreement would be subject to tax pursuant to Section 409A of the Code, the parties shall
make reasonable efforts to restructure the payments to avoid imposition of such tax.





3. Covenants.




	 	3.1.	 	Unauthorized Disclosure. The Employee agrees and understands that in the
Employee’s position with the Company, the Employee has been and will be exposed to and has
and will receive non-public information relating to the confidential affairs of the
Company, the Parent, and their respective subsidiaries and affiliates (collectively, the
“Entities”), including, without limitation, technical information, intellectual
property, business and marketing plans, strategies, customer information, software, other
information concerning the products, promotions, development, financing, expansion plans,
business policies and practices of the Entities and other non-public forms of information
considered by the Entities to be confidential and in the nature of trade secrets
(including, without limitation, ideas, research and development, know-how, technical data,
customer and supplier lists, pricing and cost information and business and marketing plans
and proposals) (collectively, the “Confidential Information”). The Employee agrees
that at all times during the Employee’s employment with the Company, except as may be
required for the Employee to discharge the Employee’s duties, and thereafter, the Employee
shall not disclose Confidential Information, either directly or indirectly, to any




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	 	 	 	individual, corporation, partnership, limited liability company, association, trust or
other entity or organization, including a government or political subdivision or an agency
or instrumentality thereof (each, a “Person”) without the prior written consent of
the Company and shall not use or attempt to use any such information in any manner other
than in connection with the Employee’s employment with the Company, unless required by law
to disclose such information, in which case the Employee shall provide the Company with
written notice of such requirement as far in advance of such anticipated disclosure as
possible. This confidentiality covenant has no temporal or geographical restriction. Upon
termination of the Employee’s employment with the Company, the Employee shall promptly
supply to the Company (or destroy, at the Company’s option) all property, keys, notes,
memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data and any other tangible product or
document which has been produced by, received by or otherwise submitted to the Employee
during or prior to the Employee’s employment with the Company, and any copies thereof in
the Employee’s (or capable of being reduced to the Employee’s) possession.






	 	3.2.	 	Non-Competition. By and in consideration of the
Company’s entering into this Agreement and the Merger Agreement, and the payments to be made by the Company hereunder,
and in further consideration of the Employee’s exposure to the Confidential Information of
the Entities, the Employee agrees that the Employee shall not, during the Employee’s
employment with the Company and thereafter for a period ending twenty-four (24) months
following the termination of the Employee’s employment for any reason (the
“Restriction Period”), directly or indirectly, own, manage, operate, join,
control, be employed by, or participate in the ownership, management, operation or control
of, or be connected in any manner with, including, without limitation, holding any
position as a stockholder, director, officer, consultant, independent contractor,
executive, partner, or investor in, any Restricted Enterprise (as defined below);
provided, that in no event shall ownership of three percent (3%) or less of the
outstanding securities of any class of any issuer whose securities are registered under
the Securities Exchange Act of 1934, as amended, standing alone, be prohibited by this
Section 3.2 so long as the Employee does not have, or exercise, any rights to manage or
operate the business of such issuer other than rights as a stockholder thereof. For
purposes of this Section 3.2, “Restricted Enterprise” shall mean any Person that
is engaged, in any geographic area in which the Parent, the Company or any of its or their
subsidiaries (the “Company Group”) operates or markets, in any business which is
in competition with the business of the Company Group (i) conducted during the preceding
twelve (12) months (or following the Employee’s termination of employment, the twelve (12)
months preceding the date of termination of the Employee’s employment with the Company) or
(ii) proposed to be conducted by any member of the Company Group in its business plan as
in effect at that time (or following the Employee’s termination of employment, the
business plan as in effect as of the date of termination of the
Employee’s employment with the Company). During the Restriction Period, upon




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	 	 	 	request of the Company, the Employee shall notify the Company of the Employee’s
then-current employment status.
	 
	 	3.3.	 	Non-Solicitation of Employees. During the Restriction Period, the Employee
shall not directly or indirectly hire, contact, induce or solicit (or assist any Person to
hire, contact, induce or solicit) for employment any person who is, or within six (6)
months prior to the date of such solicitation was, an employee of any Entity.
	 
	 	3.4.	 	Interference with Business Relationships. During the Restriction Period, the
Employee shall not directly or indirectly contact, induce or solicit (or assist any Person
to contact, induce or solicit) any customer or client of any Entity to terminate its
relationship or otherwise cease doing business in whole or in part with the Entity, or
directly or indirectly interfere with (or assist any Person to interfere with) any
material relationship between the Entities and any of its customers or clients.
	 
	 	3.5.	 	Extension of Restriction Period. The Restriction Period shall be tolled for
any period during which the Employee is in breach of any of Section 3.2, 3.3 or 3.4
hereof.
	 
	 	3.6.	 	Remedies. The Employee agrees that any breach of the terms of this Section 3
would result in irreparable injury and damage to the Company Group for which the Company
Group would have no adequate remedy at law; the Employee therefore also agrees that in the
event of said breach or any threat of breach, any member of the Company Group shall be
entitled to an immediate injunction and restraining order, from any court with
jurisdiction over the Employee and the matter, to prevent such breach and/or threatened
breach and/or continued breach by the Employee and/or any and all Persons acting for
and/or with the Employee, without having to prove damages, in addition to any other
remedies to which the member of the Company Group may be entitled at law or in equity. The
terms of this Section 3.6 shall not prevent any member of the
Company Group from pursuing any other available remedies for any breach or threatened breach
hereof, including, without limitation, the recovery of damages from the Employee. The
Employee further agree that the provisions of the covenants contained in this Section 3
are reasonable and necessary to protect the businesses of the Entities because of the
Employee’s access to Confidential Information and the Employee’s material participation in
the operation of such businesses.
	 
	 	3.7.	 	Acknowledgment. The Employee acknowledges that the Parent and the Company would
not have entered into the Merger Agreement unless the Employee entered into this Agreement.






	4.	 	Non-Disparagement. From and after the Effective Time and following termination of the
Employee’s employment with the Company, the Employee shall not make any statement that
criticizes, ridicules, disparages, or is otherwise derogatory of any member of the Company
Group or any of its employees, officers, directors, or stockholders.




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	5.	 	Enforceability of Covenants. The Company’s obligation to make any or all of the
payments provided for under this Agreement shall cease and terminate in the event of a
material breach by the Employee of any of the covenants contained herein. The Employee
acknowledges that such payments are full and adequate consideration for the Employee’s
covenants with the Company.
	 
	6.	 	Stock Options. By executing this Agreement, the Employee consents to the treatment of
the Options held by the Employee that is described in Section 3.6 of the Merger Agreement.
	 
	7.	 	Severability.Whenever possible, each provision or portion of any provision of this
Agreement, including those contained in Section 3 hereof, will be interpreted in such manner as
to be effective and valid under applicable law. The invalidity or unenforceability of any
provision or portion of any provision of this Agreement in any jurisdiction shall not affect
the validity or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision or portion of any
provision, in any other jurisdiction. In addition, should a court or arbitrator determine that
any provision or portion of any provision of this Agreement, including those contained in
Section 3 hereof, is not reasonable or valid, either in period of time, geographical area, or
otherwise, the parties agree that such provision should be interpreted and enforced to the
maximum extent which such court or arbitrator deems reasonable or
valid.
	 
	8.	 	Assignments, etc. The Employee shall not transfer, assign, anticipate, mortgage, or
otherwise encumber in advance any of the benefits payable hereunder. The Employee agrees that
the Company may assign this Agreement to the Parent or any of its subsidiaries, and this
Agreement shall be binding upon the parties hereto, their heirs, executors, administrators,
successors or assigns.
	 
	9.	 	Amendments. This Agreement may be amended or revoked at any time only by mutual
written agreement of the parties.
	 
	10.	 	Entire Agreement. This Agreement represents the complete agreement and understanding
between the Employee and the Company pertaining to the Employee’s eligibility for a retention
bonus and supersedes all prior agreements or understandings, written or oral, between the
parties with respect to such subject matters. In the event that the Merger
Agreement is terminated prior to the Effective Time, this Agreement shall be void ab initio and
of no force and effect.






	11.	 	Governing Law. The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the State of New York without giving effect to the
conflicts of laws principles thereof.





[signature page follows]





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     IN WITNESS WHEREOF, the parties have exercised this Agreement as of the date first set
forth above.



	 	 	 	 	 	 	 	 	 	 	 
	TEREX CORPORATION	 	 	 	A.S.V., INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Eric I Cohen
	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 

	 	Eric I Cohen, Senior Vice President	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Dated:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	THOMAS KARGES	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 





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     IN WITNESS WHEREOF, the parties have exercised this Agreement as of the date first set
forth above.



	 	 	 	 	 	 	 	 	 	 	 
	TEREX CORPORATION	 	 	 	A.S.V., INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 
 

	 	 	 	By:
	 	/s/ Richard A. Benson
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Dated:
	 	1-13-08	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	THOMAS KARGES	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Thomas Karges	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	1/13/08	 	 	 	 	 	 	 	 






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Exhibit A




RELEASE OF CLAIMS




               This
RELEASE OF CLAIMS, dated as of ___ is made and entered into by and between
A.S.V., Inc., a Minnesota corporation (the “Company”), Terex Corporation, a Delaware
Corporation (the “Parent”) and Thomas R. Karges (the “Employee”) (the
“Release”).



               WHEREAS, the Company and the Employee are parties to that certain Retention Agreement, dated
as of January 13, 2008 (the “Retention Agreement”); and



               WHEREAS, the Company’s obligations to make the payments described in Sections 1 and 2 of the
Retention Agreement are conditioned upon the Employee’s execution, delivery, and non-revocation of
a valid and enforceable general release of claims.



               NOW THEREFORE, in consideration of the mutual covenants contained herein and in the Retention
Agreement and other valid consideration, the sufficiency of which is acknowledged, the parties
hereto agree as follows:




	1.	 	General Release of Claims.






	 	(a)	 	Release. In consideration of the payments and benefits to be made to the Employee
pursuant to the Retention Agreement, the Employee, with the intention of binding the Employee
and the Employee’s heirs, executors, administrators and assigns, does hereby release, remise,
acquit and forever discharge the Parent, the Company and each of its and their subsidiaries and
affiliates (the “Company Affiliated Group”), their present and former officers,
directors, executives, agents, shareholders, attorneys, employees and employee benefits plans
(and the fiduciaries thereof), and the successors, predecessors and assigns of each of the
foregoing (collectively, the “Company Released Parties”), of and from any and all
claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums
of money, accounts, financial obligations, suits, expenses, attorneys’ fees and liabilities of
whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent,
unliquidated or otherwise and whether now known, unknown, suspected or unsuspected which the
Employee, individually or as a member of a class, now has, owns or holds, or has at any time
heretofore had, owned or held, against any Company Released Party (an “Action”) arising
on or prior to the date hereof out of or in connection with the Employee’s service as an
employee, officer, shareholder and/or director to any member of the Company Affiliated Group
(or the predecessors thereof), including for breach of contract, impairment of economic
opportunity, defamation, intentional infliction of emotional harm or other tort and for any
violation of applicable state and local labor and employment laws (including, without
limitation, all laws concerning harassment, discrimination, retaliation and other unlawful or
unfair labor and employment practices), any and all Actions based
on the Employee Retirement Income Security Act of 1974 (“ERISA”), and any and all
Actions arising under the civil rights laws of any federal, state or local jurisdiction,
including, without limitation, Title VII of the Civil Rights Act of 1964 (“Title VII”),
the Americans with Disabilities Act (“ADA”), Sections 503 and 504 of the Rehabilitation
Act, the Family and




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     Medical Leave Act and the Age Discrimination in Employment Act (“ADEA”),
excepting only:




	 	i.	 	any Action by the Employee to enforce the Employee’s rights under the
Retention Agreement;
	 
	 	ii.	 	rights to indemnification the Employee may have (A) under applicable
corporate law, (B) under the by-laws or certificate of incorporation of any Company
Released Party or (C) as an insured under any director’s and officer’s liability
insurance policy now or previously in force;
	 
	 	iii.	 	claims (A) for benefits under any health, disability, retirement,
deferred compensation, life insurance or other, similar employee benefit plan or
arrangement of any member of the Company Affiliated Group and (B) for earned but
unpaid base salary through the date hereof; and
	 
	 	iv.	 	claims for the reimbursement of unreimbursed business expenses incurred
prior to the date hereof.






	 	(b)	 	No Admissions, Complaints or Other Claims. The Employee acknowledges and
agrees that the release of claims set forth herein is not to be construed in any way as an
admission of any liability whatsoever by any Company Released Party, any such liability
being expressly denied. The Employee also acknowledges and agrees that the Employee has
not, with respect to any transaction or state of facts existing prior to the date hereof,
filed any Actions against any Company Released Party with any governmental agency, court
or tribunal.
	 
	 	(c)	 	Application to all Forms of Relief. This Release applies to any relief no
matter how called, including, without limitation, wages, back pay, front pay, compensatory
damages, liquidated damages, punitive damages for pain or suffering, costs and attorney’s
fees and expenses.
	 
	 	(d)	 	Specific Waiver. The Employee specifically acknowledges that the Employee’s
acceptance of the terms of this Release, is, among other things, a specific waiver of any
and all Actions under Title VII, ADEA, ADA and any state or local law or regulation in
respect of discrimination of any kind; provided, however, that nothing herein shall be
deemed, nor does anything herein purport, to be a waiver of any right or Action which by
law the Employee is not permitted to waive.






	2.	 	Voluntariness. The Employee acknowledges and agrees that the Employee is relying
solely upon the Employee’s own judgment in deciding whether to execute this Release; that the
Employee is over eighteen years of age and is legally competent to sign this Release; that the
Employee is signing this Release of the Employee’s own free will; that the Employee has read
and understood this Release before signing it; and that the Employee is signing this Release
in exchange for consideration that the Employee believes is satisfactory and adequate. The
Employee also acknowledges and agrees that the Employee has been




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	 	 	informed of the right to consult with legal counsel and has been encouraged to do so.






	3.	 	Severability. If any provision or portion of this Release or the application of any
provision or portion of this Release shall be determined to be invalid or unenforceable to any
extent or for any reason, all other provisions and portions of this Release shall remain in
full force and shall continue to be enforceable to the fullest and greatest extent permitted
by law.






	4.	 	Governing Law. Except for matters hereunder as to which federal law is applicable,
this Release shall be construed and enforced in accordance with, and the rights and
obligations of the parties hereto shall be governed by, the laws of the State of New York,
without giving effect to the conflicts of law principles thereof.





[signature page follows]




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     IN WITNESS WHEREOF, the parties have executed this Release as of the date first set forth above.



	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	TEREX CORPORATION	 	A.S.V., INC.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	Name:	 	 	 	 
	 

	 	Title:
	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	THOMAS R. KARGES	 	 	 	 	 	 	 	 
	 
	By:

	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 






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