W.D.  GEHL/GEHL
EMPLOYMENT AGREEMENT  



INDEX 


	 	 	 
	Section 1	EMPLOYMENT	1 
	
Section 2	TERM OF EMPLOYMENT	2 
	
Section 3	COMPENSATION	2 
	
Section 4	TERMINATION OF EMPLOYMENT	2 
	
Section 5	CHANGE IN CONTROL	3 
	
Section 6	BENEFITS	8 
	
      (i)	RETIREMENT/DEATH BENEFIT	9 
	
      (ii)	BONUS	9 
	
      (iii)	SPLIT DOLLAR LIFE INSURANCE	9 
	
Section 7	REIMBURSEMENT OF EXPENSES	10 
	
Section 8	VACATION	10 
	
Section 9	ADDITIONAL UNDERTAKINGS OF EXECUTIVE; NON-COMPETITION PROVISIONS	10 
	
Section 10	ASSIGNS AND SUCCESSORS	11 
	
Section 11	CONSTRUCTION	11 
	
Section 12	NOTICES	11 
	
Section 13	SEVERABILITY	12 
	
Section 14	LIMITATION ON PAYMENTS	12 
	
Section 15	GOVERNING LAW; RESOLUTION OF DISPUTES	13 
	
Section 16	AMENDMENT	14 
	
Section 17	EXPENSES AND INTEREST	14 
	
Section 18	EXTENDED CARE INSURANCE	15 
















WILLIAM D. GEHL/GEHL
COMPANY 
EMPLOYMENT AGREEMENT 






        THIS
EMPLOYMENT AGREEMENT is made by and between Gehl Company (“GEHL”), a
Wisconsin corporation with its principal place of business in West Bend, Wisconsin,
and William D. Gehl, (“Executive”) as of June 14, 2004.  





RECITALS  





        WHEREAS,
GEHL wishes to continue to retain the services of Executive as its Chairman of the Board
and Chief Executive Officer and Executive desires to continue to serve GEHL in that
capacity; and  





        NOW,
THEREFORE, in consideration of the mutual promises and agreements set forth herein, the
parties agree as follows:  





        Section
1.    Employment.    GEHL shall employ Executive and Executive
shall serve as the Chairman of the Board and Chief Executive Officer of GEHL during the
term of employment set forth in Section 2 of this Agreement, and as such term shall be
extended as provided herein. Executive shall report only to the Board of Directors of
GEHL, and his powers and authority and responsibilities shall be superior to those of any
other officer or employee of GEHL or of any subsidiary thereof. Executive agrees, subject
to his election as such, to serve as a Director, and as a member of any committee of the
Board of Directors of GEHL, during such term of employment.  





        If
at any time during the term of employment, the Board of Directors of GEHL shall not
reelect Executive as Chairman of the Board and Chief Executive Officer of GEHL or shall
remove him from such office (other than for cause), or if at any time during the term of
employment Executive shall fail to be vested by GEHL with the powers and authority of the
Chairman of the Board and Chief Executive Officer of GEHL as described above, Executive
shall have the right, by written notice to GEHL, to terminate his services hereunder,
effective as of the last day of the month of receipt by GEHL of any such written notice,
and Executive shall have no further obligation under this Agreement. Termination by
Executive under this Section 1 shall be treated as a termination of employment by GEHL
other than for cause and shall be governed by the provisions of Section 4 or 5 of
this Agreement, as applicable.  










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        Section
2.    Term of Employment.    Executive’s “term of
employment,” as this phrase is used throughout this Agreement, shall be for the
period commencing June 14, 2004, and ending on June 14, 2008 unless Executive’s
employment is terminated earlier with the consequences described herein in which event
the term of employment shall extend through the date of such termination.  





        Section
3.    Compensation.    GEHL shall pay or cause to be paid to
Executive during the period commencing June 14, 2004 through the end of the term of
employment a minimum base salary of Four Hundred Thirty-two Thousand Three Hundred
Dollars ($432,300.00) per annum, payable in twenty-six (26) equal installments (subject
to the appropriate withholding items). This salary shall be reviewed at least annually by
the GEHL Board of Directors or a committee thereof and increased or decreased in its
discretion, subject to the minimum above.  





        Section
4.    Termination of Employment.    If Executive’s
employment is involuntarily terminated by GEHL during the term of employment for any
reason other than (i) cause, as defined below in this Section 4, (ii) circumstances
governed by Section 5 hereof or (iii) Executive’s death or disability, Executive
shall be entitled to receive, and GEHL shall be obligated to pay, his full base salary
set forth in Section 3 above as in effect immediately prior to such termination, for two
(2) full years from date of termination. During such year, Executive shall also continue
to participate in all group welfare benefit plans and programs of GEHL referred to in the
first sentence of Section 6 hereof to the extent that such continued participation is
possible under the general terms and provisions of such plans and programs. In the event
that Executive’s continued participation in any such plans and programs is barred,
and in lieu thereof, Executive shall be entitled to receive for the above period an
amount equal to the sum of the average annual contributions, payments, credits, or
allocations made by GEHL to him, to his account, or on his behalf over the three (3)
fiscal years (or fraction thereof) of GEHL preceding the termination of his employment
under such plans and programs from which his continued participation is barred.  









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        Termination
by GEHL for “cause” shall mean termination by action of the GEHL Board of
Directors because of the failure of Executive to fulfill his obligations under this
Agreement or because of serious willful misconduct by Executive in respect of his
obligations under this Agreement, as, for example, the commission by Executive of a
felony or the perpetration by Executive of a common-law fraud against GEHL or any major
material action (i.e., not procedural or operational differences) taken against the
expressed directive of the Board.  





        If
Executive’s employment is terminated by Executive, as a result of Executive’s
death or disability, or by GEHL for cause, Executive’s base salary shall terminate
on such date, and Executive’s participation in GEHL’s fringe benefit plans
shall terminate in accordance with their terms.  





        Section
5.    Change in Control.    In the event a Change in Control, as
defined below, occurs during the term of Executive’s employment under this
Agreement, the Executive’s term of employment shall be automatically extended to a
date which is two years after the occurrence of the Change in Control (such two-year
extended term of employment referred to in this Section 5 as the “Change in Control
Contract Term”). In addition, upon the occurrence of a Change in Control, (i) the
unvested stock options awarded to Executive under the GEHL 1995 Option Plan shall vest,
and (ii) all restrictions limiting the exercise, transferability, entitlement or
incidents of ownership of any outstanding award, including options, restricted stock,
supplemental retirement and death benefits, deferred compensation, or other property or
rights granted to the Executive after the date of this Agreement (other than pursuant to
plans of general application to salaried employees such as tax-qualified retirement
plans, life insurance and the health plan) shall lapse, and such awards shall become
fully vested and be held by or for the Executive free and clear of all such restrictions.
This provision shall apply to all such property or rights notwithstanding the provisions
of any other plan or agreement.  










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        If
Executive’s employment shall be terminated by GEHL without cause (as defined in
Section 4) or the Executive shall terminate his employment for Good Reason (as defined
below in this Section 5) during the Change in Control Contract Term, or if GEHL shall
terminate Executive’s employment without cause within six (6) months before the
execution of a definitive purchase agreement that ultimately results in a Change in
Control and Executive shall reasonably demonstrate that such termination was in
connection with or in anticipation of the Change in Control, Executive shall be entitled
to the following paid in a lump sum within 30 days of the date of the Executive’s
termination of employment hereunder (the “Termination Date”):  





        (a)    
               The base salary as then in effect under Section 3 hereof (“the
Current Base                Salary”) through the Termination Date to the extent not
theretofore paid;  





        (b)    
               The bonus which would be earned by Executive through the Termination Date
               computed under GEHL’s bonus plan, ignoring any requirement that
Executive                be employed through the end of the fiscal year and not reduced
for any deferrals                which may otherwise be required under the bonus plan;  












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        (c)    
               Any compensation previously deferred, including that deferred under any
bonus                plan as then in effect, which deferrals shall become immediately
vested upon the                Change in Control, to the extent not previously paid; and  





        (d)    
               Three (3) times the sum of (i) the Current Base Salary and (ii) the
highest                bonus amount earned by the Executive in any of the five fiscal
years which                precede the year in which the Termination Date occurs,
including any amounts                deferred.  





        (e)    
               The present value of the Employee’s benefits under Section 2 of the
               Employee’s most current Supplemental Retirement Benefit Agreement
using a                discount rate equal to the “GATT” interest rate that
would be used by                the Gehl Company Retirement Income Plan “B” to
calculate the amount of                a lump sum distribution to be made on the same
date as the payment                hereunder.” 





        Executive
shall also receive, at the expense of GEHL, outplacement services, on an individualized
basis at a level of service commensurate with Executive’s most senior status with
GEHL during the 180-day period prior to the date of the Change in Control, provided by a
nationally recognized senior executive placement firm selected by GEHL with the consent
of Executive, provided that the cost to GEHL of such services shall not exceed 20% of
Executive’s Current Base Salary. In the alternative, Executive, at his election, may
choose to receive the net amount of these services, up to a maximum of $15,000, to be
paid as a lump sum within 30 days of the Termination Date as outlined above.  










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        In
addition, for twenty-four (24) months after the Termination Date, GEHL shall provide to
the Executive and his family medical benefits at least substantially equal on a pre-tax
basis to those provided to him and his family just prior to the date of the Change in
Control, whether pursuant to a group plan or individual coverage. Notwithstanding the
foregoing, if Executive obtains employment during the 24-month period and family medical
benefits are available from the new employer, GEHL’s obligation under this paragraph
shall cease for so long as Executive remains employed.  





        In
no event shall Executive be obligated to seek other employment or take any other action
by way of mitigation of the amounts payable to the Executive under this Section 5 and
such amounts shall not be reduced (except to the extent set forth in the immediately
preceding paragraph) whether or not the Executive obtains other employment. In addition,
GEHL will not be entitled to reduce the amounts payable under this Section 5 for any
claims or rights it may have against Executive.  





        “Change
in Control,” for the purposes of this Agreement, shall be defined as one of the
following:  





        (i)    
               securities of GEHL representing 25% or more of the combined voting power
of                GEHL’s then outstanding voting securities are acquired pursuant to
a tender                offer or an exchange offer; or  





        (ii)   
               the shareholders of GEHL approve a merger or consolidation of GEHL with
any                other corporation as a result of which less than fifty percent (50%)
of the                outstanding voting securities of the surviving or resulting entity
are owned by                the former shareholders of GEHL (other than a shareholder who
is an                “affiliate,” as defined under rules promulgated under the
Securities                Act of 1933, as amended, of any party to such consolidation or
merger); or  





        (iii)  
               the shareholders of GEHL approve the sale of substantially all of GEHL’s
               assets to a corporation which is not a wholly-owned subsidiary of GEHL; or  









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        (iv)   
               any person becomes the “beneficial owner,” as defined under
rules                promulgated under the Securities Exchange Act of 1934, as amended,
directly or                indirectly, of securities of GEHL representing twenty-five
percent (25%) or more                of the combined voting power of GEHL’s then
outstanding securities the                effect of which (as determined by the Board) is
to take over control of GEHL; or  





        (v)    
               during any period of two consecutive years, individuals who, at the
beginning of                such period, constituted the Board of Directors of GEHL
cease, for any reason,                to constitute at least a majority thereof, unless
the election or nomination for                election of each new director was approved
by the vote of at least two-thirds of                the directors then still in office
who were directors at the beginning of the                period.  





        “Good
Reason” for the purposes of this Agreement, shall be defined as the occurrence of
any one of the following events or conditions after, or in anticipation of, the Change in
Control.  





        (i)    
               The removal of the Executive from, or any failure to reelect or reappoint
the                Executive to, any of the positions held with GEHL on the date of the
Change in                Control or any other positions with GEHL to which the Executive
shall thereafter                be elected, appointed or assigned, except in connection
with the termination of                his employment for disability, cause, as a result
of his death or by the                Executive other than for Good Reason;  





        (ii)   
               A good faith determination by the Executive that there has been a
significant                adverse change, without the Executive’s written consent,
in the                Executive’s working conditions or status with GEHL from such
working                conditions or status in effect immediately prior to the Change in
Control,                including but not limited to (A) a significant change in the
nature or scope of                the Executive’s authority, powers, functions,
duties or responsibilities,                or (B) a significant reduction in the level of
support services, staff,                secretarial and other assistance, office space
and accoutrements;  










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        (iii)  
               Any material breach by GEHL of any provision of this Agreement;  





        (iv)   
               Any purported termination of the Executive’s employment for cause by
GEHL                which is determined under Section 16 not to be for conduct
encompassed in the                definition of cause contained herein;  





        (v)    
               The failure of GEHL to obtain an agreement, satisfactory to the Executive,
from                any successor or assign of GEHL, to assume and agree to perform this
Agreement,                as contemplated in Section 11 hereof;  





        (vi)   
               GEHL’s requiring Executive to be based at any office or location
which is                not within a fifty (50) mile radius of West Bend, Wisconsin,
except for travel                reasonably required in the performance of Executive’s
responsibilities                hereunder, without Executive’s consent; or  





        (vii)  
               Any voluntary termination of employment by Executive for any reason where
the                notice of termination is delivered by Executive to GEHL at any time
within                ninety (90) days following the six-month anniversary of the Change
in Control.  





        For
purposes of this Section 5, any good faith determination of Good Reason made by the
Executive shall be conclusive.  





        Section
6.    Benefits.    Executive shall be entitled to participate in
any group insurance, hospitalization, medical, health and accident, disability, or
similar plan or program of GEHL now existing or established hereafter to the extent that
he is eligible under the general provisions thereof.  









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        Furthermore,
Executive shall be entitled to other payments, in addition to the base salary above, as
provided below:  





        (i)    
Retirement/Death Benefit.    The Supplemental Retirement Benefit Agreement
               between Executive and GEHL shall dictate the Retirement/Death benefits
other                than those provided under the employee benefit plans generally
available to all                salaried employees. Such Supplemental Retirement Benefit
Agreement is                specifically referenced and made a part hereof.  





        (ii)   
Bonus.    Executive shall be entitled to an annual cash bonus as calculated
               in accordance with the Company’s Executive Compensation Plan or other
               similar Plan in effect in the event the Executive is employed with GEHL on
the                last day of the applicable calendar year. Notwithstanding the
foregoing, in the                event Executive’s employment is terminated during
the applicable year as a                result of death or disability or by GEHL for any
reason other than cause, as                defined in Section 4 hereof, or circumstances
governed by Section 5 hereof,                Executive shall be entitled to a pro rata
portion of the bonus which would                otherwise have been payable for such
calendar year of termination. The pro rata                portion shall be equal to the
number of completed months in the calendar year                through the date of
termination divided by twelve (12).  





        (iii)  
Split Dollar Life Insurance.    Executive, as the insured, a trust for the
               benefit of Executive’s family (the “Trust”), as the owner,
and                GEHL have entered into the Split Dollar Insurance Agreement regarding
the                purchase of a $1 million whole life insurance policy. The Trust shall
execute a                collateral assignment of such policy to GEHL to secure its
interest therein as                provided in the Split Dollar Insurance Agreement. Said
agreement is specifically                referenced and made a part hereof.  










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        Section
7.    Reimbursement of Expenses.    GEHL shall pay or reimburse
Executive for all reasonable travel and other expenses in accordance with GEHL policy.
GEHL further agrees to furnish Executive with a private office and a private secretary
and such other assistance and accommodations as shall be suitable to the character of
Executive’s position with GEHL and adequate to the performance of his duties
hereunder.  





        Section
8.    Vacation.    Executive shall be entitled to five (5) weeks paid vacation each
year.  





        Section
9.    Additional Undertakings of Executive; Non-competition
Provisions.    Executive agrees that during the term of employment under this Agreement
he will apply on a full-time basis (allowing for usual vacations and sick leave) all of
his skill and experience to the performance of his duties in such employment. It is
understood that Executive may have other business investments and participate in other
business ventures which may, from time to time, require minor portions of his time, but
which shall not interfere or be inconsistent with his duties hereunder. Executive agrees
that during the term of employment and for one (1) year thereafter, or, in the event of
termination of his employment by GEHL for cause (as defined in Section 4 above) for two
(2) years after such termination, Executive will not, without the prior written approval
of the Board of Directors of GEHL, become an owner, officer, employee, agent, partner, or
director of any business enterprise in substantial direct competition (as defined below)
with GEHL or any subsidiary of GEHL as the business of GEHL or any subsidiary of GEHL may
be constituted during the term of employment or at the termination thereof. If Executive’s
employment is terminated by GEHL other than for cause (as defined in Section 4 above), he
will not be subject to any restrictions under this Section 9.  









10 












        If
Executive’s employment by GEHL is terminated by him (other than under the
circumstances set forth in Section 1 above), in breach of this Agreement during the term
of employment, Executive shall not, for a two (2)-year period following such termination,
become an owner, officer, employee, agent, partner, or director of any business
enterprise in substantial direct competition (as defined below) with GEHL or any
subsidiary of GEHL as the business of GEHL or any subsidiary of GEHL may be constituted
at the time of such termination.  





        For
the purposes of this Section 9, a business enterprise with which Executive becomes
associated as an owner, officer, employee, agent, partner or director, shall be
considered in “substantial direct competition,” if, during a year (adjusted for
fractions of a year in respect of a new enterprise) when such competition is prohibited,
its sales of any product or service sold by GEHL or any subsidiary of GEHL amount to more
than either ten percent (10%) of its (new enterprise) total sales or Ten Million
($10,000,000.00) Dollars.  





        Section
10.  Assigns and Successors.    The rights and obligations of GEHL under this
Agreement shall inure to the benefit of and shall be binding upon the successors and
assigns of GEHL and GEHL shall require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that GEHL would be
required to perform if no such succession or assignment had taken place.  





        Section
11.  Construction.    This Agreement shall be construed under the laws of the State of
Wisconsin. Section headings are for convenience only and shall not be considered a part
of the terms and provisions of this Agreement.  





        Section
12.  Notices.    All notices under this Agreement shall be in writing and shall be
deemed effective when delivered in person (in GEHL’s case, to its Secretary) or by
facsimile to the number provided for such purpose by the applicable party or forty-eight
(48) hours after deposit thereof in the U.S. mails, postage prepaid, addressed, in the
case of Executive, to his last known address as carried on the personnel records of GEHL
and, in the case of GEHL, to the corporate headquarters, attention of the Secretary, or
to such other address as the party to be notified may specify by notice to the other
party.  









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        Section
13.  Severability.    Should it be determined that one or more of the clauses of this
Agreement is (are) found to be unenforceable, illegal, contrary to public policy, etc.,
this Agreement remains in full force and effect except for the unenforceable, illegal, or
contrary to public policy provisions.  





        Section
14.  Limitation on Payments.  





        (a)    Notwithstanding
anything contained herein to the contrary, prior to the payment           of any amounts
pursuant to Section 5 hereof, a national accounting firm           designated by GEHL
(the “Accounting Firm”) shall compute whether there           would be any
“excess parachute payments” payable to the Executive,           within the
meaning of Section 280G of the Internal Revenue Code of 1986, as           amended (the
“Code”), taking into account the total “parachute           payments,” within
the meaning of Section 280G of the Code, payable to the           Executive by GEHL or
any successor thereto under this Agreement and any other           plan, agreement or
otherwise. If there would be any excess parachute payments,           the Accounting Firm
will compute the net after-tax proceeds to the Executive,           taking into account
the excise tax imposed by Section 4999 of the Code, if (i)           the payments
hereunder were reduced, but not below zero, such that the total           parachute
payments payable to the Executive would not exceed three (3) times the           “base
amount” as defined in Section 280G of the Code, less One Dollar           ($1.00) or
(ii) the payments hereunder were not reduced. If reducing the           payments
hereunder would result in a greater after-tax amount to the Executive,           such
lesser amount shall be paid to the Executive. If not reducing the payments
          hereunder would result in a greater after-tax amount to the Executive, such
          payments shall not be reduced. The determination by the Accounting Firm shall
be           binding upon GEHL and the Executive subject to the application of Section
22(b)           hereof.  









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        (b)    As
a result of the uncertainty in the application of Section 280G of the Code,           it
is possible that excess parachute payments will be paid when such payment           wold
result in a lesser after-tax amount to the Executive; this is not the           intent
hereof. In such cases, the payment of any excess parachute payments will           be
void ab initio as regards any such excess. Any excess will be treated as a           loan
by GEHL to the Executive. The Executive will return the excess to GEHL,           within
fifteen (15) business days of any determination by the Accounting Firm           that
excess parachute payments have been paid when not so intended, with           interest at
an annual rate equal to the rate provided in Section 1274(d) of the           Code (or
120% of such rate if the Accounting Firm determines that such rate is           necessary
to avoid an excise tax under Section 4999 of the Code) from the date           the
Executive received the excess until it is repaid to GEHL.  





        (c)    All
fees, costs and expenses (including, but not limited to, the cost of           retaining
experts) of the Accounting Firm shall be borne by GEHL and GEHL shall           pay such
fees, costs and expenses as they become due. In performing the           computations
required hereunder, the Accounting Firm shall assume that taxes           will be paid
for state and federal purposes at the highest possible marginal tax           rates which
could be applicable to the Executive in the year of receipt of the           payments,
unless the Executive agrees otherwise.  





        Section
15.  Governing Law; Resolution of Disputes.    This Agreement and the rights and
obligations hereunder shall be governed by and construed in accordance with the laws of
the State of Wisconsin. Any dispute arising out of this Agreement shall, at the Executive’s
election, be determined by arbitration under the rules of the American Arbitration
Association then in effect (in which case both parties shall be bound by the arbitration
award) or by litigation. Whether the dispute is to be settled by arbitration or
litigation, the venue for the arbitration or litigation shall be West Bend, Wisconsin or,
at the Executive’s election, if the Executive is no longer residing or working in
the West Bend, Wisconsin metropolitan area, in the judicial district encompassing the
city in which the Executive resides; provided, that, if the Executive is
not then residing in the United States, the election of the Executive with respect to
such venue shall be either West Bend, Wisconsin or in the judicial district encompassing
that city in the United Sates among the thirty cities having the largest population (as
determined by the most recent United States Census data available at termination date)
which is closest to the Executive’s residence. The parties consent to personal
jurisdiction in each trial court in the selected venue having subject matter jurisdiction
notwithstanding their residence or situs, and each party irrevocably consents to service
of process in the manner provided hereunder for the giving of notices.  










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        Section
16.  Amendment.    Section 17. No modification or amendment to this Agreement may be
made without the written consent of the parties hereto.  





        Section
17.  Expenses and Interest.    If (i) a dispute arises with respect to the enforcement
of Executive’s rights under this Agreement, (ii) any legal or arbitration proceeding
shall be brought to enforce or interpret any provision contained herein or to recover
damages for breach hereof, or (iii) any tax audit or proceeding is commenced that is
attributable in part to the application of Section 4999 of the Code, in any case so long
as Executive is not acting in bad faith, then GEHL shall reimburse Executive for any
reasonable attorney’s fees and necessary costs and disbursements incurred as a
result of such dispute, legal or arbitration award obtained by Executive calculated at
the rate of interest announced by M&I Bank, Milwaukee, Wisconsin, from time to time
as its prime or base lending rate from the date that payments to Executive should have
been made under this Agreement. Within ten days after Executive’s written request
therefor, GEHL shall pay to Executive, or such person or entity as Executive may
designate in writing to GEHL, Executive’s reasonable Expenses in advance of the
final disposition or conclusion of any such dispute, legal or arbitration proceeding.  










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        Section
18.   Extended Care Insurance.    GEHL agrees to provide Executive with an extended
care insurance policy which will be fully paid up in ten (10) years, providing a $200/day
benefit for six (6) years with an annual premium of $6,419.30. GEHL shall pay the premium
as long as Executive is employed. Thereafter, it shall be the responsibility of
Executive.  





        IN
WITNESS WHEREOF, GEHL COMPANY has caused this Agreement to be executed by its duly
authorized officers, and Executive has hereunto set his hand, all as of the date set
forth above.  






	Attest:

		GEHL COMPANY


	/s/ M. J. Mulcahy 
		/s/ Nicholas C. Babson 

	Its:  Secretary		Its:  Director:  Nicholas C. Babson
	
/s/ M. J. Mulcahy 
		
/s/ William D. Gehl 

	Witness as to William D. Gehl		William D. Gehl, Executive











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