EMPLOYMENT AGREEMENT

         THIS AGREEMENT by and between Pierce Manufacturing Inc., a Wisconsin
corporation (the "Company"), and John W. Randjelovic, (the "Executive"), dated
as of the 16th day of September 1996.

                                 WITNESSETH THAT

         WHEREAS, the parties wish to provide for the employment by the Company
of the Executive, and the Executive wishes to serve the Company and its
affiliate, Oshkosh Truck Corporation, in the capacities and on the terms and
conditions set forth in this Agreement.

         NOW THEREFORE, it is hereby agreed as follows:

         1. Employment Period. The Company shall employ the Executive, and the
Executive shall serve the Company, on the terms and conditions set forth in this
Agreement, for an initial period (the "Initial Period") commencing at the date
of this Agreement and ending on November 30, 1996. This Agreement thereafter
will renew automatically for successive terms of one (1) year each, unless
either party has given at least forty-five (45) days' advance written notice of
it or his intent to allow this Agreement to expire as of the end of such Initial
Period or renewal term. The term during which the Executive is employed by the
Company hereunder (including without limitation the Initial Period) is hereafter
referred to as the "Employment Period."

         In the event that for any reason, the Executive's employment continues
with the Company following the expiration of the Employment Period, as set forth
above, then for so long as the Executive is so employed by the Company, the
provisions of Sections 8 and 9 shall survive the expiration of the Employment
Period of this Agreement.

         2.    Position and Duties.
               -------------------

                  (a) The Executive shall serve as Vice President,
         Manufacturing; with such duties and responsibilities as are customarily
         assigned to such position, and such other duties and responsibilities
         not inconsistent therewith as may from time to time be assigned to him
         by the President (the "President") of the Company.

                  (b) During the Employment Period, and excluding any periods of
         vacation and sick leave to which the Executive is entitled, the
         Executive shall devote his full attention and time during normal
         business hours to the business and affairs of the Company and its
         affiliate and, to the extent necessary to discharge the
         responsibilities assigned to the Executive under this Agreement, use
         the Executive's reasonable best efforts to carry out such
         responsibilities faithfully and efficiently. It shall not be considered
         a violation of the foregoing for the Executive to serve on industry,
         civic, or charitable boards or committees, so long as such activities
         do not significantly interfere with the performance of the Executive's
         responsibilities as an employee of the Company and its affiliate in
         accordance with this Agreement.

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         3.    Compensation.
               ------------

                  (a) Base Salary. The Executive's compensation during the
         Employment Period shall be determined by the President, subject to the
         next sentence and paragraph (b) of Section 3. During the Initial
         Period, the Executive shall receive an annual base salary ("Annual Base
         Salary") of not less than his aggregate annual base salary from Company
         as in effect immediately before the date of this Agreement. The Annual
         Base Salary shall be payable in accordance with the Company's regular
         payroll practice for its executives, as in effect from time to time.
         During the Employment Period, the Annual Base Salary shall be reviewed
         for possible adjustment at least annually. Any adjustment in the Annual
         Base Salary shall not limit or reduce any other obligation of the
         Company under this Agreement. The term "Annual Base Salary" shall
         thereafter refer to the Annual Base Salary as so adjusted.

                  (b) Incentive Compensation. During the Employment Period, the
         Executive shall be provided the opportunity to participate in
         short-term incentive compensation plans and long-term incentive
         compensation plans which shall be developed and offered by the Company
         to executives employed in the business.

                  (c) Vacations and Holidays. The Executive shall be entitled to
         receive twenty (20) days of paid vacation per year together with the
         paid holidays available to all other management personnel.

                  (d) Fringe Benefits. The Executive shall be entitled to
         participate in fringe benefit plans and programs in effect from time to
         time for employees of the company, and on a basis appropriate to the
         position, including medical and dental insurance, expense
         reimbursements, pension and retirement benefits and other similar
         benefits.

                  (e) Reimbursements. The Company shall reimburse the Executive
         for actual out-of-pocket costs incurred by him in the course of
         carrying out his duties hereunder, such reimbursements to be made in
         accordance with the policies and procedures of the Company in effect
         from time to time.

                  (f) Withholding. All payments under this Agreement shall be
         subject to withholding or deduction by reason of the Federal Insurance
         Contributions Act, the federal income tax and state or local income tax
         and similar laws, to the extent such laws apply to such payments.

         4.    Termination of Employment.
               -------------------------

                  (a) Death or Disability. The Executive's employment shall
         terminate automatically upon the Executive's death during the
         Employment Period. The Company shall be entitled to terminate the
         Executive's employment because of the Executive's Disability during the
         Employment Period. "Disability" means that (i) the Executive has been
         unable, for a period of one hundred eighty (180) consecutive days, to
         perform the

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         Executive's duties under this Agreement, as a result of physical or
         mental illness or injury, and (ii) a physician selected by the Company
         or its insurers, and acceptable to the Executive or the Executive's
         legal representative, has determined that the Executive's incapacity
         will continue. A termination of the Executive's employment by the
         Company for Disability shall be communicated to the Executive by
         written notice, and shall be effective on the thirtieth day after
         receipt of such notice by the Executive (the "Disability Effective
         Date"), unless the Executive returns to full-time performance of the
         Executive's duties before the Disability Effective Date.

                  (b)      By the Company.
                           --------------

                           (i) The Company may terminate the Executive's
                  employment during the Employment Period for Cause or without
                  Cause. "Cause" means:

                                    A. The willful and continued failure of the
                           Executive to substantially perform the Executive's
                           duties under this Agreement (other than as a result
                           of physical or mental illness or injury), after the
                           President delivers to the Executive a written demand
                           for substantial performance that specifically
                           identifies the manner in which the President believes
                           that the Executive has not substantially performed
                           the Executive's duties; or

                                    B. Illegal conduct or gross misconduct by
                           the Executive, in either case that is willful and
                           results in material and demonstrable damage to the
                           business or reputation of the Company.

                                    C. Violation of any of the covenants set
                           forth under Sections 8 and 9 of this Agreement.

                           No act or failure to act on the part of the Executive
                  shall be considered "willful" unless it is done, or omitted to
                  be done, by the Executive in bad faith or without reasonable
                  belief that the Executive's action or omission was in the best
                  interests of the Company.

                           (ii) A termination of the Executive's employment for
                  Cause shall be effected by the President following written
                  notice to the Executive and an opportunity for the Executive
                  to be heard by the Chairman and CEO of Oshkosh Truck
                  Corporation.

                           (iii) A termination of the Executive's employment
                  without Cause shall be effected by the President following
                  written notice to the Executive and an opportunity for the
                  Executive to be heard by the Chairman and CEO of Oshkosh Truck
                  Corporation.


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                  (c)      Good Reason.
                           -----------

                           (i) The Executive may terminate employment for Good
                  Reason or without Good Reason. "Good Reason" means:

                                    A. The assignment to the Executive of any
                           duties inconsistent in any respect with paragraph (a)
                           of Section 2 of this Agreement, or any other action
                           by the Company that results in a diminution in the
                           Executive's position, including base salary,
                           authority, duties or responsibilities, other than an
                           isolated, insubstantial and inadvertent action that
                           is not taken in bad faith and is remedied by the
                           Company promptly after receipt of notice thereof from
                           the Executive.

                                    B. Any failure by the Company to comply with
                           any provision of Section 3 of this Agreement, other
                           than an isolated, insubstantial and inadvertent
                           failure that is not taken in bad faith and is
                           remedied by the Company promptly after receipt of
                           notice thereof from the Executive;

                                    C. Any purported termination of the
                           Executive's employment by the Company for a reason or
                           in a manner not expressly permitted by this
                           Agreement; or

                                    D. Any other substantial breach of this
                           Agreement by the Company that either is not taken in
                           good faith or is not remedied by the Company promptly
                           after receipt of notice thereof from the Executive.

                           (ii) A termination of employment by the Executive for
                  Good Reason shall be effected by giving the Company written
                  notice ("Notice of Termination for Good Reason") of the
                  termination within three (3) months of the event constituting
                  Good Reason, setting forth in reasonable detail the specific
                  conduct of the Company that constitutes Good Reason and the
                  specific provision(s) of this Agreement on which the Executive
                  relies. A termination of employment by the Executive for Good
                  Reason shall be effective on the fifth business day following
                  the date when the Notice of Termination for Good Reason is
                  given, unless the notice sets forth a later date (which date
                  shall in no event be later than thirty (30) days after the
                  notice is given).

                           (iii) A termination of the Executive's employment by
                  the Executive without Good Reason shall be effected by giving
                  the Company written notice of the termination.

                  (d) Date of Termination. The "Date of Termination" means the
         date of the Executive's death, the Disability Effective Date, the date
         on which the termination of the Executive's employment by the Company
         for Cause or without Cause or by the Executive for Good Reason is
         effective, or the date on which the Executive gives the Company notice
         of a termination of employment without Good Reason, as the case may be.


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         5.    Obligations of the Company upon Termination.
               -------------------------------------------

                  (a) By the Company other than for Cause, Death or Disability;
         by the Executive for Good Reason. If, during the Employment Period, the
         Company terminates the Executive's employment, other than for Cause,
         Death, or Disability, or the Executive terminates employment for Good
         Reason the Company shall continue to provide the Executive with the
         compensation and fringe benefits as set forth in paragraphs (a) and (d)
         of Section 3 as if he had remained employed by the Company pursuant to
         this Agreement through the end of the Employment Period, but, in no
         event for fewer than twelve (12) months. The payments provided pursuant
         to this paragraph (a) of Section 5 are intended as liquidated damages
         for a termination of the Executive's employment by the Company other
         than for Cause or Disability or for the actions of the Company leading
         to a termination of the Executive's employment by the Executive for
         Good Reason, and shall be the sole and exclusive remedy therefor.

                  (b) Death and Disability. If the Executive's employment is
         terminated by reason of the Executive's death or Disability during the
         Employment Period, the Company shall pay to the Executive or, in the
         case of the Executive's death, to the Executive's designated
         beneficiaries (or, if there is no such beneficiary, to the Executive's
         estate or legal representative), in a lump sum in cash within thirty
         (30) days after the Date of Termination, the sum of the following
         amounts (the "Accrued Obligations"): (1) any portion of the Executive's
         Annual Base Salary through the Date of Termination that has not yet
         been paid; (2) an amount representing Incentive Compensation due for
         the period through the Date of Termination; and (3) any accrued but
         unpaid vacation pay.

                  (c) By the Company for Cause; By the Executive Other than for
         Good Reason. If the Executive's employment is terminated by the Company
         for Cause during the Employment Period the Company shall pay the
         Executive the Annual Base Salary through the Date of Termination and
         the Company shall have no further obligations under this Agreement,
         except as specified in Section 6 below. If the Executive voluntarily
         terminates employment during the Employment Period, other than for Good
         Reason, the Company shall pay to the Executive: (1) any portion of the
         Executive's Annual Base Salary through the Date of Termination that has
         not yet been paid; and (2) any accrued vacation pay, both payable in a
         lump sum in cash within thirty (30) days of the Date of Termination,
         and the Company shall have no further obligations under this Agreement,
         except as specified in Section 6 below.

                  (d) Pierce Manufacturing Inc., Severance Plan. Not
         withstanding the foregoing subparagraphs (a), (b), and (c), the
         Executive also shall be entitled to receive any applicable benefits
         under the Pierce Manufacturing Inc., severance plan adopted by the
         Board of Directors of the company on August 26, 1996.

         6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing of future participation in any plan,
program, policy or practice provided by the Company or any of its affiliates for
which the Executive may qualify, nor shall anything


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in this Agreement limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliates
relating to subject matter other than that specifically addressed herein. Vested
benefits and other amounts that the Executive is otherwise entitled to receive
under the Company's Compensation program or any other plan, policy, practice or
program of or any contract or agreement with, the Company or any of its
affiliates on or after the Date of Termination shall be payable in accordance
with the terms of each such plan, policy, practice, program, contract or
agreement, as the case may be, except as explicitly modified by this Agreement.

         7. Full Settlement. The Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action that the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement.

         8.    Confidential Information.
               ------------------------

                  (a) Defined. "Confidential Information" shall mean ideas,
         information, knowledge and discoveries, whether or not patentable, that
         are not generally known in the trade or industry and about which the
         Executive has knowledge as a result of his employment with the Company,
         including without limitation fire products engineering information,
         marketing, sales, distribution, pricing and bid process information,
         product specifications, manufacturing procedures, methods, business
         plans, strategic plans, marketing plans, internal memoranda, formulae,
         trade secrets, know-how, research and development and other
         confidential technical or business information and data. Confidential
         Information shall not include any information that the Executive can
         demonstrate is in the public domain by means other than disclosure by
         the Executive.

                  (b) Nondisclosure. For a period of two (2) years after the
         termination of the Executive's active employment with the Company
         (whether such termination occurs before or after the expiration of the
         term of this Agreement) and indefinitely thereafter in respect of any
         Confidential Information that constitutes a trade secret or other
         information protected by law, the Executive will keep confidential and
         protect all Confidential Information known to or in the possession of
         the Executive, will not disclose any Confidential Information to any
         other person and will not use any Confidential Information, except for
         use or disclosure of Confidential Information for the exclusive benefit
         of the Company as it may direct or as necessary to fulfill the
         Executive's continuing duties as an employee of the Company.

                  (c) Return of Property. All memoranda, notes, records, papers,
         tapes, disks, programs or other documents or forms of documents and all
         copies thereof relating to the operations or business of the Company or
         any of its subsidiaries that contain Confidential Information, some of
         which may be prepared by the Executive, and all objects associated
         therewith in any way obtained by him shall be the property of the
         Company. The Executive shall not, except for the use of the Company or
         any of its subsidiaries, use or


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         duplicate any such documents or objects, nor remove them from
         facilities and premises of the Company or any subsidiary, nor use any
         information concerning them except for the benefit of the Company or
         any subsidiary, at any time. The Executive will deliver all of the
         aforementioned documents and objects, if any, that may be in his
         possession to the Company at any time at the request of the Company.

         9.    Restrictive Covenants.
               ---------------------

                  (a) The Executive shall hold in a fiduciary capacity for the
         benefit of the Company all secret or Confidential Information,
         knowledge or data relating to the Company or any of its affiliated
         companies and their respective businesses that the Executive obtains
         during the Executive's employment by the Company or any of its
         affiliated companies and that is not public knowledge (other than as a
         result of the Executive's violation of this Section 9). The Executive
         shall not communicate, divulge or disseminate Confidential Information
         at any time during the Executive's employment with the Company and for
         the two (2) year period thereafter, except with the prior written
         consent of the Company or as otherwise required by law or legal
         process. In no event shall any asserted violation of the provisions of
         this Section 9 constitute a basis for deferring or withholding any
         amounts otherwise payable to the Executive under the Agreement.

                  (b) The Executive shall not, during the Employment Period and
         for one (1) year following the end of the Employment Period, without
         the prior written consent of the President of the Company, be employed
         directly or indirectly by, be a sole proprietor or partner of, or act
         as a consultant to, any business in any capacity where confidential
         information concerning the Company and/or its subsidiaries or
         affiliates which was acquired by the Executive during his employment
         with the same would reasonably be considered to be useful; neither will
         the Executive, directly or indirectly, make sales solicitations to any
         person, corporation, partnership or other business entity which is, at
         the present time and at the time of such sales solicitation, a customer
         or prospective customer of the Company and/or its subsidiaries or
         affiliates, if the effect of such action would be likely to cause such
         customer to substantially reduce existing or future business
         relationships with or purchases from the Company and/or its
         subsidiaries or affiliates.

                  (c) The Executive agrees that the Company will suffer
         irreparable damage in the event the provisions of paragraphs (b) and
         (c) of Section 8 and paragraphs (a) and (b) of Section 9 are breached
         and his acceptance of the provisions of Sections 8 and 9 is a material
         factor in his decision to enter into this Agreement. The Executive
         further agrees that the Company shall be entitled as a matter of right
         to injunctive relief to prevent a breach by the Executive of the
         provisions of Sections 8 and 9. Resort to such equitable relief,
         however, shall not constitute a waiver of any other rights or remedies
         the Company may have. Nothing in this Agreement modifies or reduces the
         Executive's obligation to comply with applicable laws relating to trade
         secrets, confidential information, or unfair competition.


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         10.   Successors.
               ----------

                  (a) This Agreement is personal to the Executive and, without
         the prior written consent of the Company, shall not be assignable by
         the Executive. This Agreement shall inure to the benefit of and be
         enforceable by the Executive's legal representatives.

                  (b) This Agreement shall inure to the benefit of and be
         binding upon the Company and its successors and assigns.

         11.   Miscellaneous.
               -------------

                  (a) This Agreement shall be governed by, and construed in
         accordance with, the laws of the State of Wisconsin, without reference
         to principles of conflict of laws. The captions of this Agreement are
         not part of the provisions hereof and shall have no force or effect.
         This Agreement may not be amended or modified except by a written
         agreement executed by the parties hereto or their respective successors
         and legal representatives.

                  (b) All notices and other communications under this Agreement
         shall be in writing and shall be given by hand delivery to the other
         party or by registered or certified mail, return receipt requested,
         postage prepaid, addressed as follows:

                           (i) If to the Executive:

                               (Executive Name and Address)

                                    Or, in person, by hand to the Executive at
                                    the Executive's place of employment.

                           (ii) If to the Company:

                                Pierce Manufacturing Inc.
                                c/o Oshkosh Truck Corporation
                                2307 Oregon Street
                                P.O. Box 2566
                                Oshkosh, WI 54903-2566
                                Attn: Corporate Secretary

         or to such other address as either party furnishes to the other in
         writing in accordance with this paragraph (b) of Section 11. Notices
         and communications shall be effective when actually received by the
         addressee.

                  (c) The invalidity or unenforceability of any provision of
         this Agreement shall not affect the validity or enforceability of any
         other provision of this Agreement. If any provision of this Agreement
         shall be held invalid or unenforceable in part, the remaining portion
         of such provision, together with all other provisions of this
         Agreement, shall remain valid and enforceable and continue in full
         force and effect to the fullest extent consistent with law.


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                  (d) Notwithstanding any other provisions of this Agreement,
         the Company may withhold from amounts payable under this Agreement all
         federal, state, local and foreign taxes that are required to be
         withheld by applicable laws or regulations.

                  (e) The Executive's or the Company's failure to insist upon
         strict compliance with any provisions of, or to assert any right under,
         this Agreement (including, without limitation, the right of Executive
         to terminate employment for Good Reason pursuant to paragraph (c) of
         Section 4 of this Agreement) shall not be deemed to be a waiver of such
         provision or right or of any other provision of or right under this
         Agreement.

                  (f) The rights and benefits of the Executive under this
         Agreement may not be anticipated, assigned, alienated or subject to
         attachment, garnishment, levy, execution or other legal or equitable
         process except as required by law. Any attempt by the Executive to
         anticipate, alienate, assign, sell transfer, pledge, encumber or charge
         the same shall be void. Payments hereunder shall not be considered
         assets of the Executive in the event of insolvency or bankruptcy.

                  (g) This Agreement may be executed in several counterparts,
         each of which shall be deemed an original, and said counterparts shall
         constitute but one and the same instrument.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.

                                       OSHKOSH TRUCK CORPORATION

                                       By: /s/ Robert G. Bohn
                                           -------------------------------------
                                               Robert G. Bohn

                                       Title: President and COO
                                             -----------------------------------

                                       Date: 9-9-96
                                             -----------------------------------

                                       Attest: Kristina J. Cartmill
                                              ----------------------------------


                                       AGREED TO:

                                       By: /s/ John W. Randjelovic
                                           -------------------------------------
                                               John W. Randjelovic

                                       Title: Vice President - Manufacturing
                                             -----------------------------------

                                       Date: 9-16-96
                                             -----------------------------------

                                       Attest: Matthew J. Zolnowski
                                              ---------------------------------


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