Document:

exv10w36

 

 Exhibit 10.36

Sovereign Bancorp, Inc.

2007 Deferred Compensation Plan

As amended and restated effective January 1, 2007

     WHEREAS, effective November 1, 1997, Sovereign Bancorp, Inc. (the “Company”) adopted the
Sovereign Bancorp, Inc. Bonus Recognition and Retention Program (the “Plan”); and

     WHEREAS, pursuant to Section 8.1 of the Plan, the Company may amend the Plan through
appropriate action of the Company’s board of directors; and

     WHEREAS, the Company desires to amend and restate the Plan in certain respects, with such
amendment and restatement being effective January 1, 2007; and

     WHEREAS, the Company desires to change the name of the Plan to the Sovereign Bancorp, Inc.
2007 Deferred Compensation Plan.

     NOW, THEREFORE, BE IT RESOLVED, that the Plan be, and it hereby is, amended and restated to
read as set forth herein.

1. DEFINITIONS

     For purposes of this Plan, unless otherwise clearly apparent from the context, the following
phrases and terms shall have the indicated meanings:

     1.1 “Account” shall mean an account established on the books of the Company for the purpose of
recording amounts credited on behalf of a Participant and any income, expenses, gains, or losses
included thereon.

     1.2 “Beneficiary” means the person or persons designated as such pursuant to Section 2.2. For
purposes of the preceding sentence the term “person” shall include an individual, trust, and
estate. In default of a valid Beneficiary designation, a Participant’s Beneficiary shall be such
Participant’s estate.

     1.3 “Board” means the board of directors of the Company.

     1.4 “Bonus” means any compensation relating to services performed during any calendar year(s),
whether or not paid in a calendar year or included on the Federal Income Tax Form W-2 for a
calendar year, payable to a Participant as an Employee under any Employer’s bonus or cash
compensation incentive plans, including the Incentive Plan excluding stock options and restricted
stock.

     1.5 “Bonus Deferrals” means the deferrals elected by the Participant pursuant to Section 3.2.

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     1.6 “BRRP Deferrals” means Salary and Bonus deferrals made with respect to Plan Years ending
prior to January 1, 2007.

     1.7 “BRRP Deferral Account” means, with respect to an individual who is a Participant for a
given Plan Year beginning prior to January 1, 2007, an account established on his or her behalf
within the Trust for the investment and reinvestment of the deferred Bonus earned with respect to
such Plan Year, the Matching Amount, and any earnings thereon. Such BRRP Deferral Account will be
established for each Plan Year in which an individual actively participates in the Plan.

     1.8 “BRRP Election” means the election to defer a portion of the Participant’s Bonus under
Appendix A.

     1.9 “Cause” means:

     (a) the Office of Thrift Supervision or any other government regulatory agency recommends
or orders in writing that an Employee’s Employer terminate or relieve him or her of his or her
duties;

     (b) an Employee is convicted of or enters a plea of nolo contendere to a felony, a crime
of falsehood, or a crime involving fraud or moral turpitude, or the actual incarceration of an
Employee for a period of 45 or more consecutive days; or

     (c) an Employee willfully fails to follow the lawful instructions of the Board after the
Employee’s receipt of written notice of such instructions, other than a failure resulting from
the Employee’s incapacity because of physical or mental illness.

     1.10 “Change in Control” means the first to occur of any of the following events:

     (a) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
except for any of the Company’s employee benefit plans, or any entity holding the Company’s
voting securities for, or pursuant to, the terms of any such plan (or any trust forming a part
thereof) (the “Benefit Plan(s)”), is or becomes the beneficial owner, directly or indirectly,
of the Company’s securities representing 19.9% or more of the combined voting power of the
Company’s then outstanding securities, other than: (i) pursuant to a transaction excepted in
Clauses (c) or (d); or (ii) pursuant to a Buyer Acquisition Transaction (as defined in the
Investment Agreement (the “Investment Agreement”), between the Company and Banco Santander
Central Hispano, S.A., dated as of October 24, 2005, as it may be thereafter amended)
effectuated in accordance with the terms of the Investment Agreement other than a Buyer
Acquisition Transaction contemplated in Sections 8.06 through 8.08 and 8.10 of the Investment
Agreement;

     (b) there occurs a contested proxy solicitation of the Company’s shareholders that results
in the contesting party obtaining the ability to vote securities representing 19.9% or more of
the combined voting power of the Company’s then outstanding securities;

     (c) a binding written agreement is executed (and, if legally required, approved by the
Company’s shareholders) providing for a sale, exchange, transfer, or other disposition of

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all or substantially all of the assets of the Company or of Sovereign Bank to another
entity, except to an entity controlled directly or indirectly by the Company;

     (d) the shareholders of the Company approve a merger, consolidation, or other
reorganization of the Company, unless:

     (i) under the terms of the agreement approved by the Company’s shareholders
providing for such merger, consolidation, or reorganization, the shareholders of the
Company immediately before such merger, consolidation, or reorganization, will own,
directly or indirectly immediately following such merger, consolidation, or
reorganization, at least 51% of the combined voting power of the outstanding voting
securities of the Company resulting from such merger, consolidation, or reorganization
(the “Surviving Company”) in substantially the same proportion as their ownership of
the voting securities immediately before such merger, consolidation, or reorganization;

     (ii) under the terms of the agreement approved by the Company’s shareholders
providing for such merger, consolidation, or reorganization, the individuals who were
members of the Board immediately prior to the execution of such agreement will
constitute at least 51% of the members of the board of directors of the Surviving
Company after such merger, consolidation, or reorganization; and

     (iii) based on the terms of the agreement approved by the Company’s shareholders
providing for such merger, consolidation, or reorganization, no Person (other than (A)
the Company or any Subsidiary of the Company, (B) any Benefit Plan, (C) the Surviving
Company or any Subsidiary of the Surviving Company, or (D) any Person who, immediately
prior to such merger, consolidation, or reorganization had beneficial ownership of
19.9% or more of the then outstanding voting securities) will have beneficial ownership
of 19.9% or more of the combined voting power of the Surviving Company’s then
outstanding voting securities;

     (e) a plan of liquidation or dissolution of the Company, other than pursuant to bankruptcy
or insolvency laws, is adopted;

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

     (g) the occurrence of a Triggering Event within the meaning of the Second Amended and
Restated Rights Agreement, between the Company and Mellon Investor Services LLC, as rights
agent, dated as of January 19, 2005, as amended on October 24, 2005, and as it may be further
amended from time to time.

Notwithstanding Clause (a), a Change in Control shall not be deemed to have occurred if a
Person becomes the beneficial owner, directly or indirectly, of the Company’s securities
representing 19.9% or more of the combined voting power of the Company’s then

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outstanding securities solely as a result of an acquisition by the Company of its voting
securities that, by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 19.9% or more of the combined voting
power of the Company’s then outstanding securities; provided, however, that if a Person
becomes a beneficial owner of 19.9% or more of the combined voting power of the Company’s then
outstanding securities by reason of share purchases by the Company and shall, after such share
purchases by the Company, become the beneficial owner, directly or indirectly, of any
additional voting securities of the Company (other than as a result of a stock split, stock
dividend or similar transaction), then a Change in Control of the Company shall be deemed to
have occurred with respect to such Person under Clause (a). In no event shall a Change in
Control of the Company be deemed to occur under Clause (a) with respect to Benefit Plans.

     1.11 “Code” means the Internal Revenue Code of 1986, as amended.

     1.12 “Committee” means the Compensation Committee of the Board or such other committee as may
be appointed by the Board to administer this Plan. Such term also includes the whole Board to the
extent it takes action with respect to administrative or operational matters relating to the Plan.

     1.13 “Common Stock” means the common stock of the Company (no par value), as described in the
Company’s Articles of Incorporation, or such other stock as may be substituted therefor.

     1.14 “Company” shall mean Sovereign Bancorp, Inc. and any successor thereto.

     1.15 “Deferral Account” means the Account that is maintained with respect to the Salary
Deferrals and Bonus Deferrals of the Participant and any hypothetical earnings or losses thereon.

     1.16 “Deferral Election” means an irrevocable election, on a form prescribed by the Committee,
by a Participant to defer receipt of a portion of such Participant’s Salary, Bonus, and/or
Directors Fees, as applicable, for a given Plan Year.

     1.17 “Director” means a member of the board of directors of the Company or of a Subsidiary who
is not an Employee.

     1.18 “Director Deferrals” means the deferrals elected by the Participant pursuant to Section
3.3.

     1.19 “Director Deferral Account” means the Account with is maintained with respect to the
Director Deferral credits of the Participant and any hypothetical earnings or losses thereon.

     1.20 “Directors Fees” means the portion of a Director’s regularly scheduled fees payable in
cash for service on the Board.

     1.21 “Disability” means a medically determinable physical or mental impairment that is of such
permanence and degree that it can be expected to result in death or that a Participant is unable,
because of such impairment, to perform any substantial gainful activity that he is suited

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by virtue of his experience, training, or education and that would entitle such Participant to
benefit under the Employer’s long-term disability plan, if any, or to Social Security disability
benefits as evidenced by a disability award letter.

     1.22 “Effective Date” means January 1, 2007.

     1.23 “Employee” means an individual who is a common law employee of any Employer.

     1.24 “Employer” means the Company and/or any Subsidiary of the Company that the Board has
selected as eligible to have certain of its management and highly compensated personnel participate
in the Plan.

     1.25 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     1.26 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     1.27 “Fair Market Value” of a share of Common Stock on any given date means the closing sale
price for such shares on that date as listed on the New York Stock Exchange (or any national
securities exchange or quotation system on which the Common Stock is then listed or reported). If
a closing sale price for the Common Stock for the given date is not listed or reported, or if there
is none, the Fair Market Value shall be equal to the closing sale price on the nearest trading day
preceding such date. Notwithstanding the foregoing, if, in the Committee’s judgment, there are
unusual circumstances or occurrences under which the otherwise determined Fair Market Value of the
Common Stock does not represent the actual fair value thereof, then the Fair Market Value of such
Common Stock shall be determined by the Committee on the basis of such prices or market quotations
as it shall deem appropriate and fairly reflective of the then fair value of such Common Stock.

     1.28 “Incentive Plan” means the Sovereign Bank Short-Term Incentive Plan. Such term shall
also mean any other successor or comparable plan or program as designated by Committee and approved
by the Board from time to time.

     1.29 “Investment Funds” means the investment alternatives made available by the Committee from
time to time under the Plan.

     1.30 “Matching Amount” means, with respect to the amount of a BRRP Deferral for any year by a
Participant, an amount equal to 100% of such BRRP Deferral amount.

     1.31 “Participant” means an individual who (i) has properly designated such Participant’s
elections pursuant to Section 2.2 and (ii) remains an Employee or Director or, if not, has a
balance standing to his or her credit in one or more Deferral Accounts. Such term also includes a
deceased Participant’s Beneficiary, who is entitled to a Plan benefit, until such benefit is paid.

     1.32 “Plan” means this 2007 Sovereign Bancorp, Inc. Nonqualified Deferred Compensation Plan.

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     1.33 “Plan Year” means a calendar year or such other fiscal year as may be designated by the
Committee from time to time.

     1.34 “Retirement” means the voluntary termination of employment by a Participant on or after
any early or normal retirement date specified in the Company’s employee stock ownership plan in
effect at the relevant time.

     1.35 “Securities Act” means the Securities Act of 1933, as amended.

     1.36 “Salary” means the annual cash compensation relating to services performed during any
calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form
W-2 for such calendar year, excluding bonuses, commissions, overtime, fringe benefits, stock
options, relocation expenses, incentive payments, non-monetary awards, fees, automobile and other
allowances paid to a Participant for employment services rendered (whether or not such allowances
are included in the Employee’s gross income). Base Salary shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or
non-qualified plans of any Employer and shall be calculated to include amounts not otherwise
included in the Participant’s gross income under Code Sections 125, 132(f), 402(e)(3), 402(h), or
403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will
be included in compensation only to the extent that, had there been no such plan, the amount would
have been payable in cash to the Participant.

     1.37 “Subsidiary” means a subsidiary corporation, as defined in Code Section 424(f), that is a
subsidiary of the corporation to which reference is being made.

     1.38 “Salary Deferrals” means the deferrals elected by the Participant pursuant to Section
3.1.

     1.39 “Termination” means a Participant’s (a) termination of employment with an Employer, in
the case of an Employee and (b) termination of board service with the Company or a Subsidiary in
the case of a Director.

     1.40 “Trust” means the trust established under an agreement by and between the Trustee, for
purposes of facilitating implementation and operation of the Plan.

     1.41 “Trustee” means Manufacturers and Traders Trust Co., successor to FMB Trust Company,
N.A., the trustee under the agreement establishing the Trust, and any successor thereto.

     1.42 “Unforeseeable Emergency” means a severe financial hardship to the Participant resulting
from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as
defined in Code Section 152(a)) of the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant.

     1.43 “Valuation Date” means any day that the New York Stock Exchange or any successor to its
business is open for trading.

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     1.44 “Year of Service” means a one-year period of continuous employment by one or more
Employers.

2. ELIGIBILITY AND PARTICIPATION

     2.1 Eligibility for Participation: Participation in the Plan is limited to those individuals
that the Committee selects. No individual shall be eligible for selection unless such individual
meets one or more of the following criteria:

     (a) To be eligible to make Salary Deferrals or Bonus Deferrals for a Plan Year the
individual must be in a select group of management and highly compensated Employees, as
determined in its sole discretion. From that group, the Committee shall select, in its sole
discretion, the Employees who shall be eligible to make Salary Deferrals or Bonus Deferrals for
such Plan Year. The Company’s Chief Executive Officer shall at all times be deemed eligible to
make Salary Deferrals or Bonus Deferrals in accordance with the terms of the Plan.

     (b) To be eligible to make Director Deferrals for a Plan Year, the individual must be
Director as of the December 1st prior to the Plan Year and be authorized to participate in the
Plan by the Committee.

     2.2 Commencement of Participation: Each Participant shall be provided an opportunity to
designate irrevocably, prior to each Plan Year (or, in the Participant’s first year of eligibility,
within 30 days following the date the Participant became eligible), his or her elections pursuant
to Article 3. Such Participant must make such designation in the manner authorized by the
Committee and must be accompanied by, as applicable:

     (a) an irrevocable authorization for the Company to make regular deductions to cover the
amount of such deferrals elected pursuant to Section 3.1 or Section 3.3;

     (b) an irrevocable authorization to defer receipt of a percentage of future Bonus amounts
for any year as elected under Section 3.2;

     (c) a designation of Beneficiary; and

     (d) a designation as to the form and timing of the distribution of each of the
Participant’s Accounts as provided under Sections 5.1 and 5.2.

     2.3 Cessation of Participation: A Participant shall cease to be an active Participant on the
earliest of:

     (a) the date that the Plan terminates, or

     (b) the date that the Participant ceases to be eligible to participate in the Plan under
Section 2.1.

     A former active Participant shall be deemed a Participant for all purposes except with respect
to the right to make deferrals, as long as he or she maintains a Participant Account.

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3. DEFERRAL OF COMPENSATION

     3.1 Salary Deferrals: To the extent that the Committee permits, each Participant eligible to
make Salary Deferrals may authorize the Employer that employs such Participant, in the manner
described in Section 2.2, to have Salary Deferrals made on his or her behalf. Such election shall
apply to the Participant’s Salary attributable to services performed in the Plan Year subsequent to
the election. Such Salary Deferrals shall be a stated percentage of the Participant’s Salary for
such period, up to 25 percent as designated by the Participant. A Participant’s annual election to
make Salary Deferrals shall be irrevocable for such calendar year. A Participant must make a new
election in each calendar year to make a Salary Deferral for the subsequent calendar year.

     3.2 Bonus Deferrals: Each Participant eligible to make Bonus Deferrals may authorize the
Employer that employs such Participant, in the manner described in Section 2.2, to defer a
percentage of his or her Bonus that would otherwise be payable for services performed in the
twelve-month period beginning on the January 1 immediately following such December 31. Such Bonus
Deferrals shall be a stated percentage of the Participant’s Bonus for such period, up to 100
percent as designated by the Participant. A Participant must make a new election in each calendar
year to defer a Bonus for the subsequent calendar year. A Participant’s annual election to defer a
Bonus that is based on services performed over the 12 month calendar year period may be changed up
to June 30 in the year such Bonus is earned, but thereafter shall be irrevocable for such calendar
year.

     3.3 Director Deferrals: Each Participant eligible to make Director Deferrals may authorize
the Company or the Subsidiary of which such Director serves as a director, in the manner described
in Section 2.2, to have Director Deferrals made on his or her behalf. Such election shall apply to
the Participant’s cash fees attributable to services performed in the Plan Year subsequent to the
election. Such Director Deferrals shall be a stated whole percentage of such cash fees, up to 100
percent as designated by the Participant. A Participant must make a new election in each calendar
year to make Director Deferrals for the subsequent calendar year.

     3.4 First Year of Eligibility: In the case of the first year in which a Participant becomes
eligible to participate in the Plan, such Participant’s election with respect to Sections 3.1 or
3.3 may be made with respect to services to be performed subsequent to the election within 30 days
following the date the Participant becomes eligible to participate in the Plan

     3.5 Vesting: Each Participant shall always be 100% vested in each of such Participant’s
Accounts. Notwithstanding the foregoing, Appendix A shall govern the vesting of a BRRP Deferral
Account.

4. INVESTMENT OF CONTRIBUTION

     4.1 Establishment of Accounts: The Company shall establish Accounts for each Participant, but
only to the extent the Participant has amounts to be allocated to such Account:

     (a) a Deferral Account, which shall be credited with the Participant’s Salary Deferrals
and Bonus Deferrals and any deemed earnings and losses credited thereto;

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     (b) a Director Deferral Account, which shall be credited with the Participant’s Director
Deferrals and any deemed earnings and losses credited thereto; and

     (c) a BRRP Deferral Account, which shall be credited with the Participant’s BRRP Deferrals
and any deemed earnings and losses credited thereto

     Each Participant shall receive periodic statements (no less frequently than quarterly)
reflecting the balances in his or her Accounts.

     4.2 Obligation of the Company: Individual benefits under the Plan are payable as they become
due solely from the general assets of the Company. To the extent a Participant, or any person,
acquires a right to receive payments under this Plan, such right shall be no greater than the right
of any general creditor of the Company. Neither this Plan, nor any action taken pursuant to the
terms of this Plan, shall be considered to create a fiduciary relationship between the Company and
the Participant, or any other persons, or to require the establishment of a trust in which the
assets are beyond the claims of any general creditor of the Company.

     4.3 Establishment of Investment Funds: The Committee will establish multiple deemed
Investment Funds that the Committee will cause to be maintained for determining the investment
return to be credited to each Participant’s Accounts. The Committee may change the number,
identity, or composition of the Investment Funds from time to time. Each Participant will indicate
the Investment Funds based on which amounts allocated in accordance with Article 3 is to be
adjusted. Each Participant’s Accounts will be increased or decreased by the net amount of
investment earnings or losses that it would have achieved had it actually been invested in the
deemed investments. The Company is not required to purchase or hold any of the deemed investments.
Investment Fund elections must be made in a minimum of 1% increments and in such manner as the
Committee will specify. A Participant may make separate Investment Fund elections with respect to
each Account (as applicable) set forth in Section 4.1. A Participant may change his or her
Investment Fund election periodically in the manner provided by the Committee. Any such change
shall become effective as soon as administratively practicable following the date the Committee
receives notice of such change in the form prescribed by the Committee.

     4.4 Crediting Investment Results: No less frequently than as of each Valuation Date, each
Participant Account will be increased or decreased to reflect investment results. Each Participant
Account will be credited with the investment return of the Investment Funds in which the
Participant elected to be deemed to participate. The credited investment return is intended to
reflect the actual performance of the Investment Funds net of any applicable investment management
fees or administrative expenses determined by the Committee. Notwithstanding the above, the amount
of any payment of Plan benefits pursuant to Article 5 or upon Plan termination shall be determined
as of the Valuation Date preceding the date of payment.

     4.5 BRRP Deferral Account Investment: Notwithstanding the foregoing, Appendix A shall govern
the investment of a BRRP Deferral Account.

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5. PAYMENT AND AMOUNT OF BENEFITS

     5.1 Form of Distribution:

     (a) Each Participant shall elect the form and timing of the distribution with respect to
each of his or her Accounts in the manner authorized by the Committee. The Participant’s
election shall indicate the form of distribution of the amounts credited to the Participant’s
Deferral Account or Director Deferral Account, as applicable.

     (b) If the Participant elects a monthly installment distribution, the amount of each
installment shall be determined by multiplying the Participant’s remaining Account balance by a
fraction, the numerator of which is one and the denominator of which is the number of months
remaining in the installment period.

     5.2 Time of Distribution: Each Participant shall elect the timing of the distribution with
respect to his or her Participant Account in the manner authorized by the Committee. A Participant
shall make a separate election as to the timing of payment with respect to each Account grouping
specified in Section 5.1(a) above. The Participant’s election(s) shall indicate that payment shall
be made (in the case of a lump sum election) or shall commence (in the case of an installment
election):

     (a) as soon as administratively practicable following the Participant’s Termination;
provided, however, if the Participant is a specified employee (as defined in Code Section 409A
and the guidance promulgated thereunder) and the stock of the Company is publicly traded on an
established securities market, distributions shall not commence before the date which is six
months following the date of Termination (or, if earlier, the death of the Participant); or

     (b) in a specific month and year, but in no event (1) later than the first of the month
following the Participant’s 70th birthday, or (2) earlier than the Participant’s Termination.
If a Participant elects his or her distribution to be made or commenced in accordance with this
paragraph (b), and such date falls before the Participant’s Termination, the distribution shall
be delayed until as soon as practicable following the Participant’s Termination.

     5.3 Change in Control Election: Notwithstanding the elections made in accordance with
Sections 4.1 and 4.2 above, a Participant may elect that in the event of a Change in Control, a
election shall be superseded and that, in the event of the Participant’s Termination within 12
months following the Change in Control, the Account balance shall be paid in a lump sum. If so
elected, such lump sum payment shall be made as soon as administratively practicable following the
Participant’s Termination; provided, however, if the Participant is a specified employee (as
defined in Code Section 409A and the guidance promulgated thereunder) and the stock of the Company
is publicly traded on an established securities market, distributions shall not commence before the
date that is 6 months following the date of Termination (or, if earlier, the death of the
Participant).

     5.4 Change in Form or Time of Distribution: A Participant may change his or her form and
timing election applicable to the distribution of an Account under Sections 5.1, 5.2, and 5.3,
provided that such request for change is made (i) at least 12 consecutive months prior to the

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date that such distribution would otherwise have been made or commenced and (ii) with respect
to elections under Section 5.1 and 5.2, the first payment with respect to such new election is
deferred for a period of not less than five years beyond the date such distribution would otherwise
have been made.

     5.5 Distribution after Death: If a Participant dies prior to receiving the entire amounts
credited to his or her Participant Accounts, the remaining amounts shall be paid to the
Participant’s Beneficiary designated by the Participant at the time and in the form as previously
elected by the Participant under Section 5.1, 5.2, and 5.3 (i.e, there are no special distribution
elections for distribution upon death). In the case of an election for amounts to be paid as of
Termination, the Participant’s death shall be considered a Termination.

     5.6 De Minimis Distributions: Notwithstanding the provisions of Sections 5.1, 5.2, 5.3, 5.4,
and 5.5, if, as of the Participant’s Termination or death and prior to the commencement of
installment payments, the value of amounts in all of the Participant’s Accounts (determined as of
the Valuation Date immediately preceding such date) is less than $10,000, the entire balance in the
Participant’s Accounts shall be distributed as soon as practicable and in accordance with Code
Section 409A and the guidance promulgated thereunder to the Participant (or if the Participant is
deceased, the Participant’s Beneficiary) as a lump sum payment.

     5.7 Distribution Due to Unforeseeable Emergency: Distributions hereunder may commence if the
Committee determines, based upon uniform, established standards, that the Participant has incurred
an Unforeseeable Emergency. The amount distributed under this Section 5.7 shall not exceed the
amount necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the extent that such
hardship is or maybe relieved through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant’s assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship.) Distributions under this Section 5.7 shall be distributed
from either the Participant’s Deferral Account or Director Deferral Account, as appropriate, under
Section 5.1. Distributions under this Section 5.7 from a Participant’s Deferral Account shall
first be debited from the Participant’s Salary Deferrals and then from the Participant’s Bonus
Deferrals, and any deemed earnings and losses credited thereto. Amounts distributed pursuant to
this Section 5.7 shall be debited pro-rata from each Investment Fund maintained for the respective
Account at the time of distribution under Section 4.3.

     5.8 BRRP Deferral Account Distribution: Notwithstanding the foregoing, Appendix A shall
govern the distribution of a BRRP Deferral Account.

6. FINANCING

     No Participant shall have any right or interest in any such policy or the proceeds thereof or
in any other specific fund or asset the Company because of the Plan. The rights of Participants to
benefit payments hereunder shall be no greater than those of a general creditor.

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7. ADMINISTRATION

     7.1 Administration: Responsibility for establishing the requirements for participation and
for administration of the Plan shall be vested in the Committee, which shall have the full and
exclusive discretionary authority to interpret the Plan, to determine all benefits and to resolve
all questions arising from the administration, interpretation, and application of their provisions,
either by general rules or by particular decisions, including determinations as to whether a
claimant is eligible for benefits, the amount, form and timing of benefits, and any other matter
(including any question of fact) raised by a claimant or identified by the Committee. The
Committee may delegate administrative tasks as necessary to persons who are not Committee members.
All decisions of the Committee shall be conclusive and binding upon all affected persons.

     7.2 Plan Expenses: The expenses of administering the Plan shall be borne by the Company. No
employee shall receive any remuneration for service in such capacity. However, expenses of the
Committee or its members paid or incurred in connection with administering the Plan shall be
reimbursed by the Company.

     7.3 Liability: The Company shall indemnify and hold harmless the members of the Committee
against any and all claims, loss, damage, expense or liability arising from any action or failure
to act with respect to this Plan, except in the case of gross negligence or willful misconduct.

8. AMENDMENT OR TERMINATION

     8.1 Plan Amendment: The Plan may be amended or otherwise modified by the Committee, in whole
or in part, provided that no amendment or modification shall divest any Participant of any amount
previously credited to such Participant’s Account under Article 3 and 4 or of the amount and method
of crediting earnings to such Account under Article 5 of the Plan as of the date of such amendment.

     8.2 Termination of the Plan: The Committee reserves the right to terminate the Plan at any
time in whole or in part. In the event of any such termination, the Company shall pay a benefit to
the Participant or the Beneficiary of any deceased Participant, in lieu of other benefits
hereunder, equal to the value of the Participant’s Accounts in the form and at the benefit
commencement date elected by the Participant pursuant to Article 6 of the Plan. Earnings shall
continue to be allocated under Article 5 of the Plan after the termination of the Plan until the
Participant’s benefits have been paid in full notwithstanding the termination of the Plan.

9. CLAIMS PROCEDURE

     9.1 Claim: Any person claiming a benefit, requesting an interpretation or ruling under the
Plan, or requesting information under the Plan shall present the request in writing to the
Committee, which shall respond in writing as soon as practicable.

12

 

     9.2 Denial of Claim: If the claim or request is denied, the written notice of denial shall
state:

     (a) the reasons for denial, with specific reference to the Plan provisions that the
Committee basis the denial;

     (b) a description of any additional material or information required and an explanation of
why it is necessary; and

     (c) an explanation of the Plan’s claim review procedure.

     9.3 Review of Claim: Any person whose claim or request is denied or who has not received a
response within 30 days may request review by notice given in writing to the Committee. The
Committee shall review the claim or request and the Committee may, but shall not be required to,
grant the claimant a hearing. On review, the claimant may have representation, examine pertinent
documents, and submit issues and comments in writing.

     9.4 Final Decision: The Committee shall normally make its review decision within 60 days. If
the Committee requires an extension of time for a hearing or other special circumstances, the
Committee shall notify the claimant and the time limit shall be 120 days. The decision shall be in
writing and shall state the reasons and the relevant Plan provisions. All decisions on review
shall be final and bind all parties concerned.

     9.5 Attorney’s Fees and Expenses: In the event a Participant’s claim for benefits under this
Plan is denied and the Participant successfully appeals the denial of such claim under the
foregoing procedures, the Company shall pay or reimburse the legal fees and expenses directly
incurred by the Participant in connection with his appeal subject to a maximum payment or
reimbursement of one-third of the balance of the Participant’s Accounts. Any such legal fees and
expenses shall be paid to, or on behalf of, the Participant no later than 30 days following the
Participant’s written request for the payment of such legal fees and expenses, provided the
Participant supplies the Committee with evidence of the fees and expenses incurred by the
Participant that the Committee, in its sole discretion, determines is sufficient.

     9.6 Interest on Delayed Payments: In the event a Participant’s claim for benefits under this
Plan is denied and the Participant successfully appeals the denial of such claim under the
foregoing procedures, the Company shall pay to the Participant interest on the portion of the
Participant’s benefits that were not otherwise paid when due because of the initial denial of the
claim. For purposes of the preceding sentence, interest shall accrue at an annual rate equal to
the prime rate as quoted in the Wall Street Journal as of the date the benefits would otherwise
have been paid if the claim had not initially been denied, plus five percent, and shall be adjusted
as necessary to reflect any partial payment or payments of the amounts owed to the Participant.

10. GRANDFATHERED PROVISIONS

     10.1 BRRP Participants: Notwithstanding anything in the Plan to the contrary, the operative
terms of the Plan in existence on December 31, 2006, as amended effective January 1, 2005, for Code
Section 409A, relevant provisions of which are renumbered and set forth in

13

 

Appendix A, shall govern with respect to deferrals made for Plan Years ending before January
1, 2007.

11. MISCELLANEOUS

     11.1 Non-Alienation of Benefits: No amount payable under the Plan shall be subject to
assignment, transfer, sale, pledge, encumbrance, alienation, or charge by a Participant or the
Beneficiary of a Participant except as may be required by law.

     11.2 Limitation of Rights: Neither the establishment of this Plan, nor any modification
thereof, nor the creation of an Account, nor the payment of any benefits shall be construed as
giving:

     (a) any Participant, Beneficiary, or any other person, any legal or equitable right
against the Company unless such right shall be specifically provided for in the Plan or
conferred by affirmative action of the Committee in accordance with the terms and provisions of
the Plan; or

     (b) any Participant or any other person, the right to be retained in the service of the
Company, and all Participants and other employees and directors shall remain subject to
termination to the same extent as if the Plan had never been adopted.

     11.3 Participant’s Rights Unsecured: The right of any Participant or Beneficiary to receive
payment under the provisions of the Plan shall be as an unsecured claim against the Company, as the
case may be, and no provisions contained in the Plan shall be construed to give any Participant or
Beneficiary at any time a security interest in the Participant’s Accounts or any asset of the
Company. The liabilities of the Company to any Participant or Beneficiary pursuant to the Plan
shall be those of a debtor pursuant to such contractual obligations as are created by the Plan.
Accounts, if any, which may be set aside by the Company for accounting purposes shall not in any
way be held in trust for, or be subject to the claims of, a Participant or Beneficiary.

     11.4 Incapacity: In the event that the Committee shall find that a Participant or other
person entitled to benefits hereunder is unable to care for his or her affairs because of illness
or accident, the Committee may direct that any benefit payment due him or her, unless claim shall
have been made therefor by a duly appointed legal representative, be paid to the Participant’s
spouse, child, parent or other blood relative, or to a person with whom he or she resides, and any
such payment so made shall be a complete discharge of the liabilities of the Company and the Plan
therefor.

     11.5 Withholding: There shall be deducted from all payments under this Plan the amount of any
taxes required to be withheld by any Federal, state, or local government. The Participants and
their Beneficiaries, distributees, and personal representatives will bear any and all Federal,
foreign, state, local, or other income or other taxes imposed on amounts paid under this Plan.
Notwithstanding the foregoing, the Trustee is authorized to withhold shares of Common Stock to
satisfy a Participant’s withholding obligation under the Plan with respect to BRRP Deferrals,
provided, however, that any such withholding of shares of Common Stock shall be in accordance with
the provisions of Rule 16b-3 promulgated under the Exchange Act.

14

 

     11.6 Severability: Should any provision of the Plan or any regulations adopted thereunder be
deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect the
other provisions or regulations unless such invalidity shall render impossible or impractical the
functioning of the Plan and, in such case, the appropriate parties shall adopt a new provision or
regulation to take the place of the one held illegal or invalid.

     11.7 Controlling Law: The Plan shall be governed by the laws of the Commonwealth of
Pennsylvania except to the extent preempted by ERISA and any other law of the United States.

15

 

APPENDIX A

SPECIAL PROVISIONS RELATING TO

GRANDFATHERED BRRP DEFERRAL ACCOUNTS

1. ELIGIBILITY

     1.1 Eligibility for BRRP Deferral Account. Participants who, prior to the restatement of the
Plan effective January 1, 2007, had established BRRP Elections and/or BRRP Deferral Accounts shall
be eligible to have a BRRP Deferral Account under the Plan.

2. PLAN CONTRIBUTIONS AND INVESTMENTS

     2.1 Bonus Deferral. Prior BRRP Elections to defer a portion of a Participant’s Bonus shall be
honored under the Plan. Effective January 1, 2007, no new BRRP Elections shall be made.

     2.2 Payment of Deferred Bonus to Trust; Investment of Deferred Bonus. The portion of a Bonus
deferred by a Participant as a BRRP Deferral shall be deposited by or on behalf of his or her
Employer in the Trust as soon as administratively feasible following the date such bonus is paid.
Any amount so deposited shall be allocated to a BRRP Deferral Account established by the Trustee
for the year of deferral. As soon as practicable thereafter, the Trustee shall invest the amount
in Common Stock, utilizing such purchasing procedures (i) as are in compliance with any applicable
provisions of federal and state securities laws, including the Securities Act and/or the Exchange
Act, and (ii) as may be agreed to by the Company and the Trustee from time to time. Such
purchasing procedures may include, without limitation, open market purchases, purchases from the
Company, and purchase through privately negotiated transactions. The Company (on behalf of itself
and any other Employers) may satisfy the Bonus payment requirements of this section, in whole or in
part, by depositing Common Stock with a Fair Market Value equal to the amount otherwise required to
be so paid. For purposes of the preceding sentence, the Fair Market Value of the Common Stock
shall be determined as of the trading date immediately preceding the date of payment to the Trust.

     2.3 Additional Payment to Trust; Investment of Additional Payment. On the same day that a
deferred Bonus is paid over to the Trust on behalf of a Participant, a Matching Amount shall be
paid thereto by or on behalf of his or her Employer. Such Matching Amount shall be allocated to
the Participant’s BRRP Deferral Account for such year and shall be invested as provided in Section
4.2. Payment of the Matching Amount may be made in Common Stock as provided in Section 4.2.

     2.4 Reinvestment of Earnings. Except as provided in the following sentence, all dividend
income received in cash on Common Stock held in an BRRP Deferral Account shall be invested in
additional Common Stock, subject to the provisions of Section 2.2 of Appendix A relating to Common
Stock purchases. Cash receipts may be temporarily invested in money market or other cash
equivalents as the Trustee deems advisable or practical under the

16

 

circumstances. Dividends or stock splits received in Common Stock shall be retained in the
relevant BRRP Deferral Account.

     2.5 Effect on Deferral Election Upon Certain Terminations of Employment. In the event a
Participant files a Deferral Election and subsequently terminates as an Employee prior to the date
Bonuses are paid for the relevant year, the Deferral Election filed for such year shall be
administered as provided in this section in lieu of any otherwise applicable provision of the Plan.
In such event, if (i) under the terms of the Incentive Plan, he or she is entitled to a Bonus
notwithstanding such termination and (ii) the termination of employment is described in Sections
3.2, 3.3 or 3.5 of Appendix A or occurs following the time described in Section 3.4 of Appendix A,
then such Bonus and the related Matching Amount shall be (A) distributed to such individual or his
or her Beneficiary in cash or (B) invested and so distributed in Common Stock, at the Committee’s
election, within 60 days following the date such year’s Bonuses are paid.

3. VESTING

     3.1 In General. A Participant shall become 100% vested in an BRRP Deferral Account on the
fifth anniversary date of the initial funding of such BRRP Deferral Account, provided he or she
remains continuously employed by an Employer from the date of funding to such anniversary date.

     3.2 Death; Disability. Notwithstanding the provisions of Section 3.1 of Appendix A, in the
event of the death of a Participant or the termination of the Participant’s employment by reason of
Disability, he or she will thereupon become 100% vested in each of his or her BRRP Deferral
Accounts.

     3.3 Retirement. Notwithstanding the provisions of Section 3.1 of Appendix A, in the event of
the Retirement of a Participant, he or she will thereupon become 100% vested in each of his or her
BRRP Deferral Accounts.

     3.4 Change in Control. Notwithstanding the provisions of Section 3.1 of Appendix A, a
Participant shall become 100% vested in each of his or her BRRP Deferral Accounts upon the
occurrence of a Change in Control.

     3.5 Involuntary Termination. Notwithstanding the provisions of Section 3.1 of Appendix A, in
the event a Participant is involuntarily terminated as an Employee, other than for Cause, prior to
the attainment of 100% vesting in any of his or her BRRP Deferral Accounts, he or she shall become
100% vested in each of the otherwise nonvested BRRP Deferral Accounts.

     3.6 Termination for Cause; Certain Voluntary Termination. In the event a Participant is
terminated as an Employee for Cause or voluntarily terminates as an Employee (other than by reason
of Retirement) prior to the attainment of 100% vesting in an BRRP Deferral Account, then, in either
case, he or she shall forfeit the balance in each such nonvested BRRP Deferral Account.

     3.7 Disposition of Forfeitures. All Common Stock and other amounts forfeited under this
Article shall revert to the entity that is the Participant’s Employer immediately prior to the date
he or she terminates as an Employee.

17

 

4. DISTRIBUTION OF BENEFITS

     4.1 Distribution In General. Following the occurrence of an event occasioning a distribution,
the vested portion of a Participant’s BRRP Deferral Account shall be paid to him or her or, in the
case of death, his or her Beneficiary. The number of days within which payment shall be made shall
be as set forth in Section 4.3.

     4.2 Events Occasioning Distribution. For purposes of Section 4.1 of Appendix A, each of the
following shall be an event occasioning a distribution with respect to a relevant BRRP Deferral
Account:

     (a) If a Participant has in effect a valid Payment Election with respect to such BRRP
Deferral Account providing for its distribution upon 100% vesting therein and satisfies the
provisions of Section 3.1 of Appendix A, such event shall be the fifth anniversary of the
initial funding of such BRRP Deferral Account.

     (b) If a Participant has in effect a valid Payment Election with respect to such BRRP
Deferral Account providing for its distribution upon termination as an Employee and he or she
so terminates after having previously satisfied the provisions of Section 3.1 of Appendix A,
such event shall be the date of such termination.

     (c) If a Participant dies or terminates employment by reason of Disability, such event
shall be the date of termination of employment.

     (d) In the event of the Retirement of a Participant, such event shall be the date of
Retirement.

     (e) If a Participant has in effect a valid Payment Election with respect to such BRRP
Deferral Account providing for its distribution upon 100% vesting therein and a Change in
Control occurs, such event shall be the date of the Change in Control.

     (f) If a Participant has in effect a valid Payment Election with respect to such BRRP
Deferral Account providing for its distribution upon termination as an Employee and he or she
so terminates after having previously become 100% vested therein by reason of a Change in
Control, such event shall be the date of such termination.

     (g) If a Participant is involuntarily terminated under circumstances described in Section
3.5 of Appendix A, such event shall be the date of such termination.

     4.3 Time of Distribution. Distributions of vested benefits from BRRP Deferral Accounts shall
be made (i) within 30 days following an event described in Section 4.2(a) or (e) of Appendix A, and
(ii) within 60 days following an event described in Section 4.2(b), (c), (d), (f) or (g) of
Appendix A, provided that all distributions of BRRP Deferral Accounts shall be made in accordance
with Code Section 409A and the guidance promulgated thereunder.

     4.4 Mode of Distribution. All Plan distributions shall be made in one lump sum in Common
Stock; provided, however, amounts not yet invested in Common Stock as of the relevant distribution
date shall be paid in cash.

18

 

			
	5. ADDITIONAL ADMINISTRATIVE PROVISIONS WITH RESPECT TO BRRP DEFERRAL ACCOUNT

     5.1 Voting of Common Stock. To the extent permitted by applicable law, the Participants shall
be entitled to direct the Trustee as to the voting of vested and nonvested shares of Common Stock
held in their BRRP Deferral Accounts. In the event the Participants are not permitted to vote such
shares under applicable law, or a Participant fails to direct the Trustee as to shares allocated to
his or her account(s), the Trustee shall vote such shares as it deems appropriate under the
circumstances.

5.2 Certain Securities Law Matters.

     (a) Distribution of a Participant’s Bonus Deferral Account may be suspended or modified to
the extent necessary to comply with any applicable federal or state securities law.

     (b) Shares of Common Stock distributed a Participant’s Bonus Deferral Account may be
marked with such legend as the Company, after consultation with counsel, deems necessary or
appropriate to comply with any applicable federal or state securities or other law.

19GEHL COMPANY
2004
EQUITY INCENTIVE PLAN  

STOCK APPRECIATION
RIGHTS AWARD AGREEMENT 

        THIS
AGREEMENT, made and entered into as of this ____ day of _____________, by and between
GEHL COMPANY, a Wisconsin corporation (the “Company”),
and ________________________ (the “Participating Key Employee”). 

W I T N E S S E T H : 

        WHEREAS,
the Company has adopted the Gehl Company 2004 Equity Incentive Plan (the
“Plan”), the terms of which, to the extent not stated herein, are specifically
incorporated by reference in this Agreement; and 

        WHEREAS,
one of the purposes of the Plan is to permit the granting of awards of stock appreciation
rights with respect to shares of the Company’s Common Stock, $.10 par value (the
“Common Stock”), to certain key employees of the Company and its Affiliates (as
defined in the Plan); and 

        WHEREAS,
the Participating Key Employee is now employed by the Company or an Affiliate of the
Company in a key capacity, and the Company desires the Participating Key Employee to
remain in such employ and to increase his or her incentive and personal interest in the
welfare of the Company. 

        NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements herein
set forth, the parties hereby mutually covenant and agree as follows: 

        1.    Award
of SARs. Subject to the terms and conditions of the Plan and           this
Agreement, the Company hereby awards the Participating Key Employee the           number
of stock appreciation rights set forth on the signature page of this           Agreement
(the “SARs”). The SARs are solely a unit of measurement of           the amount
of cash compensation, if any, to which the Participating Key Employee           may be
entitled.  

        2.    Initial
Value of SARs. Each SAR has an initial value as set forth           on the
signature page of this Agreement (the “Initial Value”).  

        3.    Exercisability
and Termination of SARs. Except as provided herein,           the SARs may be
exercised only while the Participating Key Employee is an           employee of either
the Company or an Affiliate of the Company and only if the           Participating Key
Employee has been continuously so employed since the date of           the award of the
SARs. Subject to Paragraph 4, the SARs may be exercised by the           Participating
Key Employee in whole, or in part from time to time, during the           period
beginning on the date of grant of the SARs set forth on the signature           page of
this Agreement (the “Grant Date”) and ending on the tenth           anniversary
of the Grant Date (the “10-Year Maturity Date”) but only           in
accordance with the following schedule:  

	Elapsed Period of Time

After Grant Date	Cumulative Percentage of SARs

Which May Be Exercised

(which number of shares shall be rounded

down to the nearest whole number
	
Less than One Year	0%
	One Year	33-1/3%
	Two Years	66-2/3%
	Three Years	100%

provided, however, that
notwithstanding the foregoing vesting schedule, the SARs shall become immediately
exercisable in full following a Change of Control of the Company (as such term is defined
in the Plan). 

        4.    Exercisability
After Termination of Employment. 

        (a)    Death
or Disability; Retirement. In the event the           Participating Key
Employee dies while he or she is in the employ of the Company           or an Affiliate
thereof or if his or her employment is terminated by reason of           retirement on or
after attaining age 62 or by reason of his or her disability,           the SARs, to the
extent not theretofore exercised, may be exercised in full as           follows: (i) by
the Beneficiary at any time within twelve months after the date           of the
Participating Key Employee’s death while in the employ of the           Company or
an Affiliate thereof; or (ii) by the Participating Key Employee at           any time
within twelve months after the termination of Participating Key           Employee’s
employment by reason of retirement on or after attaining age 62           or by reason of
his or her disability, but in no event later than the 10-Year           Maturity Date.  

        (b)    Voluntary
Termination; Termination for Cause. In the event           the
Participating Key Employee voluntarily terminates employment with the           Company
and, if applicable, any of its Affiliates or if his or her employment is
          terminated for Cause (as hereinafter defined), the SARs, to the extent not
          theretofore exercised, shall immediately terminate upon such termination of
          employment. For purposes of this Agreement, the term “Cause” shall
          mean any termination of the Participating Key Employee by action of the Board
of           Directors of the Company because of the failure of the Participating Key
          Employee to fulfill his or her obligations with the Company or any Affiliate
          thereof or because of serious willful misconduct by the Participating Key
          Employee in respect of his or her obligations with the Company or any Affiliate
          thereof which would cause a substantial and demonstrable detriment to the
          Company, as, for example, the commission by the Participating Key Employee of a
          felony or the perpetration by the Participating Key Employee of a common-law
          fraud against the Company or any Affiliate thereof, or any major material
action           (i.e., not procedural or operational differences) taken against
the           expressed directive of the Board of Directors of the Company.  

        (c)    Other.
In the event that the Participating Key Employee is           discharged or leaves the
employ of the Company and, if applicable, its           Affiliates for any reason (other
than the death or disability of the           Participating Key Employee, the retirement
of the Participating Key Employee on           or after attaining age 62, the
Participating Key Employee’s voluntary           termination of employment or the
termination of the Participating Key Employee           for Cause), the SARs, to the
extent not theretofore exercised but then permitted           under the percentage
limitations of Paragraph 3 hereof, may be exercised by the           Participating Key
Employee at any time within three months after the date of           termination of
employment, but in no event later than the 10-Year Maturity Date.  

-2- 

        5.    Final
Value of SARs. The value of each exercised SAR shall be the           difference
between (i) the Initial Value and (ii) the last per share sale price           of the
Common Stock as reflected on The Nasdaq Stock Market on the date of           exercise as
determined pursuant to Paragraph 6 (such difference being the           “Final Value”).  

        6.    Manner
of Exercise. Except as provided herein, the SARs may be           exercised only
by written notice to the Company, served upon the Secretary of           the Company at
its office at West Bend, Wisconsin, specifying the number of SARs           being
exercised. The exercise shall be effective on the business day such           written
notice is received or, if such written notice is received on a day which           is not
a business day, on the next following business day. A day of the week is           a
business day if it is a day that both the West Bend office of the Company and
          The Nasdaq Stock Market are open for business. Any such written notice is
          irrevocable. Notwithstanding the foregoing, in no event may any SARs be
          exercised except during the windows defined pursuant to the Company’s
          insider trading policy; any blackout periods under such policy shall not extend
          the exercise period for SARs hereunder.  

        7.    Cash
Payment. As soon as practicable after a valid exercise           of a SAR,
the Company shall make a cash payment to the Participating Key           Employee or the
Beneficiary thereof, as applicable. The cash payment shall be           equal to the
Final Value, subject to the Company’s obligation to withhold           Federal,
state or local taxes.  

        8.    Nontransferability
of the SARs. The SARs shall not be           assignable, alienable,
saleable or transferable by the Participating Key           Employee other than by will
or the laws of descent and distribution; provided,           however, that the
Participating Key Employee shall be entitled, in the manner           provided in
Paragraph 9 hereof, to designate a beneficiary to exercise his or           her rights
with respect to the SARs upon the death of the Participating Key           Employee. The
SARs may be exercised during the lifetime of the Participating Key           Employee
only by the Participating Key Employee or, if permitted by applicable           law, the
Participating Key Employee’s guardian or legal representative.  

        9.    Designation
of Beneficiary. 

        (a)              The
person whose name appears on the signature page hereof after the caption           “Beneficiary” or
any successor designated by the Participating Key           Employee in accordance
herewith (the person who is the Participating Key           Employee’s beneficiary
at the time of his or her death is herein referred           to as the “Beneficiary”)
shall be entitled to exercise the SARs, to           the extent they are exercisable,
after the death of the Participating Key           Employee. The Participating Key
Employee may from time to time revoke or change           his or her Beneficiary without
the consent of any prior Beneficiary by filing a           new designation with the
Committee (as defined in the Plan). The last such           designation received by the
Committee shall be controlling; provided,           however, that no designation,
or change or revocation thereof, shall be           effective unless received by the
Committee prior to the Participating Key           Employee’s death, and in no event
shall any designation be effective as of           a date prior to such receipt.  

-3- 

        (b)              If
no such Beneficiary designation is in effect at the time of the Participating
          Key Employee’s death, or if no designated Beneficiary survives the
          Participating Key Employee or if such designation conflicts with applicable
law,           the Participating Key Employee’s estate shall be entitled to exercise
the           SARs, to the extent they are exercisable after the death of the
Participating           Key Employee. If the Committee is in doubt as to the right of any
person to           exercise the SARs, the Company may refuse to recognize such exercise,
without           liability for any interest thereon, until the Committee determines the
person           entitled to exercise the SARs, or the Company may apply to any court of
          appropriate jurisdiction and such application shall be a complete discharge of
          the liability of the Company therefor.  

        10.    Adjustments. In
the event of any reclassification, subdivision or           combination of shares of
Common Stock, merger or consolidation of the Company or           sale by the Company of
all or a portion of its assets, or other event which           could, in the judgment of
the Committee, distort the implementation of the Plan           or the realization of its
objectives, the Committee may make such adjustments in           the number of SARs
and/or the Initial Value or in the terms, conditions or           restrictions of this
Agreement as the Committee deems equitable to the extent           consistent with the
Plan.  

        11.    Powers
of Company Not Affected. The existence of the SARs shall           not affect in
any way the right or power of the Company or its shareholders to           make or
authorize any combination, subdivision or reclassification of the Common           Stock
or any reorganization, merger, consolidation, business combination,           exchange of
shares, or other change in the Company’s capital structure or           its
business, or any issue of bonds, debentures or stock having rights or
          preferences equal, superior or affecting the SARs or the rights thereof, or
          dissolution or liquidation of the Company, or any sale or transfer of all or
any           part of its assets or business, or any other corporate act or proceeding,
          whether of a similar character or otherwise. Nothing in this Agreement shall
          confer upon the Participating Key Employee any right to continue in the
          employment of the Company or any of its Affiliates or interfere with or limit
in           any way the right of the Company or any of its Affiliates to terminate the
          Participating Key Employee’s employment at any time.  

        12.    Interpretation
by Committee. The Participating Key Employee agrees           that any dispute or
disagreement which may arise in connection with this           Agreement shall be
resolved by the Committee, in its sole discretion, and that           any interpretation
by the Committee of the terms of this Agreement or the Plan           and any
determination made by the Committee under this Agreement or the Plan may           be
made in the sole discretion of the Committee and shall be final, binding, and
          conclusive all as more fully set forth in the Plan. Any such determination need
          not be uniform and may be made differently among Participating Key Employees
          awarded SARs.  

        13.    Miscellaneous. 

        (a)              This
Agreement shall be governed and construed in accordance with the laws of           the
State of Wisconsin applicable to contracts made and to be performed therein
          between residents thereof.  

        (b)              This
Agreement may not be amended or modified except by the written consent of           the
parties hereto.  

-4- 

        (c)              Headings
are given to the paragraphs and subparagraphs of this Agreement solely           as a
convenience to facilitate reference. Such headings shall not be deemed in           any
way material or relevant to the construction or interpretation of this
          Agreement or any provision thereof.  

        (d)              Any
notice, filing or delivery hereunder or with respect to SARs shall be given           to
the Participating Key Employee at either his or her usual work location or           his
or her home address as indicated in the records of the Company, and shall be
          given to the Committee or the Company at  

	 	
143
Water Street
West Bend, Wisconsin 53095
Attention: Corporate Secretary 

All such notices shall be given by
first class mail, postage pre-paid, or by personal delivery. 

        (e)              This
Agreement shall be binding upon and inure to the benefit of the Company and           its
successors and assigns and shall be binding upon and inure to the benefit of
          the Participating Key Employee, the Beneficiary and the personal
          representative(s) and heirs of the Participating Key Employee.  

        IN
WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly
authorized officers and its corporate seal hereunto affixed, and the Participating Key
Employee has hereunto affixed his or her hand, all on the day and year set forth below. 

		GEHL COMPANY
	
             (CORPORATE SEAL)
	
 	By:_________________________________________________
	
 	Attest:______________________________________________
	
 	PARTICIPATING KEY EMPLOYEE
	
 	___________________________________________________

	 	
Number
of SARs:                   
Initial Value:                   
Grant Date:
                  
Beneficiary:                   
Address of Beneficiary:
                  
Beneficiary Tax Identification No.: 

-5-

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