GEHL COMPANY/____________________
CHANGE IN CONTROL AND SEVERANCE AGREEMENT
THIS AGREEMENT, made and entered into as of the _____ day of April,
2000, by and between Gehl Company, a Wisconsin corporation (hereinafter
referred to as the "GEHL"), and _______________________ (hereinafter referred
to as the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is employed by GEHL in a key executive capacity,
and the Executive's services are valuable to the conduct of the business of
GEHL;
WHEREAS, the Board of Directors of GEHL (the "Board") recognizes that
circumstances may arise in which a change in control of GEHL occurs, through
acquisition or otherwise, thereby causing uncertainty about the Executive's
future employment with GEHL without regard to the Executive's competence or
past contributions, which uncertainty may result in the loss of valuable
services of the Executive to the detriment of GEHL and its shareholders, and
GEHL and the Executive wish to provide reasonable security to the Executive
against changes in the Executive's relationship with GEHL in the event of any
such change in control;
WHEREAS, GEHL and the Executive are desirous that any proposal for a
change in control or acquisition of GEHL will be considered by the Executive
objectively and with reference only to the best interests of GEHL and its
shareholders;
WHEREAS, the Executive will be in a better position to consider GEHL's
best interests if the Executive is afforded reasonable security, as provided
in this Agreement, against altered conditions of employment which could result
from any such change in control or acquisition; and
WHEREAS, GEHL deems it appropriate to provide the Executive with
specified severance benefits, as provided in this Agreement, in the event of
certain termination of the Executive other than in the context of a Change in
Control or acquisition.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
Section 1. Change in Control. In the event a Change in Control, as
defined below, occurs while the Executive is employed by the company and this
Agreement is in effect, the Executive shall automatically be entitled to
employment by the company for two years after the occurrence of the Change in
Control (such two-year term of employment is hereafter referred to as the
"Change in Control Contract Term"). While employed by the Company during the
Change in Control Contract Term, the Executive shall be entitled to a base
salary, bonus opportunity and other employee benefits substantially equivalent
to those the Executive was entitled to immediately prior to the Change in
Control. In addition, upon the occurrence of a Change in Control, and
assuming that the Executive is in the employ of the Company at such time or
demonstrates that his prior termination was effected in anticipation of a
Change in Control as contemplated by the succeeding paragraph, (i) the
unvested stock options awarded to the Executive under the GEHL Stock Option
Plans shall vest, (ii) the Executive's Bank Balance in the Bonus Bank under
the GEHL Shareholder Value Added Management Incentive Compensation Plan shall
vest and be paid and (iii) all restrictions limiting the exercise,
transferability, entitlement or incidents of ownership of any outstanding
award, including options, restricted stock, supplemental retirement and death
benefits, deferred compensation, or other property or rights granted to the
Executive after the date of this Agreement (other than pursuant to plans of
general application to salaried employees such as tax-qualified retirement
plans, life insurance and the health plan) shall lapse, and such awards shall
become fully vested and be held by or for the Executive free and clear of all
such restrictions. This provision shall apply to all such property or rights
notwithstanding the provisions of any other plan or agreement.
If the Executive's employment shall be terminated by GEHL without
Cause (as defined below) or the Executive shall terminate his employment for
Good Reason (as defined below) during the Change in Control Contract Term, or
if GEHL shall terminate the Executive's employment without Cause within six
(6) months before the execution of a definitive purchase agreement that
ultimately results in a Change in Control and the Executive shall reasonably
demonstrate that such termination was in connection with or in anticipation of
the Change in Control, the Executive shall be entitled to the following paid
in a lump sum within 30 days of the date of the Executive's termination of
employment hereunder (the "Termination Date") or the date that the Executive
demonstrates that such termination was in connection with or in anticipation
of the Change in Control, whichever is applicable:
(a) The Executive's base salary as in effect on the Termination Date
("Current Base Salary") through the Termination Date to the extent
not theretofore paid;
(b) The bonus which would be earned by the Executive through the
Termination Date computed under GEHL's existing bonus plan, ignoring
any requirement that the Executive be employed through the end of
the fiscal year and not reduced for any deferrals which would
otherwise be required under the bonus plan;
(c) Any compensation previously deferred, including that deferred under
any bonus plan as then in effect, which deferrals shall become
immediately vested upon the Change in Control, to the extent not
previously paid; and
(d) Two (2) times the sum of the Current Base Salary.
(e) The present value of the Executive's benefits under Section 2 of the
Executive's most current Supplemental Retirement Benefit Agreement
using a discount rate equal to the "GATT" interest rate that would
be used by the Gehl Company Retirement Income Plan "B" to calculate
the amount of a lump sum distribution to be made on the same date as
the payment hereunder.
In addition, for twenty-four (24) months after the Termination Date, GEHL
shall provide to the Executive and his family medical benefits at least
substantially equal on a pre-tax basis to those provided to him and his family
just prior to the date of the Change in Control, whether pursuant to a group
plan or individual coverage. Notwithstanding the foregoing, if the Executive
obtains employment during the 24-month period and family medical benefits
(substantially equivalent to those offered by GEHL just prior to the date of
the Change in Control) are available from the new employer, GEHL's obligation
to provide such family medical benefits shall cease for so long as the
Executive remains employed.
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 this Agreement and such amounts shall not be reduced (except
to the extent set forth in the immediately preceding paragraph) whether or not
the Executive obtains other employment. In addition, GEHL will not be
entitled to reduce the amounts payable under this Agreement for any claims or
rights it may have against the Executive.
"Change in Control," for the purposes of this Agreement shall be defined
as one of the following:
i) Securities of GEHL representing 25% or more of the combined voting
power of GEHL's then outstanding voting securities are acquired
pursuant to a tender offer or an exchange offer; or
ii) The shareholders of GEHL approve a merger or consolidation of GEHL
with any other corporation as a result of which less than fifty
percent (50%) of the outstanding voting securities of the surviving
or resulting entity are owned by the former shareholders of GEHL
(other than a shareholder who is an "affiliate," as defined under
rules promulgated under the Securities Act of 1933, as amended, of
any party to such consolidation or merger); or
iii) The shareholders of GEHL approve the sale of substantially all of
GEHL's assets to a corporation which is not a wholly-owned
subsidiary of GEHL; or
iv) Any person becomes the "beneficial owner," as defined under rules
promulgated under the Securities Exchange Act of 1934, as amended,
directly or indirectly of securities of GEHL representing twenty-
five (25%) or more of the combined voting power of GEHL's then
outstanding securities the effect of which (as determined by the
Board) is to take over control of GEHL; or
v) During any period of two consecutive years, individuals who, at the
beginning of such period, constituted the Board cease, for any
reason, to constitute at least a majority thereof, unless the
election or nomination for election of each new director was
approved by the vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period.
"Good Reason" for the purposes of this Agreement, shall be defined as the
occurrence of any one of the following events or conditions after, or in
anticipation of, the Change in Control:
i) The removal of the Executive from, or any failure to re-elect or
reappoint the Executive to, any of the positions held with GEHL on
the date of the Change in Control or any other positions with GEHL
to which the Executive shall thereafter be elected, appointed or
assigned, except in connection with the termination of his
employment for disability, Cause, as a result of his death or by the
Executive other than for Good Reason; or
ii) A good faith determination by the Executive that there has been a
significant adverse change, without the Executive's written consent,
in the Executive's working conditions or status with GEHL from such
working conditions or status in effect immediately prior to the
Change in Control, including but not limited to (A) a significant
change in the nature or scope of the Executive's authority, powers,
functions, duties or responsibilities, or (B) a significant
reduction in the level of support services, staff, secretarial and
other assistance, office space and accoutrements; or
iii) Any material breach by GEHL of any provision of this Agreement; or
iv) Any purported termination of the Executive's employment for Cause by
GEHL which is determined under Section 14 not to be for conduct
encompassed in the definition of Cause contained herein; or
v) The failure of GEHL to obtain an agreement, satisfactory to the
Executive, from any successor or assign of GEHL, to assume and agree
to perform this Agreement, as contemplated in Section 3 hereof; or
vi) GEHL's requiring the Executive to be based at any office or location
which is not within a fifty (50) mile radius of West Bend,
Wisconsin, except for travel reasonably required in the performance
of the Executive's responsibilities hereunder, without the
Executive's consent.
For purposes of this Section, any good faith determination of Good Reason made
by the Executive shall be conclusive.
Section 2. Termination of Employment Other Than in the Context of a
Change in Control/Severance. If the Executive's employment is involuntarily
terminated by GEHL for any reason other than (i) Cause, (ii) circumstances
under which the Executive would be entitled to the payments provided by
Section 1 hereof or (iii) the Executive's death or disability, the Executive
shall be entitled to receive, and GEHL shall be obligated to pay, the
Executive's then Current Base Salary, as in effect immediately prior to such
termination, for one (1) full year from the Executive's date of termination.
During such year, the Executive shall also continue to participate in all
group health and welfare benefit plans and programs of GEHL to the extent that
such continued participation is possible under the general terms and
provisions of such plans and programs. In the event that the Executive's
continued participation in any such plans and programs is barred, and in lieu
thereof, the Executive shall be entitled to receive for the above period an
amount equal to the sum of the average annual contributions, payments,
credits, or allocations made by GEHL to him, to his account, or on his behalf
over the two (2) fiscal years (or fraction thereof) of GEHL preceding the
termination of his employment under such plans and programs from which his
continued participation is barred.
Termination by GEHL for "Cause" shall mean termination by action of the
Board because of the material failure of the Executive to fulfill his
obligations as an officer of the Company or because of serious willful
misconduct by the Executive in respect of his obligations as an officer of the
Company as, for example, the commission by the Executive of a felony or the
perpetration by the Executive of a common-law fraud against GEHL or any major
material action (i.e., not procedural or operational differences )taken
against the expressed directive of the Board.
Section 3. Assigns and Successors. The rights and obligations of GEHL
under this Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of GEHL and GEHL shall require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that GEHL would be required to perform if no
such succession or assignment had taken place.
Section 4. Construction. Section headings are for convenience only and
shall not be considered a part of the terms and provisions of this Agreement.
Section 5. Notices. All notices under this Agreement shall be in
writing and shall be deemed effective when delivered in person (in GEHL's
case, to its Secretary, or to its Chief Executive Officer if the Executive is
then serving as Secretary) or by facsimile to the number provided for such
purpose by the applicable party or forty-eight (48) hours after deposit
thereof in the U.S. mails, postage prepaid, addressed, in the case of the
Executive, to his last known address as carried on the personnel records of
GEHL and, in the case of GEHL, to the corporate headquarters, attention of the
Secretary, or to its Chief Executive Officer if the Executive is then serving
as Secretary, or to such other address as the party to be notified may specify
by notice to the other party.
Section 6. Severability. Should it be determined that one or more of
the clauses of this Agreement is (are) found to be unenforceable, illegal,
contrary to public policy, etc., this Agreement shall remain in full force and
effect except for the unenforceable, illegal, or contrary to public policy
provisions.
Section 7. Limitation on Payments.
(a) Notwithstanding anything contained herein to the contrary, prior to
the payment of any amounts pursuant to Sections 1 or 2 hereof, a
national accounting firm designated by GEHL (the "Accounting Firm")
shall compute whether there would be any "excess parachute payments"
payable to the Executive, within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), taking into
account the total "parachute payments," within the meaning of
Section 280G of the Code, payable to the Executive by GEHL or any
successor thereto under this Agreement and any other plan, agreement
or otherwise. If there would be any excess parachute payments, the
Accounting Firm will compute the net after-tax proceeds to the
Executive, taking into account the excise tax imposed by Section
4999 of the Code, if (i) the payments hereunder were reduced, but
not below zero, such that the total parachute payments payable to
the Executive would not exceed three (3) times the "base amount" as
defined in Section 280G of the Code, less One Dollar ($1.00) or (ii)
the payments hereunder were not reduced. If reducing the payments
hereunder would result in a greater after-tax amount to the
Executive, such lesser amount shall be paid to the Executive. If
not reducing the payments hereunder would result in a greater after-
tax amount to the Executive, such payments shall not be reduced.
The determination by the Accounting Firm shall be binding upon GEHL
and the Executive.
(b) As a result of the uncertainty in the application of Section 280G of
the Code, it is possible that excess parachute payments will be paid
when such payment would result in a lesser after-tax amount to the
Executive; this is not the intent hereof. In such cases, the
payment of any excess parachute payments will be void ab initio as
regards any such excess. Any excess will be treated as a loan by
GEHL to the Executive. The Executive will return the excess to
GEHL, within fifteen (15) business days of any determination by the
Accounting Firm that excess parachute payments have been paid when
not so intended, with interest at an annual rate equal to the rate
provided in Section 1274(d) of the Code (or 120% of such rate if the
Accounting Firm determines that such rate is necessary to avoid an
excise tax under Section 4999 of the Code) from the date the
Executive received the excess until it is repaid to GEHL.
(c) All fees, costs and expenses (including, but not limited to, the
cost of retaining experts) of the Accounting Firm shall be borne by
GEHL and GEHL shall pay such fees, costs and expenses as they become
due. In performing the computations required hereunder, the
Accounting Firm shall assume that taxes will be paid for state and
federal purposes at the highest possible marginal tax rates which
could be applicable to the Executive in the year of receipt of the
payments, unless the Executive agrees otherwise.
Section 8. Confidentiality. During and following the Executive's
employment by GEHL, the Executive shall hold in confidence and not directly or
indirectly disclose or use or copy or make lists of any confidential
information or proprietary data of GEHL except to the extent authorized in
writing by the Board or required by any court or administrative agency, other
than to an employee of GEHL or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by the Executive
of his duties as an executive of GEHL. Confidential information shall not
include any information known generally to the public or any information of a
type not otherwise considered confidential by persons engaged in the same
business or a business similar to that of GEHL. All records, files, documents
and materials, or copies thereof, relating to the business of GEHL which the
Executive shall prepare, or use, or come into contact with, shall be and
remain the sole property of GEHL and shall be promptly returned to GEHL upon
termination of employment with GEHL.
Section 9. Expenses and Interest. If (i) a dispute arises with respect
to the enforcement of the Executive's rights under this Agreement, (ii) any
legal or arbitration proceeding shall be brought to enforce or interpret any
provision contained herein or to recover damages for breach hereof, or (iii)
any tax audit or proceeding is commenced that is attributable in part to the
application of Section 4999 of the Code, in any case so long as the Executive
is not acting in bad faith, then GEHL shall reimburse the Executive for any
reasonable attorneys' fees and necessary costs and disbursements incurred as a
result of such dispute, legal or arbitration proceeding or tax audit or
proceeding ("Expenses"), and prejudgment interest on any money judgment or
arbitration award obtained by the Executive calculated at the rate of interest
announced by M&I Bank, Milwaukee, Wisconsin, from time to time as its prime or
base lending rate from the date that payments to the Executive should have
been made under this Agreement. Within ten days after the Executive's written
request therefor, GEHL shall pay to the Executive, or such other person or
entity as the Executive may designate in writing to GEHL, the Executive's
reasonable Expenses in advance of the final disposition or conclusion of any
such dispute, legal or arbitration proceeding.
Section 10. Payment Obligations Absolute. GEHL's obligation to pay the
Executive any amounts required hereunder and to make the benefit and other
arrangements provided herein shall be absolute and unconditional and shall not
be affected by any circumstances, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right which GEHL may have against
the Executive or anyone else. Except as provided in Section 9, all amounts
payable by GEHL hereunder shall be paid without notice or demand. Each and
every payment made hereunder by GEHL shall be final, and GEHL will not seek to
recover all or any part of such payment from the Executive, or from whomsoever
may be entitled thereto, for any reason whatsoever.
Section 11. No Waiver. The Executive's or GEHL's failure to insist upon
strict compliance with any provision of this Agreement or the failure to
assert any right the Executive or GEHL may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good
Reason, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
Section 12. Headings. The headings herein contained are for reference
only and shall not affect the meaning or interpretation of any provision of
this Agreement.
Section 13. Governing Law; Resolution of Disputes. This Agreement and
the rights and obligations hereunder shall be governed by and construed in
accordance with the laws of the State of Wisconsin. Any dispute arising out
of this Agreement shall, at the Executive's election, be determined by
arbitration under the rules of the American Arbitration Association then in
effect (in which case both parties shall be bound by the arbitration award) or
by litigation. Whether the dispute is to be settled by arbitration or
litigation, the venue for the arbitration or litigation shall be West Bend,
Wisconsin or, at the Executive's election, if the Executive is no longer
residing or working in the West Bend, Wisconsin metropolitan area, in the
judicial district encompassing the city in which the Executive resides;
provided, that, if the Executive is not then residing in the United States,
the election of the Executive with respect to such venue shall be either West
Bend, Wisconsin or in the judicial district encompassing that city in the
United States among the thirty cities having the largest population (as
determined by the most recent United States Census data available at
Termination Date) which is closest to the Executive's residence. The parties
consent to personal jurisdiction in each trial court in the selected venue
having subject matter jurisdiction notwithstanding their residence or situs,
and each party irrevocably consents to service of process in the manner
provided hereunder for the giving of notices.
Section 14. Amendment. No modification or amendment to this Agreement
may be made without the written consent of the parties hereto.
IN WITNESS WHEREOF, GEHL COMPANY has caused this Agreement to be executed
by its duly authorized officer, and the Executive has hereunto set his hand,
all as of the date set forth above.
GEHL COMPANY
_____________________________________
William D. Gehl
Chairman, President & CEO
_____________________________________
Executive