RETENTION AGREEMENT
This retention Agreement (this "Agreement") is made and entered into
as of June 13, 2001 by and between Gehl Company, a Wisconsin corporation (the
"Company") and __________________ (the "Executive").
1. Purpose. The purpose of this Agreement is to provide to the Executive a
financial incentive to agree (i) to provide such additional services as are
requested by the Company to enable the Company to prepare for, evaluate and
negotiate a potential Change of Control Transaction (as defined herein) and (ii)
to remain employed with the Company or, in the event a Change of Control
Transaction has occurred, with the Company or the purchaser of the Company or
any affiliate of such purchaser (collectively, the "Purchaser"), until March 31,
2002. The commitment of the Executive to provide additional services in
connection with a Change of Control Transaction and to remain employed with the
Company or the Purchaser until March 31, 2002, has been deemed by the Board of
Directors of the Company to be in the best interests of the Company and its
shareholders in connection with the consideration of a potential Change of
Control Transaction.
2. Change of Control Transaction. For the purpose of this Agreement, the
term "Change of Control Transaction " means any of the following:
a. securities of the Company representing 25% or more of the combined
voting power of the Company's then outstanding voting securities are acquired
pursuant to a tender offer or an exchange offer; or
b. the shareholders of the Company approve a merger or consolidation
of the Company 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 the Company (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
c. the shareholders of the Company approve the sale of substantially
all of the Company's assets to a corporation which is not a wholly-owned
subsidiary of the Company; or
d. 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 the Company representing twenty-five (25%) or more
of the combined voting power of the Company's then outstanding securities the
effect of which (as determined by the Company's Board of Directors (the
"Board")) is to take over control of the Company.
3. Duties of Executive. In consideration for the payment provided to the
Executive hereunder, the Executive hereby agrees:
a. to remain employed with the Company or, in the event a Change of
Control Transaction has occurred, with the Company or the Purchaser, until March
31, 2002; and
b. to provide such services as may be reasonably requested by the
Company to assist the Company in preparing for, evaluating and, if deemed by the
Board of Directors of the Company to be in the best interests of the Company and
its shareholders, negotiating and consummating a Change of Control Transaction;
and
c. in the event a Change of Control Transaction occurs, to provide
such services (consistent with the Executive's role immediately prior to the
Change of Control Transaction) as may be reasonably requested by the Purchaser
to assist in any transition of management, personnel or operations of the
Company resulting from such Change of Control Transaction; and
d. for a period of three months following the earlier to occur of the
dates provided in Section 4(a)(i), (ii) and (iii) below, to not be employed by
any other business (excluding the Company and/or the Purchaser) that is a direct
competitor of the Company as it relates to a major product line of the Company;
provided, however, that the Executive shall not be obligated to perform the
covenants of this Section 3(d) unless the Retention Bonus (as defined below)
provided in Section 4 hereof is paid to the Executive pursuant to the terms set
forth in such section.
4. Consideration. In consideration for fulfillment by the Executive of
Executive's duties hereunder, the Company and the Executive hereby agree as
follows:
a. The Company agrees to pay to the Executive a cash retention bonus
(the "Retention Bonus") equal in value to nine (9) months of the Executive's
Monthly Base Salary (as defined below). Such amount (if it is to be paid as
provided herein) shall be paid on the earlier to occur of (i) March 31, 2002
(provided Executive has remained in the employment of the Company or the
Purchaser until such date irrespective of whether or not a Change of Control
Transaction has been consummated); (ii) such date that Executive's employment
with the Company or, in the event a Change of Control Transaction occurs, with
the Company or the Purchaser terminates prior to March 31, 2002 for any reason
other than death or disability of the Executive, termination of employment by
the Company or the Purchaser, as the case may be, for Cause (as defined herein),
or voluntary separation from employment by the Executive other than as
contemplated in Section 4(a)(iii); or (iii) such date that Executive's
employment with the Company or, in the event a Change of Control Transaction
occurs, with the Company or the Purchaser is terminated by the Executive prior
to March 31, 2002 for Good Reason (as defined in Section 4(d)).
b. In the event the Executive's employment with the Company or the
Purchaser is terminated due to his death or disability prior to the earlier to
occur of the dates provided in Section 4(a)(i), (ii) and (iii) above, the
Company agrees to pay to the Executive or his estate an amount in cash equal to
the Retention Bonus multiplied by a fraction the denominator of which is the
number of calendar days from the date hereof to and including
-2-
March 31, 2002 and the numerator of which is the number of calendar days from
the date hereof to and including the date the Executive died or became disabled.
For the purposes of this Paragraph 4, the term "disability" means the
Executive's absence from, or his inability to perform, his duties hereunder on a
full-time basis for a period of three (3) consecutive months or more than three
(3) months in the aggregate prior to March 31, 2002 due to his physical or
mental illness or injury, whether or not such illness or injury is job-related.
c. "Cause" means termination by action of the Board of Directors of
the Company or the Purchaser, as the case may be, because of the willful and
continued failure of the Executive to fulfill his obligations as an officer of
the Company (other than such failure resulting from the Executive's death or
disability) or because of serious willful misconduct by the Executive, as, for
example, the commission by the Executive of a felony or the perpetration by the
Executive of a common-law fraud against the Company or the Purchaser, as the
case may be.
d. "Good Reason" means the occurrence of any one of the following
events or conditions:
i. the removal of the Executive from, or any failure to re-elect
or reappoint the Executive to, any of the positions held with the Company
on the date hereof or any other positions with the Company to which the
Executive shall thereafter be elected, appointed or assigned, except in
connection with the termination of his employment for Cause or as a result
of his death or disability; 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 from such working
conditions or status in effect on the date hereof, 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 the Company or the Purchaser of any
provision of this Agreement; or
iv. the failure of the Company to obtain an agreement,
satisfactory to the Executive, from any successor or assign of the Company,
to assume and agree to perform this Agreement; or
v. the Company's or the Purchaser'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 and consistent with
past practice, without the Executive's consent.
-3-
For purposes of this Section, any good faith determination of Good Reason made
by the Executive shall be conclusive.
e. "Monthly Base Salary" means the Executive's monthly gross rate of
pay as of the date hereof, including holiday and vacation pay, sick leave
compensation, salary reduction contributions made on behalf of the Executive to
tax-deferred retirement plans and pre-tax welfare benefit plans, and any amounts
transferred with respect to the month to non-qualified deferred compensation
plans sponsored by the Company.
5. Not Employment Agreement. This Agreement is not and shall not be
construed as an employment agreement. Subject to the obligations to pay the
Retention Bonus to the Executive pursuant to Section 4 hereof, the Company or
Purchaser, as the case may be, may at any time dismiss the Executive from
employment.
6. Severability. The provisions of this Agreement shall be regarded as
divisible, and if any of such provisions or any part hereof are declared invalid
or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts thereof and the
applicability thereof shall not be affected thereby.
7. Contents of Agreement; Amendment. This Agreement sets forth the entire
understanding between the parties hereto with respect to the subject matter
hereof, but does not affect the terms or interpretation of any other agreements
existing between the Company and the Executive. This Agreement may not be
amended or modified at any time except by written instrument executed by the
Company and the Executive.
8. Withholding. The Company shall be entitled to withhold from amounts to
be paid to the Executive hereunder any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold.
9. Assignment; Parties in Interest. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto, other than by operation
of law or with the written consent of the parties hereto. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors and permitted assigns.
10. Governing Law. This Agreement and the rights and obligations hereunder
shall be governed by and construed in accordance with the laws of the State of
Wisconsin.
11. Notice. Notices given pursuant to this Agreement shall be in writing
and shall be deemed given when actually received by the Executive or actually
received by the Company or the Purchaser, as the case may be. If mailed, such
notices shall be mailed by United States registered or certified mail, return
receipt requested, addressee only, postage prepaid.
12. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
-4-
IN WITNESS WHEREOF, the 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 EXECUTIVE
By:
-------------------------------- -------------------------------------
Name: Name:
Title:
-5-