SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.1)

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[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
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RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

A.S.V., Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Notes:

EXPLANATORY NOTE

A.S.V., Inc. is filing this revised definitive proxy statement in order to
accurately reflect the number of shares of A.S.V., Inc. common stock that were
issued and outstanding as of the record date for the 2004 Annual Meeting of
Shareholders.

[A.S.V. LOGO]

A.S.V., INC.

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
JUNE 4, 2004

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The Annual Meeting of Shareholders of A.S.V., Inc. will be held at the
Reif Center, 720 Conifer Drive, Grand Rapids, Minnesota on Friday, June 4, 2004
at 2:00 p.m., local time, for the following purposes:

1. To elect eight directors to the Board of Directors.

2. To approve the A.S.V., Inc. 2004 Stock Incentive Plan.

3. To ratify the appointment of Grant Thornton LLP as independent
auditors of the Company for the fiscal year ending December
31, 2004.

4. To take action upon any other business that may properly come
before the meeting or any adjournment thereof.

Accompanying this Notice of Annual Meeting of Shareholders is a proxy
statement, form of proxy and the Company's 2003 Annual Report to Shareholders,
which are being sent to you by order of the Board of Directors.

Only shareholders of record shown on the books of the Company at the
close of business on April 14, 2004 will be entitled to vote at the meeting or
any adjournment thereof. Each shareholder is entitled to one vote per share on
all matters to be voted on at the meeting.

Please join us for factory tours from 10 a.m. to 12 noon on Friday,
June 4, 2004. A map to the Company's facility is located on the inside front
cover of the proxy statement.

You are cordially invited to attend the meeting. Whether or not you
plan to attend the meeting, please sign, date and return your proxy in the
return envelope provided as soon as possible. Your cooperation in promptly
signing and returning the proxy will help avoid further solicitation expense to
the Company.

By Order of the Board of Directors,

/s/ Edgar E. Hetteen

Edgar E. Hetteen
Secretary

Dated: May 3, 2004
Grand Rapids, Minnesota

[GRAND RAPIDS, MINNESOTA MAP]

A.S.V., INC.
840 LILY LANE
GRAND RAPIDS, MINNESOTA 55744

PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 4, 2004

TABLE OF CONTENTS

Page
----

INTRODUCTION.................................................................................................... 1

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.................................................. 2

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE......................................................... 3

ELECTION OF DIRECTORS (PROPOSAL #1)............................................................................. 3

CORPORATE GOVERNANCE............................................................................................ 3
Directors and Executive Officers.......................................................................... 3
Board Independence........................................................................................ 4
Board Meetings and Committees............................................................................. 4
Compensation of Directors................................................................................. 6
Policy Regarding Attendance at Annual Meetings............................................................ 6
Shareholder Communication with Directors.................................................................. 6
Code of Business Conduct and Ethics....................................................................... 6
Legal Proceedings......................................................................................... 7

EXECUTIVE COMPENSATION.......................................................................................... 7
Compensation Committee Report on Executive Compensation................................................... 7
Summary Compensation Table................................................................................ 8
Option Grants in Last Fiscal Year......................................................................... 9
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values......................... 9
Employment Agreement...................................................................................... 9

COMPARATIVE STOCK PERFORMANCE................................................................................... 10

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................................. 11
Compensation Committee Interlocks and Insider Participation............................................... 11
Certain Transactions...................................................................................... 11

APPROVAL OF A.S.V., INC. 2004 STOCK INCENTIVE PLAN (PROPOSAL #2)................................................ 12
General Information....................................................................................... 12
Summary of the 2004 Stock Incentive Plan.................................................................. 13

AUDIT COMMITTEE REPORT AND PAYMENT OF FEES TO AUDITORS.......................................................... 17
Audit Committee Report.................................................................................... 17
Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees............................................... 18
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services Provided by the
Company's Independent Auditors ........................................................................... 18

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS (PROPOSAL #3)............................................... 19

PROPOSALS FOR THE NEXT ANNUAL MEETING........................................................................... 19

ADDITIONAL MATTERS.............................................................................................. 19

ANNUAL REPORT TO SHAREHOLDERS................................................................................... 20

A.S.V., Inc. Audit Committee Charter............................................................................ Appendix A

A.S.V., Inc. 2004 Stock Incentive Plan.......................................................................... Appendix B

INTRODUCTION

This proxy statement is being furnished to the shareholders of A.S.V.,
Inc. ("ASV" or the "Company"), in connection with the solicitation by the Board
of Directors of ASV of proxies to be voted at the Annual Meeting of Shareholders
(the "Annual Meeting") to be held on Friday, June 4, 2004 at 2:00 p.m., local
time, and at any adjournment thereof, for the purposes set forth in the attached
Notice of Annual Meeting of Shareholders. This proxy statement and the
accompanying proxy are first being mailed or given to shareholders on or about
May 3, 2004.

The cost of soliciting proxies, including preparing, assembling and
mailing the proxies and soliciting material, will be borne by the Company.
Directors, officers and regular employees of the Company may, without
compensation other than their regular compensation, solicit proxies in person or
by letter or telephone.

Any shareholder submitting a proxy may revoke it at any time prior to
its use at the Annual Meeting by giving written notice of such revocation to the
Secretary or other officer of the Company or by filing a new written proxy with
an officer of the Company. Personal attendance at the Annual Meeting is not, by
itself, sufficient to revoke a proxy unless written notice of the revocation or
a subsequent proxy is delivered to an officer before the revoked or superseded
proxy is used at the Annual Meeting.

The presence at the Annual Meeting in person or by proxy of the holders
of a majority of the outstanding shares of ASV's Common Stock entitled to vote
shall constitute a quorum for the transaction of business. proxies not revoked
will be voted in accordance with the instructions specified by shareholders by
means of the ballot provided on the proxy for that purpose. Proxies which are
signed but which lack any such specific instructions with respect to any
proposal will, subject to the following, be voted in favor of the proposals set
forth in the Notice of Annual Meeting and in favor of the slate of directors
proposed by the Board of Directors as listed herein. If a shareholder abstains
from voting as to any proposal, then the shares held by such shareholder shall
be deemed present at the Annual Meeting for purposes of determining a quorum and
for purposes of calculating the vote with respect to such proposal, but shall
not be deemed to have been voted in favor of such proposal. Abstentions as to
any proposal, therefore, will have the same effect as votes against such
proposal. If a broker returns a "non-vote" proxy, indicating a lack of voting
instruction by the beneficial holder of the shares and a lack of discretionary
authority on the part of the broker to vote on a particular proposal, then the
shares covered by such non-vote proxy shall be deemed present at the Annual
Meeting for purposes of determining a quorum but shall not be deemed to be
present at the Annual Meeting for purposes of calculating the vote required for
approval of such proposal.

The Board of Directors of the Company has fixed April 14, 2004 as the
record date (the "Record Date") for determining shareholders entitled to vote at
the Annual Meeting. Persons who were not shareholders on the Record Date will
not be allowed to vote at the Annual Meeting. At the close of business on the
Record Date 12,641,240 shares of ASV's Common Stock were issued and outstanding.
Each share of Common Stock is entitled to one vote on each matter to be voted
upon at the Annual Meeting. Holders of the Common Stock are not entitled to
cumulative voting rights. Generally, the affirmative vote of a majority of the
shares of Common Stock present and entitled to vote on each matter is required
for the election of each director nominee and the approval of each other matter
to be acted upon. However, if the shares present and entitled to vote on that
item of business would not constitute a quorum for the transaction of business
at the meeting, then the item must be approved by a majority of the voting power
of the minimum number of shares that would constitute such a quorum.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the
beneficial ownership of ASV's Common Stock as of April 14, 2004 by: (i) each
director of the Company, (ii) each executive officer of the Company named in the
Summary Compensation Table in this proxy statement, (iii) all directors and
executive officers of the Company as a group and (iv) each person or entity
known by the Company to own beneficially more than five percent of ASV's Common
Stock.

OPTION SHARES TOTAL
COMMON EXERCISABLE SHARES PERCENT OF
SHARES WITHIN 60 BENEFICIALLY OUTSTANDING
NAME OWNED DAYS OWNED (1) SHARES (1)
- ------------------------------------- --------- ------------- ------------ -----------

Caterpillar Inc. (2)................. 3,140,069 --- 3,140,069 24.8
James H. Dahl (3).................... 631,218 (4) 9,500 640,718 5.1
Gary D. Lemke........................ 359,330 (5) 226,250 585,580 4.6
Jerome T. Miner...................... 357,350 9,500 366,850 2.9
Edgar E. Hetteen..................... 199,852 (6) 11,250 211,102 1.7
Thomas R. Karges..................... 48,102 (7) 79,625 127,727 1.0
Leland T. Lynch...................... 122,500 (8) --- 122,500 1.0
R. E. "Teddy" Turner, IV............. 1,750 9,500 11,250 *
Karlin S. Symons..................... 500 --- 500 *
Richard A. Benson.................... --- --- --- *
All executive officers and
directors as a group
(9 persons).................... 1,720,602 (9) 345,625 2,066,227 15.9

* Less than 1%

(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and includes generally voting power
and/or investment power with respect to securities. Shares of Common
Stock subject to options currently exercisable or exercisable within 60
days of April 14, 2004 are deemed outstanding for computing the
beneficial ownership percentage of the person holding such options but
are not deemed outstanding for computing the beneficial ownership
percentage of any other person. Except as indicated by footnote, the
persons named in the table above have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned
by them.

(2) The address of Caterpillar Inc. is 100 Northeast Adams St., Peoria,
IL 61629-2495.

(3) The business address of Mr. Dahl is 1200 Riverplace Boulevard, Suite
902, Jacksonville, FL 32207.

(4) Includes 313,330 shares held by Rock Creek Partners, Ltd., an
investment partnership, of which Mr. Dahl is the Managing General
Partner and 295,150 shares held by a trust established for the benefit
of Mr. Dahl's dependent child; excludes 295,550 shares held by a trust
established for the benefit of Mr. Dahl's non-dependent child, as to
which Mr. Dahl disclaims beneficial ownership.

(5) Includes 122,754 shares held jointly with Mr. Lemke's wife, 61,363
shares held by Mr. Lemke's wife and 11,000 shares held in the Company's
401(k) Plan.

(6) Includes 79,500 shares held by Mr. Hetteen's wife.

(7) Includes 5,524 shares held in the Company's 401(k) Plan.

(8) Includes 10,000 shares held by Mr. Lynch's wife and 11,650 shares owned
by trusts established for the benefit of Mr. Lynch's grandchildren.

(9) Includes 16,524 shares held in the Company's 401(k) Plan.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors of the Company, and persons who beneficially own more
than 10% of the Company's outstanding shares of Common Stock, to file initial
reports of ownership and reports of changes in ownership of securities of the
Company with the Securities and Exchange Commission. Officers, directors and
greater than 10% shareholders are required by the Securities and Exchange
Commission to furnish the Company with copies of all Section 16(a) forms they
file.

Based solely on a review of the copies of such reports furnished to or
obtained by the Company, the Company believes during the fiscal year ended
December 31, 2003, all filing requirements applicable to its directors, officers
or beneficial owners of more than 10% of the Company's outstanding shares of
Common Stock were complied with, except that Mr. Lynch filed one report one day
late for the purchase of 10,000 shares and Messrs. Lynch, Miner and Turner each
filed one report one day late for the award of a stock option for 3,000 shares.

ELECTION OF DIRECTORS
(PROPOSAL #1)

The Board of Directors has set the number of directors to be elected
for the 2004 fiscal year at eight (8) and has nominated the eight current
directors to stand for reelection at the Annual Meeting. The eight current
directors of the Company are Gary D. Lemke, Edgar E. Hetteen, Jerome T. Miner,
Leland T. Lynch, James H. Dahl, R. E. "Teddy" Turner, IV, Richard A. Benson and
Karlin S. Symons (the "Nominees"). The Nominees have consented to stand for
reelection.

If elected, each Nominee shall serve until the next annual meeting of
shareholders and until his or her successor has been elected and qualified. If
any of the Nominees should be unable to serve as director by reason of death,
incapacity or other unexpected occurrence, the proxies solicited by the Board of
Directors shall be voted by the proxy representatives for such substitute
nominee(s) as is recommended by the Board of Directors, or, in the absence of
such recommendation, for such fewer number of directors as remain willing and
able to serve.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" EACH
OF THE NOMINEES. IN THE ABSENCE OF OTHER INSTRUCTIONS, THE PROXIES WILL BE VOTED
FOR EACH OF THE NOMINEES.

CORPORATE GOVERNANCE

DIRECTORS AND EXECUTIVE OFFICERS

The following provides certain information with respect to the Nominees
and the Company's executive officers.

GARY D. LEMKE, 63, has been President of ASV since he co-founded the
Company in 1983 and Chairman since September 2000. Mr. Lemke has been a director
of the Company since 1983.

EDGAR E. HETTEEN, 83, has been Vice President and Secretary of ASV
since he co-founded the Company in 1983. Mr. Hetteen has been a director of the
Company since 1983.

JEROME T. MINER, 68, has been Vice Chairman of ASV since 1995 and the
President of Jerry Miner Realty, Inc., an owner and operator of various retail
stores in Grand Rapids, Minnesota, since 1984. Mr. Miner has been a director of
the Company since 1991.

LELAND T. LYNCH, 67, has been Managing Partner, Chairman and Chief
Executive Officer of the advertising firm of Carmichael Lynch Inc. in
Minneapolis, Minnesota since 1962. Mr. Lynch has been a director of the Company
since 1995. Mr. Lynch is a director of Archivers Inc. and a partner in the
Historical Theatre Group.

JAMES H. DAHL, 50, has been the President of James Dahl & Company, a
private investment company, since 1989 and the Managing General Partner of Rock
Creek Partners, Ltd., a private investment partnership in

Jacksonville, Florida, since 1993. Mr. Dahl is Chairman of the Investment
Advisory Committee of the State of Florida Pension Fund. Mr. Dahl has been a
director of the Company since 1996.

R. E. "TEDDY" TURNER, IV, 40, has been the owner of Charleston
Boatworks, Inc., a yacht repair facility that specializes in high-tech composite
racing sailboats, located in Charleston, South Carolina, since 2000. From 1998
to 2000, Mr. Turner was the Chairman of the Board of MyTurn.com, Inc., a
computer hardware and software company. From 1996 to 1998, Mr. Turner was the
President of Turner Telecommunications Inc., an advanced video technology
company. Mr. Turner is a trustee of the Turner Foundation and the Jane Smith
Turner Foundation. Mr. Turner has been a director of the Company since 1997.

RICHARD A. BENSON, 61, has been Vice President of Caterpillar Inc.,
Diversified Products Division since 1992 and President of Caterpillar's Global
Mining Division since 2000. Mr. Benson is a director of Cat Elphinstone,
Morrison Products, Mitsibushi Caterpillar and the Illinois Agricultural
Leadership Foundation. Mr. Benson has been a director of the Company since
January 1999.

KARLIN S. SYMONS, 57, has been the President of Plus Relocation
Services, Inc. since January 2004. From 1995 to 2004, Ms. Symons was a partner
with the law firm of Kaplan, Strangis and Kaplan of Minneapolis, Minnesota. Ms.
Symons has been director since April 2004 and was previously a director of the
Company from 1995 to 2001.

THOMAS R. KARGES, 43, has been the Company's Chief Financial Officer
since October 1994.

Mr. Benson was appointed to the Board of Directors pursuant to the
terms of the Securities Purchase Agreement dated October 14, 1998 between
Caterpillar Inc. and the Company.

BOARD INDEPENDENCE

The Board of Directors has determined that each of the Company's
directors is independent under the Nasdaq listing standards, except for Gary D.
Lemke, who serves as the Company's President, Edgar E. Hetteen, who serves as
the Company's Vice President and Secretary, and Richard A. Benson, who serves as
Vice President of Caterpillar Inc., Diversified Products Division and President
of Caterpillar's Global Mining Division. In making the independence
determinations, the Board of Directors reviewed all of the directors'
relationships with the Company based primarily on a review of the responses of
the directors to questions regarding employment, business, familial,
compensation and other relationships with the Company and the Company's
management.

BOARD MEETINGS AND COMMITTEES

During fiscal 2003, the Board of Directors met four times. In addition
to meetings of the full Board, directors also attended various Board committee
meetings. All directors attended 75% or more of the total number of meetings of
the Board of Directors and committees of which they were members.

The Board and its committees take formal action by written consent from
time-to-time, in accordance with Minnesota law, rather than holding formal Board
and committee meetings.

The Company's Board of Directors had two standing committees in 2003,
the Audit Committee and the Compensation and Stock Option Committee. The
Company's Board of Directors established the Nominating Committee in April 2004.

Audit Committee

Members: R. E. "Teddy" Turner, IV, Chair

James H. Dahl

Jerome T. Miner

The Audit Committee oversees the Company's accounting and financial
reporting processes and financial statements, the Company's program to ensure
compliance with legal and regulatory requirements, and the independent auditor's
qualifications and independence. The Audit Committee is directly responsible for
the appointment, compensation, retention and oversight of the work of the
Company's independent auditors. The Audit Committee is comprised of three
directors and operates under a written charter. The Audit Committee charter was
amended in April 2004 and is included as Appendix A to this proxy statement. A
copy of the Audit Committee charter may also be found on the Company's web site
at www.asvi.com under "Investors Relations - Corporate Governance." All of the
Audit Committee members meet the independence and experience requirements of the
Nasdaq listing standards and the Securities and Exchange Commission. The Board
of Directors has identified R. E. "Teddy" Turner, IV to be an audit committee
financial expert under the rules of the Securities and Exchange Commission. The
Audit committee met five times in 2003.

Compensation and Stock Option Committee

Members: R. E. "Teddy" Turner, IV, Chair

Jerome T. Miner

Karlin S. Symons (as of April 2004)

The Compensation and Stock Option Committee provides recommendations
concerning salaries and incentive compensation for officers and employees of the
Company. The Compensation and Stock Option Committee is comprised of
non-employee directors who meet the independence requirements of the Nasdaq
listing standards. The Compensation and Stock Option Committee met one time in
2003.

Nominating Committee

Members: Leland T. Lynch, Chair

James H. Dahl

In April 2004, the Board of Directors approved the establishment of the
Nominating Committee. The Nominating Committee recommends new director nominees
to the Board. The Nominating Committee operates under a written charter, which
was adopted in April 2004 and which may be found on the Company's web site at
www.asvi.com under "Investors Relations - Corporate Governance." All of the
Nominating Committee members meet the independence requirements of the Nasdaq
listing standards. Because the Nominating Committee was not established until
fiscal 2004, no meetings of the Nominating Committee were held in fiscal 2003.

The Nominating Committee determines the required selection criteria and
qualifications of director nominees based upon the Company's needs at the time
nominees are considered. Directors should possess the highest personal and
professional ethics, integrity and values, and be committed to representing the
long-term interests of the Company's shareholders. In evaluating a candidate for
nomination as a director of the Company, the Nominating Committee will consider
criteria including business and financial expertise; geography; experience as a
director of a public company; gender and ethnic diversity on the Board; and
general criteria such as ethical standards, independent thought, practical
wisdom and mature judgment. The Nominating Committee will consider these
criteria for nominees identified by the Nominating Committee, by shareholders,
or through some other source.

The Nominating Committee will consider qualified candidates for
possible nomination that are submitted by the Company's shareholders.
Shareholders wishing to make such a submission may do so by sending the
following information to the Nominating Committee c/o Chief Financial Officer at
the address indicated on the

Notice of Annual Meeting of Shareholders: (1) name of the candidate and a brief
biographical sketch and resume; (2) contact information for the candidate and a
document evidencing the candidate's willingness to serve as a director if
elected; and (3) a signed statement as to the submitting shareholder's current
status as a shareholder and the number of shares currently held.

The Nominating Committee conducts a process of making a preliminary
assessment of each proposed nominee based upon the resume and biographical
information, an indication of the individual's willingness to serve and other
background information, business experience, and leadership skills, all to the
extent available and deemed relevant by the Nominating Committee. This
information is evaluated against the criteria set forth above and the Company's
specific needs at that time. Based upon a preliminary assessment of the
candidate(s), those who appear best suited to meet the Company's needs may be
invited to participate in a series of interviews, which are used as a further
means of evaluating potential candidates. On the basis of information learned
during this process, the Nominating Committee determines which nominee(s) to
recommend to the Board to submit for election at the next annual meeting. The
Nominating Committee uses the same process for evaluating all nominees,
regardless of the original source of the nomination.

No candidates for director nominations were submitted by any
shareholder in connection with the 2004 annual meeting.

COMPENSATION OF DIRECTORS

The Company does not pay its directors a fee for attendance at Board or
committee meetings. Each non-employee director is eligible for stock option
grants under the 1998 Non-Employee Director Stock Option Plan (the "Director
Plan"), including an option to purchase 2,250 shares of Common Stock upon
initial election to the Board and an option to purchase 3,000 shares of Common
Stock on the first business day of each calendar year thereafter, provided such
person is a director of the Company at the time of grant of the option. In
addition, the Company reimburses directors for expenses incurred in connection
with attendance at Board meetings.

Options to purchase 3,000 shares of ASV's Common Stock at $8.09 per
share were granted on January 2, 2003 to Messrs. Miner, Lynch, Dahl and Turner.
Mr. Benson was eligible to receive an option to purchase 3,000 shares of ASV's
Common Stock at $8.09 per share in January 2003. However, due to his employment
by Caterpillar Inc., Mr. Benson declined this option.

Directors who are also employees of the Company do not receive any
additional compensation for serving on the Board of Directors, but may receive
stock options as part of their compensation as officers of the Company.

POLICY REGARDING ATTENDANCE AT ANNUAL MEETINGS

The Company encourages, but does not require, its Board members to
attend the annual meeting of shareholders. Last year, two of the Company's
directors attended the annual meeting of shareholders.

SHAREHOLDER COMMUNICATION WITH DIRECTORS

Shareholders may communicate with the Company's Board of Directors by
sending a letter addressed to the Board of Directors or specified individual
directors to: A.S.V., Inc., c/o Chief Financial Officer, 840 Lily Lane, P.O. Box
5160, Grand Rapids, MN 55744. All communications will be compiled by the Chief
Financial Officer of the Company and submitted to the Board or the individual
directors on a periodic basis.

CODE OF BUSINESS CONDUCT AND ETHICS

The Company has adopted a Code of Business Conduct and Ethics (the
"Code of Ethics") which applies to the Company's directors, officers and
employees. The Code of Ethics is published on the Company's website at
www.asvi.com under "Investors Relations - Corporate Governance." Any amendments
to the Code of Ethics and waivers of the Code of Ethics for the Company's Chief
Executive Officer, Chief Financial Officer or Controller will be published on
the Company's website.

LEGAL PROCEEDINGS

R. E. "Teddy" Turner, IV was the Chairman of the Board of MyTurn.com,
Inc., a computer hardware and software company, from 1998 to 2000 and a director
of MyTurn.com, Inc. through October 2000. On March 2, 2001, MyTurn.com, Inc.
filed a voluntary petition for relief under Chapter 11 of the Federal Bankruptcy
Code in the United States Bankruptcy Court for the Northern District of
California.

EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Overview

The Company's Compensation and Stock Option Committee (the
"Compensation Committee") is responsible for establishing compensation policies
for all executive officers of the Company, including the Company's President.
The Compensation Committee is composed entirely of independent non-employee
directors. The present members of the Committee are listed at the end of this
report.

The objectives of the Company's executive compensation program are:

1. to attract, retain and motivate superior talent and reward
individual performance;

2. to support the achievement of the Company's strategic goals;
and

3. through stock based compensation, align the executive
officers' interests with those of the shareholders of the
Company.

The following report addresses the Company's executive compensation
policies and discusses factors considered by the Compensation Committee in
determining the compensation of the Company's President and other executive
officers for the year ended December 31, 2003.

Compensation Policies for Executive Officers

The Compensation Committee's executive compensation policies are
designed to provide competitive levels of compensation that integrate pay with
the Company's annual and long term performance goals, reward the achievement of
corporate goals, recognize individual initiative and achievements, and assist
the Company in attracting and retaining qualified executives. The Company's
executive officers are paid base salaries that are subject to annual
cost-of-living increases, along with periodic adjustments to recognize favorable
corporate and individual performance and also to make such salaries competitive
with other similar sized companies in the manufacturing industry. The Company's
executive officers are also given the opportunity to participate in certain
other broad-based employee benefit plans. The Company's use of stock option
grants as a key component of its executive compensation plans reflects the
Compensation Committee's position that stock ownership by management and stock
based compensation arrangements are beneficial in aligning management's and
shareholders' interests to enhance shareholder value. The Compensation Committee
believes that a greater reliance on stock-based incentives is appropriate for
the Company's current stage of development.

Stock Options

Stock options awarded under the Company's 1994 Long-Term Incentive and
Stock Option Plan and 1996 Incentive and Stock Option Plan are intended as
incentive compensation and have historically been granted to officers and other
key employees to attract, retain and motivate the talent necessary for the
Company to achieve its objectives. The Company's policy is to grant stock
options annually in connection with a review of each individual's performance of
their job functions and their current stock option holdings, at which point the
Compensation Committee may or may not grant additional options at its
discretion. The Company also grants stock options to newly hired employees as
part of their overall compensation package.

The 1996 Incentive and Stock Option Plan provides for the granting of
options to those employees who are not subject to Section 16(b) of the
Securities Exchange Act of 1934 without the approval of the Compensation
Committee. In 2003, stock option grants totaling 271,500 shares were granted to
116 employees in this manner.

Stock option grants totaling 511,500 shares (which includes the 271,500
shares discussed above) were approved by the Compensation Committee in January
2003 to be granted to full-time employees in 2003. Included in this figure is a
stock option grant for 60,000 shares granted to the chief financial officer on
January 31, 2003.

President's Compensation

Gary D. Lemke serves as the Company's President, Chief Executive
Officer and Chairman of the Board of Directors. Mr. Lemke's base compensation
for 2003 was increased to $191,500 based on performance. Mr. Lemke was granted
an option to purchase 180,000 shares of ASV's Common Stock at $8.83 per share in
January 2003 based on performance.

At this time the Committee has no formal written plan for Presidential
compensation separate and apart from the Company's general compensation
philosophy. Until a plan specific to the President is developed, Presidential
compensation will be based on corporate and individual performance, consistent
with guidelines applicable to all key employees.

SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS:

R. E. "Teddy" Turner, IV, Chair Jerome T. Miner

SUMMARY COMPENSATION TABLE

The following table sets forth the total remuneration paid during the
Company's last three fiscal years to the Company's President and Chief Executive
Officer and all other executive officers of the Company who earned total annual
salary and bonus in fiscal 2003 in excess of $100,000.

ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------ ----------------------
FISCAL SECURITIES
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) UNDERLYING OPTIONS (#)
- -------------------------------------------- ------ ---------- --------- ----------------------

Gary D. Lemke............................... 2003 191,500 --- 180,000
President and Chairman of the Board 2002 181,500 --- 10,000
2001 165,000 --- 15,000

Thomas R. Karges............................ 2003 120,000 --- 60,000
Chief Financial Officer 2002 115,500 --- 8,000
2001 105,000 --- 7,500

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information concerning grants of
options to purchase Common Stock made during fiscal 2003 to the executive
officers named in the Summary Compensation Table above.

POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
OPTION TERM (2)
------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5%($) 10% ($)
- -------------------------- ---------- --------------- --------- ------------ ------- ---------

Gary D. Lemke............. 180,000 35.2 8.83 Jan 31, 2010 647,045 1,507,890
Thomas R. Karges.......... 60,000 11.7 8.83 Jan 31, 2010 215,682 502,630

(1) Twenty-five percent of the option becomes exercisable on each annual
anniversary date of the option beginning January 31, 2004.

(2) The hypothetical potential appreciation shown in these columns reflects
the required calculations at annual rates of 5% and 10% set by the
Securities and Exchange Commission, and is not intended to represent
either historical appreciation or anticipated future appreciation of
ASV's Common Stock price.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table summarizes information related to options exercised
during fiscal 2003 and the number and value of options held at the end of fiscal
2003 by the executive officers named in the Summary Compensation Table above.

NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 2003 AT DECEMBER 31, 2003 ($)(2)
------------------------------- --------------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ------------ --------- ----------- ------------- ----------- -------------

Gary D. Lemke.......... 461,250 5,810,812 171,250 198,750 3,336,235 5,582,445
Thomas R. Karges....... 56,251 619,360 58,250 72,250 1,161,270 2,011,520

(1) Market value of underlying securities on date of exercise minus the
exercise price.

(2) Market value of underlying securities at fiscal year end minus the
exercise price.

EMPLOYMENT AGREEMENT

Thomas R. Karges and the Company are parties to an employment agreement
dated October 17, 1994, which provides for the payment of base salary and annual
bonus and other compensation to Mr. Karges as determined by the Compensation and
Stock Option Committee of the Board of Directors and for other fringe benefits.
The agreement may be terminated upon 60 days written notice by either party.

COMPARATIVE STOCK PERFORMANCE

The graph below compares the cumulative total shareholder return on
ASV's Common Stock for the five fiscal years ended December 31, 2003 with the
cumulative total return on the Total Return Index for the Nasdaq Stock Market
(U.S. Companies) and the Total Return Index for Nasdaq Non-Financial Stocks over
the same period (assuming the investment of $100 in each on December 31, 1998
and the reinvestment of all dividends).

COMPARISON OF CUMULATIVE TOTAL RETURN

[PERFORMANCE GRAPH]

12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
-------- -------- -------- -------- -------- --------

A.S.V., Inc. $ 100.00 $ 76.22 $ 44.76 $ 65.23 $ 43.92 $ 208.39

Nasdaq - U. S. Companies 100.00 185.43 111.83 88.77 61.37 91.75

Nasdaq - Non-Financial Companies 100.00 196.05 114.46 87.58 57.22 87.59

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 2003, the following individuals served as members of the
Compensation and Stock Option Committee: R. E. "Teddy" Turner, IV and Jerome T.
Miner. None of these individuals has ever served as an officer or employee of
the Company or any of the Company's subsidiaries. During fiscal 2003, none of
the Company's executive officers served as a director or member of the
compensation committee (or other committee performing similar functions) of any
other entity of which an executive officer served on the Company's Board of
Directors or any Board committee.

CERTAIN TRANSACTIONS

The Company uses a public relations firm that is affiliated with Mr.
Lynch. Total fees paid to the public relations firm in 2003 were approximately
$157,000.

Affiliation with Caterpillar Inc.

On October 14, 1998, the Company entered into a Securities Purchase
Agreement (the "Purchase Agreement") with Caterpillar Inc. ("Caterpillar")
pursuant to which Caterpillar acquired, for an aggregate purchase price of
$18,000,000, one million newly-issued shares of ASV's Common Stock and a warrant
(the "Warrant") to purchase an additional 10,267,127 newly-issued shares of
ASV's Common Stock at an exercise price of $21.00 per share. The purchase of the
Common Stock and the Warrant closed on January 29, 1999 (the "Closing Date").
The Purchase Agreement contains certain agreements regarding various matters
including (i) the conduct of the Company's business following the Closing Date,
(ii) Caterpillar's right to designate directors of the Company, (iii)
Caterpillar's right of first offer with respect to future stock issuances by the
Company and (iv) the issuance of additional warrants to Caterpillar in the event
the Company issues additional shares of stock (except in certain limited
circumstances). The Warrant was exercisable at any time from the Closing Date
until the tenth anniversary of the Closing Date, except that it could expire
with respect to a portion of the shares in the event the Company met certain
revenue levels and certain other conditions.

In connection with entering into the Purchase Agreement, the Company
and Caterpillar entered into a commercial alliance agreement (the "Commercial
Alliance Agreement") on October 14, 1998, pursuant to which the Company and
Caterpillar agreed to enter into a number of additional agreements
contemporaneously with or following the closing of the transaction contemplated
by the Purchase Agreement.

On the Closing Date, the Company and Caterpillar entered into a
Marketing Agreement which requires Caterpillar to provide the Company with
access to its worldwide distribution network, in part, by promoting the sale of
the Company's products to Caterpillar's dealers, and requires the Company to pay
a commission to Caterpillar for sales of certain of the Company's products to
Caterpillar dealers plus the cost of certain additional services that may be
provided by Caterpillar under the agreement. Also on the Closing Date, the
Company and Caterpillar entered into a Management Services Agreement pursuant to
which Caterpillar agreed to make available to the Company, for a fee, general
management support in connection with the day-to-day operation of its business,
commercial development and marketing research services, financial planning
services, such other administrative services as the Company and Caterpillar may
agree, and manufacturing and engineering services. Unless otherwise agreed, the
fee to be paid for these services is equal to Caterpillar's cost plus an
administrative surcharge.

The Commercial Alliance Agreement also provides that the Company and
Caterpillar enter into several additional agreements relating to (i) services to
be provided to the Company by Caterpillar, (ii) the supply of components to
Caterpillar by the Company and to the Company by Caterpillar and (iii) the
license of technology by the Company to Caterpillar. None of these agreements
have been entered into, although Caterpillar has provided certain services and
supplied certain parts to the Company without the formal agreements contemplated
by the Commercial Alliance Agreement in place. The Company and Caterpillar do
not currently anticipate pursuing events that would create the need to enter
into any of these agreements.

In October 2000, the Company and Caterpillar entered into an alliance
agreement to jointly develop and manufacture a new product line of Caterpillar
rubber track skid steer loaders called Multi-Terrain Loaders (MTLs). The product
line, which currently consists of five models, features Caterpillar's patented
skid steer loader technology and ASV's patented Maximum Traction Support
System(TM) rubber track undercarriage. The MTLs are being sold through the
Caterpillar dealer network. During 2003, 54% of the Company's net sales were
made to Caterpillar. At December 31, 2003, the accounts receivable balance from
Caterpillar was approximately $3,800,000.

Also in October 2000, Caterpillar purchased 500,000 additional newly
issued shares of ASV's Common Stock at $18 per share and the Company also
amended the warrant issued to Caterpillar, reducing the number of shares of
ASV's Common Stock available for purchase under the original warrant by 500,000
shares. The amended warrant was exercisable at any time until January 29, 2009,
except that it could expire with respect to a portion of the shares in the event
the Company met certain revenue levels and certain other conditions.

In October 2003, the Company issued a warrant acceleration notice to
Caterpillar covering approximately one million shares of its Common Stock. Under
the acceleration notice, Caterpillar had 75 days from the date issued to either
purchase the number of shares subject to the acceleration notice at $21.00 per
share, or lose the ability to purchase the shares under the terms of the
warrant. On January 5, 2004, Caterpillar purchased the shares subject to the
acceleration notice.

In November 2003, the Company issued a second warrant acceleration
notice to Caterpillar covering approximately two million shares of its Common
Stock. Under the second acceleration notice, Caterpillar had 75 days from the
date issued to either elect to purchase the number of shares subject to the
acceleration notice at $21.00 per share, or lose the ability to purchase the
shares under the terms of the warrant. In January 2004, prior to the expiration
of the second acceleration notice, the Company repurchased the remaining warrant
held by Caterpillar for a cash payment of $7.2 million and the issuance of
500,000 shares of ASV's Common stock. As of April 14, 2004, Caterpillar owned
24.8% of the Company's outstanding Common Stock.

The Company purchases parts used in its products from Caterpillar and
also reimburses Caterpillar for the salary and related costs of two Caterpillar
employees that work on the Company's behalf. In addition, the Company utilizes
Caterpillar's warranty processing system to handle warranty claims on its
machines and reimburses Caterpillar for the warranty expense incurred by
Caterpillar dealers. In connection with the MTL alliance agreement, the Company
has agreed to reimburse Caterpillar for its research and development costs
related to the MTLs as it pertains to the combination of the Caterpillar portion
of the machines with the Company's undercarriages.

During 2003, total commissions, parts purchases and salary and warranty
reimbursements were approximately $4,082,000. Also, at December 31, 2003,
accounts payable to Caterpillar were $637,000.

APPROVAL OF A.S.V., INC. 2004 STOCK INCENTIVE PLAN
(PROPOSAL #2)

GENERAL INFORMATION

On April 13, 2004, the Board adopted, subject to shareholder approval,
the A.S.V., Inc. 2004 Stock Incentive Plan (the "2004 Stock Plan"). The purpose
of the 2004 Stock Incentive Plan is to promote the interests of the Company and
the Company's shareholders by aiding the Company in attracting and retaining
employees, officers, consultants, advisors and directors who will contribute to
the Company's growth and financial performance for the benefit of the Company's
shareholders.

The Company currently awards non-qualified stock options to employees
through the 1994 Long-Term Incentive and Stock Option Plan and the 1996
Incentive and Stock Option Plan. The 1994 Long-Term Incentive and Stock Option
Plan will expire on June 7, 2004. As of April 14, 2004, the Company had 686,347
shares remaining available for future awards under the 1994 Long-Term Incentive
and Stock Option Plan and 159,750 shares available for future awards under the
1996 Incentive and Stock Option Plan.

The Board believes that the continuation of incentive compensation is
essential in attracting, retaining and motivating individuals to enhance the
likelihood of the Company's future success. Shareholder approval of the 2004
Stock Incentive Plan will permit the Company to award incentives that achieve
these goals.

The following is a summary of the material terms of the 2004 Stock
Incentive Plan and is qualified in its entirety by reference to the 2004 Stock
Incentive Plan. A copy of the 2004 Stock Incentive Plan is included as Appendix
B to this proxy statement.

SUMMARY OF THE 2004 STOCK INCENTIVE PLAN

Administration

The Compensation Committee will administer the 2004 Stock Incentive
Plan and will have full power and authority to determine when and to whom awards
will be granted, and the type, amount, form of payment and other terms and
conditions of each award, consistent with the provisions of the 2004 Stock
Incentive Plan. In addition, the committee can specify whether, and under what
circumstances, awards to be received under the 2004 Stock Incentive Plan may be
deferred automatically or at the election of either the holder of the award or
the committee. Subject to the provisions of the 2004 Stock Incentive Plan, the
committee may amend or waive the terms and conditions, or accelerate the
exercisability, of an outstanding award. The committee has authority to
interpret the 2004 Stock Incentive Plan and establish rules and regulations for
the administration of the 2004 Stock Incentive Plan. The Board may exercise the
powers of the committee at any time, subject to certain conditions. The
committee may delegate to one or more officers or directors of the Company the
authority to grant options, subject to certain conditions and the terms,
conditions and limitations the committee may establish.

Eligible Participants

Any employee, officer, consultant, advisor or director providing
services to the Company or any of the Company's affiliates who is selected by
the committee is eligible to receive an award under the 2004 Stock Incentive
Plan. As of April 14, 2004, approximately 159 employees, officers and directors
were eligible to be selected by the committee to receive awards under the 2004
Stock Incentive Plan.

Shares Available For Awards

The aggregate number of shares of ASV's Common Stock that may be issued
under all stock-based awards made under the 2004 Stock Incentive Plan will be
1,500,000. Certain awards under the 2004 Stock Incentive Plan are subject to
limitations on the number of shares that may be awarded as follows:

- A maximum of 1,500,000 shares will be available for granting
incentive stock options under the 2004 Stock Incentive Plan,
subject to the provisions of Section 422 or 424 of the
Internal Revenue Code of 1986 (the "Code"), or any successor
provision.

- No person may be granted under the 2004 Stock Incentive Plan
in any calendar year awards, the value of which is based
solely on an increase in the value of ASV's Common Stock after
the date of grant of the award, for more than 250,000 shares
in the aggregate.

The committee may adjust the number of shares and share limits
described above in the case of a stock dividend or other distribution, including
a stock split, merger or other similar corporate transaction or event, in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be provided under the 2004 Stock Incentive Plan.

If any shares of ASV's Common Stock subject to any award or to which an
award relates are forfeited or are reacquired by the Company, or if any award
terminates without the delivery of any shares, the shares previously set aside
for such awards will be available for future awards under the 2004 Stock
Incentive Plan. In addition, shares used by award recipients as payment of the
exercise price of an award or in satisfaction of the tax obligations relating to
an award will be available again for award grants.

Types of Awards and Terms and Conditions

The 2004 Stock Incentive Plan permits the granting of:

- stock options (including both incentive and non-qualified
stock options);

- stock appreciation rights ("SARs");

- restricted stock and restricted stock units;

- performance awards of cash, stock or property; and

- other stock grants.

Awards may be granted alone, in addition to, in combination with or in
substitution for, any other award granted under the 2004 Stock Incentive Plan or
any other compensation plan. Awards can be granted for no cash consideration, or
for cash or other consideration as determined by the committee or as required by
applicable law. Awards may provide that upon the grant or exercise thereof, the
holder will receive cash, shares of ASV's Common Stock or other securities, or
property, or any combination of these in a single payment, installments or on a
deferred basis. The exercise price per share under any stock option may not be
less than the fair market value on the date of grant of such option. The grant
price of any SAR may not be less than the fair market value on the date of grant
of such SAR except to satisfy legal requirements of foreign jurisdictions or if
the award is in substitution for an award previously granted by an entity
acquired by the Company. Determinations of fair market value under the 2004
Stock Incentive Plan will be made in accordance with methods and procedures
established by the committee. The term of awards will be determined by the
committee.

Stock Options. The holder of an option will be entitled to purchase a
number of shares of ASV's Common Stock at a specified exercise price during a
specified time period, all as determined by the committee. The option exercise
price may be payable either in cash or, at the discretion of the committee, in
other securities or other property having a fair market value on the exercise
date equal to the exercise price.

Stock Appreciation Rights. The holder of a SAR is entitled to receive
the excess of the fair market value (calculated as of the exercise date or, in
the committee's discretion, as of any time during a specified period before or
after the exercise date) of a specified number of shares of ASV's Common Stock
over the grant price of the SAR. SARs vest and become exercisable in accordance
with a vesting schedule established by the committee.

Restricted Stock and Restricted Stock Units. The holder of restricted
stock will own shares of ASV's Common Stock subject to restrictions imposed by
the committee (including, for example, restrictions on the right to vote the
restricted shares or to receive any dividends with respect to the shares) for a
specified time period determined by the committee. The holder of restricted
stock units will have the right, subject to any restrictions imposed by the
committee, to receive shares of ASV's Common Stock, or a cash payment equal to
the fair market value of those shares, at some future date determined by the
committee. If the participant's employment or service as a director terminates
during the vesting period for any reason, the restricted stock and restricted
stock units will be forfeited, unless the committee determines that it would be
in the Company's best interest to waive the remaining restrictions.

Performance Awards. Performance awards granted under the 2004 Stock
Incentive Plan are intended to qualify as "performance-based compensation"
within the meaning of Section 162(m) of the Code. Performance awards give
participants the right to receive payments in cash, stock or property based
solely upon the achievement of certain performance goals during a specified
performance period. The committee must designate all participants for each
performance period, and establish performance goals and target awards for each
participant no later than 90 days after the beginning of each performance period
within the parameters of Section 162(m) of the Code.

Performance goals must be based solely on one or more of the following
business criteria: revenue, cash flow, earnings (including one or more of gross
profit, earnings before interest and taxes, earnings before interest,

taxes, depreciation and amortization and net earnings), earnings per share
(basic or diluted), margins (including one or more of gross, operating and net
income margins), returns (including one or more of return on assets, equity,
investment, capital and revenue and total stockholder return), stock price,
economic value added, working capital, market share, cost reductions, workforce
satisfaction and diversity goals, employee retention, customer satisfaction,
completion of key projects and strategic plan development and implementation.

The measure of performance may be set by reference to an absolute
standard or a comparison to specified companies or groups of companies, or other
external measures, and may be applied at individual or organizational levels.
The aggregate dollar value of performance awards paid to any recipient in any
calendar year may not exceed $2 million.

Other Stock Grants. The committee may grant unrestricted shares of
ASV's Common Stock, subject to terms and conditions determined by the committee
and the 2004 Stock Incentive Plan limitations.

Duration, Termination and Amendment. Unless discontinued or terminated
by the Board, the 2004 Stock Incentive Plan will expire on June 3, 2014. No
awards may be made after that date. However, any award granted under the 2004
Stock Incentive Plan prior to expiration may extend beyond the end of such
period through the award's normal expiration date.

The Board may amend, alter or discontinue the 2004 Stock Incentive Plan
at any time, although shareholder approval must be obtained for any action that
would increase the number of shares of ASV's Common Stock available, increase
the award limits under the 2004 Stock Incentive Plan, permit repricing of
options or SARs or prevent the grant of options or SARs that would qualify under
Section 162(m) of the Code. Shareholder approval is also required for any action
that would, absent such approval, violate the rules and regulations of the
National Association of Securities Dealers, Inc. or any other securities
exchange applicable to the Company.

Prohibition on Repricing Awards

Without the approval of the Company's shareholders, no option or SAR
may be amended to reduce its exercise or grant price, and no option or SAR may
be canceled and replaced with an option or SAR having a lower exercise price,
except in connection with a stock dividend or other distribution, including a
stock split, merger or other similar corporate transaction or event, in order to
prevent dilution or enlargement of the benefits, or potential benefits intended
to be provided under the 2004 Stock Incentive Plan.

Transferability of Awards

Unless otherwise provided by the committee, awards under the 2004 Stock
Incentive Plan may only be transferred by will or by the laws of descent and
distribution.

Federal Income Tax Consequences

Grant of Options and SARs. The grant of a stock option or SAR is not
expected to result in any taxable income for the recipient.

Exercise of Options and SARs. Upon exercising a non-qualified stock
option, the optionee must recognize ordinary income equal to the excess of the
fair market value of the shares of ASV's Common Stock acquired on the date of
exercise over the exercise price, and the Company will generally be entitled at
that time to an income tax deduction for the same amount. The holder of an
incentive stock option generally will have no taxable income upon exercising the
option (except that an alternative minimum tax liability may arise), and the
Company will not be entitled to an income tax deduction. Upon exercising a SAR,
the amount of any cash received and the fair market value on the exercise date
of any shares of ASV's Common Stock received are taxable to the recipient as
ordinary income and generally deductible by the Company.

Disposition of Shares Acquired Upon Exercise of Options and SARs. The
tax consequence upon a disposition of shares acquired through the exercise of an
option or SAR will depend on how long the shares have

been held and whether the shares were acquired by exercising an incentive stock
option or by exercising a non-qualified stock option or SAR. Generally, there
will be no tax consequence to the Company in connection with the disposition of
shares acquired under an option or SAR, except that the Company may be entitled
to an income tax deduction in the case of the disposition of shares acquired
under an incentive stock option before the applicable incentive stock option
holding periods set forth in the Code have been satisfied.

Awards Other than Options and SARs. As to other awards granted under
the 2004 Stock Incentive Plan that are payable either in cash or shares of ASV's
Common Stock that are either transferable or not subject to substantial risk of
forfeiture, the holder of the award must recognize ordinary income equal to (a)
the amount of cash received or, as applicable, (b) the excess of (i) the fair
market value of the shares received (determined as of the date of receipt) over
(ii) the amount (if any) paid for the shares by the holder of the award. The
Company will generally be entitled at that time to an income tax deduction for
the same amount.

As to an award that is payable in shares of ASV's Common Stock that are
restricted from transfer and subject to substantial risk of forfeiture, unless a
special election is made by the holder of the award under the Code, the holder
must recognize ordinary income equal to the excess of (a) the fair market value
of the shares received (determined as of the first time the shares become
transferable or not subject to substantial risk of forfeiture, whichever occurs
earlier) over (b) the amount (if any) paid for the shares by the holder. The
Company will generally be entitled at that time to an income tax deduction for
the same amount.

Income Tax Deduction. Subject to the usual rules concerning reasonable
compensation, and assuming that, as expected, performance awards paid under the
2004 Stock Incentive Plan are "qualified performance-based compensation" within
the meaning of Section 162(m) of the Code, the Company will generally be
entitled to a corresponding income tax deduction at the time a participant
recognizes ordinary income from awards made under the 2004 Stock Incentive Plan.

Application of Section 16. Special rules may apply to individuals
subject to Section 16 of the Securities Exchange Act of 1934. In particular,
unless a special election is made pursuant to the Code, shares received through
the exercise of a stock option or SAR may be treated as restricted as to
transferability and subject to a substantial risk of forfeiture for a period of
up to six months after the date of exercise. Accordingly, the amount of any
ordinary income recognized and the amount of the Company's income tax deduction
will be determined as of the end of that period.

Delivery of Shares for Tax Obligation. Under the 2004 Stock Incentive
Plan, the committee may permit participants receiving or exercising awards,
subject to the discretion of the committee and upon such terms and conditions as
it may impose, to deliver shares of ASV's Common Stock (either shares received
upon the receipt or exercise of the award or shares previously owned by the
holder of the option) to the Company to satisfy federal and state income tax
obligations.

New Plan Benefits

No benefits or amounts have been granted, awarded or received under the
2004 Stock Incentive Plan. In addition, the committee in its sole discretion
will determine the number and types of awards that will be granted. Thus, it is
not possible to determine the benefits that will be received by eligible
participants if the 2004 Stock Incentive Plan were to be approved by the
shareholders. The closing price of a share of ASV's Common Stock as reported on
the Nasdaq Stock Market on April 14, 2004 was $32.10.

Equity Compensation Plan Information

The following table presents information as of December 31, 2003 for
the Company's equity compensation plans.

NUMBER OF SECURITIES REMAINING
NUMBER OF SECURITIES TO WEIGHTED AVERAGE EXERCISE AVAILABLE FOR FUTURE ISSUANCE
BE ISSUED UPON EXERCISE PRICE OF OUTSTANDING UNDER EQUITY COMPENSATION
OF OUTSTANDING OPTIONS, OPTIONS, WARRANTS PLANS (EXCLUDING SECURITIES
PLAN CATEGORY WARRANTS AND RIGHTS AND RIGHTS REFLECTED IN THE FIRST COLUMN)
- ---------------------------------- ----------------------- ------------------------- ------------------------------

Equity compensation plans approved
by security holders 1,058,120 $ 12.19 1,459,687

Equity compensation plans not
approved by security holders None N/A None

Total 1,058,120 $ 12.19 1,459,687

Board Voting Recommendation

UPON THE RECOMMENDATION OF MANAGEMENT, THE BOARD OF DIRECTORS ADOPTED
THE A.S.V., INC. 2004 STOCK INCENTIVE PLAN AND RECOMMENDS TO THE SHAREHOLDERS
THAT THEY VOTE "FOR" THE APPROVAL OF THE PLAN.

AUDIT COMMITTEE REPORT AND PAYMENT OF FEES TO AUDITORS

AUDIT COMMITTEE REPORT

In carrying out its duties, the Audit Committee performed the
following:

- Reviewed and discussed the Company's audited financial
statements for the year ended December 31, 2003 with the
Company's management and independent auditors.

- Discussed with the Company's independent auditors the matters
required to be discussed by Statement of Auditing Standards
No. 61 regarding communication with audit committees.

- Received the written disclosures and the letter from the
Company's independent auditors required by Independence
Standards Board Statement No. 1 (Independent Discussions with
Audit Committees) and discussed with the Company's independent
auditors their independence.

Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report of Form 10-K for the year
ended December 31, 2003 for filing with the Securities and Exchange Commission.

SUBMITTED BY THE AUDIT COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS:

R. E. "Teddy" Turner, IV, Chair James H. Dahl Jerome T. Miner

AUDIT FEES, AUDIT-RELATED FEES, TAX FEES AND ALL OTHER FEES

The following table presents fees billed for professional services
rendered for the audit of the Company's annual financial statements for 2002 and
2003 and fees billed for other services provided by our independent auditors in
each of the last two fiscal years:

2003 2002
------------- -------------

Audit Fees (1).......................................... $ 95,775 $ 91,300
Audit-Related Fees...................................... 0 0
Tax Fees (2)............................................ 10,075 5,440
All Other Fees (3)...................................... 7,950 0

(1) Audit fees consisted of audit work performed in preparation of the
Company's annual financial statements and review of the quarterly
financial statements included in our quarterly reports on Form 10-Q for
fiscal years 2002 and 2003.

(2) Tax fees consisted of federal and state income tax return preparation
and tax planning and tax advice related to the Company's stock option
plans.

(3) Other fees include fees for consultations concerning financial
accounting and reporting standards.

The Audit Committee has considered whether the non-audit services
provided by Grant Thornton LLP during the last fiscal year are compatible with
maintaining Grant Thornton LLP's independence and has concluded that they are.

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES PROVIDED BY THE COMPANY'S INDEPENDENT AUDITORS

The Audit Committee is responsible for appointing, setting compensation
for and overseeing the work of the independent auditors. The Audit Committee has
established a policy for pre-approving the services provided by the Company's
independent auditors in accordance with the auditor independence rules of the
Securities and Exchange Commission. This policy requires the review and
pre-approval by the Audit Committee of all audit and permissible non-audit
services provided by the independent auditors and an annual review of the
financial plan for audit fees.

To ensure that auditor independence is maintained, the Audit Committee
annually pre-approves the audit services to be provided by the independent
auditors and the related estimated fees for such services, as well as the nature
and extent of specific types of audit-related, tax and other non-audit services
to be provided by the independent auditors during the year.

As the need arises, other specific permitted services are pre-approved
on a case-by-case basis during the year. A request for pre-approval of services
on a case-by-case basis must be submitted by the Company's Chief Financial
Officer, providing information as to the nature of the particular service to be
provided, estimated related fees and management's assessment of the impact of
the service on the auditor's independence. The Audit Committee has delegated to
its Chair pre-approval authority between meetings of the Audit Committee. Any
pre-approvals made by the Chair must be reported to the Audit Committee. The
Audit Committee will not delegate to management the pre-approval of services to
be performed by the independent auditors.

All of the services provided by the independent auditors in fiscal
2003, including services related to the Audit-Related Fees, Tax Fees and All
Other Fees described above, were approved by the Audit Committee under its
pre-approval policies.

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL #3)

While the Company is not required to do so, the Company is submitting
the selection of Grant Thornton LLP to serve as the Company's independent
auditors for the fiscal year ending December 31, 2004 for ratification in order
to ascertain the views of the Company's shareholders on this appointment. If the
selection is not ratified, the Audit Committee will reconsider its selection.

Grant Thornton LLP has been the Company's independent auditor since
1994. Representatives of Grant Thornton LLP are expected to be present at the
Annual Meeting, will be given an opportunity to make a statement regarding
financial and accounting matters of the Company if they so desire, and will be
available to respond to appropriate questions from the Company's shareholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
RATIFY THE APPOINTMENT OF GRANT THORNTON LLP, INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS, AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2004. UNLESS OTHERWISE INSTRUCTED, THE PROXIES WILL BE SO VOTED.

PROPOSALS FOR THE NEXT ANNUAL MEETING

In order to be eligible for inclusion in the Company's proxy
solicitation materials for its next annual meeting of shareholders, any
shareholder proposal to be considered at such meeting must be received at the
Company's principal executive offices, P.O. Box 5160, Grand Rapids, Minnesota
55744, not later than January 3, 2005. Pursuant to the Company's Bylaws, in
order for business to be properly brought before the next annual meeting by a
shareholder, the shareholder must give written notice of such shareholder's
intent to bring a matter before the annual meeting no later January 3, 2005.
Each such notice should be sent to the Secretary, and must set forth certain
information with respect to the shareholder who intends to bring such matter
before the meeting and the business desired to be conducted, as set forth in
greater detail in the Company's Bylaws. Any such proposal will be subject to the
requirements of the proxy rules adopted by the Securities Act of 1934.

Management may use discretionary authority to vote against any
shareholder proposal presented at the 2004 annual meeting if: (1) such proposal
has been properly omitted from the Company's proxy materials under federal
securities law; (2) notice of such proposal was not submitted to the Secretary
of the Company at the address listed above by January 1, 2004; or (3) the
proponent has not solicited proxies in compliance with federal securities laws
from the holders of at least the percentage of the Company's voting shares
required to carry the proposal.

ADDITIONAL MATTERS

The Board of Directors of the Company does not presently know of any
matters to be presented for consideration at the Annual Meeting other than the
matters described in the Notice of Annual Meeting of Shareholders mailed
together with this proxy statement, but if other matters are presented it is the
intention of the persons named in the accompanying proxy to vote on such matters
in accordance with their best judgment.

ANNUAL REPORT TO SHAREHOLDERS

A copy of the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 2003, including financial statements, accompanies this
Notice of Annual Meeting of Shareholders and proxy statement. No portion of the
Annual Report is incorporated herein or is to be considered proxy soliciting
material.

The Company will furnish, without charge, a copy of its Annual Report
on Form 10-K for the fiscal year ended December 31, 2003, including financial
statements and schedules, to any shareholder of the Company upon written
request. Requests should be sent to Thomas R. Karges, Chief Financial Officer,
A.S.V., Inc., P.O. Box 5160, Grand Rapids, Minnesota 55744.

By Order of the Board of Directors,

Edgar E. Hetteen
Secretary

Dated: May 3, 2004
Grand Rapids, Minnesota

APPENDIX A

A.S.V., INC.
Audit Committee Charter

I. PURPOSE

The purpose of the Audit Committee ("Committee") of A.S.V., Inc.
("ASV") is to assist ASV's Board of Directors ("Board") in its oversight of the
integrity of ASV's accounting and financial reporting processes and financial
statements, ASV's compliance with legal and regulatory requirements and the
independent auditor's qualifications and independence.

II. COMMITTEE MEMBERSHIP

The Committee is a standing committee of and approved by the Board and
shall be comprised of at least three directors, each of whom shall be
independent as required by the Securities Exchange Act of 1934, as amended
("Exchange Act"), any rules and regulations promulgated thereunder by the
Securities and Exchange Commission ("SEC"), and the rules of The Nasdaq Stock
Market, Inc. ("Nasdaq"). No member of the Committee shall have participated in
the preparation of ASV's financial statements or the financial statements of any
current subsidiary of ASV at any time during the past three years. All members
of the Committee shall be able to read and understand fundamental financial
statements, including a company's balance sheet, income statement and cash flow
statement. At least one member of the Committee shall have past employment
experience in finance or accounting, requisite professional certification in
accounting, or any other comparable experience or background which results in
the individual's financial sophistication, including being or having been a
chief executive officer, chief financial officer or other senior officer with
financial oversight responsibilities. The term of appointment of each Committee
member is at the discretion of the Board.

III. COMMITTEE FUNCTION AND RESPONSIBILITIES

A. Committee Function

The Committee shall be directly responsible for the
appointment, compensation, retention and oversight of the work of the
independent auditor engaged for the purpose of preparing or issuing an
audit report (including resolution of disagreements between management
and the auditor regarding financial reporting) or performing other
audit, review or attest services for ASV. The independent auditor shall
report directly to the Committee. The Committee is not responsible for
preparing financial statements or performing audits, and its members
are not auditors or certifiers of ASV's financial statements.

B. Review of Independent Auditor Qualifications

The Committee's responsibilities shall include the following:

1. Receive from the independent auditor a formal written
statement delineating all relationships between the
independent auditor and ASV consistent with
Independent Standards Board Standard No. 1,
Independence Discussions with Audit Committees.

2. Actively engage in a dialogue with the independent
auditor with respect to any disclosed relationships
or services that may impact the objectivity and
independence of the independent auditor and take, or
recommend that the full Board take, appropriate
action to oversee the independence of the independent
auditor.

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3. Establish policies and procedures for, and, as
appropriate, approve the engagement of, the
independent auditor for any non-audit service (to the
extent such service is not prohibited by Section
10A(g) of the Exchange Act) and the fee for such
service, and consider whether the independent
auditor's performance of any non-audit services is
compatible with its independence.

4. Review the audit firm's proposed executive partner
and auditing personnel background and experience.

5. Determine the audit firm's registration with the
AICPA's SEC practice division and participation in
the voluntary peer review professional practice
programs.

6. Review the audit firm's litigation history and
professional liability insurance.

C. Independent Auditor Engagement Letter

The independent auditor shall provide a letter that defines
the nature and scope of the audit engagement and a contract
for the professional services of the auditing firm.

D. Annual Audit Planning and Supervision

The Committee shall:

1. Query the independent auditor regarding the audit
scope, timing and conduct of the audit.

2. Ascertain that the audit team has requisite industry
and corporate knowledge, appropriate ratio of staff
assistants to supervisors, and supervisory review
procedures.

3. Confirm that the auditor's written audit plans give
sufficient consideration to:

a. Financial disclosures;

b. Operational efficiency;

c. Corporate compliance; and

d. Compliance with laws.

E. Annual Audit Review

In connection with the annual audit, the Committee shall:

1. Ascertain any disagreements among audit personnel or
between audit personnel and ASV management.

2. Review ASV's accounting policies and practices
regarding:

a. Revenue recognition;

b. Reserves and allowances;

c. Asset capitalization;

d. Extraordinary charges or
write-offs; and

e. Any other accounting practice of an
unusual or infrequent nature.

3. Affirm that the accounting policies are consistent
with industry practices, that correct requirements
are reflected in accounting policies, and that the
accounting policies are consistent with a fair
presentation of the financial statements in
conformity with accounting principles generally
accepted in the United States.

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F. Quarterly Review

In connection with the quarterly reviews:

1. Prior to the time that ASV files its Quarterly Report
on Form 10-Q, the independent auditor shall conduct
an SAS 71 Interim Financial Review.

2. Prior to the filing of the Form 10-Q, the independent
auditor shall discuss with a representative of
financial management and the Committee or the
Committee's chairman, the matters described in AU
Section 380, Communications with Audit Committees,
including significant adjustments, significant new
accounting policies, and disagreements with
management, as needed.

G. Annual Report

In connection with the preparation of ASV's annual report on
Form 10-K, the Committee shall:

1. Review ASV's annual report to evaluate whether it
contains a fair and meaningful presentation of
financial statements, footnotes, and supplementary
information.

2. Affirm that the annual report discusses changes in
corporate reporting or accounting practices (for
example, departures from accounting principles
generally accepted in the United States, exceptions
to the consistent application of accounting
principles, etc.).

3. Review financial statement disclosures and ensure
that practices are fully and fairly disclosed.

4. Affirm appropriate use of statutory "safe harbor"
disclosure if the annual report contains
forward-looking information.

5. Recommend to the Board whether, based on the review
described in items 1-4 above, the annual audited
financial statements should be included in ASV's
Annual Report on Form 10-K.

6. Prepare for the annual report on Form 10-K and for
inclusion in ASV's annual proxy statement an Audit
Committee Report stating whether with respect to the
prior fiscal year:

a. The Committee has reviewed and
discussed the audited financial
statements with management;

b. The Committee has discussed with
the independent auditor the matters
required to be discussed by SAS No.
61 (Codification of Statements on
Auditing Standards, AU Section
380), as may be modified or
supplemented;

c. The Committee has received the
written disclosures and the letter
from the independent auditor
required by Independence Standards
Board Standard No. 1, Independence
Discussions with Audit Committees,
as may be modified or supplemented,
and has discussed with the
independent auditor the independent
auditor's independence; and

d. Based on the review and discussions
referred to in items a-c above, the
Committee recommended to the Board
that the audited financial
statements be included in ASV's
Annual Report on Form 10-K.

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H. Other Responsibilities

The Committee shall also:

1. Review outside counsel's letter regarding litigation,
claims and assessments and review the accounting
treatment concerning contingency losses and their
effect on the financial statements.

2. Confer with the independent auditor and/or outside
counsel to ascertain ASV's compliance with legal and
regulatory requirements.

3. Approve all related party transactions (as defined by
applicable Nasdaq rules) to which ASV is a party and
review such transactions for potential conflict of
interest situations at least annually.

4. Establish procedures for (a) the receipt, retention
and treatment of complaints received by ASV regarding
accounting, internal accounting controls or auditing
matters, and (b) the confidential, anonymous
submission by ASV employees of concerns regarding
questionable accounting or auditing matters.

5. Review and reassess the adequacy of this Charter at
least annually and recommend any proposed changes to
the Board for approval.

IV. ANNUAL REPORT TO THE BOARD

At least annually, the Committee shall report to the Board the
following:

- A chronological review of Committee's activities, particularly
auditing and accounting cycle activities;

- A summary of the Committee's recommendations, particularly
with respect to the selection of the auditing firm and the
review of the independent auditor's report; and

- Attach critical audit reports and management letters.

V. RESOURCES AND AUTHORITY

ASV shall provide appropriate funding to the Committee, as determined
by the Committee, for payment of (i) compensation to the independent auditor,
and any outsourced internal auditor, for services approved by the Committee,
(ii) compensation to any outside advisers retained by the Committee, and (iii)
ordinary administrative expenses of the Committee that are necessary or
appropriate in carrying out its duties.

The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including authority to:

- conduct or authorize investigations into any matters within
its scope of responsibilities;

- engage outside auditors for special audits, reviews and other
procedures;

- retain special counsel and other experts and consultants to
advise the Committee; and

- approve the fees and other retention terms for such parties.

The Committee may request to have any officer, employee, outside
counsel or independent auditor of ASV attend a meeting of the Committee or meet
with any members of, or consultants to, the Committee. The Committee

A-4

has the authority to use other resources, either within or outside ASV, to
address special circumstances when appropriate.

VI. ADOPTION OF CHARTER

This Charter was initially adopted by the Board on April 13, 2004.

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APPENDIX B

A.S.V., INC.

2004 STOCK INCENTIVE PLAN

APRIL 13, 2004

TABLE OF CONTENTS

SECTION 1. PURPOSE........................................................................................ 1

SECTION 2. DEFINITIONS.................................................................................... 1

SECTION 3. ADMINISTRATION................................................................................. 3
(a) Power and Authority of the Committee........................................................... 3
(b) Power and Authority of the Board............................................................... 3
(c) Delegation..................................................................................... 3

SECTION 4. SHARES AVAILABLE FOR AWARDS.................................................................... 3
(a) Shares Available............................................................................... 3
(b) Accounting for Awards.......................................................................... 3
(c) Adjustments.................................................................................... 4
(d) Award Limitations Under the Plan............................................................... 4

SECTION 5. ELIGIBILITY.................................................................................... 4

SECTION 6. AWARDS......................................................................................... 5
(a) Options........................................................................................ 5
(b) Stock Appreciation Rights...................................................................... 5
(c) Restricted Stock and Restricted Stock Units.................................................... 5
(d) Performance Awards............................................................................. 6
(e) Other Stock Grants............................................................................. 6
(f) General........................................................................................ 6

SECTION 7. AMENDMENT AND TERMINATION; ADJUSTMENTS......................................................... 7
(a) Amendments to the Plan......................................................................... 7
(b) Amendments to Awards........................................................................... 8
(c) Correction of Defects, Omissions and Inconsistencies........................................... 8

SECTION 8. INCOME TAX WITHHOLDING......................................................................... 8

SECTION 9. GENERAL PROVISIONS............................................................................. 8
(a) No Rights to Awards............................................................................ 8
(b) Award Agreements............................................................................... 8
(c) Plan Provisions Control........................................................................ 8
(d) No Rights of Shareholders...................................................................... 8
(e) No Limit on Other Compensation Arrangements.................................................... 8
(f) No Right to Employment......................................................................... 8
(g) Governing Law.................................................................................. 9
(h) Severability................................................................................... 9
(i) No Trust or Fund Created....................................................................... 9
(j) No Fractional Shares........................................................................... 9
(k) Headings....................................................................................... 9

SECTION 10. EFFECTIVE DATE OF THE PLAN..................................................................... 9

SECTION 11. TERM OF THE PLAN............................................................................... 9

B-i

A.S.V., INC.
2004 STOCK INCENTIVE PLAN

SECTION 1. PURPOSE

The purpose of the Plan is to promote the interests of the Company and
its shareholders by aiding the Company in attracting and retaining employees,
officers, consultants, advisors and directors capable of assuring the future
success of the Company, to offer such persons incentives to put forth maximum
efforts for the success of the Company's business and to compensate such persons
through various stock-based arrangements and provide them with opportunities for
stock ownership in the Company, thereby aligning the interests of such persons
with the Company's shareholders.

SECTION 2. DEFINITIONS

As used in the Plan, the following terms shall have the meanings set
forth below:

(a) "Affiliate" shall mean (i) any entity that, directly or
indirectly through one or more intermediaries, is controlled by the Company and
(ii) any entity in which the Company has a significant equity interest, in each
case as determined by the Committee.

(b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award or Other Stock Grant
granted under the Plan.

(c) "Award Agreement" shall mean any written agreement, contract
or other instrument or document evidencing an Award granted under the Plan. Each
Award Agreement shall be subject to the applicable terms and conditions of the
Plan and any other terms and conditions (not inconsistent with the Plan)
determined by the Committee.

(d) "Board" shall mean the Board of Directors of the Company.

(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated thereunder.

(f) "Committee" shall mean the Compensation Committee of the Board
or any successor committee of the Board designated by the Board to administer
the Plan. The Committee shall be comprised of not less than such number of
Directors as shall be required to permit Awards granted under the Plan to
qualify under Rule 16b-3 and Section 162(m) of the Code, and each member of the
Committee shall be a "Non-Employee Director"

(g) "Company" shall mean A.S.V., Inc., a Minnesota corporation,
and any successor corporation.

(h) "Director" shall mean a member of the Board, including any
Non-Employee Director.

(i) "Eligible Person" shall mean any employee, officer,
consultant, advisor or director providing services to the Company or any
Affiliate who the Committee determines to be an Eligible Person. An Eligible
Person must be a natural person.

(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

(k) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee. Notwithstanding the foregoing
and unless otherwise determined

B-1

by the Committee, the Fair Market Value of a Share as of a given date shall be,
if the Shares are then listed on the Nasdaq National Market, the closing sale
price of one Share as reported on the Nasdaq National Market on such date or, if
the Nasdaq National Market is not open for trading on such date, on the most
recent preceding date when it is open for trading.

(l) "Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to qualify as an "incentive stock
option" in accordance with the terms of Section 422 of the Code or any successor
provision.

(m) "Non-Employee Director" shall mean any Director who is not
also an employee of the Company or an Affiliate within the meaning of Rule 16b-3
and an "outside director" within the meaning of Section 162(m) of the Code.

(n) "Non-Qualified Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is not an Incentive Stock Option.

(o) "Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.

(p) "Other Stock Grant" shall mean any right granted under Section
6(e) of the Plan.

(q) "Participant" shall mean an Eligible Person designated to be
granted an Award under the Plan.

(r) "Performance Award" shall mean any right granted under Section
6(d) of the Plan.

(s) "Performance Goal" shall mean one or more of the following
performance goals, either individually, alternatively or in any combination,
applied on a corporate, subsidiary or group basis: revenue, cash flow, earnings
(including one or more of gross profit, earnings before interest and taxes,
earnings before interest, taxes, depreciation and amortization and net
earnings), earnings per share (basic or diluted), margins (including one or more
of gross, operating and net income margins), returns (including one or more of
return on assets, equity, investment, capital and revenue and total stockholder
return), stock price, economic value added, working capital, market share, cost
reductions, workforce satisfaction and diversity goals, employee retention,
customer satisfaction, completion of key projects and strategic plan development
and implementation. Such goals may reflect absolute entity or group performance
or a relative comparison to the performance of a peer group of entities or other
external measure of the selected performance criteria. Pursuant to rules and
conditions adopted by the Committee on or before the 90th day of the applicable
performance period for which Performance Goals are established, the Committee
may appropriately adjust any evaluation of performance under such goals to
exclude the effect of certain events, including any of the following events:
asset write-downs; litigation or claim judgments or settlements; changes in tax
law, accounting principles or other such laws or provisions affecting reported
results; severance, contract termination and other costs related to exiting
certain business activities; and gains or losses from the disposition of
businesses or assets or from the early extinguishment of debt.

(t) "Person" shall mean any individual or entity, including a
corporation, partnership, limited liability company, association, joint venture
or trust.

(u) "Plan" shall mean the A.S.V., Inc. 2004 Stock Incentive Plan,
as amended from time to time, the provisions of which are set forth herein.

(v) "Restricted Stock" shall mean any Share granted under Section
6(c) of the Plan.

(w) "Restricted Stock Unit" shall mean any unit granted under
Section 6(c) of the Plan evidencing the right to receive a Share (or a cash
payment equal to the Fair Market Value of a Share) at some future date.

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(x) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Exchange Act, or any successor rule
or regulation.

(y) "Section 162(m)" shall mean Section 162(m) of the Code and the
applicable Treasury Regulations promulgated thereunder.

(z) "Share" or "Shares" shall mean a share or shares of common
stock, $.10 par value per share, of the Company or such other securities or
property as may become subject to Awards pursuant to an adjustment made under
Section 4(c) of the Plan.

(aa) "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.

SECTION 3. ADMINISTRATION

(a) Power and Authority of the Committee. The Plan shall be
administered by the Committee. Subject to the express provisions of the Plan and
to applicable law, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to each Participant under the Plan; (iii) determine the number of Shares to be
covered by (or the method by which payments or other rights are to be determined
in connection with) each Award; (iv) determine the terms and conditions of any
Award or Award Agreement; (v) amend the terms and conditions of any Award or
Award Agreement and accelerate the exercisability of any Option or waive any
restrictions relating to any Award; (vi) determine whether, to what extent and
under what circumstances Awards may be exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or suspended;
(vii) determine whether, to what extent and under what circumstances cash,
Shares, other securities, other Awards, other property and other amounts payable
with respect to an Award under the Plan shall be deferred either automatically
or at the election of the holder thereof or the Committee; (viii) interpret and
administer the Plan and any instrument or agreement, including any Award
Agreement, relating to the Plan; (ix) establish, amend, suspend or waive such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (x) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions under or with
respect to the Plan or any Award or Award Agreement shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon any Eligible Person and any holder or beneficiary of
any Award.

(b) Power and Authority of the Board. Notwithstanding anything to
the contrary contained herein, the Board may, at any time and from time to time,
without any further action of the Committee, exercise the powers and duties of
the Committee under the Plan unless the exercise of such powers and duties by
the Board would cause the Plan not to comply with the requirements of Section
162(m) of the Code.

(c) Delegation. The Committee may delegate to one or more officers
or Directors of the Company, subject to such terms, conditions and limitations
as the Committee may establish in its sole discretion, the authority to grant
Options; provided, however, that the Committee shall not delegate such authority
(i) with regard to grants of Options to be made to officers or directors of the
Company or any Affiliate who are subject to Section 16 of the Exchange Act or
(ii) in such a manner as would cause the Plan not to comply with the
requirements of Section 162(m) of the Code.

SECTION 4. SHARES AVAILABLE FOR AWARDS

(a) Shares Available. Subject to adjustment as provided in Section
4(c) of the Plan, the aggregate number of Shares that may be issued under the
Plan shall be 1,500,000.

(b) Accounting for Awards. For purposes of this Section 4, if an
Award entitles the holder thereof to receive or purchase Shares, the number of
Shares covered by such Award or to which such Award relates shall be counted on
the date of grant of such Award against the aggregate number of Shares available
for granting Awards

B-3

under the Plan. If an Award terminates or is forfeited or cancelled without the
issuance of any Shares, or if any Shares covered by an Award or to which an
Award relates are not issued for any other reason, then the number of Shares
counted against the aggregate number of Shares available under the Plan with
respect to such Award, to the extent of any such termination, forfeiture,
cancellation or other event, shall again be available for granting Awards under
the Plan. If Shares of Restricted Stock are forfeited or otherwise reacquired by
the Company prior to vesting, whether or not dividends have been paid on such
Shares, then the number of Shares counted against the aggregate number of Shares
available under the Plan with respect to such Award of Restricted Stock, to the
extent of any such forfeiture or reacquisition by the Company, shall again be
available for granting Awards under the Plan. Shares that are withheld in full
or partial payment to the Company of the purchase or exercise price relating to
an Award or in connection with the satisfaction of tax obligations relating to
an Award shall again be available for granting Awards under the Plan. Any
previously issued Shares that are used by a Participant as full or partial
payment to the Company of the purchase or exercise price relating to an Award or
in connection with the satisfaction of tax obligations relating to an Award
shall again be available for granting Awards under the Plan.

(c) Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and type of Shares (or other securities or other property) that
thereafter may be made the subject of Awards, (ii) the number and type of Shares
(or other securities or other property) subject to outstanding Awards and (iii)
the purchase price or exercise price with respect to any Award.

(d) Award Limitations Under the Plan

(i) Section 162(m) Limitation for Certain Types of
Awards. No Eligible Person may be granted Options, Stock Appreciation
Rights or any other Award or Awards under the Plan, the value of which
Award or Awards is based solely on an increase in the value of the
Shares after the date of grant of such Award or Awards, for more than
250,000 Shares (subject to adjustment as provided in Section 4(c) of
the Plan) in the aggregate in any calendar year.

(ii) Section 162(m) Limitation for Performance Awards. The
maximum amount payable pursuant to all Performance Awards to any
Participant in the aggregate in any calendar year shall be $2,000,000
in value, whether payable in cash, Shares or other property. This
limitation does not apply to any Award subject to the limitation
contained in Section 4(d)(i) of the Plan.

(iii) Limitation on Incentive Stock Options. The number of
Shares available for granting Incentive Stock Options under the Plan
shall not exceed 1,500,000, subject to adjustment as provided in
Section 4(c) of the Plan and subject to the provisions of Section 422
or 424 of the Code or any successor provision.

SECTION 5. ELIGIBILITY

Any Eligible Person shall be eligible to be designated a Participant.
In determining which Eligible Persons shall receive an Award and the terms of
any Award, the Committee may take into account the nature of the services
rendered by the respective Eligible Persons, their present and potential
contributions to the success of the Company or such other factors as the
Committee, in its discretion, shall deem relevant. Notwithstanding the
foregoing, an Incentive Stock Option may only be granted to full-time or
part-time employees (which term as used herein includes, without limitation,
officers and Directors who are also employees), and an Incentive Stock Option
shall not be granted to an employee of an Affiliate unless such Affiliate is
also a "subsidiary corporation" of the Company within the meaning of Section
424(f) of the Code or any successor provision.

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SECTION 6. AWARDS

(a) Options. The Committee is hereby authorized to grant Options
to Eligible Persons with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:

(i) Exercise Price. The purchase price per Share
purchasable under an Option shall be determined by the Committee;
provided, however, that such purchase price shall not be less than 100%
of the Fair Market Value of a Share on the date of grant of such
Option.

(ii) Option Term. The term of each Option shall be fixed
by the Committee at the time of grant.

(iii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part and the method or methods by which, and the form or
forms (including, without limitation, cash, Shares, other securities,
other Awards or other property, or any combination thereof, having a
Fair Market Value on the exercise date equal to the applicable exercise
price) in which, payment of the exercise price with respect thereto may
be made or deemed to have been made.

(b) Stock Appreciation Rights. The Committee is hereby authorized
to grant Stock Appreciation Rights to Eligible Persons subject to the terms of
the Plan and any applicable Award Agreement. A Stock Appreciation Right granted
under the Plan shall confer on the holder thereof a right to receive upon
exercise thereof the excess of (i) the Fair Market Value of one Share on the
date of exercise (or, if the Committee shall so determine, at any time during a
specified period before or after the date of exercise) over (ii) the grant price
of the Stock Appreciation Right as determined by the Committee, which grant
price shall not be less than 100% of the Fair Market Value of one Share on the
date of grant of the Stock Appreciation Right; provided, however, that the
Committee may designate a per share grant price below Fair Market Value on the
date of grant (A) to the extent necessary or appropriate, as determined by the
Committee, to satisfy applicable legal or regulatory requirements of a foreign
jurisdiction or (B) if the Stock Appreciation Right is granted in substitution
for a stock appreciation right previously granted by an entity that is acquired
by or merged with the Company or an Affiliate. Subject to the terms of the Plan,
the grant price, term, methods of exercise, dates of exercise, methods of
settlement and any other terms and conditions (including conditions or
restrictions on the exercise thereof) of any Stock Appreciation Right shall be
as determined by the Committee.

(c) Restricted Stock and Restricted Stock Units. The Committee is
hereby authorized to grant Restricted Stock and Restricted Stock Units to
Eligible Persons with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:

(i) Restrictions. Shares of Restricted Stock and
Restricted Stock Units shall be subject to such restrictions as the
Committee may impose (including, without limitation, any limitation on
the right to vote a Share of Restricted Stock or the right to receive
any dividend or other right or property with respect thereto), which
restrictions may lapse separately or in combination at such time or
times, in such installments or otherwise as the Committee may deem
appropriate.

(ii) Issuance and Delivery of Shares. Any Restricted Stock
granted under the Plan shall be issued at the time such Awards are
granted and may be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration or issuance of a stock
certificate or certificates, which certificate or certificates shall be
held by the Company. Such certificate or certificates shall be
registered in the name of the Participant and shall bear an appropriate
legend referring to the restrictions applicable to such Restricted
Stock. Shares representing Restricted Stock that is no longer subject
to restrictions shall be delivered to the Participant promptly after
the applicable restrictions lapse or are waived. In the case of
Restricted Stock Units, no Shares shall be issued at the time such
Awards are granted. Upon the lapse or

B-5

waiver of restrictions and the restricted period relating to Restricted
Stock Units evidencing the right to receive Shares, such Shares shall
be issued and delivered to the holder of the Restricted Stock Units.

(iii) Forfeiture. Except as otherwise determined by the
Committee, upon a Participant's termination of employment or
resignation or removal as a Director (in either case, as determined
under criteria established by the Committee) during the applicable
restriction period, all Shares of Restricted Stock and Restricted Stock
Units held by the Participant at such time subject to restriction shall
be forfeited and reacquired by the Company; provided, however, that the
Committee may, when it finds that a waiver would be in the best
interest of the Company, waive in whole or in part any or all remaining
restrictions with respect to Shares of Restricted Stock or Restricted
Stock Units.

(d) Performance Awards. The Committee is hereby authorized to
grant to Eligible Persons Performance Awards which are intended to be "qualified
performance-based compensation" within the meaning of Section 162(m). A
Performance Award granted under the Plan may be payable in cash or in Shares
(including, without limitation, Restricted Stock). Performance Awards shall, to
the extent required by Section 162(m), be conditioned solely on the achievement
of one or more objective Performance Goals, and such Performance Goals shall be
established by the Committee within the time period prescribed by, and shall
otherwise comply with the requirements of, Section 162(m). Subject to the terms
of the Plan and any applicable Award Agreement, the Performance Goals to be
achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted, the amount of any payment or
transfer to be made pursuant to any Performance Award and any other terms and
conditions of any Performance Award shall be determined by the Committee. The
Committee shall also certify in writing that such Performance Goals have been
met prior to payment of the Performance Awards to the extent required by Section
162(m).

(e) Other Stock Grants. The Committee is hereby authorized,
subject to the terms of the Plan, to grant to Eligible Persons Shares without
restrictions thereon as are deemed by the Committee to be consistent with the
purpose of the Plan. Subject to the terms of the Plan and any applicable Award
Agreement, such Stock Awards may have such terms and conditions as the Committee
shall determine.

(f) General

(i) Consideration for Awards. Awards may be granted for
no cash consideration or for any cash or other consideration as
determined by the Committee or required by applicable law.

(ii) Awards May Be Granted Separately or Together. Awards
may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with or in substitution for any other Award or
any award granted under any plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or in
addition to or in tandem with awards granted under any such other plan
of the Company or any Affiliate may be granted either at the same time
as or at a different time from the grant of such other Awards or
awards.

(iii) Forms of Payment under Awards. Subject to the terms
of the Plan and of any applicable Award Agreement, payments or
transfers to be made by the Company or an Affiliate upon the grant,
exercise or payment of an Award may be made in such form or forms as
the Committee shall determine (including, without limitation, cash,
Shares, other securities, other Awards or other property or any
combination thereof), and may be made in a single payment or transfer,
in installments or on a deferred basis, in each case in accordance with
rules and procedures established by the Committee. Such rules and
procedures may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred
payments.

(iv) Limits on Transfer of Awards. Except as otherwise
provided by the Committee or the terms of this Plan, no Award and no
right under any such Award shall be transferable by a Participant other
than by will or by the laws of descent and distribution. The Committee
may establish procedures as it deems appropriate for a Participant to
designate a Person or Persons, as beneficiary or beneficiaries, to

B-6

exercise the rights of the Participant and receive any property
distributable with respect to any Award in the event of the
Participant's death. The Committee, in its discretion and subject to
such additional terms and conditions as it determines, may permit a
Participant to transfer a Non-Qualified Stock Option to any "family
member" (as such term is defined in the General Instructions to Form
S-8 (or any successor to such Instructions or such Form) under the
Securities Act of 1933, as amended) at any time that such Participant
holds such Option, provided that such transfers may not be for value
(i.e., the transferor may not receive any consideration therefore) and
the family member may not make any subsequent transfers other than by
will or by the laws of descent and distribution. Each Award under the
Plan or right under any such Award shall be exercisable during the
Participant's lifetime only by the Participant (except as provided
herein or in an Award Agreement or amendment thereto relating to a
Non-Qualified Stock Option) or, if permissible under applicable law, by
the Participant's guardian or legal representative. No Award or right
under any such Award may be pledged, alienated, attached or otherwise
encumbered, and any purported pledge, alienation, attachment or
encumbrance thereof shall be void and unenforceable against the Company
or any Affiliate.

(v) Term of Awards. The term of each Award shall be for
such period as may be determined by the Committee.

(vi) Restrictions; Securities Exchange Listing. All Shares
or other securities delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the Plan,
applicable federal or state securities laws and regulatory
requirements, and the Committee may direct appropriate stop transfer
orders and cause other legends to be placed on the certificates for
such Shares or other securities to reflect such restrictions. If the
Shares or other securities are traded on a securities exchange, the
Company shall not be required to deliver any Shares or other securities
covered by an Award unless and until such Shares or other securities
have been admitted for trading on such securities exchange.

(vii) Prohibition on Option Repricing. Except as provided
in Section 4(c) of the Plan, no Option or Stock Appreciation Right may
be amended to reduce its initial exercise or grant price and no Option
or Stock Appreciation Right shall be canceled and replaced with Options
or Stock Appreciation Rights having a lower exercise or grant price,
without the approval of the shareholders of the Company.

SECTION 7. AMENDMENT AND TERMINATION; ADJUSTMENTS

(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue or terminate the Plan at any time; provided, however, that,
notwithstanding any other provision of the Plan or any Award Agreement, without
the approval of the shareholders of the Company, no such amendment, alteration,
suspension, discontinuation or termination shall be made that, absent such
approval:

(i) violates the rules or regulations of the National
Association of Securities Dealers, Inc. or any other securities
exchange applicable to the Company;

(ii) increases the number of shares authorized under the
Plan as specified in Section 4(a) of the Plan;

(iii) increases the number of shares subject to the
limitations contained in Section 4(d) of the Plan;

(iv) permits the repricing of Options or Stock
Appreciation Rights, as prohibited by Section 6(f)(vii) of the Plan; or

(v) would prevent the grant of Options or Stock
Appreciation Rights that would qualify under Section 162(m) of the
Code.

B-7

(b) Amendments to Awards. The Committee may waive any conditions
of or rights of the Company under any outstanding Award, prospectively or
retroactively. Except as otherwise provided herein or in an Award Agreement, the
Committee may not amend, alter, suspend, discontinue or terminate any
outstanding Award, prospectively or retroactively, if such action would
adversely affect the rights of the holder of such Award, without the consent of
the Participant or holder or beneficiary thereof.

(c) Correction of Defects, Omissions and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any Award or Award Agreement in the manner and
to the extent it shall deem desirable to implement or maintain the effectiveness
of the Plan.

SECTION 8. INCOME TAX WITHHOLDING

In order to comply with all applicable federal, state, local or foreign
income tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal, state, local or foreign
payroll, withholding, income or other taxes, which are the sole and absolute
responsibility of a Participant, are withheld or collected from such
Participant. In order to assist a Participant in paying all or a portion of
applicable taxes to be withheld or collected upon exercise or receipt of (or the
lapse of restrictions relating to) an Award, the Committee, in its discretion
and subject to such additional terms and conditions as it may adopt, may permit
the Participant to satisfy such tax obligation by (i) electing to have the
Company withhold a portion of the Shares otherwise to be delivered upon exercise
or receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes or (ii) delivering to the Company
Shares other than Shares issuable upon exercise or receipt of (or the lapse of
restrictions relating to) such Award with a Fair Market Value equal to the
amount of such taxes. The election, if any, must be made on or before the date
that the amount of tax to be withheld is determined.

SECTION 9. GENERAL PROVISIONS

(a) No Rights to Awards. No Eligible Person or other Person shall
have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons or holders or
beneficiaries of Awards under the Plan. The terms and conditions of Awards need
not be the same with respect to any Participant or with respect to different
Participants.

(b) Award Agreements. No Participant will have rights under an
Award granted to such Participant unless and until an Award Agreement shall have
been duly executed on behalf of the Company and, if requested by the Company,
signed by the Participant.

(c) Plan Provisions Control. In the event that any provision of an
Award Agreement conflicts with or is inconsistent in any respect with the terms
of the Plan as set forth herein or subsequently amended, the terms of the Plan
shall control.

(d) No Rights of Shareholders. Except with respect to Shares of
Restricted Stock as to which the Participant has been granted the right to vote,
neither a Participant nor the Participant's legal representative shall be, or
have any of the rights and privileges of, a shareholder of the Company with
respect to any Shares issuable to such Participant upon the exercise or payment
of any Award, in whole or in part, unless and until such Shares have been
issued.

(e) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.

(f) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained as an employee of the
Company or any Affiliate, or a Director to be retained as a Director, nor will
it affect in any way the right of the Company or an Affiliate to terminate a
Participant's employment at any time, with or without cause. In addition, the
Company or an Affiliate may at any time dismiss a Participant from

B-8

employment free from any liability or any claim under the Plan or any Award,
unless otherwise expressly provided in the Plan or in any Award Agreement.

(g) Governing Law. The validity, construction and effect of the
Plan or any Award, and any rules and regulations relating to the Plan or any
Award, shall be determined in accordance with the internal laws, and not the law
of conflicts, of the State of Minnesota.

(h) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.

(i) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and an Eligible
Person or any other Person. To the extent that any Person acquires a right to
receive payments from the Company or any Affiliate pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor of
the Company or any Affiliate.

(j) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash shall be paid in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

(k) Headings. Headings are given to the Sections and subsections
of the Plan 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 the Plan or any provision thereof.

SECTION 10. EFFECTIVE DATE OF THE PLAN

The Plan shall be subject to approval by the shareholders of the
Company at the annual meeting of shareholders of the Company to be held on June
4, 2004 and the Plan shall be effective as of the date of such shareholder
approval.

SECTION 11. TERM OF THE PLAN

The Plan shall terminate at midnight on June 3, 2014, unless terminated
before then by the Board. Awards may be granted under the Plan until the Plan
terminates or until all Shares available for Awards under the Plan have been
purchased or acquired; provided, however, that Incentive Stock Options may not
be granted following the 10-year anniversary of the Board's adoption of the Plan
(April 13, 2004). The Plan shall remain in effect as long as any Awards are
outstanding.

B-9

Please detach here

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.

1.ELECTION OF DIRECTORS: 01 Gary D. Lemke 02 Edgar E. Hetteen [ ] Vote FOR [ ] Vote WITHHELD
03 Jerome T. Miner 04 Leland T. Lynch all nominees for all nominees
05 R. E. "Teddy" Turner, IV 06 James H. Dahl (except as marked)
07 Richard A. Benson 08 Karlin S. Symons

(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE ____________________
FOR ANY INDICATED NOMINEE, WRITE THE NUMBER(S)
OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) ____________________

2. APPROVE THE A.S.V., INC. 2004 STOCK
INCENTIVE PLAN [ ]For [ ]Against [ ]Abstain

3. RATIFY APPOINTMENT OF GRANT THORNTON LLP AS INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2004. [ ]For [ ]Against [ ]Abstain

4. OTHER MATTERS. In their discretion, the appointed proxies are authorized to
vote upon such other business as may properly come before the Meeting or
any adjournment.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL
Address Change? Mark Box [ ]Indicate changes below:

Date_______________________

___________________________

Signature(s) in Box

Please sign exactly as your
name(s) appear on Proxy. If
held in joint tenancy, all
person must sign. Trustees,
administrators, etc.,
should include title and
authority. Corporations
should provide full name of
corporation and title of
authorized officer signing
the proxy.

A.S.V., INC.

ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, JUNE 4, 2004
2:00 P.M.
MYLES REIF PERFORMING ARTS CENTER
720 CONIFER DRIVE
GRAND RAPIDS, MN 55744

A.S.V., INC.

[A.S.V. LOGO] 840 LILY LANE, GRAND RAPIDS, MN 55744 PROXY

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON JUNE 4, 2004.

The shares of stock you hold in your account will be voted as you specify on the
reverse side.

IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1, 2 AND 3.

By signing the proxy, you revoke all prior proxies and appoint Gary D. Lemke and
Thomas R. Karges, and each of them, with full power of substitution, to vote
your shares on the matters shown on the reverse side and any other matters which
may come before the Annual Meeting and all adjournments.

See reverse for voting instructions.