-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DJnMJtosi89zS2Yk/7u62uivtBVNg/4GJC1jC714H8Hq0mzry0ncP/NPmIqiQrxJ ZCMiPO+ckr9wcOFZ5TVoKQ== 0000856386-98-000004.txt : 19980313 0000856386-98-000004.hdr.sgml : 19980313 ACCESSION NUMBER: 0000856386-98-000004 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980312 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEHL CO CENTRAL INDEX KEY: 0000856386 STANDARD INDUSTRIAL CLASSIFICATION: FARM MACHINERY & EQUIPMENT [3523] IRS NUMBER: 390300430 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-18110 FILM NUMBER: 98564547 BUSINESS ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 BUSINESS PHONE: 4143349461 MAIL ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 10-K405 1 FORM 10-K FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _________________________ [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from __ to __ Commission file number 0-18110 Gehl Company (Exact name of registrant as specified in its charter) Wisconsin 39-0300430 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 143 Water Street, West Bend, WI 53095 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (414) 334-9461 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.10 par value (Title of class) Rights to Purchase Preferred Shares (Title of class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [X] Aggregate market value of voting stock held by non-affiliates of the registrant: $123,817,683.00 at February 16, 1998. Number of shares outstanding of each of the registrant's classes of common stock, as of February 16, 1998: Class Shares Outstanding Common Stock, $.10 Par Value 6,240,565 DOCUMENTS INCORPORATED BY REFERENCE Gehl Company 1997 Annual Report to Shareholders (Parts I and II) Gehl Company Proxy Statement for the 1998 Annual Meeting of Shareholders (to be filed with the Commission under Regulation 14A within 120 days after the end of the registrant's fiscal year and, upon such filing, to be incorporated by reference into Part III) GEHL[R] COMPANY _________________ INDEX TO ANNUAL REPORT ON FORM 10-K For The Year Ended December 31, 1997 Page Part I Item 1 Business . . . . . . . . 1 Item 2 Properties . . . . . . . . 8 Item 3 Legal Proceedings . . . . . 8 Item 4 Submission of Matters to a Vote of Security Holders . . . . . . 9 Executive Officers of the Registrant 9 Part II Item 5 Market for Registrant's Common Equity and Related Shareholder Matters . . . 11 Item 6 Selected Financial Data . 11 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 7A Quantitative and Qualitative Disclosures About Market Risk . . . . . . . 11 Item 8 Financial Statements and Supplementary Data 11 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 11 Part III Item 10 Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . 12 Item 11 Executive Compensation . . 12 Item 12 Security Ownership of Certain Beneficial Owners and Management . . . . . . 12 Item 13 Certain Relationships and Related Transactions . . . . . . . 12 Part IV Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . 13 Signatures. . . . . . . . . . . . . . . . . . 14 Part I Item 1. Business Overview Gehl Company (the "Company" or "Gehl") designs, manufactures, distributes, sells and finances equipment used in the light construction equipment and the agricultural equipment industries. The Company's construction segment ("Gehl Construction") manufactures and markets skid steer loaders, rough-terrain telescopic forklifts, and asphalt pavers used by contractors, sub-contractors, owner operators and municipalities. The Company's agricultural segment ("Gehl Agriculture") has manufactured agricultural implements for 139 years, and today markets a broad range of equipment used primarily in the dairy and livestock industries, including haymaking, forage harvesting, materials handling (skid steer loaders and attachments), manure handling and feedmaking equipment. The Company believes that it is currently the largest non-tractor agricultural equipment manufacturer in North America. On October 2, 1997, the Company acquired all of the issued and outstanding shares of capital stock of Brunel America, Inc. and Subsidiaries, including Mustang Manufacturing Company, Inc. ("Mustang") from Brunel Holdings, plc. Mustang[R] designs, manufactures and distributes skid steer loaders and related attachments. Gehl acquired the Brunel America, Inc. stock for $26.7 million; and entered into a five year non-competition agreement with the seller pursuant to which Gehl paid $1.0 million. The Company borrowed $27.7 million under its existing credit facility to fund the acquisition. The acquisition has been accounted for as a purchase transaction and resulted in the recording of $14.0 million of goodwill. The results of the Mustang operations have been included in the Company's operating results since the date of the acquisition. Equipment for Gehl Construction is manufactured in Minnesota and in two South Dakota facilities and equipment for Gehl Agriculture is manufactured in plants in Wisconsin, Pennsylvania and South Dakota. The Company was founded in 1859 and was incorporated in the State of Wisconsin in 1890. The statements which are not historical facts contained in this Form 10-K and other information provided by the Company are forward-looking statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. These factors include, without limitation, competitive conditions in the markets served by the Company, market acceptance of existing and new products manufactured by the Company, changes in the cost of raw materials and component parts purchased by the Company, changes in interest and currency exchange rates, general economic conditions, and the ability of the Company to successfully integrate its recent acquisition of the Mustang operations. These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. The Company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Business Segments The Company operates in two business segments, construction and agriculture. The following table shows certain information relating to the Company's operations by industry segment: (dollars in thousands) Year ended December 31, 1995 1996 1997 Amount % Amount % Amount % Net sales: Gehl Construction $64,381 42.0% $70,826 44.4% $101,635 51.6% Gehl Agriculture 89,071 58.0 88,836 55.6 95,420 48.4 ------- ---- ------- ---- -------- ---- Total $153,452 100% $159,662 100% $197,055 100% Income from operations: Gehl Construction $13,164 96.7% $12,967 83.4% $16,277 74.5% Gehl Agriculture 449 3.3 2,580 16.6 5,571 25.5 ------- ---- ------- ---- ------- ----- Total $13,613 100% $15,547 100% $21,848 100% The Company had no intersegment sales or transfers during the years set forth above. For segment information with respect to identifiable assets, depreciation/amortization and capital expenditures for the construction and agriculture markets, see Note 13 of "Notes to Consolidated Financial Statements", included on Pages 22 and 23 of the Gehl Company 1997 Annual Report to Shareholders, which pages are incorporated by reference herein. Gehl Construction Products: Gehl Construction markets equipment in the following three product areas: 1. Skid Steer Loaders - Gehl Construction offers seven models of Gehl skid steer loaders which feature a choice of hand-operated controls or hand and foot controls and four models of Mustang skid steer loaders which feature a choice of T-bar, hand only and hand/foot controls. The skid steer loader, with its fixed- wheel four-wheel drive, is used principally for material handling duties. The skid steer loader may also be used with a variety of attachments, including dirt, snow and cement buckets, pallet forks and hydraulically-operated devices such as cold planers, backhoes, brooms, trenchers, snowblowers, industrial grapples, tree diggers, concrete breakers, augers and many more. 2. Rough-Terrain Forklifts - Gehl markets six models of Dynalift[R] rough-terrain telescopic forklifts and one model of the Dyna- Handler[R], a rough-terrain telescopic forklift with digging capabilities. These forklifts are designed to handle heavy loads (up to 10,000 pounds) reaching horizontally and vertically for use by a variety of customers, including masons, roofers and building contractors. 3. Asphalt Pavers - Four models of Power Box[R] pavers are marketed by Gehl. These pavers allow variable paving widths from 4 1/2 to 13 feet and are used for both commercial and municipal jobs such as county and municipal road, sidewalk, golf cart path, jogging trail, parking lot, driveway, trailer court and tennis court preparation. Marketing and Distribution: The Company maintains a separate distribution system for Gehl Construction. The Company markets its equipment in North America through 336 independent dealers (with 627 outlets) and worldwide through 64 distributors. The Company has no Company-owned dealers and its dealers may sell equipment produced by other construction equipment manufacturers. The top ten dealers and distributors in Gehl Construction accounted for approximately 14% of the Company's sales for the year ended December 31, 1997; however, no single dealer or distributor accounted for more than 2.5% of the Company's sales for that period. Sales of the skid steer loader product line by Gehl Construction accounted for more than 19% of the Company's net sales in 1995, 1996 and 1997. Sales of the rough terrain forklift product line by Gehl Construction accounted for more than 17% of the Company's net sales in 1995, 1996 and 1997. The Company believes that maintenance and expansion of its dealer network is important to its success in the light construction equipment market. Gehl Construction provides various forms of support for its dealers, including sales and service training, and, in the United States and Canada, floor plan financing for its dealers and retail financing for both its dealers and their customers. The light construction equipment dealers in North America are also supported by district sales managers who provide a variety of services, including training, equipment demonstrations and sales, warranty and service assistance. Industry and Competition: Gehl Construction's product lines face competition in each of their markets. In general, each line competes with a small group of from seven to twelve different companies. No one company competes directly with Gehl Construction across all of its product lines. In the compact asphalt paving equipment market niche Gehl serves, the Company believes it is first or second in terms of market share. In the rough-terrain telescopic forklift market, the Company believes it and four other competitors share at least 75% of the market among them. In the skid steer loader product market, three other companies (exclusive of Gehl) share over 80% of the market. The Company believes that it shares a greater portion of the balance of the skid steer loader market than does any of its remaining competitors. The Company competes within the light construction equipment markets based primarily on price, quality, service and distribution. Gehl Construction's primary markets outside of North America are in Europe, Australia, Latin America, the Middle East and the Pacific Rim. The Company believes it is a significant competitor in the skid steer loader market in most of these markets. Gehl Agriculture Products: Gehl Agriculture markets equipment in five product areas. 1. Haymaking - Gehl's haymaking line includes a broad range of products used to harvest and process hay crops for livestock feed. The Company offers disc mowers, a wide range of pull-type disc mower conditioners, hay rakes and variable-chamber round balers. 2. Forage Harvesting - The Company believes that it currently manufactures and sells one of the industry's most complete lines of forage harvesting equipment, including forage harvesters, wagons and blowers. 3. Materials Handling - Gehl Agriculture's materials handling line consists of seven different models of Gehl skid steer loaders and the Dyna-Handler forklift. The skid steer loader is a compact, fixed-wheel four-wheel drive unit typically equipped with a bucket or fork and is used for moving a variety of material. The Dyna-Handler is a rough-terrain telescopic forklift with digging capabilities. The skid steer loader and Dyna-Handler forklift are marketed by both Gehl Agriculture and Gehl Construction. 4. Manure Handling - Gehl offers a broad range of manure spreaders, including the Scavenger . The Scavenger[R] "V-Tank" side- discharge manure spreader incorporates a hydraulically controlled auger which allows the spreader to handle a wide range of semi-liquid waste products, including municipal sludge. For handling mostly solid manure, the Company also markets four models of rear-discharge box spreaders. 5. Feedmaking - The Company believes that it offers the broadest line of portable feedmaking equipment in the industry. Gehl Agriculture offers the Gehl Mix-All[R] line of grinder mixers and a line of mixer feeders and a feeder wagon for both mixing feed rations and delivery to livestock feeders. Marketing and Distribution: In North America, Gehl's agricultural equipment is sold through approximately 500 geographically dispersed dealers (with 556 outlets). Seventy-one of these dealers are located in Canada. Gehl Agriculture also markets products through 31 distributors in Europe, the Middle East, the Pacific Rim and Latin America. The Company has no Company-owned dealers and its dealers may sell equipment produced by other agricultural equipment manufacturers. It has been and remains the Company's objective to increase the share of Gehl products sold by a Gehl dealer. Gehl Agriculture is not dependent for its sales on any specific dealer or group of dealers. The top ten dealers and distributors in Gehl Agriculture accounted for approximately 6% of the Company's sales for the year ended December 31, 1997 and no one dealer or distributor accounted for over 1% of the Company's sales during that period. Sales of the Gehl skid steer loader product line by Gehl Agriculture accounted for more than 15% of the Company's net sales in 1995, 1996 and 1997. The Company provides various forms of support for its dealer network, including sales and service training. The Company also provides floor plan and retail finance support for products sold by its dealers in the United States and Canada. The Company employs district sales managers to assist its agricultural dealers in the promotion and sale of its product and regional service managers to assist in warranty and servicing matters. The Company currently operates three service parts distribution centers located in: Memphis, Tennessee; Syracuse, New York; and Minneapolis, Minnesota. The Company also contracts for two service parts distribution locations in Rockwood, Ontario and Saskatoon, Saskatchewan. Industry and Competition: The agricultural equipment industry has seen significant consolidation and retrenchment since 1980. This has served to reduce the total number of competitors, to strengthen certain major competitors, and to reduce the strength of certain other companies in the industry. The Company competes within the agricultural equipment industry based primarily on price, quality, service and distribution. The agricultural equipment markets in North America are highly competitive and require substantial capital outlays. The Company has four major competitors as well as numerous other limited line manufacturers and importers. The largest manufacturers in the agricultural equipment industry, the Company's major competitors, generally produce tractors and combines as well as a full line of tillage and planting equipment. Such manufacturers also market, to varying degrees, haymaking, forage harvesting, materials handling, manure handling and/or feedmaking equipment, the areas in which the Company's agricultural products are concentrated. Except for one competitor, no other single competitor competes with the Company in each of its product lines. The Company believes that it is the only non-tractor manufacturer in the industry that produces equipment in each of these product lines. Smaller manufacturers which compete with the Company produce only a limited line of specialty items and often compete only in regional markets. Gehl Agriculture primarily serves the dairy and livestock industries. Compared to a more volatile period in the late 1980's through 1992, milk prices, cash income, land values, and the general economy were more favorable and stable for the dairy farmer in 1993 through 1997. These more favorable conditions and lower debt to equity ratios than generally experienced in most of the 1980's led to increased buying by farmers of agriculture equipment in 1993 and 1994. In 1995, 1996 and 1997 industry market demand varied, with demand for the Company's products generally lower than in 1994. Approximately 80% of the Company's agricultural dealers also carry the tractor and combine product lines of a major manufacturer. In addition to selling the tractors and combines of a major manufacturer, many of these dealers carry the major manufacturer's entire line of products, some of which directly compete with the products offered by Gehl Agriculture. Gehl Agriculture's dealers also market equipment manufactured by limited line manufacturers which compete with specific product lines offered by the Company. Gehl Agriculture's primary markets outside of North America are in Europe and the Pacific Rim. In these markets the Company competes with both agricultural manufacturers from the United States, some of which have manufacturing facilities in foreign countries, and foreign manufacturers. The Company does not believe, however, that it is presently a significant competitor in any of these foreign markets. Backlog The backlog of unfilled equipment orders (which orders are subject to cancellation in certain circumstances) as of December 31, 1997 was $34.9 million versus $42.7 million at December 31, 1996. Virtually all orders in the backlog at December 31, 1997 are expected to be shipped in 1998. The decreased backlog at December 31, 1997 was due primarily to the reduced level of Gehl Construction backlog. Order backlog is lower in Gehl Construction due to the introduction of a new series of telescopic handlers in December 1997, for which orders were not received prior to year-end, and a change in the Construction dealer order pattern resulting in dealers placing orders at a point in time closer to their expected utilization of the machinery. As the Company has increased its sales of Gehl Construction products, the Company has been successful in reducing the seasonality of its sales. However, some sales seasonality still remains, primarily in April through June, the Company's second fiscal quarter. The Company's first and fourth fiscal quarters in January through March and October through December, respectively, have traditionally been its weakest. Because the haymaking and forage equipment products are primarily retailed by the Company's dealers in the Spring, Summer, and early Fall, the Company's floor plan financed accounts receivable generally reach a seasonal peak in early Summer and a post-seasonal low in late Fall. Floor Plan and Retail Financing Floor Plan Financing: The Company, as is typical in the industry, generally provides floor plan financing for its dealers. Products shipped to dealers under the Company's floor plan financing program are recorded by the Company as sales and the dealers' obligations to the Company are reflected as accounts receivable. The Company provides interest-free floor plan financing to its dealers, in Gehl Construction for varying periods of time generally up to six months and in Gehl Agriculture generally for up to one year. Dealers who sell products utilizing floor plan financing are required to make immediate payment for those products to the Company upon sale or delivery to the retail customer. At the end of the interest-free period, if the equipment remains unsold to retail customers, the Company generally charges interest to the dealer at rates between 1.5% to 3.25% above the prime rate or on occasion provides an interest-free extension of up to six months upon payment by the dealer of a curtailment of 20% of the original invoice price to the dealer. This type of floor plan equipment financing accounts for approximately 90% of Gehl's accounts receivable, with all such floor planned receivables required to be secured by a first priority security interest in the equipment sold. Retail Financing: The Company also provides retail financing primarily to facilitate the sale of equipment to end users. Additionally, a number of dealers purchase equipment which is held for rental to the public. The Company also provides retail financing to such dealers in connection with these purchases. Retail financing in the United States is provided by the Company primarily through Gehl Finance , the Company's finance division. Retail financing is provided in Canada by third parties at rates subsidized by the Company. The Company does not offer or sponsor retail financing outside of North America. The Company maintains arrangements with third parties pursuant to which the Company sells with recourse certain of the Company's retail finance contracts. The finance contracts require periodic installments of principal and interest over periods of up to 60 months; interest rates are based on market conditions. The majority of these contracts have maturities of 24 to 48 months. The Company continues to service the finance contracts it sells, including cash collections. See Note 3 of "Notes to Consolidated Financial Statements," Page 18, and "Management's Discussion and Analysis," Page 13 of the Gehl Company 1997 Annual Report to Shareholders, which pages are incorporated by reference herein. Employees As of December 31, 1997, the Company had 1,192 employees, of which 801 were hourly employees and 391 were salaried employees. At the production facilities in West Bend, Wisconsin, one of five Gehl production facilities, 223 hourly employees are covered by a collective bargaining agreement with the United Paperworkers International Union (formerly the Allied Industrial Workers) which expires December 31, 1999. None of the remaining employees of the Company are represented by unions. There have been no labor-related work stoppages at the Company's facilities during the past twenty-four years. Manufacturing During 1997, the Company completed expansion if its two South Dakota manufacturing facilities and believes that its present manufacturing facilities will be sufficient to provide adequate capacity for its operations in 1998. Component parts needed in the manufacture of the Company's equipment are primarily produced by the Company. The Company obtains raw materials (principally steel), component parts that it does not manufacture, most notably engines and hydraulics, and supplies from third party suppliers. All such materials and components used are available from a number of sources. The Company is not dependent on any supplier that cannot be readily replaced and has not experienced difficulty in obtaining necessary purchased materials. In addition to the equipment it manufacturers, the Company markets equipment acquired from third party suppliers. Products acquired from these suppliers accounted for less than 10% of the Company's sales in 1997. Research and Development The Company attempts to maintain and strengthen its market position through internal new product development and incremental improvement to existing products. The Company's research and development is devoted to developing new products that meet specific customer needs and to devising incremental improvements to existing products. Research and development performed by the Company includes the designing and testing of new and improved products as well as the fabrication of prototypes. The Company expended approximately $2.3 million, $2.2 million and $1.4 million on research and development for the years ended December 31, 1997, 1996 and 1995, respectively. Patents and Trademarks The Company possesses rights under a number of domestic and foreign patents and trademarks relating to its products and business. While the Company considers the patents and trademarks important in the operation of its business, including the Gehl , the Mustang name and the group of patents relating to the Scavenger manure spreader, the business of the Company is not dependent on any single patent or trademark or group of patents or trademarks. Export Sales Information regarding the Company's export sales is included in Note 13 of "Notes to Consolidated Financial Statements," Page 23, of the Gehl Company 1997 Annual Report to Shareholders, which page is incorporated by reference herein. Item 2. Properties The following table sets forth certain information as of December 31, 1997, relating to the Company's principal manufacturing facilities. See "Management's Discussion and Analysis - Liquidity and Capital Resources, Capital Expenditures," Page 13, of the Gehl Company 1997 Annual Report to Shareholders, which page is incorporated by reference herein. For information regarding collateral pledges, see Note 6 of "Notes to Consolidated Financial Statements", included on Page 19, of the Gehl Company 1997 Annual Report to Shareholders, which page is incorporated by reference herein. Approximate Owned Floor Area or in Square Leased Feet Principal Uses West Bend, WI 450,000 Owned General offices and engineering, research and development and manufacture of products for Gehl Agriculture Madison, SD 130,000 Owned Manufacture of Gehl skid steer loaders for Gehl Construction and Gehl Agriculture Lebanon, PA 170,000 Owned(1) Manufacture of products for Gehl Agriculture Yankton, SD 100,000 Owned Manufacture of products for Gehl Construction Owatonna, MN 235,000 Owned Manufacture of Mustang skid steer loaders for Gehl Construction (1) This facility is financed with the proceeds from the sale of industrial development bonds maturing in 2010. The Company also operates three service parts centers located in: Memphis, Tennessee; Syracuse, New York; and Minneapolis, Minnesota. The Company leases these facilities, except for the Minneapolis center which is owned. The leases have terms ranging from three to five years. The Company anticipates no difficulty in retaining adequate leased facilities, either by renewing existing leases prior to expiration or by replacing them with equivalent leased facilities. Item 3. Legal Proceedings. The Company is a defendant from time to time in actions for product liability and other matters arising out of its ordinary business operations. The Company believes that the actions presently pending will not have a material adverse effect on its consolidated financial position or results of operations. To the Company's knowledge, there are no material legal proceedings to which any director, officer, affiliate or more than 5% shareholder of the Company (or any associate of the foregoing persons) is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or its subsidiaries. Item 4. Submission of Matters to a Vote of Security Holders. No matters were submitted to a vote of security holders during the quarter ended December 31, 1997. Executive Officers of the Registrant. Set forth below is certain information concerning the executive officers of the Company as of February 1, 1998: Name, Age and Position Business Experience William D. Gehl, 51, Mr. Gehl has served as Chairman, President, Chairman of the Board Chief Executive of Directors of the Officer and Director Company since April, 1996. Mr. Gehl has served as President and Chief Executive Officer of the Company since November, 1992 and has served as a director of the Company since 1987. From January, 1990 until joining the Company, Mr. Gehl served as Executive Vice President, Chief Operating Officer, General Counsel and Secretary of The Ziegler Companies, Inc. (a financial services holding company). Mr. Gehl held various senior management positions with The Ziegler Companies from 1978 to 1990. Victor A. Mancinelli, 54, Mr. Mancinelli has Executive Vice served as Executive President and Vice President and Chief Operating Officer Chief Operating Officer of the Company since November, 1992. From 1990 to 1992, Mr. Mancinelli served as Group Vice President of W.H. Brady Co. From 1987 to 1990, Mr. Mancinelli served as President and Chief Operating Officer of Syracuse China Corp., a subsidiary of Canadian Pacific Ltd. From 1985 to 1987, Mr. Mancinelli served as Vice President International Business for Simplex Tire Reorder Co. Prior to 1985, Mr. Mancinelli served in a variety of management positions with Cummins Engine Company, Inc. John W. Gehl, 56, Mr. Gehl has served as Vice President, Vice President, International International of the Company since 1992. Mr. Gehl joined the Company in 1962 and has served as a Vice President of the Company since 1977 and in a variety of positions in marketing, manufacturing and strategic planning. Mr. Gehl has been a director of the Company since 1974. Mr. Gehl has announced his retirement as an officer of the Company effective March 1, 1998. Kenneth P. Hahn, 40 Mr. Hahn joined the Vice President of Company as Corporate Finance Controller in April, and Treasurer 1988. Mr. Hahn was elected as an executive officer of the Company in April, 1994. Mr. Hahn was appointed Vice President of Finance and Treasurer in February, 1997. Michael J. Mulcahy, 51, Mr. Mulcahy has served Vice President, as General Counsel of Secretary the Company since 1974 and General Counsel and became Secretary in 1977 and a Vice President in 1986. Mr. Mulcahy has also served, since 1988, as President of Equipco Insurance Company, Ltd., which provides liability insurance coverage for equipment manufacturers, including the Company. Richard J. Semler, 58, Mr. Semler joined the Vice President of Company in May, 1960 Data Systems and has served in his current position with the Company since January, 1977. All officers of the Company are elected annually by the Board of Directors following the Annual Meeting of Shareholders. The 1998 Annual Meeting of Shareholders is currently scheduled for April 29, 1998. The Company has employment agreements with William D. Gehl, pursuant to which he is to serve as President and Chief Executive Officer of the Company through the expiration of the agreement on December 31, 1998, and Victor A. Mancinelli, pursuant to which he is to serve as Executive Vice President and Chief Operating Officer of the Company through the expiration of the agreement on September 30, 1998. PART II Item 5. Market for Registrant's Common Equity and Related Shareholder Matters. Information required by this item is included on Page 25 of the Gehl Company 1997 Annual Report to Shareholders, which page is hereby incorporated herein by reference. Item 6. Selected Financial Data. Information required by this item is included on Page 24 of the Gehl Company 1997 Annual Report to Shareholders, which page is hereby incorporated herein by reference. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Information required by this item is included on Pages 10 through 13 of the Gehl Company 1997 Annual Report to Shareholders, which pages are hereby incorporated herein by reference. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not Applicable Item 8. Financial Statements and Supplementary Data. Information required by this item is included on Page 9 and Pages 14 through 23 of the Gehl Company 1997 Annual Report to Shareholders, which pages are hereby incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. There have been no changes in or disagreements with the Company's accountants regarding accounting and financial disclosure required to be reported pursuant to this item. PART III Item 10. Directors and Executive Officers of the Registrant. Pursuant to Instruction G, the information required by this item with respect to directors is hereby incorporated herein by reference from the caption entitled "Election of Directors" set forth in the Company's definitive Proxy Statement for its 1998 Annual Meeting of Shareholders ("Proxy Statement")F1. Information with respect to executive officers of the Company appears at the end of Part I, Pages 9 through 10 of this Annual Report on Form 10-K. Item 11. Executive Compensation. Pursuant to Instruction G, the information required by this item is hereby incorporated herein by reference from the captions entitled "Board of Directors" and "Executive Compensation" set forth in the Proxy Statement; provided, however, that the subsection entitled "Executive Compensation - Report on Executive Compensation" shall not be deemed to be incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management. Pursuant to Instruction G, the information required by this item is hereby incorporated by reference herein from the caption "Principal Shareholders" set forth in the Proxy Statement. Item 13. Certain Relationships and Related Transactions. There are no relationships or related transactions to be reported pursuant to this item. The Proxy Statement will be filed with the Commission pursuant to Regulation 14A within 120 days after the end of the Company's fiscal year. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a) 1 and 2. Financial statements and financial statement schedule. Reference is made to the separate index to the Company's consolidated financial statements and schedule contained on Page 15 hereof. 3. Exhibits. Reference is made to the separate exhibit index contained on Pages 18 through 21 hereof. (b) Reports on Form 8-K. The Company filed a Current Report on Form 8-K, dated October 17, 1997, reporting (pursuant to Items 2 and 7) the acquisition of all of the issued and outstanding shares of capital stock of Brunel America, Inc. In connection with this acquisition, the Company, through Brunel America, Inc., acquired all of the issued and outstanding shares of capital stock of the following direct and indirect subsidiaries of Brunel America, Inc.: Mustang America, Inc.; Mustang Manufacturing Company, Inc.; Mustang Finance Inc.; and Mustang International, Inc. The Company filed an amendment, dated December 16, 1997, to the above-referenced Form 8-K, which amendment includes Financial Statements and Pro-Forma Financial Information relating to the acquisition of all of the issued and outstanding stock of Brunel America, Inc. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GEHL COMPANY Date: March 6, 1998 By /s/ William D. Gehl William D. Gehl, Chairman of the Board, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /s/ William D. Gehl Chairman of the Board, President, March 6, 1998 William D. Gehl Chief Executive Officer and Director (Principal Executive Officer) /s/ Kenneth P. Hahn Vice President of Finance March 6, 1998 Kenneth P. Hahn and Treasurer (Principal Financial and Accounting Officer) /s/ Thomas J. Boldt Director March 6, 1998 Thomas J. Boldt /s/ Fred M. Butler Director March 6, 1998 Fred M. Butler /s/ John W. Gehl Director March 6, 1998 John W. Gehl /s/ William P. Killian Director March 6, 1998 William P. Killian /s/ Arthur W. Nesbitt Director March 6, 1998 Arthur W. Nesbitt /s/ Roger E. Secrist Director March 6, 1998 Roger E. Secrist /s/ John W. Splude Director March 6, 1998 John W. Splude GEHL COMPANY INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES Page(s) in Annual Report* The following documents are filed as part of this report: (1) Financial Statements: Report of Independent Accountants 9 Consolidated Balance Sheets at December 31, 1997 and 1996 14 Consolidated Statements of Income for the three years ended December 31, 1997 15 Consolidated Statements of Shareholders' Equity for the three years ended December 31, 1997 15 Consolidated Statements of Cash Flows for the three years ended December 31, 1997 16 Notes to Consolidated Financial Statements 17-23 * Incorporated by reference from the indicated pages of the Gehl Company 1997 Annual Report to Shareholders. Page in Form 10-K (2) Financial Statement Schedule: Report of Independent Accountants on Financial Statement Schedule 16 For the three years ended December 31, 1997 -- Schedule II - Valuation and Qualifying Accounts 17 All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE To the Board of Directors of Gehl Company Our audits of the consolidated financial statements referred to in our report dated February 10, 1998 appearing in the 1997 Annual Report to Shareholders of Gehl Company (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 14(a) of this Form 10-K. In our opinion, this Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. PRICE WATERHOUSE LLP Milwaukee, Wisconsin February 10, 1998 GEHL COMPANY AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in thousands) Additions -------------------- Balance Charged to Balance Beginning Costs and Acquired at End Period Description of Year Expenses Balances Deductions of Year - ------ ----------- --------- ---------- --------- ---------- ------- Year Ended December 31, 1995 Return & Allowances $115 $ - $ - $ - $ 115 Allowance for Doubtful Accounts-Trade Receivables 639 165 - 52 752 Volume Discounts 1,990 2,026 - 2,213 1,803 Product Discontinuance 1,600 - - 265 1,335 ------ ------ ------ ------- ------ Total $4,344 $2,191 $ - $2,530 $4,005 ====== ====== ======= ======= ====== Allowances of Doubtful Accounts - Retail Contracts $ 504 $ 428 $ - $ 365 $ 567 ====== ====== ======== ======= ====== Inventory Obsolescence Reserve $4,052 $ 502 $ - $1,777 $2,777 ====== ====== ======= ======= ====== Income Tax Valuation Allowance $5,687 $ - $ - $3,038 $2,649 ====== ====== ======= ======= ====== Year Ended December 31, 1996 Return & Allowances $ 115 $ 35 $ - $ - $ 150 Allowance for Doubtful Accounts-Trade Receivables 752 64 - 255 561 Volume Discounts 1,803 2,389 - 2,463 1,729 Product Discontinuance 1,335 (131) - 429 775 ------ ------ ------ ------- ------ Total $4,005 $2,357 $ - $3,147 $3,215 ====== ====== ====== ======= ====== Allowances of Doubtful Accounts - Retail Contracts $ 567 $ 276 $ - $ 252 $ 591 ====== ====== ====== ======= ====== Inventory Obsolescence Reserve $2,777 $ 527 $ - $1,564 $1,740 ====== ====== ====== ======= ====== Income Tax Valuation Allowance $2,649 $ - $ - $1,414 $1,235 ====== ====== ====== ======= ====== Year Ended December 31, 1997 Return & Allowances $ 150 $ - $ - $ - $ 150 Allowance for Doubtful Accounts-Trade Receivables 561 144 388 25 1,068 Volume Discounts 1,729 2,674 - 2,705 1,698 Product Discontinuance 775 - - 458 317 ------ ------ ------ ------- ------ Total $3,215 $2,818 $ 388 $3,188 $3,233 ====== ====== ======= ======= ====== Allowances of Doubtful Accounts - Retail Contracts $ 591 $ 355 $ 28 $ 91 $ 883 Inventory Obsolescence Reserve $1,740 $ 576 $ 265 $ 982 $1,599 ====== ====== ====== ======= ====== Income Tax Valuation Allowance $1,235 $ - $ - $ 268 $ 967 ====== ====== ====== ======= ====== GEHL COMPANY INDEX TO EXHIBITS Exhibit Number Document Description (2) Stock Purchase Agreement, dated as of September 12, 1997, between Gehl Company and Brunel Holdings, plc [Incorporated by reference to Exhibit 2 of the Company's Current Report on Form 8-K, dated October 17, 1997] (3.1) Restated Articles of Incorporation, as amended, of Gehl Company [Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 28, 1997.] (3.2) By-laws of Gehl Company, as amended [Incorporated by reference to Exhibit 3.3 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995] (4.1) Amended and Restated Loan and Security Agreement by and between ITT Commercial Finance Corp. and Gehl Company and its subsidiaries, dated October 1, 1994 [Incorporated by reference to Exhibit 4.1 of the Company's Annual Report on Form 10-K for the year ended December 31, 1994] (4.2) First Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp. and Gehl Company and its subsidiaries, dated May 10, 1995 [Incorporated by reference to Exhibit 4.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended July 1, 1995] (4.3) Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp., Deutsche Financial Services Canada Corporation and Gehl Company and its subsidiaries, dated December 1, 1995 [Incorporated by reference to Exhibit 4.1 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995] (4.4) Third Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp., Deutsche Financial Services Canada Corporation and Gehl Company and its subsidiaries, dated as of July 15, 1996. (4.5) Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp., Deutsche Financial Services Canada Corporation and Gehl Company and its subsidiaries, dated October 2, 1997 [Incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated October 17, 1997] (4.6) Fifth Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp., Deutsche Financial Services, a division of Deutsche Bank Canada, and Gehl Company and its subsidiaries, dated as of February 5, 1998. (4.7) Common Stock Purchase Warrant No. 2, dated June 4, 1997, from Gehl Company to William L. Dahl, SVCC TTEE, The Dahl Children's Trust, FBO James A. Dahl U/A/D 12-31-84. (4.8) Common Stock Purchase Warrant No. 3, dated June 4, 1997, from Gehl Company to William L. Dahl, SVCC TTEE, The Dahl Children's Trust, FBO Kathryn W. Dahl U/A/D 12-31-84. (4.9) Common Stock Purchase Warrant No. 4, dated June 4, 1997 from Gehl Company to Rock Creek Partners LTD. (4.10) Loan Agreement between Pennsylvania Economic Development Financing Authority and Gehl Company, dated as of September 1, 1990 [Incorporated by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 29, 1990] (4.11) First Supplemental Loan Agreement between Pennsylvania Economic Development Financing Authority and Gehl Company, dated as of April 23, 1993 [Incorporated by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended April 3, 1993] (4.12) Second Supplemental Loan Agreement between Pennsylvania Economic Development Financing Authority and Gehl Company, dated as of February 1, 1994 [Incorporated by reference to Exhibit 4.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 1993] (4.13) Mortgage and Security Agreement by and between Gehl Company and First Pennsylvania Bank N.A., dated as of September 1, 1990 [Incorporated by reference to Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 29, 1990] (4.14) Rights Agreement, dated as of May 28, 1997, between Gehl Company and Firstar Trust Company [Incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form 8-A, dated as of May 28, 1997] (10.1)* Form of Supplemental Retirement Benefit Agreement between Gehl Company and Messrs. J.W. Gehl, Hahn, Mulcahy and Semler [Incorporated by reference to Exhibit 10.4 to the Company's Form S-1 Registration Statement (Reg. No. 33-31571)]. (10.2)* Gehl Company Director Stock Grant Plan [Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 29, 1997] (10.3)* Amended and Restated Employment Agreement between Gehl Company and William D. Gehl dated as of December 19, 1997 (10.4)* Employment Agreement by and between Victor A. Mancinelli and Gehl Company, dated as of October 1, 1995 [Incorporated by reference to Exhibit 10.3 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995] (10.5)* Supplemental Retirement Benefit Agreement by and between William D. Gehl and Gehl Company [Incorporated by reference to Exhibit 10.4 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995] (10.6)* Supplemental Retirement Benefit Agreement by and between Victor A. Mancinelli and Gehl Company [Incorporated by reference to Exhibit 10.5 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995] (10.7)* Gehl Company Shareholder Value Added Management Incentive Compensation Plan [Incorporated by reference to Exhibit 10.6 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995] (10.8)* Gehl Savings Plan, as amended and restated executed March 17, 1997. (10.9)* Gehl Company Retirement Income Plan "B", as amended [Incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994] (10.10)* Gehl Company 1987 Stock Option Plan, as amended [Incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996] (10.11)* Form of Stock Option Agreement used in conjunction with the Gehl Company 1987 Stock Option Plan [Incorporated by reference to Exhibit 4.2 to the Company's Form S-8 Registration Statement (Reg. No. 33-38392)] (10.12)* Gehl Company 1995 Stock Option Plan, as amended [Incorporated by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K for the year ended December 31, 1996] (10.13)* Form of Stock Option Agreement for executive officers used in conjunction with the Gehl Company 1995 Stock Option Plan. [Incorporated by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995] (10.14)* Form of Stock Option Agreement for non-employee directors used in conjunction with the Gehl Company 1995 Stock Option Plan. [Incorporated by reference to Exhibit 10.13 of the Company's Annual Report on Form 10-K for the year ended December 31, 1995] (10.15) Technical Assistance and License Agreement by and between Gehl Company and Rheiner Maschinenfabrik Windhoff AG, dated as of May 4, 1985, as amended [Incorporated by reference to Exhibit 10.13 to the Company's Form S-1 Registration Statement (Reg. No. 33- 31571)] (10.16) Distributorship Agreement by and between Gehl Company and Gehl GmbH, dated as of April 15, 1985 [Incorporated by reference to Exhibit 10.16 to the Company's Form S-1 Registration Statement (Reg. No. 33-31571)] (10.17) Trademark Licensing Agreement by and between Gehl Company and Gehl GmbH, dated as of April 15, 1985 [Incorporated by reference to Exhibit 10.17 to the Company's Form S-1 Registration Statement (Reg. No. 33-31571)] (13) Portions of the Gehl Company 1997 Annual Report to Shareholders that are incorporated by reference herein (21) Subsidiaries of Gehl Company (23) Consent of Price Waterhouse LLP (27) Financial Data Schedule (99) Proxy Statement for 1998 Annual Meeting of Shareholders (To be filed with the Securities and Exchange Commission under Regulation 14A within 120 days after the end of the Company's fiscal year; except to the extent incorporated by reference, the Proxy Statement for the 1998 Annual Meeting of Shareholders shall not be deemed to be filed with the Securities and Exchange Commission as part of this Annual Report or Form 10-K) * A management contract or compensatory plan or arrangement. Except as otherwise noted, all documents incorporated by reference are to Commission File No. 0-18110. EX-4 2 THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT This Third Amendment to Amended and Restated Loan and Security Agreement is made to that certain Amended and Restated Loan and Security Agreement entered into on October 1, 1994 ("Agreement") by and between GEHL COMPANY, and its subsidiaries/divisions including but not limited to Hedlund Martin, Inc., and Gehl Power Products, Inc. (collectively and individually "Gehl Company"), DEUTSCHE FINANCIAL SERVICES CORPORATION, f/k/a ITT Commercial Finance Corp., ("DFS") and DEUTSCHE FINANCIAL SERVICES CANADA CORPORATION, successor in interest to ITT Commercial Finance, a Division of ITT Industries of Canada Ltd., (Deutsche Financial Services Corporation and Deutsche Financial Services Canada Corporation are individually and collectively referred to as "DFS"). FOR GOOD AND VALUABLE CONSIDERATION RECEIVED, Gehl Company and DFS agree to amend the Agreement as follows: 1. The definition of "Banker's Acceptance Rate" in Section 1.1 of the Agreement is deleted in its entirety and restated to read as follows: "Bankers' Acceptance Rate" shall mean, for Canadian Loans, for any calendar week commencing on Tuesday of such week, the average rate for one month Canadian dollar bankers' acceptances as of 10:00 a.m. Toronto time on (a) the Monday immediately preceding, or (b) if any such Monday is not a business day, then on the business day immediately preceding such Monday, as reported on the Reuters Screen CDOR (Canadian Deposit Offered Rate), the TelerateScreen 3197 or on the Bloomberg ticker symbol CDOR01. 2. The first sentence of Section 2.1(a) of the Agreement is hereby deleted in its entirety and restated to read as follows: (a) "Maximum Line of Credit": In consideration of Gehl Company's performance of its Obligations and subject to Sections 3 and 4, DFS grants to Gehl Company separate lines of credit of (i) SIXTY-NINE MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS ($69,500,000.00 U.S.) (the "U.S. Line"), and (ii) that fluctuating amount of Canadian Dollars which, from day-to-day, shall equal, based on the daily noon spot exchange rate of the Royal Bank of Canada (the "Exchange Rate") FIVE MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS ($5,500,000.00 U.S.) (the "Canadian Line") for the period commencing on the execution of this Agreement until December 31, 1998. 3. All other terms as they appear in the Agreement, to the extent not inconsistent with the foregoing, are ratified and remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties have executed this Third Amendment to Amended and Restated Loan and Security Agreement as of this 15th day of July, 1996. GEHL COMPANY HEDLUND MARTIN, INC. By: s/s K.F. Kaplan By: s/s K.F. Kaplan Title: Vice President Title: Treasurer By: s/s M.J. Mulcahy By: s/s M.J. Mulcahy Title: Secretary Title: Secretary GEHL POWER PRODUCTS, INC. DEUTSCHE FINANCIAL SERVICES CORPORATION By: s/s K.F. Kaplan By: s/s J.J. Jones Title: Treasurer Title: Regional Vice President By: s/s M.J. Mulcahy DEUTSCHE FINANCIAL SERVICES Title: Secretary A division of Deutsche Bank Canada (successor-in-interest to ITT Commercial Finance, a division of ITT Industries of Canada Ltd.) By: s/s Bill Blight Title: Vice President By: s/s Joe Conte Title: Vice President EX-4 3 FIFTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT This Fifth Amendment is made to that certain Amended and Restated Loan and Security Agreement executed as of October 1, 1994 by and between Deutsche Financial Services Corporation, f/k/a ITT Commercial Finance Corp ("ITT"), ("DFS"), Deutsche Financial Services, a division of Deutsche Bank Canada, successor-in-interest to ITT Commercial Finance, a division of ITT Industries of Canada Ltd., ("DFSC")(DFS and DFSC are hereinafter collectively referred to as "DFS"), and Gehl Company ("Gehl") and its subsidiaries, including, but not limited to, Hedlund Martin, Inc., Gehl Power Products, Inc., Mustang Manufacturing Company, Inc. and Mustang Finance, Inc. (collectively "Gehl Company") as amended ("Agreement"). FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is acknowledged, DFS and Gehl Company agree to amend the Agreement as follows: 1. All subsection letter designations in Subsection 1.1 of the Agreement are deleted. 2. The following definition is incorporated into Subsection 1.1 as if fully and originally set forth therein: "'Maturity Date': December 31, 2000." 3. The last clause of the first sentence of subsection 2.1(a) of the Agreement is deleted in its entirety and restated as follows: "for the period commencing on the execution of this Agreement until the Maturity Date." 4. Section 2.1.2 of the Agreement is deleted in its entirety and restated as follows: "Gehl Company agrees to pay DFS in advance of each year of this Agreement an annual Credit Facility Fee (sometimes also referred to herein as a "charge") equal to the lesser of (a) (i) One Hundred Thousand Dollars ($100,000.00) on each of December 31, 1997 and December 31, 1998, (ii) Twenty-five Thousand Dollars on December 31, 1999, and (b) the highest charges from time to time permitted by applicable law (and amounts received from Gehl Company in excess of such highest permitted amount or rate will be considered reductions of principal to the extent of such excess). DFS will rebate to Gehl Company certain amounts of such Credit Facility Fee based on the average daily outstanding balance under the Credit Facility during a calendar year ("ADB"), as set out below, ("Rebates") by January 30 of the following calendar year, provided that Gehl has not given notice of termination of the Agreement prior to payment of any applicable rebate. 1998 Rebate ADB in 1998 Rebate Amount $30,000,000.01 or greater $75,000.00 $25,000,000.01-$30,000,000.00 $37,500.00 $20,000,000.01-$25,000,000.00 $18,750.00 $20,000,000.00 or less $0 1999 Rebate ADB in 1999 Rebate Amount $25,000,000.01 or greater $75,000.00 $20,000,000.01 -$25,000,000.00 $56,250.00 $15,000,000.01-$20,000,000.00 $37,500.00 $10,000,000.01 -$15,000,000.00 $18,750.00 $10,000,000.00 or less $0 2000.00 The Credit Facility Fee payable on December 31, 1999 is Twenty-Five Thousand Dollars ($25,000.00) and, regardless of ADB, no rebate is payable for calendar year 2000. 5. The first three sentences of Section 8.1 of the Agreement are deleted in their entirety and restated as follows: "This Agreement shall terminate on the Maturity Date. This Agreement may not be terminated by either party prior to the Maturity Date, other than as a result of any Default by Gehl Company or any default by DFS hereunder. If Gehl Company terminates this Agreement prior to Maturity, Gehl will remain obligated to pay DFS all principal, interest, costs, expenses, fees and charges otherwise payable under this Agreement, including, without limitation, all Credit Facility Fees, as if the Agreement had not been terminated. Additionally in the event that Gehl terminates this Agreement prior to Maturity, Gehl will forfeit the right to receive any Rebates not paid by DFS prior to DFS' receipt of a notice of termination." 6. The fourth sentence of Section 9.5 of the Agreement is deleted in its entirety and restated as follows: "All notices that Gehl Company sends to DFS will be sufficiently given if mailed or delivered to DFS at: Deutsche Financial Services Corporation 655 Maryville Centre Dr. St. Louis, MO 63141 Attention: General Counsel or such other address as DFS may specify from time to time." 7. All other terms and provisions of the Agreement remain unchanged and in full force and effect. IN WITNESS WHEREOF the dully authorized representatives of DFS, DFSC, and Gehl Company have executed this 5th Amendment to Amended and Restated Loan and Security Agreement as of this 5th day of February, 1998. GEHL COMPANY HEDLUND MARTIN, INC. By: s/s W.D. Gehl By: s/s W.D. Gehl Title: President Title: President By: s/s Kenneth P. Hahn By: s/s Kenneth P. Hahn Title: Vice President Title: Treasurer GEHL POWER PRODUCTS, INC. MUSTANG MANUFACTURING COMPANY, INC. By: s/s W.D. Gehl By: s/s W.D. Gehl Title: President Title: Chairman of the Board By: s/s Kenneth P. Hahn By: s/s Kenneth P. Hahn Title: Treasurer Title: Vice President MUSTANG FINANCE, INC. By: s/s W.D. Gehl Title: Chairman of the Board By: s/s Kenneth P. Hahn Title: Vice President DEUTSCHE FINANCIAL SERVICES DEUTSCHE FINANCIAL SERVICES, CORPORATION a division of Deutsche Bank Canada By: s/s Thomas L. Meredith By: s/s Bill C. Blight Title: Vice President Title: Vice President By: Title: NEGOTIABLE PROMISSORY NOTE $75,000,000.00 February 5, 1998 For value received, Gehl Company, Hedlund-Martin, Inc., Gehl Power Products, Inc., Mustang Manufacturing Company, Inc. and Mustang Finance, Inc. (individually and collectively, "Maker") jointly and severally promise to pay to Deutsche Financial Services f/k/a ITT Commercial Finance Corp. ("DFS") or order, on or before December 31, 2000 the sum of Seventy-Five Million Dollars ($75,000,000.00) or such lesser principal amount as has been advanced to Maker and not repaid under the terms of the Amended and Restated Loan and Security Agreement dated as of October 1, 1994 between Maker, DFS and Deutsche Financial Services, a division of Deutsche Bank Canada, successor-in-interest to ITT Commercial Finance, a division of ITT Industries of Canada, Ltd. ("DFSC"), as amended (the "Agreement"), together with interest thereon at a rate determined in accordance with Section 2.1.1. of the Agreement, which section and referenced sections therein is hereby incorporated as if originally set forth herein. The principal portion of this note not paid when due shall, at the option of holder, bear late charges thereon calculated at Prime Rate (as defined in the Agreement) plus Three percent (3.0%) per annum. Maker promises to pay the reasonable attorney's fees and expenses, if placed in the hands of an attorney for collection. This Note is made pursuant to the Agreement. Reference is made to the Agreement for a description of the terms and conditions of the indebtedness evidence hereby and the circumstances under which the maturity of such indebtedness may be accelerated. The holder hereof may grant to the Maker, any endorsers and any other persons obligated hereon, extensions of time for payment of this Note and/or the maturity of any installment or installments, in whole or in part, without limit as to the number of extensions or the period or periods thereof and without waiving any rights to enforce payment of any other installment or other obligation hereunder. Maker hereby waives presentment and demand for payment, protest and notice of nonpayment and protest and consent that the holder hereof may, without notice to and without releasing the liability of the undersigned hereunder, compound or release, any rights against the Maker or any endorser(s) and grant extensions of time as provided in this Note. Maker waives any right to trial by jury in connection with any action on this Note. This Note shall be governed by the laws of the state of Missouri. GEHL COMPANY HEDLUND MARTIN, INC. By: s/s W.D. Gehl By: s/s W.D. Gehl Its: President Its: President Date: 2/5/98 Date: 2/5/98 By: s/s Kenneth P. Hahn By: s/s Kenneth P. Hahn Its: Vice President Its: Treasurer Date: 2/5/98 Date: 2/5/98 GEHL POWER PRODUCTS, INC. MUSTANG MANUFACTURING COMPANY, INC. By: s/s W.D. Gehl By: s/s W.D. Gehl Its: President Its: Chairman of the Board Date: 2/5/98 Date: 2/5/98 By: s/s Kenneth P. Hahn By: s/s Kenneth P. Hahn Its: Treasurer Its: Vice President Date: 2/5/98 Date: 2/5/98 MUSTANG FINANCE, INC. By: s/s W.D. Gehl Its: Chairman of the Board Date: 2/5/98 By: s/s Kenneth P. Hahn Its: Vice President Date: 2/5/98 Negotiable and payable Notices to: at the office of: Deutsche Financial Services Corporation Deutsche Financial Services Corporation P.O. Box 31626 655 Maryville Centre Drive St. Louis, MO 63131 St. Louis, MO 63141-5832 EX-4 4 THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR LAWS. COMMON STOCK PURCHASE WARRANT To Subscribe for and Purchase Common Stock of GEHL COMPANY WARRANT NO. 2 This certifies that, for value received, William L. Dahl, SVCC TTEE, The Dahl Childrens Trust, FBO James A. Dahl U/A/D 12-31-84, or its transferee or assignee (the "Holder" which term includes any transferee and assignee), is entitled to subscribe for and purchase from GEHL COMPANY, a Wisconsin corporation (the "Company"), at the aggregate exercise price of $175,000 (subject to the adjustment provided in Section 7 hereof) (or, if this Common Stock Purchase Warrant is issued in substitution or exchange for a predecessor common stock purchase warrant and represents rights to purchase less than the maximum number or percentage of shares of Common Stock as hereinafter defined which were purchasable upon exercise of such predecessor common stock purchase warrant, a proportionately smaller amount) at any time or times after the date hereof and until the date specified in Section 12 hereof, twenty-five thousand (25,000) shares of fully paid and nonassessable (except as otherwise provided in Section 180.0622 of the Wisconsin Business Corporation Law) shares of the Company's common stock, $0.10 par value per share (the "Common Stock"), provided, however, that this Common Stock Purchase Warrant shall be exercisable for a proportionately fewer or greater number of shares of Common Stock if the Company combines by reverse stock split or otherwise or subdivides by stock split, stock dividend or otherwise its outstanding Common Stock. For the purposes of this Common Stock Purchase Warrant, the term "Other Common Stock" shall mean other classes of equity securities not limited to a fixed sum or percentage of a fixed sum in respect of participation in dividends or distribution of assets in voluntary or involuntary liquidation, dissolution or winding-up. The predecessor to this Common Stock Purchase Warrant was originally issued to the State of Wisconsin Investment Board (the "Board") pursuant to the terms of the Second Amended and Restated Credit Agreement, dated as of March 5, 1993 by and between the Company and the Board (the "Credit Agreement"), in connection with the separate and individual purchases from the Company by the Board of the Company's Senior Note, Junior Note and Make-Whole Note (all as defined in the Credit Agreement) (together with any note or notes issued in substitution or exchange therefor). This Common Stock Purchase Warrant (and its predecessor) and all Common Stock Purchase Warrants issued in substitution or exchange herefor are herein individually called a "Warrant" and collectively called the "Warrants." This Warrant is subject to the following provisions, terms and conditions: 1. Exercise; Issuance of Certificates; Payment for Shares. The rights represented by this Warrant may be exercised by the Holder, in whole or in part and at one or more times by the surrender of this Warrant (properly endorsed if required) at the principal office of the Company (or such other office or agency of the Company as the Company may designate by written notice to the Holder) and upon payment to the Company by wire transfer, certified check or bank draft of the purchase price for the shares of Common Stock purchasable hereunder and upon compliance with any registration requirements or exemptions therefrom under the Securities Act (as defined below) and applicable state securities laws. The Company agrees that the shares so purchased shall and will be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. Certificates for the shares of Common Stock so purchased shall be delivered to the Holder within a reasonable time, not exceeding five (5) days, after the rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant appropriately providing for the purchase of Common Stock with respect to which this Warrant shall not then have been exercised and stating the purchase price therefor shall also be delivered to the Holder within such time. 2. Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all shares which may be issued upon the exercise of the rights represented by this Warrant and the payment of the purchase price hereunder will, upon issuance, be fully paid and nonassessable (except as otherwise provided by Section 180.0622 of the Wisconsin Business Corporation Law) and free from all taxes, liens and charges with respect to the issue thereof. Without limiting the generality of the foregoing, the Company covenants and agrees that it will from time to time take all such action as may be requisite to assure that the par value per share of the Common Stock is at all times equal to or less than the then effective purchase price per share of the Common Stock issuable upon exercise of this Warrant. The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. The Company will take all such action as may be necessary to assure that such shares of Common Stock may be so issued without violation of any applicable law or regulation (except for any such violation that may be a result of the Holder's failure to register the shares of Common Stock under the Securities Act as hereinafter defined and any applicable state securities law), or of any requirements of any domestic securities exchange upon which the Common Stock of the Company may be listed. 3. [Reserved] 4. Record Date. In case the Company shall fix a record date or otherwise make a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution payable in Common Stock or Other Common Stock, then such record date shall be deemed to be the date of the issue of the shares of Common Stock or Other Common Stock deemed to have been issued upon the declaration of such dividend or the making of such other distribution. 5. Reorganization, Reclassification, Consolidation, Merger or Sale. Any capital reorganization, reclassification, consolidation, merger or sale of all or substantially all of the Company's assets to another person, entity, firm or partnership which is effected in such a way that holders of Common Stock or Other Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock or Other Common Stock is referred to herein as an "Organic Change." Prior to the consummation of any Organic Change, the Company will make appropriate provision (in form and substance satisfactory to the Holder) to insure that the Holder will thereafter have the right to purchase and receive, in lieu of or in addition to the Common Stock immediately theretofore purchasable and receivable upon the exercise of this Warrant, such shares of stock, securities or assets as the Holder would have received in connection with such Organic Change if the Holder had exercised this Warrant. The Company will not effect any such reorganization, reclassification, consolidation, merger or sale unless, prior to the consummation thereof, the successor corporation (if other than the Company) resulting from such Organic Change assumes by written instrument (in form reasonably satisfactory to the Holder) the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to acquire. 6. Liquidating Dividends. If the Company declares or pays a dividend (other than a stock dividend payable in shares of Common Stock) upon the Common Stock payable otherwise than in cash out of earnings or earned surplus, determined in accordance with generally accepted accounting principles, consistently applied (a "Liquidating Dividend"), then the Company shall provide written notice of such declaration or payment of the Liquidating Dividend at least fifteen (15) days prior to the date proposed for the payment thereof. Said notice shall specify (i) the proposed date of payment of the Liquidating Dividend and the amount per share of Common Stock thereof. The Company furthermore shall cooperate with the Holder to effect the exercise of this Warrant should the Holder desire to so exercise in order to enable the Holder to participate in the Liquidating Dividend. 7. Adjustment in Aggregate Exercise Price. If the Company while this Warrant is outstanding shall issue and sell or otherwise distribute any Common Stock or Other Common Stock (other than a distribution to the existing holders of Common Stock or Other Common Stock) at a price per share which would be less than the aggregate exercise price of this Warrant divided by the number of shares of Common Stock issuable upon the exercise of this Warrant, then, and thereafter successively upon each such issue, the aggregate exercise price then if effect shall be reduced to the lowest price obtained by multiplying such lowest price per share of Common Stock or Other Common Stock times the number of shares of Common Stock then issuable upon exercise of this Warrant; provided however that the adjustment in aggregate purchase price provided in this Section 7 shall not apply unless and until the Company shall issue and sell or otherwise distribute any Common Stock or Other Common Stock in excess of six hundred twenty-five thousand (625,000) shares following March 5, 1993. (a) In the case of the issuance of additional Common Stock or Other Common Stock for cash, in determining the price per share of such issuance, the consideration received by the Company therefor shall be deemed to be the cash proceeds received by the Company for such shares after deducting any commissions or other expenses paid or incurred by the Company for any underwriting of, or otherwise in connection with, the issuance of such shares. (b) In the case of the issuance (otherwise than upon conversion or exchange of obligations or shares of stock of the Company) of additional Common Stock or Other Common Stock for a consideration other than cash or a consideration a part of which shall be other than cash, in determining the price per share of such issuance, the amount of the consideration other than cash received by the Company for such Common Stock or Other Common Stock shall be deemed to be the value of such consideration as determined reasonably and in good faith by the board of directors of the Company. (c) In case of the issuance by the Company after the date hereof of (i) any security that is convertible into Common Stock or Other Common Stock, (ii) any rights or options to purchase Common Stock or Other Common Stock, the Company shall be deemed to have issued the maximum number of shares of Common Stock or Other Common Stock into which such convertible security may be converted, and the maximum number of shares of Common Stock or Other Common Stock deliverable on the exercise of such rights or options, for the consideration received by the Company for such convertible security or for such rights or options (less the amount of any underwriting discount), as the case may be, and after deducting therefrom any expenses or commissions incurred or paid by the Company for any underwriting of, or otherwise in connection with, the issuance of such convertible security or rights or options, plus (A) any consideration or adjustment payment to be received by the Company in connection with such conversion and (B) the minimum consideration to be received by the Company for the Common Stock or Other Common Stock issuable upon the exercise of such rights or options. No further adjustment of the aggregate exercise price shall be made as a result of the actual issuance of the Common Stock or Other Common Stock upon conversion of any convertible security or exercise of any rights or options referred to in this clause (c) or issued prior to the date hereof. 8. Closing of Books. The Company will at no time close its transfer books against the transfer of this Warrant or of any shares of Common Stock issued or issuable upon the exercise of this Warrant in any manner which interferes with the timely exercise of this Warrant. 9. No Voting or Other Rights. This Warrant shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. 10. Warrant Transferable. This Warrant and all rights and obligations hereunder are transferable, in whole, without charge to the Holder upon surrender of this Warrant with a properly executed assignment (in form reasonably acceptable to the Company) at the principal office of the Company. This Warrant is not transferable except pursuant to an effective registration statement under the Securities Act (as defined below) or in a transaction exempt from the registration requirements of the Securities Act and in compliance with any applicable state securities laws. 11. Warrants Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Holder at the office or agency of the Company referred to in Section 1 hereof, for new Warrants of like tenor representing in the aggregate the right to subscribe for and purchase the maximum number of shares of Common Stock which may be subscribed for and purchased hereunder (subject to reduction to reflect any partial exercise or exercises of this Warrant), each of such new Warrants to represent the right to subscribe for and purchase the number of shares of Common Stock purchasable upon exercise of this Warrant as shall be designated by the Holder at the time of such surrender. 12. Duration. The rights to purchase shares of Common Stock hereunder shall remain in existence until March 5, 1998, unless the same are exercised in full prior thereto, and thereafter the rights evidenced by this Warrant shall expire. 13. No Dilution or Impairment. The Company shall not undertake or participate in any action whatsoever for the purpose or having the result of avoiding or seeking to avoid the observance or performance of any of its obligations pursuant to this Warrant. 14. Registration Rights. As used in this Section 14, the term Board shall mean collectively the State of Wisconsin Investment Board, its transferees or assignees (including the Holder), and any assignee or transferee of Common Stock from the Board which the Board obtained upon exercise of this Warrant, other than those who received such Common Stock in a public offering or pursuant to Rule 144 promulgated under the Securities Act; provided however that the transferee or assignee of the Common Stock shall be the same as the transferee or assignee of this Warrant. 14.1 Demand Registrations. At any time within two (2) years following the exercise of its right to purchase the Company's Common Stock pursuant to the Warrant, the Board may demand registration under the Securities Act of 1933, as amended (the "Securities Act"), of all of the Common Stock issuable or which has been issued upon exercise of the Warrant, on Form S-1 or any similar long-form registration ("Long-Form Registrations") or on Form S-2 or S-3 or any similar short-form registration ("Short-Form Registrations"), if available under applicable rules of the SEC. The written request to be delivered by the Board to the Company pursuant to this Section 14.1 shall (i) specify the number of shares intended to be offered and sold by the Board, (ii) express the present intent of the Board to offer such shares for distribution, and (iii) describe the nature and method of the proposed offer and sale thereof. The registration requested pursuant to this Section 14.1 is referred to herein as "Demand Registration." (a) Number of Registrations. The Board will be entitled to demand two (2) Long-Form or Short-Form Registrations. A registration initiated as a Demand Registration shall include all shares of Common Stock issuable or which has been issued upon exercise of the Warrant then owned by the Board. A registration initiated as a Demand Registration may be withdrawn at any time at the request of the Board or the underwriters selected by the Board, but shall count as one of the two (2) Demand Registrations; provided that in any event, the Company will pay all registration expenses in connection with any registration initiated as the Demand Registration as provided in Section 14.5. (b) Priority on Demand Registrations. The Company will not include in the Demand Registration any securities which are not Common Stock owned by the Board, without the written consent of the Board. If the Demand Registration is an underwritten offering, and the managing underwriters advise the Company in writing that in their opinion the number of shares of Common Stock requested to be included exceeds the number of shares of Common Stock which can be sold in such offering, the Company will include in such registration, prior to the inclusion of any securities which are not shares of Common Stock owned by the Board, the number of shares of Common Stock owned by the Board requested to be included which in the opinion of such underwriters can be sold; and the balance of the shares of Common Stock which the Board requested to be included in such offering shall be withheld from sale for a period of time requested by the underwriters, but not to exceed one hundred twenty (120) days. (c) Restrictions on Demand Registration. The Company will not be obligated to effect a Demand Registration within one hundred twenty (120) days after the effective date of a registration in which the Board was given a participation in a registered offering pursuant to Section 14.2 hereof. The Company may postpone for up to ninety (90) days the filing or the effectiveness of a registration statement for a Demand Registration if the Company and the Board reasonably and in good faith agree that such Demand Registration might have an adverse effect on any proposal or plan by the Company to engage in any financing, acquisition of assets (other than in the ordinary course of business) or any corporate reorganization, merger, consolidation, tender offer or similar transaction; provided that in such event, the Board will be entitled to withdraw such request and that, if such request is withdrawn, such Demand Registration will not count as the one Demand Registration to which the Board is entitled. (d) Selection of Underwriters. The Board will have the right to select the investment banker(s) and manager(s) to administer the offering, subject to the Company's approval (which will not be unreasonably withheld) of such investment banker(s) and manager(s). 14.2 Participation in Registered Offerings. If the Company at any time or times proposes or is required to register any of its Common Stock or the equity securities for public sale in an underwritten public offering for cash (other than in connection with any incentive stock option, bonus or other employee benefit plan or arrangement) under the Securities Act or any applicable state securities law, it will each such time give written notice to the Board, of its intention to do so. Upon the written request of the board given thirty (30) business days after receipt of any such notice (which request shall state the intended method of disposition of such equity securities and shall state in reasonable detail, to the extent practicable, the net consideration, after all commissions and discounts which the prospective seller or sellers expect to receive upon such disposition), the Company shall use its best efforts to cause all such Common Stock requested (which request will not be for less than thirty percent (30%) of the number of shares of Common Stock purchasable or receivable upon exercise of the Warrant(s)) to be registered by the Board to be registered under the Securities Act and any applicable state securities laws (provided, that if the managing underwriter advises that less than all of the registered shares of equity securities should be offered for sale so as not to materially and adversely affect the price or salability of the offering being registered by the Company or the Board for a period not to exceed one hundred twenty (120) days, the Board will withhold from sale for the period of time and for such number of shares of Common Stock as the underwriter may specify; provided further that a pro rata number of shares owned by all other shareholders of the Company also shall be similarly withheld from sale), all to the extent requisite to permit the sale or other disposition (in accordance with the intended method of disposition thereof as aforesaid) by the prospective seller or sellers of the securities so registered. In the event an underwriter is involved with a registration initiated by the Company of the stock, and the Board requests to participate in the registration, the Board must commit to sell through the underwriter. The Company may, in its sole discretion, withdraw any registration contemplated by this Section 14.2 and abandon the proposed offering in which the Board had requested to participate without any further obligation to the Board with respect to such registration statement or offering; provided however that the Board shall be indemnified by the Company for any fees, costs and expense of and incidental to such registration, excluding the fees and disbursements of counsel acting solely on behalf of the Board. 14.3 Obligations of the Board. It shall be a condition precedent to the obligation of the Company to register any Common Stock pursuant to Sections 14.1 and 14.2 hereof that the Board shall (i) furnish to the Company such information regarding the Common Stock held by it and the intended method of disposition thereof and other information concerning the Board as the Company shall reasonably request and as shall be required in connection with the registration statement to be filed by the Company; (ii) agree to abide by such additional or customary terms affecting the proposed offering as reasonably may be requested by the managing underwriter of such offering, including a requirement, if applicable, to withhold (on a pro-rata basis) from the public market for a period of at least one hundred twenty (120) days after any such offering, any shares excluded from the offering at the instance of the underwriter as permitted under Sections 14.1 and 14.2 hereof; and (iii) agree in writing in form satisfactory to the Company to pay the underwriting discounts and commissions applicable to the Common Stock being sold by it. 14.4 Registration Proceedings. If and whenever the Company is required by the provisions of Sections 14.1 and 14.2 hereof to effect the registration of the Common Stock under the Securities Act, until the securities covered by such registration statement have been sold or for six (6) months after effectiveness, whichever is the shorter period of time, the Company shall: (a) Prepare and file with the SEC a registration statement with respect to such Common Stock and use its best efforts to cause such registration statement to become and remain effective; (b) Prepare and file with the SEC such amendments to such registration statement and supplements to the prospectus contained therein as may be necessary to keep such registration statement effective; (c) Furnish to the Board and to the underwriters of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such underwriters may reasonably request in order to facilitate the public offering of such securities; (d) Use its best efforts to register or qualify the securities covered by such registration statement under such state securities or "Blue Sky" laws of such jurisdictions as the Board may reasonably request within twenty (20) days prior to the original filing of such registration statement, except that the Company shall not for any purpose be required to qualify to do business as a foreign corporation in any jurisdiction wherein it is not so qualified, and except that the Company shall not be required to so register or qualify in more than forty (40) such jurisdictions if in the good faith judgment of the managing underwriter such additional registrations or qualifications would be unreasonably expensive or harmful to the consummation of the proposed offering; (e) Notify the Board, promptly after it shall receive notice thereof, of the time when such registration statement has become effective or a supplement to any prospectus forming a part of such registration statement has been filed; (f) Notify the Board promptly of any request by the SEC for the amending or supplementing of such registration statement or prospectus or for additional information; (g) Prepare and file with the SEC, promptly upon the request of the Board, any amendments or supplements to such registration statement or prospectus which, in the opinion of counsel for the Board and counsel for the underwriter or manager of the offering, are required under the Securities Act or the rules and regulations thereunder in connection with the distribution of Common Stock by the Board; (h) Prepare and promptly file with the SEC and promptly notify the Board of the filing of such amendment or supplement to such registration statement or prospectus as may be necessary to correct any statements or omissions if, at the time when a prospectus relating to such securities is required to be delivered under the Securities Act, any event shall have occurred as the result of which any such prospectus or any other prospectus as then in effect would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (i) In case the Board or any underwriter for the Board is required to deliver a prospectus at a time when the prospectus then in circulation is not in compliance with the Securities Act, the Company will prepare and file such supplements or amendments to such registration statement and such prospectus or prospectuses as may be necessary to permit compliance with the requirements of the Securities Act; (j) Advise the Board, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for that purpose and promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued; (k) Not file any amendment or supplement to such registration statement or prospectus to which a majority in interest of the Board shall reasonably have objected on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the Securities Act or the rules and regulations thereunder, after having been furnished with a copy thereof at least two (2) business days prior to the filing thereof; and (l) At the request of the Board (i) use its best efforts to obtain and furnish on the effective date of the registration statement or, if such registration includes an underwritten public offering, at the closing provided for in the underwriting agreement, an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, addressed to the underwriters, if any, and to the Board, which shall contain such opinions as are customary in an underwritten public offering, or, if the offering is not underwritten, shall state that such registration statement has become effective under the Securities Act and that (or substantially to the effect that): (a) to the best of such counsel's knowledge, no stop order suspending the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act; (b) the registration statement, related prospectus and each amendment or supplement thereto comply as to form in all material respects with the requirements of the Securities Act and applicable rules and regulations of the SEC thereunder (except that such counsel need express no opinion as to financial statements, schedules or other financial or statistical data contained therein); (c) such counsel has no reason to believe that either the registration statement or the prospectus or any amendment or supplement thereto (other than financial statements and schedules or financial and statistical data, as to which such counsel need not comment) contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (d) the description in the registration statement or prospectus or any amendment or supplement thereto of all legal and governmental matters and all contracts and other legal documents or instruments described therein are accurate in all material respects; and (e) such counsel does not know of any legal or governmental proceedings, pending or threatened, required to be described in the registration statement or prospectus or any amendment or supplement thereto which are not described as required, nor of any contracts or documents or instruments of the character required to be described in the registration statement or prospectus or amendment or supplement thereto or to be filed as exhibits to the registration statement, which are not described and filed as required; and (ii) use its best efforts to obtain letters dated on such effective date, and such closing date, if any, from the independent certified public accountants of the Company, addressed to the underwriters, if any, and to the Board, stating that they are independent certified public accountants within the meaning of the Securities Act and dealing with such matters as the underwriters may request, or, if the offering is not underwritten, stating that in the opinion of such accountants, the financial statements and other financial data pertaining to the Company included in the registration statement or the prospectus or any amendment or supplement thereto comply in all material respects with the applicable accounting requirements of the Securities Act; such opinion of counsel shall additionally cover such legal matters with respect to the registration and with respect to which such opinion is being given as the Board may reasonably request; such letter from the independent certified public accountants shall additionally cover such other financial matters, including information as to the period ending not more than five (5) business days prior to the date of such letter, with respect to the registration statement and prospectus, as the Board may reasonably request. 14.5 Expenses. With respect to each inclusion of Common Stock of the Board in a registration statement pursuant to Sections 14.1 and 14.2 hereof, all registration expenses, fees, costs and expenses of and incidental to such registration, inclusion and public offering in connection therewith shall be borne by the Company (excluding the fees and disbursements of advisors retained by the Board and counsel acting solely on behalf of the Board); provided, however, that the Board shall bear the Board's pro rata share of the underwriting discount and commissions. The fees, costs and expenses of registration to be borne by the Company shall include, without limitation, all registration, filing and NASD fees, printing expenses, fees and disbursements of counsel and accountants for the Company (including the cost of any special audit requested in order to effect such registration), fees and disbursements of counsel for the underwriter or underwriters of such securities (if the Company and/or selling security holders are required to bear such fees and disbursements), all legal fees and disbursements and other expenses of complying with state securities or "Blue Sky" laws of any jurisdiction in which the securities to be offered are to be registered or qualified, and the premiums and other costs of policies of insurance against liability arising out of such public offering. 14.6 Indemnification of the Board. Subject to the conditions set forth below, in connection with any registration of securities pursuant to Sections 14.1 or 14.2 hereof, the Company agrees to indemnify and hold harmless the Board and each person, if any, who controls the Board (and its respective officers, directors and agents), within the meaning of Section 15 of the Securities Act, as follows: (a) Against any and all loss, claim, damage and expense whatsoever arising out of or based upon (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending any litigation, commenced or threatened, or any claim whatsoever based upon) any untrue or alleged untrue statement of a material fact contained in any preliminary prospectus (if used prior to the effective date of the registration statement), the registration statement or the final prospectus (as from time to time amended and supplemented if the Company shall have filed with the SEC any amendment thereof or amendment thereto) if used within the period during which the Company is required to keep the registration statement or prospectus current, or in any application or other document executed by the Company or based upon written information furnished by the Company filed in any jurisdiction in order to qualify the Company's securities under the securities laws thereof; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or any other violation of applicable federal or state statutory or regulatory requirements or limitations relating to action or inaction by the Company in the course of preparing, filing, or implementing such registered offering; provided, however, that the indemnity agreement contained in this Section 14.6(a) shall not apply to any loss, claim, damage, liability or action arising out of or based upon any untrue or alleged untrue statement or omission made in reliance upon and in conformity with any information furnished in writing to the Company by or on behalf of the Board expressly for use in connection therewith; (b) Subject to the proviso contained in Section 14.6(a) above, against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any such litigation or claim) if such settlement is effected with the written consent of the Company and no indemnity shall inure to the benefit of the Board or any controlling person thereof if the person asserting the claim failed to receive a copy of the final prospectus at or prior to the written confirmation of the sale of shares of Common Stock to such person if the untrue statement or omission has been corrected in such final prospectus and the failure to receive such final prospectus is not a necessary element of such person's claim; (c) In no case shall the Company be liable under this indemnity agreement with respect to any claim made against the Board or any such controlling person (or its respective officers, directors and agents) unless the Company shall be notified, by letter or by telegram confirmed by letter, of any claim made or action commenced against such persons, reasonably promptly (but in any event within twenty (20) days of receipt of such claim or, in the event that any summons or other service of process requiring a responsive pleading within thirty (30) days or less time, within ten (10) days after receipt of such summons or other process) after such person shall have received notice of such claim or been served with the summons or other legal process giving information as to the nature and basis of the claim, but failure to so notify the Company shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The Company shall be entitled to participate at its own expense in the defense of any suit brought to enforce any such claim, but if the Company elects to assume the defense, such defense shall be conducted by counsel chosen by it, provided that such counsel is reasonably satisfactory to the Board. In the event the Company elects to assume the defense of any such suit and retain such counsel, the Board shall, after the date the Board is notified of such election, bear the fees and expenses of any counsel thereafter retained by the Board as well as any other expenses thereafter incurred by the Board in connection with the defense thereof; provided, however, that the Company shall bear the fees and expenses of any such separate counsel retained by the Board if the counsel representing the Company has a conflict of interest (which is not waived) with the Board which would prohibit such counsel from representing the Board. 14.7 Indemnification of Company. The Board in any registered offering pursuant to Sections 14.1 or 14.2 above agrees to indemnify and hold harmless the Company and each of the officers and directors and agents of it and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any and all such losses, liabilities, claims, damages and expenses as are indemnified against by the Company under Section 14.6 hereof; provided, however, that such indemnification shall be limited to statements or omissions, if any, made (or in settlement of any litigation effected with the written consent of the Board alleged to have been made) in any preliminary prospectus, the registration statement or prospectus or any amendment or supplement thereof or any application or other document in reliance upon, and in conformity with, written information furnished in respect of the Board, by or on behalf of the Board expressly for use in any preliminary prospectus, the registration statement or prospectus or any amendment or supplement thereof or in any such application or other document. In case any action shall be brought against the Company, or any other person so indemnified based on any preliminary prospectus, the registration statement or prospectus or any amendment or supplement thereof or any such application or other documents, in respect of which indemnity may be sought against the Board, it shall have the rights and duties given to the Company, and each other person so indemnified shall have the rights and duties given to the Board, by the provisions of Section 14.6(c) hereof. The Company agrees to notify the Board promptly after the assertion of any claim against the Company in connection with the sale of securities covered by this Warrant. 14.8 Future Registration Rights. The Company may agree with its shareholders other than the Board to allow their participation in any registered offering which may be requested pursuant to Section 14.1 hereof, provided all such rights of participation under Section 14.1 hereof shall be subordinated to the rights of the Board herein, in a manner reasonably satisfactory to counsel for the Board. 15. Descriptive Headings and Governing Law. The descriptive headings of the several Sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant is being delivered and is intended to be performed in the State of Wisconsin and shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the internal laws of such State (regardless of such State's conflict of law provisions or principles). IN WITNESS WHEREOF, Gehl Company has caused this Warrant to be signed by its duly authorized officers this 4th day of June, 1997. GEHL COMPANY By: /s/ Kenneth P. Hahn Title: Vice President Attest: /s/ Michael J. Mulcahy Title: Secretary EX-4 5 THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR LAWS. COMMON STOCK PURCHASE WARRANT To Subscribe for and Purchase Common Stock of GEHL COMPANY WARRANT NO. 3 This certifies that, for value received, William L. Dahl SVCC TTEE, The Dahl Childrens Trust, FBO Kathryn W. Dahl U/A/D 12-31-84, or its transferee or assignee (the "Holder" which term includes any transferee and assignee), is entitled to subscribe for and purchase from GEHL COMPANY, a Wisconsin corporation (the "Company"), at the aggregate exercise price of $175,000 (subject to the adjustment provided in Section 7 hereof) (or, if this Common Stock Purchase Warrant is issued in substitution or exchange for a predecessor common stock purchase warrant and represents rights to purchase less than the maximum number or percentage of shares of Common Stock as hereinafter defined which were purchasable upon exercise of such predecessor common stock purchase warrant, a proportionately smaller amount) at any time or times after the date hereof and until the date specified in Section 12 hereof, twenty-five thousand (25,000) shares of fully paid and nonassessable (except as otherwise provided in Section 180.0622 of the Wisconsin Business Corporation Law) shares of the Company's common stock, $0.10 par value per share (the "Common Stock"), provided, however, that this Common Stock Purchase Warrant shall be exercisable for a proportionately fewer or greater number of shares of Common Stock if the Company combines by reverse stock split or otherwise or subdivides by stock split, stock dividend or otherwise its outstanding Common Stock. For the purposes of this Common Stock Purchase Warrant, the term "Other Common Stock" shall mean other classes of equity securities not limited to a fixed sum or percentage of a fixed sum in respect of participation in dividends or distribution of assets in voluntary or involuntary liquidation, dissolution or winding-up. The predecessor to this Common Stock Purchase Warrant was originally issued to the State of Wisconsin Investment Board (the "Board") pursuant to the terms of the Second Amended and Restated Credit Agreement, dated as of March 5, 1993 by and between the Company and the Board (the "Credit Agreement"), in connection with the separate and individual purchases from the Company by the Board of the Company's Senior Note, Junior Note and Make-Whole Note (all as defined in the Credit Agreement) (together with any note or notes issued in substitution or exchange therefor). This Common Stock Purchase Warrant (and its predecessor) and all Common Stock Purchase Warrants issued in substitution or exchange herefor are herein individually called a "Warrant" and collectively called the "Warrants." This Warrant is subject to the following provisions, terms and conditions: 1. Exercise; Issuance of Certificates; Payment for Shares. The rights represented by this Warrant may be exercised by the Holder, in whole or in part and at one or more times by the surrender of this Warrant (properly endorsed if required) at the principal office of the Company (or such other office or agency of the Company as the Company may designate by written notice to the Holder) and upon payment to the Company by wire transfer, certified check or bank draft of the purchase price for the shares of Common Stock purchasable hereunder and upon compliance with any registration requirements or exemptions therefrom under the Securities Act (as defined below) and applicable state securities laws. The Company agrees that the shares so purchased shall and will be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. Certificates for the shares of Common Stock so purchased shall be delivered to the Holder within a reasonable time, not exceeding five (5) days, after the rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant appropriately providing for the purchase of Common Stock with respect to which this Warrant shall not then have been exercised and stating the purchase price therefor shall also be delivered to the Holder within such time. 2. Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all shares which may be issued upon the exercise of the rights represented by this Warrant and the payment of the purchase price hereunder will, upon issuance, be fully paid and nonassessable (except as otherwise provided by Section 180.0622 of the Wisconsin Business Corporation Law) and free from all taxes, liens and charges with respect to the issue thereof. Without limiting the generality of the foregoing, the Company covenants and agrees that it will from time to time take all such action as may be requisite to assure that the par value per share of the Common Stock is at all times equal to or less than the then effective purchase price per share of the Common Stock issuable upon exercise of this Warrant. The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. The Company will take all such action as may be necessary to assure that such shares of Common Stock may be so issued without violation of any applicable law or regulation (except for any such violation that may be a result of the Holder's failure to register the shares of Common Stock under the Securities Act as hereinafter defined and any applicable state securities law), or of any requirements of any domestic securities exchange upon which the Common Stock of the Company may be listed. 3. [Reserved] 4. Record Date. In case the Company shall fix a record date or otherwise make a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution payable in Common Stock or Other Common Stock, then such record date shall be deemed to be the date of the issue of the shares of Common Stock or Other Common Stock deemed to have been issued upon the declaration of such dividend or the making of such other distribution. 5. Reorganization, Reclassification, Consolidation, Merger or Sale. Any capital reorganization, reclassification, consolidation, merger or sale of all or substantially all of the Company's assets to another person, entity, firm or partnership which is effected in such a way that holders of Common Stock or Other Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock or Other Common Stock is referred to herein as an "Organic Change." Prior to the consummation of any Organic Change, the Company will make appropriate provision (in form and substance satisfactory to the Holder) to insure that the Holder will thereafter have the right to purchase and receive, in lieu of or in addition to the Common Stock immediately theretofore purchasable and receivable upon the exercise of this Warrant, such shares of stock, securities or assets as the Holder would have received in connection with such Organic Change if the Holder had exercised this Warrant. The Company will not effect any such reorganization, reclassification, consolidation, merger or sale unless, prior to the consummation thereof, the successor corporation (if other than the Company) resulting from such Organic Change assumes by written instrument (in form reasonably satisfactory to the Holder) the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to acquire. 6. Liquidating Dividends. If the Company declares or pays a dividend (other than a stock dividend payable in shares of Common Stock) upon the Common Stock payable otherwise than in cash out of earnings or earned surplus, determined in accordance with generally accepted accounting principles, consistently applied (a "Liquidating Dividend"), then the Company shall provide written notice of such declaration or payment of the Liquidating Dividend at least fifteen (15) days prior to the date proposed for the payment thereof. Said notice shall specify (i) the proposed date of payment of the Liquidating Dividend and the amount per share of Common Stock thereof. The Company furthermore shall cooperate with the Holder to effect the exercise of this Warrant should the Holder desire to so exercise in order to enable the Holder to participate in the Liquidating Dividend. 7. Adjustment in Aggregate Exercise Price. If the Company while this Warrant is outstanding shall issue and sell or otherwise distribute any Common Stock or Other Common Stock (other than a distribution to the existing holders of Common Stock or Other Common Stock) at a price per share which would be less than the aggregate exercise price of this Warrant divided by the number of shares of Common Stock issuable upon the exercise of this Warrant, then, and thereafter successively upon each such issue, the aggregate exercise price then if effect shall be reduced to the lowest price obtained by multiplying such lowest price per share of Common Stock or Other Common Stock times the number of shares of Common Stock then issuable upon exercise of this Warrant; provided however that the adjustment in aggregate purchase price provided in this Section 7 shall not apply unless and until the Company shall issue and sell or otherwise distribute any Common Stock or Other Common Stock in excess of six hundred twenty-five thousand (625,000) shares following March 5, 1993. (a) In the case of the issuance of additional Common Stock or Other Common Stock for cash, in determining the price per share of such issuance, the consideration received by the Company therefor shall be deemed to be the cash proceeds received by the Company for such shares after deducting any commissions or other expenses paid or incurred by the Company for any underwriting of, or otherwise in connection with, the issuance of such shares. (b) In the case of the issuance (otherwise than upon conversion or exchange of obligations or shares of stock of the Company) of additional Common Stock or Other Common Stock for a consideration other than cash or a consideration a part of which shall be other than cash, in determining the price per share of such issuance, the amount of the consideration other than cash received by the Company for such Common Stock or Other Common Stock shall be deemed to be the value of such consideration as determined reasonably and in good faith by the board of directors of the Company. (c) In case of the issuance by the Company after the date hereof of (i) any security that is convertible into Common Stock or Other Common Stock, (ii) any rights or options to purchase Common Stock or Other Common Stock, the Company shall be deemed to have issued the maximum number of shares of Common Stock or Other Common Stock into which such convertible security may be converted, and the maximum number of shares of Common Stock or Other Common Stock deliverable on the exercise of such rights or options, for the consideration received by the Company for such convertible security or for such rights or options (less the amount of any underwriting discount), as the case may be, and after deducting therefrom any expenses or commissions incurred or paid by the Company for any underwriting of, or otherwise in connection with, the issuance of such convertible security or rights or options, plus (A) any consideration or adjustment payment to be received by the Company in connection with such conversion and (B) the minimum consideration to be received by the Company for the Common Stock or Other Common Stock issuable upon the exercise of such rights or options. No further adjustment of the aggregate exercise price shall be made as a result of the actual issuance of the Common Stock or Other Common Stock upon conversion of any convertible security or exercise of any rights or options referred to in this clause (c) or issued prior to the date hereof. 8. Closing of Books. The Company will at no time close its transfer books against the transfer of this Warrant or of any shares of Common Stock issued or issuable upon the exercise of this Warrant in any manner which interferes with the timely exercise of this Warrant. 9. No Voting or Other Rights. This Warrant shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. 10. Warrant Transferable. This Warrant and all rights and obligations hereunder are transferable, in whole, without charge to the Holder upon surrender of this Warrant with a properly executed assignment (in form reasonably acceptable to the Company) at the principal office of the Company. This Warrant is not transferable except pursuant to an effective registration statement under the Securities Act (as defined below) or in a transaction exempt from the registration requirements of the Securities Act and in compliance with any applicable state securities laws. 11. Warrants Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Holder at the office or agency of the Company referred to in Section 1 hereof, for new Warrants of like tenor representing in the aggregate the right to subscribe for and purchase the maximum number of shares of Common Stock which may be subscribed for and purchased hereunder (subject to reduction to reflect any partial exercise or exercises of this Warrant), each of such new Warrants to represent the right to subscribe for and purchase the number of shares of Common Stock purchasable upon exercise of this Warrant as shall be designated by the Holder at the time of such surrender. 12. Duration. The rights to purchase shares of Common Stock hereunder shall remain in existence until March 5, 1998, unless the same are exercised in full prior thereto, and thereafter the rights evidenced by this Warrant shall expire. 13. No Dilution or Impairment. The Company shall not undertake or participate in any action whatsoever for the purpose or having the result of avoiding or seeking to avoid the observance or performance of any of its obligations pursuant to this Warrant. 14. Registration Rights. As used in this Section 14, the term Board shall mean collectively the State of Wisconsin Investment Board, its transferees or assignees (including the Holder), and any assignee or transferee of Common Stock from the Board which the Board obtained upon exercise of this Warrant, other than those who received such Common Stock in a public offering or pursuant to Rule 144 promulgated under the Securities Act; provided however that the transferee or assignee of the Common Stock shall be the same as the transferee or assignee of this Warrant. 14.1 Demand Registrations. At any time within two (2) years following the exercise of its right to purchase the Company's Common Stock pursuant to the Warrant, the Board may demand registration under the Securities Act of 1933, as amended (the "Securities Act"), of all of the Common Stock issuable or which has been issued upon exercise of the Warrant, on Form S-1 or any similar long-form registration ("Long-Form Registrations") or on Form S-2 or S-3 or any similar short-form registration ("Short-Form Registrations"), if available under applicable rules of the SEC. The written request to be delivered by the Board to the Company pursuant to this Section 14.1 shall (i) specify the number of shares intended to be offered and sold by the Board, (ii) express the present intent of the Board to offer such shares for distribution, and (iii) describe the nature and method of the proposed offer and sale thereof. The registration requested pursuant to this Section 14.1 is referred to herein as "Demand Registration." (a) Number of Registrations. The Board will be entitled to demand two (2) Long-Form or Short-Form Registrations. A registration initiated as a Demand Registration shall include all shares of Common Stock issuable or which has been issued upon exercise of the Warrant then owned by the Board. A registration initiated as a Demand Registration may be withdrawn at any time at the request of the Board or the underwriters selected by the Board, but shall count as one of the two (2) Demand Registrations; provided that in any event, the Company will pay all registration expenses in connection with any registration initiated as the Demand Registration as provided in Section 14.5. (b) Priority on Demand Registrations. The Company will not include in the Demand Registration any securities which are not Common Stock owned by the Board, without the written consent of the Board. If the Demand Registration is an underwritten offering, and the managing underwriters advise the Company in writing that in their opinion the number of shares of Common Stock requested to be included exceeds the number of shares of Common Stock which can be sold in such offering, the Company will include in such registration, prior to the inclusion of any securities which are not shares of Common Stock owned by the Board, the number of shares of Common Stock owned by the Board requested to be included which in the opinion of such underwriters can be sold; and the balance of the shares of Common Stock which the Board requested to be included in such offering shall be withheld from sale for a period of time requested by the underwriters, but not to exceed one hundred twenty (120) days. (c) Restrictions on Demand Registration. The Company will not be obligated to effect a Demand Registration within one hundred twenty (120) days after the effective date of a registration in which the Board was given a participation in a registered offering pursuant to Section 14.2 hereof. The Company may postpone for up to ninety (90) days the filing or the effectiveness of a registration statement for a Demand Registration if the Company and the Board reasonably and in good faith agree that such Demand Registration might have an adverse effect on any proposal or plan by the Company to engage in any financing, acquisition of assets (other than in the ordinary course of business) or any corporate reorganization, merger, consolidation, tender offer or similar transaction; provided that in such event, the Board will be entitled to withdraw such request and that, if such request is withdrawn, such Demand Registration will not count as the one Demand Registration to which the Board is entitled. (d) Selection of Underwriters. The Board will have the right to select the investment banker(s) and manager(s) to administer the offering, subject to the Company's approval (which will not be unreasonably withheld) of such investment banker(s) and manager(s). 14.2 Participation in Registered Offerings. If the Company at any time or times proposes or is required to register any of its Common Stock or the equity securities for public sale in an underwritten public offering for cash (other than in connection with any incentive stock option, bonus or other employee benefit plan or arrangement) under the Securities Act or any applicable state securities law, it will each such time give written notice to the Board, of its intention to do so. Upon the written request of the board given thirty (30) business days after receipt of any such notice (which request shall state the intended method of disposition of such equity securities and shall state in reasonable detail, to the extent practicable, the net consideration, after all commissions and discounts which the prospective seller or sellers expect to receive upon such disposition), the Company shall use its best efforts to cause all such Common Stock requested (which request will not be for less than thirty percent (30%) of the number of shares of Common Stock purchasable or receivable upon exercise of the Warrant(s)) to be registered by the Board to be registered under the Securities Act and any applicable state securities laws (provided, that if the managing underwriter advises that less than all of the registered shares of equity securities should be offered for sale so as not to materially and adversely affect the price or salability of the offering being registered by the Company or the Board for a period not to exceed one hundred twenty (120) days, the Board will withhold from sale for the period of time and for such number of shares of Common Stock as the underwriter may specify; provided further that a pro rata number of shares owned by all other shareholders of the Company also shall be similarly withheld from sale), all to the extent requisite to permit the sale or other disposition (in accordance with the intended method of disposition thereof as aforesaid) by the prospective seller or sellers of the securities so registered. In the event an underwriter is involved with a registration initiated by the Company of the stock, and the Board requests to participate in the registration, the Board must commit to sell through the underwriter. The Company may, in its sole discretion, withdraw any registration contemplated by this Section 14.2 and abandon the proposed offering in which the Board had requested to participate without any further obligation to the Board with respect to such registration statement or offering; provided however that the Board shall be indemnified by the Company for any fees, costs and expense of and incidental to such registration, excluding the fees and disbursements of counsel acting solely on behalf of the Board. 14.3 Obligations of the Board. It shall be a condition precedent to the obligation of the Company to register any Common Stock pursuant to Sections 14.1 and 14.2 hereof that the Board shall (i) furnish to the Company such information regarding the Common Stock held by it and the intended method of disposition thereof and other information concerning the Board as the Company shall reasonably request and as shall be required in connection with the registration statement to be filed by the Company; (ii) agree to abide by such additional or customary terms affecting the proposed offering as reasonably may be requested by the managing underwriter of such offering, including a requirement, if applicable, to withhold (on a pro-rata basis) from the public market for a period of at least one hundred twenty (120) days after any such offering, any shares excluded from the offering at the instance of the underwriter as permitted under Sections 14.1 and 14.2 hereof; and (iii) agree in writing in form satisfactory to the Company to pay the underwriting discounts and commissions applicable to the Common Stock being sold by it. 14.4 Registration Proceedings. If and whenever the Company is required by the provisions of Sections 14.1 and 14.2 hereof to effect the registration of the Common Stock under the Securities Act, until the securities covered by such registration statement have been sold or for six (6) months after effectiveness, whichever is the shorter period of time, the Company shall: (a) Prepare and file with the SEC a registration statement with respect to such Common Stock and use its best efforts to cause such registration statement to become and remain effective; (b) Prepare and file with the SEC such amendments to such registration statement and supplements to the prospectus contained therein as may be necessary to keep such registration statement effective; (c) Furnish to the Board and to the underwriters of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such underwriters may reasonably request in order to facilitate the public offering of such securities; (d) Use its best efforts to register or qualify the securities covered by such registration statement under such state securities or "Blue Sky" laws of such jurisdictions as the Board may reasonably request within twenty (20) days prior to the original filing of such registration statement, except that the Company shall not for any purpose be required to qualify to do business as a foreign corporation in any jurisdiction wherein it is not so qualified, and except that the Company shall not be required to so register or qualify in more than forty (40) such jurisdictions if in the good faith judgment of the managing underwriter such additional registrations or qualifications would be unreasonably expensive or harmful to the consummation of the proposed offering; (e) Notify the Board, promptly after it shall receive notice thereof, of the time when such registration statement has become effective or a supplement to any prospectus forming a part of such registration statement has been filed; (f) Notify the Board promptly of any request by the SEC for the amending or supplementing of such registration statement or prospectus or for additional information; (g) Prepare and file with the SEC, promptly upon the request of the Board, any amendments or supplements to such registration statement or prospectus which, in the opinion of counsel for the Board and counsel for the underwriter or manager of the offering, are required under the Securities Act or the rules and regulations thereunder in connection with the distribution of Common Stock by the Board; (h) Prepare and promptly file with the SEC and promptly notify the Board of the filing of such amendment or supplement to such registration statement or prospectus as may be necessary to correct any statements or omissions if, at the time when a prospectus relating to such securities is required to be delivered under the Securities Act, any event shall have occurred as the result of which any such prospectus or any other prospectus as then in effect would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (i) In case the Board or any underwriter for the Board is required to deliver a prospectus at a time when the prospectus then in circulation is not in compliance with the Securities Act, the Company will prepare and file such supplements or amendments to such registration statement and such prospectus or prospectuses as may be necessary to permit compliance with the requirements of the Securities Act; (j) Advise the Board, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for that purpose and promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued; (k) Not file any amendment or supplement to such registration statement or prospectus to which a majority in interest of the Board shall reasonably have objected on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the Securities Act or the rules and regulations thereunder, after having been furnished with a copy thereof at least two (2) business days prior to the filing thereof; and (l) At the request of the Board (i) use its best efforts to obtain and furnish on the effective date of the registration statement or, if such registration includes an underwritten public offering, at the closing provided for in the underwriting agreement, an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, addressed to the underwriters, if any, and to the Board, which shall contain such opinions as are customary in an underwritten public offering, or, if the offering is not underwritten, shall state that such registration statement has become effective under the Securities Act and that (or substantially to the effect that): (a) to the best of such counsel's knowledge, no stop order suspending the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act; (b) the registration statement, related prospectus and each amendment or supplement thereto comply as to form in all material respects with the requirements of the Securities Act and applicable rules and regulations of the SEC thereunder (except that such counsel need express no opinion as to financial statements, schedules or other financial or statistical data contained therein); (c) such counsel has no reason to believe that either the registration statement or the prospectus or any amendment or supplement thereto (other than financial statements and schedules or financial and statistical data, as to which such counsel need not comment) contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (d) the description in the registration statement or prospectus or any amendment or supplement thereto of all legal and governmental matters and all contracts and other legal documents or instruments described therein are accurate in all material respects; and (e) such counsel does not know of any legal or governmental proceedings, pending or threatened, required to be described in the registration statement or prospectus or any amendment or supplement thereto which are not described as required, nor of any contracts or documents or instruments of the character required to be described in the registration statement or prospectus or amendment or supplement thereto or to be filed as exhibits to the registration statement, which are not described and filed as required; and (ii) use its best efforts to obtain letters dated on such effective date, and such closing date, if any, from the independent certified public accountants of the Company, addressed to the underwriters, if any, and to the Board, stating that they are independent certified public accountants within the meaning of the Securities Act and dealing with such matters as the underwriters may request, or, if the offering is not underwritten, stating that in the opinion of such accountants, the financial statements and other financial data pertaining to the Company included in the registration statement or the prospectus or any amendment or supplement thereto comply in all material respects with the applicable accounting requirements of the Securities Act; such opinion of counsel shall additionally cover such legal matters with respect to the registration and with respect to which such opinion is being given as the Board may reasonably request; such letter from the independent certified public accountants shall additionally cover such other financial matters, including information as to the period ending not more than five (5) business days prior to the date of such letter, with respect to the registration statement and prospectus, as the Board may reasonably request. 14.5 Expenses. With respect to each inclusion of Common Stock of the Board in a registration statement pursuant to Sections 14.1 and 14.2 hereof, all registration expenses, fees, costs and expenses of and incidental to such registration, inclusion and public offering in connection therewith shall be borne by the Company (excluding the fees and disbursements of advisors retained by the Board and counsel acting solely on behalf of the Board); provided, however, that the Board shall bear the Board's pro rata share of the underwriting discount and commissions. The fees, costs and expenses of registration to be borne by the Company shall include, without limitation, all registration, filing and NASD fees, printing expenses, fees and disbursements of counsel and accountants for the Company (including the cost of any special audit requested in order to effect such registration), fees and disbursements of counsel for the underwriter or underwriters of such securities (if the Company and/or selling security holders are required to bear such fees and disbursements), all legal fees and disbursements and other expenses of complying with state securities or "Blue Sky" laws of any jurisdiction in which the securities to be offered are to be registered or qualified, and the premiums and other costs of policies of insurance against liability arising out of such public offering. 14.6 Indemnification of the Board. Subject to the conditions set forth below, in connection with any registration of securities pursuant to Sections 14.1 or 14.2 hereof, the Company agrees to indemnify and hold harmless the Board and each person, if any, who controls the Board (and its respective officers, directors and agents), within the meaning of Section 15 of the Securities Act, as follows: (a) Against any and all loss, claim, damage and expense whatsoever arising out of or based upon (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending any litigation, commenced or threatened, or any claim whatsoever based upon) any untrue or alleged untrue statement of a material fact contained in any preliminary prospectus (if used prior to the effective date of the registration statement), the registration statement or the final prospectus (as from time to time amended and supplemented if the Company shall have filed with the SEC any amendment thereof or amendment thereto) if used within the period during which the Company is required to keep the registration statement or prospectus current, or in any application or other document executed by the Company or based upon written information furnished by the Company filed in any jurisdiction in order to qualify the Company's securities under the securities laws thereof; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or any other violation of applicable federal or state statutory or regulatory requirements or limitations relating to action or inaction by the Company in the course of preparing, filing, or implementing such registered offering; provided, however, that the indemnity agreement contained in this Section 14.6(a) shall not apply to any loss, claim, damage, liability or action arising out of or based upon any untrue or alleged untrue statement or omission made in reliance upon and in conformity with any information furnished in writing to the Company by or on behalf of the Board expressly for use in connection therewith; (b) Subject to the proviso contained in Section 14.6(a) above, against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any such litigation or claim) if such settlement is effected with the written consent of the Company and no indemnity shall inure to the benefit of the Board or any controlling person thereof if the person asserting the claim failed to receive a copy of the final prospectus at or prior to the written confirmation of the sale of shares of Common Stock to such person if the untrue statement or omission has been corrected in such final prospectus and the failure to receive such final prospectus is not a necessary element of such person's claim; (c) In no case shall the Company be liable under this indemnity agreement with respect to any claim made against the Board or any such controlling person (or its respective officers, directors and agents) unless the Company shall be notified, by letter or by telegram confirmed by letter, of any claim made or action commenced against such persons, reasonably promptly (but in any event within twenty (20) days of receipt of such claim or, in the event that any summons or other service of process requiring a responsive pleading within thirty (30) days or less time, within ten (10) days after receipt of such summons or other process) after such person shall have received notice of such claim or been served with the summons or other legal process giving information as to the nature and basis of the claim, but failure to so notify the Company shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The Company shall be entitled to participate at its own expense in the defense of any suit brought to enforce any such claim, but if the Company elects to assume the defense, such defense shall be conducted by counsel chosen by it, provided that such counsel is reasonably satisfactory to the Board. In the event the Company elects to assume the defense of any such suit and retain such counsel, the Board shall, after the date the Board is notified of such election, bear the fees and expenses of any counsel thereafter retained by the Board as well as any other expenses thereafter incurred by the Board in connection with the defense thereof; provided, however, that the Company shall bear the fees and expenses of any such separate counsel retained by the Board if the counsel representing the Company has a conflict of interest (which is not waived) with the Board which would prohibit such counsel from representing the Board. 14.7 Indemnification of Company. The Board in any registered offering pursuant to Sections 14.1 or 14.2 above agrees to indemnify and hold harmless the Company and each of the officers and directors and agents of it and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any and all such losses, liabilities, claims, damages and expenses as are indemnified against by the Company under Section 14.6 hereof; provided, however, that such indemnification shall be limited to statements or omissions, if any, made (or in settlement of any litigation effected with the written consent of the Board alleged to have been made) in any preliminary prospectus, the registration statement or prospectus or any amendment or supplement thereof or any application or other document in reliance upon, and in conformity with, written information furnished in respect of the Board, by or on behalf of the Board expressly for use in any preliminary prospectus, the registration statement or prospectus or any amendment or supplement thereof or in any such application or other document. In case any action shall be brought against the Company, or any other person so indemnified based on any preliminary prospectus, the registration statement or prospectus or any amendment or supplement thereof or any such application or other documents, in respect of which indemnity may be sought against the Board, it shall have the rights and duties given to the Company, and each other person so indemnified shall have the rights and duties given to the Board, by the provisions of Section 14.6(c) hereof. The Company agrees to notify the Board promptly after the assertion of any claim against the Company in connection with the sale of securities covered by this Warrant. 14.8 Future Registration Rights. The Company may agree with its shareholders other than the Board to allow their participation in any registered offering which may be requested pursuant to Section 14.1 hereof, provided all such rights of participation under Section 14.1 hereof shall be subordinated to the rights of the Board herein, in a manner reasonably satisfactory to counsel for the Board. 15. Descriptive Headings and Governing Law. The descriptive headings of the several Sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant is being delivered and is intended to be performed in the State of Wisconsin and shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the internal laws of such State (regardless of such State's conflict of law provisions or principles). IN WITNESS WHEREOF, Gehl Company has caused this Warrant to be signed by its duly authorized officers this 4th day of June, 1997. GEHL COMPANY By: /s/ Kenneth P. Hahn Title: Vice President Attest: /s/ Michael J. Mulcahy Title: Secretary EX-4 6 THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR LAWS. COMMON STOCK PURCHASE WARRANT To Subscribe for and Purchase Common Stock of GEHL COMPANY WARRANT NO. 4 This certifies that, for value received, ROCK CREEK PARTNERS LTD., or its transferee or assignee (the "Holder" which term includes any transferee and assignee), is entitled to subscribe for and purchase from GEHL COMPANY, a Wisconsin corporation (the "Company"), at the aggregate exercise price of $560,000 (subject to the adjustment provided in Section 7 hereof) (or, if this Common Stock Purchase Warrant is issued in substitution or exchange for a predecessor common stock purchase warrant and represents rights to purchase less than the maximum number or percentage of shares of Common Stock as hereinafter defined which were purchasable upon exercise of such predecessor common stock purchase warrant, a proportionately smaller amount) at any time or times after the date hereof and until the date specified in Section 12 hereof, eighty thousand (80,000) shares of fully paid and nonassessable (except as otherwise provided in Section 180.0622 of the Wisconsin Business Corporation Law) shares of the Company's common stock, $0.10 par value per share (the "Common Stock"), provided, however, that this Common Stock Purchase Warrant shall be exercisable for a proportionately fewer or greater number of shares of Common Stock if the Company combines by reverse stock split or otherwise or subdivides by stock split, stock dividend or otherwise its outstanding Common Stock. For the purposes of this Common Stock Purchase Warrant, the term "Other Common Stock" shall mean other classes of equity securities not limited to a fixed sum or percentage of a fixed sum in respect of participation in dividends or distribution of assets in voluntary or involuntary liquidation, dissolution or winding-up. The predecessor to this Common Stock Purchase Warrant was originally issued to the State of Wisconsin Investment Board (the "Board") pursuant to the terms of the Second Amended and Restated Credit Agreement, dated as of March 5, 1993 by and between the Company and the Board (the "Credit Agreement"), in connection with the separate and individual purchases from the Company by the Board of the Company's Senior Note, Junior Note and Make-Whole Note (all as defined in the Credit Agreement) (together with any note or notes issued in substitution or exchange therefor). This Common Stock Purchase Warrant (and its predecessor) and all Common Stock Purchase Warrants issued in substitution or exchange herefor are herein individually called a "Warrant" and collectively called the "Warrants." This Warrant is subject to the following provisions, terms and conditions: 1. Exercise; Issuance of Certificates; Payment for Shares. The rights represented by this Warrant may be exercised by the Holder, in whole or in part and at one or more times by the surrender of this Warrant (properly endorsed if required) at the principal office of the Company (or such other office or agency of the Company as the Company may designate by written notice to the Holder) and upon payment to the Company by wire transfer, certified check or bank draft of the purchase price for the shares of Common Stock purchasable hereunder and upon compliance with any registration requirements or exemptions therefrom under the Securities Act (as defined below) and applicable state securities laws. The Company agrees that the shares so purchased shall and will be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. Certificates for the shares of Common Stock so purchased shall be delivered to the Holder within a reasonable time, not exceeding five (5) days, after the rights represented by this Warrant shall have been so exercised, and, unless this Warrant has expired, a new Warrant appropriately providing for the purchase of Common Stock with respect to which this Warrant shall not then have been exercised and stating the purchase price therefor shall also be delivered to the Holder within such time. 2. Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all shares which may be issued upon the exercise of the rights represented by this Warrant and the payment of the purchase price hereunder will, upon issuance, be fully paid and nonassessable (except as otherwise provided by Section 180.0622 of the Wisconsin Business Corporation Law) and free from all taxes, liens and charges with respect to the issue thereof. Without limiting the generality of the foregoing, the Company covenants and agrees that it will from time to time take all such action as may be requisite to assure that the par value per share of the Common Stock is at all times equal to or less than the then effective purchase price per share of the Common Stock issuable upon exercise of this Warrant. The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. The Company will take all such action as may be necessary to assure that such shares of Common Stock may be so issued without violation of any applicable law or regulation (except for any such violation that may be a result of the Holder's failure to register the shares of Common Stock under the Securities Act as hereinafter defined and any applicable state securities law), or of any requirements of any domestic securities exchange upon which the Common Stock of the Company may be listed. 3. [Reserved] 4. Record Date. In case the Company shall fix a record date or otherwise make a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution payable in Common Stock or Other Common Stock, then such record date shall be deemed to be the date of the issue of the shares of Common Stock or Other Common Stock deemed to have been issued upon the declaration of such dividend or the making of such other distribution. 5. Reorganization, Reclassification, Consolidation, Merger or Sale. Any capital reorganization, reclassification, consolidation, merger or sale of all or substantially all of the Company's assets to another person, entity, firm or partnership which is effected in such a way that holders of Common Stock or Other Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock or Other Common Stock is referred to herein as an "Organic Change." Prior to the consummation of any Organic Change, the Company will make appropriate provision (in form and substance satisfactory to the Holder) to insure that the Holder will thereafter have the right to purchase and receive, in lieu of or in addition to the Common Stock immediately theretofore purchasable and receivable upon the exercise of this Warrant, such shares of stock, securities or assets as the Holder would have received in connection with such Organic Change if the Holder had exercised this Warrant. The Company will not effect any such reorganization, reclassification, consolidation, merger or sale unless, prior to the consummation thereof, the successor corporation (if other than the Company) resulting from such Organic Change assumes by written instrument (in form reasonably satisfactory to the Holder) the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to acquire. 6. Liquidating Dividends. If the Company declares or pays a dividend (other than a stock dividend payable in shares of Common Stock) upon the Common Stock payable otherwise than in cash out of earnings or earned surplus, determined in accordance with generally accepted accounting principles, consistently applied (a "Liquidating Dividend"), then the Company shall provide written notice of such declaration or payment of the Liquidating Dividend at least fifteen (15) days prior to the date proposed for the payment thereof. Said notice shall specify (i) the proposed date of payment of the Liquidating Dividend and the amount per share of Common Stock thereof. The Company furthermore shall cooperate with the Holder to effect the exercise of this Warrant should the Holder desire to so exercise in order to enable the Holder to participate in the Liquidating Dividend. 7. Adjustment in Aggregate Exercise Price. If the Company while this Warrant is outstanding shall issue and sell or otherwise distribute any Common Stock or Other Common Stock (other than a distribution to the existing holders of Common Stock or Other Common Stock) at a price per share which would be less than the aggregate exercise price of this Warrant divided by the number of shares of Common Stock issuable upon the exercise of this Warrant, then, and thereafter successively upon each such issue, the aggregate exercise price then if effect shall be reduced to the lowest price obtained by multiplying such lowest price per share of Common Stock or Other Common Stock times the number of shares of Common Stock then issuable upon exercise of this Warrant; provided however that the adjustment in aggregate purchase price provided in this Section 7 shall not apply unless and until the Company shall issue and sell or otherwise distribute any Common Stock or Other Common Stock in excess of six hundred twenty-five thousand (625,000) shares following March 5, 1993. (a) In the case of the issuance of additional Common Stock or Other Common Stock for cash, in determining the price per share of such issuance, the consideration received by the Company therefor shall be deemed to be the cash proceeds received by the Company for such shares after deducting any commissions or other expenses paid or incurred by the Company for any underwriting of, or otherwise in connection with, the issuance of such shares. (b) In the case of the issuance (otherwise than upon conversion or exchange of obligations or shares of stock of the Company) of additional Common Stock or Other Common Stock for a consideration other than cash or a consideration a part of which shall be other than cash, in determining the price per share of such issuance, the amount of the consideration other than cash received by the Company for such Common Stock or Other Common Stock shall be deemed to be the value of such consideration as determined reasonably and in good faith by the board of directors of the Company. (c) In case of the issuance by the Company after the date hereof of (i) any security that is convertible into Common Stock or Other Common Stock, (ii) any rights or options to purchase Common Stock or Other Common Stock, the Company shall be deemed to have issued the maximum number of shares of Common Stock or Other Common Stock into which such convertible security may be converted, and the maximum number of shares of Common Stock or Other Common Stock deliverable on the exercise of such rights or options, for the consideration received by the Company for such convertible security or for such rights or options (less the amount of any underwriting discount), as the case may be, and after deducting therefrom any expenses or commissions incurred or paid by the Company for any underwriting of, or otherwise in connection with, the issuance of such convertible security or rights or options, plus (A) any consideration or adjustment payment to be received by the Company in connection with such conversion and (B) the minimum consideration to be received by the Company for the Common Stock or Other Common Stock issuable upon the exercise of such rights or options. No further adjustment of the aggregate exercise price shall be made as a result of the actual issuance of the Common Stock or Other Common Stock upon conversion of any convertible security or exercise of any rights or options referred to in this clause (c) or issued prior to the date hereof. 8. Closing of Books. The Company will at no time close its transfer books against the transfer of this Warrant or of any shares of Common Stock issued or issuable upon the exercise of this Warrant in any manner which interferes with the timely exercise of this Warrant. 9. No Voting or Other Rights. This Warrant shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. 10. Warrant Transferable. This Warrant and all rights and obligations hereunder are transferable, in whole, without charge to the Holder upon surrender of this Warrant with a properly executed assignment (in form reasonably acceptable to the Company) at the principal office of the Company. This Warrant is not transferable except pursuant to an effective registration statement under the Securities Act (as defined below) or in a transaction exempt from the registration requirements of the Securities Act and in compliance with any applicable state securities laws. 11. Warrants Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Holder at the office or agency of the Company referred to in Section 1 hereof, for new Warrants of like tenor representing in the aggregate the right to subscribe for and purchase the maximum number of shares of Common Stock which may be subscribed for and purchased hereunder (subject to reduction to reflect any partial exercise or exercises of this Warrant), each of such new Warrants to represent the right to subscribe for and purchase the number of shares of Common Stock purchasable upon exercise of this Warrant as shall be designated by the Holder at the time of such surrender. 12. Duration. The rights to purchase shares of Common Stock hereunder shall remain in existence until March 5, 1998, unless the same are exercised in full prior thereto, and thereafter the rights evidenced by this Warrant shall expire. 13. No Dilution or Impairment. The Company shall not undertake or participate in any action whatsoever for the purpose or having the result of avoiding or seeking to avoid the observance or performance of any of its obligations pursuant to this Warrant. 14. Registration Rights. As used in this Section 14, the term Board shall mean collectively the State of Wisconsin Investment Board, its transferees or assignees (including the Holder), and any assignee or transferee of Common Stock from the Board which the Board obtained upon exercise of this Warrant, other than those who received such Common Stock in a public offering or pursuant to Rule 144 promulgated under the Securities Act; provided however that the transferee or assignee of the Common Stock shall be the same as the transferee or assignee of this Warrant. 14.1 Demand Registrations. At any time within two (2) years following the exercise of its right to purchase the Company's Common Stock pursuant to the Warrant, the Board may demand registration under the Securities Act of 1933, as amended (the "Securities Act"), of all of the Common Stock issuable or which has been issued upon exercise of the Warrant, on Form S-1 or any similar long-form registration ("Long-Form Registrations") or on Form S-2 or S-3 or any similar short-form registration ("Short-Form Registrations"), if available under applicable rules of the SEC. The written request to be delivered by the Board to the Company pursuant to this Section 14.1 shall (i) specify the number of shares intended to be offered and sold by the Board, (ii) express the present intent of the Board to offer such shares for distribution, and (iii) describe the nature and method of the proposed offer and sale thereof. The registration requested pursuant to this Section 14.1 is referred to herein as "Demand Registration." (a) Number of Registrations. The Board will be entitled to demand two (2) Long-Form or Short-Form Registrations. A registration initiated as a Demand Registration shall include all shares of Common Stock issuable or which has been issued upon exercise of the Warrant then owned by the Board. A registration initiated as a Demand Registration may be withdrawn at any time at the request of the Board or the underwriters selected by the Board, but shall count as one of the two (2) Demand Registrations; provided that in any event, the Company will pay all registration expenses in connection with any registration initiated as the Demand Registration as provided in Section 14.5. (b) Priority on Demand Registrations. The Company will not include in the Demand Registration any securities which are not Common Stock owned by the Board, without the written consent of the Board. If the Demand Registration is an underwritten offering, and the managing underwriters advise the Company in writing that in their opinion the number of shares of Common Stock requested to be included exceeds the number of shares of Common Stock which can be sold in such offering, the Company will include in such registration, prior to the inclusion of any securities which are not shares of Common Stock owned by the Board, the number of shares of Common Stock owned by the Board requested to be included which in the opinion of such underwriters can be sold; and the balance of the shares of Common Stock which the Board requested to be included in such offering shall be withheld from sale for a period of time requested by the underwriters, but not to exceed one hundred twenty (120) days. (c) Restrictions on Demand Registration. The Company will not be obligated to effect a Demand Registration within one hundred twenty (120) days after the effective date of a registration in which the Board was given a participation in a registered offering pursuant to Section 14.2 hereof. The Company may postpone for up to ninety (90) days the filing or the effectiveness of a registration statement for a Demand Registration if the Company and the Board reasonably and in good faith agree that such Demand Registration might have an adverse effect on any proposal or plan by the Company to engage in any financing, acquisition of assets (other than in the ordinary course of business) or any corporate reorganization, merger, consolidation, tender offer or similar transaction; provided that in such event, the Board will be entitled to withdraw such request and that, if such request is withdrawn, such Demand Registration will not count as the one Demand Registration to which the Board is entitled. (d) Selection of Underwriters. The Board will have the right to select the investment banker(s) and manager(s) to administer the offering, subject to the Company's approval (which will not be unreasonably withheld) of such investment banker(s) and manager(s). 14.2 Participation in Registered Offerings. If the Company at any time or times proposes or is required to register any of its Common Stock or the equity securities for public sale in an underwritten public offering for cash (other than in connection with any incentive stock option, bonus or other employee benefit plan or arrangement) under the Securities Act or any applicable state securities law, it will each such time give written notice to the Board, of its intention to do so. Upon the written request of the board given thirty (30) business days after receipt of any such notice (which request shall state the intended method of disposition of such equity securities and shall state in reasonable detail, to the extent practicable, the net consideration, after all commissions and discounts which the prospective seller or sellers expect to receive upon such disposition), the Company shall use its best efforts to cause all such Common Stock requested (which request will not be for less than thirty percent (30%) of the number of shares of Common Stock purchasable or receivable upon exercise of the Warrant(s)) to be registered by the Board to be registered under the Securities Act and any applicable state securities laws (provided, that if the managing underwriter advises that less than all of the registered shares of equity securities should be offered for sale so as not to materially and adversely affect the price or salability of the offering being registered by the Company or the Board for a period not to exceed one hundred twenty (120) days, the Board will withhold from sale for the period of time and for such number of shares of Common Stock as the underwriter may specify; provided further that a pro rata number of shares owned by all other shareholders of the Company also shall be similarly withheld from sale), all to the extent requisite to permit the sale or other disposition (in accordance with the intended method of disposition thereof as aforesaid) by the prospective seller or sellers of the securities so registered. In the event an underwriter is involved with a registration initiated by the Company of the stock, and the Board requests to participate in the registration, the Board must commit to sell through the underwriter. The Company may, in its sole discretion, withdraw any registration contemplated by this Section 14.2 and abandon the proposed offering in which the Board had requested to participate without any further obligation to the Board with respect to such registration statement or offering; provided however that the Board shall be indemnified by the Company for any fees, costs and expense of and incidental to such registration, excluding the fees and disbursements of counsel acting solely on behalf of the Board. 14.3 Obligations of the Board. It shall be a condition precedent to the obligation of the Company to register any Common Stock pursuant to Sections 14.1 and 14.2 hereof that the Board shall (i) furnish to the Company such information regarding the Common Stock held by it and the intended method of disposition thereof and other information concerning the Board as the Company shall reasonably request and as shall be required in connection with the registration statement to be filed by the Company; (ii) agree to abide by such additional or customary terms affecting the proposed offering as reasonably may be requested by the managing underwriter of such offering, including a requirement, if applicable, to withhold (on a pro-rata basis) from the public market for a period of at least one hundred twenty (120) days after any such offering, any shares excluded from the offering at the instance of the underwriter as permitted under Sections 14.1 and 14.2 hereof; and (iii) agree in writing in form satisfactory to the Company to pay the underwriting discounts and commissions applicable to the Common Stock being sold by it. 14.4 Registration Proceedings. If and whenever the Company is required by the provisions of Sections 14.1 and 14.2 hereof to effect the registration of the Common Stock under the Securities Act, until the securities covered by such registration statement have been sold or for six (6) months after effectiveness, whichever is the shorter period of time, the Company shall: (a) Prepare and file with the SEC a registration statement with respect to such Common Stock and use its best efforts to cause such registration statement to become and remain effective; (b) Prepare and file with the SEC such amendments to such registration statement and supplements to the prospectus contained therein as may be necessary to keep such registration statement effective; (c) Furnish to the Board and to the underwriters of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such underwriters may reasonably request in order to facilitate the public offering of such securities; (d) Use its best efforts to register or qualify the securities covered by such registration statement under such state securities or "Blue Sky" laws of such jurisdictions as the Board may reasonably request within twenty (20) days prior to the original filing of such registration statement, except that the Company shall not for any purpose be required to qualify to do business as a foreign corporation in any jurisdiction wherein it is not so qualified, and except that the Company shall not be required to so register or qualify in more than forty (40) such jurisdictions if in the good faith judgment of the managing underwriter such additional registrations or qualifications would be unreasonably expensive or harmful to the consummation of the proposed offering; (e) Notify the Board, promptly after it shall receive notice thereof, of the time when such registration statement has become effective or a supplement to any prospectus forming a part of such registration statement has been filed; (f) Notify the Board promptly of any request by the SEC for the amending or supplementing of such registration statement or prospectus or for additional information; (g) Prepare and file with the SEC, promptly upon the request of the Board, any amendments or supplements to such registration statement or prospectus which, in the opinion of counsel for the Board and counsel for the underwriter or manager of the offering, are required under the Securities Act or the rules and regulations thereunder in connection with the distribution of Common Stock by the Board; (h) Prepare and promptly file with the SEC and promptly notify the Board of the filing of such amendment or supplement to such registration statement or prospectus as may be necessary to correct any statements or omissions if, at the time when a prospectus relating to such securities is required to be delivered under the Securities Act, any event shall have occurred as the result of which any such prospectus or any other prospectus as then in effect would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (i) In case the Board or any underwriter for the Board is required to deliver a prospectus at a time when the prospectus then in circulation is not in compliance with the Securities Act, the Company will prepare and file such supplements or amendments to such registration statement and such prospectus or prospectuses as may be necessary to permit compliance with the requirements of the Securities Act; (j) Advise the Board, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for that purpose and promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued; (k) Not file any amendment or supplement to such registration statement or prospectus to which a majority in interest of the Board shall reasonably have objected on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the Securities Act or the rules and regulations thereunder, after having been furnished with a copy thereof at least two (2) business days prior to the filing thereof; and (l) At the request of the Board (i) use its best efforts to obtain and furnish on the effective date of the registration statement or, if such registration includes an underwritten public offering, at the closing provided for in the underwriting agreement, an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, addressed to the underwriters, if any, and to the Board, which shall contain such opinions as are customary in an underwritten public offering, or, if the offering is not underwritten, shall state that such registration statement has become effective under the Securities Act and that (or substantially to the effect that): (a) to the best of such counsel's knowledge, no stop order suspending the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act; (b) the registration statement, related prospectus and each amendment or supplement thereto comply as to form in all material respects with the requirements of the Securities Act and applicable rules and regulations of the SEC thereunder (except that such counsel need express no opinion as to financial statements, schedules or other financial or statistical data contained therein); (c) such counsel has no reason to believe that either the registration statement or the prospectus or any amendment or supplement thereto (other than financial statements and schedules or financial and statistical data, as to which such counsel need not comment) contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (d) the description in the registration statement or prospectus or any amendment or supplement thereto of all legal and governmental matters and all contracts and other legal documents or instruments described therein are accurate in all material respects; and (e) such counsel does not know of any legal or governmental proceedings, pending or threatened, required to be described in the registration statement or prospectus or any amendment or supplement thereto which are not described as required, nor of any contracts or documents or instruments of the character required to be described in the registration statement or prospectus or amendment or supplement thereto or to be filed as exhibits to the registration statement, which are not described and filed as required; and (ii) use its best efforts to obtain letters dated on such effective date, and such closing date, if any, from the independent certified public accountants of the Company, addressed to the underwriters, if any, and to the Board, stating that they are independent certified public accountants within the meaning of the Securities Act and dealing with such matters as the underwriters may request, or, if the offering is not underwritten, stating that in the opinion of such accountants, the financial statements and other financial data pertaining to the Company included in the registration statement or the prospectus or any amendment or supplement thereto comply in all material respects with the applicable accounting requirements of the Securities Act; such opinion of counsel shall additionally cover such legal matters with respect to the registration and with respect to which such opinion is being given as the Board may reasonably request; such letter from the independent certified public accountants shall additionally cover such other financial matters, including information as to the period ending not more than five (5) business days prior to the date of such letter, with respect to the registration statement and prospectus, as the Board may reasonably request. 14.5 Expenses. With respect to each inclusion of Common Stock of the Board in a registration statement pursuant to Sections 14.1 and 14.2 hereof, all registration expenses, fees, costs and expenses of and incidental to such registration, inclusion and public offering in connection therewith shall be borne by the Company (excluding the fees and disbursements of advisors retained by the Board and counsel acting solely on behalf of the Board); provided, however, that the Board shall bear the Board's pro rata share of the underwriting discount and commissions. The fees, costs and expenses of registration to be borne by the Company shall include, without limitation, all registration, filing and NASD fees, printing expenses, fees and disbursements of counsel and accountants for the Company (including the cost of any special audit requested in order to effect such registration), fees and disbursements of counsel for the underwriter or underwriters of such securities (if the Company and/or selling security holders are required to bear such fees and disbursements), all legal fees and disbursements and other expenses of complying with state securities or "Blue Sky" laws of any jurisdiction in which the securities to be offered are to be registered or qualified, and the premiums and other costs of policies of insurance against liability arising out of such public offering. 14.6 Indemnification of the Board. Subject to the conditions set forth below, in connection with any registration of securities pursuant to Sections 14.1 or 14.2 hereof, the Company agrees to indemnify and hold harmless the Board and each person, if any, who controls the Board (and its respective officers, directors and agents), within the meaning of Section 15 of the Securities Act, as follows: (a) Against any and all loss, claim, damage and expense whatsoever arising out of or based upon (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending any litigation, commenced or threatened, or any claim whatsoever based upon) any untrue or alleged untrue statement of a material fact contained in any preliminary prospectus (if used prior to the effective date of the registration statement), the registration statement or the final prospectus (as from time to time amended and supplemented if the Company shall have filed with the SEC any amendment thereof or amendment thereto) if used within the period during which the Company is required to keep the registration statement or prospectus current, or in any application or other document executed by the Company or based upon written information furnished by the Company filed in any jurisdiction in order to qualify the Company's securities under the securities laws thereof; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or any other violation of applicable federal or state statutory or regulatory requirements or limitations relating to action or inaction by the Company in the course of preparing, filing, or implementing such registered offering; provided, however, that the indemnity agreement contained in this Section 14.6(a) shall not apply to any loss, claim, damage, liability or action arising out of or based upon any untrue or alleged untrue statement or omission made in reliance upon and in conformity with any information furnished in writing to the Company by or on behalf of the Board expressly for use in connection therewith; (b) Subject to the proviso contained in Section 14.6(a) above, against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any such litigation or claim) if such settlement is effected with the written consent of the Company and no indemnity shall inure to the benefit of the Board or any controlling person thereof if the person asserting the claim failed to receive a copy of the final prospectus at or prior to the written confirmation of the sale of shares of Common Stock to such person if the untrue statement or omission has been corrected in such final prospectus and the failure to receive such final prospectus is not a necessary element of such person's claim; (c) In no case shall the Company be liable under this indemnity agreement with respect to any claim made against the Board or any such controlling person (or its respective officers, directors and agents) unless the Company shall be notified, by letter or by telegram confirmed by letter, of any claim made or action commenced against such persons, reasonably promptly (but in any event within twenty (20) days of receipt of such claim or, in the event that any summons or other service of process requiring a responsive pleading within thirty (30) days or less time, within ten (10) days after receipt of such summons or other process) after such person shall have received notice of such claim or been served with the summons or other legal process giving information as to the nature and basis of the claim, but failure to so notify the Company shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The Company shall be entitled to participate at its own expense in the defense of any suit brought to enforce any such claim, but if the Company elects to assume the defense, such defense shall be conducted by counsel chosen by it, provided that such counsel is reasonably satisfactory to the Board. In the event the Company elects to assume the defense of any such suit and retain such counsel, the Board shall, after the date the Board is notified of such election, bear the fees and expenses of any counsel thereafter retained by the Board as well as any other expenses thereafter incurred by the Board in connection with the defense thereof; provided, however, that the Company shall bear the fees and expenses of any such separate counsel retained by the Board if the counsel representing the Company has a conflict of interest (which is not waived) with the Board which would prohibit such counsel from representing the Board. 14.7 Indemnification of Company. The Board in any registered offering pursuant to Sections 14.1 or 14.2 above agrees to indemnify and hold harmless the Company and each of the officers and directors and agents of it and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any and all such losses, liabilities, claims, damages and expenses as are indemnified against by the Company under Section 14.6 hereof; provided, however, that such indemnification shall be limited to statements or omissions, if any, made (or in settlement of any litigation effected with the written consent of the Board alleged to have been made) in any preliminary prospectus, the registration statement or prospectus or any amendment or supplement thereof or any application or other document in reliance upon, and in conformity with, written information furnished in respect of the Board, by or on behalf of the Board expressly for use in any preliminary prospectus, the registration statement or prospectus or any amendment or supplement thereof or in any such application or other document. In case any action shall be brought against the Company, or any other person so indemnified based on any preliminary prospectus, the registration statement or prospectus or any amendment or supplement thereof or any such application or other documents, in respect of which indemnity may be sought against the Board, it shall have the rights and duties given to the Company, and each other person so indemnified shall have the rights and duties given to the Board, by the provisions of Section 14.6(c) hereof. The Company agrees to notify the Board promptly after the assertion of any claim against the Company in connection with the sale of securities covered by this Warrant. 14.8 Future Registration Rights. The Company may agree with its shareholders other than the Board to allow their participation in any registered offering which may be requested pursuant to Section 14.1 hereof, provided all such rights of participation under Section 14.1 hereof shall be subordinated to the rights of the Board herein, in a manner reasonably satisfactory to counsel for the Board. 15. Descriptive Headings and Governing Law. The descriptive headings of the several Sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant is being delivered and is intended to be performed in the State of Wisconsin and shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the internal laws of such State (regardless of such State's conflict of law provisions or principles). IN WITNESS WHEREOF, Gehl Company has caused this Warrant to be signed by its duly authorized officers this 4th day of June, 1997. GEHL COMPANY By: /s/ Kenneth P. Hahn Title: Vice President Attest: /s/ Michael J. Mulcahy Title: Secretary EX-10 7 W.D. GEHL/GEHL EMPLOYMENT AGREEMENT INDEX SECTION 1. EMPLOYMENT. . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 2. TERM OF EMPLOYMENT. . . . . . . . . . . . . . . . . . . . . 2 SECTION 3. COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 4. TERMINATION OF EMPLOYMENT. . . . . . . . . . . . . . . . . . 2 SECTION 5. CHANGE IN CONTROL. . . . . . . . . . . . . . . . . . . . . . 4 SECTION 6. BENEFITS. . . . . . . . . . . . . . . . . . . . . . . . . . 8 (i) Retirement/Death Benefit. . . . . . . . . . . . . . . . . . 8 (ii) Bonus. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 (iii) Split Dollar Life Insurance. . . . . . . . . . . . . . . . . 9 SECTION 7. REIMBURSEMENT OF EXPENSES. . . . . . . . . . . . . . . . . . 9 SECTION 8. VACATION. . . . . . . . . . . . . . . . . . . . . . . . . . 9 SECTION 9. STOCK OPTION. . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 10. ADDITIONAL UNDERTAKINGS OF EXECUTIVE; NON-COMPETITION PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 11. ASSIGNS AND SUCCESSORS. . . . . . . . . . . . . . . . . . . 11 SECTION 12. CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 13. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 14. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . 12 SECTION 15. LIMITATION ON PAYMENTS. . . . . . . . . . . . . . . . . . . 12 SECTION 16. GOVERNING LAW; RESOLUTION OF DISPUTES. . . . . . . . . . . . 13 SECTION 17. AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 14 WILLIAM D. GEHL/GEHL COMPANY AMENDED AND RESTATED EMPLOYMENT AGREEMENT THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made by and between Gehl Company ("GEHL"), a Wisconsin corporation with its principal place of business in West Bend, Wisconsin, and William D. Gehl, ("Executive") as of December 19, 1997. RECITALS WHEREAS, GEHL wishes to continue to retain the services of Executive as its Chairman of the Board, President and Chief Executive Officer and Executive desires to continue to serve GEHL in that capacity; and WHEREAS, GEHL and Executive wish to amend and restate the Employment Agreement between the parties dated as of December 15, 1995. NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties agree as follows: Section 1. Employment. GEHL shall employ Executive and Executive shall serve as the Chairman of the Board, President and Chief Executive Officer of GEHL during the term of employment set forth in Section 2 of this Agreement, and as such term shall be extended as provided herein. Executive shall report only to the Board of Directors of GEHL, and his powers and authority and responsibilities shall be superior to those of any other officer or employee of GEHL or of any subsidiary thereof. Executive agrees, subject to his election as such, to serve as a Director, and as a member of any committee of the Board of Directors of GEHL, during such term of employment. If at any time during the term of employment, the Board of Directors of GEHL shall not reelect Executive as Chairman of the Board, President and Chief Executive Officer of GEHL or shall remove him from such office (other than for cause), or if at any time during the term of employment Executive shall fail to be vested by GEHL with the powers and authority of the Chairman of the Board, President and Chief Executive Officer of GEHL as described above, Executive shall have the right, by written notice to GEHL, to terminate his services hereunder, effective as of the last day of the month of receipt by GEHL of any such written notice, and Executive shall have no further obligation under this Agreement. Termination by Executive under this Section 1 shall be treated as a termination of employment by GEHL other than for cause and shall be governed by the provisions of Section 4 or 5 of this Agreement, as applicable. Section 2. Term of Employment. Executive's "term of employment," as this phrase is used throughout this Agreement, shall be for the period commencing July 1, 1995, and ending December 31, 1998. Section 3. Compensation. GEHL shall pay or cause to be paid to Executive during the period commencing October 1, 1997 through the end of the term of employment a minimum base salary of Three Hundred Thousand Dollars ($300,000.00) per annum, payable in twenty-six (26) equal installments (subject to the appropriate withholding items). This salary shall be reviewed at least annually by the GEHL Board of Directors or a committee thereof and increased or decreased in its discretion, subject to the minimum above. Section 4. Termination of Employment. If Executive's employment is involuntarily terminated by Gehl during the term of employment for any reason other than (i) cause, as defined below in this Section 4, (ii) circumstances governed by Section 5 hereof or (iii) Executive's death or disability, Executive shall be entitled to receive, and GEHL shall be obligated to pay, his full base salary set forth in Section 3 above as in effect immediately prior to such termination, for one (1) full year from date of termination. During such year, Executive shall also continue to participate in all group welfare benefit plans and programs of GEHL referred to in the first sentence of Section 6 hereof to the extent that such continued participation is possible under the general terms and provisions of such plans and programs. In the event that Executive's continued participation in any such plans and programs is barred, and in lieu thereof, Executive shall be entitled to receive for the above period an amount equal to the sum of the average annual contributions, payments, credits, or allocations made by GEHL to him, to his account, or on his behalf over the three (3) fiscal years (or fraction thereof) of GEHL preceding the termination of his employment under such plans and programs from which his continued participation is barred. Termination by GEHL for "cause" shall mean termination by action of the GEHL Board of Directors because of the failure of Executive to fulfill his obligations under this Agreement or because of serious willful misconduct by Executive in respect of his obligations under this Agreement, as, for example, the commission by Executive of a felony or the perpetration by Executive of a common-law fraud against GEHL or any major material action (i.e., not procedural or operational differences) taken against the expressed directive of the Board. If Executive's employment is terminated by Executive, as a result of Executive's death or disability, or by GEHL for cause, Executive's base salary shall terminate on such date, and Executive's participation in GEHL's fringe benefit plans shall terminate in accordance with their terms. Section 5. Change in Control. In the event a Change in Control, as defined below, occurs during the term of Executive's employment under this Agreement, the Executive's term of employment shall be automatically extended to a date which is two years after the occurrence of the Change in Control (such two-year extended term of employment referred to in this Section 5 as the "Change in Control Contract Term"). In addition, upon the occurrence of a Change in Control, (i) the unvested stock options awarded to Executive under the Gehl 1995 Option Plan shall vest, (ii) the Executive's Bank Balance in the Bonus Bank under the Gehl Shareholder Value Added Management Incentive Compensation Plan shall vest and be paid and (iii) all restrictions limiting the exercise, transferability, entitlement or incidents of ownership of any outstanding award, including options, restricted stock, supplemental retirement and death benefits, deferred compensation, or other property or rights granted to the Executive after the date of this Agreement (other than pursuant to plans of general application to salaried employees such as tax- qualified retirement plans, life insurance and the health plan) shall lapse, and such awards shall become fully vested and be held by or for the Executive free and clear of all such restrictions. This provision shall apply to all such property or rights notwithstanding the provisions of any other plan or agreement. If Executive's employment shall be terminated by GEHL without cause (as defined in Section 4) or the Executive shall terminate his employment for Good Reason (as defined below in this Section 5) during the Change in Control Contract Term, or if GEHL shall terminate Executive's employment without cause within six (6) months before the execution of a definitive purchase agreement that ultimately results in a Change in Control and Executive shall reasonably demonstrate that such termination was in connection with or in anticipation of the Change in Control, Executive shall be entitled to the following paid in a lump sum within 30 days of the date of the Executive's termination of employment hereunder (the "Termination Date"): (a) The base salary as then in effect under Section 3 hereof ("the Current Base Salary") through the Termination Date to the extent not theretofore paid; (b) The bonus which would be earned by Executive through the Termination Date computed under GEHL's bonus plan, ignoring any requirement that Executive be employed through the end of the fiscal year and not reduced for any deferrals which would otherwise be required under the bonus plan; (c) Any compensation previously deferred, including that deferred under any bonus plan as then in effect, which deferrals shall become immediately vested upon the Change in Control, to the extent not previously paid; and (d) Three (3) times the sum of (i) the Current Base Salary and (ii) the highest bonus amount earned by the Executive in any of the five fiscal years which precede the year in which the Termination Date occurs, including any amounts deferred. In addition, for twenty-four (24) months after the Termination Date, GEHL shall provide to the Executive and his family medical benefits at least substantially equal on a pre-tax basis to those provided to him and his family just prior to the date of the Change in Control, whether pursuant to a group plan or individual coverage. Notwithstanding the foregoing, if Executive obtains employment during the 24-month period and family medical benefits are available from the new employer, GEHL's obligation under this paragraph shall cease for so long as Executive remains employed. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under this Section 5 and such amounts shall not be reduced (except to the extent set forth in the immediately preceding paragraph) whether or not the Executive obtains other employment. In addition, GEHL will not be entitled to reduce the amounts payable under this Section 5 for any claims or rights it may have against Executive. "Change in Control," for the purposes of this Agreement, shall be defined as one of the following: (i) securities of GEHL representing 25% or more of the combined voting power of GEHL's then outstanding voting securities are acquired pursuant to a tender offer or an exchange offer; or (ii) the shareholders of GEHL approve a merger or consolidation of GEHL with any other corporation as a result of which less than fifty percent (50%) of the outstanding voting securities of the surviving or resulting entity are owned by the former shareholders of GEHL (other than a shareholder who is an "affiliate," as defined under rules promulgated under the Securities Act of 1933, as amended, of any party to such consolidation or merger); or (iii)the shareholders of GEHL approve the sale of substantially all of GEHL's assets to a corporation which is not a wholly-owned subsidiary of GEHL; or (iv) any person becomes the "beneficial owner," as defined under rules promulgated under the Securities Exchange Act of 1934, as amended, directly or indirectly, of securities of GEHL representing twenty-five percent (25%) or more of the combined voting power of GEHL's then outstanding securities the effect of which (as determined by the Board) is to take over control of GEHL; or (v) during any period of two consecutive years, individuals who, at the beginning of such period, constituted the Board of Directors of GEHL cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by the vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. "Good Reason" for the purposes of this Agreement, shall be defined as the occurrence of any one of the followng events or conditions after, or in anticipation of, the Change in Control. (i) The removal of the Executive from, or any failure to reelect or reappoint the Executive to, any of the positions held with GEHL on the date of the Change in Control or any other posotions with GEHL to which the Executive shall thereafter be elected, appointed or assigned, except in connection with the termination of his employment for disability, cause, as a result of his death or by the Executive other than for Good Reason; (ii) A good faith determination by the Executive that there has been a significant adverse change, without the Executive's written consent, in the Executive's working conditions or status with GEHL from such working conditions or status in effect immediately prior to the Change in Control, including but not limited to (A) a significant change in the nature or scope of the Executive's authority, powers, functions, duties or responsibilities, or (B) a significant reduction in the level of support services, staff, secretarial and other assistance, office space and accoutrements; (iii)Any material breach by GEHL of any provision of this Agreement; (iv) Any purported termination of the Executive's employment for cause by GEHL which is determined under Section 16 not to be for conduct encompassed in the definition of cause contained herein; (v) The failure of GEHL to obtain an agreement, satisfactory to the Executive, from any successor or assign of GEHL, to assume and agree to perform this Agreement, as contemplated in Section 11 hereof; or (vi) GEHL's requiring Executive to be based at any office or location which is not within a fifty (50) mile radius of West Bend, Wisconsin, except for travel reasonably required in the performance of Executive's responsibilities hereunder, without Executive's consent. For purposes of this Section 5, any good faith determination of Good Reason made by the Executive shall be conclusive. Section 6. Benefits. Executive shall be entitled to participate in any group insurance, hospitalization, medical, health and accident, disability, or similar plan or program of GEHL now existing or established hereafter to the extent that he is eligible under the general provisions thereof. Furthermore, Executive shall be entitled to other payments, in addition to the base salary above, as provided below: (i) Retirement/Death Benefit. The Supplemental Retirement Benefit Agreement between Executive and GEHL shall dictate the Retirement/Death benefits other than those provided under the employee benefit plans generally available to all salaried employees. Such Supplemental Retirement Benefit Agreement is specifically referenced and made a part hereof. (ii) Bonus. Executive shall be entitled to an annual cash bonus as calculated in accordance with the Company's SVA Plan in the event the Executive is employed with GEHL on the last day of the applicable calendar year. Notwithstanding the foregoing, in the event Executive's employment is terminated during the applicable year as a result of death or disability or by GEHL for any reason other than cause, as defined in Section 4 hereof, or circumstances governed by Section 5 hereof, Executive shall be entitled to a pro rata portion of the bonus which would otherwise have been payable for such calendar year of termination. The pro rata portion shall be equal to the number of completed months in the calendar year through the date of termination divided by twelve (12). (iii) Split Dollar Life Insurance. Executive, as the insured, a trust for the benefit of Executive's family (the "Trust"), as the owner, and GEHL have entered into the Split Dollar Insurance Agreement regarding the purchase of a $1 million whole life insurance policy. The Trust shall execute a collateral assignment of such policy to GEHL to secure its interest therein as provided in the Split Dollar Insurance Agreement. Said agreement is specifically referenced and made a part hereof. Section 7. Reimbursement of Expenses. GEHL shall pay or reimburse Executive for all reasonable travel and other expenses in accordance with GEHL policy. GEHL further agrees to furnish Executive with a private office and a private secretary and such other assistance and accommodations as shall be suitable to the character of Executive's position with GEHL and adequate to the performance of his duties hereunder. Section 8. Vacation. Executive shall be entitled to four (4) weeks paid vacation each year. Section 9. Stock Option. Concurrent with the original execution of this Agreement, Executive and GEHL entered into a Stock Option Agreement, specifically referenced herein and made a part hereof, wherein Executive was granted as of July 19, 1995 an option to purchase 100,000 shares of GEHL common stock under the 1995 Stock Option Plan. Section 10. Additional Undertakings of Executive; Non-competition Provisions. Executive agrees that during the term of employment under this Agreement he will apply on a full-time basis (allowing for usual vacations and sick leave) all of his skill and experience to the performance of his duties in such employment. It is understood that Executive may have other business investments and participate in other business ventures which may, from time to time, require minor portions of his time, but which shall not interfere or be inconsistent with his duties hereunder. Executive agrees that during the term of employment and for one (1) year thereafter, or, in the event of termination of his employment by GEHL for cause (as defined in Section 4 above) for two (2) years after such termination, Executive will not, without the prior written approval of the Board of Directors of GEHL, become an owner, officer, employee, agent, partner, or director of any business enterprise in substantial direct competition (as defined below) with GEHL or any subsidiary of GEHL as the business of GEHL or any subsidiary of GEHL may be constituted during the term of employment or at the termination thereof. If Executive's employment is terminated by GEHL other than for cause (as defined in Section 4 above), he will not be subject to any restrictions under this Section 10. If Executive's employment by GEHL is terminated by him (other than under the circumstances set forth in Section 1 above), in breach of this Agreement during the term of employment, Executive shall not, for a two (2)-year period following such termination, become an owner, officer, employee, agent, partner, or director of any business enterprise in substantial direct competition (as defined below) with GEHL or any subsidiary of GEHL as the business of GEHL or any subsidiary of GEHL may be constituted at the time of such termination. For the purposes of this Section 10, a business enterprise with which Executive becomes associated as an owner, officer, employee, agent, partner or director, shall be considered in "substantial direct competition," if, during a year (adjusted for fractions of a year in respect of a new enterprise) when such competition is prohibited, its sales of any product or service sold by GEHL or any subsidiary of GEHL amount to more than either ten percent (10%) of its (new enterprise) total sales or Ten Million ($10,000,000.00) Dollars. Section 11. Assigns and Successors. The rights and obligations of GEHL under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of GEHL and GEHL shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that GEHL would be required to perform if no such succession or assignment had taken place. Section 12. Construction. This Agreement shall be construed under the laws of the State of Wisconsin. Section headings are for convenience only and shall not be considered a part of the terms and provisions of this Agreement. Section 13. Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in GEHL's case, to its Secretary) or by facsimile to the number provided for such purpose by the applicable party or forty-eight (48) hours after deposit thereof in the U.S. mails, postage prepaid, addressed, in the case of Executive, to his last known address as carried on the personnel records of GEHL and, in the case of GEHL, to the corporate headquarters, attention of the Secretary, or to such other address as the party to be notified may specify by notice to the other party. Section 14. Severability. Should it be determined that one or more of the clauses of this Agreement is (are) found to be unenforceable, illegal, contrary to public policy, etc., this Agreement remains in full force and effect except for the unenforceable, illegal, or contrary to public policy provisions. Section 15. Limitation on Payments. (a) Notwithstanding anything contained herein to the contrary, prior to the payment of any amounts pursuant to Section 5 hereof, a national accounting firm designated by GEHL (the "Accounting Firm") shall compute whether there would be any "excess parachute payments" payable to the Executive, within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), taking into account the total "parachute payments," within the meaning of Section 280G of the Code, payable to the Executive by GEHL or any successor thereto under this Agreement and any other plan, agreement or otherwise. If there would be any excess parachute payments, the Accounting Firm will compute the net after-tax proceeds to the Executive, taking into account the excise tax imposed by Section 4999 of the Code, if (i) the payments hereunder were reduced, but not below zero, such that the total parachute payments payable to the Executive would not exceed three (3) times the "base amount" as defined in Section 280G of the Code, less One Dollar ($1.00) or (ii) the payments hereunder were not reduced. If reducing the payments hereunder would result in a greater after-tax amount to the Executive, such lesser amount shall be paid to the Executive. If not reducing the payments hereunder would result in a greater after-tax amount to the Executive, such payments shall not be reduced. The determination by the Accounting Firm shall be binding upon GEHL and the Executive subject to the application of Section 22(b) hereof. (b) As a result of the uncertainty in the application of Section 280G of the Code, it is possible that excess parachute payments will be paid when such payment wold result in a lesser after-tax amount to the Executive; this is not the intent hereof. In such cases, the payment of any excess parachute payments will be void ab initio as regards any such excess. Any excess will be treated as a loan by GEHL to the Executive. The Executive will return the excess to GEHL, within fifteen (15) business days of any determination by the Accounting Firm that excess parachute payments have been paid when not so intended, with interest at an annual rate equal to the rate provided in Section 1274(d) of the Code (or 120% of such rate if the Accounting Firm determines that such rate is necessary to avoid an excise tax under Section 4999 of the Code) from the date the Executive received the excess until it is repaid to GEHL. (c) All fees, costs and expenses (including, but not limited to, the cost of retaining experts) of the Accounting Firm shall be borne by GEHL and GEHL shall pay such fees, costs and expenses as they become due. In performing the computations required hereunder, the Accounting Firm shall assume that taxes will be paid for state and federal purposes at the highest possible marginal tax rates which could be applicable to the Executive in the year of receipt of the payments, unless the Executive agrees otherwise. Section 16. Governing Law; Resolution of Disputes. This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Wisconsin. Any dispute arising out of this Agreement shall, at the Executive's election, be determined by arbitration under the rules of the American Arbitration Association then in effect (in which case both parties shall be bound by the arbitration award) or by litigation. Whether the dispute is to be settled by arbitration or litigation, the venue for the arbitration or litigation shall be West Bend, Wisconsin or, at the Executive's election, if the Executive is no longer residing or working in the West Bend, Wisconsin metropolitan area, in the judicial district encompassing the city in which the Executive resides; provided, that, if the Executive is not then residing in the United States, the election of the Executive with respect to such venue shall be either West Bend, Wisconsin or in the judicial district encompassing that city in the United Sates among the thirty cities having the largest population (as determined by the most recent United States Census data available at termination date) which is closest to the Executive's residence. The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction notwithstanding their residence or situs, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices. Section 17. Amendment. No modification or amendment to this Agreement may be made without the written consent of the parties hereto. IN WITNESS WHEREOF, GEHL COMPANY has caused this Agreement to be executed by its duly authorized officers, and Executive has hereunto set his hand, all as of the date set forth above. Attest: GEHL COMPANY s/s Fred M. Butler Its: Secretary Its:Director s/s William D. Gehl Witness as to William D. Gehl Executive EX-10 8 GEHL SAVINGS PLAN AND TRUST AGREEMENT As Amended and Restated as of October 1, 1996. GEHL SAVINGS PLAN Table of Contents Page ARTICLE I. DEFINITIONS AND CONSTRUCTION Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . 2 Section 1.02. Construction . . . . . . . . . . . . . . . . . . . . 5 ARTICLE II. PARTICIPATION, VESTING SERVICE, BREAK IN SERVICE Section 2.01. Participation . . . . . . . . . . . . . . . . . . . . 6 Section 2.02. Vesting Service . . . . . . . . . . . . . . . . . . . 7 Section 2.03. Break in Service . . . . . . . . . . . . . . . . . . 7 Section 2.04. Service for Controlled Group . . . . . . . . . . . . 7 ARTICLE III. CONTRIBUTIONS TO THE TRUST FUND Section 3.01. Election to Make Deposits . . . . . . . . . . . . . . 8 Section 3.02. Amount and Payment of Participant Deposits . . . . . 8 Section 3.03. Company Matching Contributions . . . . . . . . . . . 9 Section 3.04. No Liability for Future Company Contributions . . . . 10 Section 3.05. Time Period for Payment of Company Contributions . . 10 ARTICLE IV. INVESTMENTS Section 4.01. Direction of Investment . . . . . . . . . . . . . . . 11 Section 4.02. Reallocation of Accounts . . . . . . . . . . . . . . 11 Section 4.03. Description of Funds . . . . . . . . . . . . . . . . 11 Section 4.04. Funding Policy . . . . . . . . . . . . . . . . . . . 12 ARTICLE V. PARTICIPANT ACCOUNTS Section 5.01. Participant Accounts . . . . . . . . . . . . . . . . 13 Section 5.02. Allocation of Participant Deposits . . . . . . . . . 13 Section 5.03. Allocation of Company Matching Contributions . . . . 13 Section 5.04. Disposition of Forfeitures . . . . . . . . . . . . . 13 Section 5.05. Allocation of Changes in Value . . . . . . . . . . . 13 Section 5.06. Maximum Allocation Limitations . . . . . . . . . . . 13 ARTICLE VI. BENEFITS Section 6.01. Eligibility for Benefits and Vesting . . . . . . . . 15 Section 6.02. Death . . . . . . . . . . . . . . . . . . . . . . . . 16 Section 6.03. Form and Time of Payment . . . . . . . . . . . . . . 16 Section 6.04. Payments to Minor or Incompetent Person . . . . . . . 18 Section 6.05. Direct Transfer of Eligible Rollover Distributions . 19 Section 6.06. Withdrawals . . . . . . . . . . . . . . . . . . . . . 19 Section 6.07. Erroneous Overpayments . . . . . . . . . . . . . . . 20 Section 6.08. Gehl Company Common Stock . . . . . . . . . . . . . . . 21 ARTICLE VII. PLAN ADMINISTRATION Section 7.01. Appointment of Administrator . . . . . . . . . . . . 22 Section 7.02. Responsibility and Authority of the Administrator . . 22 Section 7.03. Use of Professional Services . . . . . . . . . . . . 23 Section 7.04. Fees and Expenses . . . . . . . . . . . . . . . . . . 23 Section 7.05. Delegation of Authority and Responsibility . . . . . 23 Section 7.06. Requirement to Furnish Information and to Use Administrator's Forms . . . . . . . . . . . . . 24 Section 7.07. Claims Procedure . . . . . . . . . . . . . . . . . . 24 Section 7.08. Agent for Service of Process . . . . . . . . . . . . 24 ARTICLE VIII. TRUSTEE Section 8.01. Successor Trustee . . . . . . . . . . . . . . . . . . 25 Section 8.02. General Powers . . . . . . . . . . . . . . . . . . . 25 Section 8.03. Payments from the Trust Fund . . . . . . . . . . . . 26 Section 8.04. Trustee Accounting . . . . . . . . . . . . . . . . . 26 Section 8.05. Settlement of Trustee Accounts . . . . . . . . . . . 26 Section 8.06. Reliance on Written Communications . . . . . . . . . 27 Section 8.07. Trustee Fees and Expenses . . . . . . . . . . . . . . 27 ARTICLE IX. INVESTMENT OF TRUST FUND Section 9.01. Trustee Investment of Trust Fund . . . . . . . . . . 28 Section 9.02. Appointment of Investment Manager . . . . . . . . . . 28 ARTICLE X. FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES Section 10.01. Fiduciaries . . . . . . . . . . . . . . . . . . . . 29 Section 10.02. Allocation of Fiduciary Responsibilities . . . . . . 29 Section 10.03. General Limitation on Liability . . . . . . . . . . 29 Section 10.04. Multiple Fiduciary Capacities . . . . . . . . . . . 29 ARTICLE XI. AMENDMENT AND TERMINATION Section 11.01. Amendment . . . . . . . . . . . . . . . . . . . . . 30 Section 11.02. Termination . . . . . . . . . . . . . . . . . . . . 30 ARTICLE XII. GENERAL PROVISIONS Section 12.01. Non-Guarantee of Continued Employment or Other Benefits . . . . . . . . . . . . . . . . . . . 31 Section 12.02. Mergers, Consolidations and Transfers of Plan Assets 31 Section 12.03. Spendthrift Clause . . . . . . . . . . . . . . . . . 31 Section 12.04. Exclusive Benefit . . . . . . . . . . . . . . . . . 31 Section 12.05. Full Satisfaction of Claims . . . . . . . . . . . . 32 Section 12.06. Indemnification . . . . . . . . . . . . . . . . . . 32 Section 12.07. Counterparts . . . . . . . . . . . . . . . . . . . . 32 Section 12.08. Successors and Assigns . . . . . . . . . . . . . . . 32 Section 12.09. IRS Approval . . . . . . . . . . . . . . . . . . . . 32 Section 12.10. Top-Heavy Restrictions . . . . . . . . . . . . . . . 32 Section 12.11. Retroactive Application of Certain Plan Provisions . 34 ARTICLE XIII. TRUSTEE ACCEPTANCE Section 13.01. Date of Acceptance . . . . . . . . . . . . . . . . . 35 GEHL SAVINGS PLAN THIS TRUST AGREEMENT, revised and continued this 1st day of October, 1996 by and between Gehl Company, a Wisconsin corporation (hereinafter called the "Company"), and Marshall and Ilsley Trust Company as trustee of the trust hereby continued (hereinafter called the "Trustee"). W I T N E S S E T H: WHEREAS, effective as of April 22, 1985, the Company adopted the Gehl Savings Plan to encourage eligible employees to contribute toward their own retirement savings through the means of a "cash or deferred arrangement" under Section 401(k) of the Internal Revenue Code of 1954, as amended; and WHEREAS, the plan and trust herein set forth is intended to satisfy the applicable requirements of Sections 401(a), 401(k), and 501(a) of such Code, as amended by the Tax Reform Act of 1986 (and now known as the Internal Revenue Code of 1986) and other statutory and regulatory requirements; and WHEREAS, in order to reflect the change in Trustee and the proposed change to a daily valuation system, it is necessary to amend and restate the plan and trust as hereinafter set forth, effective as of October 1, 1996; NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the Company and the Trustee agree as follows: ARTICLE I. DEFINITIONS AND CONSTRUCTION Section 1.01. Definitions. Whenever used herein, the following words and phrases shall have the following meanings, except as required otherwise by the context: (a) "Administrator" means the individual, group of individuals, corporation or other entity appointed by the Board to administer the Plan pursuant to Section 7.01 hereof. (b) "Beneficiary" means the person, trust and/or other entity entitled to receive benefits in the event of the Participant's death. A Participant shall designate his Beneficiary on the form and in the manner prescribed by the Administrator and such designation may be changed or withdrawn by the Participant at any time. The most recent valid designation on file with the Administrator at the time of the Participant's death shall be the Beneficiary. Notwithstanding the foregoing, in the event the Participant is married at the time of his death, the Beneficiary shall be the Participant's spouse at such time unless such spouse consented in writing to the designation of an alternative Beneficiary after notice of the spouse's rights and such consent was witnessed (i) by a Plan representative appointed by the Administrator or (ii) by a notary public. In the event no valid designation of a Beneficiary is on file with the Administrator at the date of death or no designated Beneficiary survives him, the Participant's spouse shall be deemed the Beneficiary; in the further event the Participant is unmarried or his spouse does not survive him, the Participant's estate shall be deemed to be his Beneficiary. (c) "Board" means the Board of Directors of the Company. (d) "Break in Service" means, with respect to a Participant, any Period of Severance which lasts for twelve (12) or more consecutive months. (e) "Code" means the Internal Revenue Code of 1986, as interpreted by applicable regulations and rulings issued pursuant thereto, all as amended and in effect from time to time. (f) "Company" means Gehl Company, a Wisconsin corporation, and any successors and assigns thereto. (g) "Compensation" means the earnings paid to a Participant for services on or after his entry date in Section 2.01(a), equal to the sum of the amount reportable in Box 1 of Form W-2, plus any Deposits hereunder and salary reduction pursuant to Code Section 125 or 401(k), less any reimbursements or other expense allowances, fringe benefits (cash or noncash), moving expenses, deferred compensation, and welfare benefits. The maximum annual compensation taken into account hereunder for purposes of calculating any Participant's accrued benefit (including the right to any optional benefit) and for all other purposes under the Plan shall be $150,000 (or such higher amount permitted pursuant to Code Section 401(a)(17)). For purposes of calculating this maximum for any 5 percent owner or highly compensated employee who is in the group of ten employees paid the greatest compensation during the year, pursuant to Code Section 414(q)(6), the compensation of a spouse or a lineal descendant under age nineteen before the end of the Plan Year shall be treated as if paid to the employee. (h) "Date of Hire" means the first day on which an individual performs an hour of employment as defined in Section 2.01(c) hereof. (i) "Date of Rehire" means the first day on which an individual performs an hour of employment upon rehire following a Break in Service. (j) "Deposits" means amounts designated under the Plan by Participants pursuant to Article III hereof which are contributed by the Company in lieu of payment of an equal amount to the Participant as compensation. (k) "Employee" means any person employed on other than a temporary basis (i) by the Company in the position of an office, sales, or supervisory employee or (ii) in a non-union hourly position by either Gehl in Madison, South Dakota, Gehl Power Products, Inc. in Yankton, South Dakota or Hedlund-Martin, Inc. in Lebanon, Pennsylvania. Persons working at other Company facilities shall become Employees only upon specific action of the Board. A person who is a "leased employee" within the meaning of Code Section 414(n) and (o) shall not be eligible to participate in the Plan, but in the event such a person was participating or subsequently becomes eligible to participate herein, credit shall be given for the person's service as a leased employee toward completion of the Plan's eligibility and vesting requirements, including any service for a member of the controlled group or affiliated service group, if applicable. In addition, "Employee" shall also mean any person employed in West Bend, Wisconsin, in a position represented by a collective bargaining unit, provided that any such Employee shall not be eligible for any contributions under Sections 3.03 and 5.03. (l) "ERISA" means the Employee Retirement Income Security Act of 1974, as interpreted and applied under regulations and rulings issued pursuant thereto, all as amended and in effect from time to time. (m) "Investment Manager" means the Administrator or a person, insurance company, corporation or association which qualifies as an "investment manager" as defined in Section 3(38) of ERISA, including the Trustee, appointed pursuant to Section 9.02 to direct the investment of all or any portion of the assets held by the Trustee under this Agreement. (n) "Normal Retirement Date" means the Participant's sixty-fifth (65th) birthday. (o) "Participant" means any Employee who satisfies the provisions of Section 2.01 hereof. (p) "Period of Severance" means the total period of time, calculated in years, months and days, which elapses between an employee's Severance from Service Date and such employee's Date of Rehire. (q) "Plan" means the profit sharing retirement plan herein contained, as amended and in effect from time to time, which shall be known as the "Gehl Savings Plan." (r) "Plan Year" means the twelve (12) month period commencing on January 1 of each year except that the first Plan Year will be April 22, 1985 through December 31, 1985. (s) "Severance From Service Date" means the earlier of the date on which an employee's employment with the Company terminates on account of a quit, discharge, retirement (including retirement due to Total and Permanent Disability) or death, or the first anniversary of an employee's absence for any other reason, including a leave of absence, sick leave or disability leave; provided, however, that, in the case of an employee who leaves active service with the Company in connection with his commencing to perform military duty in the armed forces of the United States of America or of any state thereof under circumstances entitling him to veterans' reemployment rights pursuant to the Vietnam Era Veterans' Readjustment Act or any other comparable federal statute, he shall not be deemed to have incurred a Severance from Service Date hereunder while performing such military duty and shall have the period thereof included as part of his Vesting Service hereunder if, but only if, he returns to the Company's service within the applicable time limit and under the other conditions prescribed by such statutes for his exercise of such veterans' reemployment rights. (t) "Total and Permanent Disability" means a physical or mental condition which totally and presumably permanently prevents a Participant from engaging in any substantially gainful activity, as determined by the Administrator based on a medical examination by a doctor or clinic appointed by the Administrator. Notwithstanding any other provision of this section, no Participant shall qualify if the Administrator determines that his disability results from an injury suffered while engaged in a felonious or criminal act or enterprise. (u) "Trust Fund" means all sums of money and other property, together with all earnings, income and other increment thereon, held in trust for purposes of providing benefits and defraying the reasonable expenses of the Plan, pursuant to the terms of this Agreement. (v) "Trustee" means Marshall and Ilsley Trust Company or any successor or successors thereto designated by the Board pursuant to Section 8.01 hereof. (w) "Vesting Service" means a Participant's service with the Company as calculated under Section 2.02 hereof. Section 1.02. Construction. (a) Whenever any words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases where they would so apply; and wherever any words are used in the singular or the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply. The words "hereof," "herein," "hereunder" and other similar compounds of the word "here" shall mean and refer to this entire Agreement and not to any particular article or section. Titles of articles and sections hereof are for general information only, and this Agreement and the Plan are not to be construed by reference thereto. (b) The Plan is intended to qualify under Section 401 of the Code and shall be interpreted so as to comply with the applicable requirements thereof, where such requirements are not clearly contrary to the express terms hereof. This Agreement and the Plan shall be construed and their validity determined according to the laws of the State of Wisconsin to the extent such laws are not preempted by federal law. In case any provision of this Agreement and/or the Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of this Agreement and/or the Plan, but this Agreement and/or the Plan shall be construed and enforced as if said illegal and invalid provisions had never been inserted therein. ARTICLE II. PARTICIPATION, VESTING SERVICE, BREAK IN SERVICE Section II.01. Participation. (a) An Employee shall become a Participant as of the first day of any quarter (i.e., January 1, April 1, July 1 or October 1) coincident with or next following his completion of the qualifying period and filing of the election of Deposits. (b) The qualifying period shall be the first to occur of the following: (i) the twelve (12) month period immediately following the employee's date of employment during which the employee accumulates at least 1,000 hours of employment; or (ii) any Plan Year commencing after the date of employment during which the employee accumulates at least 1,000 hours of employment; or (iii) for any employee regularly scheduled to work forty (40) hours per week, sixty (60) days of Vesting Service. (c) For purposes of this Section an hour of employment is an hour for which a person is directly or indirectly paid by the Company for the performance of duties. Hours of employment shall also include each hour not credited under the preceding sentence for which back pay has been either awarded or agreed to, irrespective of mitigation of damages, and each of the first 501 hours during a single continuous period of absence for which a Participant is paid or entitled to payment for vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence. Notwithstanding the foregoing, no credit shall be given for payments pursuant to applicable workers' compensation or unemployment compensation or disability insurance laws. The Administrator shall determine each Participant's hours of employment in accordance with Department of Labor Regulations 2530.200b-2(b) and (c). (d) A former Participant who is rehired by the Company shall resume participation in the Plan as of the first day of the calendar month coincident with or next following his election to make Deposits. (e) It is expressly provided that any employee who is in a unit of employees covered by a collective bargaining agreement shall become, or continue as, a Participant only if such bargaining agreement specifically provides that employees in such unit shall be covered by the Plan. Section II.02. Vesting Service. Each Participant shall be credited with Vesting Service equal to the aggregate periods of time between his Date of Hire or subsequent Date of Rehire, as applicable, and the next following Severance from Service Date. A Participant shall also be credited with Vesting Service for any Period of Severance of less than twelve (12) consecutive months in duration. Except for purposes of eligibility to participate pursuant to Section 2.01(b)(iii), Vesting Service shall not count any period prior to January 1, 1985. Section II.03. Break in Service. Vesting Service earned after a Break in Service which lasts for at least six (6) years shall not be considered for purposes of determining a Participant's vested interest in amounts accrued in his account prior to the Break in Service. Vesting Service earned prior to a Break in Service shall be aggregated with Vesting Service earned after the Break in Service for purposes of determining a Participant's vested interest in amounts accrued in his account after the Break in Service. Separate accounts shall be maintained for amounts accrued with respect to a Participant before a six (6) year Break in Service and after such a Break in Service. Section II.04. Service for Controlled Group. Solely for purposes of Sections 2.01(b), 2.01(c), 2.02, and 2.03 hereof, employment with the Company shall include employment with any member of a controlled group of corporations, a group of trades or businesses under common control or an affiliated service group member as defined in Code Sections 414(b), (c) and (m) that includes the Company, but only while such corporation is in such controlled group. ARTICLE III. CONTRIBUTIONS TO THE TRUST FUND Section III.01. Election to Make Deposits. Upon completion of his qualification requirement under Section 2.01, an Employee may file a written election for the Company to make Deposits under the Plan. An Employee is not required to file such election immediately upon completion of his qualifying period but may, subject to any rules the Administrator may adopt, file the election at a later date. The election shall be filed with the Administrator on such form and in the manner the Administrator prescribes. The election shall be effective as of the Employee's participation date in subsection 2.01(a) and shall continue in effect until suspended or terminated pursuant to the terms hereof. Section III.02. Amount and Payment of Participant Deposits. (a) Amount: At the time of his election under Section 3.01 hereof, the Employee shall select the rate of his Deposits, based on a percentage of his Compensation. Deposits shall commence with the payroll period which commences on or immediately after the Employee's participation date. The Employee may designate any whole percentage from one percent (1%) through fifteen percent (15%), but only the first six percent (6%) of Compensation shall be eligible for a match by Company contributions. (b) Change in Rate: The rate of a Participant's Deposits shall remain in effect and may be changed only as of the payroll period which commences on or immediately after the first day of any quarter (i.e., January 1, April 1, July 1 or October 1) and such other dates as determined by the Administrator, pursuant to such rules as the Administrator may establish. Deposits may be suspended entirely at any time by thirty (30) days written notice to the Administrator. (c) Payment: Deposits shall be made by the Company through regular payroll deduction in lieu of payment as Compensation to the Participants. Deposits so received by the Company shall be remitted to the Trustee as soon as practicable thereafter. (d) No Participant shall contribute Deposits in excess of $9,500 in any calendar year (or such higher amount permitted pursuant to Code Section 402(g)) less the amount of any elective deferrals under all other plans, contracts or arrangements maintained by the Company. In addition, the Plan is subject to the limitations of Code Section 401(k) which are incorporated herein by this reference. Accordingly, the actual deferral percentage for highly compensated employees as defined in Code Section 414(q) shall not exceed the greater of: (i) the actual deferral percentage of the nonhighly compensated employees multiplied by 1.25, or (ii) the lesser of (A) the actual deferral percentage of the nonhighly compensated employees plus two percentage points, or (B) the actual deferral percentage of the nonhighly compensated employees multiplied by 2.0, subject to such other applicable limit as may be prescribed by the Secretary of the Treasury to prevent the multiple use of this alternative limitation. In order to ensure the favorable tax treatment of Deposits hereunder pursuant to Code Section 401(k) or to ensure compliance with Code Section 402(g) or 415, the Administrator in its discretion may prospectively decrease the rate of Deposits of any Participant at any time and, to the extent permitted by applicable regulations, may direct the Trustee to refund Deposits to any Participant. Any excess contributions, determined (i) after application of the family aggregation rules, any recharacterization of deferrals as after-tax contributions if applicable and use of qualified nonelective contributions and/or qualified matching contributions as helpful in the actual deferral percentage test, and (ii) by leveling the highest deferral ratios until the test is satisfied, and excess deferrals shall be distributed including applicable income determined pursuant to applicable regulations, including gap period income after 1988, together with any applicable matching contribution. Such distributions shall be made during the Plan Year following the year the excess contributions were made, and the amount shall be determined based on the respective portions attributable to each highly compensated employee as defined in Code Section 414(q) and based on compensation as defined in Code Section 415(c)(3). Testing hereunder shall be done separately for nonunion Employees and each group of Employees represented by a collective bargaining unit. Section III.03. Company Matching Contributions. (a) Subject to the Company's right to amend or terminate the Plan as herein provided, the Company shall contribute to the Trust Fund such amount from time to time as it determines. Such contributions are not intended to be nor shall they be treated as part of a "cash or deferred arrangement" under Section 401(k) of the Code. (b) The Plan is subject to the limitations of Code Section 401(m) which are incorporated herein by this reference. Accordingly, the actual contribution percentage of employer contributions for highly compensated employees as defined in Code Section 414(q) shall not exceed the greater of: (i) the actual contribution percentage of the nonhighly compensated employees multiplied by 1.25, or (ii) the lesser of (A) the actual contribution percentage of the nonhighly compensated employees plus two percentage points, or (B) the actual contribution percentage of the nonhighly compensated employees multiplied by 2.0, subject to such other applicable limit as may be prescribed by the Secretary of the Treasury to prevent the multiple use of this alternative limitation. In order to ensure compliance with Code Section 401(m), any excess aggregate contributions, determined (i) after application of the family aggregation rules, any recharacterization of deferrals as after-tax contributions if applicable and use of qualified nonelective contributions and/or qualified matching contributions as helpful in the actual deferral percentage test, and (ii) by leveling the highest contribution ratios until the test is satisfied, shall be distributed if vested or forfeited if forfeitable, including applicable income determined pursuant to applicable regulations, including gap period income after 1988, together with any applicable matching contribution. Such distributions shall be made during the plan year following the year the excess aggregate contributions were made, and the amount shall be determined based on the respective portions attributable to each highly compensated employee as defined in Code Section 414(q) and based on compensation as defined in Code Section 415(c)(3). Testing hereunder shall be done separately for nonunion Employees and each group of Employees represented by a collective bargaining unit. Section III.04. No Liability for Future Company Contributions. The benefits under the Plan shall be only such as can be provided by the assets of the Trust Fund, and there shall be no liability or obligation to make future profit sharing contributions hereunder or to make any further contributions in the event of termination of the Plan. Section III.05 Time Period for Payment of Company Contributions. The Company's contributions for any Plan Year shall be paid to the Trustee not later than the time prescribed by law, including any extensions thereof, for filing the Company's federal income tax return with respect to such year. ARTICLE IV. INVESTMENTS Section IV.01. Direction of Investment. (a) Each Participant shall direct, in the manner the Administrator prescribes, the percentage of Deposits and allocable share of Company contributions which shall be invested in each fund described in Section 4.03 hereof. A Participant who is a former Employee or a Beneficiary, other than the deceased Participant's spouse, may not direct the investment of his account. Such account shall remain in the funds in which it was invested as of the date of the Participant's termination of employment or date of death, whichever is applicable. (b) In the event a Participant fails to direct investment of any part of the account, such amount shall be invested on the Participant's behalf in the Balanced Fund described in Section 4.03(a)(i) hereof. (c) A Participant's direction of investment may be changed as of the first day of any quarter (i.e., January 1, April 1, July 1 or October 1), and such other dates as determined by the Administrator, pursuant to such rules as the Administrator may establish. The election of investments designates the percentage of future contributions to be allocated to a particular fund. No reallocation shall be made due to differences in investment results between various funds except as provided in Section 4.02 hereof. Section IV.02. Reallocation of Accounts. Each Participant may direct the Trustee, in the manner the Administrator prescribes, to reallocate the Participant's accounts as of the first day of any quarter (i.e., January 1, April 1, July 1 or October 1), and such other dates as determined by the Administrator, pursuant to such rules as the Administrator may establish. Except to the extent permitted by the Administrator, no Participant's direction to the Trustee for reallocation of the Participant's account may include a reallocation to the Gehl Company Stock Fund. Such direction may include a reallocation out of the Gehl Company Stock Fund. Section IV.03. Description of Funds. (a) There shall be at least four (4) investment funds with the investment characteristics as determined by the Investment Manager. (b) Additional funds may be established in the discretion of the Investment Manager, with such titles and investment characteristics as shall be determined by the Investment Manager, and communicated to Participants. Any fund or any additional fund may be eliminated in the discretion of the Investment Manager after notice to Participants and reallocation of such amounts to remaining funds. (c) Pending investment in securities of a character described for the fund, any part of a fund may be invested in savings accounts or other deposits with a bank, commercial paper or other short-term securities, including any common funds of the Trustee utilizing similar investments but excluding any securities of the Company. (d) Each Participant's Deposits and allocable share of Company contributions shall be invested in the various funds as directed by the Participant pursuant to Sections 4.01 and 4.02 hereof. Section IV.04. Funding Policy. The funding policy for the Plan is that Deposits and Company contributions shall be managed in a manner consistent with ERISA and the general investment objectives for the applicable funds and for the purpose of defraying the reasonable expenses of administering the Plan. The Administrator shall have primary responsibility for carrying out the funding policy, and in addition to its specific responsibilities set forth elsewhere in the Plan, shall establish and communicate to the Trustee and/or other Investment Manager the general investment policy and objectives for the funds designated pursuant to Section 4.03 hereof. ARTICLE V. PARTICIPANT ACCOUNTS Section V.01. Participant Accounts. The Trustee shall establish and maintain an account in the name of each Participant for his allocated share of Company contributions and Participant Deposits. As soon as practicable following each Plan Year, the Trustee shall prepare for each Participant an annual statement reflecting the status of the Participant's account as of the end of the Plan Year. Section V.02. Allocation of Participant Deposits. As of each December 31 and such other dates as determined by the Administrator, the Trustee shall allocate each Participant's Deposits for the payroll deduction periods since the last Deposit applicable Participant's account. Section V.03. Allocation of Company Matching Contributions. As of each December 31 and such other dates as determined by the Administrator, the Trustee shall allocate the Company's matching contribution, if any, and any allocable forfeitures under Section 5.04 hereof among the Participants on a pro rata basis with respect to Participant Deposits for the applicable period, up to a maximum Deposit of six percent (6%) of Compensation for such period. Notwithstanding the foregoing, Participants who are employed in West Bend, Wisconsin, represented by a collective bargaining unit shall not be eligible for any Company matching contributions. Section V.04. Disposition of Forfeitures. The Trustee shall establish a special account known as the "Suspense Account" and shall enter into such account amounts as are forfeited by any former Participant under Section 6.01 hereof. Amounts in the Suspense Account shall be allocated with the Company matching contribution pursuant to Section 5.03 hereof as soon as practicable. Section V.05. Allocation of Changes in Value. As of each December 31 and such other dates as determined by the Administrator, the Trustee shall value each investment fund under Section 4.03 hereof and proportionately adjust each Participant's account invested in such fund to reflect the effect of income received, any change in fair market value (whether realized or unrealized), expenses and all other transactions during the applicable period respecting such fund. Section V.06. Maximum Allocation Limitations. The Plan is subject to the limitations on benefits and contributions imposed by Code Section 415 which are incorporated herein by this reference. The limitation year shall be the Plan Year. In the event that there are multiple plans, and the sum of the defined benefit plan fraction and the defined contribution plan fraction, as defined in Code Section 415, exceeds applicable limits, then such Participants benefit under the defined benefit plan shall be reduced until such limits are satisfied. If, notwithstanding the foregoing provisions of this section, the limitations of Code Section 415 are exceeded as a result of a reasonable error in estimating a Participant's compensation, a reasonable error in estimating the amount of Participant's Deposits that a Participant may elect under the limits of Code section 415, the allocation of forfeitures, or such other facts and circumstances as the commissioner of the Internal Revenue Service may prescribe, there shall be deducted from the Participant's account and returned to the Participant such portion of the Participant's Deposits, together with earnings thereon, as may be necessary to satisfy Code Section 415. If the requirements are still not satisfied, there shall be deducted from the Participant's account all or a portion of the employer contributions for such limitation year as may be necessary to comply with Code Section 415 which amounts shall be reallocated among other eligible Participants to the extent that such additional allocation would not exceed the Code Section 415 limits with respect to such other Participants. Any amounts which cannot be allocated or reallocated due to limitations shall be credited to a suspense account subject to the following conditions: (i) amounts in the suspense account shall be allocated as a forfeiture among all eligible Participants hereunder at such time, including termination of the Plan or complete discontinuance of company contributions, as the foregoing limitations permit, (ii) no investment gains or losses shall be allocated to the suspense account, (iii) no further company contributions shall be permitted until the foregoing limitations permit their allocation to Participant's accounts, and (iv) upon termination of the Plan any unallocated amounts in the suspense account shall revert to the Company. ARTICLE VI. BENEFITS Section VI.01. Eligibility for Benefits and Vesting. (a) A Participant shall be fully vested and entitled pursuant to Section 6.03 hereof to receive upon termination of employment the total amount credited to his account if he: (i) attains age sixty-five (65); (ii) terminates employment under circumstances eligible for early retirement under a Company-sponsored, qualified defined benefit plan in which the Participant is covered; (iii) terminates employment on account of Total and Permanent Disability; or (iv) incurs a layoff without recall which results in his termination of employment pursuant to Company policy. If a Participant's employment is terminated under any other circumstances (except by reason of death which is provided for in Section 6.02 hereof), he shall be entitled pursuant to Section 6.03 hereof to receive the entire balance of the account attributable to his Deposits, plus that percentage of the balance in his account attributable to Company contributions which represents his vested interest determined in accordance with the following table, and the remainder of his account balance attributable to Company contributions shall be subject to forfeiture pursuant to subsection (b) below. Percentage of Account Balance Attributable to Company Contributions Years of Vesting Service Representing Vested Interest Less than 1 0% 1 20% 2 40% 3 60% 4 80% 5 or more 100% (b) Any amounts in a Participant's account which are not payable under subsection (a) above when his employment with the Company is severed shall remain in such account and shall continue to share in allocations under Section 5.05 hereof until such former Participant incurs a six-year break in service as defined in Section 2.04 hereof, whereupon they shall be forfeited and administered pursuant to Section 5.04 hereof. Notwithstanding the foregoing, if a Participant whose employment with the Company terminates prior to his becoming one hundred percent (100%) vested in the portion of his account balance attributable to Company contributions receives a distribution or distributions of his entire vested interest in his account, such Participant's nonvested interest in the Company contributions credited to his account shall be forfeited; provided, however, that if such Participant is reemployed prior to incurring a six-year break in service, any forfeited amounts shall be reinstated from current forfeitures if available or a special Company contribution. Any amounts that are reinstated pursuant to the previous sentence shall continue to vest according to the schedule in subsection (a) above taking into consideration any distributed amount. In any such event, the Participant's vested portion of his remaining account shall not be less than an amount "X" determined by the formula X = P(AB+D)-D, where P is the vested percentage at the relevant time, AB is the account balance at the relevant time, and D is the amount of the distribution. A Participant whose entire vested interest in his account has been distributed or who has no vested interest shall be deemed cashed out of the Plan. (c) Benefits payable in installments to a former Participant shall be suspended upon his reemployment by the Company. Any undistributed amount shall be maintained in his account and shall continue to share in allocations under Section 5.05 hereof until he again terminates his employment with the Company. Section VI.02. Death. Upon the death of a Participant before his termination of employment with the Company, the total amount then credited to his account shall be fully vested and payable to the Participant's Beneficiary. Upon the death of a Participant after his termination of employment, the vested portion of his account shall be payable to the Participant's Beneficiary. Section VI.03. Form and Time of Payment. (a) All amounts payable to a Participant who terminates employment with the Company on account of Total and Permanent Disability or after attainment of age sixty-five (65) shall be paid as the Participant shall determine in one of the following ways: (i) in lump sum; or (ii) in substantially equivalent installments over a period determined by the Participant not to exceed up to ten (10) years. In any case where the Participant has determined payment to be on an installment basis, payment of all or any portion of the unpaid balance may be accelerated in the Participant's sole discretion. (b) All amounts payable to a Beneficiary shall be paid as the Beneficiary shall determine in one of the following ways: (i) in lump sum; or (ii) in substantially equivalent installments over a period determined by the Beneficiary not exceeding five (5) years from the Participant's death; provided, however, that if payment to the Participant has begun in installments prior to his death, the balance of his account shall be distributed at least as rapidly as that method selected prior to his death. (c) All amounts not payable pursuant to subsection (a) or (b) above shall be paid in lump sum. (d) Payment, under whichever method is determined, shall commence at such time as the particular Participant or Beneficiary involved shall determine. Notwithstanding the foregoing, (i) except with respect to death benefits payable to a nonspouse Beneficiary, no lump sum cash distribution shall be made without the consent of the Participant or deceased Participant's spouse, to the extent required by law, where the nonforfeitable portion of such Participant's or spouse's, in case of the Participant's death, account exceeds, or has ever exceeded, $3,500; but (ii) benefits shall not commence later than sixty (60) days after the end of the Plan Year in which the Participant attains or would have attained, in the case of death benefits payable to a deceased Participant's spouse, age sixty-five (65) or incurs a termination of employment, whichever shall last occur; but (iii) notwithstanding the foregoing, effective April 1, 1990, benefits payable to a Participant shall be paid or commenced no later than the April 1 following the calendar year in which the Participant attains age seventy and one-half (70-1/2), even if the Participant is still employed; with respect to benefits payable to a deceased Participant's spouse, benefits shall be paid or commenced no later than the later of (A) December 31 of the calendar year immediately following the calendar year in which the Participant died and (B) December 31 of the calendar year in which the Participant would have attained age seventy and one-half (70-1/2). (e) For purposes of any distribution or withdrawal pursuant to this Article, the value of the Participant's account balances shall be determined as of the end of any quarter (i.e. March 31, June 30, September 30 or December 31) coincident or immediately following the date on which the Trustee receives the direction from the Administrator to make such payment. At the election of the Participant or deceased Participant's spouse, the direction to the Trustee shall include a direction to pay a percentage of the anticipated balance, not in excess of eighty percent (80%), prior to the applicable end of any quarter (i.e. March 31, June 30, September 30 or December 31), with a final payment after the valuation for the end of any quarter (i.e. March 31, June 30, September 30 or December 31) has been completed; provided however, that if the Participant or spouse makes such an election, the Participant or spouse shall pay all costs incurred to effect the early valuation necessitated by his election. Notwithstanding the foregoing provisions of this section, after the change to a daily valuation system, for purposes of any distribution or withdrawal pursuant to this Article, the value of the Participant's account balances shall be determined as of the business day immediately preceding the date of the distribution. (f) The provisions of the Plan are intended to comply with Code Section 401(a)(9) which prescribes certain rules regarding minimum distributions and requires that death benefits be incidental to retirement benefits. All distributions under the Plan shall be made in conformance with Section 401(a)(9) and the regulations thereunder which are incorporated herein by reference. The provisions of the Plan governing distributions are intended to apply in lieu of any default provisions prescribed in regulations; provided, however, that Code Section 401(a)(9) and the regulations thereunder override any Plan provisions inconsistent with such Code Section and regulations. Section VI.04. Payments to Minor or Incompetent Person. In the event that any amount is payable under the Plan to any person who is a minor or is deemed by the Administrator to be incompetent, either mentally or physically, or for any other reason incapable of receiving such payment, the Administrator may, in its sole discretion, make such payment for the benefit of such person in any of the following ways that the Administrator may select: (i) to such person's legal representative appointed by proceedings satisfactory to the Administrator; (ii) directly to such person even though he is not then able to exercise control over such payment; and/or (iii) to any custodian under the Uniform Gifts to Minors Act or similar statutes or guardian of such person or of his property with whom such person is making his home. The Administrator shall not be required to see to the proper application of any such payment made for such person's benefit pursuant to the provisions of this Section, and any such payment shall satisfy in full such person's entitlement to that payment. Section VI.05. Direct Transfer of Eligible Rollover Distributions. (a) This section applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this section, a distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover as such terms are defined herein. (b) An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a) (9) of the Code; and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (c) An eligible retirement plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (d) A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (e) A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. Section VI.06. Withdrawals. (a) Upon a showing of substantial hardship, a Participant may withdraw any portion of the balance in his account which is attributable to his Participant Deposits upon written request to and approval of the Administrator. For purposes of this Section, substantial hardship shall mean: (i) unreimbursed medical expenses described in Code Section 213(d) incurred by the Participant, the Participant's spouse or any dependents of the Participant (as defined in Code Section 152) or necessary for these individuals to obtain medical care; (ii) costs directly related to the purchase (excluding mortgagepayments) ofa principalresidence for the Participant; (iii) payment of tuition and related educational fees for the next 12 months of post-secondary education for the Participant or the Participant's spouse, children or dependents; or (iv) payments necessary to prevent the eviction of the Participant from his principal residence or foreclosure on the mortgage of the Participant's principal residence. The hardship withdrawal (i) shall be limited to the amount of the immediate and heavy financial need, (ii) including to the extent permitted by rules established by the Administrator any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the withdrawal. (iii) shall be made only after the Participant takes all permitted loans and distributions hereunder and pursuant to any other plan maintained by the Employers and (iv) shall not include any net earnings credited after December 31, 1988 to the balance in the Participant's account derived from Deposits. Any Participant who makes a withdrawal under this Section, shall have his Deposits and any other elective contributions or employee contributions under this Plan or any other plan maintained by the Employer (both qualified and nonqualified) automatically suspended for a period of twelve (12) months following such withdrawal. The amount which such a Participant may contribute as Deposits for the calendar year following such withdrawal shall not exceed the amount described in Section 402(g) for such year, reduced by the amount of such Participant's actual Deposits for the calendar year in which the withdrawal occurred. (b) After attainment of age fifty-nine and one-half (59-1/2), a Participant may withdraw any portion of the balance in his account which is attributable to his Participant Deposits upon written request to the Administrator. No more than two (2) such withdrawals may be made by a Participant during any twelve (12) month period. Section VI.07. Erroneous Overpayments. In the event any payments hereunder to a Participant, former Participant, surviving spouse or any other Beneficiary hereunder exceed the amounts to which such person was entitled, the Administrator may withhold or reduce subsequent payments, or may take such other action as it deems necessary or appropriate. Section VI.08. Gehl Company Common Stock. (a) A Participant may direct the voting at each annual meeting and at each special meeting of the stockholders of Gehl Company of that number of whole shares of Gehl Company Common Stock attributable to his balance in Gehl Company Stock Fund, as of the valuation date preceding the record date for such meeting. Each such Participant will be provided with copies of any pertinent material together with a request for the Participant's confidential instructions as to how such shares are to be voted. The Trustee shall vote such shares in accordance with such instructions. Any shares of Gehl Company Common Stock for which the Trustee has not received instructions shall not be voted. (b) Participant may direct the Trustee with respect to the exercise of tender offer rights with respect to that number of whole and fractional shares of Gehl Company Common Stock attributable to his balance in the Gehl Company Stock Fund as of the valuation date preceding the applicable record date. Each Participant shall be provided with copies of any pertinent material distributed to shareholders generally, in addition to a request for the Participant's instructions. The Trustee shall act in accordance with the directions received from the Participants. Any shares of Gehl Company Common Stock for which the Trustee has not received instructions shall not be tendered. The proceeds of any shares of Gehl Company Common Stock tendered in accordance with this Section shall be credited to the investment fund or funds elected by the Participant pursuant to rules established by the Administrator. (c) The Trustee shall be responsible for ensuring the confidentiality of a Participant's instructions under this Section to the extent reasonably possible. ARTICLE VII. PLAN ADMINISTRATION Section VII.01. Appointment of Administrator. The Plan shall be administered by an individual, or a committee of individuals appointed by the Board and serving at its pleasure. An Administrator position may, but need not, be filled by an officer, director or employee of the Company. Any vacancy in an Administrator position, whether caused by death, resignation, removal or other cause, shall be filled by the Board and the President of the Company shall act as Administrator until such vacancy is filled. If the Administrator is a committee, such vacancy shall not affect the Administrator's authority to carry out its duties and responsibilities under the Plan. Also, if the Administrator is a committee, it may select from its committee members a chairman and such other officers as it deems appropriate, and Administrator action may be taken on vote of at least a majority of the committee members present at any meeting or upon unanimous written consent of all members without a meeting. Such Administrator meetings shall be scheduled to be held at least annually and minutes of such meetings shall be kept. All actions of the Administrator shall be recorded in such minutes or other appropriate written form. The Administrator may establish such other procedures and operating rules as it deems appropriate. Any party serving in an Administrator position may serve in similar capacities under other employee retirement and welfare benefit plans established and maintained by the Company. The Administrator shall be deemed the Plan's administrator for all purposes of ERISA. Section VII.02. Responsibility and Authority of the Administrator. The Administrator shall have and exercise all discretionary and other authority to control and manage the operation and administration of the Plan as it may be amended by the Board from time to time, except such authority as is specifically allocated otherwise by or under the terms hereof. Without limiting the foregoing and in addition to the authority and duties specified elsewhere herein, the Administrator shall have exclusive authority to: (a) interpret and apply all provisions hereof, including without limitation, the power to determine who is a Participant in the Plan, and the amount of Vesting Service and Compensation to be recognized for each such Participant; (b) formulate, issue and apply rules and regulations, which are consistent with the terms and provisions hereof and the requirements of applicable law; (c) make appropriate determinations and calculations and direct the Trustee to pay benefits accordingly; (d) prescribe and require the use of appropriate forms; (e) prepare all reports which may be required by law; (f) determine the existence of Total and Permanent Disability and, in this connection, to require any Participant to submit to a physical examination by a licensed physician, in accordance with uniform rules and procedures consistently applied to similarly situated individuals; (g) approve or deny all applications under Article VI hereof and direct the Trustee as to the timing of any distribution; (h) transmit to the Trustee the investment elections of Participants pursuant to Article IV hereof; and (i) appoint any Investment Managers or otherwise direct investments pursuant to Section 9.02 hereof. Section VII.03. Use of Professional Services. The Administrator may engage the services of and/or consult with any legal counsel, independent qualified public accountant or other persons as may be deemed appropriate. Such persons may be employed for the purpose of rendering advice to the Administrator concerning the Administrator's responsibilities hereunder and may be persons who render services to the Company and/or the Trustee. In any case in which such services are utilized, the Administrator shall retain exclusive discretionary authority and control over the management and administration of the Plan. Section VII.04. Fees and Expenses. No employee of the Company shall receive compensation for services rendered in an Administrator capacity but shall be reimbursed for all reasonable expenses incurred in that capacity. Any other person or entity serving in an Administrator capacity shall be entitled to such reasonable compensation therefor as may be mutually agreed upon with the Company. Where services are utilized as provided in Section 7.03 hereof, the Administrator shall review and approve fees and other costs for those services. Such fees and costs and any other expenses incurred in the administration of the Plan and Trust Fund shall be paid out of the principal or income of the Trust Fund unless voluntarily paid by the Company. Section VII.05. Delegation of Authority and Responsibility. The Administrator may direct other employees to perform duties and functions relating to the administration of the Plan under the Administrator's supervision. It is expressly provided, however, that in any such case, the Administrator retains full and exclusive authority and responsibility for and respecting any such activities by other employees, and nothing contained in this Section 7.05 shall be construed to confer upon such other employees any discretionary authority or control in and respecting the management and administration of the Plan. Section VII.06. Requirement to Furnish Information and to Use Administrator's Forms. Each person entitled to benefits under the Plan shall furnish to the Administrator such evidence, dates or information as the Administrator considers necessary or desirable in order to properly administer the Plan. Any designation of Beneficiary, benefit application, notification or other writing to be submitted hereunder to the Administrator must be filed pursuant to the procedure and on the appropriate form prescribed, and its receipt acknowledged by the Administrator in order to be valid and effective. Section VII.07. Claims Procedure. (a) A Participant or Beneficiary who believes that he is then entitled to benefits hereunder in an amount greater than he is receiving or has received, may file a claim for such benefits by writing directly to the Administrator. Every claim which is properly filed shall be decided and answered in writing within ninety (90) days (or one hundred eighty (180) days if additional time is needed and the claimant is so notified prior to the commencement of the extension) of its receipt by the Administrator, stating whether the claim is granted or denied. If the claim is wholly or partially denied, the specific reasons for denial and reference to the pertinent Plan provisions shall be set forth in a written notice to the claimant. Such notice shall also describe any information necessary for the claimant to perfect an appeal and an explanation of the Plan's claims appeal procedure as set forth in subsection (b) below. (b) Within sixty (60) days of notice that a claim is denied, the claimant may file a written appeal to the Administrator, including any comments, statements or documents the claimant may wish to provide. Every appeal shall be decided and answered within sixty (60) days (or one hundred twenty (120) days if additional time is needed and the claimant is so notified prior to the commencement of the extension) of its receipt by the Administrator. If a Committee is serving as Administrator, the appeal shall be considered and decided by the entire body at its next regularly scheduled meeting occurring at least thirty (30) days after the appeal is timely filed unless an extension of time is required to process the appeal, in which case a written notice thereof shall be given to the claimant prior to the start of such extension which shall not go beyond the third such regularly scheduled meeting occurring after such filing. In the event the claim is denied upon appeal, the specific reasons for denial and reference to the pertinent Plan provisions shall be set forth in a written decision which shall be sent to the claimant. The Administrator shall comply with any reasonable request from a claimant for documents or information relevant to his claim prior to his filing an appeal. The Administrator shall have discretionary authority to determine eligibility for benefits and to construe the terms of the Plan; any such determination or construction shall be final and binding on all parties unless arbitrary and capricious. Section VII.08. Agent for Service of Process. The Administrator is designated as the agent for service of legal process with respect to all matters pertaining to the Plan and the Trust Fund. ARTICLE VIII. TRUSTEE Section VIII.01. Successor Trustee. Any Trustee may be removed by action of the Board at any time, with or without cause, upon thirty (30) days' written notice. Any Trustee may resign at any time upon thirty (30) days' written notice to the Company. Upon such removal or resignation of a Trustee the Board may appoint or designate a successor trustee or trustees and all the monies and other property then constituting the Trust Fund shall be assigned, transferred and paid over to such successor trustee or trustees. Section VIII.02. General Powers. Except as otherwise limited by Article IV and otherwise herein, in addition to any powers or authority otherwise granted to the Trustee hereunder, the Trustee is authorized and empowered: (a) to act as complete and absolute owner of all assets in the Trust Fund; (b) to sell, exchange, convey, transfer or dispose of, or to grant options with respect to, any asset in the Trust Fund and to apply the proceeds of any such transaction in any manner consistent with the purposes of the Trust Fund, including any loans authorized pursuant to Section 6.06 hereof; (c) to borrow or raise monies for the purposes of the Trust Fund in such amount and upon such terms and conditions as the Trustee in its discretion may deem advisable; (d) to make, execute, acknowledge and deliver any and all assignments, documents of transfer or conveyance and any and all other instruments or documents that may be necessary or appropriate to carry out the powers herein granted; (e) to cause any asset in the Trust Fund to be registered in or transferred to its name as Trustee or the name of its nominee or nominees or to retain same unregistered or in form permitting transferability by delivery, but the books and records of the Trustee shall at all times show that all such assets are part of the Trust Fund; (f) to execute any option, right or privilege appurtenant to or respecting any asset of the Trust Fund or any contract with an insurance company, including the right to vote in person or by proxy as to any security in the Trust Fund; (g) to employ such legal counsel, independent qualified public accountant and other persons as may be deemed necessary for administering the Trust Fund, which assistants may be those consulted by the Company, any Investment Manager and/or the Administrator; (h) to enforce, compromise, settle or abstain from same in its discretion, any right, obligation or claim, whether asserted by or against the Trustee and in general to protect in any way the interests of the Trust Fund; (i) to do all other acts which the Trustee may deem necessary or proper and to exercise any and all powers of the Trustee upon such terms and conditions as is deemed to be for the best interests of the Trust Fund; and (j) to employ or appoint investment advisors or managers to manage any or all of the assets comprising the Trust, including any advisor or manager which is a member of an affiliated group of which Marshall and Ilsley Trust Company, or any successor trustee, is a member. To effectuate such appointment, the Trustee shall have the power to execute any documents as are necessary and to appoint such advisor or manager as co-fiduciary. Section VIII.03. Payments from the Trust Fund. The Trustee shall make payments from the Trust Fund to such persons, and in such manner and amounts as may be specified in written directions to the Trustee from the Administrator. Should any such payment be unclaimed, the Trustee shall notify the Administrator thereof, and shall dispose of same in accordance with the Administrator's further directions. Section VIII.04. Trustee Accounting. The Trustee shall keep accurate and detailed accounts of all investments, receipts and disbursements and other transactions hereunder, and all accounts, books and records relating thereto shall be open to inspection and audit at reasonable times by any person or persons designated by the Administrator or the Company. Within ninety (90) days following the last day of each Plan Year, or following the close of such other annual period as may be agreed upon between the Trustee and the Company, and within ninety (90) days after the removal or resignation of the Trustee, the Trustee shall file with the Company a written report setting forth all investments, receipts and disbursements, and other transactions effected by it during the period ending as of such date or to the date of such removal or resignation, as the case may be, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales, and showing all cash, securities and other property held at the end of such period. Section VIII.05. Settlement of Trustee Accounts. In case of any disapproval of any statement of accounts of the Trustee submitted by the Company in writing within ninety (90) days of receipt of such statement, an audit of such statement shall be made by an independent certified public accountant appointed by the Company unless a corrected statement shall have been rendered to the Company and approved in writing by the Company. Upon completion of such audit, the inaccuracies in such statement so audited, if any, shall be corrected to conform to such audit and a corrected statement shall be delivered by the Trustee to the Company. Any such corrected statement shall stand approved as the statement of account of the Trustee as to all matters embraced therein, without further approval. An approved or corrected statement of account shall constitute an account stated between the Trustee and the Company as to all matters embraced in such statement, and shall be binding and conclusive upon all persons interested in the Trust Fund to the same extent as if the account of the Trustee had been settled and allowed in a proceeding for judicial settlement of its accounts in any court of competent jurisdiction, to which all such persons had been made parties; provided, however, that no such statement of accounts nor the Company's approval thereof shall be deemed to relieve the Trustee of any liability which may be imposed upon it for violation of a specific provision of the Code or ERISA; provided further that nothing contained herein shall be deemed to deprive the Trustee and/or the Company of the right to have a judicial settlement of the Trustee's accounts. Section VIII.06. Reliance on Written Communications. The Trustee shall be fully protected in relying upon any written notice, certification or other document or writing received from the Company, the Board, any Investment Manager and/or the Administrator and believed to be genuine and shall be under no duty to make an investigation or inquiry as to statements contained in any such notice, certification or other document or writing, and may accept the same as conclusive. Except when otherwise expressly provided herein, any instrument to be delivered or furnished by the Company or the Board to the Trustee shall be sufficiently executed if executed in the name of the Company or Board by any appropriate officer of the former and any instrument to be delivered or furnished by the Administrator to the Trustee shall be sufficiently executed in the Administrator's name. The Trustee shall be fully protected in relying upon a resolution of the Board, duly certified by the Company's secretary or assistant secretary, as to the identity of any party serving in the Administrator capacity until a subsequent resolution is filed with the Trustee by the Board. The Company shall furnish to the Trustee the name and signature of any person serving in the Administrator capacity and such other person who shall be entitled to act on behalf of the Company in dealing with the Trustee. Each Investment Manager appointed pursuant to Section 9.02 hereof shall, from time to time, furnish the Trustee with the name and specimen signature of any person authorized to direct the Trust on its behalf under this Agreement. The Trustee shall have the right to request that all directions and orders from the Investment Manager be in writing and shall assume no liability hereunder for failure to act pursuant to such directions and orders unless and until they are received in a form satisfactory to it. Section VIII.07. Trustee Fees and Expenses. The Trustee shall be entitled to reimbursement of any reasonable expenses properly incurred in the performance of its duties hereunder and any Trustee who is not an employee of the Company shall be entitled to such reasonable compensation as shall be mutually agreed upon with the Company. Such compensation and expenses shall be paid from the Trust Fund unless paid by the Company. ARTICLE IX. INVESTMENT OF TRUST FUND Section IX.01. Trustee Investment of Trust Fund. The Trust Fund shall be invested and reinvested without distinction between principal and income in such manner as the Trustee or any Investment Manager appointed pursuant to Section 9.02 shall determine to be consistent and in accord with the applicable requirements of ERISA and the Code and the provisions of Article IV. Subject to the foregoing requirements, such investments and reinvestments shall not be restricted to those of the character authorized for fiduciaries under any present or future laws or administrative regulations or pursuant to any rule of court, nor shall any investments be limited to any amount or type in relation to the amount or type of investments of the Trust Fund as a whole. The Trustee may hold all or any part of the Trust Fund in cash, and shall not be liable for interest on monies so held, notwithstanding that the Trustee, or any affiliate thereof, may accrue interest on such uninvested cash. Such cash or cash balances may be deposited with any bank or similar financial institution, including the Trustee, in savings accounts earning a reasonable rate of interest. The Trustee may, from time to time, invest and reinvest in interests in common, pooled, diversified, or consolidated funds created and maintained by any bank, insurance company or other financial institution, including the Trustee, for the collective investment of assets in trusts of employee retirement plans qualified under the applicable provisions of the Code whereupon, during the effective period of such investment and reinvestment in such a fund, any instrument governing such fund shall be deemed to be incorporated in and made a part of this Agreement as fully and to all intents and purposes as if set forth herein at length. The Trustee may invest in any registered investment company, including any such company from which the Trustee, or any affiliate thereof, receives an investment advisory fee or any other fee. Section IX.02. Appointment of Investment Manager. The Administrator may appoint one or more Investment Managers to manage the investment and reinvestment of all or any portion of the investment funds in Section 4.03. Any such Investment Manager shall serve at the pleasure of the Administrator. Each Investment Manager shall acknowledge in writing that it is a fiduciary with respect to the Plan. To the extent that Investment Managers have been appointed to manage the investment and reinvestment of any assets of the Trust Fund, then with respect to such assets, the Trustee shall be charged with responsibility only to execute with reasonable diligence and care the instructions of such Investment Manager and the Trustee shall not be liable in any way for depreciation or loss incurred by reason or in respect of any investments made or assets held pursuant to such instructions. To the extent that no Investment Manager is appointed with respect to all or any portion of an investment fund, the Administrator shall be deemed the Investment Manager. ARTICLE X. FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES Section X.01. Fiduciaries. The Board, the Administrator, any Investment Manager and the Trustee shall be deemed to be the only fiduciaries, named and otherwise, of the Plan and Trust Fund for all purposes of ERISA. No named fiduciary designated in this Section 10.01 shall be required to give any bond or other security for the faithful performance of its duties and responsibilities with respect to the Plan and/or Trust Fund, except as may be required from time to time under ERISA. Section X.02. Allocation of Fiduciary Responsibilities. The fiduciary responsibilities (within the meaning of ERISA) allocated to each named fiduciary designated in Section 10.01 hereof shall consist of the responsibilities, duties, authority and discretion of such named fiduciary which are expressly provided herein and in any related documents. Each such named fiduciary may obtain the services of such legal, actuarial, accounting and other assistants as it deems appropriate, any of whom may be assistants who also render services to any other named fiduciary, the Plan and/or the Company; provided, however, that where such services are obtained, the named fiduciary shall not be deemed to have delegated any of its fiduciary responsibilities to any such assistant but shall retain full and complete authority over and responsibility for any activities of such assistant. The Board, Trustee, any Investment Manager, Administrator and any individual members thereof shall not be responsible for any act or failure to act of any other one of them except as may be otherwise specifically provided under ERISA. Section X.03. General Limitation on Liability. Neither the Board, the Administrator, the Trustee, any Investment Manager nor any other person or entity, including the Company and its shareholders, directors and employees, guarantees the Trust Fund in any manner against loss or depreciation and none of them shall be jointly or severally liable for any act or failure to act or for anything whatever in connection with the Plan and the Trust Fund, or the administration thereof, except and only to the extent of liability imposed because of a breach of fiduciary responsibility specifically prohibited under ERISA. Section X.04. Multiple Fiduciary Capacities. Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan and/or the Trust Fund. ARTICLE XI. AMENDMENT AND TERMINATION Section XI.01. Amendment. The Company shall have the right by action of the Board to amend this Agreement and/or the Plan at any time and in any manner consistent with the Code and ERISA; provided, however, that any amendment which increases the duties or responsibilities of the Trustee shall be effective only with the Trustee's consent. In addition, the Administrator may adopt such amendments to the Plan as may be requested by the Internal Revenue Service in order to comply with the requirements for qualification under Sections 401(a) and 501(a) of the Code. Any amendment may be retroactive to the extent permitted by applicable law. Notwithstanding the foregoing, no amendment to the Plan shall decrease a Participant's accrued benefit or vested percentage or eliminate an optional form of distribution for a previously accrued benefit. Section 11.02. Termination. The Company shall have the right to terminate the Plan, in whole or in part, by action of the Board at any time and in such event, upon any other termination or partial termination, or upon termination due to permanent discontinuance of all Company contributions, the Trust Fund shall be fully vested and nonforfeitable to the extent of the termination. Distribution of benefits shall be in the discretion of the Administrator pursuant to Section 6.03 hereof. ARTICLE XII. GENERAL PROVISIONS Section XII.01. Non-Guarantee of Continued Employment or Other Benefits. Neither the establishment of the Plan, nor any modification or amendment thereof, nor the payment of any benefit hereunder shall be construed as giving any Participant or other person whomsoever any legal or equitable right against the Company, its individual officers and employees, the Board or its members, any Investment Manager, the Administrator or any Trustee, or the right to the payment of any benefits hereunder (unless the same shall be specifically provided herein) or as giving any employee the right to continue his employment with the Company or as affecting the Company's right to sever such employment. Section XII.02. Mergers, Consolidations and Transfers of Plan Assets. In the case of any merger, consolidation with, or transfer of assets or liabilities to any other plan, each Participant must be entitled to receive a benefit immediately after the merger, consolidation, or transfer (if the applicable plan were then to terminate) which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the applicable plan were then to terminate). Section XII.03. Spendthrift Clause. No Participant or Beneficiary shall have the right to transfer, assign, alienate, anticipate, pledge or encumber any part of such benefits, nor shall such benefits, or any part of the Trust Fund from which such benefits are payable, be subject to seizure by legal process by any creditor of such Participant or Beneficiary. Any attempt to effect such a diversion or seizure as aforedescribed shall be deemed null and void for all purposes hereunder to the extent permitted by ERISA and the Code. Notwithstanding the foregoing, the Trustee may recognize a qualified domestic relations order with respect to child support, alimony payments or marital property rights if such order contains sufficient information for the Administrator to determine that it meets the applicable requirements of Section 414(p) of the Code. The Administrator shall establish written procedures concerning the notification of interested parties and the determination of the validity of such orders; if any such order so directs, distribution of benefits to the alternate payee may be made at a time not permitted for distributions to the Participant. Section XII.04. Exclusive Benefit. Anything in the Plan which might be construed to the contrary notwithstanding, it shall be impossible at any time prior to the satisfaction of all liabilities with respect to Participants and their Beneficiaries under the Plan for any part of the Trust Fund assets to be used for, or diverted to, purposes other than the exclusive benefit of such Participants or their Beneficiaries and defraying the reasonable expenses of administering the Plan and the Trust Fund. In no event shall the Company receive at any time any amounts from such assets except as provided in Section 5.06 or 12.09 hereof or the event of a mistake of fact pursuant to the directions of the Administrator within one year after such mistake is made. Notwithstanding any provision herein to the contrary, employer contributions hereunder are conditioned upon their deductibility under Code Section 404. To the extent a deduction is disallowed, contributions may be returned to the Employer within one year after such disallowance. Section XII.05. Full Satisfaction of Claims. Any payment or distribution to any Participant or Beneficiary shall be in full satisfaction of all claims against the Trust Fund, the Trustee, the Administrator, any Investment Manager and the Company and shall give rise to no claim or liability notwithstanding it shall later appear that such payment or distribution was made under a mistake of fact or law, except as otherwise specifically provided by the Code or ERISA. No payment shall be made hereunder which would be in violation of any applicable law or governmental regulation as determined by the Administrator. Section XII.06. Indemnification. The Company shall indemnify any director and/or employee of the Company who acts with respect to the Plan as a member of the Board, in an Administrator capacity or as a Trustee and shall hold any such director and/or employee harmless from the consequences of his acts or conduct in connection with the Plan except to the extent that such consequences are the result of willful misconduct or bad faith shown on the part of such director and/or employee. Section XII.07. Counterparts. This Agreement may be executed in a number of counterparts, each of which shall be deemed an original, and such counterparts shall constitute but one and the same instrument. This Agreement may be sufficiently evidenced by any one counterpart. Section XII.08. Successors and Assigns. This Agreement and the Plan herein contained shall be binding upon the successors and assigns of the Company and the Trustee. Section XII.09. IRS Approval. Any other provision to the contrary notwithstanding, the effectiveness of this Agreement is subject to the condition subsequent of the Company obtaining a determination from the Internal Revenue Service that the Plan meets the requirements for qualification contained in Code Section 401(a) and that the Trust Fund is exempt from tax under Code Section 501(a). Section XII.10. Top-Heavy Restrictions. (a) Notwithstanding any provision to the contrary herein, in accordance with Code Section 416, if the Plan is a top-heavy plan for any Plan Year, then the provisions of this Section shall be applicable. The Plan is "top-heavy" for a Plan Year if as of its "determination date" (i.e. the last day of the preceding Plan Year or the last day of the Plan's first Plan Year, whichever is applicable), the total present value of the accrued benefits of key employees (as defined in Code Section 416(i)(1) and applicable regulations) exceeds sixty percent (60%) of the total present value of the accrued benefits of all employees under the plan (excluding those of former key employees and employees who have not performed any services during the preceding five (5) year period) (as such amounts are computed pursuant to Section 416(g) and applicable regulations using a five percent (5%) interest assumption and a 1971 GAM mortality assumption) unless such plan can be aggregated with other plans maintained by the applicable controlled group in either a permissive or required aggregation group and such group as a whole is not top-heavy. Any nonproportional subsidies for early retirement and benefit options are counted assuming commencement at the age at which they are most valuable. In addition, a plan is top-heavy if it is part of a required aggregation group which is top-heavy. Any plan of a controlled group may be included in a permissive aggregation group as long as together they satisfy Code Section 401(a)(4) and 410 discrimination requirements. Plans of a controlled group which must be included in a required aggregation group include any plan in which a key employee participates or participated at any time during the determination period (regardless of whether the plan has terminated) and any plan which enables such a plan to meet Code Section 401(a)(4) or 410 discrimination requirements. The present values of aggregated plans are determined separately as of each plan's determination date and the results aggregated for the determination dates which fall in the same calendar year. A "controlled group" for purposes of this Section includes any group employers aggregated pursuant to Code Sections 414(b), (c) or (m). The calculation of the present value shall be done as of a valuation date which for a defined contribution plan is the determination date and for a defined benefit plan is the date as of which funding calculations are generally made within the twelve-month period ending on the determination date. Solely for the purpose of determining if the Plan, or any other plan included in a required aggregation group of which this Plan is a part, is top-heavy (within the meaning of Section 416(g) of the Code) the accrued benefit of an Employee other than a key employee (within the meaning of Section 416(i)(1) of the Code) shall be determined under (i) the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Affiliates, or (ii) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rate of Section 411(b)(1)(C) of the Code. (b) If a defined contribution plan is top-heavy in a Plan Year, non-key employee participants who have not separated from service at the end of such Plan Year will receive allocations of employer contributions and forfeitures at least equal to the lesser of three percent (3%) of compensation (as defined in Code Section 415) for such year or the percentage of compensation allocated on behalf of the key employee for whom such percentage was the highest for such year (including any salary reduction contributions). If a defined benefit plan is top-heavy in a Plan Year and no defined contribution plan is maintained, the employer-derived accrued benefit on a life-only basis commencing at the normal retirement age of each non-key employee shall be at least equal to a percentage of the highest average compensation for five consecutive years, excluding any years after such Plan permanently ceases to be top-heavy, such percentage being the lesser of (i) twenty percent (20%) or (ii) two percent (2%) times the years of service after December 31, 1983 in which a Plan Year ends in which the Plan is top-heavy. If the controlled group maintains both a defined contribution plan and a defined benefit plan which cover the same non-key employee, such employee will be entitled to the defined benefit plan minimum and not to the defined contribution plan minimum. (c) If the controlled group maintains a defined benefit plan and a defined contribution plan which both cover one or more of the same key employees, and if such plans are top-heavy, then the limitation stated in a separate provision of this Plan with respect to the Code Section 415(e) maximum benefit limitations shall be amended so that a 1.0 adjustment on the dollar limitation applies rather than a 1.25 adjustment. This provision shall not apply if the Plan is not "super top-heavy" and if the minimum benefit requirements of this Section are met when two percent (2%) is changed to three percent (3%) and twenty percent (20%) is changed to an amount not greater than thirty percent (30%) which equals twenty percent (20%) plus one percent (1%) for each year such plan is top-heavy. A plan is "super top-heavy" if the ratio referred to in subsection (a) above results in a percentage in excess of ninety percent (90%) rather than a percentage in excess of sixty percent (60%). Section XII.11. Retroactive Application of Certain Plan Provisions. (a) The following provisions shall apply retroactively from and after the Plan Year beginning in 1987: (i) leased employees in Section 1.01(1); (ii) contribution limitations in Sections 3.02(d), 3.03(b) and 5.06; and (iii) top-heavy rules in Section 12.10. (b) The provision describing the direct transfer of eligible rollover distributions in Section 6.05 shall apply retroactively from and after January 1, 1993. (c) The following provisions shall apply retroactively from and after January 1, 1994: (i) The maximum annual compensation considered under the Plan in Section 1.01(g); and (ii) The description of substantial hardship in Section 6.06(a). ARTICLE XIII. TRUSTEE ACCEPTANCE Section XIII.01. Date of Acceptance. Effective as of October 1, 1996, the Trustee accepts the Trust hereby amended and restated and agrees to be bound by all of the terms of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this 21st day of March, 1997. GEHL COMPANY By: Kenneth P. Hahn Title: Vice President Attest: M.J. Mulcahy Title: Vice President and Secretary [Corporate Seal] MARSHALL AND ILSLEY TRUST COMPANY, TRUSTEE By: Walter A. Lecocq Title: Vice President Attest: Forrest Du Pre Title: Vice President [Corporate Seal] EX-13 9 [Page 9 of the Annual Report] Reports of Management and Independent Accountants Report of Management The management of Gehl Company is responsible for the preparation and integrity of all financial statements and other information contained in this annual report. The financial statements have been prepared by the Company in conformity with generally accepted accounting principles appropriate in the circumstances. Such statements necessarily include amounts based on the best estimates and judgments of management after giving due consideration to materiality. The Company maintains an internal control system designed to provide reasonable assurance that transactions are properly recorded and executed in accordance with management's authorization and that assets are safeguarded from loss or unauthorized use. The internal control system is augmented by careful selection and training of qualified employees, proper division of responsibilities, and the development and dissemination of written policies and procedures. The Board of Directors elects, from among its members, an Audit Committee, consisting entirely of outside directors, which is responsible for reviewing and evaluating the overall performance of the Company's financial reporting and accounting practices and for recommending appointment of the independent accountants. The Audit Committee meets periodically with management and the independent accountants to discuss any and all matters within the Committee's responsibilities. The independent accountants have free access to the Committee, without the presence of management if so requested. The Company's financial statements have been audited by Price Waterhouse LLP, independent accountants, whose report also appears on this page. Included in the audit process was a review of the Company's system of internal controls. Price Waterhouse LLP annually provides to management and the Audit Committee a supplemental report which includes comments on the adequacy of the system and recommendations for any improvements. William D. Gehl Chairman of the Board of Directors, President and Chief Executive Officer Kenneth P. Hahn Vice President, Finance and Treasurer Report of Independent Accountants PRICE WATERHOUSE LLP To the Board of Directors and Shareholders of Gehl Company In our opinion, the statements appearing on pages 14 through 23 of this report present fairly, in all material respects, the financial position of Gehl Company and its subsidiaries at December 31, 1997 and 1996, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Milwaukee, Wisconsin February 10, 1998 [Pages 10 through 13 of the Annual Report] Management's Discussion and Analysis Overview The Company's net income in 1997 was $12.8 million, a 33% increase from $9.6 million earned in 1996. Diluted earnings per share for 1997 were $1.95 compared to $1.54 reported for 1996. Basic earnings per share for 1997 were $2.06 versus $1.56 reported in 1996. Net sales in 1997 increased 23% to $197.1 million from $159.7 million in 1996. Construction equipment 1997 net sales increased 44% to $101.7 million and Agriculture equipment 1997 net sales increased 7% to $95.4 million. Construction equipment comprised 52% of Company net sales in 1997 versus 44% in 1996 and 42% in 1995. Agriculture equipment sales were 48% of Company net sales in 1997, down from 56% in 1996. Operating profit in 1997 increased 41% to $21.8 million. Construction equipment accounted for $16.3 million of the operating profit, while Agriculture equipment contributed the balance of $5.5 million. Interest expense in 1997 declined $1.1 million, or 32%, to $2.3 million. On October 2, 1997, the Company acquired all of the issued and outstanding shares of capital stock of Brunel America, Inc. and subsidiaries, including Mustang Manufacturing Company, Inc. ("Mustang") from Brunel Holdings, plc . Mustang designs, manufactures and distributes skid steer loaders and related attachments. Gehl acquired the Brunel America, Inc. stock for $26.7 million; and entered into a five year non-competition agreement with the seller pursuant to which Gehl paid $1.0 million. The Company borrowed $27.7 million under its existing credit facility to fund the acquisition. The acquisition has been accounted for as a purchase transaction and resulted in the recording of $14.0 million of goodwill. The results of the Mustang operation have been included in the Company's operating results since the date of the acquisition. The Company continued to reduce its Agriculture equipment accounts receivable in 1997, from $43.3 million at December 31, 1996 to $41.6 million at December 31, 1997. Cash flow provided by operating activities in 1997 was $15.1 million following $31.8 million provided by operating activities in 1996. Cash flow generated in 1997 was used to fund capital expenditures and repay debt outstanding under the Company's line of credit facility. The Company has reduced its debt by $48.0 million during the last five years, despite borrowing $27.7 million to fund the Mustang acquisition. The Company's ratio of debt to total capital was 39.1% at December 31, 1997, as compared with 23.0% and 45.7% at December 31, 1996 and 1995, respectively. Results of Operations 1997 vs. 1996 Net Sales: ($ millions) 1997 1996 1995 1994 1993 Construction Equipment $101.7 $70.8 $64.4 $51.8 $43.3 Agriculture Equipment 95.4 88.9 89.1 94.8 93.9 ------ ------ ------ ------ ------ Total $197.1 $159.7 $153.5 $146.6 $137.2 (% of total) Construction Equipment 51.6% 44.4% 42.0% 35.3% 31.5% Agriculture Equipment 48.4% 55.6% 58.0% 64.7% 68.5% Net sales for 1997 of $197.1 million were 23% greater than the $159.7 million of net sales in 1996. Construction equipment net sales in 1997 were $101.7 million, 44% higher than sales of $70.8 million in 1996. The increase from 1996 levels was a result of the fourth quarter 1997 shipment of Mustang skid loaders subsequent to the closing of the acquisition of Mustang and increased demand for rough-terrain telescopic forklifts and skid loaders due to the continuation of the favorable economic trends which prevailed in the United States construction industry. Agriculture equipment net sales in 1997 increased 7% to $95.4 million from $88.9 million in 1996. The increase was a result of increased demand for skid loaders and manure spreading equipment from 1996 levels. Partially offsetting this increase was a decrease in haytool equipment sales, primarily the result of approximately $1.7 million of shipments, during 1996, of products not available in 1997 due to their previous discontinuance. Gross Profit: Gross profit in 1997 of $57.8 million was 21% higher than 1996's $47.8 million. Gross profit as a percent of net sales decreased in 1997 to 29.3% from 29.9% in 1996 (29.3% excluding $1.0 million of decreased cost of sales in 1996 resulting from liquidation of LIFO quantities carried at lower costs prevailing in prior years See Note 4 of Notes to Consolidated Financial Statements). Construction equipment gross profit as a percent of net sales for 1997 decreased to 29.6% from 32.2% in 1996. This decrease was due primarily to: 1) Mustang skid loader gross margins being lower than the gross margin on other Construction equipment sales; 2) competitive pressures restricting price increases to lower levels than incurred cost increases; and 3) inefficiencies incurred late in 1997 in producing the newly redesigned Dynalift line of telescopic handlers. Historically, the Mustang product line has had a lower gross profit percentage than other Gehl construction equipment. Thus, in 1998, the gross margin on Construction equipment sales will be impacted by the full year inclusion of the Mustang operations. Agriculture equipment 1997 gross profit as a percent of net sales increased to 29.0% from 28.1% (26.9% without the favorable LIFO liquidation impact) in 1996. This increase was due primarily to: 1) the favorable impact of a change in the mix of products shipped in 1997 versus products shipped in 1996; 2) higher production levels in 1997 over 1996 generating increased absorption of factory overhead; 3) 1996's gross margin being adversely impacted by the sale of $1.7 million of previously discontinued, low margin products; and 4) export sales, typically at lower gross margins than domestic sales, comprising a lower percentage of sales in 1997 than in 1996. Selling, General and Administrative Expenses: Selling, general and administrative expenses increased $3.8 million, or 12%, to $36.0 million in 1997 as compared with $32.2 million in 1996. As a percent of sales, however, selling, general and administrative expenses in 1997 decreased to 18.2% from 20.2% in 1996. The increased expenses in 1997 resulted primarily from costs associated with the Mustang operations for the fourth quarter of 1997 and increased selling expenses. Income from Operations: ($ millions) 1997 1996 1995 1994 1993 Construction Equipment $16.3 $12.9 $13.2 $8.6 $1.8 Agriculture Equipment 5.5 2.6 .4 4.4 5.5 ----- ----- ----- ----- ---- Total $21.8 $15.5 $13.6 $13.0 $7.3 Due primarily to higher net sales volume combined with controlled operating expense spending, income from operations in 1997 increased 41% from 1996 to $21.8 million. Construction equipment income from operations increased 26% in 1997 to $16.3 million from $12.9 million in 1996. The impact of increased Construction equipment sales volume was offset, in part, by reduced gross margin levels and increased investments in research, development and selling costs. Agriculture equipment income from operations increased to $5.5 million in 1997 from $2.6 million in 1996. Increased Agriculture equipment sales volume coupled with an improved gross margin percentage and lower promotional costs combined to generate this increase. Interest Expense: Interest expense decreased $1.1 million, or 32%, to $2.3 million. During the last five years, annual interest expense has declined $7.8 million, or 77%, from the peak of $10.1 million in 1992. Reductions in interest-bearing debt from $97.7 million at the end of 1992 to $49.7 million at December 31, 1997 and lower borrowing rates have resulted in the significant reduction in the Company's interest expense. The average rate of interest paid by the Company in 1997 was 8.0% compared to 8.2% in 1996. Provision for Income Taxes: The Company's effective income tax rate was 36.4% for 1997 versus 23.4% for 1996 when the Company utilized its remaining federal net operating loss carryforwards. Net Income: Net income in 1997 of $12.8 million was 33% higher than 1996's $9.6 million of net income. Diluted earnings per share were $1.95 in 1997 compared to $1.54 in 1996. Basic earnings per share were $2.06 in 1997 versus $1.56 in 1996. No dividends were declared in 1997 on the Company's common stock. 1996 vs. 1995 Net Sales: Net sales for 1996 of $159.7 million were 4% greater than the $153.5 million of net sales in 1995. Construction equipment net sales in 1996 were $70.8 million, 10% higher than sales of $64.4 million in 1995. The increase from 1995 levels was a result of increased demand for rough-terrain telescopic forklifts and skid loaders due to the favorable construction climate which prevailed in the United States. Agriculture equipment net sales in 1996 decreased .3% to $88.9 million from $89.1 million in 1995. The decrease was due in part to the introduction of only one redesigned product line in 1996 contrasted to two such introductions during 1995. The decrease was also due in part to approximately $1.3 million of shipments, during 1995, of products which have since been discontinued. Partially offsetting these shipment reductions was an increase in shipments of forage harvesters and skid loaders in 1996. Gross Profit: 1996 gross profit of $47.8 million was 7% higher than 1995's $44.6 million. Gross profit as a percent of net sales increased in 1996 to 29.9% from 29.1% in 1995. The increase was the result of higher sales volume, the shift in product mix of sales toward Construction equipment and the favorable impact associated with a liquidation of LIFO inventory quantities (See Note 4 of Notes to Consolidated Financial Statements). Construction equipment gross profit as a percent of net sales for 1996 remained consistent, at 32.2%, with 1995 percent levels. Agriculture equipment 1996 gross profit as a percent of net sales increased to 28.1% from 26.8% in 1995. This increase was due primarily to: 1) the favorable impact associated with a liquidation of LIFO inventory quantities; 2) the impact of favorable material purchase prices, especially steel, during 1996; and 3) the impact of a change in the mix of products shipped in 1996 versus products shipped in 1995. Selling, General and Administrative Expenses: Selling, general and administrative expenses increased $1.2 million, or 4%, to $32.2 million in 1996 as compared with $31.0 million in 1995. As a percent of sales, however, selling, general and administrative expenses in 1996 remained consistent, at 20.2%, with 1995 percent levels. The increased expenses in 1996 resulted primarily from increased investments in research and development costs and increased selling expenses. Income from Operations: Due primarily to higher net sales combined with improved gross profit, income from operations in 1996 increased 14% from 1995 to $15.5 million. Construction equipment income from operations decreased 2% in 1996 to $12.9 million from $13.2 million in 1995. Increased investments in research, development and selling costs offset the impacts of increased Construction equipment sales volumes. Agriculture equipment income from operations increased to $2.6 million in 1996 from $449,000 in 1995, due in part to the favorable impact associated with a liquidation of LIFO inventory quantities in 1996. The remainder of the improvement results from favorable material purchase prices and reduced operating expenses. Interest Expense: Interest expense decreased $2.3 million, or 40%, to $3.4 million in 1996. During the last four years, interest expense has declined $6.7 million, or 66%, from 1992's $10.1 million peak. Reductions in interest-bearing debt from $97.7 million at the end of 1992 to $19.4 million at December 31, 1996 and lower borrowing rates resulted in the significant reduction in the Company's interest expense. The average rate of interest paid by the Company in 1996 was 8.2% compared to 9.8% in 1995. The rate decrease was due to the impact of a reduced interest rate structure negotiated by the Company with the December 1, 1995 amendment to its line of credit facility. Other Income (Expense), Net: Other expense increased $615,000 in 1996 to $1,152,000 from $537,000 in 1995. The increase in expense was due primarily to an increase of $673,000 associated with the costs of selling finance contracts receivable to third parties in 1996 compared with 1995. The increase in the costs of such sales was the result of selling approximately $7.4 million more contracts in 1996 than in 1995 combined with lower weighted average yields on such finance contracts sold due to lower financing rates offered to the Company's retail customers. Provision for Income Taxes: The Company's effective income tax rate was 23.4% for 1996. Under generally accepted accounting principles, the Company was not required to record a federal income tax provision related to its 1995 pre-tax income due to the existence of net operating loss and tax credit carryforwards. The $150,000 provision for taxes made in 1995 related primarily to state tax requirements. The Company has utilized, in years prior to 1996, substantially all of its federal net operating loss carryforwards. Net Income: Net income in 1996 of $9.6 million was 6% higher than 1995's $9.0 million net income. Diluted earnings per share for 1996 were $1.54 compared to $1.44 reported for 1995. Basic earnings per share for 1996 were $1.56 compared to $1.46 reported in 1995. No dividends were declared in 1996 on the Company's common stock. Liquidity and Capital Resources Working Capital: The Company's working capital increased 28% to $73.5 million at December 31, 1997 from $57.6 million twelve months earlier primarily due to the working capital associated with the acquired Mustang operations at October 2, 1997. The Company's current ratio at December 31, 1997 decreased to 2.7 to 1 from 2.8 to 1 at the same time a year ago. Cash on hand at December 31, 1997 was $1.2 million as compared to $4.2 million a year earlier. Cash Flow Provided by Operating Activities: ($ thousands) 1997 1996 1995 1994 1993 Cash Flow $15,119 $31,795 $9,701 $19,522 $26,113 In 1997, cash flow provided by operating activities was $15.1 million as compared to $31.8 million in 1996. Net income before depreciation and amortization was primarily responsible for the positive cash flow. The decrease from 1996 was due to higher cash flow provided in 1996 by reductions in accounts receivable ($13.9 million) because of the higher level of accounts receivable existing at the beginning of 1996. Adjusting for the accounts receivable acquired at October 2, 1997 associated with the Mustang acquisition, Gehl reduced accounts receivable levels by $1.5 million during 1997 while increasing net sales by 23%. The 1997 cash flow was used to fund property, plant and equipment additions and to repay debt. Accounts Receivable: The Company's net accounts receivable, net of the $18.5 million in receivables acquired with the Mustang operation, decreased $1.5 million during 1997. Agriculture equipment accounts receivable at year-end 1997 decreased $1.7 million from a year earlier, while Construction equipment accounts receivables, net of the $18.5 million of Mustang receivables, increased $200,000 over the same period. Finance Contracts Receivable: Finance contracts receivable increased $3.1 million to $11.2 million at December 31, 1997. The combined portfolio of owned and sold-but-serviced finance contracts receivable was $67.6 million at December 31, 1997 as compared to $61.7 million at year-end 1996. (See "Sales of Finance Contracts Receivable" following.) Capital Expenditures: ($ thousands) 1997 1996 1995 1994 1993 Capital expenditures $8,718 $3,837 $2,437 $2,505 $809 Depreciation $2,955 $2,438 $2,520 $2,692 $2,940 The Company expended $8.7 million for property, plant and equipment in 1997. Approximately $4.4 million was spent to expand its two South Dakota manufacturing facilities and add equipment to increase production levels of skid loaders, rough-terrain telescopic forklifts and pavers. The majority of the remaining 1997 expenditures were incurred to upgrade and maintain machinery and equipment, to enhance capability, to improve productivity and to improve product quality. No significant commitments for capital items were outstanding at December 31, 1997. Approximately $5.3 million in capital expenditures are planned for 1998. The Company believes its present facilities are sufficient to provide adequate capacity for its operations in 1998. The Company believes that the costs necessary to bring its computer systems into year 2000 compliance will not be material. Debt and Equity: ($ millions) December 31 1997 1996 1995 1994 1993 Total Debt $49.7 $19.4 $46.9 $54.9 $72.8 Shareholders' Equity $77.6 $64.8 $55.7 $46.3 $40.9 % Total Debt to Total Capitalization 39.1% 23.0% 45.7% 54.2% 64.0% At December 31, 1997, shareholders' equity had increased $12.8 million to $77.6 million from $64.8 million a year earlier. As a result of the $30.2 million increase in outstanding debt primarily resulting from the Mustang acquisition, the Company's capitalization ratio increased to 39.1% at December 31, 1997. Borrowing Arrangements (See also Note 6 of Notes to Consolidated Financial Statements): The Company maintains a $75 million line of credit facility (the "Facility") which expires December 31, 2000, and is subject to a borrowing base related to the Company's accounts receivable, finance contracts receivable and inventories. The interest rate paid on loans denominated in U.S. dollars is 2.00% above the London Interbank Offered Rate for one-month deposits ("LIBOR"). In Canada, where the Company may borrow up to $5.5 million, the interest rate is 2.50% above Canadian one-month bankers' acceptance rates ("BA Rate"). At December 31, 1997, the Company had unused borrowing capacity of $28.3 million under the Facility, versus $45.4 million a year earlier. Management believes the Facility provides sufficient borrowing capacity for the Company to finance its operations for the foreseeable future. The Company also has outstanding $8.4 million of 9% industrial development bonds with a 2010 final maturity; repayments commence in 2005. Sales of Finance Contracts Receivable: The sale of finance contracts is an important component of the Company's overall liquidity. The Company has arrangements with several financial institutions and financial service companies to sell, with recourse, its finance contracts receivable. The Company continues to service substantially all contracts whether or not sold. At December 31, 1997, the Company serviced $67.6 million of such contracts, of which $55.4 million were owned by third parties. Losses on finance contracts due to customer nonperformance were $91,000 in 1997 as compared to $252,000 in 1996. As a percentage of outstanding serviced contracts, the loss ratios were .1% and .4% in 1997 and 1996, respectively. The Company incurred $1.1 million of costs in selling $37.1 million of its finance contracts in 1997, as compared to $1.2 million of costs in selling $38.8 million of such contracts in 1996. The costs arise primarily from the difference between the weighted average interest rate on the contracts being sold and the interest rate negotiated with the purchaser of the contracts. Management believes the Company has sufficient capacity to meet its requirements to sell its finance contracts for the foreseeable future. Accounting Pronouncements: The FASB has issued SFAS No. 130, "Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information". These statements are both effective for periods beginning after December 15, 1997. The adoption of these statements is not expected to affect the Company's financial condition or results of operations as they are disclosure only pronouncements. [Pages 14 through 23 of Annual Report] GEHL COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS In Thousands, Except Share Data - December 31, 1997 1996 Assets Cash $ 1,239 $ 4,208 Accounts receivable - net 72,190 55,141 Finance contracts receivable - net 8,210 5,098 Inventories 30,340 18,642 Prepaid income taxes 4,217 5,035 Prepaid expenses and other assets 1,645 1,624 ________ ________ Total current assets 117,841 89,748 ________ ________ Property, plant and equipment - net 35,082 21,678 Finance contracts receivable - net, non-current 3,031 3,063 Intangible assets 14,816 - Other assets 5,453 5,636 ________ ________ Total assets $176,223 $120,125 ======== ======== Liabilities and Shareholders' Equity Current portion of long-term debt obligations $ 672 $ 178 Accounts payable 22,212 14,384 Accrued liabilities 21,444 17,574 ________ ________ Total current liabilities 44,328 32,136 ________ ________ Line of credit facility 39,357 10,454 Long-term debt obligations 9,689 8,740 Deferred inocme taxes 3,421 2,369 Other long-term liabilities 1,855 1,594 ________ ________ Total long-term liabilities 54,322 23,157 ________ ________ Common stock, $.10 par value, 25,000,000 shares authorized, 6,212,686 and 6,158,720 shares outstanding at December 31, 1997 and 1996, respectively 621 616 Preferred stock, $.10 par value, 2,000,000 shares authorized, no shares issued -- -- Capital in excess of par 26,319 26,155 Retained earnings 50,633 38,061 ________ ________ Total shareholders' equity 77,573 64,832 ________ ________ Total liabilities and shareholders' equity $176,223 $120,125 ======== ======== Contingencies (Notes 3 and 12) The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME In Thousands, Except Per Share Data - Year Ended December 31, 1997 1996 1995 Net sales $197,055 $159,662 $153,452 Cost of goods sold 139,252 111,902 108,838 ________ ________ ________ Gross profit 57,803 47,760 44,614 Selling, general and administrative expenses 35,955 32,213 31,001 ________ ________ ________ Income from operations 21,848 15,547 13,613 Interest expense (2,325) (3,443) (5,733) Interest income 1,429 1,542 1,820 Other (expense) income, net (892) (1,152) (537) ________ ________ ________ Income before income taxes 20,060 12,494 9,163 Provision for income taxes 7,299 2,929 150 ________ ________ ________ Net income $12,761 $ 9,565 $ 9,013 ======== ======== ======== Diluted net income per common share $ 1.95 $ 1.54 $ 1.44 ======== ======== ======== Basic net income per common share $ 2.06 $ 1.56 $ 1.46 ======== ======== ======== The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Capital In Common Excess of Retained In Thousands Stock Par Earnings Total Balance at December 31, 1994 $617 $26,133 $19,533 $46,283 Net income -- -- 9,013 9,013 Exercise of stock options 5 265 -- 270 Amortization of unearned compensation related to restricted stock grants -- 182 -- 182 Minimum liability adjustment -- -- (69) (69) ____ _______ _______ _______ Balance at December 31, 1995 622 26,580 28,477 55,679 Net income -- -- 9,565 9,565 Exercise of stock options 2 102 -- 104 Treasury stock purchase/cancellation (8) (527) -- (535) Minimum liability adjustment -- -- 19 19 ____ _______ _______ _______ Balance at December 31, 1996 616 26,155 38,061 64,832 Net income -- -- 12,761 12,761 Exercise of stock options 5 357 -- 362 Purchase of stock warrant -- (193) -- (193) Minimum liability adjustment -- -- (189) (189) ____ _______ _______ _______ Balance at December 31, 1996 $621 $26,319 $50,633 $77,573 ==== ======= ======= ======= The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS In Thousands - Year Ended December 31, 1997 1996 1995 Cash Flows from Operating Activities Net income $ 12,761 $ 9,565 $ 9,013 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,211 2,576 2,865 Loss (gain) on sale of equipment 13 10 (13) Cost of sales of finance contracts 1,123 1,208 534 Deferred income taxes 1,592 306 (2,071) Proceeds from sales of finance contracts 35,962 36,824 30,062 Increase (decrease) in cash due to changes in: Accounts receivable - net 1,451 13,946 3,306 Finance contracts receivable - net (39,285) (39,248) (33,432) Inventories (3,816) 4,678 (1,868) Prepaid expenses and other assets (291) (288) 231 Other assets 689 (14) 240 Accounts payable 1,165 301 (394) Accrued liabilities 544 1,931 1,228 ________ ________ ________ Net cash provided by operating activities 15,119 31,795 9,701 ________ ________ ________ Cash Flows from Investing Activities Acquisition of business - net of cash acquired (27,857) -- -- Property, plant and equipment additions (8,718) (3,837) (2,437) Decrease (increase) in unexpended plant construction fund 20 (10) (16) Proceeds from sale of equipment 215 26 47 Decrease in other assets 45 869 777 Other (189) 19 113 ________ ________ ________ Net cash (used for) investing activities (36,484) (2,933) (1,516) ________ ________ ________ Cash Flows from Financing Activities (Decrease)increase in other long-term obligations (292) (97) 14 Proceeds from (repayment of) revolving credit loans 18,258 (27,394) (8,031) Increase in other long- term liabilities 261 2 258 Proceeds from issuance of common stock 362 104 270 Purchase of stock warrant (193) -- -- Treasury stock purchase -- (535) -- ________ ________ ________ Net cash provided by (used for) financing activities 18,396 (27,920) (7,489) ________ ________ ________ Net (decrease) increase in cash (2,969) 942 696 Cash, beginning of year 4,208 3,266 2,570 ________ ________ ________ Cash, end of year $ 1,239 $ 4,208 $ 3,266 ======== ======== ======== The accompanying notes are an integral part of the financial statements. Notes to Consolidated Financial Statements Note 1 - Significant Accounting Policies Consolidation: Gehl Company is engaged in the manufacture and distribution of equipment and machinery for the construction market, and in the manufacture and distribution of farm equipment and machinery primarily for the dairy, livestock and poultry agricultural sector. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: Hedlund Martin, Inc.; Gehl Power Products, Inc.; Brunel America, Inc. and Subsidiaries (Brunel); and Gehl International, Inc., a foreign sales corporation. All signifcant intercompany transactions and balances are eliminated. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions, in certain circumstances, that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Ultimate realization of assets and settlement of liabilities in the future could differ from those estimates. Revenue Recognition: Revenue is recorded upon the shipment of products to dealers and distributors; these dealers and distributors have no right of return, except as provided by law. Accounts Receivable: The Company provides financing for its dealers in both the construction and agricultural markets. The financing agreements provide for, in certain instances, interest-free periods which generally range from 4 to 12 months. Finance Contracts Receivable: The Company offers financing for its products to retail customers and to its dealers through its finance division. Finance contracts require periodic installments of principal and interest over periods of up to 60 months. Unearned interest is recognized over the life of the contracts using the sum of the digits method. Principal expected to be collected within twelve months of the balance sheet date is classified as a current asset; the remainder is classified as a non-current asset. Inventories: Inventories are valued at the lower of cost or market. Cost is determined by the last-in, first-out (LIFO) method for substantially all of the Company's inventories. Properties and Depreciation: Properties are stated at cost. When properties are sold or otherwise disposed of, cost and accumulated depreciation are removed from the respective accounts and any gain or loss is included in income. The Company provides for depreciation of assets generally using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Expenditures which substantially increase value or extend asset lives are capitalized. Expenditures for maintenance and repairs are charged against income as incurred. Debt Issue Costs: Costs incurred in conjunction with incurrence of indebtedness are capitalized and subsequently amortized over the related periods of the obligations. Intangible Assets: The cost in excess of the fair market value of net assets acquired (goodwill) arising from the acquisition of Brunel is being amortized on the straight line basis over 30 years. A five year noncompete agreement with the former owners of Brunel is being amortized on the straight line basis over the life of the agreement. Accumulated amortization of intangible assets at December 31, 1997 is $167,000. Foreign Currency Transactions: Foreign currency transaction gains and losses are included in the determination of income. Foreign currency (losses) gains were ($98,000), $24,000 and $107,000 in 1997, 1996 and 1995, respectively. Income Taxes: The Company follows the liability method in accounting for income taxes. The liability method provides that deferred tax assets and liabilities be recorded based on the difference between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Product Liability Costs: The Company directly assumes all liability for costs associated with claims up to specified limits in any policy year. Known incidents involving the Company's products are investigated and reserves are established for any estimated liability. Product Warranty Costs: In general, the Company provides warranty on equipment for a period of up to twelve months or for a specified period of use after sale or rental by the dealer. Reserves for estimated warranty costs are established at the time of sale. Environmental Costs: Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and that do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the costs can be reasonably estimated. Research and Development Costs: Costs for research activities relating to product development and improvement are charged against income as incurred. Such costs amounted to approximately $2,326,000, $2,227,000 and $1,363,000 in 1997, 1996 and 1995, respectively. Other (Expense) Income: Other (expense) income is comprised primarily of foreign currency transaction gains (losses), cost of sales of finance contracts, amortization of debt issue costs, and royalty and license (expense) income. Accounting Pronouncements: In the fourth quarter of 1997, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share." All prior period earnings per share data have been restated for comparative purposes. Additionally, the Financial Accounting Standards Board (FASB) has issued SFAS No. 130, "Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." These statements are both effective for periods beginning after December 15, 1997. The adoption of these statements is not expected to affect the Company's financial condition or results of operations as they are disclosure only pronouncements. Note 2 - Acquisition of Business On October 2, 1997, the Company acquired all of the issued and outstanding shares of capital stock of Brunel for $27.7 million. Brunel designs, manufactures and distributes skid steer loaders and related attachments through its wholly-owned subsidiary Mustang America, Inc. (Mustang). This acquisition has been accounted for as a purchase and the results of operations of Brunel have been included in the Company's consolidated financial statements since the date of the acquisition. The following unaudited pro-forma consolidated results of operations for the years ended December 31, 1997 and 1996 are presented as if the acquisition occurred as of January 1, 1996 (in thousands, except per share data): Year Ended December 31 1997 1996 Net sales $ 240,532 $ 214,124 Net income 12,658 8,906 Diluted net income per share 1.93 1.43 Basic net income per share 2.04 1.45 The unaudited pro-forma financial information is not necessarily indicative of either the results of operations that would have occurred had the acquisition been made during the period presented or the future results of the combined operations. Note 3 - Accounts Receivable and Finance Contracts Receivable Accounts receivable and finance contracts receivable were comprised of the following (in thousands): December 31, 1997 1996 Accounts receivable $75,423 $58,356 Less allowances for: doubtful accounts (1,068) (561) returns and dealer discounts (2,165) (2,654) _______ _______ $72,190 $55,141 ======= ======= Finance contracts receivable $12,879 $ 9,294 Less: unearned interest (755) (542) allowance for doubtful accounts (883) (591) _______ _______ 11,241 8,161 Less: non-current portion (3,031) (3,063) _______ _______ Current portion $ 8,210 $ 5,098 ======= ======= The finance contracts receivable at December 31, 1997 have a weighted average interest rate of approximately 7%. The Company has entered into various agreements with third parties to sell with recourse certain finance contracts receivable. The recourse provisions of certain past agreements required that the Company provide additional collateral in the form of cash withheld at the time of sale. At December 31, 1997, $716,000 of cash previously withheld by third party buyers was provided as additional collateral. The finance contracts require periodic installments of principal and interest over periods of up to 60 months; interest rates are based on market conditions. The Company has retained the servicing of substantially all of these contracts which generally have maturities of 24 to 48 months. Amounts to cover potential losses on these sold receivables are included in the allowance for doubtful accounts. The following summarizes the Company's sales of retail finance contracts receivable during 1997 and 1996 (in thousands): 1997 1996 Value of contracts sold - net of $4.0 million and $4.4 million, respectively, of unearned interest $37,085 $38,804 Cash received on sales of contracts 35,962 36,824 Cash withheld as additional collateral - 772 _______ _______ Cost of sales of finance contracts $ 1,123 $ 1,208 ======= ======= Net receivables outstanding at December 31 relating to finance contracts sold $61,710 $52,971 ======= ======= The Company retains as collateral a security interest in the equipment associated with accounts receivable and finance contracts receivable. The Company also maintains certain levels of dealer recourse deposits as additional security associated with finance contracts receivable. Note 4 - Inventories If all of the Company's inventories had been valued on a current cost basis, which approximates FIFO value, estimated inventories by major classification would have been as follows (in thousands): December 31, 1997 1996 Raw materials and supplies $ 14,830 $ 8,625 Work-in-process 5,182 4,042 Finished machines and parts 29,578 24,770 ________ ________ Total current cost value 49,590 37,437 Adjustment to LIFO basis (19,250) (18,795) ________ ________ $ 30,340 $ 18,642 ======== ======== During 1996, inventory quantities were reduced. This reduction resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of 1996 purchases, the effect of which decreased cost of goods sold by approximately $1 million. Note 5 - Property, Plant and Equipment - Net Property, plant and equipment consisted of the following (in thousands): December 31, 1997 1996 Land $ 1,838 $ 1,411 Buildings 25,507 18,551 Machinery and equipment 36,665 28,972 Autos and trucks 393 410 Office furniture and fixtures 8,346 7,727 _________ _________ 72,749 57,071 Less: accumulated depreciation (37,667) (35,393) _________ _________ Property, plant and equipment - net $ 35,082 $ 21,678 ========= ========= Note 6 - Debt Obligations A summary of the Company's debt obligations, and related current maturities, is as follows (in thousands): December 31, 1997 1996 Line of credit facility $39,357 $10,454 9.0% industrial development bonds 8,400 8,400 Other debt obligations 1,961 518 _______ _______ 49,718 19,372 Less: current portion (672) (178) _______ _______ Long-term debt obligations $49,046 $19,194 ======= ======= The Company maintains a $75 million line of credit facility (the "Facility") which expires December 31, 1998. On February 5, 1998, this Facility was extended to December 31, 2000 and accordingly, all amounts outstanding have been classified as non-current liabilities. Interest is paid monthly on outstanding borrowings under the Facility as follows: borrowings in Canadian denominated dollars up to a $5.5 million credit line are at 2.5% above Canadian one-month bankers' acceptance rates; the remainder of the borrowings are in U.S. dollars and are at 2.0% above the London Interbank Offered Rate for one-month deposits ("LIBOR"). Under the Facility, $25 million is tied to a borrowing base related to the Company's finance contracts receivable and inventories. The remaining availability is tied to a borrowing base related to the Company's accounts receivable. Borrowings under the Facility are secured by finance contracts receivable, inventories and accounts receivable. At December 31, 1997, the Company had unused borrowing capacity of approximately $28.3 million under the Facility. The Facility also includes financial covenants requiring the maintenance of a minimum tangible net worth level and a maximum debt to equity ratio. The 9% industrial development bonds are secured by the Company's Lebanon, Pennsylvania manufacturing facility and require principal repayment in six equal annual installments of $1.4 million commencing in 2005. The Company has established a debt reserve fund of approximately $500,000 until the first mandatory bond redemption period in 2003. The debt reserve fund was established with remaining funds in the trustee-controlled unexpended plant construction fund and interest subsequently earned. Financial covenants related to the industrial development bonds require the maintenance of a minimum tangible net worth level and a maximum debt to equity ratio. Annual maturities of debt obligations are as follows (in thousands): 1998 $ 672 1999 587 2000 39,864 2001 155 2002 40 Later years 8,400 ________ $49,718 ======== Interest paid on total debt obligations was $2.4 million, $3.6 million and $5.9 million in 1997, 1996 and 1995, respectively. Note 7 - Accrued Liabilities Accrued liabilities were comprised of the following (in thousands): December 31, 1997 1996 Accrued salaries and wages $ 4,982 $ 4,132 Dealer recourse deposits 2,335 2,308 Accrued warranty costs 3,581 2,290 Accrued product liability costs 3,272 3,870 Other 7,274 4,974 _______ _______ $21,444 $17,574 ======= ======= Note 8 - Income Taxes The income tax provision recorded for the years ended December 31, 1997, 1996 and 1995 consisted of the following (in thousands): Year Ended State and December 31, Federal Foreign Total 1997 Current $ 5,552 $ 155 $ 5,707 Deferred 1,592 - 1,592 ________ ________ ________ Total $ 7,144 $ 155 $ 7,299 ======== ======== ======== 1996 Current $ 2,548 $ 75 $ 2,623 Deferred 306 - 306 ________ ________ ________ Total $ 2,854 $ 75 $ 2,929 ======== ======== ======== 1995 Current $ 2,303 $ 150 $ 2,453 Deferred (2,303) - (2,303) ________ ________ ________ Total $ - $ 150 $ 150 ======== ======== ======== A reconciliation between the reported income tax provision and the federal statutory rate follows (as a percent of pre-tax income): Year Ended December 31, 1997 1996 1995 Federal statutory rate 35.0% 34.0% 34.0% Minimum tax credits utilized - (10.5) - Net operating loss utilized - - (34.0) State income taxes, net of Federal income tax effect .5 .5 1.6 Other, net .9 (.6) - _______ _______ _______ 36.4% 23.4% 1.6% ======= ======= ======= The Company's temporary differences and carryforwards which give rise to deferred tax assets and liabilities consisted of the following (in thousands): December 31, 1997 1996 Accrued expenses and reserves $5,167 $4,297 Asset valuation reserves 705 1,643 Operating loss carryforwards 1,741 925 Tax credit carryforwards 377 1,615 Installment sales (2,056) (2,118) Property, plant and equipment (2,802) (1,230) Other, net (1,369) (1,231) Valuation allowance (967) (1,235) ______ ______ Net deferred tax asset $ 796 $2,666 ====== ====== The net asset is included in the consolidated balance sheet in the following captions (in thousands): December 31, 1997 1996 Prepaid income taxes $4,217 $5,035 Deferred income taxes (3,421) (2,369) ______ ______ $ 796 $2,666 ====== ====== At December 31, 1997, the Company had alternative minimum tax credit carryforwards of $233,000 which do not expire, federal net operating loss carryforwards of $2.7 million and state net operating loss carryforwards of $15.5 million. The carryforwards will be available for the reduction of future income tax liabilities; a valuation allowance has been recorded against certain of these carryforwards for which utilization is uncertain. Cash paid related to income taxes during 1997, 1996 and 1995 was $5,456,000, $2,607,000 and $3,012,000, respectively. Note 9 - Employee Retirement Plans The Company maintains non-contributory defined benefit pension plans covering certain of its employees. The benefits provided by certain of the plans are based on a defined monthly multiplier applied to the employee's length of service, with the remaining plans providing benefits based primarily on years of service and average compensation. Net pension expense (income) includes the following components (in thousands): Year Ended December 31, 1997 1996 1995 Service cost $ 493 $ 483 $ 411 Interest cost on projected benefit obligation 1,901 1,808 1,830 Actual return on plan assets (6,175) (1,830) (3,381) Net amortization and deferral 3,810 (475) 1,018 _______ _______ _______ Net periodic pension expense (income) $ 29 $ (14) $ (122) ======= ======= ======= The following schedule details (in thousands) the funded status of the plans. 1997 1996 1995 Actuarial present value of benefit obligation: Vested $25,133 $21,866 $21,982 Nonvested 1,575 1,570 1,690 _______ _______ _______ Accumulated benefit obligation 26,708 23,436 23,672 Effect of projected salary increases 1,282 1,103 1,186 _______ _______ _______ Total projected benefit obligation 27,990 24,539 24,858 Plan assets at fair value 30,199 25,277 23,670 _______ _______ _______ Plan assets in excess of (less than) projected benefit obligation 2,209 738 (1,188) Unrecognized transitional asset (272) (707) (1,093) Prior service cost not yet recognized in net periodic pension cost 1,396 1,544 1,094 Unrecognized net (gain) loss (71) 1,315 3,607 _______ _______ _______ Prepaid pension asset $3,262 $2,890 $ 2,420 ====== ====== ====== The projected benefit obligation was determined using assumed discount rates of 7.5% in 1997, 8.0% in 1996 and 7.75% in 1995, and assumed long-term rates of compensation increase of 4% in 1997, 1996 and 1995. The annual long-term rate of return on plan assets was assumed to be 9.0% in 1997, 1996 and 1995. The measurement date used for each of the actuarial calculations was September 30. Plan assets consist principally of common stocks and fixed income investments. Funding for the plans equals or exceeds the minimum requirements of the Employee Retirement Income Security Act of 1974. In addition, the Company maintains an unfunded supplemental retirement benefit plan for certain management employees. The accumulated benefit obligation for this plan was $1.3 million and $989,000 at December 31, 1997 and 1996, respectively, using a discount rate of 8.0%. The Company maintains a savings and profit sharing plan which covers substantially all employees who have completed sixty (60) days of service with the Company. Effective July 1, 1995, the Company reinstated its policy of matching 25% of non-bargaining unit employee contributions to the plan not to exceed 6% of the employees annual compensation. Effective January 1, 1997, the matching percentage was increased to 50%. Vesting of Company contributions occur at the rate of 20% per year. Contributions approximated $436,000, $155,000 and $58,000 in 1997, 1996 and 1995, respectively. The Company maintains a defined contribution plan that covers certain employees not included under a defined benefit plan. The Company contributes various percentages of eligible employee compensation (as defined therein); the plan does not allow employee contributions. The Company has contributed approximately $287,000, $252,000 and $212,000 in connection with this plan for 1997, 1996 and 1995, respectively. The Company provides postretirement benefits to certain retirees in two areas: a $2,500 life insurance policy for retired office employees and subsidized health insurance benefits for early retirees prior to their attaining age 65. The number of retirees associated with postretirement benefit costs is approximately 163. Net postretirement benefit expense included the following components (in thousands): Year Ended December 31, 1997 1996 1995 Service cost $ 46 $ 49 $ 47 Interest cost on projected benefit obligation 100 102 117 Net amortization and deferral 45 58 57 _____ _____ _____ Net postretirement benefit expense $191 $209 $221 ===== ===== ===== The Company's postretirement benefit plans are not funded. The status of the Company's plans was as follows (in thousands): December 31, 1997 1996 Actuarial present value of accumulated postretirement benefit obligation $1,407 $1,564 Unrecognized transitional obligation (338) (361) Unrecognized net loss (573) (667) _____ _____ Accrued postretirement benefit liability $ 496 $ 536 ===== ===== The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation at December 31, 1997 was 9% decreasing to 6% over four years and at December 31, 1996 was 10% decreasing to 6% over four years. The discount rate used in determining the accumulated postretirement benefit obligation was 7.5% in 1997 and 1996. A one percentage point increase in the health care cost trend rate would increase the accumulated postretirement benefit obligation by approximately $173,000 and would increase the net postretirement benefit expense by approximately $28,000. Note 10 - Shareholders' Equity During April 1996, the 1995 Stock Option Plan was adopted by the Company as approved by the shareholders (the "1995 Plan"), which authorized the granting of options for up to 600,000 shares of the Company's common stock. In addition, through its expiration in December 1996, the Company was authorized to grant options for up to 530,000 shares of the Company's common stock under the 1987 Stock Option Plan. The 1995 Plan provides that options be granted at an exercise price not less than fair market value on the date the options are granted and that the options vest ratably over a period not exceeding three years after the grant date. The option period shall not be more than ten years after the grant date. Following is a summary of activity in the stock option plans for 1995, 1996 and 1997: Weighted Shares Average Subject Option to Option Price Outstanding, January 1, 1995 240,919 $6.58 Granted 170,500 7.31 Exercised (47,242) 5.71 Cancelled (8,505) 5.94 _________ ______ Outstanding, December 31, 1995 355,672 $7.06 Granted 323,650 8.60 Exercised (32,082) 5.79 Cancelled (53,751) 8.82 _________ ______ Outstanding, December 31, 1996 593,489 $7.81 Granted 96,000 19.59 Exercised (41,084) 6.70 Cancelled (5,000) 14.88 _________ ________ Outstanding, December 31, 1997 643,405 $9.58 ========= ======== Exercisable, December 31, 1997 341,894 $7.46 ========= ====== The exercise price for options outstanding at December 31, 1997 range from $3.00 to $21.25 per share. The weighted-average remaining contractual life of these options approximates seven years. The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation." Accordingly, no compensation cost has been recognized for options granted under the stock option plans. Had compensation cost been determined based on the fair value at the grant date for awards in 1995, 1996 and 1997 consistent with the provisions of SFAS No. 123, the Company's pro-forma net income and earnings per share would have been as presented below (in thousands, except per share data): Year Ended December 31, 1997 1996 1995 Net income $12,414 $9,306 $9,006 Diluted net income per share 1.90 1.49 1.44 Basic net income per share 2.00 1.51 1.46 The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 1997, 1996 and 1995: Year Ended December 31, 1997 1996 1995 Expected stock price volatility 19.1% 20.9% 21.2% Risk-free interest rate 6.1% 6.4% 5.6% Expected life of options - years 7 7 6 The weighted-average grant-date fair value of options granted during 1997, 1996 and 1995 was $7.60, $3.40 and $2.58, respectively. On May 28, 1997, the Board of Directors of the Company adopted a Shareholder Rights Plan and declared a rights dividend of one preferred share purchase right (Right) for each share of common stock outstanding on June 16, 1997, and provided that one Right would be issued with each share of common stock thereafter issued. The Shareholder Rights Plan provides that in the event a person or group acquires or seeks to acquire 15% or more of the outstanding common stock of the Company, the Rights, subject to certain limitations, will become exercisable. Each Right once exercisable initially entitles the holder thereof (other than the acquiring person whose rights are cancelled) to purchase from the Company one one-hundredth of a share of Series A preferred stock at an initial exercise price of $55 per one one-hundredth of a share (subject to adjustment), or, upon the occurrence of certain events, common stock of the Company or common stock of an "acquiring company" having a market value equivalent to two times the exercise price. Subject to certain conditions, the Rights are redeemable by the Board of Directors for $.01 per Right and are exchangeable for shares of common stock. The Rights have no voting power and expire on May 28, 2007. At December 31, 1997, warrants to purchase 130,000 shares of the Company's common stock for $7 per share, subject to certain adjustments as provided in the warrant agreement, are outstanding. The warrants can be exercised at any time through March 5, 1998. During 1997, the Company purchased a previously issued warrant to purchase 50,000 shares of the Company's stock for $193,000. Note 11 - Earnings Per Share Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common shares, and if applicable, common stock equivalents which would arise from the exercise of stock options and warrants. A reconciliation of the shares used in the computation follows (in thousands): Year Ended December 31, 1997 1996 1995 Basic shares 6,194 6,147 6,189 Effect of warrants and options 348 80 63 ______ ______ ______ Diluted shares 6,542 6,227 6,252 Note 12 - Contingencies The Company is involved in litigation of which the ultimate outcome and liability to the Company, if any, is not presently determinable. Management believes, based on opinion of counsel, that final disposition of such litigation will not have a material impact on the Company's results of operations or financial position. Note 13 - Segment Information The Company manufactures and distributes products into two industry segments. Construction equipment is manufactured and distributed for customers in the construction market. As of December 31, 1997, 42% of the Company's accounts receivable were from customers in the construction market. Agricultural equipment is manufactured and distributed for customers in the dairy and livestock agricultural sector. As of December 31, 1997, 58% of the Company's accounts receivable were from customers in the agricultural sector. Unallocated assets are cash, deferred income taxes and other nonallocable assets. Segments of business by industry are presented below (in thousands): Year Ended December 31, 1997 1996 1995 Net Sales Construction $101,635 $ 70,826 $ 64,381 Agriculture 95,420 88,836 89,071 ________ ________ ________ Consolidated $197,055 $159,662 $153,452 ======== ======== ======== Income from Operations Construction $ 16,277 $ 12,967 $ 13,164 Agriculture 5,571 2,580 449 ________ ________ ________ Consolidated $ 21,848 $ 15,547 $ 13,613 ======== ======== ======== Assets (Year-end) Construction $ 86,647 $ 27,994 $ 29,999 Agriculture 78,281 76,857 91,612 Unallocated 11,295 15,274 13,312 ________ ________ ________ Consolidated $176,223 $120,125 $134,923 ======== ======== ======== Depreciation/ Amortization Construction $ 1,225 $ 760 $ 921 Agriculture 1,957 1,758 1,883 Unallocated 29 58 61 ________ ________ ________ Consolidated $ 3,211 $ 2,576 $ 2,865 ======== ======== ======== Capital Expenditures Construction $ 5,265 $ 922 $ 655 Agriculture 3,453 2,915 1,782 ________ ________ ________ Consolidated $ 8,718 $ 3,837 $ 2,437 ======== ======== ======== Exports of U.S. produced products were approximately $32.9 million, $26.8 million and $28.0 million in 1997, 1996 and 1995, respectively. Note 14 - Quarterly Financial Data (unaudited) In Thousands, Except Per First Second Third Fourth Share Data Quarter Quarter Quarter Quarter Total 1997 Net sales $43,675 $51,592 $48,140 $53,648 $197,055 Gross profit 12,983 15,547 14,807 14,466 57,803 Net income 2,529 3,885 3,453 2,894 12,761 Diluted net income per common share .39 .60 .52 .43 1.95 Basic net income per common share .41 .63 .56 .47 2.06 1996 Net sales $39,165 $44,474 $40,550 $35,473 $159,662 Gross profit 11,016 13,352 12,252 11,140 47,760 Net income 1,896 2,933 2,621 2,115 9,565 Diluted net income per common share .31 .47 .42 .34 1.54 Basic net income per common share .31 .48 .43 .34 1.56 Due to the use of the weighted average shares outstanding each quarter for computing net income per share, the sum of the quarterly per share amounts does not equal the per share amounts for the year. [Page 24 of the Annual Report] GEHL COMPANY AND SUBSIDIARIES FIVE-YEAR FINANCIAL SUMMARY Dollars in Thousands, Except Per Share Data 1997 1996 1995 1994 1993 Summary of Operations Net sales $197,055 $159,662 $153,452 $146,620 $137,218 Gross profit 57,803 47,760 44,614 43,274 38,883 Income from operations 21,848 15,547 13,613 12,961 7,339 Interest expense 2,325 3,443 5,733 6,711 8,364 Income before income taxes 20,060 12,494 9,163 5,035 366 Net income 12,761 9,565 9,013 5,035 241 Financial Position at December 31 Current assets $117,841 $89,748 $106,563 $102,621 $114,355 Current liabilities 44,328 32,136 29,561 28,710 30,328 Working capital 73,513 57,612 77,002 73,911 84,027 Accounts receivable 72,190 55,141 69,087 72,393 84,969 Finance contracts receivable 11,241 8,161 7,716 5,647 6,847 Inventories 30,340 18,642 23,320 21,452 21,633 Property, plant and equipment, net 35,082 21,678 20,315 20,433 20,088 Total assets 176,223 120,125 134,923 131,027 144,280 Long-term debt 49,046 19,194 46,666 54,700 72,259 Total debt 49,718 19,372 46,863 54,880 72,808 Shareholders' equity 77,573 64,832 55,679 46,283 40,895 Common Share Summary Diluted net income per share $1.95 $1.54 $1.44 $.82 $.04 Basic net income per share 2.06 1.56 1.46 .82 .04 Dividends per share -- -- -- -- -- Book value per share 12.49 10.53 8.96 7.50 6.67 Shares outstanding at year-end 6,212,686 6,158,720 6,216,765 6,169,523 6,132,443 Other Financial Statistics Net cash provided by operating activities $15,119 $31,795 $9,701 $19,522 $26,113 Capital expenditures 8,718 3,837 2,437 2,505 809 Depreciation 2,955 2,438 2,520 2,692 2,940 Current ratio 2.7 to 1 2.8 to 1 3.6 to 1 3.6 to 1 3.8 to 1 Percent total debt to total capitalization 39.1% 23.0% 45.7% 54.2% 64.0% Net income as a percent of net sales 6.5% 6.0% 5.9% 3.4% .2% After-tax return on average shareholders' equity 17.9% 15.9% 17.7% 11.6% .6% Employees at year-end 1,192 832 842 928 946 Common stock price range 24-15/16 - 9-3/8 12 - 6-7/8 9-5/8 - 6-1/4 8-1/2 - 5-3/8 7-3/8 - 3 Investor Information Price Range Dividends 1997 1996 1997 1996 Stock Prices and Dividends First Quarter $11- 5/8 - 9-3/8 $8-3/4 - 6-7/8 $ -- $ -- Second Quarter 17- 7/8 - 10 8-3/4 - 7-5/8 -- -- Third Quarter 24- 5/8 - 16-5/8 8-5/8 - 7-3/8 -- -- Fourth Quarter 24-15/16 - 19-3/8 12 - 7-5/8 -- -- __________________ ______________ __________ __________ Year $24-15/16 - 9-3/8 $12 - 6-7/8 $ -- $ -- ================== ============== ========== ========== [Page 25 of the Annual Report] Directors and Officers Board of Directors Thomas J. Boldt President, The Boldt Group, Inc. (1) Fred M. Butler President and Chief Executive Officer The Manitowoc Company (*2) John W. Findley Chairman and President, Vine and Branches Foundation, Inc. and Chairman and President, Cedars of Nemahbin Foundation, Inc. (1,2) John W. Gehl Retired Vice President, Gehl International (3) William D. Gehl Chairman of the Board of Directors, President and Chief Executive Officer (3) William P. Killian Vice President, Corporate Development and Strategy Johnson Controls, Inc. (3) Arthur W. Nesbitt Vice Chairman, ABC School Supply, Inc. (2,*3) Roger E. Secrist Retired Chairman and Chief Executive Officer ANGUS Chemical Company (2,3) John W. Splude Chairman, President and Chief Executive Officer HK Systems, Inc. (*1) Executive Officers William D. Gehl Chairman of the Board of Directors President and Chief Executive Officer Victor A. Mancinelli Executive Vice President and Chief Operating Officer Kenneth P. Hahn Vice President, Finance and Treasurer Michael J. Mulcahy Vice President, Secretary and General Counsel Richard J. Semler Vice President, Data Systems (*) Chairman (1) Audit Committee (2) Compensation and Benefits Committee (3) Nominating Committee Information of Interest Investor Information Gehl Company provides quarterly financial information to Shareholders through an automated "News on Demand Service". Gehl Company does not mail out Quarterly Reports to Shareholders. By calling 1-800-882-2786, you will be able to request from a directory maintained by the Company a faxed copy of financial and other types of information about the Company to be sent directly to you. You may also order for mailing to you Forms 10-K and 10-Q and other available information by calling the same toll-free number. Additionally, copies of Gehl Company's Form 10-K for 1997, as well as other financial information about the Company, are available from: Michael J. Mulcahy Corporate Secretary Gehl Company 143 Water Street West Bend, Wisconsin 53095 414-334-9461 Gehl Company anticipates making 1998 quarterly earnings announcements: First Quarter: Week ending, April 17, 1998 Second Quarter: Week ending, July 17, 1998 Third Quarter: Week ending, October 16, 1998 Fourth Quarter: Week ending, February 19, 1999 Stock Market Information Gehl Company common stock is traded on The Nasdaq Stock Market under the symbol GEHL. As of February 2, 1998, shareholders of record numbered 693. This number does not include shareholders who hold Gehl Company Stock in street name. Independent Accountants Price Waterhouse, LLP; Milwaukee, Wisconsin Annual Meeting All shareholders are invited to attend our annual meeting which will be held on Wednesday, April 29, 1998, at 3:00 p.m. at the Cedar Theatre, Cedar Lake Campus, 5595 Hwy. Z, West Bend, Wisconsin. Transfer Agent Shareholders with a change of address or related needs should contact: Firstar Trust Company 1555 N. River Center Drive, Suite 301 Milwaukee, Wisconsin 53212 800-637-7549 Special Note Regarding Forward-Looking Statments Certain matters discussed in this Annual Report (including the capition "Management's Discussion and Analysis of Financial Position and Operations") are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include such words as the Company "believes," "anticipates" or "expects," or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include demand for the Company's products, general economic conditions in the agricultural and construction markets, price and product competition and foreign currency fluctuations. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. EX-21 10 Exhibit 21 The following are subsidiaries of Gehl Company Gehl International, Inc. U.S. Virgin Islands Gehl Power Products, Inc. South Dakota Hedlund Martin, Inc. Pennsylvania Brunel America, Inc. Delaware Mustang America, Inc. Delaware Mustang Manufacturing Company, Inc. Minnesota Mustang Finance, Inc. Minnesota Mustang International, Inc. Barbados EX-23 11 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements listed below of Gehl Company of our report dated February 10, 1998 appearing in the 1997 Annual Report to Shareholders which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears in this Form 10-K. 1. Registration Statement on Form S-8 (Registration No. 33-38392) 2. Registration Statement on Form S-8 (Registration No. 33-39150) 3. Registration Statement on Form S-8 (Registration No. 333-02195) 4. Registration Statement on Form S-8 (Registration No. 333-04017) 5. Registration Statement on Form S-3 (Registration No. 333-9173) PRICE WATERHOUSE LLP Milwaukee, Wisconsin March 11, 1998 EX-27 12
5 This schedule contains summary financial information extracted from Gehl Company's consolidated balance sheet at December 31, 1997 and consolidated statements of income for the twelve month period ended December 31, 1997 and is qualified in its entirety by reference to such financial statements. 1000 12-MOS DEC-31-1997 JAN-1-1997 DEC-31-1997 1239 0 87547 4116 30340 117841 72749 37667 176223 44328 49046 621 0 0 76952 176223 197055 197055 139252 139252 0 0 2325 20060 7299 12761 0 0 0 12761 2.06 1.95 Includes all non-current portion of debt obligations Represents the current calculation of Basic Earnings per Share
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