-----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, LfqKEnBbqs8nfkcZoQmKh9DZR2pOprvpObx3O5EOn1VFoR8ay/YnwS7sxlt2HDm4 EygZnw2X7cbMRuDRKh8Vkg== 0000897069-04-001950.txt : 20041109 0000897069-04-001950.hdr.sgml : 20041109 20041109143831 ACCESSION NUMBER: 0000897069-04-001950 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20040925 FILED AS OF DATE: 20041109 DATE AS OF CHANGE: 20041109 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18110 FILM NUMBER: 041128972 BUSINESS ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 BUSINESS PHONE: 2623349461 MAIL ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 10-Q 1 sdc809.htm QUARTERLY REPORT

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 25, 2004

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

Wisconsin	39-0300430
(State or other jurisdiction of incorporation	(I.R.S. Employer Identification No.)
or organization)
143 Water Street, West Bend, WI	53095
(Address of principal executive office)	(Zip code)

(262) 334-9461

(Registrant's telephone number, including area code)

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 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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes

No X

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at September 25, 2004
Common Stock, $.10 Par Value	6,520,002

Gehl Company

FORM 10-Q

September 25, 2004

Report Index

		Page No.
PART I. -	Financial Information
Item 1	Financial Statements
	Condensed Consolidated Statements of Operations for the Three- and
	Nine-month Periods Ended September 25, 2004 and
	September 27, 2003	3
	Condensed Consolidated Balance Sheets at September 25, 2004,
	December 31, 2003, and September 27, 2003	4
	Condensed Consolidated Statements of Cash Flows for
	the Nine-month Periods Ended September 25, 2004 and
	September 27, 2003	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2	Management's Discussion and Analysis of Results of
	Operations and Financial Condition	13
Item 3	Quantitative and Qualitative Disclosures about Market Risk	22
Item 4	Controls and Procedures	22
PART II. -	Other Information
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 5	Other Information	23
Item 6	Exhibits	24
Signatures		25

-2-

PART I – Financial Information

Item 1. Financial Statements

Gehl Company and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited and in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	September 25,			September 27,			September 25,			September 27,
	2004			2003			2004			2003
Net sales	$	87,470		$	60,465		$	267,656		$	187,547
Cost of goods sold		69,545			47,346			213,308			147,699

Gross profit		17,925			13,119			54,348			39,848
Selling, general and
administrative expenses		12,664			10,339			37,724			32,191
Asset impairment and other
restructuring costs		--			3,716			--			3,997

Total operating expenses		12,664			14,055			37,724			36,188
Income (loss) from operations		5,261			(936	)		16,624			3,660
Interest expense		(632	)		(908	)		(1,876	)		(2,791	)
Interest income		518			418			1,418			1,449
Other income (expense), net		288			78			(550	)		462

Income (loss) before income taxes		5,435			(1,348	)		15,616			2,780
Provision (benefit) for income taxes		1,795			(445	)		5,156			934

Net income (loss)	$	3,640		$	(903	)	$	10,460		$	1,846

Net income (loss) per share:
Diluted	$	0.57		$	(0.17	)	$	1.79		$	0.34

Basic	$	0.59		$	(0.17	)	$	1.84		$	0.35

The accompanying notes are an integral part of the financial statements.

-3-

Gehl Company and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited and in thousands, except share data)

	September 25,			December 31,			September 27,
	2004			2003			2003
Assets
Cash	$	2,607		$	3,688		$	2,212
Accounts receivable - net		136,055			92,474			112,843
Finance contracts receivable - net		41,365			2,546			5,973
Inventories		34,342			31,598			31,810
Deferred income tax assets		7,128			7,128			8,469
Prepaid expenses and other current assets		1,727			4,503			8,905

Total current assets		223,224			141,937			170,212

Property, plant and equipment - net		33,574			35,316			34,866
Finance contracts receivable - net, non-current		2,222			1,982			2,804
Goodwill		11,748			11,748			11,748
Other assets		16,134			12,371			12,219

Total assets	$	286,902		$	203,354		$	231,849

Liabilities and Shareholders' Equity
Current portion of debt obligations	$	88		$	186		$	9,253
Accounts payable		41,747			31,556			28,560
Accrued and other current liabilities		27,695			26,861			27,682

Total current liabilities		69,530			58,603			65,495

Line of credit facility		59,893			26,340			50,376
Long-term debt obligations		157			198			255
Deferred income tax liabilities		1,126			1,742			1,190
Other long-term liabilities		25,690			18,471			16,769

Total long-term liabilities		86,866			46,751			68,590

Common stock, $.10 par value,
25,000,000 shares authorized, 6,520,002,
5,333,439 and 5,311,494 shares outstanding,
respectively		652			533			531
Preferred stock, $.10 par value,
2,000,000 shares authorized, 250,000 shares
designated as Series A preferred stock, no
shares issued		--			--			--
Capital in excess of par		28,821			6,665			6,410
Retained earnings		112,562			102,102			101,318
Accumulated other comprehensive loss		(11,529	)		(11,300	)		(10,495	)

Total shareholders' equity		130,506			98,000			97,764

Total liabilities and shareholders' equity	$	286,902		$	203,354		$	231,849

The accompanying notes are an integral part of the financial statements.

-4-

Gehl Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited and in thousands)

	Nine Months Ended
	September 25,			September 27,
	2004			2003
Cash Flows from Operating Activities
Net income	$	10,460		$	1,846
Adjustments to reconcile net income to net cash
(used for) provided by operating activities:
Depreciation		3,662			3,699
Amortization		23			40
Gain on sale of property, plant and equipment		(86	)		--
Deferred income taxes		(616	)		(454	)
Asset impairment (non-cash)		--			3,599
Cost of sales of finance contracts		269			(175	)
Proceeds from sales of finance contracts		57,318			82,455
Increase in finance contracts receivable		(96,646	)		(84,022	)
Change in accounts receivable - net		(43,779	)		(14,876	)
Change in inventories		(2,897	)		5,084
Change in accounts payable		10,344			721
Net changes in remaining working capital items		5,293			2,108

Net cash (used for) provided by operating activities		(56,655	)		25

Cash Flows from Investing Activities
Property, plant and equipment additions		(2,151	)		(1,226	)
Proceeds from the sale of property, plant and equipment		2,174			--
Other assets		(138	)		(113	)

Net cash used for investing activities		(115	)		(1,339	)

Cash Flows from Financing Activities
Proceeds from revolving credit loans		33,553			2,999
Repayments of other borrowings - net		(139	)		(1,090	)
Proceeds from issuance of common stock		22,275			102
Treasury stock purchases		--			(728	)

Net cash provided by financing activities		55,689			1,283

Net decrease in cash		(1,081	)		(31	)
Cash, beginning of period		3,688			2,243

Cash, end of period	$	2,607		$	2,212

The accompanying notes are an integral part of the financial statements.

-5-

Gehl Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 25, 2004
(Unaudited)

Note 1 – Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading.

In the opinion of management, the information furnished for the three- and nine-month periods ended September 25, 2004 and September 27, 2003 includes all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results of operations and financial position of the Company. Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on previously reported net income. Due in part to the seasonal nature of the Company’s business, the results of operations for the nine-month period ended September 25, 2004 are not necessarily indicative of the results to be expected for the entire year.

It is suggested that these interim financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 as filed with the Securities and Exchange Commission.

Note 2 – Stock Based Compensation

The Company maintains stock option plans for certain of its directors, officers and key employees and accounts for these plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees.” No compensation expense has been recognized for options granted under these plans as the option price was equal to the market value of the Company’s common stock on the date of grant.

-6-

The effect on net income (loss) and net income (loss) per share had the Company applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” is presented below (in thousands, except per share data):

	Three Months Ended
	September 25, 2004			September 27, 2003
Net income (loss), as reported	$	3,640		$	(903	)
Less: stock-based compensation expense determined based on
the fair value method, net of tax		(120	)		(175	)

Pro forma net income (loss)	$	3,520		$	(1,078	)

Diluted net income (loss) per share:
As reported	$	0.57		$	(0.17	)
Pro forma	$	0.55		$	(0.20	)
Basic net income (loss) per share:
As reported	$	0.59		$	(0.17	)
Pro forma	$	0.57		$	(0.20	)
	Nine Months Ended
	September 25, 2004			September 27, 2003
Net income, as reported	$	10,460		$	1,846
Less: stock-based compensation expense determined based on
the fair value method, net of tax		(424	)		(477	)

Pro forma net income	$	10,036		$	1,369
Diluted net income per share:
As reported	$	1.79		$	0.34
Pro forma	$	1.72		$	0.26
Basic net income per share:
As reported	$	1.84		$	0.35
Pro forma	$	1.77		$	0.26

Note 3 – Income Taxes

The income tax provision (benefit) is determined by applying an estimated annual effective income tax rate to income (loss) before income taxes. The estimated annual effective income tax rate is based on the most recent annualized forecast of pretax income (loss), permanent book/tax differences and tax credits.

Note 4 – Asset Impairment

In conjunction with a plant rationalization initiative adopted by the Company on September 26, 2001, the Company closed its Lebanon, Pennsylvania (“Lebanon”) and Owatonna, Minnesota (“Owatonna”) manufacturing facilities. These facilities and certain related assets were held for sale subsequent to the facility closings. During the 2003 third quarter, the Company recorded a $3.6 million asset impairment charge to adjust the carrying value of these facilities and related assets to their net realizable value. The Lebanon and Owatonna facilities were sold in the 2003 fourth quarter and 2004 third quarter, respectively. Of the $3.6 million charge, $1.2 million and $2.4 million related to the construction equipment and agricultural equipment segments, respectively.

-7-

Note 5 – Inventories

If all of the Company’s inventories had been valued on a current cost basis, which approximated FIFO value, estimated inventories by major classification would have been as follows (in thousands):

	September 25, 2004			December 31, 2003			September 27, 2003
Raw materials and supplies	$	16,868		$	11,456		$	12,163
Work-in-process		3,253			3,011			3,030
Finished machines and parts		37,169			40,079			40,120

Total current cost value		57,290			54,546			55,313
Adjustment to LIFO basis		(22,948	)		(22,948	)		(23,503	)

LIFO inventory value	$	34,342		$	31,598		$	31,810

Note 6 – Product Warranties and Other Guarantees

In general, the Company provides warranty coverage on equipment for a period of up to twelve months. The Company’s reserve for warranty claims is established based on the best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. While the Company’s warranty costs have historically been within its calculated estimates, it is possible that future warranty costs could differ from those estimates. The changes in the carrying amount of the Company’s total product warranty liability for the nine-month period ended September 25, 2004 were as follows (in thousands):

Balance as of December 31, 2003	$	4,054
Accruals for warranties issued during the period		3,210
Accruals related to pre-existing warranties
(including changes in estimates)		--
Settlements made (in cash or in kind) during the period		(2,743	)

Balance as of September 25, 2004	$	4,521

Note 7 – Employee Retirement Plans

The Company sponsors two qualified defined benefit pension plans for certain of its employees. The following table provides disclosure of the net periodic benefit cost (in thousands):

	For the Three Months Ended						For the Nine Months Ended
	September 25,			September 27,			September 25,			September 27,
	2004			2003			2004			2003
Service cost	$	196		$	174		$	589		$	522
Interest cost		670			638			2,010			1,914
Expected return on plan assets		(753	)		(734	)		(2,259	)		(2,202	)
Amortization of prior service cost		52			53			156			159
Amortization of net loss		311			157			932			471

Net periodic benefit cost	$	476		$	288		$	1,428		$	864

In April 2004, the Pension Funding Equity Act of 2004 (“the Pension Funding Act”) was signed into law providing a temporary solution to several issues that arose from the discontinuance of new-issue, 30-year Treasury Bonds several years ago. Under the Pension Funding Act, companies will use high-quality corporate bond rates for key liability measures in place of the extrapolated long-term treasury rates used prior to the Pension Funding Act. This will reduce required pension contributions during 2004 and 2005. As of September 25, 2004, $5.3 million of contributions have been made during 2004. The Company is required to make $5.4 million of contributions for all of 2004.

-8-

The Company maintains an unfunded non-qualified supplemental retirement benefit plan for certain management employees. The following table provides disclosure of the net periodic benefit cost (in thousands):

	For the Three Months Ended				For the Nine Months Ended
	September 25,		September 27,		September 25,		September 27,
	2004		2003		2004		2003
Service cost	$	73	$	57	$	219	$	170
Interest cost		73		64		219		192
Amortization of prior service cost		23		21		69		63
Amortization of net loss		13		5		38		15

Net periodic benefit cost	$	182	$	147	$	545	$	440

The Company provides postemployment benefits to certain retirees, which includes subsidized health insurance benefits for early retirees prior to their attaining age 65. The following table provides disclosure of the net periodic benefit cost (in thousands):

	For the Three Months Ended				For the Nine Months Ended
	September 25,		September 27,		September 25,		September 27,
	2004		2003		2004		2003
Service cost	$	15	$	13	$	46	$	40
Interest cost		22		23		65		69
Amortization of transition obligation		6		6		18		18
Amortization of net loss		5		5		15		15

Net periodic benefit cost	$	48	$	47	$	144	$	142

Note 8 – Accounting Pronouncements

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Modernization Act”) introduced a prescription drug benefit under Medicare, as well as a federal subsidy to sponsors of retiree health care benefit plans. In January 2004, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. FAS 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (“106-1”). FSP No. FAS 106-1 permits a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Modernization Act if there is insufficient data, time or guidance available to ensure appropriate accounting. As permitted by FSP No. FAS 106-1, the Company elected to defer the accounting for the effects of the Modernization Act. In May 2004, the FASB issued FSP No. FAS 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” which surpersedes FSP No. FAS 106-1. The Company reviewed FSP No. FAS 106-2 and has concluded that the Company’s accounting for postemployment health insurance will not be impacted by FSP No. FAS 106-2 as the Company will not be eligible to receive a government subsidy as defined in the Modernization Act.

-9-

In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” (“FIN 46”). FIN 46 clarifies the application of Accounting Research Bulletin No. 51, “Consolidated Financial Statements” to certain entities in which, among others, equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The consolidation provisions of FIN 46, as revised, were effective immediately for interests created after January 31, 2003 and were effective on March 31, 2004 for interests created before February 1, 2003. As of September 25, 2004, the Company did not own an interest in any variable interest entities.

Note 9 – Net Income (Loss) Per Share and Comprehensive Income (Loss)

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted- average number of common shares outstanding for the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares and, if applicable, common stock equivalents that would arise from the exercise of stock options.

A reconciliation of the shares used in the computation of earnings per share follows (in thousands):

	Three Months Ended
	September 25, 2004		September 27, 2003
Basic shares		6,198		5,310
Effect of options		217		--

Diluted shares		6,415		5,310

	Nine Months Ended
	September 25, 2004		September 27, 2003
Basic shares		5,670		5,343
Effect of options		180		22

Diluted shares		5,850		5,365

The components of comprehensive income (loss) are as follows (in thousands):

	Three Months Ended
	September 25, 2004			September 27, 2003
Net income (loss)	$	3,640		$	(903	)
Foreign currency translation
adjustments		65			(12	)
Unrealized losses on derivatives		(80	)		--

Other comprehensive loss		(15	)		(12	)

Comprehensive income (loss)	$	3,625		$	(915	)

	Nine Months Ended
	September 25, 2004			September 27, 2003
Net income	$	10,460		$	1,846
Foreign currency translation
adjustments		(149	)		406
Unrealized losses on derivatives		(80	)		--

Other comprehensive (loss) income		(229	)		406

Comprehensive income	$	10,231		$	2,252

-10-

Note 10 – Business Segments

The Company operates in two business segments: Construction equipment and Agricultural equipment. The long-term financial performance of the Company’s reportable segments is affected by separate economic conditions and cycles. The segments are managed separately based on the fundamental differences in their operations. Following is selected segment information (in thousands):

	Three Months Ended						Nine Months Ended
	September 25, 2004			September 27, 2003			September 25, 2004		September 27, 2003
Net sales:
Construction	$	58,784		$	38,766		$	174,771	$	118,687
Agricultural		28,686			21,699			92,885		68,860

Consolidated	$	87,470		$	60,465		$	267,656	$	187,547

Income (loss) from operations:
Construction	$	5,392		$	2,235		$	14,826	$	6,790
Agricultural		(131	)		(3,171	)		1,798		(3,130	)

Consolidated	$	5,261		$	(936	)	$	16,624	$	3,660

The loss from operations for the three- and nine-month periods ended September 27, 2003 includes a $3.6 million asset impairment charge. Of the $3.6 million charge, $1.2 million and $2.4 million relates to the construction equipment and agricultural equipment segments, respectively (See note 4).

Note 11 – Stock Repurchases

In September 2001, the Company’s Board of Directors authorized a stock repurchase plan providing for the repurchase of up to 500,000 shares of the Company’s outstanding common stock. No shares under this authorization were repurchased during the three- and nine-month periods ended September 25, 2004 nor the three-month period ended September 27, 2003. During the nine-month period ended September 27, 2003, the Company repurchased 73,700 shares in the open market under this authorization at an aggregate cost of $0.7 million. As of September 25, 2004, the Company has repurchased an aggregate of 151,900 shares under this authorization. All treasury stock acquired by the Company has been cancelled and returned to the status of authorized but unissued shares.

Note 12 – Shareholders’ Equity

On July 22, 2004, in conjunction with the establishment of a strategic alliance with Manitou, the world’s largest manufacturer of telescopic handlers, the Company issued 961,768 shares of common stock to Manitou at an aggregate purchase price of $19.8 million. The proceeds from the sale of the common stock were used to pay down the Company’s line of credit facility.

Beginning in 2005, the Company and Manitou will distribute select models of each others’ telescopic handler product lines in the United States through their respective dealer networks. Pursuant to a license agreement with Manitou, the Company will also begin to manufacture two series of Manitou compact telescopic handlers at the Company’s Yankton, South Dakota facility.

-11-

Note 13 – Financial Instruments

The Company selectively uses interest rate swaps to reduce market risk associated with changes in interest rates. The use of derivatives is restricted to those intended for hedging purposes.

In September 2004, the Company entered into two interest rate swap agreements (“swaps”). The swaps, which expire in five years, were entered into to hedge a portion of the gains / losses on the sale of retail finance contracts. Under the swaps, the Company receives interest on a variable U.S. 30-day LIBOR rate and pays on a fixed U.S. dollar rate of 3.73% and 3.41%, respectively.

The Company’s derivative instruments are recorded at fair value in the Condensed Consolidated Balance Sheet. At September 25, 2004, the notional amount of the swaps totaled $32 million and the fair value was recorded as a liability of $80,000. There were no outstanding swaps at September 27, 2003. The Company’s interest rate swaps are hedges protecting against underlying changes in interest rates and their impact on the gains / losses incurred upon the sale of retail finance contracts. Accordingly, the implied gains / losses associated with the fair values of interest rate swaps would be offset by gains / losses on the sale of the underlying retail finance contracts.

-12-

Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition

Results of Operations

Three Months Ended September 25, 2004 Compared to Three Months Ended September 27, 2003

Net Sales

Net sales in the three months ended September 25, 2004 (“2004 third quarter”) were $87.5 million compared to $60.5 million in the three months ended September 27, 2003 (“2003 third quarter”), an increase of $27.0 million, or 45%.

Construction equipment segment net sales were $58.8 million in the 2004 third quarter compared to $38.8 million in the 2003 third quarter, an increase of $20.0 million, or 52%. Shipments of Gehl and Mustang branded skid loaders in the 2004 third quarter increased over 45% from the 2003 third quarter. Telescopic handler shipments in the 2004 third quarter more than doubled from the 2003 third quarter as demand from larger rental customers continued in the 2004 third quarter. Demand for compact track loaders, a product introduced in mid-2002, continued to grow and resulted in 2004 third quarter shipments which were up nearly 70% from the 2003 third quarter. The Company’s European subsidiary, Gehl Europe, also posted strong sales during the 2004 third quarter.

Agricultural equipment segment net sales were $28.7 million in the 2004 third quarter, compared to $21.7 million in the 2003 third quarter, an increase of $7.0 million, or 32%. Milk prices paid to dairy farmers in the 2004 third quarter were improved over the 2003 third quarter. Skid loader shipments to agricultural dealers during the 2004 third quarter were up nearly 60% as demand for the new models of Gehl brand skid loaders introduced in January 2004 remained strong during the 2004 third quarter. Demand for compact track loaders continued to grow and resulted in 2004 third quarter shipments to agricultural dealers which more than doubled from the 2003 third quarter. Shipments of agricultural implements in the 2004 third quarter decreased slightly from the 2003 third quarter.

Of the Company’s total net sales reported for the 2004 third quarter, $13.7 million were made outside of the United States compared with $12.0 million in the 2003 third quarter. The increase in export sales was primarily due to increased sales in Europe.

Gross Profit

Gross profit was $17.9 million in the 2004 third quarter compared to $13.1 million for the 2003 third quarter, an increase of $4.8 million, or 37%. Gross profit as a percent of net sales (gross margin) was 20.5% for the 2004 third quarter compared to 21.7% for the 2003 third quarter.

Gross margin for the construction equipment segment was 22.9% for the 2004 third quarter compared with 24.8% for the 2003 third quarter. Gross margin for the agricultural equipment segment was 15.6% for the 2004 third quarter compared to 16.1% for the 2003 third quarter. The 2004 third quarter gross margin for both segments was negatively impacted by higher steel and component part costs and costs of finished goods sourced from overseas due to the weak U.S. dollar versus the Euro and the yen. These cost increases have been partially offset by selective selling price increases in the first and third quarters. Gross margin will likely continue to be adversely impacted by high steel and component part costs.

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The decline in the agricultural equipment segment gross margin was partially offset by the mix of products shipped, as well as lower levels of discounts and sales incentives incurred in the 2004 third quarter compared to the 2003 third quarter. The construction equipment segment gross margin further reflects the unfavorable mix of both product shipments and customers shipped to during the 2004 third quarter compared to the 2003 third quarter.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $12.7 million, or 14.5% of net sales, for the 2004 third quarter compared to $10.3 million, or 17.1% of net sales, for the 2003 third quarter. The increase in spending is primarily the result of items that vary with sales levels as well as increased costs associated with efforts to comply with the 2002 Sarbanes-Oxley Act. However, selling, general and administrative expenses as a percentage of net sales improved as the growth in net sales exceeded expense increases.

Asset Impairment

Income (Loss) from Operations

Income from operations for the 2004 third quarter was $5.3 million, or 6.0% of net sales, compared to a loss from operations of ($0.9) million, or (1.5%) of net sales, for the 2003 third quarter, an increase of $6.2 million. The 2003 loss from operations includes the $3.6 million impairment charge discussed in “Asset Impairment” above.

Interest Expense

Interest expense was $0.6 million for the 2004 third quarter compared to $0.9 million for the 2003 third quarter, a decrease of $0.3 million, or 30%. The decrease in the Company’s average outstanding debt balance and lower average borrowing costs contributed to a decrease in the 2004 third quarter interest expense. See “Financial Condition” at page 17 for discussion of changes in outstanding debt.

Net Other Income

The Company recorded net other income of $0.3 million and $0.1 million in the 2004 third quarter and 2003 third quarter, respectively. The increase in net other income was primarily due to an increase in foreign exchange transaction income in the 2004 third quarter compared to the 2003 third quarter.

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Net Income (Loss)

Net income was $3.6 million in the 2004 third quarter, or 4.2% of net sales, compared to a net loss of ($0.9) million in the 2003 third quarter, or (1.5%) of net sales, an increase of $4.5 million. The 2003 loss from operations includes the $2.4 million after-tax impairment charge discussed in “Asset Impairment” above.

Nine Months Ended September 25, 2004 Compared to Nine Months Ended September 27, 2003

Net Sales

Net sales for the nine months ended September 25, 2004 (“2004 nine months”) were $267.7 million compared to $187.5 million for the nine months ended September 27, 2003 (“2003 nine months”), an increase of $80.1 million, or 43%.

Construction equipment segment net sales were $174.8 million for the 2004 nine months compared to $118.7 million for the 2003 nine months, an increase of $56.1 million, or 47%. Shipments of skid loaders in the 2004 nine months were up over 35% from the 2003 nine months due to demand for new Gehl skid loaders models introduced in January 2004, as well as increased demand for Mustang brand skid loaders. Telescopic handler shipments nearly doubled during the 2004 nine months compared to the 2003 nine months as demand from larger rental customers was strong. Demand for compact track loaders, a product introduced in mid-2002, continued to grow and resulted in shipments increasing over 85% during the 2004 nine months compared to the 2003 nine months. The Company’s European subsidiary, Gehl Europe, also posted strong sales during the 2004 nine months.

Agricultural equipment segment net sales were $92.9 million for the 2004 nine months, compared to $68.9 million for the 2003 nine months, an increase of $24.0 million, or 35%. Milk prices paid to dairy farmers in the 2004 nine months were improved over the 2003 nine months. Skid loader shipments during the 2004 nine months increased over 45% from the 2003 nine months. Demand for compact track loaders was also strong as 2004 nine month shipments more than doubled from the 2003 nine months. In addition, shipments of agricultural implements in the 2004 nine months increased nearly 10% from the 2003 nine months.

Of the Company’s total net sales reported for the 2004 nine months, $43.3 million were made outside of the United States compared with $36.7 million for the 2003 nine months. The increase in export sales was primarily due to increased sales in Europe.

Gross Profit

Gross profit was $54.3 million for the 2004 nine months compared to $39.8 million for the 2003 nine months, an increase of $14.5 million, or 36%. Gross profit as a percent of net sales (gross margin) was 20.3% for the 2004 nine months compared to 21.2% for the 2003 nine months.

Gross margin for the construction equipment segment was 22.2% for the 2004 nine months compared with 23.6% for the 2003 nine months. Gross margin for the agricultural equipment segment was 16.7% for the 2004 nine months compared to 17.2% for the 2003 nine months. The 2004 nine month gross margin for both segments was negatively impacted by higher steel and component part costs, costs of finished goods sourced from overseas due to the weak U.S. dollar versus the Euro and the yen and manufacturing inefficiencies associated with the start-up of production of the new Gehl skid loader models in early 2004. These cost increases have been partially offset by selective selling price increases in the first and third quarters. Gross margin will likely continue to be adversely impacted by high steel and component part costs.

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The decline in the agricultural equipment segment gross margin was partially offset by the mix of products shipped, as well as lower levels of discounts and sales incentives incurred in the 2004 nine months compared to the 2003 nine months. The construction equipment segment gross margin further reflects the unfavorable mix of both product shipments and customers shipped to during the 2004 nine months compared to the 2003 nine months.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $37.7 million, or 14.1% of net sales, for the 2004 nine months compared to $32.2 million, or 17.2% of net sales, for the 2003 nine months. The increase in selling, general and administrative expenses is primarily the result of items that vary with sales levels. However, selling, general and administrative expenses as a percentage of net sales improved as the growth in net sales exceeded expense increases.

Income from Operations

Income from operations for the 2004 nine months was $16.6 million, or 6.2% of net sales, compared to $3.7 million, or 2.0% of net sales, for the 2003 nine months, an increase of $13.0 million. The 2003 income from operations includes the $3.6 million impairment charge discussed in “Asset Impairment” above.

Interest Expense

Interest expense was $1.9 million for the 2004 nine months compared to $2.8 million for the 2003 nine months, a decrease of $0.9 million, or 33%. The decrease in the Company’s average outstanding debt balance and lower average borrowing costs contributed to a decrease in the 2004 nine month interest expense. See “Financial Condition” at page 17 for discussion of changes in outstanding debt.

Net Other Income (Expense)

The Company incurred net other expense of $0.6 million for the 2004 nine months compared to net other income of $0.5 million for the 2003 nine months. The Company’s costs of selling retail finance contracts during the 2004 nine months increased $0.4 million from the 2003 nine months due to an increasing interest rate environment. In addition, the Company incurred foreign exchange transaction expense in the 2004 nine months of $0.2 million compared to foreign exchange transaction income in the 2003 nine months of $0.3 million.

Net Income

Net income was $10.5 million for the 2004 nine months compared with $1.8 million for the 2003 nine months, an increase of $8.6 million. The 2003 net income includes the $2.4 million after-tax impairment charge discussed in “Asset Impairment” above.

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Financial Condition

The Company’s working capital was $153.7 million at September 25, 2004, as compared to $83.3 million at December 31, 2003, and $104.7 million at September 27, 2003. The increase since September 27, 2003 was primarily due to increases in accounts receivable ($23.2 million) and finance contracts receivable ($35.4 million) offset, in part, by an increase in accounts payable ($13.2 million). The increase in accounts receivable was due to strong shipments in the 2004 nine months, which were primarily driven by the shipments of the new Gehl brand skid loaders and strong demand for telescopic handlers and compact track loaders. Finance contracts receivable increased as the Company retained contracts for a 2004 fourth quarter sale (see additional discussion below). The increase in accounts payable was due to increased production resulting from strong shipments as well as the timing of payments resulting from a change in the mix of vendors.

The increase in working capital from December 31, 2003 was primarily due to increases in accounts receivable ($43.6 million) and finance contracts receivable ($38.8 million) offset, in part, by increases in accounts payable ($10.2 million). The increase in accounts receivable was due to strong shipments in the 2004 nine months, which were primarily driven by the shipments of the new Gehl brand skid loaders and strong demand for telescopic handlers and compact track loaders as well as normal seasonal sales patterns. Finance contracts receivable increased as the Company has been retaining contracts for a 2004 fourth quarter sale (see additional discussion below). The increase in accounts payable was due to increased production resulting from strong shipments, normal seasonal production increases as well as the timing of payments resulting from a change in the mix of vendors.

Capital expenditures for property, plant and equipment during the 2004 nine months were approximately $2.2 million. During 2004, the Company anticipates making an aggregate of up to $4.0 million in capital expenditures. The Company believes that its present manufacturing facilities will be sufficient to provide adequate capacity for its operations in 2004. During October 2004, the Company’s Board of Directors approved a project to increase manufacturing capacity in 2005. The Company anticipates making capital expenditures of approximately $5.3 million related to the capacity expansion project during 2005.

The Company maintains a $75 million line of credit facility (“Facility”) which expires December 31, 2007. The amount available under the Facility increases from $75 million to $90 million from the period March 1 to July 15 each year through December 31, 2007. On September 21, 2004, the Facility was amended to extend the 2004 period of $90 million of availability through December 31, 2004. The Company had available unused borrowing capacity of $28.6 million, $46.8 million and $23.1 million under the Facility at September 25, 2004, December 31, 2003, and September 27, 2003, respectively. At September 25, 2004, December 31, 2003, and September 27, 2003, the Company’s outstanding borrowings under the Facility were $59.9 million, $26.3 million and $50.4 million, respectively. As of September 25, 2004, the weighted-average interest rate paid by the Company on outstanding borrowings under its Facility was 4.5%.

The changes in total borrowings from September 27, 2003 and December 31, 2003 to September 25, 2004 were primarily due to increases in working capital requirements as discussed above, offset by $19.8 million in proceeds received from the sale of 961,768 shares of the Company’s common stock in conjunction with the establishment of the strategic alliance with Manitou announced on July 22, 2004 (See note 12 of “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this Form 10-Q). In addition, $8.4 million of Industrial Development Bonds associated with the Company’s Lebanon, Pennsylvania were defeased in conjunction with the December 2003 sale of the facility (see “Asset Impairment” on page 14 for additional discussion) further reducing outstanding borrowings from September 27, 2003 to September 25, 2004.

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The Company believes it has adequate capital resources and borrowing capacity to meet its projected capital requirements for the foreseeable future. Requirements for working capital, capital expenditures, pension fund contributions and debt maturities in fiscal 2004 will continue to be funded by operations and borrowings under the Facility.

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 September 25, 2004, the Company serviced $230.8 million of such contracts, of which $186.2 million were owned by other parties. The Company is in the process of finalizing an agreement with a financial institution pursuant to which the Company would sell substantially all of its finance contracts under an asset securitization program to this financial institution beginning in the 2004 fourth quarter. The Company has been retaining contracts for the initial 2004 fourth quarter sale. If this agreement is not finalized during the 2004 fourth quarter, the Company believes that it will be able to arrange sufficient capacity to sell its finance contracts for the foreseeable future.

At September 25, 2004, shareholders’ equity had increased $32.7 million to $130.5 million from $97.8 million at September 27, 2003. This increase was due to the net income earned from September 27, 2003 to September 25, 2004, $19.8 million in proceeds from the sale of 961,768 shares of common stock, exercise of stock options and currency translation adjustments, offset by the minimum pension liability adjustment recorded in 2003.

In September 2001, the Company’s Board of Directors authorized a stock repurchase plan providing for the repurchase of up to 500,000 shares of the Company’s outstanding common stock. No shares were repurchased under this authorization during the three- and nine-month periods ended September 25, 2004 nor the three-month period ended September 27, 2003. During the nine-month period ended September 27, 2003, the Company repurchased 73,700 shares in the open market under this authorization at an aggregate cost of $0.7 million. As of September 25, 2004, the Company has repurchased an aggregate of 151,900 shares under this authorization. All treasury stock acquired by the Company has been cancelled and returned to the status of authorized but unissued shares.

Other than extension of the expiration date of the Company’s Facility to December 31, 2007 resulting from a March 23, 2004 amendment to the Facility, there have been no material changes to the annual maturities of debt obligations nor to the future minimum non-cancelable operating lease payments as disclosed in Management’s Discussion and Analysis of Results of Operations and Financial Condition and Notes 7 and 14, respectively, of Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 as filed with the Securities and Exchange Commission.

Accounting Pronouncements

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Critical Accounting Policies and Estimates

The preparation of the Company’s condensed consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and materially impact the carrying value of the assets and liabilities. The Company believes the following accounting policies are critical to the Company’s business operations and the understanding of the Company’s results of operations and financial condition.

Allowance for Doubtful Accounts

The Company’s accounts receivable are reduced by an allowance for amounts that may be uncollectible in the future. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific reserve for bad debts is recorded against the accounts receivable balance to reduce the amount due to the net amount reasonably expected to be collected. Additionally, a general percentage of past due receivables is reserved, based on the Company’s past experience of collectibility. If circumstances change (i.e., higher than expected defaults or an unexpected material adverse change in a major customer’s ability to meet its financial obligations), estimates of the recoverability of amounts due could be reduced by a material amount.

Inventories

Inventories are valued at the lower of cost or market value. Cost is determined using the last-in, first-out (LIFO) method for the majority of the Company’s inventories. In valuing inventory, management is required to make assumptions regarding the level of reserves required to value potentially obsolete or slow moving items to the lower of cost or market value. Inventory reserves are established taking into account inventory age and frequency of use or sale. While calculations are made involving these factors, significant management judgment regarding expectations for future events is involved. Future events that could significantly influence management’s judgment and related estimates include general economic conditions in markets where the Company’s products are sold, as well as new products and design changes introduced by the Company.

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Accrued Warranty

The Company establishes reserves related to the warranties provided on its products. Specific reserves are maintained for programs related to known machine safety and reliability issues. When establishing specific reserves, estimates are made regarding the size of the population, the type of program, costs to be incurred and estimated participation. Additionally, general reserves are maintained based on the historical percentage relationships of warranty costs to machine sales and applied to current equipment sales. If these estimates and related assumptions change, reserve levels may require adjustment.

Accrued Product Liability

The Company records a general reserve for potential product liability claims based on the Company’s prior claim experience and specific reserves for known product liability claims. Specific reserves for known claims are valued based upon the Company’s prior claims experience, including consideration of the jurisdiction, circumstances of the accident, type of loss or injury, identity of plaintiff, other potential responsible parties, analysis of outside counsel, and analysis of internal product liability counsel. Actual product liability costs could be different due to a number of variables, including decisions of juries or judges.

Goodwill Impairment

In connection with SFAS No. 142, “Goodwill and Other Intangible Assets,” the Company is required to perform goodwill impairment reviews, at least annually, using a fair-value-based approach. The Company performs its annual impairment review as of December 31. As part of the annual impairment review, an estimate of the fair value of the Company’s construction equipment segment (the entire carrying amount of goodwill is allocated to the construction segment), primarily by using a discounted cash flow analysis, is performed. Significant assumptions used in this analysis include: expected future revenue growth rates, operating profit margins, working capital levels and a weighted average cost of capital. Changes in assumptions could significantly impact the estimate of the fair value of the construction equipment segment, which could result in a goodwill impairment charge and could have a significant impact on the results of the construction equipment segment and the consolidated financial statements.

Pension and Postemployment Benefits

Pension and postemployment benefit costs and obligations are dependent on assumptions used in calculation of these amounts. These assumptions, used by actuaries, include discount rates, expected return on plan assets for funded plans, rate of salary increases, health care cost trend rates, mortality rates and other factors. In accordance with accounting principles generally accepted in the United States, actual results that differ from the actuarial assumptions are accumulated and amortized to future periods and therefore affect recognized expense and recorded obligations in future periods. While the Company believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may materially effect its financial position or results of operations.

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Outlook

Sales are expected to remain strong for the balance of 2004 and the Company’s order backlog remains robust, indicating that the Company’s markets continue to show signs of strength. Based on actual year-to-date results, along with the current market outlook, the Company expects its net sales for the full year 2004 to be in the range of 44% to 46% over 2003 levels. Provided the Company’s sales levels meet projected forecasts, the Company expects to earn in the range of $2.05 to $2.15 per diluted share in 2004.

Forward-Looking Statements

Certain statements included in this filing are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including the statements in the section entitled “Full Year Outlook,” are forward-looking statements. When used in this filing, words such as the Company “believes,” “anticipates,” “expects”, “estimates” or “projects” or words of similar meaning are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, that could cause actual results to differ materially from those anticipated as of the date of this filing. Factors that could cause such a variance include, but are not limited to, any interruption in the continued general economic recovery, unanticipated changes in capital market conditions, the Company’s ability to implement successfully its strategic initiatives, market acceptance of newly introduced products, unexpected issues related to the pricing and availability of raw materials (including steel) and component parts, the ability of the Company to increase its prices to reflect higher prices for raw materials and component parts, the cyclical nature of the Company’s business, the Company’s and its customers’ access to credit, competitive pricing, product initiatives and other actions taken by competitors, disruptions in production capacity, excess inventory levels, the effect of changes in laws and regulations (including government subsidies and international trade regulations), technological difficulties, changes in currency exchange rates or interest rates, the Company’s ability to secure sources of liquidity necessary to fund its operations, unanticipated issues associated with the Company’s plan to enter into a securitization agreement relating to its finance contracts, changes in environmental laws, the impact of any acquisition effected by the Company, and employee and labor relations. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this filing are only made as of the date of this filing, and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. In addition, the Company’s expectations for fiscal year 2004 are based in part on certain assumptions made by the Company, including those relating to commodities prices, which are strongly affected by weather and other factors and can fluctuate significantly, housing starts and other construction activities, which are sensitive to, among other things, interest rates and government spending, and the performance of the U.S. economy generally. The accuracy of these or other assumptions could have a material effect on the Company’s ability to achieve its expectations.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

There are no material changes to the information provided in response to this item as set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 as filed with the Securities and Exchange Commission.

Item 4. Controls and Procedures

The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the Company’s disclosure controls and procedures as of September 25, 2004. Based upon that evaluation, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of September 25, 2004. There was no change in the Company’s internal control over financial reporting that occurred during the three months ended September 25, 2004, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On July 22, 2004, in conjunction with the establishment of a strategic alliance with Manitou BF S.A., the world’s largest manufacturer of telescopic handlers, the Company issued, pursuant to Section 4(2) under the Securities Act of 1933, as amended, 961,768 shares of common stock to Manitou at an aggregate purchase price of $19.8 million. The proceeds from the sale of the common stock were used to pay down the Company’s line of credit facility.

In September 2001, the Company’s Board of Directors authorized a stock repurchase plan providing for the repurchase of up to 500,000 shares of the Company’s outstanding common stock in open market or privately negotiated transactions. The plan does not have an expiration date. No shares were repurchased under the plan during the three- and nine-month periods ended September 25, 2004. As of September 25, 2004, the Company had authority to repurchase 348,100 shares under the plan.

Item 5. Other Information

On July 27, 2004, Kurt Helletzgruber retired as a Director of the Company. Mr. Helletzgruber had served as a Director since 2002. On July 30, 2004, Johann Neunteufel was elected a Director of the Company, succeeding Mr. Helletzgruber. Mr. Neunteufel’s current term as a director expires at the 2005 annual meeting of shareholders.

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Item 6. Exhibits

Exhibit No.

Document Description

4.1

Fifteenth Amendment to the Amended and Restated Loan and Security Agreement by and between GE Commercial Distribution Finance Corporate and GE Commercial Distribution Finance of Canada Inc. and Gehl Company and its subsidiaries, dated as of September 21, 2004.

10.1

Employment Agreement by and between Gehl Company and William D. Gehl, dated as of June 14, 2004 (executed as of July 30, 2004).

10.2

Change in Control and Severance Agreement by and between Gehl Company and Thomas M. Rettler dated as of August 23, 2004.

10.3

Supplemental Retirement Benefit Agreement by and between Gehl Company and Thomas M. Rettler dated as of August 23, 2004.

10.4

Form of Restricted Stock Agreement used in conjunction with the Gehl Company 2004 Equity Incentive Plan.

31.1

Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements 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: November 8, 2004	By: /s/ William D. Gehl
	William D. Gehl
	Chairman of the Board
	and Chief Executive Officer
Date: November 8, 2004	By: /s/ Thomas M. Rettler
	Thomas M. Rettler
	Vice President and
	Chief Financial Officer
	(Principal Financial and
	Accounting Officer)

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GEHL COMPANY

INDEX TO EXHIBITS

Exhibit No.

Document Description

4.1	Fifteenth Amendment to the Amended and Restated Loan and Security Agreement by and between GE Commercial Distribution Finance Corporate and GE Commercial Distribution Finance of Canada Inc. and Gehl Company and its subsidiaries, dated as of September 21, 2004.

10.1	Employment Agreement by and between Gehl Company and William D. Gehl, dated as of June 14, 2004 (executed as of July 30, 2004).

10.2	Change in Control and Severance Agreement by and between Gehl Company and Thomas M. Rettler dated as of August 23, 2004.

10.3	Supplemental Retirement Benefit Agreement by and between Gehl Company and Thomas M. Rettler dated as of August 23, 2004.

10.4	Form of Restricted Stock Agreement used in conjunction with the Gehl Company 2004 Equity Incentive Plan.

31.1	Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

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EX-4.1 2 sdc809a.htm FIFTEENTH AMENDMENT TO SECURITY AGREEMENT

FIFTEENTH AMENDMENT
to
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This FIFTEENTH AMENDMENT to AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of September 21, 2004, by and among GEHL COMPANY, a Wisconsin corporation, GEHL POWER PRODUCTS, INC., a South Dakota corporation, COMPACT EQUIPMENT ATTACHMENTS INC., a Wisconsin corporation, HEDLUND-MARTIN, INC., a Pennsylvania corporation (“Hedlund”), and MUSTANG MANUFACTURING COMPANY, INC., a Minnesota corporation (herein, separately and collectively, “Borrower” or “Gehl Company”) and GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION (formerly Deutsche Financial Services Corporation) and GE COMMERCIAL DISTRIBUTION FINANCE CANADA INC. (formerly Deutsche Financial Services Canada Corporation) (herein, separately and collectively, “Lender”).

Recitals:

Borrower and Lender (or their respective predecessors in interest) are party to that Amended and Restated Loan and Security Agreement dated as of October 1, 1994 (as it has been and may be further amended, restated, extended, renewed, replaced, or otherwise modified from time to time, the “Loan Agreement”).

B.	Borrower and Lender desire to amend the Loan Agreement and clarify certain agreements and understanding among them on the terms and conditions set forth herein

Amendment

Therefore, in consideration of the mutual agreements herein and other sufficient consideration, the receipt of which is hereby acknowledged, Borrower and Lender hereby amend the Loan Agreement as follows:

1. Definitions. Capitalized terms used and not otherwise defined herein have the meanings given them in the Loan Agreement. All references to the “Agreement” in the Loan Agreement and in this Amendment shall be deemed to be references to the Loan Agreement as it is amended hereby and as it may be further amended, restated, extended, renewed, replaced, or otherwise modified from time to time.

2. Conditions to Effectiveness of Amendment. This Amendment shall become effective as of the date first above written if this Amendment has been duly executed by all parties hereto.

3. Amendments

3.1. Maximum Line of Credit. The lead-in to Section 2.1, Section 2.1(a) and Section 2.1(b) are each hereby deleted in their entirety and are restated as follows:

“2.1. Credit Facility. In consideration of Gehl Company’s performance of its obligations and subject to Sections 3 and 4 of this Agreement, and subject to the other terms and provisions of this Agreement, GECDF grants to Gehl Company until the Maturity Date, an aggregate credit facility in the maximum amount of $75,000,000, provided, however from and including the period March 1 through and including July 15 of each calendar year during the term of this Agreement, the amount referenced in this sentence shall be $90,000,000, and provided further, however, for the 2004 calendar year, the foregoing period shall be March 1, 2004 through and including December 31, 2004 (the “Credit Facility”), which shall be available in the form as follows:

(a) Maximum Line of Credit. In consideration of Gehl Company’s performance of its Obligations and subject to Sections 3 and 4 hereof and the other terms and provisions of this Agreement, GECDF grants to Gehl Company, until the Maturity Date, a line of credit of $75,000,000 which shall include the outstanding loans and advances under the Canadian Line, provided, however from and including the period March 1 through and including July 15 of each calendar year during the term of this Agreement, the amount referenced in this sentence shall be $90,000,000, and provided further, however, for the 2004 calendar year, the foregoing period shall be March 1, 2004 through and including December 31, 2004 (the “U.S. Line”). The U.S. Line shall be subject to the limitations contained in this Agreement. GECDF shall make available to Gehl Company a sub-limit from the U.S. Line of a 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, or any successor thereto (the “Exchange Rate”) $5,500,000 (the “Canadian Line”) for the period commencing on the execution of this Agreement until the Maturity Date which shall be subject to the limitations in Section 3.2 with respect Eligible Accounts payable in Canadian Dollars and Net Accounts payable in Canadian Dollars. The U.S. Line of Credit, with the sub-limit of the Canadian Line, are collectively called the “Maximum Line of Credit”; loans under the U.S. Line are called “U.S. Loans;" and loans under the Canadian Line are called “Canadian Loans.” U.S. Loans shall be repayable only in United States Dollars; and Canadian Loans shall be repayable only in Canadian Dollars. Gehl Company agrees that for purposes of determining loan availability and over-advance positions, all outstanding Canadian Loans shall be valued daily at the then-current Exchange Rate (by way of example only: if on January 1, Gehl Company borrowed $CN7,500,000 which at the time was equivalent to $5,500,000, and on January 3, the Exchange Rate changed such that $CN7,500,000 was then valued at $6,000,000, Gehl Company will be deemed over-advanced by $500,000). Any over-advance will be immediately repayable by Gehl Company upon demand by GECDF. In determining credit available at any given time for U.S. Loans pursuant to the provisions of Section 3.2 or 4.2 or Canadian Loans pursuant to the provisions of Section 3.2, Canadian Loans may be made only with respect to Eligible Accounts arising from sales payable in Canadian Dollars; and U.S. Loans may be made only with respect to Eligible Accounts, including, but not limited to, Eligible Retail Chattel Paper arising from sales payable in United States Dollars and Eligible Inventory. Gehl Company agrees that all reports, agings, records and other information provided by it pursuant to this Agreement, including, without limitation, those provided pursuant to Section 3.1, shall be in form and detail reasonably satisfactory to GECDF and separately identify Gehl Company’s Accounts payable in Canadian Dollars from those Accounts payable in United States Dollars. All references in this Agreement to “Dollars” or “$” means United States Dollars; all references in this Agreement to “$CN” or “Canadian Dollars” means Dollars of Canada.

(b) Supplement Line of Credit. GECDF shall make available to Gehl Company a Supplemental Line of Credit as a sublimit of the U.S. Line in an amount not to exceed $25,000,000 of the U.S. Line, which such Supplemental Line of Credit is also subject to the limitations contained in Section 4.2.”

4. Effect of Amendment. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Lender under the Loan Agreement or any of the Other Agreements, nor constitute a waiver of any provision of the Loan Agreement, any of the Other Agreements or any existing Default, nor act as a release or subordination of the security interests of Lender. Each reference in the Loan Agreement to “the Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, shall be read as referring to the Loan Agreement as amended by this Amendment.

5. Representations and Warranties. Borrower hereby represents and warrants to Lender as of the date hereof that (i) this Amendment has been duly authorized by Borrower’s Board of Directors pursuant to authority duly granted by Borrower’s Board of Directors, (ii) no consents are necessary from any third parties for Borrower’s execution, delivery or performance of this Amendment which have not been obtained, (iii) this Amendment constitutes the legal, valid and binding obligation of Borrower enforceable against Borrower in accordance with its terms except as the enforcement thereof may be limited by bankruptcy, insolvency or other laws related to creditors rights generally or by the application of equity principles, (iv) all of the representations and warranties contained in the Loan Agreement are true and correct in all material respects with the same force and effect as if made on and as of the date of this Amendment, except that with respect to the representations and warranties made regarding financial data in the Loan Agreement, such representations and warranties are hereby made with respect to the most recent financial statements and the other financial data (in the form required by the Loan Agreement) delivered by Borrower to Lender, and (v) there exists no Default under the Loan Agreement.

6. Reaffirmation. Borrower hereby acknowledges and confirms that (i) the Other Agreements remain in full force and effect, (ii) the Loan Agreement is in full force and effect, (iii) Borrower has no defenses to its obligations under the Loan Agreement and the Other Agreements, (iv) the security interests of Lender secure all the Obligations under the Loan Agreement as amended by this Amendment and the Other Agreements, continue in full force and effect and have the same priority as before this Amendment, and (v) Borrower has no claim against Lender arising from or in connection with the Loan Agreement or the Other Agreements. Any and all such claims against Lender are forever discharged, released and waived by Borrower.

7. Governing Law. This Amendment has been executed and delivered in St. Louis, Missouri, and shall be governed by and construed under the laws of the State of Missouri without giving effect to choice or conflicts of law principles thereunder.

8. Customer Identification — USA Patriot Act Notice. GECDF hereby notifies the Borrowers that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (as amended from time to time (including any successor statute) and together with all rules promulgated thereunder, collectively, the “Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow GECDF and each Lender to identify the Borrowers in accordance with the Act.

9. Section Titles. The section titles in this Amendment are for convenience of reference only and shall not be construed so as to modify any provisions of this Amendment.

10. Counterparts; Facsimile Transmissions. This Amendment may be executed in one or more counterparts and on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures to this Amendment may be given by facsimile or other electronic transmission, and such signatures shall be fully binding on the party sending the same.

11. Incorporation by Reference. Borrower and Lender hereby agree that all of the terms of the Loan Agreement and the Other Agreements are incorporated in and made a part of this Amendment by this reference.

12. Notice—Oral Commitments Not Enforceable. The following notice is given pursuant to Section 432.045 of the Missouri Revised Statutes; nothing contained in such notice shall be deemed to limit or modify the terms of the Loan Documents:

ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

BORROWER AND LENDER HEREBY AFFIRM THAT THERE IS NO UNWRITTEN ORAL CREDIT AGREEMENT BETWEEN BORROWER AND LENDER WITH RESPECT TO THE SUBJECT MATTER OF THIS AMENDMENT.

13. Statutory Notice-Insurance. The following notice is given pursuant to Section 427.120 of the Missouri Revised Statutes; nothing contained in such notice shall be deemed to limit or modify the terms of the Loan Documents:

UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR INTERESTS. THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION WITH THE COLLATERAL. YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY OUR AGREEMENT. IF WE PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO YOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.

[signature pages follow]

IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first above written.

GEHL COMPANY
By:	/s/ M. J. Mulcahy
Name:	M. J. Mulcahy
Title:	Vice President & Secretary

GEHL POWER PRODUCTS, INC.
By:	/s/ M. J. Mulcahy
Name:	M. J. Mulcahy
Title:	Vice President & Secretary

COMPACT EQUIPMENT ATTACHMENTS INC.
By:	/s/ M. J. Mulcahy
Name:	M. J. Mulcahy
Title:	Vice President & Secretary

HEDLUND-MARTIN, INC.
By:	/s/ M. J. Mulcahy
Name:	M. J. Mulcahy
Title:	Vice President & Secretary

MUSTANG MANUFACTURING COMPANY, INC.
By:	/s/ M. J. Mulcahy
Name:	M. J. Mulcahy
Title:	Vice President & Secretary

GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION
By:	/s/ J. Kinkenon
Name:	J. Kinkenon
Title:	Vice President

GE COMMERCIAL DISTRIBUTION FINANCE CANADA INC.
By:	/s/ Graham McAusland
Name:	Graham McAusland
Title:	Credit Manager

EX-10.1 3 sdc809d.htm EMPLOYMENT AGREEMENT

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	3
Section 6	BENEFITS	8
(i)	RETIREMENT/DEATH BENEFIT	9
(ii)	BONUS	9
(iii)	SPLIT DOLLAR LIFE INSURANCE	9
Section 7	REIMBURSEMENT OF EXPENSES	10
Section 8	VACATION	10
Section 9	ADDITIONAL UNDERTAKINGS OF EXECUTIVE; NON-COMPETITION PROVISIONS	10
Section 10	ASSIGNS AND SUCCESSORS	11
Section 11	CONSTRUCTION	11
Section 12	NOTICES	11
Section 13	SEVERABILITY	12
Section 14	LIMITATION ON PAYMENTS	12
Section 15	GOVERNING LAW; RESOLUTION OF DISPUTES	13
Section 16	AMENDMENT	14
Section 17	EXPENSES AND INTEREST	14
Section 18	EXTENDED CARE INSURANCE	15

WILLIAM D. GEHL/GEHL COMPANY
EMPLOYMENT AGREEMENT

THIS 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 June 14, 2004.

RECITALS

WHEREAS, GEHL wishes to continue to retain the services of Executive as its Chairman of the Board and Chief Executive Officer and Executive desires to continue to serve GEHL in that capacity; and

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 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 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 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 June 14, 2004, and ending on June 14, 2008 unless Executive’s employment is terminated earlier with the consequences described herein in which event the term of employment shall extend through the date of such termination.

Section 3. Compensation. GEHL shall pay or cause to be paid to Executive during the period commencing June 14, 2004 through the end of the term of employment a minimum base salary of Four Hundred Thirty-two Thousand Three Hundred Dollars ($432,300.00) 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 two (2) full years 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, and (ii) 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 may 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.

(e) The present value of the Employee’s benefits under Section 2 of the Employee’s most current Supplemental Retirement Benefit Agreement using a discount rate equal to the “GATT” interest rate that would be used by the Gehl Company Retirement Income Plan “B” to calculate the amount of a lump sum distribution to be made on the same date as the payment hereunder.”

Executive shall also receive, at the expense of GEHL, outplacement services, on an individualized basis at a level of service commensurate with Executive’s most senior status with GEHL during the 180-day period prior to the date of the Change in Control, provided by a nationally recognized senior executive placement firm selected by GEHL with the consent of Executive, provided that the cost to GEHL of such services shall not exceed 20% of Executive’s Current Base Salary. In the alternative, Executive, at his election, may choose to receive the net amount of these services, up to a maximum of $15,000, to be paid as a lump sum within 30 days of the Termination Date as outlined above.

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 following 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 positions with GEHL to which the Executive shall thereafter be elected, appointed or assigned, except in connection with the termination of his employment for disability, cause, as a result of his death or by the Executive other than for Good Reason;

(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;

(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; or

(vii) Any voluntary termination of employment by Executive for any reason where the notice of termination is delivered by Executive to GEHL at any time within ninety (90) days following the six-month anniversary of the Change in Control.

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 Executive Compensation Plan or other similar Plan in effect 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 five (5) weeks paid vacation each year.

Section 9. 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 9.

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 9, 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 10. 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 11. 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 12. 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 13. 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 14. 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 15. 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 16. Amendment. Section 17. No modification or amendment to this Agreement may be made without the written consent of the parties hereto.

Section 17. Expenses and Interest. If (i) a dispute arises with respect to the enforcement of Executive’s rights under this Agreement, (ii) any legal or arbitration proceeding shall be brought to enforce or interpret any provision contained herein or to recover damages for breach hereof, or (iii) any tax audit or proceeding is commenced that is attributable in part to the application of Section 4999 of the Code, in any case so long as Executive is not acting in bad faith, then GEHL shall reimburse Executive for any reasonable attorney’s fees and necessary costs and disbursements incurred as a result of such dispute, legal or arbitration award obtained by Executive calculated at the rate of interest announced by M&I Bank, Milwaukee, Wisconsin, from time to time as its prime or base lending rate from the date that payments to Executive should have been made under this Agreement. Within ten days after Executive’s written request therefor, GEHL shall pay to Executive, or such person or entity as Executive may designate in writing to GEHL, Executive’s reasonable Expenses in advance of the final disposition or conclusion of any such dispute, legal or arbitration proceeding.

Section 18. Extended Care Insurance. GEHL agrees to provide Executive with an extended care insurance policy which will be fully paid up in ten (10) years, providing a $200/day benefit for six (6) years with an annual premium of $6,419.30. GEHL shall pay the premium as long as Executive is employed. Thereafter, it shall be the responsibility of Executive.

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/ M. J. Mulcahy		/s/ Nicholas C. Babson
Its: Secretary		Its: Director: Nicholas C. Babson
/s/ M. J. Mulcahy		/s/ William D. Gehl
Witness as to William D. Gehl		William D. Gehl, Executive

EX-10.2 4 sdc809b.htm CHANGE IN CONTROL AND SEVERANCE AGR.

GEHL COMPANY/RETTLER
CHANGE IN CONTROL AND SEVERANCE AGREEMENT

THIS AGREEMENT, made and entered into as of the 23^rdday of August, 2004, by and between Gehl Company, a Wisconsin corporation (hereinafter referred to as the “GEHL”), and Thomas M. Rettler (hereinafter referred to as the “Executive”).

W I T N E S S E T H :

WHEREAS, the Executive is employed by GEHL in a key executive capacity, and the Executive’s services are valuable to the conduct of the business of GEHL;

WHEREAS, the Board of Directors of GEHL (the “Board”) recognizes that circumstances may arise in which a change in control of GEHL occurs, through acquisition or otherwise, thereby causing uncertainty about the Executive’s future employment with GEHL without regard to the Executive’s competence or past contributions, which uncertainty may result in the loss of valuable services of the Executive to the detriment of GEHL and its shareholders, and GEHL and the Executive wish to provide reasonable security to the Executive against changes in the Executive’s relationship with GEHL in the event of any such change in control;

WHEREAS, GEHL and the Executive are desirous that any proposal for a change in control or acquisition of GEHL will be considered by the Executive objectively and with reference only to the best interests of GEHL and its shareholders;

WHEREAS, the Executive will be in a better position to consider GEHL’s best interests if the Executive is afforded reasonable security, as provided in this Agreement, against altered conditions of employment which could result from any such change in control or acquisition; and

WHEREAS, GEHL deems it appropriate to provide the Executive with specified severance benefits, as provided in this Agreement, in the event of certain termination of the Executive other than in the context of a Change in Control or acquisition.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto mutually covenant and agree as follows:

Section 1. Change in Control. In the event a Change in Control, as defined below, occurs while the Executive is employed by the company and this Agreement is in effect, the Executive shall automatically be entitled to employment by the company for two years after the occurrence of the Change in Control (such two-year term of employment is hereafter referred to as the “Change in Control Contract Term”). While employed by the Company during the Change in Control Contract Term, the Executive shall be entitled to a base salary, bonus opportunity and other employee benefits substantially equivalent to those the Executive was entitled to immediately prior to the Change in Control. In addition, upon the occurrence of a Change in Control, and assuming that the Executive is in the employ of the Company at such time or demonstrates that his prior termination was effected in anticipation of a Change in Control as contemplated by the succeeding paragraph, (i) the unvested stock options awarded to the Executive under the GEHL Stock Option Plans shall vest, (ii) the Executive’s Bank Balance in the Bonus Bank under the GEHL Shareholder Value Added Management Incentive Compensation Plan shall vest and be paid and (iii) all restrictions limiting the exercise, transferability, entitlement or incidents of ownership of any outstanding award, including options, restricted stock, supplemental retirement and death benefits, deferred compensation, or other property or rights granted to the Executive after the date of this Agreement (other than pursuant to plans of general application to salaried employees such as tax-qualified retirement plans, life insurance and the health plan) shall lapse, and such awards shall become fully vested and be held by or for the Executive free and clear of all such restrictions. This provision shall apply to all such property or rights notwithstanding the provisions of any other plan or agreement.

If the Executive’s employment shall be terminated by GEHL without Cause (as defined below) or the Executive shall terminate his employment for Good Reason (as defined below) during the Change in Control Contract Term, or if GEHL shall terminate the Executive’s employment without Cause within six (6) months before the execution of a definitive purchase agreement that ultimately results in a Change in Control and the Executive shall reasonably demonstrate that such termination was in connection with or in anticipation of the Change in Control, the Executive shall be entitled to the following paid in a lump sum within 30 days of the date of the Executive’s termination of employment hereunder (the “Termination Date”) or the date that the Executive demonstrates that such termination was in connection with or in anticipation of the Change in Control, whichever is applicable:

(a)

The Executive’s base salary as in effect on the Termination Date (“Current Base Salary”) through the Termination Date to the extent not theretofore paid;

(b)

The bonus¹ which would be earned by the Executive through the Termination Date computed under GEHL’s existing bonus plan, ignoring any requirement that the Executive be employed through the end of the fiscal year and not reduced for any deferrals which would otherwise be required under the bonus plan;

(c)

Any compensation previously deferred, including that deferred under any bonus plan as then in effect, which deferrals shall become immediately vested upon the Change in Control, to the extent not previously paid;

(d)

Two (2) times the sum of (i) the Current Base Salary and (ii) the highest bonus¹ 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; and

(e)

The present value of the Executive’s benefits under Section 2 of the Executive’s most current Supplemental Retirement Benefit Agreement using a discount rate equal to the “GATT” interest rate that would be used by the Gehl Company Retirement Income Plan “B” to calculate the amount of a lump sum distribution to be made on the same date as the payment hereunder.

¹ Until the first full year bonus has been earned, the bonus shall be based on the “targeted” amount of 40% of base salary.

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The Executive shall also receive, at the expense of GEHL, outplacement services, on an individualized basis at a level of service commensurate with the Executive’s most senior status with GEHL during the 180-day period prior to the date of the Change in Control, provided by a nationally recognized senior executive placement firm selected by GEHL with the consent of the Executive, provided that the cost to GEHL of such services shall not exceed 20% of the Executive’s Current Base Salary. In the alternative, the Executive, at his election, may choose to receive that net amount, up to a maximum of $15,000, to be paid as a lump sum within 30 days of the Termination Date as outlined above.

In addition, for twenty-four (24) months after the Termination Date, GEHL shall provide to the Executive and his family medical benefits at least substantially equal on a pre-tax basis to those provided to him and his family just prior to the date of the Change in Control, whether pursuant to a group plan or individual coverage. Notwithstanding the foregoing, if the Executive obtains employment during the 24-month period and family medical benefits (substantially equivalent to those offered by GEHL just prior to the date of the Change in Control) are available from the new employer, GEHL’s obligation to provide such family medical benefits shall cease for so long as the Executive remains employed.

In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under this Agreement and such amounts shall not be reduced (except to the extent set forth in the immediately preceding paragraph) whether or not the Executive obtains other employment. In addition, GEHL will not be entitled to reduce the amounts payable under this Agreement for any claims or rights it may have against the Executive.

“Change in Control,” for the purposes of this Agreement shall be defined as one of the following:

Securities of GEHL representing 25% or more of the combined voting power of GEHL’s then outstanding voting securities are acquired pursuant to a tender offer or an exchange offer; or

ii)

The shareholders of GEHL approve a merger or consolidation of GEHL with any other corporation as a result of which less than fifty percent (50%) of the outstanding voting securities of the surviving or resulting entity are owned by the former shareholders of GEHL (other than a shareholder who is an “affiliate,” as defined under rules promulgated under the Securities Act of 1933, as amended, of any party to such consolidation or merger); or

iii)

The shareholders of GEHL approve the sale of substantially all of GEHL’s assets to a corporation which is not a wholly-owned subsidiary of GEHL; or

iv)

Any person becomes the “beneficial owner,” as defined under rules promulgated under the Securities Exchange Act of 1934, as amended, directly or indirectly of securities of GEHL representing twenty-five (25%) or more of the combined voting power of GEHL’s then outstanding securities the effect of which (as determined by the Board) is to take over control of GEHL; or

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During any period of two consecutive years, individuals who, at the beginning of such period, constituted the Board cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by the vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period.

“Good Reason” for the purposes of this Agreement, shall be defined as the occurrence of any one of the following events or conditions after, or in anticipation of, the Change in Control:

The removal of the Executive from, or any failure to re-elect or reappoint the Executive to, any of the positions held with GEHL on the date of the Change in Control or any other positions with GEHL to which the Executive shall thereafter be elected, appointed or assigned, except in connection with the termination of his employment for disability, Cause, as a result of his death or by the Executive other than for Good Reason; or

ii)

A good faith determination by the Executive that there has been a significant adverse change, without the Executive’s written consent, in the Executive’s working conditions or status with GEHL from such working conditions or status in effect immediately prior to the Change in Control, including but not limited to (A) a significant change in the nature or scope of the Executive’s authority, powers, functions, duties or responsibilities, or (B) a significant reduction in the level of support services, staff, secretarial and other assistance, office space and accoutrements; or

iii)

Any material breach by GEHL of any provision of this Agreement; or

iv)

Any purported termination of the Executive’s employment for Cause by GEHL which is determined under Section 14 not to be for conduct encompassed in the definition of Cause contained herein; or

The failure of GEHL to obtain an agreement, satisfactory to the Executive, from any successor or assign of GEHL, to assume and agree to perform this Agreement, as contemplated in Section 3 hereof; or

vi)

GEHL’s requiring the Executive to be based at any office or location which is not within a fifty (50) mile radius of West Bend, Wisconsin, except for travel reasonably required in the performance of the Executive’s responsibilities hereunder, without the Executive’s consent.

For purposes of this Section, any good faith determination of Good Reason made by the Executive shall be conclusive.

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Section 2. Termination of Employment Other Than in the Context of a Change in Control/Severance. If the Executive’s employment is involuntarily terminated by GEHL for any reason other than (i) Cause, (ii) circumstances under which the Executive would be entitled to the payments provided by Section 1 hereof or (iii) the Executive’s death or disability, the Executive shall be entitled to receive, and GEHL shall be obligated to pay, the Executive’s then Current Base Salary, as in effect immediately prior to such termination, for one (1) full year from the Executive’s date of termination. During such year, the Executive shall also continue to participate in all group health and welfare benefit plans and programs of GEHL to the extent that such continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive’s continued participation in any such plans and programs is barred, and in lieu thereof, the Executive shall be entitled to receive for the above period an amount equal to the sum of the average annual contributions, payments, credits, or allocations made by GEHL to him, to his account, or on his behalf over the two (2) fiscal years (or fraction thereof) of GEHL preceding the termination of his employment under such plans and programs from which his continued participation is barred.

Termination by GEHL for “Cause” shall mean termination by action of the Board because of the material failure of the Executive to fulfill his obligations as an officer of the Company or because of serious willful misconduct by the Executive in respect of his obligations as an officer of the Company as, for example, the commission by the Executive of a felony or the perpetration by the Executive of a common-law fraud against GEHL or any major material action (i.e., not procedural or operational differences )taken against the expressed directive of the Board.

Section 3. Assigns and Successors. The rights and obligations of GEHL under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of GEHL and GEHL shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that GEHL would be required to perform if no such succession or assignment had taken place.

Section 4. Construction. Section headings are for convenience only and shall not be considered a part of the terms and provisions of this Agreement.

Section 5. Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in GEHL’s case, to its Secretary, or to its Chief Executive Officer if the Executive is then serving as Secretary) or by facsimile to the number provided for such purpose by the applicable party or forty-eight (48) hours after deposit thereof in the U.S. mails, postage prepaid, addressed, in the case of the Executive, to his last known address as carried on the personnel records of GEHL and, in the case of GEHL, to the corporate headquarters, attention of the Secretary, or to its Chief Executive Officer if the Executive is then serving as Secretary, or to such other address as the party to be notified may specify by notice to the other party.

Section 6. Severability. Should it be determined that one or more of the clauses of this Agreement is (are) found to be unenforceable, illegal, contrary to public policy, etc., this Agreement shall remain in full force and effect except for the unenforceable, illegal, or contrary to public policy provisions.

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Section 7. Limitation on Payments.

(a)

Notwithstanding anything contained herein to the contrary, prior to the payment of any amounts pursuant to Sections 1 or 2 hereof, a national accounting firm designated by GEHL (the “Accounting Firm”) shall compute whether there would be any “excess parachute payments” payable to the Executive, within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), taking into account the total “parachute payments,” within the meaning of Section 280G of the Code, payable to the Executive by GEHL or any successor thereto under this Agreement and any other plan, agreement or otherwise. If there would be any excess parachute payments, the Accounting Firm will compute the net after-tax proceeds to the Executive, taking into account the excise tax imposed by Section 4999 of the Code, if (i) the payments hereunder were reduced, but not below zero, such that the total parachute payments payable to the Executive would not exceed three (3) times the “base amount” as defined in Section 280G of the Code, less One Dollar ($1.00) or (ii) the payments hereunder were not reduced. If reducing the payments hereunder would result in a greater after-tax amount to the Executive, such lesser amount shall be paid to the Executive. If not reducing the payments hereunder would result in a greater after-tax amount to the Executive, such payments shall not be reduced. The determination by the Accounting Firm shall be binding upon GEHL and the Executive.

(b)

As a result of the uncertainty in the application of Section 280G of the Code, it is possible that excess parachute payments will be paid when such payment would result in a lesser after-tax amount to the Executive; this is not the intent hereof. In such cases, the payment of any excess parachute payments will be void ab initio as regards any such excess. Any excess will be treated as a loan by GEHL to the Executive. The Executive will return the excess to GEHL, within fifteen (15) business days of any determination by the Accounting Firm that excess parachute payments have been paid when not so intended, with interest at an annual rate equal to the rate provided in Section 1274(d) of the Code (or 120% of such rate if the Accounting Firm determines that such rate is necessary to avoid an excise tax under Section 4999 of the Code) from the date the Executive received the excess until it is repaid to GEHL.

(c)

All fees, costs and expenses (including, but not limited to, the cost of retaining experts) of the Accounting Firm shall be borne by GEHL and GEHL shall pay such fees, costs and expenses as they become due. In performing the computations required hereunder, the Accounting Firm shall assume that taxes will be paid for state and federal purposes at the highest possible marginal tax rates which could be applicable to the Executive in the year of receipt of the payments, unless the Executive agrees otherwise.

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Section 8. Confidentiality. During and following the Executive’s employment by GEHL, the Executive shall hold in confidence and not directly or indirectly disclose or use or copy or make lists of any confidential information or proprietary data of GEHL except to the extent authorized in writing by the Board or required by any court or administrative agency, other than to an employee of GEHL or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of his duties as an executive of GEHL. Confidential information shall not include any information known generally to the public or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that of GEHL. All records, files, documents and materials, or copies thereof, relating to the business of GEHL which the Executive shall prepare, or use, or come into contact with, shall be and remain the sole property of GEHL and shall be promptly returned to GEHL upon termination of employment with GEHL.

Section 9. Expenses and Interest. If (i) a dispute arises with respect to the enforcement of the Executive’s rights under this Agreement, (ii) any legal or arbitration proceeding shall be brought to enforce or interpret any provision contained herein or to recover damages for breach hereof, or (iii) any tax audit or proceeding is commenced that is attributable in part to the application of Section 4999 of the Code, in any case so long as the Executive is not acting in bad faith, then GEHL shall reimburse the Executive for any reasonable attorneys’ fees and necessary costs and disbursements incurred as a result of such dispute, legal or arbitration proceeding or tax audit or proceeding (“Expenses”), and prejudgment interest on any money judgment or arbitration award obtained by the Executive calculated at the rate of interest announced by M&I Bank, Milwaukee, Wisconsin, from time to time as its prime or base lending rate from the date that payments to the Executive should have been made under this Agreement. Within ten days after the Executive’s written request therefor, GEHL shall pay to the Executive, or such other person or entity as the Executive may designate in writing to GEHL, the Executive’s reasonable Expenses in advance of the final disposition or conclusion of any such dispute, legal or arbitration proceeding.

Section 10. Payment Obligations Absolute. GEHL’s obligation to pay the Executive any amounts required hereunder and to make the benefit and other arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any setoff, counterclaim, recoupment, defense or other right which GEHL may have against the Executive or anyone else. Except as provided in Section 9, all amounts payable by GEHL hereunder shall be paid without notice or demand. Each and every payment made hereunder by GEHL shall be final, and GEHL will not seek to recover all or any part of such payment from the Executive, or from whomsoever may be entitled thereto, for any reason whatsoever.

Section 11. No Waiver. The Executive’s or GEHL’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or GEHL may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

Section 12. Headings. The headings herein contained are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement.

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Section 13. Governing Law; Resolution of Disputes. This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Wisconsin. Any dispute arising out of this Agreement shall, at the Executive’s election, be determined by arbitration under the rules of the American Arbitration Association then in effect (in which case both parties shall be bound by the arbitration award) or by litigation. Whether the dispute is to be settled by arbitration or litigation, the venue for the arbitration or litigation shall be West Bend, Wisconsin or, at the Executive’s election, if the Executive is no longer residing or working in the West Bend, Wisconsin metropolitan area, in the judicial district encompassing the city in which the Executive resides; provided, that, if the Executive is not then residing in the United States, the election of the Executive with respect to such venue shall be either West Bend, Wisconsin or in the judicial district encompassing that city in the United States among the thirty cities having the largest population (as determined by the most recent United States Census data available at Termination Date) which is closest to the Executive’s residence. The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction notwithstanding their residence or situs, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices.

Section 14. Amendment. No modification or amendment to this Agreement may be made without the written consent of the parties hereto.

IN WITNESS WHEREOF, GEHL COMPANY has caused this Agreement to be executed by its duly authorized officer, and the Executive has hereunto set his hand, all as of the date set forth above.

	GEHL COMPANY
	/s/ William D. Gehl
	William D. Gehl, Chairman & CEO
	/s/ Thomas M. Rettler
	Executive

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EX-10.3 5 sdc809c.htm SUPPLEMENTAL RETIREMENT BENEFIT AGR.

GEHL COMPANY/ THOMAS M. RETTLER
2004
SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT

THIS AGREEMENT, made this 23rd day of August, 2004, by and between GEHL COMPANY, West Bend, Wisconsin (hereinafter referred to as the “Company”), and Thomas M. Rettler of Mequon, Wisconsin (hereinafter referred to as the “Employee”):

W I T N E S S E T H:

WHEREAS, the Employee is currently employed by the Company in the capacity of Vice President, Chief Financial Officer, and in such position can contribute materially to its continued growth and development and to its future financial success; and

WHEREAS, the Company desires to insure insofar as possible that the Company will have the benefit of the Employee’s full services and executive capacities for future years;

NOW, THEREFORE, in consideration of services rendered by the Employee to the Company, it is agreed as follows:

Section 1. Definitions.

(a) “Average Monthly Compensation” means one-sixtieth (1/60th) of the Employee’s base salary and cash bonus from the Company for the highest five (5) calendar years within the last ten (10) completed calendar years preceding the date of the Employee’s termination of employment with the Company. In the event the Employee does not have five (5) calendar years of employment, only the number of full months from the date of hire through the December preceding termination of employment shall be used to determine Average Monthly Compensation. Cash bonus means the cash distributed to the Employee during a calendar year pursuant to the Company “SVA” Shareholder Value Added or similar incentive/bonus compensation program. Base salary and cash bonus for this purpose include any salary reduction deferrals pursuant to a cash or deferred arrangement or a cafeteria plan pursuant to Internal Revenue Code (“Code”) Sections 401(k) or 125.

(b) “Beneficiary” means the person, trust and/or other entity designated by the Employee on the form most recently filed with the Secretary of the Company prior to the Employee’s death. In the absence of a valid designation, the Beneficiary shall be the Employee’s estate.

(c) “Disability means a physical or mental condition which totally and presumably permanently prevents the Employee from engaging in any substantially gainful activity as determined in accordance with Section 4.03 of the Gehl Company Retirement Income Plan “B”.

(d) “Vested Percentage” means the percentage of the supplemental retirement benefit in Section 2 earned by the Employee, subject in any event to the forfeiture provision of Section 4 and the change in control provision of Section 5. The Vested Percentage is one hundred percent (100%) in any of the following circumstances:

(i)
(ii)
(iii)

after the Employee completes five (5) years of Vesting Service;
if the Employee suffers a Disability; or
if the Employee retires from the Company after attainment of age sixty-two (62).

In the event the Employee does not have a Vested Percentage of one hundred percent (100%), he shall receive ten percent (10%) vesting for each complete year of Vesting Service.

(e) “Vesting Service” means the period of the Employee’s consecutive employment with the Company from January 1, 1986, through the date of termination of employment.

Section 2. Supplemental Retirement Benefits.

(a) The amount of the monthly supplemental retirement benefit shall be the Employee’s Vested Percentage times an amount equal to forty percent (40%) of the Employee’s Average Monthly Compensation.

(b) The monthly supplement shall be payable to the Employee commencing as of the first day of the month following the earlier to occur of:

(i)
(ii)

age sixty-five (65); or
the later of termination of employment from the Company or age sixty two (62).

The supplement shall continue to be paid to the Employee for a period of fifteen (15) years.

(c) In the event the Employee commences receiving the supplement but dies prior to the end of the payment period, the remaining monthly payments in the fifteen (15)-year period shall be made to the Beneficiary.

(d) In the event the Employee dies after termination of employment from the Company but prior to the commencement of benefits pursuant to (b) above, the monthly supplement calculated pursuant to subsection (a) above shall be paid to the Beneficiary for the fifteen (15)-year period commencing as of the first day of the month following the later to occur of the Employee’s death or the date the Employee would have attained (or if applicable, did attain) age sixty-two (62).

Section 3. Pre-Retirement Death Benefit.

(a) In the event the Employee dies prior to commencement of the supplemental retirement benefit under Section 2(b) above and while employed by the Company, in lieu of any payment pursuant to Section 2 above, a pre-retirement death benefit shall be paid to the Beneficiary.

(b) The death benefit shall be comprised of five (5) payments, the first being due as of the last day of the month following the Employee’s death. Each succeeding payment shall be made on successive anniversaries of the first payment due date.

(c) The amount of each of the five (5) payments shall be forty percent (40%) of the Employee’s Average Monthly Compensation, annualized, as of the Employee’s date of death.

Section 4. Non-Competition Requirement. Employee agrees that for a period of two (2) years after termination of active employment hereunder, the Employee shall not, except as permitted by the Company’s prior written consent, engage in, be employed by, or in any way advise or act for, or have any financial interest in any business which is a competitor of the Company. The ownership of minority and non-controlling shares of any corporation whose shares are listed on a recognized stock exchange or traded in an over-the-counter market shall not be deemed as constituting a financial interest in such corporation. If the Employee shall fail to comply with any of the foregoing conditions, he shall forfeit all right to any payments pursuant to Section 2 hereof which would otherwise be payable to him thereafter.

Section 5. Change of Control. Notwithstanding the definition of Vested Percentage in Section 1 hereof, an Employee shall be one hundred percent (100%) vested, subject to Section 4, in the event there is a change of control of the Company. For purposes of this Agreement, a “change in control of the Company” occurs when:

(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.

Section 6. No Rights of Employment. Nothing herein contained shall be deemed to confer upon the Employee any right to continue in the employ of the Company nor to interfere with the right of the Company to terminate his employment at any time.

Section 7. Employee’s Rights Non-Assignable. Neither the Employee nor the Beneficiary shall have the power to transfer, assign, anticipate, mortgage, or otherwise encumber in advance any of the payments provided in this Agreement; nor shall any of said payments nor any assets of the Company, including any insurance policies owned by the Company, be subject to seizure for the payment of any of the recipient’s debts, judgments or other obligations arising by operation of law or in the event of bankruptcy, insolvency or otherwise.

Section 8. Company Not Required to Fund This Agreement. The Company is not obligated to set aside or credit the Employee or the Beneficiary with funds to provide for the payment of the amounts due under this Agreement, and nothing in this Agreement shall be construed as creating a trust fund of any kind for the benefit of the Employee or the Beneficiary.

Section 9. Administration. This Agreement shall be administered by the Gehl Company Compensation and Benefits Committee (herein referred to as the “Committee”). If the Employee is also a Committee member, he shall abstain from any deliberations or vote on any matter in connection with this Agreement.

Section 10. Successors and Assigns. This Agreement shall inure to and be binding upon the successors and assigns of the Company.

Section 11. Acceleration. In the event that payment of the benefits provided by Section 2 hereunder is accelerated in a present value payment pursuant to the Employee’s Change in Control and Severance Agreement, all other benefits and provisions hereof shall be deemed terminated.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

Attest:		GEHL COMPANY
/s/ M. J. Mulcahy		/s/ William D. Gehl
		Its: Chairman

		EMPLOYEE
/s/ Sandra C. Bodden		/s/ Thomas M. Rettler
Witness as to (Name)		Thomas M. Rettler

EX-10.4 6 sdc809h.htm 2004 EQUITY INCENTIVE PLAN

GEHL COMPANY
2004 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

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

W I T N E S S E T H :

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

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

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

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

1. Award of Restricted Stock. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby awards the Participating Key Employee the number of shares of Common Stock set forth on the signature page of this Agreement (the “Restricted Stock”).

2. Restrictions. Except as otherwise provided herein, the Restricted Stock may not be sold, transferred or otherwise alienated or hypothecated until the date set forth on the signature page of this Agreement (the “Release Date”).

3. Escrow. Certificates for shares of Restricted Stock shall be issued as soon as practicable in the name of the Participating Key Employee but shall be held in escrow by the Company, as escrow agent. Upon issuance of such certificates, (i) the Company shall give the Participating Key Employee a receipt for the Restricted Stock held in escrow which will state that the Company holds such Restricted Stock in escrow for the account of the Participating Key Employee, subject to the terms of this Agreement, and (ii) the Participating Key Employee shall give the Company a stock power for such Restricted Stock duly endorsed in blank which will be held in escrow for use in the event such Restricted Stock is forfeited in whole or in part. Unless theretofore forfeited as provided in this Agreement, Restricted Stock shall cease to be held in escrow and certificate(s) for the appropriate number of shares of the Common Stock shall be delivered to the Participating Key Employee, or in the case of his or her death, to his or her Beneficiary (as hereinafter defined) on the Release Date or upon any other termination of the restrictions imposed by Paragraph 2 of this Agreement.

4. Transfer After Release Date; Securities Law Restrictions. Except as otherwise provided herein, Restricted Stock shall become free of the restrictions of Paragraph 2 and be freely transferable by the Participating Key Employee on and after the Release Date. Shares of Restricted Stock granted hereunder on which the restrictions set forth in Paragraph 2 have lapsed are referred to herein as “Released Securities.” Notwithstanding anything to the contrary herein, the Participating Key Employee agrees and acknowledges with respect to any shares of Restricted Stock that have become Released Securities and which have not been registered under the Securities Act of 1933, as amended (the “Act”), (i) he or she will not sell or otherwise dispose of any of such Released Securities except pursuant to an effective registration statement under the Act and any applicable state securities laws, or in a transaction which, in the opinion of counsel for the Company, is exempt from such registration, and (ii) a legend will be placed on the certificates for the Released Securities to such effect.

5. Termination of Employment Due to Death, Disability or Retirement. If the Participating Key Employee’s employment with the Company and its Affiliates is terminated prior to the Release Date because of the Participating Key Employee’s death, retirement after reaching age 65 or disability, the restrictions of Paragraph 2 applicable to the Restricted Stock shall terminate and such Restricted Stock shall be free of such restrictions and, except as otherwise provided in Paragraph 4 hereof, freely transferable.

6. Termination of Employment for Any Other Reason. In the event that the Participating Key Employee is discharged or leaves the employ of the Company or any of its Affiliates for any reason (other than the death or disability of the Participating Key Employee or the retirement of the Participating Key Employee as contemplated by Paragraph 5 above) prior to the Release Date, all Restricted Stock shall be forfeited to the Company on the date on which such termination of employment occurs.

7. Beneficiary.

(a) The person whose name appears on the signature page hereof after the caption “Beneficiary” or any successor designated by the Participating Key Employee in accordance with the terms of this Agreement (the person who is the Participating Key Employee’s Beneficiary at the time of his or her death is herein referred to as the “Beneficiary”) shall be entitled to receive the Restricted Stock to be released to the Beneficiary under Paragraphs 3 and 5 as a result of the death of the Participating Key Employee. The Participating Key Employee may from time to time revoke or change his or her Beneficiary without the consent of any prior Beneficiary by filing a new designation with the Committee (as defined in the Plan). The last such designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Participating Key Employee’s death, and in no event shall any designation be effective as of a date prior to such receipt.

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(b) If no such Beneficiary designation is in effect at the time of a Participating Key Employee’s death, or if no designated Beneficiary survives the Participating Key Employee or if such designation conflicts with applicable law, the Participating Key Employee’s estate shall be entitled to receive the Restricted Stock to be released from the restrictions of Paragraph 2 upon the death of the Participating Key Employee. If the Committee is in doubt as to the right of any person to receive such Restricted Stock, the Company may retain the Restricted Stock, without liability for any interest thereon, until the Committee determines the person entitled thereto, or the Company may deliver such Restricted Stock to any court of appropriate jurisdiction and such delivery shall be a complete discharge of the liability of the Company therefor.

8. Certificate Legend. In addition to any legends placed on certificates for Released Securities under Paragraph 4 above, each certificate issued for shares of Restricted Stock shall bear the following legend:

“The sale or other transfer of the shares of stock represented by this certificate, whether voluntary or by operation of law, is subject to certain restrictions set forth in the Gehl Company 2004 Equity Incentive Plan and a Restricted Stock Award Agreement between Gehl Company and the registered owner hereof. A copy of such Plan and such Agreement may be obtained from the Secretary of Gehl Company.”

When the restrictions imposed by Paragraph 2 hereof terminate, the foregoing legend shall be removed from the certificates representing such Released Securities.

9. Voting Rights; Dividends and Other Distributions.

(a) While shares of Restricted Stock are subject to restrictions under Paragraph 2 and prior to any forfeiture thereof, the Participating Key Employee may exercise full voting rights for the shares of Restricted Stock registered in his or her name and held in escrow hereunder.

(b) While shares of Restricted Stock are subject to the restrictions under Paragraph 2 and prior to any forfeiture thereof, the Participating Key Employee shall be entitled to receive all dividends and other distributions paid with respect to such shares of Restricted Stock. If any such dividends or distributions are paid in shares of Common Stock or other equity securities of the Company, such equity securities shall be subject to the same restrictions as the shares of Restricted Stock with respect to which they were paid.

(c) Subject to the provisions of this Agreement, the Participating Key Employee shall have, with respect to the Restricted Stock, all other rights of holders of Common Stock.

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10. Tax Withholding Obligations Settled with Common Stock. If the Participating Key Employee does not make an election under Section 83(b) of the Internal Revenue Code of 1986, as amended, with respect to the Restricted Stock awarded hereunder, the Participating Key Employee may satisfy the Company’s withholding tax requirements by electing to have the Company withhold that number of shares of Released Securities otherwise deliverable to the Participating Key Employee from escrow hereunder or to deliver to the Company a number of shares of Common Stock, in each case, having a Fair Market Value on the Tax Date (as such terms are below) equal to the minimum amount required to be withheld as a result of the termination of the restrictions on such Restricted Stock. The election must be made in writing in accordance with such rules and regulations and in such form as the Committee may determine. The election must be delivered to the Company prior to the Tax Date. If the number of shares so determined shall include a fractional share, the Participating Key Employee shall deliver cash in lieu of such fractional share. As used herein: (y) “Tax Date” means the date on which the Participating Key Employee must include in his or her gross income for federal income tax purposes the fair market value of the Released Securities; and (z) “Fair Market Value” means the per share closing price on the date in question on the principal market in which shares of stock which are equivalent to the Restricted Stock are then traded or, if no sales of such stock have taken place on such date, the closing price on the most recent date on which selling prices were quoted.

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

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

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

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14. Change of Control. Notwithstanding any other provision to the contrary contained in this Agreement, effective upon a Change of Control of the Company (as defined in the Plan), the restrictions imposed upon the Restricted Stock by Paragraph 2 of this Agreement shall immediately be deemed to have lapsed and the applicable Release Date shall be deemed to have occurred as of the date of the Change of Control of the Company with respect to such Restricted Stock.

15. Miscellaneous.

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

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

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

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

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

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

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

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


	GEHL COMPANY
(CORPORATE SEAL)
	By:_____________________________________
	Attest:___________________________________

	PARTICIPATING KEY EMPLOYEE
	________________________________________

Number of Shares of Restricted Stock:
Date of Agreement:
Grant Date:
Release Date:

Beneficiary:
Address of Beneficiary:
Beneficiary Tax Identification No.:

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EX-31.1 7 sdc809e.htm CERTIFICATION OF CHAIRMAN AND CEO

Exhibit 31.1

I, William D. Gehl, Chairman of the Board of Directors and Chief Executive Officer of Gehl Company, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Gehl Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 8, 2004	By:	/s/ William D. Gehl
		William D. Gehl Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)

EX-31.2 8 sdc809f.htm CERTIFICATION OF VP OF FINANCE AND CFO

Exhibit 31.2

I, Thomas M. Rettler, Vice President of Finance and Chief Financial Officer of Gehl Company, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Gehl Company;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 8, 2004	By:	/s/ Thomas M. Rettler
		Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1 9 sdc809g.htm CERTIFICATION OF PERIODIC FINANCIAL RPTS.

Exhibit 32.1

CERTIFICATION OF PERIODIC FINANCIAL REPORTS

Solely for the purposes of complying with Section 906 of the Sarbanes-Oxley Act of 2002, we, William D. Gehl, Chairman of the Board of Directors and Chief Executive Officer, and Thomas M. Rettler, Vice President of Finance and Chief Financial Officer, of Gehl Company, certify, based on our knowledge, that:

(1)

the Quarterly Report on Form 10-Q for the three-month period ended September 25, 2004 (the “Quarterly Report”) to which this statement is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and

(2)

information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of Gehl Company.

Dated: November 8, 2004


	By:	/s/ William D. Gehl
		William D. Gehl
	By:	/s/ Thomas M. Rettler
		Thomas M. Rettler

-----END PRIVACY-ENHANCED MESSAGE-----

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

For the Quarterly Period Ended September 25, 2004

OR

For the transition period from __________________ to ___________________

Gehl Company

FORM 10-Q

September 25, 2004

Report Index

PART I – Financial Information

Item 1. Financial Statements

Gehl Company and Subsidiaries Condensed Consolidated Statements of Operations (unaudited and in thousands, except per share data)

Gehl Company and Subsidiaries Condensed Consolidated Balance Sheets (unaudited and in thousands, except share data)

Gehl Company and Subsidiaries Condensed Consolidated Statements of Cash Flows (unaudited and in thousands)

Note 1 – Basis of Presentation

Note 2 – Stock Based Compensation

Note 3 – Income Taxes

Note 4 – Asset Impairment

Note 5 – Inventories

Note 6 – Product Warranties and Other Guarantees

Note 7 – Employee Retirement Plans

Note 8 – Accounting Pronouncements

Note 9 – Net Income (Loss) Per Share and Comprehensive Income (Loss)

Note 10 – Business Segments

Note 11 – Stock Repurchases

Note 12 – Shareholders’ Equity

Note 13 – Financial Instruments

Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition

Results of Operations

Three Months Ended September 25, 2004 Compared to Three Months Ended September 27, 2003

Net Sales

Gross Profit

Selling, General and Administrative Expenses

Asset Impairment

Income (Loss) from Operations

Interest Expense

Net Other Income

Net Income (Loss)

Nine Months Ended September 25, 2004 Compared to Nine Months Ended September 27, 2003

Net Sales

Gross Profit

Selling, General and Administrative Expenses

Income from Operations

Interest Expense

Net Other Income (Expense)

Net Income

Financial Condition

Accounting Pronouncements

Critical Accounting Policies and Estimates

Outlook

Forward-Looking Statements

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

PART II – Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 5. Other Information

Item 6. Exhibits

SIGNATURES

GEHL COMPANY

INDEX TO EXHIBITS

FIFTEENTH AMENDMENTtoAMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Recitals:

Amendment

GEHL COMPANY/RETTLERCHANGE IN CONTROL AND SEVERANCE AGREEMENT

GEHL COMPANY2004 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

W I T N E S S E T H :

CERTIFICATION OF PERIODIC FINANCIAL REPORTS

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

For the transition period from to _

Gehl Company and Subsidiaries
Condensed Consolidated Statements of Operations
(unaudited and in thousands, except per share data)

Gehl Company and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited and in thousands, except share data)

Gehl Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited and in thousands)

FIFTEENTH AMENDMENT
to
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

GEHL COMPANY/RETTLER
CHANGE IN CONTROL AND SEVERANCE AGREEMENT

GEHL COMPANY
2004 EQUITY INCENTIVE PLAN