GEHL COMPANY/MILLER
CHANGE IN CONTROL AND SEVERANCE AGREEMENT
THIS
AGREEMENT, made and entered into as of the 16 th day of
December, 2005, by and between Gehl Company, a Wisconsin
corporation (hereinafter referred to as the “GEHL”),
and Daniel L. Miller (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:
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(a)
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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;
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(b)
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The bonus which
would be earned by the Executive through the Termination Date
computed under GEHL’s existing bonus plan, ignoring any
requirement that the Executive be employed through the end of the
fiscal year and not reduced for any deferrals which would otherwise
be required under the bonus plan;
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(c)
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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;
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(d)
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Two (2) 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; and.
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(e)
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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.
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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.
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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:
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i)
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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
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ii)
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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
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iii)
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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
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iv)
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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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v)
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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
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