Alamo Group (ALG)

Section 1.  Background and Purpose of the Plan.

            (a)        Background.    The name of this plan is the Alamo Group Inc. 2009 Equity Incentive Plan (the “Plan”).  Alamo Group Inc., a Delaware corporation (the “Company”), established an incentive compensation plan known as the “First Amended and Restated 1999 Non-Qualified Stock Option Plan,” effective August 31, 1999 (the “1999 Plan”).  The 1999 Plan expires as of July 6, 2009.  Subject to the approval of the Company’s stockholders, the Company now desires to adopt the Plan as of May 7, 2009, to replace the 1999 Plan, as set forth below. 

            (b)        Purpose.  The purpose of the Plan is to provide incentives to those officers, employees, and directors of the Company and its direct and indirect subsidiaries whose contributions are essential to the growth and success of the Company’s business, in order to strengthen the long-term commitment of such persons to the Company and its direct and indirect subsidiaries, and to help the Company and its direct and indirect subsidiaries secure and retain the services of such key persons.  To accomplish such purposes, the Plan provides that the Company may grant Nonqualified Stock Options, Restricted Stock, and Restricted Stock Units.  The Plan is intended to permit awards that satisfy the requirements of Section 162(m) of the Code and shall be interpreted in a manner consistent with the requirements therefor.

Section 1.  Background and Purpose of the Plan.

                (a)           Background.         The name of this plan is the Alamo Group Inc. 2009 Equity Incentive Plan (the “Plan”).  Alamo Group Inc., a Delaware corporation (the “Company”), established an incentive compensation plan known as the “First Amended and Restated 1999 Non-Qualified Stock Option Plan,” effective August 31, 1999 (the “1999 Plan”).  The 1999 Plan expires as of July 6, 2009.  Subject to the approval of the Company’s stockholders, the Company now desires to adopt the Plan as of _______________, 2009, to replace the 1999 Plan, as set forth below. 

                (b)           Purpose.  The purpose of the Plan is to provide incentives to those officers, employees, and directors of the Company and its direct and indirect subsidiaries whose contributions are essential to the growth and success of the Company’s business, in order to strengthen the long-term commitment of such persons to the Company and its direct and indirect subsidiaries, and to help the Company and its direct and indirect subsidiaries secure and retain the services of such key persons.  To accomplish such purposes, the Plan provides that the Company may grant Nonqualified Stock Options, Restricted Stock, and Restricted Stock Units.  The Plan is intended to permit awards that satisfy the requirements of Section 162(m) of the Code and shall be interpreted in a manner consistent with the requirements therefor.