THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

A.S.V., Inc. (ASVI)

5/1/2006 Proxy Information

Transactions with Caterpillar Inc.

On September 29, 2005 we signed a five-year Supply Agreement with Caterpillar Inc. (“Caterpillar”), effective November 1, 2005. The Supply Agreement replaced the Multi-Terrain Rubber-Tracked Loader Alliance Agreement that had been in effect since October 2000 and expired October 31, 2005. Under the Supply Agreement, Caterpillar will purchase 100% of its undercarriage and original equipment manufacturer service parts requirements for current and specified future Caterpillar MTLs, as defined, from us. We will continue to be allowed to sell our rubber track undercarriages to other equipment manufacturers for machines that do not compete with Caterpillar’s MTLs and we will continue to utilize Caterpillar components in the manufacture of our products. The Supply Agreement commenced on November 1, 2005 and will continue through November 1, 2010. The Supply Agreement will automatically renew for successive one-year renewal terms unless either party provides at least six months prior written notice of termination. During 2005, 39% of our net sales were made to Caterpillar. At December 31, 2005, the accounts receivable balance from Caterpillar was approximately $10,000,000.

In connection with the new Supply Agreement entered into with Caterpillar, all agreements previously entered into between the two companies have been terminated. The terminated agreements include the Securities Purchase Agreement, the Commercial Alliance Agreement, the Marketing Agreement, the Trademark and Trade Dress License Agreement, the Management Services Agreement and the Multi-Terrain Rubber-Tracked Loader Alliance Agreement.

Along with the Supply Agreement, ASV and Caterpillar also entered into a Registration Rights Agreement that provides Caterpillar registration rights for unregistered shares of our common stock it currently holds. However, so long as the Supply Agreement remains in effect, Caterpillar has agreed not to sell or dispose of any of its ASV shares prior to January 1, 2009. In addition, as part of the Registration Rights Agreement, Caterpillar retained its ability to designate director nominees for election to our Board of Directors in proportion to its ownership of our shares, similar to the rights it held under the Securities Purchase Agreement. Currently, one of our nine directors has been designated by Caterpillar for election to our Board, despite the fact that Caterpillar is entitled to designate two director nominees, assuming a board comprised of nine directors. If Caterpillar were to exercise its right to designate an additional director nominee, based on its current stock ownership interest, we anticipate that, assuming there were no vacancies on our board, we would expand the size of our board to accommodate the additional director nominee designated by Caterpillar.

As of March 31, 2006, Caterpillar owned 23.1% of our common stock. Until his retirement from Caterpillar in January 2005, Richard A. Benson served as Caterpillar’s designee to the Board of Directors. In January 2005, Edward J. Rapp was designated as Caterpillar’s designee to the Board of Directors. Mr. Rapp declined to stand for re-election in 2005, at which time Kenneth J. Zika was designated by Caterpillar as its new board designee.

We purchase parts used in our products from Caterpillar and also reimburse Caterpillar for the salary and related costs of one Caterpillar employee that works on our behalf. In addition, we utilize Caterpillar’s warranty processing system to handle warranty claims on their machines and reimburse Caterpillar for the warranty expense incurred by Caterpillar dealers. During 2005, total commissions, parts purchases and salary and warranty reimbursements were approximately $8,436,000. Also, at December 31, 2005, accounts payable to Caterpillar were $1,467,000.

In the fourth quarter of 2005, our subsidiary, Loegering Mfg. Inc. (“Loegering”) sold the intellectual property and the tangible personal property related to Loegering’s snowblower product line to Caterpillar for $350,000, resulting in a gain of $325,000. This gain was recorded in Other Income in our consolidated financial statements for 2005. In addition, Loegering has agreed to sell its inventory of snowblower service parts to Caterpillar at an amount to be mutually agreed on by the two parties, not to exceed $50,000, during 2006.

4/28/2005 Proxy Information

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

The Company uses a public relations firm that is affiliated with Mr. Lynch. Total fees paid to the public relations firm in 2004 were approximately $153,000.

Transactions with Caterpillar Inc.

As of March 31, 2005, Caterpillar Inc. ("Caterpillar") owned 23.5% of the Company's Common Stock. During 2004 and until his retirement from Caterpillar in 2005, the Company's director, Richard A. Benson, served as Caterpillar's designee to the Board of Directors. Thereafter, Edward J. Rapp was designated as a director by Caterpillar. Mr. Rapp has declined to stand for reelection, and Kenneth J. Zika has been designated by Caterpillar as its new board designee. Caterpillar currently has the right to designate a number of directors proportionate to its stock ownership in the Company.

In October 2000, the Company and Caterpillar entered into an alliance agreement to jointly develop and manufacture a new product line of Caterpillar rubber track skid steer loaders called Multi-Terrain Loaders (MTLs). The product line, which currently consists of five models, features Caterpillar's patented skid steer loader technology and the Company's patented Maximum Traction Support System(TM) rubber track undercarriage. The MTLs are being sold through the Caterpillar dealer network. During 2004, 40% of the Company's net sales were made to Caterpillar. At December 31, 2004, the accounts receivable balance from Caterpillar was approximately $16,000,000.

In January 2004, the Company sold 1,040,069 shares of its Common Stock to Caterpillar at $21.00 per share pursuant to the exercise of a warrant held by Caterpillar. These shares were subject to an acceleration notice issued to Caterpillar by the Company in October 2003 in connection with the warrant held by Caterpillar.

Also in January 2004, the Company repurchased the remaining warrant held by Caterpillar for a cash payment of $7.2 million and the issuance of 500,000 shares of the Company's Common Stock. As of March 31, 2005, Caterpillar owned 23.5% of the Company's outstanding Common Stock and no longer has any options, warrants or contractual rights pursuant to which they may acquire additional shares of the Company's Common Stock. In addition, in connection with the Company's repurchase of the remaining warrant, the Company and Caterpillar terminated certain covenants in the 1998 Securities Purchase Agreement which had permitted Caterpillar to maintain a proportionate interest in the Company, and which had restricted potential acquisitions or loans and the payment of dividends.

The Company purchases parts used in its products from Caterpillar and also reimburses Caterpillar for the salary and related costs of two Caterpillar employees that work on the Company's behalf. In addition, the Company utilizes Caterpillar's warranty processing system to handle warranty claims on its machines and reimburses Caterpillar for the warranty expense incurred by Caterpillar dealers. In connection with the MTL alliance agreement, the Company has agreed to reimburse Caterpillar for its research and development costs related to the MTLs as it pertains to the combination of the Caterpillar portion of the machines with the Company's undercarriages. During 2004, total commissions, parts purchases and salary and warranty reimbursements were approximately $7,958,000. Also, at December 31, 2004, accounts payable to Caterpillar were $558,000.