Employee Summary

March 2009

To:
Alamo Group Employees Worldwide

From:
Ron Robinson
President & CEO

Code of Business Conduct & Ethics Policies and Procedures

Alamo Group Inc. and all of the companies that make it up worldwide share the same values and principles governing the conduct of our business. These values are based on compliance with all applicable laws and the highest standards of honesty, integrity and fairness.

Corporate transgressions over the past several years by several public companies have resulted in the passing of new laws by the United States Congress (Sarbanes-Oxley) and regulations by the Security and Exchange Commissions and the New York Stock Exchange covering business standards and disclosures which directly affect us. We have closely monitored and implemented these changes as it has always been the policy of Alamo Group Inc. to comply with all applicable laws and to uphold and enforce the highest standards of honesty, integrity and fairness.

This is a summary of the Code of Business Conduct and Ethics Policies and Procedures that have been adopted by Senior Management and the Board of Directors. More detailed information may be found in the actual policies, which you may obtain from your supervisor. The Company's Compliance Committee addresses violations, conducts investigations and enforces the policies. We continue our "open door" policy and have implemented My Safe Workplace™ for making anonymous reports of violations of the Code and any other infractions. The Legal Department may also be contacted when you need clarification of the Code and for matters that may not be covered.

As a member of the Alamo Group team, you are expected to exhibit the highest standards of honesty, integrity and fairness in your business dealings on behalf of the Company. Some of you will be required to fill out a questionnaire confirming your adherence to the code. Compliance with the values set out in these and other Company policies is required to maintain the standards that have been a part of the Company's way of doing business throughout its history as well as to comply with laws that have been recently enacted.

General Information on the Code of Business Conduct & Ethics

The Code of Business Conduct and Ethics of Alamo Group Inc. and its subsidiaries ("the Company") sets out the policies relating to the legal and ethical standards of conduct to be followed by Company employees (which includes directors and officers) in the conduct of its business. The Company has operations and makes sales in various countries throughout the world. It is the Company's policy for its employees to comply with all laws applicable to it and the conduct of its business wherever located.

Where laws covering the activities of the Company overlap, generally the most stringent law is to be followed. As a U.S. company, there are occasions that U.S. law must be followed, even by non-U.S. subsidiaries and employees. The Legal Department will assist in resolving any conflicts of laws that affect the activities of the Company.

The Company encourages employees to report violations of the Code or any laws to their supervisors, the Legal Department or a member of the Compliance Committee. Guidance may be sought as well regarding potential or actual violations of the Code or any laws. We have an "open door" policy which allows employees to take their concerns to higher levels of management. Reports may be made anonymously by emailing My Safe Workplace.com™ or calling 1 800 461 9330. Messages will be forwarded anonymously to the Chairman of the Compliance Committee and the Chairman of the Audit Committee of the Board of Directors. They will review all messages and will offer guidance if requested and direct investigations of alleged violations. Should such an investigation reveal any wrongdoing, the Compliance Committee will enforce the Code through appropriate means of discipline up to and including termination of employment. The Code prohibits intimidation or retaliation for good-faith reports of violations except that appropriate action may be taken if a reporting employee has violated the Code.

In addition to the summaries of the provisions of the Code set out below, senior financial officers have an additional responsibility relating to fair and timely disclosure in filings with the SEC and other public communications. The Company's policies are detailed in the Personnel Policy and Procedures Manual. You may review these policies with your General Manager or Human Resource Representative if you desire.

For details of General Information on the Code of Business Conduct and Ethics, see Corporate Policy Procedure number H-1.

Confidential and Propriety Information; Inventions

Confidential and Proprietary Information of the Company is information not generally made available to the public that gives the Company a competitive advantage. Employees may also become aware of confidential and proprietary information of customers or suppliers. No such information may be disclosed by an employee outside the Company without authorization from the Company to do so. Disclosure of such information could harm the Company or a customer or be helpful to a competitor. Inventions conceived and developed on Company time with company property must be assigned to the Company.

For additional information see Corporate Policy Procedure number H-2.

Conflict of Interest and Fair Dealing

Company policy is designed to eliminate conflicts between the interests of the Company and of its employees and to promote fair dealing with employees, customers, suppliers and competitors. Conflicts of interest can be hard to define, but the following list sets out situations that would always be considered a conflict, where an employee or any person having a close personal relationship with an employee:

1) Obtains a significant financial or other beneficial interest in one of the Company's suppliers, customers or competitors without first notifying the Company and obtaining written approval from the Compliance Committee;

2) Engages in a significant personal business transaction involving the Company for profit or gain, unless such transaction has first been approved in writing by the Compliance Committee;

3) Accepts or gives money, gifts of other than nominal value, excessive hospitality, loans or other special treatment from or to any supplier, customer or competitor of the Company (loans from lending institutions at prevailing interest rates are excluded);

4) Participates in any sale, loan or gift, of Company property without obtaining written approval from the Compliance Committee;

5) Learns of a business opportunity through association with the Company and discloses it to a third party or invests in the opportunity without first offering it to the Company; or

6) Is involved in theft or waste of Company assets.

Fair dealing includes not converting company money or property for personal use, making full disclosures to the Company, acting in good faith and dealing fairly with customers, suppliers, competitors and co-employees.

For additional information see Corporate Policy Procedure number H-3.

Corporate Opportunity

Like the Conflict of Interest Policy and Fair Dealing Policy, the Corporate Opportunity Policy generally precludes employees from diverting to themselves opportunities that belong to the Company.

Employees may not:

1) Take opportunities that are discovered through the use of corporate property, information or position; or

2) Use Company property, information or position for personal gain; or

3) Compete with the Company without the Company's consent.

Insider Trading and Tipping

Securities laws are based on the general concept of a free and fair trading market, which requires that everyone operate under the same amount of information. Insider Trading and Tipping are unlawful, against Company policy and applicable to all employees worldwide.

"Insider Trading" occurs when an insider buys or sells shares of the Company's stock on the open market based on material inside information.

An "insider" is a director, officer or any employee of the Company with access to confidential information about the Company, which would give that person an advantage in buying, selling or otherwise trading in the Company's securities.

"Material inside information" is non-public or confidential information concerning the Company that, if publicly known, would be considered important by a reasonable shareholder, or a potential shareholder, in his or her determination whether to buy or sell the stock of the Company or information that could reasonably be expected to affect the price of the Company's stock. Examples of material inside information include a significant acquisition or proceeds from a disposition of the Company's assets or businesses that are significantly better or worse than expected by the investment community.

"Tipping" occurs when material inside information is given to persons outside the Company (including friends and family) or unauthorized employees in the Company to enable them to trade in the Company's securities at an advantage.

At no time may an employee buy or sell Alamo stock when in the possession of material inside information.

In the interest of (1) protecting you as an Insider, (2) protecting the Company, and (3) avoiding a potential loss of investor confidence due to Insider trading, Insiders will not be allowed to buy or sell Alamo Group stock within 10 days prior to or two full trading days after an earnings announcement or the announcement of a significant corporate development (i.e., an acquisition) or news release. All Insiders must notify and obtain the approval of the Vice-President of Administration at least ten days prior to any buying or selling transaction.

Insider Trading or Tipping can subject the insider to civil penalties of up to three times the amount of profit gained or loss avoided and/or criminal penalties of up to $1,000,000 and/or up to 10 years of jail.

For additional information see Corporate Policy Procedure number H-5.

Foreign Corrupt Practices Act Compliance Policy

The Foreign Corrupt Practices Act Compliance Policy (FCPA) is a criminal statute that prohibits U.S. companies or their employees, agents, or representatives from giving, paying, promising, offering, or authorizing the payment, directly or indirectly through a third party, of anything of value to any "foreign official" — a term that is very broadly defined — to persuade that official to help the Company obtain or keep business. This Act applies to all non-U.S. as well as U.S. companies and employees.

Under no circumstances may an employee, agent, or representative of the Company give, pay, or offer or promise to pay, or authorize the giving or payment of anything of value to any foreign official, or to any person while knowing or being aware of a high probability that the payment or promise to pay will be passed on to a foreign official.

Also, under no circumstances may an employee, agent, or representative of the Company make, offer, promise, or authorize any payment or gift in violation of local law.

The Act does not apply to minor facilitating payments made to expedite routine approvals, such as obtaining business permits, processing visas, or providing telephone or water service.

The FCPA defines "foreign official" to include:

1) Any officer or employee of a foreign government or any department, agency, or instrumentality thereof;

2) Any officer or employee of a public international organization (e.g., the International Monetary Fund, the World Bank, or the European Union);

3)Any officer or employee of a state-owned or controlled enterprise; and

4) Any political party and official thereof or candidate for political office.

The Act and Company policy require that all transactions involving Company funds or assets be recorded in reasonable detail and accurately and completely reflect the transactions and asset dispositions of the Company regardless of the country the transaction takes place.

Sanctions for FCPA violations are severe and potentially devastating to the Company and to the individuals involved. Statutory criminal penalties for individuals include fines up to $100,000 per violation or imprisonment up to five years, or both. Individual officers and employees may be prosecuted even if the Company is not. Fines assessed against individuals may not be reimbursed by the Company.

For additional information see Corporate Policy Procedure number H-6.

Antitrust

Antitrust laws and Company policy prohibit actions or agreements that could discourage or eliminate competition, create a monopoly, artificially maintain prices or otherwise illegally restrain commerce. These include agreements among competitors that may constrain trade, such as price fixing or bid rigging the terms or conditions of a sale or services. Questions regarding this topic should be addressed to the Legal Department.

For additional information see Corporate Policy Procedure number H-7.

Export Control, Sanctions and Antiboycott

A) Company employees must abide by import and export laws applicable to it in its worldwide operations. For example, export of U.S. origin products, services or technology must comply with U.S. export laws which take into account the nature of the item, the country of destination, the identity of the end user and the proposed end use. The applicable laws in each country the Company does business must be followed, but there are some U.S. laws that apply to subsidiary companies located outside the U.S. as the parent company is a U.S. Company.

B) The Company, including all subsidiaries, will not participate in any transactions with U.S. embargoed countries or entities known controlled or organized in such countries. Certain countries are subject to U.S. sanctions which restrict but do not halt trade with those countries.

As of February 23, 2009, Cuba, Iran and the Sudan are subject to comprehensive U.S. embargoes, though some non controlled items may be sent to Southern Sudan subject to various requirements.  With few exception Syria is also embargoed by U.S.  Burma/Myanmar is subject to an import ban.  Certain controlled items may not be exported to North Korea.  Libya is no longer subject to a comprehensive embargo nor is Iraq, but to export certain sensitive items to either country can require a license from the U.S. Government.

C) No employee of the Company shall refuse to do business with any country, entity or person for boycott-related purposes such as the Arab League boycott of Israel. Any agreements received with boycott language in them must be reported to the Legal Department for reporting to the U.S. government.

If you wish to make a sale to any of the countries, discussed above, contact the Legal Department.

Confidential Reporting of Alleged Code Violations

Anyone may report violations of or seek guidance with respect to actual or potential violations of the Code of Business Conduct and Ethics Procedures or the law, to management through their supervisor, the Compliance Committee, the "open door" policy under which you may arrange to meet with management personnel or the Legal Department in person, by mail, email or telephone. If you wish to remain anonymous, you may make a report or seek guidance by calling or emailing My Safe Workplace.com™ as noted below, and they will anonymously forward the message to the Chairman of the Compliance Committee of the Company and the Chairman of the Audit Committee of the Board of Directors. My Safe Workplace is an independent third party service provider staffed with trained professionals to take your information and forward it to the Compliance Committee. The Company encourages employees to discuss issues with their supervisor or to use the open door policy.

If you use My Safe Workplace:

1)You may refrain from identifying yourself (although, in the absence of such identification, the Company may have insufficient information to investigate the allegations).

2) No retribution will be imposed on you for making the report unless you are one of the violators or intentionally provide false information.

3) Your confidentiality will be maintained unless disclosure is required or advisable in connection with any governmental investigation or report or the Company's legal defense of the matter.

My Safe Workplace is not affiliated with the Company, is answered by trained professionals and is available every day, 24 hours a day. You may access My Safe Workplace toll free by dialing 1-800-461-9330 or by email at www.MySafeWorkplace.com.

The mailing address, phone numbers and email address for making Code violation reports:

To My Safe Workplace:
My Safe Workplace Staff
Suite 150
15000 West Sixth Avenue
Golden, CO 80401
1-800-461-9330
www.MySafeWorkplace.com

To the Company:
Compliance Committee Chairman
Alamo Group Inc.
1627 E. Walnut St.
Seguin, TX 78155
1-830-372-9600
dduncan@alamo-group.com

Compliance Committee:

Donald Duncan, Chairman
830-372-9600
dduncan@alamo-group.com

Bob George
830-372-9621
bgeorge@alamo-group.com

Dan Malone
830-372-9581
dmalone@alamo-group.com

Richard Wehrle
830-372-9620
rwehrle@alamo-group.com

Gabriela Garcia
830-372-9559
ggarcia@alamo-group.com

Michael Sultan
830-372-9580
msultan@alamo-group.com

Geoff Davies, Europe
011-44 1789 773383 ext. 266
gdavies@bomford-turner.com

My Safe Work Place
1-800-461-9330
www.MySafeWorkplace.com

Last updated 03 March 2009

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