EXHIBIT 10.5

 

AMENDED AND RESTATED

MANAGEMENT AGREEMENT

 

This AMENDED AND RESTATED MANAGEMENT AGREEMENT (this “Agreement”) is entered
into as of this         day of                                ,          by and
between Tennant Company, a Minnesota corporation (the “Company”), and
                                     (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company and the Executive desire to amend and restate the terms of
the Management Agreement between them dated as of                          ,
200  , as set forth in this Agreement; and(1)

 

WHEREAS, the Executive is a key member of the management of the Company and is
expected to devote substantial skill and effort to the affairs of the Company,
and the Company desires to recognize the significant personal contribution that
the Executive has made and is expected to continue to make to further the best
interests of the Company and its shareholders; and

 

WHEREAS, it is desirable and in the best interests of the Company and its
shareholders to continue to obtain the benefits of the Executive’s services and
attention to the affairs of the Company; and

 

WHEREAS, it is desirable and in the best interests of the Company and its
shareholders to provide inducement for the Executive (A) to remain in the
service of the Company in the event of any proposed or anticipated change in
control of the Company and (B) to remain in the service of the Company in order
to facilitate an orderly transition in the event of a change in control of the
Company; and

 

WHEREAS, it is desirable and in the best interests of the Company and its
shareholders that the Executive be in a position to make judgments and advise
the Company with respect to proposed changes in control of the Company without
regard to the possibility that the Executive’s employment may be terminated
without compensation in the event of certain changes in control of the Company;
and

 

WHEREAS, it is desirable and in the best interests of the Company and its
shareholders to protect confidential, proprietary and trade secret information
of the Company, to prevent unfair competition by former executives of the
Company following separation of

 

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(1)  Included in agreements with members of management who had previously signed
management agreements with the Company.

 

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their employment with the Company and to secure cooperation from former
executives with respect to matters related to their employment with the Company;
and

 

WHEREAS, the Executive desires to be protected in the event of termination of
the employment of the Executive by the Company without Cause (as defined in
Section 10) or termination of employment by the Executive for Good Reason (as
defined in Section 10); and

 

WHEREAS, for the reasons set forth above, the Company and the Executive desire
to enter into this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, the Company and the Executive agree as follows:

 

1.             Employment. The Executive shall remain in the employ of the
Company for the Term (as defined in Section 22) of this Agreement, as
                                         of the Company, and shall have all
duties customarily associated with such office and shall perform such other
duties as may be specified by the Board of Directors and/or the Chief Executive
Officer of the Company; provided, however, that either the Executive or the
Company may terminate the employment of the Executive with the Company at any
time prior to the expiration of the Term, with or without Cause and for any
reason whatever, in the manner provided in Section 4, subject to the right of
the Executive to receive any payment and other benefits that may be due pursuant
to the terms and conditions of Section 5 or 6 (as the case may be).  While the
Executive is employed by the Company hereunder, the Executive shall devote
substantially all of Executive’s business time and energy to the performance of
the Executive’s duties hereunder and shall not accept other employment with or
engage in or render services to any other business or enterprise, except that
Executive may participate in charitable activities and personal investment
activities to a reasonable extent, and Executive may serve as a director of
business organizations subject to any guidelines for such directorships that may
be established by the Company from time to time, so long as such activities and
directorships do not interfere with the performance of Executive’s duties and
responsibilities hereunder.

 

2.             Compensation.

 

(a)           During the Term, the Executive shall receive such base salary (the
“Base Salary”) per Employment Year (as defined in Section 10), prorated for any
partial Employment Year, as the Board of Directors and/or the Executive
Compensation Committee of the Board of Directors shall from time to time
determine.  The Executive’s Base Salary shall be payable in accordance with the
Company’s regular payroll practices.  The Board of Directors and/or the
Executive Compensation Committee of the Board of Directors will review the
Executive’s Base Salary at the beginning of each Employment Year commencing
after December 31, 2003, to determine whether a change in the annual amount
thereof is merited.  In no event shall the Executive’s Base Salary be decreased
in any Employment Year by more

 

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than 15% of the amount of Base Salary paid by the Company to the Executive for
the immediately preceding Employment Year.

 

(b)           Subject to all terms and conditions hereof, while the Executive is
employed by the Company hereunder, the Executive shall participate in the STIP,
as defined in Section 10.

 

3.             Fringe Benefits.

 

(a)           While the Executive is employed by the Company hereunder during
the Term, the Company shall provide to the Executive and the Executive’s
dependents such medical, dental and life insurance and disability, retirement
savings, vacation, sick leave and other employee and fringe benefits as are
provided from time to time by the Company to its senior executives and their
dependents, in accordance with the general benefits practices of the Company
then in effect; provided, however, that the benefits provided to the Executive
and the Executive’s dependents hereunder during employment with the Company
shall in no event be less favorable to them, on an aggregate basis, than the
benefits provided by the Company to the Executive and the Executive’s dependents
on the date hereof.  Notwithstanding anything stated in this Section 3(a),
coverage of the Executive and the Executive’s dependents under medical, dental,
and life insurance and disability plans, programs and benefits shall be
available only if the Executive and the Executive’s dependents satisfy
applicable waiting periods under such plans, programs and benefits.

 

(b)           The Company shall promptly reimburse the Executive for all
reasonable travel and other expenses that are incurred by the Executive during
the Term in connection with the conduct of the business of the Company while the
Executive is employed by the Company hereunder and for which the Executive
furnishes appropriate documentation in accordance with the Company’s general
expense reimbursement practices then in effect.

 

4.             Termination.  The Executive’s employment by the Company hereunder
shall terminate and be effective upon:

 

(i)            receipt by the Company of the Executive’s written resignation
from the Company (which resignation shall specify whether it is with or without
Good Reason (as defined in Section 10) and, if with Good Reason, shall set forth
in reasonable detail the basis therefor);

 

(ii)           three business days following receipt by the Executive of written
notice from the Company of termination of the Executive’s employment (which
notice shall specify whether such termination is with or without Cause and, if
with Cause, shall set forth in reasonable detail the basis therefor);

 

(iii)          the Executive’s death or Disability (as defined in Section 10);
or

 

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(iv)          expiration of the Term,

 

and the date on which the Executive’s employment by the Company hereunder ends
shall be the “Termination Date”.

 

5.             Payments Upon Termination Prior to a Change in Control.  If the
Executive’s employment by the Company hereunder ends pursuant to Section 4 prior
to the occurrence of any Change in Control (as defined in Section 10) and:

 

(a)           if such employment by the Company hereunder ends prior to the
expiration of the Term by reason of resignation by the Executive without Good
Reason or termination by the Company for Cause, then:

 

(i)            the Company shall pay to the Executive, in accordance with
Section 2(a), the Executive’s Base Salary through and including the Termination
Date;

 

(ii)           if the Termination Date occurs on or after the last day of any
Plan Year (as defined in Section 10) but prior to the date payment of the
Executive’s award, if any, under the STIP for such Plan Year has been made, the
Company shall pay the full amount of such award to the Executive no later than
the date awards under the STIP for such Plan Year are paid to the other
participants in the STIP; and

 

(iii)          the Company shall pay to the Executive, in accordance with
Section 3(b), all amounts due thereunder for reimbursement of expenses.

 

(b)           if such employment by the Company hereunder ends by reason of the
Executive’s death or Disability prior to the expiration of the Term or if such
employment terminates upon the expiration of the Term, then:

 

(i)            the Company shall pay to the Executive (or the Executive’s legal
representative), in accordance with Section 2(a), the Executive’s Base Salary
through and including the last day of the month in which the Termination Date
occurs (in the event employment hereunder ends by reason of death or Disability)
or through and including the Termination Date (in the event employment hereunder
ends by reason of the expiration of the Term);

 

(ii)           if the Termination Date occurs on or after the last day of any
Plan Year but prior to the date payment of the Executive’s award, if any, under
the STIP for such Plan Year has been made, the Company shall pay the full amount
of such award to the Executive (or the Executive’s legal

 

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representative) no later than the date awards under the STIP for such Plan Year
are paid to the other participants in the STIP;

 

(iii)          if the Termination Date occurs on any day of a Plan Year other
than the last day, the Company shall pay to the Executive (or the Executive’s
legal representative) a pro rata portion of the award that would have been
payable to the Executive under the STIP for such Plan Year had the Executive
remained employed by the Company hereunder for the duration of such Plan Year,
which payment shall be made no later than the date awards under the STIP for
such Plan Year are paid to the other participants in the STIP; and

 

(iv)          the Company shall pay to the Executive (or the Executive’s legal
representative), in accordance with Section 3(b), all amounts due thereunder for
reimbursement of expenses.

 

(c)           if such employment by the Company hereunder ends prior to the
expiration of the Term by reason of resignation by the Executive for Good Reason
or termination by the Company without Cause, then:

 

(i)            the Company shall continue to pay to the Executive, in accordance
with, and at the times provided in, Section 2(a), the Executive’s Base Salary
through and including the first anniversary of the Termination Date;

 

(ii)           if the Termination Date occurs on or after the last day of any
Plan Year but prior to the date payment of the Executive’s award, if any, under
the STIP for such Plan Year has been made, the Company shall pay the full amount
of such award to the Executive no later than the date awards under the STIP for
such Plan Year are paid to the other participants in the STIP;

 

(iii)          if the Termination Date occurs on any day of a Plan Year other
than the last day, the Company shall pay to the Executive the full amount of the
award that would have been payable to the Executive under the STIP for such Plan
Year had all performance targets been met and the Executive remained employed by
the Company hereunder for the duration of such Plan Year, which payment shall be
made no later than the date awards under the STIP for such Plan Year are or
would have been paid to the other participants in the STIP;

 

(iv)          for a period from the Termination Date through the first
anniversary of the Termination Date, and except to the extent essentially
equivalent and no less favorable benefits are provided to the Executive by a

 

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subsequent employer, the Company shall pay to the Executive or on the
Executive’s behalf a portion of the premiums required for the Executive to
maintain continuation coverage under the Company’s medical, dental and life
insurance plans in which the Executive was a participant immediately prior to
the Termination Date (such portion equal to the amount of each premium the
Company would pay if the Executive were still employed by the Company), and
shall provide to the Executive disability benefits comparable to such disability
benefits under any plan or program of the Company in which the Executive was a
participant immediately prior to the Termination Date; and

 

(v)           the Company shall pay to the Executive, in accordance with
Section 3(b), all amounts due thereunder for reimbursement of expenses.

 

6.             Payments upon Termination in Connection with, or Following, a
Change in Control.  If any Change in Control shall occur during the Term of this
Agreement and the Executive’s employment by the Company shall end at the time
of, or at any time after, the occurrence of the earliest Change in Control to
occur (the “First Change in Control”) and prior to the end of the Transition
Period (as defined in Section 10), then the Company or its successor (which term
as used herein shall include any person acquiring all or substantially all of
the assets of the Company) shall pay cash to the Executive and provide other
benefits on the following basis (it being understood that if the Executive’s
employment by the Company terminates voluntarily or involuntarily during the
Term, but prior to the occurrence of the First Change in Control, the Executive
shall be entitled to no cash payment or benefits under this Section 6, but shall
be entitled to payments and benefits to the extent provided in Section 5):

 

(a)           If at the time of, or at any time after, the occurrence of the
First Change in Control and prior to the end of the Transition Period, the
employment of the Executive with the Company is voluntarily or involuntarily
terminated for any reason (unless such termination is a voluntary termination by
the Executive other than for Good Reason or is on account of the death or
Disability of the Executive or is a termination by the Company for Cause), the
Executive (or the Executive’s legal representative), subject to the limitations
set forth in Section 6(b),

 

(i)            shall be entitled to receive from the Company or its successor,
on the Termination Date (or, in the event of termination by the Executive for
Good Reason, within five days after the Termination Date), a cash payment in an
amount equal to (A) three times (or one time in the case of a voluntary
termination by the Executive during the Window Period, as defined in
Section 10(e)(iii)(E), which, but for Section 10(e)(iii)(E), would not
constitute a termination for Good Reason) the average annual compensation
payable by the Company and includible in the gross income for Federal Income Tax

 

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purposes of the Executive during the shorter of the period consisting of (1) the
most recent five completed taxable years of the Executive ending before the
First Change in Control (other than a Change in Control described in Section
10(b)(v) unless the Executive is terminated prior to the occurrence of a Change
in Control described in clause (i), (ii), (iii) or (iv) of Section 10(b)) or (2)
that portion of such five-year period during which the Executive was employed by
the Company (for which purpose compensation for a partial year shall be
annualized before determining average annual compensation for the period in
accordance with temporary or final regulations promulgated under Section
280(G)(d) of the Internal Revenue Code of 1986 (the “Code”) or any successor
provision thereto), less (B) $1.00, such payment to be made to the Executive by
the Company or its successor in a lump sum; and

 

(ii)           shall, together with the Executive’s dependents, be entitled
until the end of the Transition Period (or for one year after the Termination
Date in the case of a voluntary termination by the Executive during the Window
Period, as defined in Section 10(e)(iii)(E), which, but for Section
10(e)(iii)(E), would not constitute a termination for Good Reason) to
participate in any medical, dental and life insurance and disability plans,
programs and benefits in which they were entitled to, and did, participate
immediately prior to the First Change in Control as if the Executive were an
employee of the Company until the end of the Transition Period or such one-year
period, as the case may be (or, in the event their participation in any such
plan, program or benefit is barred because the Executive is not an employee of
the Company, the Company, at its sole cost and expense, shall arrange to provide
the Executive and the Executive’s dependents with benefits that are no less
favorable to them than the benefits under such plan, program or benefit), except
to the extent essentially equivalent and no less favorable benefits are provided
by a subsequent employer.

 

(b)           Notwithstanding any provision to the contrary contained herein
except the last sentence of this Section 6(b), if the lump sum cash payment due
and the other benefits to which the Executive shall become entitled under
Section 6(a), either alone or together with other payments made pursuant to this
Agreement or any other agreement between the Executive and the Company or any
compensation plan or program that are in the nature of compensation to the
Executive and are contingent on a change in the ownership or effective control
of the Company or in the ownership of a substantial portion of the assets of the
Company or otherwise, would constitute a “parachute payment” as defined in
Section 280G of the Code or any successor provision thereto, such lump sum
payment and/or such other benefits and payments shall be reduced (but not below
zero) to the largest aggregate amount as will result in no portion thereof being
subject to the excise tax imposed under Section 4999 of the Code (or any
successor provision thereto) or being non-deductible to the Company for Federal
Income Tax purposes pursuant to Section 280G of the Code (or any successor
provision thereto).  Within ten days after the Company informs the Executive of

 

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the necessity of reducing the payments or benefits to avoid the excise tax or
non-deductibility or promptly after the Executive otherwise becomes aware of the
necessity of such a reduction, the Executive in good faith shall determine the
amount of any reduction to be made pursuant to this Section 6(b) and shall
select from among the foregoing benefits and payments those which shall be
reduced. No modification of, or successor provision to, Section 280G or Section
4999 subsequent to the date of this Agreement shall, however, reduce the
benefits to which the Executive would be entitled under this Agreement in the
absence of this Section 6(b) to a greater extent than they would have been
reduced if Section 280G and Section 4999 had not been modified or superseded
subsequent to the date of this Agreement, notwithstanding anything to the
contrary provided in the first sentence of this Section 6(b).

 

(c)           The Company shall pay to the Executive, in accordance with
Section 2(a), the Executive’s Base Salary through and including the Termination
Date.

 

(d)           If the Termination Date occurs on or after the last day of any
Plan Year but prior to the date payment of the Executive’s award, if any, under
the STIP for such Plan Year has been made, the Company shall pay the full amount
of such award to the Executive (or the Executive’s legal representative) no
later than the date awards under the STIP for such Plan Year are paid to the
other participants in the STIP.

 

(e)           If the Termination Date occurs on any day of a Plan Year other
than the last day, the Company shall pay to the Executive (or the Executive’s
legal representative) a pro rata portion of the award that would have been
payable to the Executive under the STIP for such Plan Year had all performance
targets been met and the Executive remained employed by the Company hereunder
for the duration of such Plan Year, which payment shall be made no later than
the date awards under the STIP for such Plan Year are or would have been paid to
the other participants in the STIP.

 

(f)            The Company shall pay to the Executive (or the Executive’s legal
representative), in accordance with Section 3(b), all amounts due thereunder for
reimbursement of expenses.

 

7.             Interpretations.

 

(a)           For purposes of determining any amounts payable under Section 5 or
Section 6, the Executive’s Base Salary at any time after the Termination Date
shall be deemed to equal the Executive’s Base Salary as in effect on the
Termination Date.

 

(b)           In the event the Executive’s employment hereunder is terminated on
any day of an Employment Year or a Plan Year other than the last day and payment
is required hereunder of a pro rata portion of any sum due with respect to such
Employment Year or Plan Year, such pro rata portion shall be determined based on
the number of days in such Employment Year or Plan Year occurring on or before,
and after, the Termination Date.

 

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(c)           Nothing in Section 5 or Section 6 shall limit any obligation of
the Company to the Executive or his dependents upon termination of the
Executive’s employment hereunder (i) as a matter of law (including but not
limited to any obligation of the Company to pay Executive for unused vacation
time accrued through the Terminate Date), (ii) under any other provision of this
Agreement or, except as otherwise expressly provided in this Agreement, any
other agreement between the Executive and the Company, or (iii) in the event of
termination by reason of the Executive’s death or Disability, under life or
disability insurance policies then in effect.  Notwithstanding the foregoing,
the payments required by Section 5 or Section 6 shall be reduced by an amount
equal to (x) any amounts Executive is eligible to receive pursuant to Paragraph
H of the Employee Agreement attached hereto as Exhibit A, plus (y) any severance
pay that the Executive is eligible to receive from the Company, its subsidiaries
or its successors under any policy or agreement of the Company, other than this
Agreement, in the event of the Company’s termination of the Executive’s
employment with the Company.

 

(d)           The Executive shall not be required to mitigate the amount of any
payment or other benefit provided for in Section 5 or Section 6 by seeking
employment with another employer or otherwise; nor shall the amount of any
payment or other benefit provided for in Section 5 or 6 be reduced by any
compensation earned by the Executive as the result of the Executive’s subsequent
employment by another employer, except as otherwise expressly provided in
Section 5 or 6.

 

(e)           The obligations of the Company under Section 5 and Section 6, if
otherwise payable thereunder because of the termination of the Executive’s
employment with the Company, shall survive any termination of employment of the
Executive pursuant to Section 4.

 

8.             Directors’ and Officers’ Indemnification; Stock Based
Compensation.  While the Executive is employed by the Company hereunder, the
Company shall not, without the prior written consent of the Executive, amend its
articles of incorporation or by-laws to prohibit or limit the indemnification
of, or advances of expenses to, its directors and officers or to impose
conditions on such indemnification or advances of expenses in addition to those
provided by law.  While the Executive is employed by the Company hereunder, the
Company shall not modify any stock based incentive plan or agreement to which
the Executive is a party (or is subject) to limit or otherwise affect the
acceleration of vesting or exercisability of stock options of the Executive in
the event of a Change in Control, the lapse of restrictions on restricted stock
of the Executive in the event of a Change in Control, or any other acceleration
of, or increase in benefits under, any stock based benefit in the event of a
Change in Control.

 

9.             Non-Competition, Non-Solicitation and Non-Disclosure.  The
parties agree to be bound by the terms of the Employee Agreement attached hereto
as Exhibit A, which Employee Agreement is incorporated herein by reference.

 

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10.           Certain Definitions.  As used in this Agreement, the following
defined terms have the meanings indicated below:

 

(a)           “Cause” for termination of the Executive’s employment at the
instance of the Company means termination for:

 

(i)            prior to a Change in Control, the Executive’s material breach of
this Agreement, which is not remedied within 30 days after receipt of written
notice thereof;

 

(ii)           prior to a Change in Control, an act or acts of dishonesty
undertaken by the Executive and intended to result in gain or personal
enrichment of the Executive at the expense of the Company;

 

(iii)          persistent failure by the Executive to perform the duties of the
Executive’s employment, which failure is demonstrably willful and deliberate on
the part of the Executive and constitutes gross neglect of duties by the
Executive and which is not remedied within 90 days after receipt of written
notice thereof; or

 

(iv)          the indictment or conviction of the Executive for a felony if the
act or acts constituting the felony are substantially detrimental to the Company
or its reputation.

 

(b)           “Change in Control” shall be deemed to have occurred if:

 

(i)            a majority of the directors of the Company shall be persons other
than persons

 

(A)          for whose election proxies shall have been solicited by the Board
of Directors of the Company, or

 

(B)           who are then serving as directors appointed by the Board of
Directors to fill vacancies on the Board of Directors caused by death or
resignation (but not by removal) or to fill newly created directorships,

 

(ii)           30% or more of the outstanding voting stock of the Company is
acquired or beneficially owned (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, or any successor rule thereto (the “Exchange
Act”)) by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act), provided, however,

 

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that the following acquisitions and beneficial ownership shall not constitute
Changes in Control pursuant to this Section 10(a)(ii):

 

(A)          any acquisition or beneficial ownership by the Company or a
subsidiary of the Company, or

 

(B)           any acquisition or beneficial ownership by any employee benefit
plan (or related trust) sponsored or maintained by the Company or one or more of
its subsidiaries, or

 

(C)           any acquisition or beneficial ownership by the Executive or any
group that includes the Executive, or

 

(D)          any acquisition or beneficial ownership by a parent corporation of
the Company (after giving effect to the merger or statutory share exchange) or
its wholly-owned subsidiaries, as long as they shall remain wholly-owned
subsidiaries, of 100% of the outstanding voting stock of the Company as a result
of a merger or statutory share exchange that complies with Section
10(b)(iii)(A)(2) or the exception in Section 10(b)(iii)(B) in all respects,

 

(iii)          the Company consummates

 

(A)          a merger or consolidation of the Company with or into another
corporation (other than (1) a merger or consolidation with a subsidiary of the
Company or (2) a merger in which

 

(i)            the Company is the surviving corporation,

 

(ii)           no outstanding voting stock of the Company (other than fractional
shares) held by shareholders immediately prior to the merger is converted into
cash, securities, or other property (except into (I) voting stock of a parent
corporation of the Company (after giving effect to the merger) owning directly,
or indirectly through wholly-owned subsidiaries, both beneficially and of record
100% of the voting stock of the Company immediately after the merger or (II)
cash upon the exercise by holders of voting stock of the Company of statutory
dissenters’ rights),

 

(iii)          the persons who were the beneficial owners, respectively, of the
outstanding common stock and outstanding voting stock of the Company immediately
prior to such merger beneficially own, directly or indirectly, immediately after

 

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the merger, more than 70% of, respectively, the then outstanding common stock
and the then outstanding voting stock of the surviving corporation in the merger
or its parent corporation, and

 

(iv)          if voting stock of the parent corporation of the Company (after
giving effect to the merger) is exchanged for voting stock of the Company in the
merger, all holders of any class or series of voting stock of the Company
immediately prior to the merger have the right to receive substantially the same
per share consideration in exchange for their voting stock of the Company as all
other holders of such class or series),

 

(B)           an exchange, pursuant to a statutory exchange of shares of voting
stock of the Company held by shareholders of the Company immediately prior to
the exchange, of shares of one or more classes or series of voting stock of the
Company for cash, securities or other property, except for (a) voting stock of a
parent corporation of the Company (after giving effect to the statutory share
exchange) owning directly, or indirectly through wholly-owned subsidiaries, both
beneficially and of record 100% of the voting stock of the Company immediately
after the statutory share exchange if (I) the persons who were the beneficial
owners, respectively, of the outstanding common stock and outstanding voting
stock of the Company immediately prior to such statutory share exchange own,
directly or indirectly, immediately after the statutory share exchange more than
70% of, respectively, the then outstanding common stock and the then outstanding
voting stock of such parent corporation, and (II) all holders of any class or
series of voting stock of the Company immediately prior to the statutory share
exchange have the right to receive substantially the same per share
consideration in exchange for their voting stock of the Company as all other
holders of such class or series or (b) cash with respect to fractional shares of
voting stock of the Company or payable as a result of the exercise by holders of
voting stock of the Company of statutory dissenters’ rights,

 

(C)           a sale or other disposition of all or substantially all of the
assets of the Company (in one transaction or a series of transactions),

 

unless a majority of the voting stock (or the voting equity interest) of the
surviving corporation or its parent corporation or of any corporation (or other
entity) acquiring all or substantially all of the assets of the Company (in the
case

 

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of a merger, consolidation or disposition of assets) or the Company or its
parent corporation (in the case of a statutory share exchange) is, immediately
following the merger, consolidation, statutory share exchange or disposition of
assets, beneficially owned by the Executive or a group of persons, including the
Executive, acting in concert,

 

(iv)          the shareholders of the Company approve a definitive agreement or
plan to liquidate or dissolve the Company, or

 

(v)           (A)          the Company enters into an agreement in principle or
a definitive agreement relating to a Change in Control described in clause (i),
(ii) or (iii) above which ultimately results in such a Change in Control
described in clause (i), (ii) or (iii) hereof,

 

(B)           a tender or exchange offer or proxy contest is commenced which
ultimately results in a Change in Control described in clause (i) or (ii)
hereof, or

 

(C)           there shall be an involuntary termination of employment of
Executive or a termination by the Executive of employment for Good Reason prior
to an event that would otherwise constitute a Change in Control, and Executive
reasonably demonstrates that such event (x) was requested by a third party that
has previously taken other steps reasonably calculated to result in a Change in
Control described in clause (i), (ii) or (iii) above and which ultimately result
in a Change in Control described in clause (i), (ii) or (iii) hereof or (y)
otherwise arose in connection with or in anticipation of a Change in Control
described in clause (i), (ii), (iii) or (iv) above that ultimately occurs.

 

(c)           “Disability” means a continuing condition of Executive that has
been determined to meet the criteria set forth in the Company’s Long Term
Disability Plan, or similar successor long-term disability insurance plan, to
render a participant eligible for long-term disability benefits under such plan,
whether or not Executive is in fact covered by such plan.  The determination
shall be made by the insurer of the plan or, if Executive is not covered by the
plan, by the Company in its sole discretion.

 

(d)           “Employment Year” shall mean the 12-month period ending on
December 31, 2003, and each succeeding year during the Term, or such portion of
such 12-month period as the Executive is employed by the Company under this
Agreement.

 

(e)           “Good Reason” for termination of the Executive’s employment at the
instance of Executive means termination for:

 

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(i)            Company’s material breach of this Agreement, which is not
remedied within 30 days after receipt of written notice thereof;

 

(ii)           the assignment to the Executive, without the Executive’s written
consent, of duties and responsibilities that are substantially inconsistent
with, or materially diminish, the Executive’s position as
                                         of the Company other than for Cause or
on account of Disability; or

 

(iii)          in the event of a termination of the Executive’s employment with
the Company at the time of or after the First Change in Control, and prior to
the end of the Transition Period

 

(A)          the Executive shall not be given substantially equivalent or
greater title, duties, responsibilities and authority or substantially
equivalent or greater salary and other remuneration and fringe benefits
(including paid vacation), in each case as compared with the Executive’s status
immediately prior to the First Change in Control, other than for Cause or on
account of Disability,

 

(B)           the Company shall have failed to obtain assumption of this
Agreement by any successor as contemplated by Section 11,

 

(C)           the Company shall require the Executive to relocate to any place
other than a location within twenty-five miles of the location at which the
Executive performed his duties immediately prior to the First Change in Control
or, if the Executive performed such duties at the Company’s principal executive
offices, the Company shall relocate its principal executive offices to any
location other than a location within twenty-five miles of the location of the
principal executive offices immediately prior to the First Change in Control,

 

(D)          the Company shall require that the Executive travel on Company
business to a substantially greater extent than required immediately prior to
the First Change in Control, or

 

(E)           subject to the limitations contained in Section 6(a)(i), the
Executive shall terminate employment with the Company during the thirty-day
period (the “Window Period”) immediately following the first anniversary of the
First Change in Control (provided that for purposes of this Section
10(e)(iii)(E) only, all references in the definition of Change in Control in
Section 10(b) (as used in the definition of “First Change in Control” in

 

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Section 6) to 30% and 70% shall instead be deemed to be references to 50%), and
such termination would not otherwise constitute a termination for Good Reason.

 

(f)            “Plan Year” shall mean the plan year with respect to which awards
are determined under the STIP.

 

(g)           “person” shall mean an individual, partnership, corporation,
limited liability company, estate, trust or other entity.

 

(h)           “STIP” shall mean the Company’s Short-Term Incentive Plan as in
existence at the date hereof or any successor plan.

 

(i)            “Transition Period” shall mean the three-year period commencing
on the date of the earliest to occur of a Change in Control described in clause
(i), (ii), (iii) or (iv) of Section 10(b) (the “Commencement Date”) and ending
on the third anniversary of the Commencement Date.

 

(j)            “voting stock” shall mean all outstanding shares of capital stock
entitled to vote generally in the election of directors, considered for purposes
of this Agreement as one class, and all references to percentages of the voting
stock shall be deemed to be references to percentages of the total voting power
of the voting stock.

 

11.           Successors and Assigns.

 

(a)           This Agreement is binding on and inures to the benefit of the
Executive and Executive’s heirs, legal representatives and permitted assigns,
and on the Company and its successors and permitted assigns.  No rights or
obligations of the Executive or the Company hereunder may be assigned, pledged,
disposed of or transferred by such party to any other person or entity without
the prior written consent of the other party.

 

(b)           The Company will require any successor (whether direct or
indirect, by purchase of a majority of the outstanding voting stock of the
Company or all or substantially all of the assets of the Company, or by merger,
consolidation or otherwise), by agreement in form and substance satisfactory to
the Executive, to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession (other than in the
case of a merger or consolidation) shall be a breach of this Agreement and shall
entitle the Executive to compensation from the Company in the same amount and on
the same terms as the Executive would be entitled hereunder if the Executive had
otherwise terminated the Executive’s employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Termination Date. As used in this
Agreement, “Company” shall mean the Company as

 

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hereinbefore defined and any successor to its business and/or assets as
aforesaid which is required to execute and deliver the agreement provided for in
this Section 11(b) or that otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.

 

12.           Separate Representation.  The Executive hereby acknowledges that
he has sought and received independent advice from counsel of his own selection
in connection with this Agreement and has not relied to any extent on any
officer, director or shareholder of, or counsel to, the Company in deciding to
enter into this Agreement.

 

13.           Governing Law.  This Agreement shall be construed under and
governed by the laws of the State of Minnesota.

 

14.           Withholding of Taxes, Etc.  All payments to the Executive
hereunder are subject to withholding of income and employment taxes and all
other amounts required by law.

 

15.           Specific Performance.  Each of the parties acknowledges and agrees
that the other party would be damaged irreparably in the event any of the
covenants contained in this Agreement are not performed in accordance with their
specific terms or otherwise are breached.  Accordingly, each of the parties
agrees that the other party shall be entitled to an injunction or injunctions to
prevent breaches of such covenants and to enforce specifically such covenants in
any action instituted before a proper forum in addition to any other remedy to
which such other party may be entitled under this Agreement or at law or in
equity.

 

16.           Arbitration.  Except for disputes or claims arising under or
relating to the occurrence of Changes in Control or payments required or alleged
to be required pursuant to Section 6, the Executive and the Company agree that
any dispute or claim that relates to or arises out of Executive’s employment
with the Company shall be resolved by the Rules of Arbitration set forth in
Exhibit B to this Agreement.  Disputes and claims encompassed by this Agreement
include all applicable federal, state and local employment related claims,
whether based on common law (such as breach of contract or defamation) or
statutes (such as the Americans With Disabilities Act, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, and the Minnesota
Human Rights Act).  The Rules of Arbitration are intended to be exclusive and
awards issued pursuant to the rules are final and binding.  The Executive and
the Company acknowledge and agree that this arbitration provision is beneficial
to both parties because it provides a quick, less expensive and confidential
manner of resolving finally any dispute or claim.  The cost of any arbitration,
including attorneys’ fees and arbitration expenses of both the Company and the
Executive, and the cost of any court proceedings permitted by this Agreement,
including attorneys’ fees and court costs of both the Company and the Executive,
shall be paid by the Company.  Notwithstanding anything to the contrary provided
in this Section 16 and without prejudice to the above procedures, either party
may apply to any court of competent jurisdiction for temporary injunctive or
other provisional judicial relief if in such party’s sole judgment such

 

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action is necessary to avoid irreparable damage or to preserve the status quo
until such time as the arbitration award is rendered or the controversy is
otherwise resolved.

 

17.           Notices.  All notices hereunder shall be delivered by hand or sent
by registered or certified mail, return receipt requested, postage prepaid, to
the party to receive the same at the address set forth with the signature of
such party hereto or at such other address as may have been furnished to the
sender by notice hereunder.

 

18.           Counterparts.  This Agreement may be executed in counterparts,
each of which when so executed shall be deemed to be an original, and such
counterparts shall together constitute but one and the same instrument.

 

19.           Entire Agreement.  This Agreement and the documents and
instruments referred to herein contain the entire understanding of the parties
hereto with respect to the employment of the Executive by the Company.

 

20.           Amendments and Waivers.  No provision hereof may be altered,
amended, modified, waived or discharged in any way whatsoever except by written
agreement executed by both parties.  No delay or failure of either party to
insist, in any one or more instances, upon performance of any of the terms and
conditions of this Agreement or to exercise any rights or remedies hereunder
shall constitute a waiver or a relinquishment of such rights or remedies or any
other rights or remedies hereunder.

 

21.           Severability; Severance. In the event that any portion of this
Agreement is held to be invalid or unenforceable for any reason, it is hereby
agreed that such invalidity or unenforceability shall not affect the other
portions of this Agreement and that the remaining covenants, terms and
conditions or portions hereof shall remain in full force and effect, and any
court of competent jurisdiction or arbitrator, as the case may be, may so modify
the objectionable provision as to make it valid, reasonable and enforceable. In
the event that any benefits to the Executive provided in this Agreement are held
to be unavailable to the Executive as a matter of law, the Executive shall be
entitled to severance benefits from the Company, in the event of an involuntary
termination of employment of the Executive by the Company (other than a
termination on account of the death or Disability of the Executive or a
termination for Cause) or a termination by the Executive for Good Reason during
the Term occurring at the time of, or following, the occurrence of a Change in
Control, at least as favorable to the Executive (when taken together with the
benefits under this Agreement that are actually received by the Executive) as
the most advantageous benefits made available by the Company to employees of
comparable position and seniority to the Executive during the five-year period
prior to the First Change in Control.

 

22.           Term. This Agreement shall commence on the date of this Agreement
and shall terminate, and the term of this Agreement (the “Term”) shall end, on
(A) December 31,                    , provided that such period shall be
automatically extended for one year, and from year to year thereafter, until
written notice of termination of this Agreement is given by the

 

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Company or the Executive to the other party hereto at least 60 days prior to
December 31,                    or the extension year then in effect, or (B) if
the Commencement Date occurs prior to December 31,                     (or prior
to the end of the extension year then in effect), the third anniversary of the
Commencement Date.

 

23.           Replacement of Prior Agreement(s).  This Agreement replaces and
supersedes all prior Management Agreement(s) between the Company and the
Executive of any nature whatsoever, including without limitation the Management
Agreement between them dated as of                          , 200  , which
agreement(s) shall be of no further force or effect. (1)

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the date and year first above written.

 

EXECUTIVE

TENNANT COMPANY

 

 

 

 

 

 

 

 

 

 

 

 

Name:

 

 

Name:

 

 

 

 

 

 

Address:

 

 

Title:

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

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(1)  Included in agreements with members of management who had previously signed
management agreements with the Company.

 

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