EXHIBIT 10.12

 

12-10-01

 

 

TENNANT COMPANY PENSION PLAN

 

(As Amended and Restated Effective January 1, 2002)

 

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TENNANT COMPANY PENSION PLAN

 

(As Amended and Restated Effective January 1, 2002)

 

ARTICLE I

GENERAL

Sec. 1.1

Name of Plan

Sec. 1.2

Purpose

Sec. 1.3

Effective Date and History

Sec. 1.4

Construction and Applicable Law

Sec. 1.5

Rules of Construction

Sec. 1.6

Benefits Determined Under Provisions in Effect at Termination of Employment

Sec. 1.7

Effective Date of Document

 

 

ARTICLE II

MISCELLANEOUS DEFINITIONS

Sec. 2.1

Active Participant

Sec. 2.2

Actuary

Sec. 2.3

Actuarial Equivalent, Actuarial Value

Sec. 2.4

Administrator

Sec. 2.5

Affiliate

Sec. 2.6

Board

Sec. 2.7

Certified Earnings

Sec. 2.8

Common Control

Sec. 2.9

Committee

Sec. 2.10

Company

Sec. 2.11

Employment Commencement Date

Sec. 2.12

Final Average Compensation

Sec. 2.13

Final Average Monthly Earnings

Sec. 2.14

Hours of Service

Sec. 2.15

Leased Employee

Sec. 2.16

Named Fiduciary

Sec. 2.17

Normal Retirement Age

Sec. 2.18

Normal Retirement Date

Sec. 2.19

Participant

Sec. 2.20

Participating Employer

Sec. 2.21

Plan Year

Sec. 2.22

Predecessor Employer

Sec. 2.23

Qualified Employee

Sec. 2.24

Social Security Covered Compensation

Sec. 2.25

Social Security Retirement Age

Sec. 2.26

Termination of Employment

Sec. 2.27

Trust

Sec. 2.28

Trustee

 

 

ARTICLE III

SERVICE DEFINITIONS

Sec. 3.1

Years of Vesting Service

Sec. 3.2

Years of Credited Service

Sec. 3.3

Adjusted Years of Credited Service

Sec. 3.4

1-Year Break In Service

Sec. 3.5

Effect of l-Year Breaks In Service On Years of Credited Service and Vesting
Service

Sec. 3.6

Periods of Military Service

 

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ARTICLE IV

PLAN PARTICIPATION

Sec. 4.1

Eligibility to Participate

Sec. 4.2

Duration of Participation

Sec. 4.3

No Guarantee of Employment

 

 

ARTICLE V

BENEFIT PROVISIONS

Sec. 5.1

Accrued Monthly Pension

Sec. 5.2

Pension on Normal Retirement

Sec. 5.3

Pension on Late Retirement

Sec. 5.4

Pension on Early Retirement

Sec. 5.5

Vested Termination

Sec. 5.6

Deduction for Other Pension Payments

Sec. 5.7

Amendments Affecting Pension Rights

Sec. 5.8

Qualified Joint and Survivor Annuity

Sec. 5.9

Optional Settlements

Sec. 5.10

Qualified Preretirement Survivor Annuity

Sec. 5.11

Additional Death Benefit

Sec. 5.12

Suspension of Benefits and Effect of Reemployment

 

 

ARTICLE VI

ADDITIONAL PROVISIONS REGARDING BENEFITS

Sec. 6.1

Commencement Date for Pension Payments

Sec. 6.2

Payment of Lump Sums and Certain Consequences Thereof

Sec. 6.3

No Other Benefits

Sec. 6.4

Source of Benefits

Sec. 6.5

Incompetent Payee

Sec. 6.6

Assignment and Alienation of Benefits

Sec. 6.7

Payment of Taxes

Sec. 6.8

Conditions Precedent

Sec. 6.9

Committee Directions to Trustee

Sec. 6.10

Benefits Not Increased by Actuarial Gains

Sec. 6.11

Maximum Limitations on Benefits

Sec. 6.12

Restrictions on Benefits for Highly Compensated Employees

Sec. 6.13

Effect on Unemployment Compensation

Sec. 6.14

Distributions Made in Accordance with Code Section 401(a)(9)

Sec. 6.15

Inability to Locate Distributee

 

 

ARTICLE VII

TRUST

Sec. 7.1

Composition

Sec. 7.2

Trustee or Other Funding Agency

Sec. 7.3

Compensation and Expenses of Trustee; Other Expenses

Sec. 7.4

Securities and Property of the Company

Sec. 7.5

No Diversion

Sec. 7.6

Employer Contributions

 

 

ARTICLE VIII

ACTUARY

Sec. 8.1

Appointment

Sec. 8.2

Responsibilities

Sec. 8.3

Compensation

Sec. 8.4

Resignation, Removal, and Successor

 

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ARTICLE IX

COMMITTEE

Sec. 9.1

Membership and Responsibility

Sec. 9.2

Organization of Committee

Sec. 9.3

Meetings and Actions of Committee

Sec. 9.4

Outside Assistance

Sec. 9.5

Powers of Committee

Sec. 9.6

Compensation, Expenses, and Bonds

 

 

ARTICLE X

ADMINISTRATION OF PLAN

Sec. 10.1

Certain Fiduciary Provisions

Sec. 10.2

General Fiduciary Standard

Sec. 10.3

Discrimination Prohibited

Sec. 10.4

Evidence

Sec. 10.5

Correction of Errors

Sec. 10.6

Claims Procedure

Sec. 10.7

Bonding

Sec. 10.8

Waiver of Notice

Sec. 10.9

Agency For Legal Process

Sec. 10.10

Indemnification

Sec. 10.11

Records

Sec. 10.12

Prohibited Transactions

Sec. 10.13

Actions Against the Secretary of Labor

Sec. 10.14

Effect of Criminal Conviction

 

 

ARTICLE XI

AMENDMENT, TERMINATION, MERGER

Sec. 11.1

Amendment

Sec. 11.2

Discontinuance of Joint Participation in Plan by a Participating Employer

Sec. 11.3

Reorganizations of Participating Employers

Sec. 11.4

Termination

Sec. 11.5

Partial Termination

Sec. 11.6

Merger, Consolidation, or Transfer of Plan Assets

Sec. 11.7

Deferral of Distributions

 

 

ARTICLE XII

TOP-HEAVY PLAN PROVISIONS

Sec. 12.1

Key Employee Defined

Sec. 12.2

Determination of Top-Heavy Status

Sec. 12.3

Minimum Accrued Benefit

Sec. 12.4

Definition of Employer

Sec. 12.5

Exception for Collective Bargaining Unit

 

 

APPENDIX

1999 VOLUNTARY EARLY RETIREMENT PROGRAM

 

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TENNANT COMPANY PENSION PLAN

 

(As Amended and Restated Effective January 1, 2002)

 

ARTICLE I

 

GENERAL

 

Sec. 1.1  Name of Plan.  The name of the pension plan set forth herein is
“Tennant Company Pension Plan”.  It is sometimes herein referred to as the
“Plan”.

 

Sec. 1.2  Purpose.  This Plan has been established so that eligible employees
will have a source of retirement income in addition to the other sources of
retirement income available to them.

 

Sec. 1.3  Effective Date and History. The “Effective Date” of the Plan is
January 1, 2001. This Plan is a “spin-off” from the Tennant Company Defined
Benefit Retirement Plan, which was originally established on January 1, 1982,
and amended thereafter from time to time.

 

(a)                                  The Tennant Company Defined Benefit
Retirement Plan was amended effective January 1, 2001 to provide for the
spin-off and establishment of this Plan with respect to those active
participants in the Defined Benefit Retirement Plan on December 31, 2000 who
elected to continue participation under a defined benefit pension program
sponsored by the Company.  Effective January 1, 2001, this Plan was established
to provide the accrued benefits of those Participants and to add an “enhanced”
benefit formula for those Participants effective as of January 1, 2001.  The
spin-off from the Tennant Company Defined Benefit Retirement Plan to this Plan
effective January 1, 2001 also included the benefits payable to (i) retirees or
other participants in the Defined Benefit Retirement Plan who had a Termination
of Employment with a vested accrued benefit prior to that date, (ii) surviving
spouses, joint annuitants or beneficiaries of such participants, and (iii)
alternate payees with respect to participants described in this sentence or in
the first sentence of this subsection. Commencing January 1, 2001, the accrued
benefits of all the individuals described in the previous sentences of this
subsection are payable solely from this Plan.

 

(b)                                 Effective December 31, 2000, the Tennant
Company Defined Benefit Retirement Plan was also amended to freeze the accrued
benefits of those participants who elected (or are deemed to have elected) not
to continue participating in a defined benefit pension program sponsored by the
Company.   The Tennant Company Defined Benefit Retirement Plan was subsequently
terminated and the benefits of such participants were distributed.  Such
individuals are not eligible for benefits under this Plan.

 

Sec. 1.4  Construction and Applicable Law. The Plan is intended to meet the
requirements for qualification under section 401(a) of the Internal Revenue
Code.  The Plan is also intended to be in full compliance with applicable
requirements of the Employee Retirement Income Security Act.  The Plan shall be
administered and construed consistently with said intent.  It shall also be
construed and administered according to the laws of the State of Minnesota to
the extent that such laws are not preempted by the laws of the United States of
America.  All controversies, disputes, and claims arising hereunder shall be
submitted to the United States District Court for the District of Minnesota,
except as otherwise provided in any trust agreement entered into with a
Trustee.  All references herein to

 

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 the “Internal Revenue Code” or “Code” are to the Internal Revenue Code of 1986
as from time to time amended.  All references herein to the “Employee Retirement
Income Security Act” or to “ERISA” are to the Employee Retirement Income
Security Act of 1974 as from time to time amended.

 

Sec. 1.5  Rules of Construction. The Plan shall be construed in accordance with
the following:

 

(a)                                  Headings at the beginning of articles and
sections hereof are for convenience of reference, shall not be considered as
part of the text of the Plan, and shall not influence its construction.

 

(b)                                 Capitalized terms used in the Plan shall
have their meaning as defined in the Plan unless the context clearly indicates
to the contrary.

 

(c)                                  Any references to the masculine gender
include the feminine and vice versa.

 

(d)                                 Use of the words “hereof”, “herein”,
“hereunder”, or similar compounds of the word “here” shall mean and refer to the
entire Plan unless the context clearly indicates to the contrary.

 

(e)                                  The provisions of the Plan shall be
construed as a whole in such manner as to carry out the provisions thereof and
shall not be construed separately without relation to the context.

 

Sec. 1.6  Benefits Determined Under Provisions in Effect at Termination of
Employment. Except as may be specifically provided herein to the contrary, with
respect to a Participant whose Termination of Employment has occurred, benefits
under the Plan attributable to service prior to his Termination of Employment
shall be determined and paid in accordance with the provisions of the Plan in
effect as of the date his Termination of Employment occurred unless he becomes
an Active Participant after that date and such active participation causes a
contrary result under the provisions hereof.  However, the provisions of this
document shall apply to any such Participant to the extent necessary to maintain
the qualified status of the Plan under Code section 401(a) or to comply with the
requirements of ERISA.  The benefits payable to or with respect to a Participant
whose Termination of Employment occurred prior to January 1, 2001 and whose
benefit has been spun off to this Plan pursuant to Sec. 1.3 shall be paid
pursuant to the provisions of the Tennant Company Defined Benefit Retirement
Plan as in effect at the applicable times. Amendments of Code section 415,
including changes in Sec. 6.11 implementing such amendments, and changes in the
dollar limitations under Code section 415 and Sec. 6.11 due to cost of living
adjustments, apply only to Participants who have at least one Hour of Service as
a Qualified Employee on or after the effective date of the change

 

Sec. 1.7  Effective Date of Document.  Unless a different date is specified for
some purpose in this document, the provisions of this Plan document are
generally effective as of January 1, 2002.  However, any provision necessary to
comply with a requirement of federal legislation or regulations which has an
effective date earlier than January 1, 2002 shall be effective as of the date
required by the applicable law or regulation, unless a different effective date
is specifically stated in this document.

 

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ARTICLE II

 

MISCELLANEOUS DEFINITIONS

 

Sec. 2.1  Active Participant. An employee is an Active Participant while he is
both a Participant and a Qualified Employee.

 

Sec. 2.2  Actuary. “Actuary” means the individual, partnership, corporation, or
other organization appointed and acting as such from time to time in accordance
with the provisions of Article VIII.

 

Sec. 2.3  Actuarial Equivalent, Actuarial Value. Each “Actuarial Equivalent” or
“Actuarial Value” shall be determined by the Actuary by the utilization of such
assumptions and techniques as in the aggregate represent the Actuary’s best
estimate of equivalent value for the purpose for which the determination is
being made, and subject to the following:

 

(a)                                  For determinations involving early or late
commencement of benefits, Qualified Joint and Survivor Annuities, optional
settlements (other than lump sum settlements), or redetermination of a pension
that was interrupted due to a period of reemployment, the following mortality
and interest assumptions shall be used:

 

(1)           Mortality:  U. P. 1984 Mortality Table.

 

(2)           Interest:  7%.

 

(b)                                 Determinations involving payment of the
present value of a Participant’s pension in a single sum or translation of a
single sum value under the Tennant Company Profit Sharing Plan into an
equivalent monthly benefit shall be based on the applicable mortality table and
applicable interest rate determined under Code section 417(e)(3)(A), as amended
by the Retirement Protection Act of 1994, in effect for October preceding the
Plan Year in which the single sum payment is or would be paid (which is based on
the average of the rates during the preceding September).  However, for lump sum
distributions occurring during 2001 or during January, February, March or April
of 2002, the applicable interest rate used to determine present values shall be
the rate in effect on the first day of the Plan Year in which the single sum
payment is or would be paid if the use of that rate would produce a larger lump
sum payment and the resulting lump sum payment is $10,000 or less.

 

(c)                                  For determinations pursuant to Sec. 6.11
and Article XII, each “Actuarial Equivalent” shall be determined on the basis of
a 5% interest rate assumption (except to the extent a different rate is required
by Code section 415(b)(2)(E)(ii)) and the mortality assumptions contained in the
U.P. 1984 Mortality Table.  However, the reduction under Sec. 6.11(c) for a
benefit commencing before age 62 shall not be less than the reduction for early
commencement applicable to the Participant under Sec. 5.4 or Sec. 5.5, whichever
is applicable.  If benefit payments commence after the Participant attains age
65, mortality between age 65 and the age at which benefits commence shall be
disregarded for purposes of Sec. 6.11.

 

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(d)                                 Each such determination shall be made in
accordance with any applicable regulation promulgated by the Secretary of Labor
or the Secretary of the Treasury or their respective delegates.

 

Sec. 2.4  Administrator.  The Company is the “Administrator” of the Plan for
purposes of ERISA.

 

Sec. 2.5  Affiliate.  “Affiliate”  means any trade or business entity under
Common Control with a Participating Employer or under Common Control with a
Predecessor Employer while it is such.

 

Sec. 2.6  Board.  The “Board” is the board of directors of the Company, and
includes any executive committee thereof authorized to act for such body.

 

Sec. 2.7  Certified Earnings.  “Certified Earnings” of a Participant for a Plan
Year means the total compensation paid to the Participant by the Participating
Employers during such Plan Year, subject to the following:

 

(a)                                  Overtime pay and bonuses shall not be
included in Certified Earnings.

 

(b)                                 Payments or contributions to or for the
benefit of the employee under this Plan shall not be included in Certified
Earnings.

 

(c)                                  Except as provided in subsection (d),
extraordinary payments which are not a part of regular compensation, vacation
pay taken in a lump sum at Termination of Employment, sick pay or disability
pay, allowances or reimbursements for expenses, payments or contributions to or
for the benefit of the employee under any other deferred compensation, pension,
profit sharing, insurance, ERISA excess benefit, or other employee benefit plan,
suggestion awards, merchandise discounts, severance pay, or benefits in the form
of property or the use of property shall not be included in computing Certified
Earnings, regardless of whether such amounts are deemed to constitute income for
income tax purposes or for any other purpose.

 

(d)                                 However, if a Participant has elected to
have his compensation reduced for the purpose of making a pre-tax contribution
under the Tennant Company Profit Sharing Plan, a cafeteria plan established
under Code section 125, or a qualified transportation fringe benefit plan
established under Code section 132(f)(4), his Certified Earnings for purposes of
this Plan shall include the amount he would have received but for the
reduction.  If a portion of the reduction is later paid back to him, said
payment shall not be included in Certified Earnings.

 

(e)                                  Compensation with respect to any period of
employment after December 31, 1981, when an employee was not an Active
Participant shall not be included in Certified Earnings.  Compensation with
respect to any period of employment prior to January 1, 1982 when an employee
was not a participant in the Tennant Company Profit Sharing Plan shall not be
included in Certified Earnings.  However, this subsection shall not have the
effect of excluding earnings prior to January 1, 1985 from Tennant Trend, Inc.
or Contract Applications, Inc. from Certified Earnings.

 

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(f)                                    For Plan Years commencing on or after
January 1, 1989, but prior to January 1, 1994, a Participant’s Certified
Earnings for any such Plan Year shall not exceed $200,000.  Said amount shall be
adjusted for each Plan Year to take into account any cost of living increase
provided for that year in accordance with regulations provided by the Secretary
of the Treasury.

 

(g)                                 For Plan Years commencing on or after
January 1, 1994 and prior to 1997, a Participant’s Certified Earnings for any
such Plan Year shall not exceed $150,000.  For Plan Years commencing after 1996
and prior to 2000, the Certified Earnings of a Participant for any Plan Year
shall not exceed $160,000.  For Plan Years commencing in 2000 and 2001, the
Certified Earnings of a Participant for any Plan Year shall not exceed
$170,000.  For Plan Years commencing during or after 2002, the Certified
Earnings of a Participant shall not exceed $200,000, adjusted for each Plan Year
to take into account any cost of living increase provided for that year in
accordance with regulations prescribed by the Secretary of the Treasury.  The
dollar increase in effect on January 1 of any calendar year shall apply to Plan
Years beginning in that calendar year.  If a Plan Year is shorter than 12
months, the limit under this subsection for that year shall be multiplied by a
fraction, the numerator of which is the number of months in the short Plan Year
and the denominator of which is 12.

 

(h)                                 In calculating a Participant’s Accrued
Monthly Pension as of any date in a Plan Year commencing on or after January 1,
1994, the Participant’s Certified Earnings taken into account for any prior Plan
Year may not exceed the applicable annual compensation limit in effect for that
prior Plan Year.  For this purpose, except as otherwise provided in subsection
(i) and in Sec. 5.1, in determining benefits in Plan Years beginning on or after
January 1, 1994, the annual compensation limit in effect for Plan Years
beginning before that date is $150,000.

 

(i)                                     Notwithstanding subsections (f), (g) and
(h), in the case of a Participant who is an Active Participant eligible to
accrue additional benefits under Article V on January 1, 2002, benefit accruals
for Plan Years commencing on or after January 1, 2002 shall be determined by
assuming that the limit under subsections (f) and (g) for years commencing prior
to 2002 is $200,000.

 

(j)                                     Effective January 1, 1997, family
aggregation rules ceased to apply to this Plan..

 

Sec. 2.8  Common Control.  A trade or business entity (whether corporation,
partnership, sole proprietorship or otherwise) is under “Common Control” with
another trade or business entity (i) if both entities are corporations which are
members of a controlled group of corporations as defined in Code section 414(b),
or (ii) if both entities are trades or businesses (whether or not incorporated)
which are under common control as defined in Code section 414(c), or (iii) if
both entities are members of an affiliated service group as defined in Code
section 414(m), or (iv) if both entities are required to be aggregated pursuant
to regulations under Code section 414(o).  Service for all entities under Common
Control shall be treated as service for a single employer to the extent required
by the Code; provided, however, that an individual shall not be a Qualified
Employee by reason of this section.  In applying the preceding sentence for
purposes of Sec. 6.11, the provisions of Code section 414(b) and (c) are deemed
to be modified as provided in Code section 415(h).

 

Sec. 2.9  Committee.  “Committee” means the committee appointed and acting as
provided in Article IX.

 

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Sec. 2.10  Company.  The “Company” is Tennant Company, a Minnesota corporation.

 

Sec. 2.11  Employment Commencement Date.  “Employment Commencement Date” means
the date on which an employee first performs an Hour of Service for a
Participating Employer (whether before or after the Participating Employer
becomes such), an Affiliate, or a Predecessor Employer, and the date on which he
first performs an Hour of Service after any One-Year Break In Service.

 

Sec. 2.12  Final Average Compensation.  A Participant’s “Final Average
Compensation” determined with respect to any Plan Year is the average of the
Participant’s Compensation for the most recent three consecutive Plan Years
throughout which he was an employee of a Participating Employer (or the average
Compensation for all service as an employee of a Participating Employer if less
than three years).  “Compensation” for this purpose is as defined in Sec.
6.11(i), except as follows:

 

(a)                                  Compensation means gross pay before any
reduction pursuant to Code section 401(k) or 125.

 

(b)                                 Compensation for any Plan Year in excess of
the Social Security taxable wage base in effect at the beginning of such Plan
Year shall not be taken into account.

 

Sec. 2.13  Final Average Monthly Earnings.  A Participant’s “Final Average
Monthly Earnings” is (i) 1/12th of his average Certified Earnings for those five
consecutive Plan Years during all of which he is an Active Participant, within
the last ten Plan Years during all of which he is an Active Participant that
produce the highest average, or (ii) 1/12th of his average Certified Earnings
for all of the Plan Years during all of which he is an Active Participant if
five or less, subject to the following:

 

(a)                                  However, a Plan Year during which he is not
an Active Participant throughout the entire year shall be used as one of the
five consecutive Plan Years if it results in a higher average than above.

 

(b)                                 The five consecutive Plan Years used in
making the computation will not necessarily be five consecutive Plan Years,
because Plan Years during all or part of which he is not an Active Participant
may be interspersed with Plan Years during all of which he is an Active
Participant.

 

(c)                                  If there are no Plan Years during all of
which the Participant was an Active Participant, his Final Average Monthly
Earnings shall be his average adjusted Certified Earnings for the last five Plan
Years (or all if less than five) during any part of which he is an Active
Participant.  Adjusted Certified Earnings are determined by annualizing his
Certified Earnings in such Plan Year or Years to reflect what they would have
been if he had been an Active Participant for the entire Plan Year.

 

(d)                                 For purposes of determining his Final
Average Monthly Earnings pursuant to this section, a Participant shall be deemed
to have been an Active Participant at all times prior to January 1, 1982 when he
was both a participant in the Tennant Company Profit Sharing Plan and a
Qualified Employee.

 

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Sec. 2.14  Hours of Service.  “Hours of Service” are determined according to the
following subsections with respect to each applicable Plan Year.  The Company
may round up the number of Hours of Service at the end of each Plan Year or more
frequently as long as a uniform practice is followed with respect to all
employees who the Company determines are in the same, or a similar, job
classification, reasonably defined.

 

(a)                                  Hours of Service are computed only with
respect to service with the Participating Employers (for service both before and
after the Participating Employer becomes such), Affiliates, and Predecessor
Employers and are aggregated for service with all such employers.

 

(b)                                 For any Plan Year during all of which a
record of hours is maintained for an employee, each of the following is an Hour
of Service:

 

(1)                                  Each hour for which the employee is paid,
or entitled to payment, for the performance of duties for his employer during
the applicable computation period is an Hour of Service.

 

(2)                                  Each hour for which the employee is paid,
or entitled to payment, by his employer on account of a period of time during
which no duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or leave of absence,
is an Hour of Service.  No more than 501 Hours of Service shall be credited
under this paragraph for any single continuous period (whether or not such
period occurs in a Plan Year).  Hours of Service shall not be credited under
this paragraph with respect to payments under a plan maintained solely for the
purpose of complying with applicable workers’ compensation, unemployment
compensation, or disability insurance laws or with respect to a payment which
solely reimburses the individual for medical or medically related expenses
incurred by the employee.

 

(3)                                  Each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed to by the employer is an
Hour of Service.  Such Hours of Service shall be credited to the computation
period or periods to which the award or agreement for back pay pertains, rather
than to the computation period in which the award, agreement, or payment is
made.  Crediting of Hours of Service for back pay awarded or agreed to with
respect to periods described in paragraph (2) shall be subject to the
limitations set forth therein.

 

(4)                                  Hours under this subsection shall be
calculated and credited pursuant to section 2530.200b-2 of the Department of
Labor Regulations, which are incorporated herein by this reference.

 

(5)                                  The Company may use any records to
determine Hours of Service which it considers an accurate reflection of the
actual facts.

 

(c)                                  For any portion of a Plan Year during which
an employee is within a classification for which a record of hours for the
performance of duties is not maintained, the employee shall be credited with 190
Hours of Service for each month for which he would otherwise be credited with at
least one Hour of Service under subsection (b).

 

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(d)                                 Nothing in this section shall be construed
as denying an employee credit for an Hour of Service if credit is required by
any federal law other than ERISA.  The nature and extent of such credit shall be
determined under such other law.

 

(e)                                  In no event shall duplicate credit as an
Hour of Service be given for the same hour.

 

(f)                                    This subsection (f) shall apply to an
individual who has service as (i) either a common law employee or Leased
Employee of (ii) either a Participating Employer or Affiliate of the
Participating Employer.  For purposes of determining Hours of Service, such
individual shall be considered an employee of such Participating Employer or
Affiliate during any period the individual would have been a Leased Employee of
such Participating Employer or Affiliate but for the requirement that he must
have performed services for such Participating Employer or Affiliate on a
substantially full-time basis for a period of at least one year.  If this Plan
is a multiple employer plan as defined in section 2530.210 of the Department of
Labor Regulations, service as a leased individual with more than one legal
entity shall be aggregated only in accordance with the rules set forth in said
section.

 

Sec. 2.15  Leased Employee.  “Leased Employee” means any person defined as such
by Code section 414(n).  In general, commencing January 1, 1997, a Leased
Employee is any person who is not otherwise an employee of a Participating
Employer or an Affiliate (referred to collectively as the “recipient”) and who
pursuant to an agreement between the recipient and any other person (“leasing
organization”) has performed services for the recipient on a substantially
full-time basis for a period of at least one year and such services are
performed under primary direction or control by the recipient.  For purposes of
the requirements listed in Code section 414(n)(3), any Leased Employee shall be
treated as an employee of the recipient, and contributions or benefits provided
by the leasing organization which are attributable to services performed for the
recipient shall be treated as provided by the recipient.  However, if Leased
Employees constitute less than 20% of the Participating Employers’ non-highly
compensated work force within the meaning of Code section 414(n)(5)(C)(ii),
those Leased Employees covered by a plan described in Code section 414(n)(5)
shall be disregarded.  Notwithstanding the foregoing, no Leased Employee shall
be a Qualified Employee or a Participant in this Plan.

 

Sec. 2.16  Named Fiduciary.  The Company is a “Named Fiduciary” for purposes of
ERISA with authority to control or manage the operation and administration of
the Plan, including control or management of the assets of the Plan, in
accordance with the provisions hereof.  The Committee is also a Named Fiduciary
under ERISA with the authority to control and manage the operation and
administration of the Plan allocated to it by the provisions of the Plan.  Other
persons are also Named Fiduciaries under ERISA if so provided by ERISA or if so
identified by the Company, by action of the Board.  Such other person or persons
shall have such authority to control or manage the operation and administration
of the Plan, including control or management of the assets of the Plan, as may
be provided by ERISA or as may be allocated by the Company, by action of the
Board.

 

Sec. 2.17  Normal Retirement Age. “Normal Retirement Age” is age 65.

 

Sec. 2.18  Normal Retirement Date. A Participant’s Normal Retirement Date is the
last day of the month in which he attains Normal Retirement Age.

 

Sec. 2.19  Participant.  A “Participant” is an individual described as such in
Article IV.

 

8

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Sec. 2.20  Participating Employer.  The Company is a Participating Employer in
the Plan.  With the consent of the Company, by action of the Board or any duly
authorized officer, any other employer may also become a Participating Employer
in the Plan effective as of a date specified by it in its adoption of the Plan. 
Also with such consent, any such adopting employer may modify the provisions of
the Plan as they shall be applicable to its employees.  The following
corporations also were Participating Employers for certain periods prior to
January 1, 1995:

 

Contract Applications, Inc., a Minnesota corporation.

Tennant Trend, Inc., a New York corporation.

 

Sec. 2.21  Plan Year.  A “Plan Year” is the 12-consecutive-month period
commencing on January 1 (including years prior to 2001) and is the year on which
records of the Plan are kept.

 

Sec. 2.22  Predecessor Employer.  Any corporation, partnership, firm, or
individual, a substantial part of the assets and employees of which are acquired
by a successor, is a “Predecessor Employer” if named in this section and subject
to any conditions and limitations with respect thereto imposed by this section;
provided, however, that any such entity may be named as a Predecessor Employer
only if all of its employees who become employees of the successor at the time
of the acquisition and Participants hereunder are treated uniformly, if
recognizing service with it does not produce discrimination in favor of highly
compensated employees (as defined in Code section 414(q)), and if there is no
duplication of benefits for such service.  To be considered a Predecessor
Employer, the acquisition of assets and employees must be by the Company, by an
Affiliate, or by another Predecessor Employer.  Any other employer shall be a
Predecessor Employer if so required by regulations prescribed by the Secretary
of the Treasury or his delegate.  As of January 1, 2002, there are no
Predecessor Employers.

 

Sec. 2.23  Qualified Employee.  “Qualified Employee” means each employee of a
Participating Employer, subject to the following:

 

(a)                                  A nonresident alien while not receiving
earned income (within the meaning of Code section 911(d)(2)) from the Company
which constitutes income from sources within the United States (within the
meaning of Code section 861(a)(3)) is not a Qualified Employee, nor is an alien
who is temporarily assigned to perform duties in the United States.

 

(b)                                 Except as otherwise provided by resolution
of the Board, citizens of the United States whose principal place of employment
is a country other than the United States are not Qualified Employees.

 

(c)                                  Eligibility of employees in a collective
bargaining unit to participate in the Plan shall be subject to negotiations with
the representative of that unit.  During any period that an employee is covered
by the provisions of a collective bargaining agreement between a Participating
Employer and such representative, he shall not be considered a Qualified
Employee for purposes of this Plan unless such agreement expressly so provides. 
For purposes of this section only, such an agreement shall be deemed to continue
after its formal expiration during collective bargaining negotiations pending
the execution of a new agreement.

 

9

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(d)                                 An employee shall be deemed to be a
Qualified Employee during a period of absence from active service which does not
result from his Termination of Employment, provided he is a Qualified Employee
at the commencement of such period of absence.

 

(e)                                  Notwithstanding anything herein to the
contrary, an individual is not a Qualified Employee during any period during
which the individual is classified by a Participating Employer as an independent
contractor or as any other status in which the person is not treated as a common
law employee of a Participating Employer for purposes of withholding of taxes,
or is treated as an employee of another entity who is leased to a Participating
Employer, regardless of the correct legal status of the individual.  The
previous sentence applies to all periods of such service of an individual who is
subsequently reclassified as an employee of a Participating Employer, whether
the reclassification is retroactive or prospective.

 

(f)                                    Notwithstanding anything herein to the
contrary, no individual other than an individual who was an active participant
in the Tennant Company Defined Benefit Retirement Plan on December 31, 2000 and
who elected on or prior to December 29, 2000 to continue to participate in a
defined benefit pension program sponsored by the Company shall be a Qualified
Employee for purposes of this Plan after that date, except as provided in Sec.
4.1(c) in the case of certain reemployed non-vested former participants.

 

Sec. 2.24  Social Security Covered Compensation.  A Participant’s “Social
Security Covered Compensation” determined with respect to any Plan Year (the
“current year”) is the average (without indexing) of the taxable wage bases for
Social Security in effect for each calendar year during the 35-year period
ending with the calendar year in which the Participant attains (or will attain)
Social Security Retirement Age.  For purposes of computing said average it will
be assumed that the taxable wage base for years after the current year will be
the same as the taxable wage base for the current year.

 

Sec. 2.25  Social Security Retirement Age.  A Participant’s “Social Security
Retirement Age” is the age determined from the following table according to the
year of the Participant’s birth:

 

Year of Birth

 

Social Security Retirement Age

 

Prior to 1938

 

65

 

1938 through 1954

 

66

 

1955 or later

 

67

 

 

Sec. 2.26  Termination of Employment.  The “Termination of Employment” of an
employee for purposes of the Plan shall be deemed to occur upon his resignation,
discharge, retirement, death, failure to return to active work at the end of an
authorized leave of absence or the authorized extension or extensions thereof,
failure to return to work when duly called following a temporary layoff, or upon
the happening of any other event or circumstance which, under the policy of a
Participating Employer, an Affiliate, or a Predecessor Employer as in effect
from time to time, results in the termination of the employer-employee
relationship.  However, Termination of Employment shall not be deemed to occur
upon a transfer between any combination of Participating Employers, Affiliates,
and Predecessor Employers.

 

Sec. 2.27  Trust.  “Trust” means the aggregate of assets described in Sec. 7.1.

 

10

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Sec. 2.28  Trustee.  “Trustee” is a trustee or trustees appointed and acting
from time to time in accordance with the provisions of Sec. 7.2 for the purpose
of holding, investing, and disbursing all or a part of the Trust.

 

11

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ARTICLE III

 

SERVICE DEFINITIONS

 

A.                                    Provisions Relating to Vesting Service

 

Sec. 3.1  Years of Vesting Service.  An employee shall obtain one “Year of
Vesting Service” for each Plan Year (including years prior to 2001) in which he
completes 1000 or more Hours of Service, subject to the following:

 

(a)                                  If the employee did not have one or more
Hours of Service after December 31, 1984, service before the first day of the
Plan Year in which he attains age 22 shall be disregarded.

 

(b)                                 In the case of any employee of Tennant
Trend, Inc., Years of Vesting Service with said corporation is not limited to
service after said corporation was acquired by the Company on February 1, 1983,
but also shall include service prior to said acquisition date.  Measurement of
such service is subject to the Plan’s usual rules for measuring Years of Vesting
Service.

 

B.                                    Provisions Relating to Benefit Accrual

 

Sec. 3.2  Years of Credited Service. A Participant’s “Years of Credited Service”
shall be determined as follows (and for purposes of this section, the individual
will be deemed to have been a Participant in this Plan while the individual was
a participant prior to January 1, 2001 in the Tennant Company Defined Benefit
Retirement Plan):

 

(a)                                  Service prior to the date an employee
became a Participant in the Tennant Company Defined Benefit Retirement Plan
shall be disregarded for purposes of determining his Years of Credited Service. 
However:

 

(1)                                  If an employee was excluded from
participating because his employment commenced after he attained age 60, and he
is an active employee of a Participating Employer on or after January 1, 1987,
his Years of Credited Service shall be the total amount he would have received
if the age 60 exclusion had never applied.

 

(2)                                  If the employee was an Active Participant
on January 1. 2001, and if the employee had been excluded from participating in
the Plan during a prior Plan Year solely because the Plan at that time required
that the employee have attained age 25 to become a Participant, the employee’s
Years of Credited Service shall include any years that would have been included
if the Plan had required attainment of age 21 rather than age 25 to become a
Participant.

 

(b)                                 With respect to service after the date an
employee became a Participant, his Years of Credited Service shall be determined
as follows:

 

(1)                                  For any Plan Year in which the employee
does not become a Participant and does not have a Termination of Employment:

 

12

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(A)                              He shall receive one Year of Credited Service
if he has at least 1000 Hours of Service as an Active Participant.

 

(B)                                He shall receive no Years of Credited Service
if he completes fewer than 1000 Hours of Service as an Active Participant.

 

(2)                                  For any Plan Year in which the employee
becomes a Participant or has a Termination of Employment, he shall receive 1/12
of a Year of Credited Service for each month in which he has at least one Hour
of Service as an Active Participant, provided his total Hours of Service as an
Active Participant for the Plan Year equals or exceeds the amount determined
from the following table:

 

Number of months in which the
employee has at least one Hour
of Service as an
Active Participant

 

Hours of Service as an
Active Participant

 

 

 

 

1

 

83 1/3

 

2

 

166 2/3

 

3

 

250

 

4

 

333 1/3

 

5

 

416 2/3

 

6

 

500

 

7

 

583 1/3

 

8

 

666 2/3

 

9

 

750

 

10

 

833 1/3

 

11

 

916 2/3

 

12

 

1000

 

 

If the employee’s Hours of Service as an Active Participant for such a Plan Year
is less than the amount determined from the foregoing table, he shall receive no
Year of Credited Service or fractional year for the Plan Year.

 

(c)                                  Notwithstanding any of the foregoing
provisions to the contrary:

 

(1)                                  In the case of any employee of Tennant
Trend, Inc. who becomes a Participant on January 1, 1985, he will be treated as
an Active Participant for all portions of the 1983 and 1984 Plan Years that he
would have been an Active Participant if Tennant Trend, Inc. had been a
Participating Employer effective February 1, 1983, and his Years of Credited
Service will be calculated accordingly.

 

(2)                                  In the case of any employee of Contract
Applications, Inc., he will be treated as an Active Participant for service with
said corporation prior to January 1, 1985 to the same extent as would have been
the case if Contract Applications, Inc. had been a Participating Employer, and
his Years of Credited Service will be calculated accordingly.

 

13

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(3)                                  If a person became a Participant on January
1, 1987 pursuant to Sec. 4.1(d)(2) of the Tennant Company Defined Benefit
Retirement Plan, his service prior to said date shall not be counted as Years of
Credited Service.

 

Sec. 3.3  Adjusted Years of Credited Service.  A Participant’s “Adjusted Years
of Credited Service” shall be equal to his Years of Credited Service (as
determined under the preceding section), adjusted as follows:

 

(a)                                  If he was a “Sec. 4.2 Participant” under
the Tennant Company Defined Benefit Retirement Plan and was under age 35 on
December 31, 1981, his Adjusted Years of Credited Service shall be equal to (1)
plus (2):

 

(1)                                  His Years of Credited Service, but not more
than 30 years.

 

(2)                                  One half of (i) his Years of Credited
Service prior to Normal Retirement Date, minus (ii) 30 years.

 

 (b)                              If he is not described in subsection (a), his
Adjusted Years of Credited Service shall be equal to his Years of Credited
Service, but not more than 30 years.

 

C.                                    Provisions Relating to Breaks In Service

 

Sec. 3.4  1-Year Break In Service.  “1-Year Break In Service” means a Plan Year
in which (i) the employee has no Hours of Service and (ii) an employer-employee
relationship with a Participating Employer, an Affiliate, or a Predecessor
Employer is not in effect at any time during such Plan Year.  The 1-Year Break
In Service shall be recognized as such on the last day of such Plan Year.  For
purposes of determining whether a Participant has a 1-Year Break In Service, a
Participant who has an absence from work with a Participating Employer
commencing in 1985 or any later year,

 

(a)                                  by reason of the pregnancy of the
Participant,

 

(b)                                 by reason of the birth of a child of the
Participant.

 

(c)                                  by reason of the placement of a child with
the Participant in connection with the adoption of such child by the Participant
(including placement with the Participant for a trial period prior to adoption),
or

 

(d)                                 for purposes of caring for such child for a
period beginning immediately following such birth or placement,

 

shall be credited with Hours of Service provided either (i) that the Company has
reasonable access to the relevant information or (ii) that the Participant
furnishes to the Company such timely information as the Company may reasonably
require to establish that the absence from work is for one of the reasons
referred to above and the number of days for which there was such an absence. 
The Hours of Service shall be credited to the Plan Year in which the period of
absence begins if but for such crediting there would be a 1-Year Break In
Service in such computation period.  Otherwise, the Hours of Service shall be
credited to the next following Plan Year.  The Hours of Service to be credited
are the Hours of Service which otherwise would normally have been credited to
the Participant but for such absence.  If the Company is unable to determine the
number of such hours, eight hours shall be credited per day of such

 

14

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absence.  In no event, however, shall more than 501 Hours of Service be credited
for such period of absence.

 

Sec. 3.5  Effect of l-Year Breaks In Service On Years of Credited Service and
Vesting Service.  If a Participant has had a 1-Year Break In Service ending
prior to January 1, 1985, or a period of five consecutive 1–Year Breaks In
Service ending on or after that date, his Years of Vesting Service and Years of
Credited Service prior to his Break in Service shall be disregarded if (i) he
had no vested right to an accrued benefit under the Plan based on service prior
to his Break in Service and (ii) the number of his consecutive 1-Year Breaks In
Service equals or exceeds the aggregate number of his Years of Vesting Service
prior to his Break in Service.  Such aggregate number of years shall not include
any Years of Vesting Service not required to be taken into account by virtue of
any prior Break in Service.

 

Sec. 3.6  Periods of Military Service.  Notwithstanding any provision of this
Plan to the contrary, benefits and service credit with respect to qualified
military service will be provided in accordance with Code section 414(u).

 

15

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ARTICLE IV

 

PLAN PARTICIPATION

 

Sec. 4.1  Eligibility to Participate.  Commencing January 1, 2001, participation
in this Plan shall be determined as follows:

 

(a)                                  Active Participants.  An employee is an
Active Participant in this Plan on and after January 1, 2001, only while all of
the following requirements are satisfied:

 

(1)                                  The employee was an active participant in
the Tennant Company Defined Benefit Retirement Plan on December 31, 2000.

 

(2)                                  The employee affirmatively elected on or
before December 29, 2000 to continue participation in a defined benefit pension
program sponsored by the Company.

 

(3)                                  The employee is currently employed as a
Qualified Employee.

 

(b)                                 Inactive Participants, Retirees,
Beneficiaries and Alternate Payees Entitled to Vested Benefits.  Any individual
receiving benefits or entitled to a vested benefit under the Tennant Company
Defined Benefit Retirement Plan as of December 31, 2000, whose benefits had not
been distributed in full from said plan prior to January 1, 2001, and whose
benefits were spun off to this Plan effective as of January 1, 2001 as described
in Sec. 1.3, shall be a Participant under this Plan (or shall be treated as a
surviving spouse, joint annuitant, beneficiary or alternate payee of a
Participant, as applicable) until such time as the individual’s benefits are
distributed in full from the Trust, subject to the following:

 

(1)                                  Any such individual entitled to a vested
benefit under the Tennant Company Defined Benefit Retirement Plan on December
31, 2000 who had made an irrevocable election to receive benefits from said plan
on or before that date shall receive (or continue to receive) benefits from this
Plan in accordance with such election.

 

(2)                                  Any such individual entitled to a vested
benefit under the Tennant Company Defined Benefit Retirement Plan on December
31, 2000 who had not made an irrevocable election to receive benefits from said
plan as of December 31, 2000 shall be entitled to elect a distribution of
benefits from this Plan in accordance with the provisions of the Tennant Company
Defined Benefit Retirement Plan in effect at the applicable time determined
pursuant to Sec. 1.6.

 

(c)                                  Individuals Rehired on or after January 1,
2001.  If an individual (i) was a participant in the Tennant Company Defined
Benefit Retirement Plan prior to January 1, 2001, or was a Participant in this
Plan on or after that date, (ii) has (or had) a Termination of Employment, (iii)
was not 100% vested in his accrued benefit at the time of the Termination of
Employment, and (iv) is subsequently reemployed by a Participating Employer on
or after January 1, 2001, but before the time that the employee’s service prior
to the break is disregarded under Sec. 3.5, then the employee shall become a
Participant again for purposes of earning additional Years of Vesting Service
with respect to service after the reemployment, but shall not be a Qualified
Employee or an

 

16

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Active Participant and shall not accrue any additional benefit or earn any
additional Years of Credited Service with respect to the period of
reemployment.  Upon the employee’s Termination of Employment following the
period of reemployment, the employee’s benefit hereunder shall be determined
under the provisions of this Plan then in effect, giving appropriate effect to
any additional Years of Vesting Service.

 

Sec. 4.2  Duration of Participation. A Participant shall continue to be such
until the later of:

 

(a)                                  His Termination of Employment.

 

(b)                                 The date all benefits, if any, to which he
is entitled hereunder have been distributed to him from the Trust.

 

Sec. 4.3  No Guarantee of Employment.  Participation in the Plan does not
constitute a guarantee or contract of employment with a Participating Employer. 
Such participation shall in no way interfere with any rights a Participating
Employer would have in the absence of such participation to determine the
duration of the employee’s employment with that employer.

 

17

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ARTICLE V

 

BENEFIT PROVISIONS

 

Sec. 5.1  Accrued Monthly Pension.  The “Accrued Monthly Pension” of an
individual who is an Active Participant in this Plan on or after January 1, 2001
shall be determined as follows:

 

(a)                                  A Participant’s Accrued Monthly Pension
shall be equal to (1) minus (2) plus (3):

 

(1)                                  1.40% of the Participant’s Final Average
Monthly Earnings multiplied by the number of his Adjusted Years of Credited
Service.

 

(2)                                  .609% of the amount in (A), (B), or (C),
whichever is least, multiplied by the number of the Participant’s Adjusted Years
of Credited Service:

 

(A)                              The Participant’s Final Average Monthly
Earnings.

 

(B)                                1/12 of the Participant’s Final Average
Compensation.

 

(C)                                1/12 of the Participant’s Social Security
Covered Compensation.

 

(3)                                  If the individual was an active participant
in the Tennant Company Defined Benefit Retirement Plan on December 31, 2000,
.60% of the Participant’s Final Average Monthly Earnings on December 31, 2000
multiplied by the number of his Adjusted Years of Credited Service prior to
January 1, 2001.  However, this paragraph (3) does not apply to any Participant
who was employed by the Company on January 1, 2000 in the capacity of a
management employee classified by the Company at the “Director” level or above,
or who was hired during 2000 into such a position.

 

(b)                                 For any person who was a “Sec. 4.2
Participant” under the Tennant Company Defined Benefit Retirement Plan, his
Accrued Monthly Pension determined under (a) on Normal Retirement, Late
Retirement, or Early Retirement shall be increased by the amount, if any, by
which the amount in paragraph (1) exceeds the amount in paragraph (2), subject,
however, to paragraph (3):

 

(1)                                  The amount in (A) minus the amount in (B):

 

(A)                              1.40% of the Participant’s Final Average
Monthly Earnings multiplied by the number of Years of Credited Service he would
have had prior to January 1, 1982 if he had become a Participant on the later of
(i) the date he attained age 35 or (ii) his most recent Employment Commencement
Date prior to January 1, 1982.

 

(B)                                .609% of the amount in (A), (B), or (C) of
paragraph (a)(2), whichever is least, multiplied by the number of Years of
Credited Service referred to in paragraph (b)(1)(A).

 

(2)                                  The monthly amount of a pension payable
monthly for life, the first payment to be made on the first day of the month
following the Participant’s Normal

 

18

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Retirement Date, and the last payment to be made as of the first day of the
month in which his death occurs, said pension to be equal in Actuarial Value to
the sum of (A) and (B):

 

(A)                              The amount credited to the Participant’s
Retirement Account under the Tennant Company Profit Sharing Plan as of the
valuation date coincident with or next following the Participant’s Termination
of Employment.

 

(B)                                The net amounts taken from the Participant’s
Retirement Account to pay life insurance premiums after the end of the Plan Year
in which the Participant attained age 34 and prior to January 1, 1983.  Said
amount shall be determined as follows:

 

(i)                                     Each such premium payment shall be
deemed to have been paid on January 1 of the Plan Year in which it was paid. 
The amount of each such premium shall be increased at an annual rate of 5%,
compounded annually, from said January 1 until December 31, 1981.

 

(ii)                                  The sum of the premiums, increased as
provided in (i), shall be determined.

 

(iii)                               The sum determined in (ii) shall be adjusted
by the same amount as if it were invested in the same investment funds and in
the same proportions as the Participant’s Retirement Account under the Tennant
Company Profit Sharing Plan is invested from time to time from January 1, 1982
until the valuation date coincident with or next following the Participant’s
Termination of Employment.

 

(iv)                              For purposes of the above calculations,
amounts received upon surrender of a life insurance policy shall be treated as a
negative premium, shall be adjusted as provided above, and shall be subtracted
from the amount determined in (iii).  Any such negative amount shall not result
in reducing the total amount under this subparagraph (B) to less than zero.

 

(3)                                  The portion of the Accrued Monthly Pension
determined under this subsection (b) shall become fixed upon a Participant’s
Termination of Employment and shall not be increased by virtue of a period of
reemployment.

 

(4)                                  For purposes of this subsection (b), a
“Sec. 4.2 Participant” is a person who was an employee of the Company on
December 31, 1981, was a Qualified Employee on January 1, 1982, elected not to
participate in Company contributions to Retirement Accounts (or any successor to
such Accounts) under the Tennant Company Profit Sharing Plan for 1982 or any
Plan Year thereafter, became a Participant in the Tennant Company Defined
Benefit Retirement Plan on the later of January 1, 1982 or the date he otherwise
would have become a Participant in the Tennant Company Profit Sharing Plan under
said plan as in effect on December 31, 1981, and became a Participant in the
Tennant Company

 

19

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Defined Benefit Retirement Plan on or  before the date he otherwise would have
become a Participant under the terms of that Plan.  A person who  made a similar
election effective January 1, 1987 is not a “Sec. 4.2 Participant.”

 

(c)                                  However, the Accrued Monthly Pension under
(a) and (b) of an employee who became a Participant under the Tennant Company
Defined Benefit Retirement Plan prior to January 1, 1989 shall not be less than
his Minimum Accrued Monthly Pension determined as follows:

 

(1)                                  If his compensation during 1988 was $78,353
or more, his Minimum Accrued Monthly Pension is an amount equal to his Accrued
Monthly Pension on December 31, 1988 under the benefit formula then in effect,
based on pay and service through said date, and disregarding any pay or service
after said date.

 

(2)                                  If his compensation during 1988 was less
than  $78,353, his Minimum Accrued Monthly Pension is an amount equal to his
Accrued Monthly Pension as of December 31, 1989 (or as of his Termination of
Employment if it occurred in 1989).  Said amount shall be determined under the
benefit formula in effect on December 31, 1988, and shall be based on pay and
service through December 31, 1989.  Pay and service after December 31, 1989
shall be disregarded.

 

“Compensation” referred to in (1) and (2) means Compensation as defined in Sec.
6.11(i) except that gross pay shall be determined before any reduction pursuant
to Code section 401(k) or 125.

 

(d)                                 Notwithstanding any provision of the Plan to
the contrary, a Participant’s Accrued Monthly Pension under this section shall
not be less than the greater of:

 

(1)                                  The Participant’s Accrued Monthly Pension
determined under the provisions of this section (or the corresponding section of
the Tennant Company Defined Benefit Retirement Plan) in effect on and after
January 1, 1994 as applied to the Participant’s total Years of Credited Service
(but disregarding any such years to the extent specified in this section and
other provisions of the Plan).

 

(2)                                  The sum of the amounts determined under (A)
and (B):

 

(A)                              The Participant’s Accrued Monthly Pension
determined as of December 31, 1993 on the basis of the provisions of the Tennant
Company Defined Benefit Retirement Plan in effect on that date as if the
Participant’s Termination of Employment had occurred on December 31, 1993.  For
this purpose, the annual compensation limit in effect under Code section
401(a)(17) and Sec. 2.7(f) for Plan Years beginning on and after January 1,
1989, but prior to January 1, 1994 shall be deemed to be equal to $235,840.

 

(B)                                The Participant’s Accrued Monthly Pension
determined under the provisions of this section (and the corresponding section
of the Tennant Company Defined Benefit Retirement Plan) in effect on and after
January 1, 1994 as applied to the Participant’s Years of Credited Service on and
after January 1, 1994.

 

20

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For purposes of compliance with any limitation on the number of the
Participant’s Years of Credited Service, such years shall first be taken into
account under subparagraph (A), and the number of years used in subparagraph (B)
shall be reduced by the number of years used in subparagraph (A).

 

Sec. 5.2  Pension on Normal Retirement.  “Normal Retirement” means Termination
of Employment of a Participant (except termination by his death) occurring on
his Normal Retirement Date.  On Normal Retirement, a Participant shall be
entitled to a pension payable monthly for life, the first payment to be made on
the first day of the month following his Normal Retirement Date (if he is living
on said first day of the month) and the last payment to be made as of the first
day of the month in which his death occurs, in a monthly amount equal to his
Accrued Monthly Pension.  The pension under this section is subject to all of
the provisions of the Plan, and in this regard special reference is to be made
to the provisions of Articles V and VI.

 

Sec. 5.3  Pension on Late Retirement.  “Late Retirement” means any Termination
of Employment of a Participant (except termination by his death) occurring after
his Normal Retirement Date.  On Late Retirement a Participant shall be entitled
to a pension payable monthly for life, the first payment to be made as of the
first day of the month following his Late Retirement (if he is living on said
first day of the month) and the last payment to be made as of the first day of
the month in which his death occurs, in a monthly amount which is equal to
whichever of the following amounts is greater:

 

(a)                                  His Accrued Monthly Pension determined as
of his Normal Retirement Date, increased so that the monthly pension on Late
Retirement is the Actuarial Equivalent thereof.

 

(b)           His Accrued Monthly Pension determined as of the date of his
Termination of Employment.

 

The pension payable under this section is subject to all the provisions of the
Plan, and in this regard special reference is to be made to the provisions of
Articles V and VI.  Effective January 1, 1997, if the Participant’s Termination
of Employment occurs on or after April 1 following the calendar year in which
the Participant attained age 70½ and payments of the Participant’s pension do
not commence by said April 1, the Participant’s monthly pension payable under
this section at the time payments commence shall not be less than the Actuarial
Equivalent of the benefit that would have been payable under this section as of
said April 1 (or as of January 1, 1997, if later), plus the Actuarial Equivalent
of any additional benefits accrued after that date, and reduced by the Actuarial
Equivalent of any distributions with respect to the Participant after that
date.  For purposes of the previous sentence, Actuarial Equivalents shall be
determined pursuant to Sec. 2.3(b), and all adjustments of the Participant’s
pension shall be made in accordance with Code section 401(a)(9)(C)(iii) and
applicable regulations or IRS Notices.

 

Sec. 5.4  Pension on Early Retirement.  “Early Retirement” means any Termination
of Employment of a Participant (except termination by his death) (i) after he
has attained age 55 and (ii) before his Normal Retirement Date.

 

(a)                                  On Early Retirement, the Participant shall
be entitled to a pension payable monthly for life, the first payment to be made
as of the first day of the month following the earlier of (i) his Normal
Retirement Date, or (ii) his Termination of Employment in the case of a
Participant who satisfies the Rule of 85, (if he is living on said first day of
the month)

 

21

--------------------------------------------------------------------------------

 

                and the last payment to be made as of the first day of the month
in which his death occurs, in a monthly amount equal to his Accrued Monthly
Pension.

 

(1)                                  A Participant satisfies the “Rule of 85” if
the Participant had attained age 40 prior to January 1, 2001 and the sum on the
date the Participant’s Termination of Employment occurs of the Participant’s age
(determined on his most recent birthday) and his Years of Vesting Service equals
or exceeds 85.

 

(2)                                  For purposes of the Rule of 85 in paragraph
(1), Years of Vesting Service do not include any service with Castex
Incorporated, or any service with the Company or any other subsidiary of the
Company for which the individual is paid through the Tennant Commercial payroll
maintained for individuals employed at the Company’s Holland, Michigan facility
and certain related operations

 

(b)                                 In lieu of a pension commencing under
subsection (a) following his Normal Retirement Date, a Participant who does not
satisfy the Rule of 85 may elect to receive a monthly pension with the first
payment to be made as of the first day of any month designated in such election
that precedes his Normal Retirement Date (if he is living on the commencement
date so elected) and the last payment to be made as of the first day of the
month in which his death occurs.  The monthly amount thereof shall be equal to
his Accrued Monthly Pension reduced as follows for the number of months by which
the commencement date precedes the Participant’s Normal Retirement Date:

 

(1)                                  One-third of one percent per month for the
first 36 months.

 

(2)                                  One-half of one percent per month for the
next 48 months.

 

(3)                                  Two-thirds of one percent per month for the
next 36 months.

 

The election of an Early Retirement benefit under this subsection (b) shall be
made by requesting the appropriate form from the Company and completing,
signing, and filing the form with the Company before the commencement date
elected.

 

(c)                                  The pension payable under this section is
subject to all the provisions of the Plan, and in this regard special reference
is to be made to the provisions of Articles V and VI.

 

(d)                                 Notwithstanding anything in Sec. 1.6 to the
contrary, if the Participant’s Termination of Employment occurred prior to
January 1, 1999 and prior to his Normal Retirement Date, but after the
Participant had both attained age 55 and completed 10 Years of Vesting Service,
the following shall apply:

 

(1)                                  If the Participant’s pension payments
commenced prior to January 1, 1999 and prior to his Normal Retirement Date, the
monthly payments payable to or with respect to the Participant on and after
January 1, 1999 shall be recalculated by assuming that the early commencement
reduction factors in subsection (b), rather than the corresponding reduction
factors in the Plan in effect at the time of the Participant’s Termination of
Employment, had applied to the Participant. If a Participant described in the
previous sentence died prior to January 1, 1999, this paragraph (1) shall be
applied to recalculate the amount payable to the Participant’s surviving spouse,
joint annuitant or Beneficiary on and after

 

22

--------------------------------------------------------------------------------

 

                                                January 1, 1999.

 

(2)                                  If the Participant’s pension payments have
not commenced prior to January 1, 1999 and the Participant subsequently elects
to commence those payments prior to his Normal Retirement Date, the early
commencement reduction factors in subsection (b) shall be used to determine the
monthly benefit payable to the Participant under the terms of the Plan.  If such
a Participant dies prior to his Normal Retirement Date and prior to the due date
for his first pension payment hereunder, the early commencement reduction
factors in subsection (b) shall be used to determine the amount of any Qualified
Preretirement Survivor Annuity payable under Sec. 5.10 following the
Participant’s death.

 

(3)                                  If the Participant died prior to January 1,
1999, prior to his Normal Retirement Date, and prior to the due date for his
first pension payment hereunder, the monthly amount payable on and after January
1, 1999 of any Qualified Preretirement Survivor Annuity payable to the
Participant’s spouse under Sec. 5.10 shall be recalculated by assuming that the
early commencement reduction factors in subsection (b) had applied to the
determination of that benefit.

 

(4)                                  This subsection (d) shall not affect the
amount payable to an alternate payee of the Participant under a qualified
domestic relations order unless the order specifically provided that the
alternate payee’s benefit is to be adjusted to reflect increases in the amount
payable to the Participant.

 

Sec. 5.5  Vested Termination.  “Vested Termination” means any Termination of
Employment of a Participant (except termination by his death) that is not
defined herein as a form of retirement and that occurs after December 31, 2000.
On a Vested Termination that occurs after December 31, 2000, the Participant
shall be entitled to receive a pension payable monthly for life, the first
payment to be made as of the first day of the month following his Normal
Retirement Date (if he is living on said commencement date) and the last payment
to be made as of the first day of the month in which his death occurs, in a
monthly amount equal to his Accrued Monthly Pension.  In lieu of said pension,
he may elect to receive a monthly pension which is the Actuarial Equivalent
thereof, the first payment to be made as of the first day of any month he may
elect which is after the month in which his Termination of Employment occurs (if
he is living on the commencement date so elected) and the last payment to be
made as of the first day of the month in which his death occurs.  However, if
the Participant had not attained age 40 prior to January 1, 2001, the earliest
commencement date that can be elected under the previous sentence is the first
day of the month following the date the Participant attains age 55.  The
election shall be made by requesting the appropriate form from the Company and
completing, signing, and filing the form with the Company before the
commencement date elected.  The pension payable under this section is subject to
all the provisions of the Plan, and in this regard special reference is to be
made to the provisions of Articles V and VI.

 

Sec. 5.6  Deduction for Other Pension Payments.  Notwithstanding the foregoing
provisions, the monthly amounts otherwise payable thereunder shall be reduced by
the amount (expressed on a comparable basis that is an Actuarial Equivalent) of
the monthly pension, if any, to which the Participant is entitled under any
other defined benefit pension plan that meets the requirements of Code section
401(a), or any comparable section or sections of any future legislation that
amends, supplements, or supersedes said section, and that is financed in whole
or in part by a Participating Employer or an Affiliate, but only to the extent
such other pension is attributable to employer contributions and to the same
period of service for which the pension is being paid under this Plan.

 

23

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Sec. 5.7  Amendments Affecting Pension Rights.  Notwithstanding the foregoing
provisions, in the event of an amendment to the Plan, the following shall be
applicable:

 

(a)                                  The amendment shall not reduce the accrued
benefit, within the meaning of Code section 411(d)(6), of a Participant
determined at the time of such amendment except in conformity with said section.

 

(b)                                 If the amendment to the Plan should change
the vesting schedule of the Plan, each Participant having not less than three
Years of Vesting Service by the end of the election period with respect to such
amendment shall be permitted within such election period to elect to have his
vested percentage computed under the Plan without regard to such amendment. 
Each such election shall be made in writing by filing with the Company within
the election period a form available from the Company for the purpose.  The
election period shall be a reasonable period determined by the Company
commencing not later than the date the amendment is adopted.  However, the
Company need not provide such election for any Participant whose vested
percentage under the Plan, as amended, at any time cannot be less than such
percentage determined without regard to such amendment.

 

Sec. 5.8  Qualified Joint and Survivor Annuity.  Notwithstanding the foregoing
provisions, the pension otherwise payable to the Participant for his life only
shall instead be paid as a Qualified Joint and Survivor Annuity which is the
Actuarial Equivalent of said life only pension unless the Participant elects
otherwise within the Election Period, subject to all of the following:

 

(a)                                  A “Qualified Joint and Survivor Annuity” is
a pension commencing at the same time as the life-only pension would commence,
with monthly payments for the life of the spouse of the Participant after the
Participant’s death which are each one-half the amount of the payments made to
the Participant during her lifetime.

 

(b)                                 For purposes of this section the “Election
Period” is the 90-day period ending on the due date of the Participant’s first
pension payment.  The Participant and his or her spouse may waive any notice or
election period required under this section to the extent permitted by
applicable regulations.

 

(c)                                  The Company within a reasonable period of
time before the due date for the Participant’s first pension payment (and
consistent with such regulations as the Secretary of the Treasury may prescribe)
shall furnish the Participant with a written explanation in nontechnical
language of the following:

 

(1)                                  The terms and conditions of the Qualified
Joint and Survivor Annuity.

 

(2)                                  The Participant’s right to make, and the
effect of, an election to waive the Qualified Joint and Survivor Annuity form of
benefit.

 

(3)                                  The rights of the Participant’s spouse with
respect to the spouse’s required consent to the Participant’s election to waive
the Qualified Joint and Survivor Annuity form of benefit.

 

24

--------------------------------------------------------------------------------

 

(4)                                  The right to make, and the effect of, a
revocation of the Participant’s election to waive the Qualified Joint and
Survivor Annuity form of benefit.

 

(d)                                 An election under this section may be
revoked in writing during the Election Period, and after such revocation another
written election may be made during the Election Period.

 

(e)                                  All elections and revocations shall be made
on the appropriate form available from the Company and shall be effective only
upon completing, signing, and filing of the form with the Company during the
Election Period.

 

(f)                                    A Participant who elects not to receive
her pension in the form of a Qualified Joint and Survivor Annuity will receive a
pension for her life only.

 

(g)                                 The provisions of this section shall not be
applicable unless the Participant and his spouse are married to each other on
the due date for the first pension payment to the Participant.  References to
“spouse” in this section are to such spouse.

 

(h)                                 A Participant’s election to waive the
Qualified Joint and Survivor Annuity shall not be effective unless all of the
following conditions are satisfied:

 

(1)                                  The Participant’s spouse consents in
writing to the election.

 

(2)                                  The Participant’s election designates a
specific form of benefit payment (i.e., life annuity or an optional form of
settlement under Sec. 5.9) and a specific beneficiary or contingent annuitant,
if applicable in connection with such form of benefit payment, which
designations may not be changed without further spousal consent (unless the
spouse’s initial consent expressly permits future designations by the
Participant without any further spousal consent.).

 

(3)                                  The spouse’s consent acknowledges the
effect of the Participant’s election.

 

(4)                                  The spouse’s consent is witnessed by a Plan
representative or notary public.

 

However, the above requirements will be deemed to be satisfied if it is
established to the satisfaction of a Plan representative that the spouse’s
consent may not be obtained because there is no spouse, because the spouse
cannot be located, or because of such other circumstances as the Secretary of
the Treasury may by regulations prescribe.  Any consent by a spouse, or
establishment that the consent of a spouse may not be obtained, shall be
effective only with respect to such spouse.  A consent by a spouse is not
revocable by that spouse.

 

Sec. 5.9  Optional Settlements.  In lieu of the amount and form of pension
payable under the preceding sections of this Article, a Participant with respect
to whom the Qualified Preretirement Survivor Annuity under Sec. 5.10 or the
Qualified Joint and Survivor Annuity under Sec. 5.8 is not payable may, under
such rules and regulations as the Company may prescribe which are in accord with
the advice of the Actuary, elect to have a pension payable under one of the
following options:

 

(a)                                  An option providing a reduced monthly
pension which is the Actuarial Equivalent of his life only pension and which is
payable to the Participant commencing on the same date

 

25

--------------------------------------------------------------------------------

 

as that upon which payments would otherwise commence and terminating with the
last monthly payment before his

death.  If  his death occurs on or after the due date of the first monthly
payment under the option and before 120 monthly payments have been made to him
such benefit shall be continued to the Beneficiary designated by the Participant
in accordance with the rules in Sec. 5.11(d) until a total of 120 monthly
payments have been made to him and his Beneficiary.

 

(b)                                 An option providing a reduced monthly
pension which is the Actuarial Equivalent of his life only pension and which is
payable to the Participant for his lifetime commencing on the same date as that
upon which payments would otherwise commence, with provision for continuance
upon his death of monthly payments of 100% or 50% of such reduced amount, as he
shall have designated, to the person designated by him as his joint annuitant,
if such joint annuitant survives him, with such monthly payments to continue for
the lifetime of the joint annuitant.  Except as provided in the last paragraph
of this section, an election of this option shall be automatically cancelled if
either the person electing the option or his joint annuitant dies before the due
date of the first monthly payment under the option.

 

(c)                                  In the case of a benefit payable to or with
respect to a Participant whose Termination of Employment occurs on or after
January 1, 2001 and who had attained age 40 prior to that date, an option
providing a lump sum payment equal to the Actuarial Equivalent present value,
determined as of the date the distribution is to occur using the factors
specified in Sec. 2.3(b), of the Participant’s Accrued Monthly Pension payable
as a life-only annuity commencing on the first day of the month following the
Participant’s Normal Retirement Date (or following the Participant’s Late
Retirement, in the case of a Participant who is older than age 65).  The lump
sum payment will be determined without regard to any benefit to which the
Participant may be entitled commencing prior to his Normal Retirement Date under
Sec. 5.4 or Sec. 5.5.

 

Election of an option may be made at any time prior to commencement of pension
payments.  If a Participant remains in the employ of a Participating Employer or
an Affiliate after his Normal Retirement Date, if his death occurs thereafter
prior to his Termination of Employment, and if he elected an optional settlement
under this section which was not revoked prior to his death, the same benefit
shall be provided his beneficiary or joint or contingent annuitant under the
option as though the Participant’s Termination of Employment had occurred for a
reason other than death on the last day of the month preceding his death.

 

Sec. 5.10  Qualified Preretirement Survivor Annuity.  If the requirements of
subsection (a) are met, a Qualified Preretirement Survivor Annuity shall be paid
with respect to a deceased Participant, subject to the following:

 

(a)                                  All of the following requirements must be
met with respect to the Participant:

 

(1)                                  Immediately prior to his death the
Participant has a nonforfeitable right to his accrued benefit under the Plan.

 

(2)                                  The Participant dies before the due date
for his first pension payment.

 

(3)                                  The Participant is survived by a Qualified
Spouse.

 

26

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(b)                                 The “Qualified Preretirement Survivor
Annuity” is the annuity that would be paid to the Qualified Spouse if the
Participant had retired with an immediate Qualified Joint and Survivor Annuity
on the day before the Participant’s date of death.   However, if the Participant
had not attained age 40 prior to January 1, 2001 and dies before attaining age
55, the “Qualified Preretirement Survivor Annuity” is instead the annuity that
would be paid to the Qualified Spouse under the following circumstances:

 

(1)                                  The Participant had a Termination of
Employment on the date of his death.

 

(2)                                  The Participant survived to the first day
of the month after his attainment of age 55.

 

(3)                                  Payments under the Qualified Joint and
Survivor Annuity form of payment commenced to the Participant on the first day
of the month after his attainment of age 55, and he died on the next day.

 

(c)                                  A surviving spouse entitled to a benefit
under this section may elect to delay the commencement of pension payments to a
later date than the date specified in subsection (b) by filing the election with
the Company prior to the date payments commence.  However, the commencement date
elected may not be later than the first day of the month following the date the
Participant would have attained age 62.  The amount of the delayed pension shall
be the Actuarial Equivalent, determined pursuant to Sec. 2.3(a), of the pension
to which the spouse was entitled commencing on the date specified in subsection
(b). However, the amount of the delayed pension shall not exceed the pension the
spouse would have received if the Participant had died in the month following
his Normal Retirement Date.

 

(d)                                 If the Participant’s Termination of
Employment occurred on or after January 1, 2001 and the Participant had attained
age 40 prior to that date, at any time prior to the date that payments to the
Qualified Spouse are to commence under subsection (b), the Qualified Spouse may
file an election with the Company that the benefit shall instead be paid in the
form of a lump sum distribution that is the Actuarial Equivalent, determined as
of the date the distribution is to occur using the factors specified in Sec.
2.3(b), of the benefit payable to the Qualified Spouse under subsection (b).

 

(e)                                  A person is a “Qualified Spouse” of a
Participant if, and only if, such person and the Participant have been married
to each other throughout the one-year period ending on the date of the
Participant’s death.

 

Sec. 5.11  Additional Death Benefit. If a Participant’s death occurs while he is
a Qualified Employee, a death benefit shall be payable, subject to the
following:

 

(a)                                  The amount of the death benefit shall be
equal to 200% of his Certified Earnings for the Plan Year preceding the Plan
Year in which his death occurred, reduced as follows:

 

(1)                                  Said amount shall be reduced by the sum of
(i) any workers compensation benefit payable with respect to the Participant by
reason of his death and (ii) any other death benefit paid by the Company with
respect to the Participant, other than any benefit paid under a trust fund
established pursuant to Code section 501(c)(9) or paid under a travel/accident
policy.

 

27

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(2)                                  If the Participant was age 55 or older on
the date of his death, the reduced amount determined in paragraph (1) shall be
further reduced as provided in (A) or (B), whichever results in the greater
reduction:

 

(A)                              The reduced amount determined in paragraph (1)
shall be further reduced to the percentage thereof determined from the following
table according to the Participant’s attained age on his last birthday
coincident with or immediately preceding the date of his death:

 

Attained age on
last birthday

 

Percentage Payable

 

55

 

92

%

56

 

84.64

%

57

 

77.87

%

58

 

71.64

%

59

 

65.91

%

60

 

60.64

%

61

 

55.78

%

62

 

51.32

%

63

 

47.22

%

64

 

43.44

%

65

 

39.96

%

66

 

36.77

%

67

 

33.83

%

68

 

31.12

%

69

 

28.63

%

70 or more

 

25

%

 

(B)                                The reduced amount determined in (1) shall be
further reduced by a single sum amount which is the Actuarial Equivalent of the
Qualified Preretirement Survivor Annuity, if any, payable with respect to the
Participant under Sec. 5.10.

 

(3)                                  If the Participant was under age 55 on the
date of his death, the reduced amount determined in paragraph (1) shall be
further reduced by a single sum amount which is the Actuarial Equivalent of the
Qualified Preretirement Survivor Annuity, if any, payable with respect to the
Participant under Sec. 5.10.

 

(b)                                 However, the amount of the death benefit may
not exceed 100 times the Net Accrued Monthly Pension the Participant would have
had on his Normal Retirement Date if he had continued working until said date at
the same rate of Certified Earnings as he was credited with for the Plan Year
preceding the Plan Year in which his death occurred.

 

(c)                                  The death benefit under this section shall
be paid in a single sum on a date determined by the Committee which shall not be
more than one year after the date of the Participant’s death.

 

(d)                                 The Participant’s “Beneficiary” is the
person or persons, natural or otherwise, designated by a Participant to receive
any benefits payable under this section.  A Participant who

 

28

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has designated a Beneficiary may, without the consent of such Beneficiary, alter
or revoke such designation.  To be effective, any such designation, alteration,
or revocation shall be in writing, in such form as the Company may prescribe,
and shall be filed with the Company prior to the Participant’s death.  If at the
time of a Participant’s death there is not on file with the Company a fully
effective designation of his Beneficiary, or if the designated Beneficiary does
not survive the Participant, the Participant’s Beneficiary shall be the person
or persons surviving him in the first of the following classes in which there is
a survivor, share and share alike:

 

(1)                                  His spouse.

 

(2)                                  His children, except that if any of his
children predecease him but leave descendants surviving him such descendant
shall take by right of representation the share their parent would have taken if
living.

 

(3)                                  His parents.

 

(4)                                  His brother and sisters.

 

(5)                                  His personal representative (executor or
administrator).

 

Determination of the identity of the Beneficiary in each case shall be made by
the Company.

 

(e)                                  If the Participant was receiving disability
benefits under any disability plan sponsored by a Participating Employer at the
time of his death, the Participant’s Certified Earnings for purposes of
subsection (a) of this section shall not be less than his Certified Earnings for
the twelve full calendar months immediately preceding the month in which the
disability commenced.

 

Sec. 5.12  Suspension of Benefits and Effect of Reemployment.  If a Participant
has a Termination of Employment, commences receiving pension payments under the
Plan, and is subsequently reemployed by a Participating Employer, or if a
Participant’s employment with a Participating Employer continues after he
attains Normal Retirement Age, the following shall be applicable:

 

(a)                                  If a Participant is reemployed by a
Participating Employer, his pension payments shall continue through the month in
which he completes 1000 or more Hours of Service during a Plan Year or portion
thereof.  After said month and prior to the month following his subsequent
Termination of Employment, pension payments that the Participant would otherwise
be entitled to receive for the following calendar months shall be permanently
withheld:

 

(1)                                  Each calendar month ending prior to or with
the Participant’s attainment of Normal Retirement Age in which he completes one
or more hours of service.

 

(2)                                  Each calendar month ending after the
Participant’s attainment of Normal Retirement Age in which he completes 40 or
more hours of service.

 

29

--------------------------------------------------------------------------------

 

(b)                                 If a Participant’s employment with a
Participating Employer continues after he attains Normal Retirement Age, his
pension payments will be permanently withheld for each calendar month in which
he completes 40 or more hours of service.

 

(c)                                  If pension payments have been withheld
pursuant to subsection (a)(2) or (b), payments shall resume or commence no later
than the first day of the third calendar month following the last month subject
to withholding.  The initial payment shall include the payment for the month in
which payments resume and any amounts withheld during the period between the
last month subject to withholding under subsection (a)(2) or (b) and the
resumption of payments, less any amounts which are subject to offset.

 

(d)                                 If a monthly pension payment is made for a
calendar month and it later is determined that such payment was subject to
permanent withholding, the amount of such payment shall be applied as an offset
against subsequent monthly payments unless the Participant has previously repaid
the overpayment.  However, the amount of any such offset shall not exceed, in
any one month after the Participant attains Normal Retirement Age, 25 percent of
the monthly total benefit payment that would have been paid but for the offset
(excluding the initial payment described in subsection (c), which is subject to
offset without limitation).

 

(e)                                  The Company shall notify a Participant of
any suspension under subsection (a)(2) or (b).  The notice shall conform to the
requirements of section 2530.203-3(b)(4) of the Department of Labor Regulations.

 

(f)                                    If the Participant was reemployed as a
Qualified Employee prior to January 1, 2001, when the Participant’s benefit
payments resume following any period of suspension under subsection (a), the
pension to which he is entitled under the Plan shall be paid under the same form
as previously in effect and shall be in a monthly amount equal to the sum of (i)
the monthly amount payable prior to the suspension plus (ii) any additional
amount based on his service during the period of reemployment.  However,
notwithstanding any other provision of the Plan to the contrary, no additional
amount will be accrued for any Plan Year during the period of reemployment prior
to the earliest Plan Year therein during which the Participant completed 1000 or
more hours of service.

 

(g)                                 If the Participant was reemployed on or
after January 1, 2001, when the Participant’s benefit payments resume following
any period of suspension under subsection (a), the pension to which he is
entitled under the Plan shall be paid under the same form as previously in
effect and shall be in a monthly amount equal to the monthly amount payable
prior to the suspension.  Notwithstanding any other provision of the Plan to the
contrary, no additional amount will be accrued for any Plan Year during the
period of reemployment.

 

(h)                                 “Hour of service” for purposes of this
section is as required to be counted as such under sections 2530.200b-2(a)(1)
and (2) of the Labor Department regulations.

 

(i)                                     The provisions of this section shall be
administered in accordance with section 2530.203-3 of the Department of Labor
Regulations.

 

30

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ARTICLE VI

 

ADDITIONAL PROVISIONS REGARDING BENEFITS

 

Sec. 6.1  Commencement Date for Pension Payments.  Pension payments under this
Plan shall be subject to the following rules:

 

(a)                                  Pension payments shall commence at the
earlier of the times specified in paragraph (1) or (2) as follows:

 

(1)                                  As soon as administratively feasible after
the date specified by the applicable Plan provision for the commencement of
pension payments.

 

(2)                                  The 60th day after the close of the Plan
Year in which the Participant reaches Normal Retirement Age or has a Termination
of Employment, whichever is later; provided, however, that if the amount of the
payment to be made cannot be determined by the latest of said dates, a payment
retroactive to such date may be made no later than 60 days after the earliest
date on which the amount of such payment can be ascertained.

 

(b)                                 Notwithstanding any provision of subsection
(a) or Article V to the contrary, effective January 1, 1997, pension payments
must commence or must recommence by April 1 following the later of (i) the
calendar year in which the Participant attains age 70½, or (ii) the calendar
year in which the Participant’s Termination of Employment occurs.  However,
clause (ii) of the previous sentence does not apply to any Participant who is a
more than 5-percent owner of a Participating Employer (as defined in Code
section 416) with respect to the Plan Year ending in the calendar year in which
the Participant attained age 70½.  A Participant whose Termination of Employment
has not occurred prior to April 1 of the calendar year following the year in
which he attained age 70½ may file a written election with the Company to begin
receiving pension payments as of the first day of any month on or after said
April 1st and prior to his actual Termination of Employment pursuant to the
provisions of the Plan as if his Termination of Employment had occurred.

 

(c)                                  Effective January 1, 1997, for purposes of
determining the amount of the monthly pension payments to a Participant who will
receive pension payments pursuant to subsection (b) while the Participant
continues to be employed by a Participating Employer, the calculation shall be
based on the assumption that the Termination of Employment occurred on March 31
of the calendar year following the calendar year in which the Participant
attained age 70½ (or the day before the commencement date elected by the
Participant, if later).  The amount of the monthly payments in each calendar
year following the year in which payments commence shall be adjusted to reflect
any additional benefit accrued.  The monthly amount shall be increased beginning
with the monthly payment for January of the calendar year immediately following
the calendar year in which the additional benefit accrues.  If a Participant had
begun receiving required minimum distributions under this section prior to 1997,
those distributions shall continue pursuant to the provisions of this subsection
(c), except to the extent modifications are required by applicable laws or
regulations.

 

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Sec. 6.2  Payment of Lump Sums and Certain Consequences Thereof.  If the
Actuarial Equivalent present value of an individual’s entire vested benefit is
$5,000 or less, the benefit shall be paid in a single lump sum as soon as
administratively feasible following the Participant’s Termination of Employment
(or in the case of a death benefit payable under Article V, as soon as
administratively feasible following the Participant’s death).  If the Actuarial
Equivalent present value of an individual’s entire vested benefit is more than
$5,000, (i) a lump sum distribution may be elected as an optional settlement
pursuant to Sec. 5.9(c) by a Participant who had attained age 40 prior to
January 1, 2001, and (ii) a lump sum distribution may be elected pursuant to
this section by a Participant who had not attained age 40 prior to January 1,
2001 if the Actuarial Equivalent present value of the Participant’s entire
vested benefit payable as a life-only annuity commencing on the first day of the
month following the Participant’s Normal Retirement Date (or following the
Participant’s Late Retirement, in the case of a Participant who is older than
age 65 when payments would commence) is $10,000 or less.  Lump sum distributions
are subject to the following:

 

(a)                                  In no event will a lump sum payment be made
to or with respect to a Participant after pension payments have commenced to or
with respect to that Participant.  In any case in which a lump sum distribution
exceeds $5,000, the following requirements must be met:

 

(1)                                  If the Participant is living, the
distribution may be made only with his written consent.

 

(2)                                  If the Participant’s spouse is living, the
distribution may be made only with the spouse’s written consent.  Any such
consent shall be subject to the requirements of Sec. 5.8(h).

 

(b)                                 If a distribution is made to the Participant
of the Actuarial Equivalent present value of his entire accrued pension under
the Plan not later than the close of the second Plan Year following the Plan
Year in which the Participant’s Termination of Employment occurs, or if such a
distribution was made under the Tennant Company Defined Benefit Retirement Plan
prior to January 1, 2001, service performed by the Participant with respect to
which such distribution is made shall be disregarded in determining his Years of
Credited Service under the Plan if he is reemployed.

 

(c)                                  If the requirements of subsection (b) are
not met, and the Participant is later reemployed, his pension upon termination
of said period of reemployment will be reduced by the Actuarial Equivalent of
the amount previously distributed to him under this Plan or the Tennant Company
Defined Benefit Retirement Plan.

 

(d)                                 If a Participant who had not attained age 40
prior to January 1, 2001 has a Termination of Employment prior to attainment of
age 55, and if the Actuarial Equivalent present value of the Participant’s
entire vested benefit is more than $5,000 but not more than $10,000, the
Participant shall be eligible to receive an immediate pension commencing on the
first day of any month he elects which is after his Termination of Employment
but prior to his Normal Retirement Date.  The pension payable under this
subsection shall be the Actuarial Equivalent (determined pursuant to Sec.
2.3(a)) of the Participant’s pension payable under Sec. 5.5 following his Normal
Retirement Date and shall be payable in any form the Participant elects which is
permitted under Sec. 5.5, Sec. 5.8 or Sec. 5.9.  Except as provided in this
subsection, any pension payable under this subsection shall be subject to all
requirements of the Plan, including the spousal consent requirements of Sec.
5.8.

 

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(e)                                  If the present value of a Participant’s
vested accrued benefit is $0 upon his Termination of Employment, the Participant
shall be deemed to have received an immediate lump sum distribution of $0, his
prior service shall be disregarded for purposes of determining his accrued
benefit under the Plan, and he shall thereupon cease to be a Participant for
purposes of section 4006 of ERISA.  However, such a Participant who is
subsequently reemployed by a Participating Employer or an Affiliate before he
has incurred a period of five consecutive 1 - Year Breaks In Service shall be
deemed to make a repayment of the $0 distribution at the time of reemployment
and his prior service shall thereupon be reinstated.

 

(f)                                    The Company may provide for payment
annually, semiannually, or quarterly, on an Actuarial Equivalent basis, of
benefits which would otherwise be payable in small amounts monthly for life or a
period of years.

 

(g)                                 With respect to lump sum distributions made
under this section, notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee’s election, a distributee may elect, at
the time and in the manner prescribed by the Company, to have any portion of the
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.  For the purposes of this subsection:

 

(1)                                  An “eligible retirement plan” is an
individual retirement account described in Code section 401(a), an individual
retirement annuity described in Code section 408(b), an annuity plan described
in Code section 403(a), or a qualified trust described in Code section 401(a)
with respect to a defined contribution plan, that accepts the distributee’s
distribution. Commencing January 1, 2002, an eligible retirement plan also means
an annuity contract described in Code section 403(b) and an eligible plan under
Code section 457(b) which is maintained by a state, a political subdivision of a
state, or any agency or instrumentality of a state or political subdivision of a
state and which agrees to account separately for amounts transferred into such
plan from this Plan.  Prior to January 1, 2002, in the case of a distribution to
the surviving spouse, an eligible retirement plan is limited to an individual
retirement account or individual retirement annuity.

 

(2)                                  A “distributee” includes a Participant or
former Participant.  In addition, the Participant’s or former Participant’s
surviving spouse and the Participant’s or former Participant’s spouse or former
spouse who is the alternate payee under a qualified domestic relations order, as
defined in Code section 414(p), are distributees with regard to the interest of
the spouse or former spouse.

 

(3)                                  A “direct rollover” is a payment by the
Plan to the eligible retirement plan specified by the distributee.

 

(4)                                  This subsection does not apply to any
portion of a lump sum distribution which is required to be distributed under
Code section 401(a)(9).

 

Sec. 6.3  No Other Benefits.  No benefits other than those specifically provided
for herein are to be provided under the Plan.

 

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Sec. 6.4  Source of Benefits.  All benefits to which persons become entitled
hereunder shall be provided only out of the Trust and only to the extent that
the Trust is adequate therefor.  No benefits are provided under the Plan except
those expressly described herein.

 

Sec. 6.5  Incompetent Payee.  If in the opinion of the Committee a person
entitled to payments hereunder is disabled from caring for his affairs because
of mental condition, physical condition, or age, payment due such person may be
made to such person’s guardian, conservator, or other legal personal
representative upon furnishing the Committee with evidence satisfactory to the
Committee of such status.  Prior to the furnishing of such evidence, the
Committee may cause payments due the person under disability to be made, for
such person’s use and benefit, to any person or institution then in the opinion
of the Committee caring for or maintaining the person under disability.  The
Committee shall have no liability with respect to payments so made.  The
Committee shall have no duty to make inquiry as to the competence of any person
entitled to receive payments hereunder.

 

Sec. 6.6  Assignment and Alienation of Benefits.  Except as otherwise expressly
permitted by the Plan or required by law, including a “qualified domestic
relations order” as defined in ERISA, the interests of persons entitled to
benefits under the Plan may not in any manner whatsoever be assigned or
alienated, whether voluntarily or involuntarily, or directly or indirectly.  The
Committee shall establish reasonable procedures to determine the qualified
status of domestic relations orders and to administer distributions under such
qualified orders.  Where payments are to be made under a qualified domestic
relations order before payments commence to the Participant, the present value
of the benefits actually accrued for the Participant shall be determined on an
Actuarial Equivalent basis.  Notwithstanding any other provisions of the Plan to
the contrary, all benefits otherwise payable under the Plan with respect to a
Participant shall be adjusted to the extent necessary to comply with a qualified
domestic relations order.

 

Sec. 6.7  Payment of Taxes.  The Trustee may pay any estate, inheritance,
income, or other tax, charge, or assessment attributable to any benefit payable
hereunder which in the Trustee’s opinion it shall be or may be required to pay
out of such benefit.  The Trustee may require, before making any payment, such
release or other document from any taxing authority and such indemnity from the
intended payee as the Trustee shall deem necessary for its protection.

 

Sec. 6.8  Conditions Precedent.  No person shall be entitled to a benefit
hereunder until his right there to has been finally determined by the Committee
nor until he has submitted to the Committee relevant data reasonably requested
by the Committee, including, but not limited to, proof of birth or death.

 

Sec. 6.9  Committee Directions to Trustee.  The Committee shall issue such
written directions to the Trustee as are necessary to accomplish distributions
to the Participants and beneficiaries in accordance with the provisions of the
Plan.

 

Sec. 6.10  Benefits Not Increased by Actuarial Gains.  Forfeitures arising from
severance of employment, death, or for any other reason shall not be applied to
increase the benefits that any person would otherwise receive under the Plan at
any time prior to the termination of the Plan or the complete discontinuance of
employer contributions thereunder.

 

Sec. 6.11  Maximum Limitations on Benefits.  Notwithstanding any provision of
the Plan to the contrary, a Participant’s benefit under the Plan shall not
exceed the maximum amount permitted under Code section 415.  For purposes of
applying the preceding sentence to Plan Years beginning on or after January 1,
2002:

 

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(a)                                  The projected annual pension for any Plan
Year with respect to a Participant whose benefit has not yet commenced, and the
annual pension paid during any Plan Year to a Participant whose benefit has
commenced, may not exceed the lesser of:

 

(1)                                  $160,000.  Effective January 1, 2003, and
each January 1 thereafter, this amount shall be automatically adjusted by
multiplying such limit by the cost of living adjustment factor prescribed by the
Secretary of the Treasury under Code section 415(d) in such manner as the
Secretary shall prescribe.  The new limitation shall apply to Plan Years ending
within the calendar year of the date of the adjustment.

 

(2)                                  100% of the Participant’s average
Compensation for his high three consecutive years of employment.

 

(b)                                 If a Participant’s benefit is paid in any
form other than a straight life annuity or a Qualified Joint and Survivor
Annuity, such benefit shall be converted on an Actuarial Equivalent basis to a
straight life annuity beginning at the same age for purposes of applying the
limitation in subsection (a).

 

(c)                                  If a Participant’s benefit commences before
the Participant attains age 62, the dollar limitation in subsection (a)(1) (as
reduced in (e), below, if necessary) shall be reduced for each month by which
benefits commence before the month in which the Participant attains age 62 so
that it is the Actuarial Equivalent of an annual benefit equal to such
limitation commencing at age 62.

 

(d)                                 If the Participant’s benefit commences after
the Participant attains age 65, the dollar limitation in subsection (a)(1) (as
reduced in (e), below, if necessary) shall be increased so that it is the
Actuarial Equivalent of a benefit of such dollar limitation commencing at age
65.

 

(e)                                  If a Participant has less than ten years of
participation in this Plan, the limit referred to in subsection (a)(1) shall be
reduced by multiplying that limit by a fraction, the numerator of which is the
number of years (or part thereof) of participation (not to exceed ten and not to
be less than one) in this Plan and the denominator of which is ten.

 

(f)                                    If a Participant has less than ten years
of service with the employer, the limit referred to in subsection (a)(2) shall
be reduced by multiplying that limit by a fraction, the numerator of which is
the number of years (or part thereof) of service (not to exceed ten and not to
be less than one) with the employer and the denominator of which is ten.

 

(g)                                 To the extent provided in Treasury
regulations, the provisions of subsections (e) and (f) shall be applied
separately with respect to each change in the benefit structure of the Plan.

 

(h)                                 If a Participant is or has been covered
under more than one defined plan maintained by a Participating Employer or an
Affiliate, the sum of the Participant’s annual benefits under all such plans may
not exceed the maximum amount permitted under this section. To the extent
necessary to comply with such limitation, the benefits under all such plans
shall be reduced on a pro rata basis.  For Plan Years commencing in 2002 or
later, any

 

35

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                                                multiemployer plan shall be
disregarded for purposes of applying the limit under subsection (a)(2).

 

(i)                                     For purposes of this section,
“Compensation” means a Participant’s earned income, wages, salaries, and other
amounts received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of employment with his
Participating Employer or an Affiliate to the extent that the amounts are
includible in gross income (including, but not limited to, commissions paid
salespersons, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan described
in Treasury Regulation § 1.62-2(c)), and excluding the following:

 

(1)                                  Employer contributions to a plan of
deferred compensation which are not includible in the Participant’s gross income
for the taxable year in which contributed, employer contributions under a
simplified employee pension plan to the extent such contributions are deductible
by the Participant, and any distributions from a plan of deferred compensation. 
However, any amounts received by a Participant pursuant to an unfunded
non-qualified plan of deferred compensation are Compensation in the year such
amounts are includible in the Participant’s gross income.  Notwithstanding the
foregoing, for Plan Years commencing on or after January 1, 1998, Compensation
includes any elective deferrals which are not includible in the gross income of
the employee under Code sections 125, 401(k), 402(h)(1)(B), 403(b) or 457 (or
under Code section 132(f)(4) commencing January 1, 2001).

 

(2)                                  Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or property) held by the
Participant either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture.

 

(3)                                  Amounts realized from the sale, exchange,
or other disposition of stock acquired under a qualified stock option.

 

(4)                                  Other amounts which received special tax
benefits.

 

Sec. 6.12  Restrictions on Benefits for Highly Compensated Employees. 
Notwithstanding any other provisions of the Plan, the benefits payable under the
Plan shall be limited in each case to the extent necessary to qualify the Plan
under the applicable provisions of Code section 401(a).  Without limiting the
generality of the foregoing:

 

(a)                                  In the event the Plan is terminated, the
benefit of any highly compensated employee (within the meaning of Code section
414(q)) and any highly compensated former employee (within the meaning of Code
section 414(q)(9)) shall be limited to a benefit that is nondiscriminatory under
Code section 401(a)(4), in accordance with Treasury Regulation section
1.401(a)(4)-5(b)(2).

 

(b)                                 The total payments made under the Plan in
any Plan Year to or on behalf of a restricted employee shall not exceed an
amount equal to the payments that would be made to or on behalf of the
restricted employee in that Plan Year under a single life annuity that is the
Actuarial Equivalent of the accrued benefit and other benefits (within the
meaning of

 

36

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Treasury Regulation section 1.401(a)(4)-5(b)(3)(iii)) to which the restricted
employee is entitled under the Plan; provided, however, that this limitation
shall not apply in any Plan Year in which any one of paragraphs (1), (2), or (3)
below is satisfied.

 

(1)                                  This paragraph is satisfied if, after
taking into account payment of all benefits under the Plan payable to or on
behalf of the restricted employee, the value of Plan assets equals or exceeds
110 percent of the value of current liabilities (within the meaning of Code
section 412(l)(7)) of the Plan.

 

(2)                                  This paragraph is satisfied if the value of
the benefits under the Plan payable to or on behalf of the restricted employee
is less than one percent of the value of current liabilities (within the meaning
of Code section 412(l)(7)) of the Plan.

 

(3)                                  This paragraph is satisfied if the value of
the benefits under the Plan payable to or on behalf of the restricted employee
does not exceed $5,000

 

(c)                                  For purposes of this section, the term
“restricted employee” for a Plan Year means any highly compensated employee
(within the meaning of Code section 414(q)) or highly compensated former
employee (within the meaning of Code section 414(q)(9)) who is one of the 25
nonexcludable employees or former employees of the Participating Employers or
any Affiliate with the largest amount of compensation in the current Plan Year
or any prior Plan Year.

 

(d)                                 These conditions shall not restrict the full
payment of any benefits payable on account of the death of a Participant who
dies while the Plan is in effect.

 

(e)                                  This section is included herein solely to
meet the requirements of Treasury Regulation section 1.401(a)(4)-5(b), and the
conditions and limitations contained in this section shall not preclude
settlements with Participants that comply with the requirements of such
regulation.  This section shall cease to be effective at such time as the
provisions of Treasury Regulation section 1.401(a)(4)-5(b) or any substitute
therefor are no longer effective or applicable.

 

(f)                                    A restricted employee’s benefit may be
distributed in full if prior to receipt of the restricted amount, the employee
enters into a written agreement with the Company to secure repayment to the Plan
of the restricted amount.  The restricted amount is the excess of the amounts
distributed to the employee (accumulated with reasonable interest) over the
amounts that could have been distributed to the employee under the single life
annuity described in subsection (b) (accumulated with reasonable interest). 
Subject to paragraphs (1)-(4), below, the employee may secure repayment of the
restricted amount by (i) entering into an agreement for promptly depositing in
escrow with an acceptable depository property having a fair market value equal
to at least 125 percent of the restricted amount, (ii) providing a bank letter
of credit in an amount equal to at least 100 percent of the restricted amount,
or (iii) posting a bond equal to at least 100 percent of the restricted amount.

 

(1)                                  If the employee elects to post bond, the
bond will be furnished by an insurance company, bonding company, or other surety
for federal bonds.

 

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(2)                                  The escrow arrangement may provide that an
employee may withdraw amounts in excess of 125 percent of the restricted
amount.  If the market value of the property in an escrow account falls below
110 percent of the remaining restricted amount, the employee must deposit
additional property to bring the value of the property held by the depository up
to 125 percent of the restricted amount.  The escrow arrangement may provide
that the employee may have the right to receive any income from the property
placed in escrow, subject to the employee’s obligation to deposit additional
property, as set forth in the preceding sentence.

 

(3)                                  A surety or bank may release any liability
on a bond or letter of credit in excess of 100 percent of the restricted amount.

 

(4)                                  If the Company certifies to the depository,
surety, or bank that the employee (or employee’s estate) is no longer obligated
to repay any restricted amount, a depository may redeliver to the employee any
property held under an escrow agreement, and a surety or bank may release any
liability on an employee’s bond or letter of credit.

 

Sec. 6.13  Effect on Unemployment Compensation.  For purposes of any
unemployment compensation law, a distribution hereunder in one sum shall be
considered to be a severance payment and allocated over a period of weeks equal
to one sum payment divided by the employee’s regular weekly pay while employed
by a Participating Employer, which period shall commence immediately following
the employee’s Termination of Employment.

 

Sec. 6.14  Distributions Made in Accordance with Code Section 401(a)(9). 
Notwithstanding any provision of the Plan to the contrary, distributions
hereunder shall be made in accordance with the requirements of Code section
401(a)(9) and regulations thereunder, including Regulation §1.41(a)(9)-2.  Any
provisions of the Plan that are inconsistent with Code section 401(a)(9) and the
regulations thereunder shall be deemed inoperative.

 

Sec. 6.15  Inability to Locate Distributee.  If all or any portion of the
benefit of a Participant, joint annuitant, or Beneficiary cannot be distributed
solely because of the inability of the Company to determine the whereabouts of
the distributee, after mailing a letter by first class mail to the last known
address of the distributee, and after such further diligent effort as the
Company determines is appropriate, and either (i) the Participant has attained
age 65, or has died, or (ii) the benefit is distributable pursuant to Sec. 6.2
without the consent of the distributee, or (iii) the distributee consented in
writing to receive a distribution, the benefit that cannot be distributed shall
be forfeited.  In the event the distributee is located after a forfeiture has
occurred under this section, the individual’s benefit shall be restored, and the
individual shall be paid any amount that would have been required by law to have
been paid prior to the date the benefit is restored, but without any interest or
other adjustment for any period prior to the date the benefit is restored.

 

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ARTICLE VII

 

TRUST

 

Sec. 7.1  Composition.  All sums of money and all securities and other property
received by the Trustee for purposes of the Plan, together with all investments
made therewith, the proceeds thereof, and all earnings and accumulations
thereon, and the part from time to time remaining shall constitute the “Trust”. 
Although the term “Trust” is used, part or all of said assets may be held by an
insurance company pursuant to a group annuity contract between the Company and
the insurance company.  All contributions of the Company to the Trust may be
commingled for investment without distinction between principal and income.

 

Sec. 7.2  Trustee or Other Funding Agency.  The Trust may be held and invested
as one fund or may be divided into any number of parts for investment purposes. 
Each part of the Trust, or the entire Trust if it is not divided into one or
more parts for investment purposes, shall be held and invested by one or more
Trustees pursuant to the trust agreement entered into by the Company and said
Trustee or Trustees or held and invested by an insurance company pursuant to an
annuity contract entered into by the Company and said insurance company.  The
selection and appointment of each Trustee or insurance company shall be made by
the Company.  The Company shall have the right at any time to remove a Trustee
or insurance company and appoint a successor thereto, subject to the terms of
any applicable trust agreement or group annuity contract.  The Company shall
have the right to determine the form and substance of each trust agreement and
group annuity contract under which any part of the Fund is held, subject only to
the requirement that they are not inconsistent with the provisions of the Plan.
Action on behalf of the Company pursuant to the foregoing provisions of this
section may be taken only by the Board or by a person or persons so authorized
by resolution of the Board.

 

Any such trust agreement may contain provisions pursuant to which (i) the
Trustee will make investments on direction of an investment manager appointed by
the Committee or (ii) the Trustee will enter into an annuity contract with an
insurance company and transfer assets to said insurance company pursuant to
directions by the Committee.

 

Sec. 7.3  Compensation and Expenses of Trustee; Other Expenses.  The Trustee
shall be entitled to receive such reasonable compensation for its services as
may be agreed upon with the Company.  The Trustee shall also be entitled to
reimbursement for all reasonable and necessary costs, expenses, and
disbursements incurred by it in the performance of its services.  Such
compensation and reimbursements shall be paid from the Trust if not paid
directly by the Company.  The Company or the Committee may obtain reimbursement
from the Trust for expenses incurred in connection with administration of the
Plan.  The Company or Committee may also direct the Trustee to make payment from
the Trust to third parties for expenses incurred in connection with
administration of the Plan.  However, no person who is a full-time employee of
the Company may receive compensation from the Trust, except for reimbursement of
expenses properly and actually incurred.

 

Sec. 7.4  Securities and Property of the Company.  An agreement with a Trustee
may provide that the Trust may be invested in qualifying employer securities or
qualifying employer real property, as those terms are used in ERISA, and to the
extent permitted by said Act.  If qualifying employer securities or qualifying
employer real property are purchased or sold as an investment of the Trust from
or to a disqualified person or party in interest, as those terms are used in the
aforesaid Act, and if there is no generally recognized market for such
securities or property, the purchase shall be for not more than fair market
value and the sale shall be for not less than fair market value, as determined
in

 

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good faith by the Company or other Named Fiduciary assigned such function, or if
the trust agreement so provides, as determined in good faith by the Trustee.

 

Sec. 7.5  No Diversion.  The Trust shall be for the exclusive purpose of
providing benefits to Participants under the Plan and their beneficiaries and
defraying reasonable expenses of administering the Plan.  Such expenses may
include premiums for the bonding of Plan officials required by ERISA, and may
also include premiums payable with respect to the Plan to the Pension Benefit
Guaranty Corporation other than premiums for contingent liability coverage.  No
part of the corpus or income of the Trust may be used for, or diverted to,
purposes other than for the exclusive benefit of employees of Participating
Employers or their beneficiaries.  Notwithstanding the foregoing:

 

(a)                                  If any contribution or portion thereof is
made by a Participating Employer by a mistake of fact, the Trustee shall, upon
written request of the Participating Employer, return such contribution or
portion thereof to the Participating Employer within one year after the payment
of the contribution to the Trustee; however, earnings attributable to such
contribution or portion thereof shall not be returned to the Participating
Employer but shall remain in the Trust, and the amount returned to the
Participating Employer shall be reduced by any losses attributable to such
contribution or portion thereof.

 

(b)                                 Contributions by a Participating Employer
are conditioned upon the deductibility of each contribution under Code section
404.  To the extent the deduction is disallowed, the Trustee shall, upon written
request of the Participating Employer, return such contribution to the
Participating Employer within one year after the disallowance of the deduction;
however, earnings attributable to such contribution (or the disallowed portion
thereof) shall not be returned to the Participating Employer but shall remain in
the Trust, and the amount returned to the Participating Employer shall be
reduced by any losses attributable to such contribution (or disallowed portion
thereof).

 

(c)                                  If, in the case of termination of the Plan
as to a Participating Employer, any residual assets attributable to such
Participating Employer remain in the Trust after all liabilities of the Plan to
Participants of such Participating Employer and their beneficiaries have been
satisfied, such residual assets shall be returned to such Participating
Employer.

 

Sec. 7.6  Employer Contributions. The Participating Employers shall make such
contributions to the Trust from time to time as they consider advisable which
shall not be less than the minimum contributions required by ERISA.

 

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ARTICLE VIII

 

ACTUARY

 

Sec. 8.1  Appointment.  The Committee shall appoint as Actuary hereunder an
individual who is an enrolled actuary as defined in ERISA or a partnership,
corporation, or other organization which has as a partner or employee thereof
such an enrolled actuary.

 

Sec. 8.2  Responsibilities.  The Actuary shall have the responsibilities
expressly allocated to it hereunder and shall have such other responsibilities
with respect to the Plan as may be agreed upon by the Committee and the Actuary.

 

Sec. 8.3  Compensation.  The Actuary shall receive such reasonable compensation
for its services hereunder as may be agreed upon by the Committee and the
Actuary.  To the extent not paid from the Fund, such compensation shall be paid
by the Participating Employers in such proportions as the Company shall
determine.

 

Sec. 8.4  Resignation, Removal, and Successor.  Any agreement between the
Committee and the Actuary for services hereunder may be terminated by either
party on 30 days written notice to the other.  In the event of a vacancy in the
office of Actuary, the Committee shall appoint a successor.

 

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ARTICLE IX

 

COMMITTEE

 

Sec. 9.1  Membership and Responsibility.  The general administration of the
Plan, except as otherwise specifically provided herein, shall be placed in a
Committee of not less than three members appointed from time to time by the
Company, by action of the Board, to serve at the pleasure of said Board.  The
members may, but need not be shareholders, directors or employees of the Company
or an Affiliate.  Any member of the Committee may resign by notice in writing
delivered to the Board and to the secretary of the Committee, such resignation
to become effective at delivery or at any later date specified therein.  Except
as expressly otherwise provided herein, the Committee shall control and manage
the operation and administration of the Plan and make all decisions and
determinations incident thereto.  In carrying out its Plan responsibilities, the
Committee shall have full discretionary authority to make factual determinations
concerning eligibility for benefits or the amount of any benefits and to
construe the terms of the Plan.  It is intended that the Committee have
discretion to the fullest extent permitted by law and that the Committee’s
exercise of its discretion be given deference to the greatest extent allowed
under the law.  This discretion includes, but is not limited to, the authority
to make any rules, regulations or computations that the Committee deems
necessary to administer the Plan.

 

Sec. 9.2  Organization of Committee.  The Committee shall elect a chairman, who
shall be one of the members of the Committee, and shall elect a secretary, who
may but need not be one of the members of the Committee.

 

Sec. 9.3  Meetings and Actions of Committee.  The Committee shall hold such
meetings, upon such notice, at such place or places, and at such time or times
as it may from time to time determine.  A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business.  All resolutions adopted or other actions taken by the Committee at a
meeting shall be by vote of the majority of the members of the Committee at the
time in office.  Action by the Committee may be taken without a formal meeting
by the written authorization of a majority of the members of the Committee at
the time in office.  The Committee may authorize one or more of its members or
any agent to sign and deliver on its behalf directions, instructions, notices,
certificates, consents, approvals, waivers, or other documents.  The certificate
of the secretary of the Committee or of the majority of the members of the
Committee that the Committee has taken or authorized any action shall be
conclusive in favor of any person acting in reliance thereon.  No member of the
Committee shall vote or otherwise participate in the consideration or
determination by the Committee of any matters solely concerning the rights or
interest of such member as a Participant hereunder.

 

Sec. 9.4  Outside Assistance.  The Committee may retain counsel (who may be
counsel for the Company), employ agents, and provide for such clerical,
accounting, investment, and other services as it may require in carrying out its
responsibilities under the Plan.

 

Sec. 9.5  Powers of Committee.  The Committee shall have full power and
authority to take any action it is specifically required or permitted to take
under the provisions of the Plan and in addition thereto shall have the sole and
exclusive power and authority subject to the limitations of the Plan:

 

(a)                                  For Plan administration:

 

(1)                                  To adopt rules and regulations, not
inconsistent with the purposes and specific provisions of the Plan, for its
administration;

 

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(2)                                  To interpret and construe the provisions of
the Plan;

 

(3)                                  To determine from time to time the status
of all parties for the purposes of the Plan;

 

(4)                                  To determine the rights of Participants to
benefits under the Plan and the method and time or times of payment of the same;

 

The foregoing determinations by the Committee shall be based on the books and
records of the Company and Affiliates as applicable, kept in the regular course
of business and such other sources as the Committee may consider to be reliable.

 

(b)                                 For Plan funding:

 

(1)                                  To establish and carry out a funding policy
and method consistent with the means and objectives of the Plan and with the
requirements of ERISA.

 

(2)                                  To communicate said policy and method to
each Trustee and Investment Manager.

 

(3)                                  To appoint an Actuary pursuant to Article
VIII.

 

(c)                                  For investment management:

 

(1)                                  To establish an investment program strategy
and supporting investment guidelines and criteria for communication to the
Trustee or investment manager consistent with the funding policy of the Plan.

 

(2)                                  To allocate investment responsibility for
Plan assets among investment managers in accordance with the requirements of
established funding policy and investment program strategies.

 

(3)                                  To select and appoint investment managers
and to assign said managers specific investment programs as determined by
established investment guidelines and criteria.

 

(4)                                  To direct the Trustee to enter into an
annuity contract with an insurance company, to determine the form of said
contract, and to direct the Trustee to transfer assets to the insurance company
pursuant to said contract.

 

(d)                                 For delegation of powers: To appoint
employees of the Company to carry out any of the aforesaid powers of the
Committee.

 

Sec. 9.6  Compensation, Expenses, and Bonds.  No member of the committee shall
receive any compensation for his services as such, but the Company shall
reimburse the Committee and the members thereof for all expenses, including
counsel and other fees, incurred or paid by them or any of them in carrying out
the responsibilities of the Committee under the Plan.  The Company may also pay
any such expenses directly.  The members of the Committee shall furnish such
bonds as the Company may require.

 

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ARTICLE X

 

ADMINISTRATION OF PLAN

 

Sec. 10.1  Certain Fiduciary Provisions.  For purposes of the Plan:

 

(a)                                  Any person or group of persons may serve in
more than one fiduciary capacity with respect to the Plan.

 

(b)                                 A Named Fiduciary, or a fiduciary designated
by a Named Fiduciary pursuant to the provisions of the Plan, may employ one or
more persons to render advice with regard to any responsibility such fiduciary
has under the Plan.

 

(c)                                  At any time that the Plan has more than one
Named Fiduciary, if pursuant to the Plan provisions fiduciary responsibilities
are not already allocated among such Named Fiduciaries, the Company, by action
of the Board or chief executive officer, may provide for such allocation; except
that such allocation shall not include any responsibility, if any, in a trust
agreement to manage or control the assets of the Plan other than a power under
the trust agreement to appoint an investment manager as defined in ERISA.

 

(d)                                 Unless expressly prohibited in its
appointment, a Named Fiduciary which is not the Company may designate a person
or persons other than such Named Fiduciary to carry out any or all of the
fiduciary responsibilities under the Plan of such Named Fiduciary; except that
such designation shall not include any responsibility, if any, in a trust
agreement to manage or control the assets of the Plan other than a power to
appoint an investment manager as defined in ERISA.

 

(e)                                  A person who is a fiduciary with respect to
the Plan, including a Named Fiduciary, shall be recognized and treated as a
fiduciary only with respect to the particular fiduciary functions as to which
such person has responsibility.

 

Each Named Fiduciary (other than the Company), each other fiduciary, each person
employed pursuant to subsection (b) above, and each investment manager shall be
entitled to receive reasonable compensation for services rendered, or for the
reimbursement of expenses properly and actually incurred in the performance of
their duties with the Plan and to payment therefor from the Trust if not paid
directly by the Participating Employers.  However, no person so serving who
already receives full-time pay from a Participating Employer shall receive
compensation from the Plan, except for reimbursement of expenses properly and
actually incurred.

 

Sec. 10.2  General Fiduciary Standard.  Each Fiduciary shall discharge his
duties with respect to the Plan solely in the interests of Participants and
their beneficiaries and with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims.

 

Sec. 10.3  Discrimination Prohibited.  No person or persons in exercising
discretion in the operation and administration of the Plan shall discriminate in
favor of highly compensated employees (as defined in Code section 414(q).

 

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Sec. 10.4  Evidence.  Evidence required of anyone under this Plan may be by
certificate, affidavit, document, or other instrument which the person acting in
reliance thereon considers to be pertinent and reliable and to be signed, made
or presented to the proper party.

 

Sec. 10.5  Correction of Errors.  It is recognized that in the operation and
administration of the Plan certain mathematical and accounting errors may be
made or mistakes may arise by reason of factual errors in information supplied
to or generated by the Committee or the Trustee.  The Committee shall have power
to cause such equitable adjustments to be made to correct for such errors as the
Committee in its discretion considers appropriate.  Such adjustments shall be
final and binding on all persons.

 

Sec. 10.6  Claims Procedure.  The Committee shall establish a claims procedure
consistent with the requirements of ERISA.  Such claims procedure shall provide
adequate notice in writing to any Participant or beneficiary whose claim for
benefits under the Plan has been denied, setting forth the specific reasons for
such denial, written in a manner calculated to be understood by the claimant and
shall afford a reasonable opportunity to a claimant whose claim for benefits has
been denied for a full and fair review by the appropriate Named Fiduciary of the
decision denying the claim.

 

Sec. 10.7  Bonding.  Plan personnel shall be bonded to the extent required by
ERISA.  Premiums for such bonding may, in the sole discretion of the Company, be
paid in whole or in part from the Fund.  Such premiums may also be paid in whole
or in part by the Participating Employers in such proportions as the Company
shall determine.  The Company may provide by agreement with any person that the
premium for required bonding shall be paid by such person.

 

Sec. 10.8  Waiver of Notice.  Any notice required hereunder may be waived by the
person entitled thereto.

 

Sec. 10.9  Agency For Legal Process.  The Company shall be the agent for service
of legal process with respect to any matter concerning the Plan, unless and
until the Company designates some other person as such agent.

 

Sec. 10.10   Indemnification.  In addition to any other applicable provisions
for indemnification, the Participating Employers jointly and severally agree to
indemnify and hold harmless, to the extent permitted by law, each director, each
officer, each employee of the Participating Employers, and each member of the
Committee against any and all liabilities, losses, costs, or expenses (including
legal fees) of whatsoever kind and nature which may be imposed on, incurred by,
or asserted against such person at any time by reason of such person’s services
as a fiduciary in connection with the Plan, but only if such person did not act
dishonestly, or in bad faith, or in willful violation of the law or regulations
under which such liability, loss, cost or expense arises.

 

Sec. 10.11  Records.  Each Participating Employer, each fiduciary with respect
to the Plan, and each other person performing any functions in the operation or
administration of the Plan or the management or control of the assets of the
Plan shall keep such records as may be necessary or appropriate in the discharge
of their respective functions hereunder, including records required by ERISA or
any other applicable law.  Records shall be retained as long as necessary for
the proper administration of the Plan and at least for any period required by
ERISA or other applicable law.

 

Sec. 10.12  Prohibited Transactions.  A fiduciary with respect to the Plan shall
not cause the Plan to engage in any prohibited transaction within the meaning of
ERISA.

 

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Sec. 10.13  Actions Against the Secretary of Labor.  Under ERISA the
Administrator of the Plan may bring suit to review a final order of the
Secretary of Labor, to restrain said Secretary of Labor from taking any actions
contrary to the provisions of ERISA, or to compel said Secretary to take any
action required under Title I of said Act.  If the Administrator of the Plan
acting in good faith brings any such suit in connection with any matter
affecting the Plan, the costs and expenses (including legal fees) of such suit
may be paid from the Fund.

 

Sec. 10.14  Effect of Criminal Conviction.  Persons who have been convicted of a
crime shall not be permitted to serve as Administrator, fiduciary, officer,
trustee, custodian, counsel, agent, or employee of or as a consultant to the
Plan, if prohibited from so serving by ERISA.

 

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ARTICLE XI

 

AMENDMENT, TERMINATION, MERGER

 

Sec. 11.1  Amendment.  Subject to the non-diversion provisions of Sec. 7.5, the
Company, by action of the Board, or by action of a person so authorized by
resolution of the Board, may amend the Plan at any time and from time to time. 
No amendment of the Plan shall have the effect of changing the rights, duties,
and liabilities of any Trustee without its written consent.  The Company agrees
that promptly upon adoption of any amendment to the Plan it will furnish a copy
of the amendment together with a certificate evidencing its due adoption, to
each Trustee then acting.  Except as otherwise expressly provided by the
amendment, an amendment to the Plan shall not be applicable in determining a
Participant’s benefit unless that Participant was actively working for the
Company or an Affiliate on or after the effective date of the amendment.

 

Sec. 11.2  Discontinuance of Joint Participation in Plan by a Participating
Employer.  A Participating Employer, by action of its board of directors and on
appropriate written notice to the Company and each Trustee then acting, may
discontinue its joint participation in the Plan with the other Participating
Employers.  The Company shall cause a determination to be made of the equitable
part of the Trust assets held on account of Participants of the withdrawing
employer and their beneficiaries.  The Company shall direct the Trustee to
transfer assets representing such equitable part to a separate fund for the plan
of the withdrawing employer; provided, however, that such transfer shall be made
only if and when the Company in its sole judgment is satisfied that the transfer
can be made in full compliance with the applicable requirements of ERISA.  Such
withdrawing employer may thereafter exercise, in respect of such separate fund,
all the rights and powers reserved to the Company with respect to the Trust. 
The plan of the withdrawing employer shall, until amended by the withdrawing
employer, continue with the same terms as the Plan herein, except that with
respect to the separate plan of the withdrawing employer the words
“Participating Employer”, “Participating Employers”, and “Company” shall
thereafter be considered to refer only to the withdrawing employer.  Any
discontinuance of participation by a Participating Employer shall be effected in
such manner that each Participant or beneficiary would (if the Plan and the plan
of the withdrawing employer then terminated) receive a benefit immediately after
such discontinuance of participation which is equal to or greater than the
benefit he would have been entitled to receive immediately before such
discontinuance of participation if the Plan had then terminated.  No transfer of
assets pursuant to this section shall be effected until such statements with
respect thereto, if any, required by ERISA to be filed in advance thereof have
been filed.

 

Sec. 11.3  Reorganizations of Participating Employers.  In the event two or more
Participating Employers shall be consolidated or merged or in the event one or
more Participating Employers shall acquire the assets of another Participating
Employer, the Plan shall be deemed to have continued, without termination and
without a complete discontinuance of contributions, as to all the Participating
Employers involved in such reorganization and their employees.  In such event,
in administering the Plan the corporation resulting from the consolidation, the
surviving corporation in the merger, or the employer acquiring the assets shall
be considered as a continuation of all of the Participating Employers involved
in the reorganization.

 

Sec. 11.4  Termination.  The Plan may be terminated by action of all of the
Participating Employers jointly participating therein at the time by action of
their respective boards of directors.  An employer which has discontinued its
joint participation in the Plan with the other Participating Employers shall
also have the right to terminate its separate plan which resulted from such
discontinuance at any time by action of its board of directors.  Any such
voluntary termination of the Plan, or separate plan, shall be made in compliance
with all applicable provisions of ERISA.  The Plan or separate plan, may

 

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also be terminated by action of the Pension Benefit Guaranty Corporation
pursuant to the provisions of said Act.  Upon termination of the Plan, or
separate plan, the following shall be applicable:

 

(a)                                  No further benefits shall accrue under the
terminated Plan, and the rights of each employee thereunder to benefits accrued
to the date of such termination, to the extent then funded, shall be
nonforfeitable, provided, however, that the sole recourse for satisfaction of
such rights shall be to the Trust and where applicable, to the Pension Benefit
Guaranty Corporation.

 

(b)                                 The Trustee shall receive for the Trust of
the applicable terminated plan any amount recovered under section 4045 of ERISA.

 

(c)                                  The Trustee shall deduct from the Trust of
the terminated Plan its compensation, expenses properly chargeable thereto, and
any and all taxes that may be imposed upon the Trust by virtue of the
termination of the Plan or otherwise; provided, however, that the Trustee may
accept such reasonable indemnity therefor from the Participating Employers as
the Trustee shall specify.

 

(d)                                 If adequate the Trust of the terminated Plan
shall then be applied to provide, in accordance with the provisions of such
terminated plan as in effect at the time of such termination, all benefits
accrued to the date of such termination whether vested or not.

 

(e)                                  If the Trust of the terminated plan is not
adequate to provide all benefits accrued to the date of termination, the assets
of the Trust of the terminated plan shall be allocated to provide benefits in
the following order of priority subject to any applicable regulations
promulgated by the Pension Benefit Guaranty Corporation or the Secretary of the
Treasury or his delegate:

 

(1)                                  In the case of benefits payable as an
annuity:

 

(A)                              In the case of the benefit of a Participant or
beneficiary which was in pay status as of the beginning of the 3-year period
ending on the termination date of the Plan, to provide each such benefit, based
on the provisions of the Plan (as in effect during the 5-year period ending on
such date) under which such benefit would be the least.  The lowest benefit in
pay status during the 3-year period shall be considered the benefit in pay
status for such period.

 

(B)                                In the case of the benefit of a Participant
or beneficiary (other than a benefit described in subparagraph (A) above) which
would have been in pay status as of the beginning of the 3-year period ending on
the termination date of the Plan if the Participant had retired prior to the
beginning of the 3-year period and if his benefits had commenced as a life only
annuity as of the beginning of such period, to provide each such benefit based
on the provisions of the Plan (as in effect during the 5-year period ending on
such date) under which such benefit would be the least.

 

(2)                                  To provide all other benefits, if any, of
individuals under the Plan guaranteed under ERISA (determined without regard to
section 4022(b)(5) of said Act), and the additional benefits, if any, which
would be so provided if section 4022(b)(6)

 

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                                                of said Act did not apply.  In
determining such benefits, section 4021 of said Act shall be applied without
regard to subsection (c) thereof.

 

(3)                                  To provide all other nonforfeitable
benefits under the Plan. If the assets available are not sufficient to satisfy
in full such benefits:

 

(A)                              The assets shall be allocated to provide
individuals with such benefits accrued under the Plan as in effect at the
beginning of the 5-year period ending on the date of Plan termination.

 

(B)                                If the assets available for allocation under
subparagraph (A) above are sufficient to satisfy in full the benefits described
therein (without regard to this subparagraph (B)), then for purposes of
subparagraph (A), benefits of individuals thereunder shall be determined on the
basis of the Plan as amended by the most recent Plan amendment effective during
such 5-year period under which the assets available for allocation are
sufficient to satisfy in full the benefits of such individuals, and any assets
remaining to be allocated shall be allocated on the basis of the Plan as amended
by the next succeeding Plan amendment effective during such period.

 

(4)                                  To provide all other accrued benefits under
the Plan.

 

The amount allocated under any of paragraphs (1) through (4) above with respect
to any benefit shall be properly adjusted for any allocation of assets with
respect to that benefit under any of the preceding of said paragraphs.  Except
as otherwise provided in paragraph (3) above, if the assets available for
allocation under any of said paragraphs are insufficient to satisfy in full the
benefits to be provided individuals under such paragraph, the assets shall be
allocated pro rata among such individuals on the basis of the present value, as
of the termination date of the Plan, of their respective benefits described in
such paragraph. If the Secretary of the Treasury or his delegate determines that
the allocation made pursuant to this subsection results in discrimination
prohibited by Code section 401(a)(4) then, if required to prevent the
disqualification of the Plan (or any trust under the Plan) the assets shall be
reallocated to the extent necessary to avoid such discrimination but only to the
extent permitted by ERISA.

 

(f)                                    If all liabilities of the Plan to
Participants and their beneficiaries have been satisfied, any residual assets of
the Plan shall be returned to the Participating Employer if such distribution
does not contravene any provision of law.

 

(g)                                 If the Actuarial Equivalent present value of
an individual’s entire benefit is $5,000 or less, the benefit shall be paid in a
single sum promptly after termination of the Plan, provided, however, that
payment may be deferred as provided in Sec. 11.7.  In all other cases, benefits
following termination of the Plan shall be provided through purchase of an
annuity contract from an insurance company offering the same settlement options
and payment terms as are provided under the Plan.

 

(h)                                 In the event of the termination of the Plan,
all Plan provisions and any agreements with Trustees relating to the Plan shall
continue to have effect for the purpose of completing distributions in
accordance with this section.

 

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Sec. 11.5  Partial Termination.  If there is a partial termination of the Plan,
either by operation of law, by amendment of the Plan, or for any other reason,
which partial termination shall be confirmed by the Company, the Company shall:

 

(a)                                  Determine the equitable part of the Trust
assets held on account of Participants with respect to whom the Plan is
terminated and their beneficiaries as though the partial termination was a
discontinuance of joint participation in the Plan by a Participating Employer
under Sec. 11.2.

 

(b)                                 Cause that portion of the Trust allocated to
those Participants (and their beneficiaries) with respect to whom the partial
termination takes place to be treated as the Trust of a terminated plan with
respect to such persons.

 

(c)                                  Cause that portion of the Trust that is not
allocated to those Participants (and their beneficiaries) with respect to whom
the partial termination takes place to continue to be held and administered
under the Plan for the benefit of the other Participants (and their
beneficiaries).

 

The provisions of Sec. 11.4 shall be applicable to the partially terminated
plan, to the Participants (and their beneficiaries) with respect to whom the
partial termination takes place, and to the funds allocated to such persons, as
though it constituted a separate plan; provided, however, that any residual
assets shall be credited to the portion of the Trust referred to in subsection
(c) above rather than being returned to the Participating Employers.

 

Sec. 11.6  Merger, Consolidation, or Transfer of Plan Assets.  In the case of
any merger or consolidation of the Plan with any other plan, or in the case of
the transfer of assets or liabilities of the Plan to any other plan, provision
shall be made so that each Participant and beneficiary would (if such other plan
then terminated) receive a benefit immediately after the merger, consolidation,
or transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if the Plan had then terminated).  No such merger, consolidation, or transfer
shall be effected until such statements with respect thereto, if any, required
by ERISA to be filed in advance thereof have been filed.

 

Sec. 11.7  Deferral of Distributions. Notwithstanding any provisions of the Plan
to the contrary, in the case of a complete or partial termination of the Plan,
the Company or the Trustee may defer any distribution of benefit payments to
Participants and beneficiaries with respect to which such termination applies
until after the following have occurred:

 

(a)                                  Receipt of a final determination from the
Treasury Department or any court of competent jurisdiction regarding the effect
of such termination on the qualified status of the Plan under Code section
401(a).

 

(b)                                 Appropriate adjustment of the Trust to
reflect taxes, costs, and expenses, if any, incident to such termination.

 

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ARTICLE XII

 

TOP-HEAVY PLAN PROVISIONS

 

Sec. 12.1  Key Employee Defined. “Key Employee” means any employee or former
employee of the employer who at any time during the determination period was an
officer of the employer or is deemed to have had an ownership interest in the
employer and who is within the definition of key employee in Code section 416(i)
and the regulations thereunder in effect for the particular Plan Year.

 

Sec. 12.2  Determination of Top-Heavy Status.  The top-heavy status of the Plan
shall be determined according to the following standards and definitions:

 

(a)                                  The Plan is a Top-Heavy Plan for a Plan
Year commencing after 1983 if the top-heavy ratio for this Plan exceeds 60
percent or if this Plan is part of a required aggregation group of plans and the
top-heavy ratio for the group of plans exceeds 60 percent.  However, the Plan is
not a Top-Heavy Plan with respect to a Plan Year if it is part of a permissive
aggregation group of plans for which the top-heavy ratio does not exceed 60
percent.

 

(b)                                 The “top-heavy ratio” shall be determined as
follows:

 

(1)                                  If the ratio is being determined only for
this Plan or if the aggregation group only includes defined benefit pension
plans, the top-heavy ratio is a fraction, the numerator of which is the sum of
the present values of the accrued benefits of all Key Employees under the Plan
or plans as of the determination date (including any part of any accrued benefit
distributed in the five-year period ending on the determination date), and the
denominator of which is the sum of the present value of all accrued benefits
(including any part of any accrued benefit distributed in the five-year period
ending on the determination date) of all employees under the Plan or plans as of
the determination date.  (The “plans” referred to in the preceding sentence are
the plans in the required or permissive aggregation group.)

 

(2)                                  If the determination is being made for a
required or permissive aggregation group which includes one or more defined
contribution plans, the top-heavy ratio is a fraction, the numerator of which is
the sum of account balances of all Key Employees under the defined contribution
plans and the present value of accrued benefits under the defined benefit plans
for all Key Employees as of the determination date (including any part of any
account balance or accrued benefit distributed in the five-year period ending on
the determination date), and the denominator of which is the sum of the account
balances under the defined contribution plans for all employees and the present
value of accrued benefits under the defined benefit plans for all employees as
of the determination date (including any part of any account balance or accrued
benefit distributed in the five-year period ending on the determination date). 
(The “plans” referred to in the preceding sentence are the plans in the required
or permissive aggregation group.)  Both the numerator and denominator of the
top-heavy ratio shall be adjusted to reflect any contribution due but unpaid as
of the determination date.

 

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(3)                                  For purposes of paragraphs (1) and (2), the
value of account balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls within the 12-month
period ending on the determination date. The account balances and accrued
benefits of an employee who is not a Key Employee but who was a Key Employee in
a prior year will be disregarded.  The calculation of the top-heavy ratio and
the extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with Code section 416 and the regulations
thereunder.  When aggregating plans, the value of account balances and accrued
benefits will be calculated with reference to the determination dates that fall
within the same calendar year.

 

(4)                                  Commencing January 1, 2002, any
distribution due to separation from service, death or disability which was made
prior to the one-year period ending on the determination date shall be
disregarded for purposes of applying this subsection (b).  The provisions of
this subsection (b) also apply to distributions under a terminated plan which,
had it not been terminated, would have been aggregated with this Plan under Code
section 416(g)(2)(A)(i).

 

(c)                                  “Required aggregation group” means (i) each
qualified plan of the employer in which at least one Key Employee participates,
and (ii) any other qualified plan of the Employer that enables a plan described
in (i) to meet the requirements of Code sections 401(a)(4) and 410.

 

(d)                                 “Permissive aggregation group” means the
required aggregation group of plans plus any other plan or plans of the employer
which, when consolidated as a group with the required aggregation group, would
continue to satisfy the requirements of Code sections 401(a)(4) and 410.

 

(e)                                  “Determination date” for any Plan Year
means the last day of the preceding Plan Year.

 

(f)                                    The “determination period” for a Plan
Year is the Plan Year in which the applicable determination date occurs and the
four preceding Plan Years.

 

(g)                                 The “valuation date” is the last day of each
Plan Year and is the date as of which account balances or accrued benefits are
valued for purposes of calculating the top-heavy ratio.

 

(g)                                 The “present value” of benefits under this
Plan and all other defined benefit plans of the employer for purposes of
computing the top-heavy ratio shall be based on 5% interest and mortality rates
based on the U.P. 1984 Mortality Table.

 

(i)                                     If an individual has not performed
services for the employer during the five–year period ending on the
determination date with respect to a Plan Year commencing prior to 2002, or
during the one-year period ending on the determination date with respect to a
Plan Year commencing in 2002 or later, any account balance or accrued benefit
for such individual shall not be taken into account for such Plan Year.

 

(j)                                     For purposes of determining if the Plan,
or any other plan included in the required aggregation group of which this Plan
is a part, is a Top-Heavy Plan, the accrued benefit of any employee (other than
a Key Employee) shall be determined as follows:

 

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(1)                                  Under the method which is used for accrual
purposes under all plans maintained by the employer.

 

(2)                                  If there is no method described in
paragraph (1), as if such benefit accrued not more rapidly than the lowest
accrual rate permitted under Code section 411(b)(1)(C).

 

Sec. 12.3  Minimum Accrued Benefit.  If the Plan is a Top-Heavy Plan,
notwithstanding any other provisions of this Plan, each Participant who is not a
Key Employee shall have a minimum accrued benefit (to be provided by employer
contributions and expressed as a single life annuity, with no ancillary
benefits, commencing at Normal Retirement Age) equal to the applicable
percentage of the Participant’s average monthly compensation for years in the
testing period.

 

(a)                                  For purposes of this section:

 

(1)                                  The “applicable percentage” is the lesser
of 2 percent multiplied by the Participant’s number of years of service with the
employer, or 20 percent.  For purposes of this paragraph (1), a Participant has
a year of service for each Plan Year in which he completes 1000 Hours of
Service; provided, however, that the following years shall not be taken into
account:

 

(A)                              Plan Years commencing before January 1, 1984.

 

(B)                                Plan Years in which the Plan is not a
Top-Heavy Plan.

 

(C)                                Plan Years in which the Participant is a Key
Employee.

 

(D)                               Plan Years during which the employer did not
maintain the Plan or a predecessor plan.

 

(E)                                 Plan Years that may be disregarded under the
break in service provisions of Code section 411(a)(6).

 

(2)                                  “Compensation” is as defined in Sec.
6.11(i), subject to the limits in Sec. 2.7(f) and (g).

 

(3)                                  A Participant’s “testing period” comprises
the five consecutive Plan Years during which the Participant had the greatest
aggregate compensation from the employer, subject to the following:

 

(A)                              The Plan Years taken into account for purposes
of this paragraph shall be adjusted for years not included in years of service
for purposes of paragraph (1) above, as provided in Code section
416(c)(1)(D)(ii).

 

(B)                                The following Plan Years shall be disregarded
for purposes of this paragraph if by disregarding such Plan Years the
Participant’s average monthly compensation for years in the testing period will
be reduced:

 

I.                                         Any Plan Year beginning before
January 1, 1984.

 

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II.                                     Any Plan Year commencing after the last
Plan Year in which the Plan was a Top-Heavy Plan.

 

(b)                                 If a Participant becomes entitled to a
benefit under the Plan, and (i) if the form of the benefit is other than a
single life annuity and/or (ii) if the benefit commences at a date other than at
Normal Retirement Age, the benefit payable to the Participant must be at least
the Actuarial Equivalent of the minimum single life annuity benefit commencing
at Normal Retirement Age.

 

(c)                                  A Participant’s minimum accrued benefit
required under this section shall not be subject to suspension of payment under
Sec. 5.12(a)(2) or (b).

 

(d)                                 This section shall not apply to any
Participant who is covered under any other defined benefit plan of the employer
to the extent the minimum benefit requirement otherwise applicable under this
Plan will be satisfied by such other plan.

 

Sec. 12.4  Definition of Employer.  For purposes of this Article, the term
“employer” means the Company and any trade or business entity under Common
Control with the Company.

 

Sec. 12.5  Exception for Collective Bargaining Unit.  Section 12.3 shall not
apply with respect to any employee included in a unit of employees covered by an
agreement which the Secretary of Labor finds to be a collective bargaining
agreement between employee representatives and one or more employers if there is
evidence that retirement benefits were the subject of good faith bargaining
between such employee representative and such employer or employers.

 

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APPENDIX

 

1999 VOLUNTARY EARLY RETIREMENT PROGRAM

 

 

Section 1.  Eligibility.  This Appendix is effective August 1, 1999 and applies
to each Participant who satisfies all of the following requirements:

 

(a)                                  The Participant must have been employed by
the Company on June 1, 1999.

 

(b)                                 The Participant either must have attained
age 60 or will have attained age 60 by December 31, 1999.

 

(c)                                  The Participant must have completed at
least 20 years of actual service with the Company (including any continuous
service preceding the acquisition date with any predecessor entity that has been
acquired by the Company), or would be credited with such years of service by
December 31, 1999 if the Participant’s Termination of Employment did not occur
prior to that date.

 

(d)                                 The Participant must file with the Company
on or before September 17, 1999, a written election to retire under this
Appendix, and such election must not have been revoked. The election must
include a release of all claims against the Company or the Plan in such form as
the Company specifies.  The Participant must also file with the Company such
other forms as are specified by the Company for this program.

 

(e)                                  The Participant’s Termination of Employment
must occur on a date specified by the Company, which shall be on or before
March 31, 2000, and the Participant must file with the Company a written
election to commence pension payments as to the first day of the month following
the Participant’s Termination of Employment.

 

(f)                                    This Appendix also applies to any
individual who meets the requirements of subsections (a) through (e) of this
section but who was not previously a Participant in this Plan solely because the
individual was employed by the Company on December 31, 1981 and is excluded from
participation in this Plan because the individual made an election to
participate in Company contributions to Retirement Accounts as described in Sec.
4.1(d) of the Tennant Company Defined Benefit Retirement Plan.  An individual
described in the previous sentence shall become a Participant as of the date the
individual’s election of this program pursuant to subsection (d) becomes
irrevocable, but such participation shall be solely for purposes of receiving
the benefits described in Sections 2 and 3 of this Appendix.

 

Section 2.  Enhanced Pension Benefit.  The benefit to which a Participant who
satisfies the requirements of Section 1 of this Appendix is entitled under the
Plan shall be determined as follows:

 

(a)                                  Except as provided in subsection (b), the
benefit to which the Participant is entitled under the Plan shall be determined
pursuant to the applicable provisions of the Plan, with the following
modifications:

 

(1)                                  The Participant’s age shall be deemed to be
equal to his or her actual age on the

 

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                                                first day of the month following
the date the Participant’s Termination of Employment occurred, plus three years;
provided, however, that such deemed age shall not exceed age 65 (or the
Participant’s actual age, if greater than 65).

 

(2)                                  The Participant’s Adjusted Years of
Credited Service under Sec. 3.3 shall be determined by adding three years to the
Participant’s Years of Credited Service on the date his or her Termination of
Employment occurred.

 

The Participant’s pension, adjusted pursuant to this subsection (a), shall
commence pursuant to the terms of the Plan as of the first day of the month
following the date the Participant’s Termination of Employment occurred.

 

(b)           The benefit payable under this Section 2 to an individual who
became a Participant pursuant to Section 1(f) of this Appendix shall be
determined as follows:

 

(1)                                  A monthly amount shall be calculated equal
to the Accrued Monthly Pension the individual would have earned under this Plan
as of the date his or her Termination of Employment occurred if the individual
had been a Participant in this Plan since January 1, 1982.  If the Participant
is under age 65 on the first day of the month following his or her Termination
of Employment, the amount determined under the previous sentence shall be
reduced as provided in Sec. 5.4 to reflect the early commencement.

 

(2)                                  A monthly amount shall be calculated equal
to the Accrued Monthly Pension the individual would have earned under this Plan
as of the date his or her Termination of Employment occurred if the individual
had been a Participant in this Plan since January 1, 1982, but reflecting three
additional Years of Credited Service as provided in subsection (a)(2) of this
Section 2.  If the Participant’s deemed age determined pursuant to subsection
(a)(1) of this Section 2 as of the first day of the month following the
Participant’s Termination of Employment is less than 65, the amount determined
under the previous sentence shall be reduced as provided in Sec. 5.4 to reflect
an early commencement at such deemed age.

 

(3)                                  The benefit to which the individual is
entitled under this Section 2 shall be equal to the amount determined under
paragraph (2) minus the amount determined under paragraph (1).  Such benefit
shall be payable as a monthly pension, with the first payment to be made as of
the first day of the month following the Participant’s Termination of Employment
and the last payment to be made as of the first day of the month in which the
Participant’s death occurs.

 

(4)                                  If the benefit payable under this
subsection (b) is to be paid in a form other than the life-only annuity
described in paragraph (3), the benefit shall be reduced on an Actuarial
Equivalent basis pursuant to the terms of the Plan to reflect the form in which
it is to be paid.

 

(c)           All rights to a pension under this Section 2 shall cease in the
event the Participant is reemployed by a Participating Employer (subject to any
provision of the Plan regarding suspension of benefits that applies in the event
of reemployment), and the Participant shall thereafter only be entitled to such
benefits as may be provided under Articles V and

 

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VI. However, the monthly benefit payable as a life-only annuity following a
subsequent Termination of Employment shall not be less than the monthly benefit
that was payable in the same form under this Section 2 prior to the
reemployment.

 

(d)                                 The benefits payable under this Section 2
and Section 3 may not exceed the maximum amount allowed under Sec. 6.11.  For
purposes of Sec. 6.11(e), an individual who is a Participant as a result of
Section 1(f) has one year of participation in this Plan.

 

(e)                                  Except as provided above to the contrary,
the pension payable under this Section 2 shall be subject to all the provisions
of the Plan, and in this regard special reference is to be made to the
provisions of Articles V and VI.

 

Section 3.  Social Security Supplement.  Each Participant who satisfies the
requirements of Section 1 of this Appendix shall receive a monthly Social
Security Supplement payment commencing as of the first day of the month
following his or her Termination of Employment, provided the Participant is
under age 62 on that commencement date, subject to the following:

 

(a)                                  The amount of the Participant’s Social
Security Supplement each month shall be equal to the amount estimated by the
Actuary based on the Participant’s rate of Certified Earnings in effect on
July 1, 1999 to be the old-age insurance benefit to which the Participant will
be entitled commencing at age 62 under Title II of the Social Security Act as in
effect on July 1, 1999.  The estimate shall be made by assuming (i) that the
Participant will have no earnings covered by the Social Security Act after 1999,
(ii) that past increases in the Participant’s earnings covered by the Social
Security Act had been at the same rate as the rate of increase in the National
Average Wage, and (iii) that there will be no increases in the Social Security
Wage Base or cost of living adjustments under the Social Security Act after
1999.

 

(b)                                 The last monthly payment under this Section
3 shall be made as of the earliest of the following dates:

 

(1)                                  The first day of the month in which the
Participant attains age 62.

 

(2)                                  The first day of the month in which the
Participant is reemployed by a Participating Employer.

 

(c)                                  If the Participant dies before receiving
all the payments to which he or she is entitled under this Section 3, the
remaining payments shall be made to the Participant’s surviving spouse, or if
there is no surviving spouse, to the Participant’s estate.  If the Participant’s
spouse survives the Participant but dies prior to receiving all of the payments
due under this section, the remaining payments shall be made to the spouse’s
estate.  The amount and time of each monthly payment under this subsection shall
be determined as though the Participant had lived.

 

Section 4.  Certain Death Situations.    If the Participant’s death occurs after
the Participant’s election to retire under Section 1(d) of this Appendix has
become irrevocable but before the date that benefit payments are to commence
under this Appendix, the Participant’s Termination of Employment for purposes of
Section 1(e) shall be deemed to have occurred on the date of the death, any
Qualified Preretirement Survivor Annuity payable under Sec. 5.10 with respect to
the Participant shall take into account the modifications provided in Section 2
of this Appendix, and payments of any Social Security

 

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Supplement to which the Participant was entitled under Section 3 of this
Appendix shall commence as of the first day of the month following the
Participant’s death to the person entitled to such payments under Section 3(c).

 

Section 5.  Applicable Plan Provisions.  Benefits under this Appendix shall be
determined pursuant to the provisions of the Plan that were in effect on the
date this Appendix was adopted, disregarding any amendments of the Plan that
were adopted after the date this Appendix was adopted unless such amendment
specifically refers to this Appendix or is required by applicable law or
regulation to apply to the benefits payable under this Appendix.  All cross
references in this Appendix are to the provisions of the Plan in effect on the
date this Appendix was adopted.

 

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