Exhibit 10.2

SERVICES AGREEMENT

 

THIS SERVICES AGREEMENT (“this Agreement”) is entered into effective November 1,
2006 (by and between Tennant Company, with its principal place of business at
701 North Lilac Drive, Minneapolis, Minnesota, USA (“the Company”) and Karel
Huijser, a resident of Antwerp, Belgium (“Executive”).

 

A.   The Company manufactures and distributes industrial and commercial floor
cleaning equipment and supplies; and

 

B.   Executive is an experienced executive, with general management experience;
and

 

C.   The Company desires to engage Executive and Executive wishes to provide his
services to the Company, subject to the terms and conditions set forth in this
Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises and the respective
agreements of the Company and Executive set forth below, the Company and
Executive, intending to be legally bound, agree as follows:

 

1.   Services.   Subject to all of the terms and conditions hereof, the Company
shall retain Executive, and Executive shall serve the Company, until Executive’s
services hereunder terminate in accordance with Section 8 hereof.

 

The Executive will keep office in Antwerp, Belgium and agrees that extensive
travel will be required in relation to his position and duties as mention under
Section 2.

 

2.   Position and Duties.   Subject to all terms and conditions of this
Agreement, the Executive will be appointed and serve as Managing Director of
Tennant Europe N.V. and Vice President International for the Company. Executive
shall perform the customary duties of a Managing Director of European
operations, of a Vice President International and such other duties as may be
specified from time to time by the Company’s Chief Executive Officer or the
Board of Directors of the Company (“the Board”). Executive shall report to the
Company’s Chief Executive Officer. While Executive is employed by the Company,
Executive shall devote full time to Executive’s duties hereunder and shall not
accept other employment or engage in other material business activity, except as
approved in writing by the Company.

 

3.   Annual Compensation.

 

(a)   Company Affiliates.   Executive’s services hereunder shall be provided to
the Company and or to one or more subsidiaries or affiliates of the Company, as
determined by the Company from time to time consistent with Section 2 above.
Executive’s base salary hereunder may be paid in whole or in part from one or
more subsidiaries or affiliates of the Company and will be paid in currency of
such countries agreed upon by the Company and Executive in cooperation with the
Company’s accountants and in accordance with applicable laws.

 

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(b)   Base Salary.   While Executive is engaged by the Company hereunder, the
Company shall pay to Executive a Base Salary, less applicable tax and other
deductions and in accordance with the Company’s normal payroll policies and
procedures, at the annual rate of 280.000 EURO. Consistent with the Company’s
practice, during March of each year the Company will review Executive’s Base
Salary.

 

(c)   Short-Term Incentive Bonus.   While Executive is engaged by the Company
hereunder, Executive shall be eligible to participate in any short-term
incentive plan or program as the Board may establish from time to time for
senior executives of the Company (throughout this Agreement references to the
“Board” shall include any authorized committee of the Board, including but not
limited to the Executive Compensation Committee of the Board). Subject to the
terms of such plan or program, Executive shall be eligible for a short-term
incentive bonus potential equal to 45% of his base salary, based on achievement
of Company goals determined at the sole discretion of the Company. For calendar
year 2006, the Executive shall receive a pro rata payment under the plan. Any
such payment shall be in the form of cash, stock and/or other equity-based
compensation in accordance with the terms of the short-term incentive plan or
program.

 

(d)   Long-Term Incentive Bonus.   While Executive is engaged by the Company
hereunder, Executive shall be eligible to participate in any long-term incentive
plan or program as the Board may establish from time to time for senior
executives of the Company. Subject to the terms of such plan or program,
Executive shall be eligible for a long-term incentive bonus potential equal to
60% of his base salary, based on achievement of Company goals determined at the
sole discretion of the Company. Any bonus payment shall be in the form of cash,
stock and/or other equity-based compensation in accordance with the terms of the
long-term incentive plan or program.

 

(e)   Stock Options.   While Executive is employed by the Company hereunder, and
subject to the terms and conditions of definitive stock option agreements and
applicable stock option plans, the Company shall annually review Executive’s
stock compensation and may grant to Executive options to purchase shares of the
Company’s common stock in its discretion. Upon commencement of Executive’s
services, the Executive shall receive a grant of 10.000 stock options, with a
strike price set at the closing sale price of the Company’s common stock on the
business day immediately preceding Executive’s first day of services with the
Company. Thereafter, grants of stock options shall be at the discretion of the
Board. In lieu of such options to purchase shares of the Company’s common stock,
the Company may grant to Executive restricted stock or other stock-based
compensation of substantially equivalent value, in a form and subject to terms
and conditions to be mutually agreed upon between the Company and Executive.

 

(f)   Restricted Stock.   While Executive is engaged by the Company hereunder,
and subject to the terms and conditions of definitive stock agreements to be
entered into between the Company and Executive, the Company shall annually
review Executive’s stock compensation and may grant Executive restricted shares
of the Company’s common stock in its discretion.

 

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4.   Signing Bonus.   Upon commencement of Executive’s services hereunder, and
subject to the terms and conditions of a definitive shareholder agreement to be
entered into between the Company and Executive, the Company shall grant
Executive 10.000 shares of restricted stock, which shares will vest 50% one (1)
year after the grant date and the remaining 50% two (2) years after the grant
date.

 

5.   Perquisite package.   In January 2007 provided Executive continues in the
service of the Company hereunder, Executive shall receive a perquisite package
of restricted stock units with a value substantially equivalent to $12.000 USD.

 

6.   Tuition Fee.   While Executive is engaged by the Company hereunder, the
Company will pay the school tuition for each of Executive’s three children until
each child completes high school. The Company and Executive expect the value of
such tuition upon commencement of this Agreement to be 60.000 EURO net (20.000
EURO per child).

 

7.   Employee Benefits.

 

(a)   Vehicle.   While Executive is engaged by the Company hereunder, the
Company shall provide a vehicle, as well as a European gasoline tank card, to
Executive for his business and personal use, of a type and model mutually agreed
upon by the Company and Executive according to Company practice. Legal tax
deductions for the private use of the car will be settled on a monthly basis via
the salary slip. Executive shall maintain accurate records of personal and
business use in such form as requested by the Company from time to time.
Executive shall promptly return the vehicle to the Company upon its request if
Executive is unable to fully perform his duties under this Agreement for more
than 90 consecutive calendar days due to disability.

 

(b)   Telephone.   While Executive is engaged by the Company hereunder, the
Company shall provide a mobile telephone to Executive for his business and
personal use, the personal contribution amounting to 10 EURO will be settled and
deducted via the monthly salary slip.

 

(c)   Vacation.   While Executive is engaged by the Company hereunder, he shall
be entitled to 30 days paid vacation. Executive shall schedule his vacation time
off so as not to unduly interfere with the operations of the Company.

 

(d)   Health Insurance.   While Executive is engaged by the Company hereunder,
the Executive will benefit from a medical insurance. The premiums for the
medical insurance of the Executive are paid by the Company; premiums for family
members are contributory.

 

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(e)   Disability.   While Executive is engaged by the Company hereunder, the
Company shall provide Executive with disability insurance as provided to Tennant
Europe N.V. management team.

 

(f)   Pension.   While Executive is engaged by the Company hereunder, the
Company shall contribute to a group insurance for pension, disability and death
in service as provided to Tennant Europe N.V. management team.

 

(g)   Relocation.   Executive shall be eligible for relocation assistance from
Shanghai, China to Antwerp, Belgium in accordance with the Company’s relocation
policies and practices for senior executives of the Company in effect at the
time, if applicable, that Executive relocates.

 

(h)   Tax assistance.   For any tax year while Executive is engaged by the
Company hereunder, the Company will provide to Executive tax assistance for
preparation of any required tax returns, on a worldwide basis, such services to
be provided by tax consultants selected and paid for by the Company.

 

8.   Termination of Services.   Executive’s engagement by the Company hereunder
shall terminate and be effective:

 

(a)   on the date set forth in a written notice from the Company to Executive of
the termination of Executive’s engagement without Cause, which date shall be at
least 120 calendar days following the date of such notice (provided, however,
that the Company may terminate Executive’s services on less than 120 days
notice, in which case the Company will continue Executive’s Base Salary and
benefits under Section 7(a), Section 7(d), Section 7(e), and Section 7(f) for
any remaining portion of the 120-day notice period);

 

(b)   on the date set forth in a written notice from Executive to the Company of
the termination of Executive’s engagement without Good Reason, which date shall
be at least 60 calendar days following the date of such notice (provided,
however, that the Company may terminate Executive’s services during such 60-day
notice period, in which case the Company will continue Executive’s Base Salary
and benefits under Section 7(a), Section 7(d), Section 7(e), and Section 7(f)
for any remaining portion of the 60-day notice period);

 

(c)   immediately upon written notice from the Company to Executive of
termination with Cause, or upon written notice from Executive to the Company of
termination with Good Reason; or

 

(d)   upon Executive’s death or Disability.

 

Any notice pursuant to Section 8(a), Section 8(b) or Section 8(c) shall, as
applicable, specify whether such termination by the Company is with or without
Cause, or termination by Executive is with or without Good Reason, and, if with
Cause or Good Reason, shall set forth in reasonable detail the basis therefor.
Upon termination of Executive’s services hereunder, Executive shall receive, in
addition to any amounts owed pursuant to Section 9 of this Agreement, any Base
Salary and STIP for the preceding year, to the extent such amounts are earned
but unpaid as of the Termination Date, in accordance with the Company’s payroll
practices and any applicable plans or programs.

 

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9.   Termination.

 

(a)   If Executive’s services hereunder terminate by reason of a termination by
the Company without Cause, or by reason of a termination by Executive with Good
Reason, then:

 

(i)   The Company shall pay to Executive, in accordance with the Company’s
regular payment schedule, Executive’s then-current Base Salary for a period of
12 consecutive months after the Termination Date.

 

(ii)   If the Termination Date is any day other than the last day of the STIP
plan year, the Company shall pay to Executive the full amount of the award that
would have been payable to Executive under the STIP for such plan year had all
performance targets been met and the Executive remained engaged by the Company
until the end of the plan year. The payment shall be made no later than the date
awards under the STIP for such plan year are or would have been paid to the
participants in the STIP.

 

(iii)   The Company shall continue Executive’s benefits in effect under Sections
7(d), 7(e), and 7(f) of this Agreement, as in place immediately prior to the
Termination Date, and shall continue to pay the Company’s portion of any costs
for such benefits for a period of up to 12 months following the Termination Date
to the extent permitted by the applicable benefit plans and programs. The
Company will stop providing such continued benefits and/or paying its portion of
the costs, as applicable, prior to the end of the 12-month period if Executive
(and Executive’s covered dependents) is no longer eligible for such benefits or
is provided essentially equivalent and no less favorable benefits by another
source, such as a subsequent employer or contractor.

 

(b)   If Executive’s services hereunder terminate due to Executive’s death or
Disability, then the Company shall pay to Executive (or Executive’s legal
representative), in accordance with the Company’s regular payment schedule,
Executive’s then-current Base Salary through and including the last day of the
calendar month in which the Termination Date occurs.

 

(c)   Upon termination of Executive’s engagement hereunder for any reason,
Executive shall immediately resign any and all positions he may then hold as an
officer or director of the Company or any subsidiary or affiliate of the
Company.

 

(d)   Payments under Section 9(a) shall be in lieu of any other severance or
notice to which the Executive may be entitled under the Company’s policies or
applicable law.

 

10.   Management Agreement. At the same time as they sign this Agreement, the
parties are entering into the Management Agreement attached hereto as Exhibit A.

 

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11.   Withholding of Taxes, Other Limitations.

 

(a)   Taxes.   All payments to Executive hereunder may be subject to withholding
of income and other taxes and all other amounts required by law. The Company may
deduct required taxes from any compensation hereunder. Executive shall be
responsible for payment of all other taxes on compensation hereunder.

 

(b)   Offsets.   Notwithstanding any other provision of this Agreement, any
payments required by Section 9(a) shall be reduced by any severance pay or other
compensation that Executive is eligible to receive from the Company, its
subsidiaries or its successors under any policy, plan or agreement of the
Company, other than this Agreement, or under applicable laws regarding
termination notice or severance, in the event of the Company’s termination of
Executive’s engagement with the Company, and by any indemnity paid to Executive
under Section 13(b) of this Agreement.

 

(c)   Effect of Management Agreement.   Notwithstanding any other provisions of
this Agreement, if a termination occurs during the Transition Period (as defined
in the Management Agreement), Executive shall not be entitled to receive any
compensation or benefits under Section 9(a) above, but shall be entitled to
compensation and benefits, if any, pursuant to the Management Agreement.

 

(d)   Code Section 409A.   This Agreement is intended to satisfy, or otherwise
be exempt from, the requirements of Code § 409A(a)(2), (3) and (4), including
current and future guidance and regulations interpreting such provisions. To the
extent that any provision of this Agreement fails to satisfy those requirements,
or fails to be exempt from Code § 409A, the provision shall automatically be
modified in a manner that, in the good-faith opinion of the Company, brings the
provisions into compliance with those requirements while preserving as closely
as possible the original intent of the provision and this Agreement.

 

(e)   No Mitigation.   Executive shall not be required to mitigate the amount of
any payment or other benefit provided for in Section 9 by seeking employment or
services with another employer or otherwise; nor shall the amount of any payment
or other benefit provided for in Section 9 be reduced by any compensation earned
by Executive as the result of Executive’s subsequent employment or services with
another employer, except as otherwise expressly provided in this Agreement.

 

12.   Return of Property.   Upon termination of Executive’s services with the
Company, Executive shall promptly deliver to the Company any and all Company
records and any and all Company property in Executive’s possession or under
Executive’s control, including without limitation manuals, books, blank forms,
documents, letters, memoranda, notes, notebooks, reports, printouts, computer
disks, computer tapes, electronic media, source codes, data, tables or
calculations and all copies thereof, documents that in whole or in part contain
any trade secrets or confidential, proprietary or other secret information of
the Company and all copies thereof, and any vehicles, keys, access cards, access
codes, passwords, credit cards, computers, telephones and other electronic
equipment belonging to the Company.

 

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13.   Certain Covenants of Executive.

 

(a)   Executive hereby agrees that while he is engaged by the Company, Executive
will not, directly or indirectly:

 

(i)   own, operate, invest in, lend money to, be employed by, act as officer or
director for, or acquire or hold any interest in (A) any business of any nature
which competes with the Company; or (B) any corporation, partnership,
association or other entity of any nature which owns, operates or has an
interest in any such competing business (except that nothing herein shall
prohibit Executive from owning not more than 1.0% of the outstanding shares of
any class of stock of a corporation if such class of stock is regularly traded
on a recognized national securities exchange);

 

(ii)   employ or attempt to employ any director, officer or employee of the
Company, or otherwise interfere with or disrupt any employment relationship
(contractual or other) of the Company;

 

(iii)   solicit, request, ad vi se or induce any present or potential customer,
advertiser, supplier or other business contact of the Company to cancel, curtail
or otherwise change its relationship with the Company; or

 

(iv)   publicly criticize or disparage in any manner or by any means the
Company, or any aspect of its management, policies, operations, products,
services, practices or personnel thereof.

 

(b)   In view of the international activities of the Company and Executive’s
services hereunder, after he has left the Company Executive shall be prohibited
from engaging in similar activities, either by running or owning a personal
enterprise or by being hired or providing services to a competing employer or
entity, and having thus the opportunity of causing a prejudice to the Company by
using for himself or for the profit of a competitor his knowledge of any
practice specific to the Company which he has acquired during his services
either directly or indirectly. This prohibition shall apply during a period of
twelve months following the termination of Executive’s services with the Company
and shall cover the following territory: United States, Europe, and any country
in Asia, Latin America, South America and the Middle East where Executive has
had material duties or responsibilities hereunder. In the event of enforcement
of this non-competition clause, Executive shall be granted a single compensatory
lump-sum indemnity, unless the Company has waived the applicability of the
non-competition clause within fifteen (15) days after the termination of
Executive’s services hereunder. In the event that Executive’s services are
terminated by the Company, the Company shall inform him, at the time notice of
termination is given, whether or not the Company intends to effectively apply
this Section 13(b). The amount of this indemnity shall be equal to one half of
the gross remuneration that would have been payable to Executive corresponding
to the period of effective enforcement of this non-competition clause had
Executive remained with the Company. In the case of enforcement of this clause,
and if Executive fails to comply with its provisions, he shall repay to the
Company the indemnity which he received and shall, in addition, pay an amount
equivalent to this indemnity, without prejudice to any additional damages which
may be claimed by the Company.

 

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(c)   Except as otherwise approved by the Company in writing, Executive shall
not at any time divulge, furnish or make accessible to anyone (other than the
Company and its directors and officers) any Confidential Information. Neither
during nor after Executive’s services for the Company, Executive shall not use
for Executive’s benefit, or to the detriment of the Company, any Confidential
Information, except as required in the conduct of the Company’s business or
authorized in writing by the Company. “Confidential Information” as used herein
shall mean all non-public information and data of the Company not generally
known or readily ascertainable by proper means including, without limitation,
customer or client lists, products, pricing structure, sales reports, marketing
programs, compensation system, staffing levels, presentations, business data,
technological information or data, statistical or other research, advertising or
marketing plans, policies, manuals, suppliers, procedures, farms, techniques,
finances, organization, personnel, plans, objectives or strategies and
information with respect to the name, address, finances, contact person, and
business needs of Company’s customers or prospective customers. “Confidential
Information” includes, but is not limited to, information which was developed by
Executive during the period of his services to the Company or to which he gained
access by virtue of his positions as Managing Director or Vice President
International.

 

14.   Definitions.   When used in this Agreement with initial capitalized
letters, the following terms have the meanings indicated below, unless context
requires otherwise:

 

(a)   Base Salary.   “Base Salary” means Executive’s annual base salary
established by the Board and/or Compensation Committee in accordance with
Section 3(a).

 

(b)   Cause.   “Cause” means:

 

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

 

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

 

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

 

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

 

(v)   any other reason constituting cause under applicable law.

 

 

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(c)   Code.   “Code” means the United States Internal Revenue Code of 1986, as
amended.

 

(d)   Company.   “Company” means Tennant Company and/or any parent, affiliate or
subsidiary of Tennant Company that is under common control with Tennant Company.

 

(e)   Disability.   “Disability” means the inability of Executive to perform his
duties hereunder by reason of illness or other physical or mental impairment or
condition, if such inability continues for an uninterrupted period of 365 days
or more. A period of inability shall be “uninterrupted” unless and until
Executive returns to full-time work for a continuous period of at least thirty
(30) days.

 

(f)   Good Reason.  

 

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

 

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

 

(g)   Management Agreement.   “Management Agreement” means the Management
Agreement between Executive and the Company of even date herewith and attached
to this Agreement as Exhibit A.

 

(h)   STIP.   “STIP” means the Company’s Short-Term Incentive Plan, as amended,
or any successor plan.

 

(i)   Termination Date.   “Termination Date” means the date on which Executive’s
services with the Company end, as defined in Section 8.

 

15.   No Violation of Other Agreements.   Executive hereby represents and agrees
that neither (a) Executive’s entering into this Agreement nor (b) Executive’s
carrying out the provisions of this Agreement, will violate any other agreement
(oral, written or other) to which Executive is a party or by which Executive is
bound.

 

16.   Successors and Assigns.   This Agreement is binding on Executive and on
the Company and its successors and assigns. The rights and obligations of the
Company under this Agreement may be assigned. No rights or obligations of
Executive hereunder may be assigned by Executive to any other person or entity.

 

17.   Severability.   Each section and provision of this Agreement shall be
considered severable and any invalidity of any provision shall not render
invalid or impair to any extent any other section or provision hereof.

 

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18.   Governing Law.   All matters relating to the interpretation, construction,
application, validity and enforcement of this Agreement shall be governed by the
laws of the state of Minnesota, USA.

 

19.   Entire Agreement.   This Agreement contains the entire agreement of the
parties relating to the subject matter of this Agreement and supersedes all
prior agreements and understandings with respect to such subject matter, and the
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement that are not set forth herein.

 

20.   Amendments.   No amendment or modification of this Agreement shall be
deemed effective unless made in writing and signed by the parties hereto.

 

21.   No Waiver.   No term or condition of this Agreement shall be deemed to
have been waived, except by a statement in writing signed by the party against
whom enforcement of the waiver is sought. Any written waiver shall not be deemed
a continuing waiver unless specifically stated, shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future or as to any act other than that specifically
waived.

 

22.   Dispute Resolution.   The parties shall endeavor to resolve any dispute
arising out of or relating to this Agreement, Executive’s engagement with the
Company or the termination of such engagement (except for any dispute arising
under the Management Agreement) (a “Dispute”) by mediation and, if such
mediation is not successful, by final and binding arbitration. Disputes and
claims encompassed by this Agreement include all applicable international,
foreign, federal, state and local claims, whether based on common law or
statutes, directives, rules or regulations. The parties shall first attempt in
good faith to resolve any Dispute by confidential mediation before a qualified
mediator mutually agreed upon by the parties. If the Dispute is not resolved by
mediation within 45 days after initial notice of the Dispute, then the Dispute
shall be finally resolved by arbitration before a single arbitrator in
accordance with the then most recent Employment Dispute Resolution Rules of the
American Arbitration Association. Any mediation or arbitration hereunder shall
be conducted in Minneapolis, Minnesota. The decision of the arbitrator shall be
final and binding, and any court of competent jurisdiction may enter judgment
upon the award. All fees and expenses of the arbitrator shall be paid by the
Company. The arbitrator shall have the jurisdiction and authority to interpret
and apply the provisions of this Agreement and relevant federal, state and local
laws, rules and regulations insofar as necessary to the determination of the
Dispute and to remedy any breaches of the Agreement or violations of applicable
laws, but shall not have jurisdiction or authority to alter in any way the
provisions of this Agreement. The parties hereby agree that this arbitration
provision shall be in lieu of any requirement that either party exhaust such
party’s administrative remedies under federal, state or local law. Executive and
the Company acknowledge and agree that this arbitration provision is beneficial
to both parties because it provides a quick, less expensive and confidential
manner of resolving finally any dispute or claim. All mediation and arbitration
proceedings hereunder shall be confidential and the parties, mediator and
arbitrator shall keep confidential the existence and nature of any Dispute and
all related proceedings. Notwithstanding anything to the contrary provided in
this Section 22 and without prejudice to the above procedures, either party may
apply to any court of competent jurisdiction for temporary injunctive or other
provisional judicial relief if in such party’s sole judgment such action is
necessary to avoid irreparable damage or to preserve the status quo until such
time as the arbitration award is rendered or the controversy is otherwise
resolved. Executive hereby voluntarily consents to jurisdiction of the state and
federal courts in Minnesota and waives any objection based on lack of personal
jurisdiction or inconvenient forum.

 

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23.   Notices.   All notices hereunder shall be delivered by hand or sent by
reliable next day courier (or 2-day courier in the case of international
delivery), to the party to receive the same at the address set forth with the
signature of such party hereto or at such other address as may have been
furnished to the sender by notice hereunder.

 

24.   Counterparts.   This Agreement may be executed in any number of
counterparts, and such counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.

 

IN WITNESS WHEREOF, Executive and the Company have executed this Agreement as of
the date set forth in the first paragraph.

 

Minneapolis August _16_, 2006

 

 

KAREL HUIJSER

 

TENNANT COMPANY

 

 

 

/S/ Karel Huijser

 

/S/ H. Chris Killingstad

 

 

 

Address:

 

By: H. Chris Killingstad

 

 

 

 

 

Its: President and CEO

 

 

 

Belgium

 

Address:

701 North Lilac Drive
Minneapolis, MN 55422

 

 

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EXHIBIT A TO

SERVICES AGREEMENT

KAREL HUIJSER

 

TENNANT COMPANY

MANAGEMENT AGREEMENT

 

THIS MANAGEMENT AGREEMENT (this “Agreement”) is entered into effective November
1, 2006 by and between Tennant Company, a Minnesota corporation (the "Company"),
and Karel Huijser, a resident of Antwerp, Belgium (“Executive”).

 

Recitals

 

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

 

B.   It is desirable and in the best interests of the Company and its
shareholders to continue to obtain the benefits of Executive’s services and
attention to the affairs of the Company.

 

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

 

D.   It is desirable and in the best interests of the Company and its
shareholders that Executive be in a position to make judgments and advise the
Company with respect to proposed changes in control of the Company without
regard to the possibility that Executive’s services may be terminated without
compensation in the event of certain changes in control of the Company.

 

NOW, THEREFORE, in consideration of the foregoing premises and the respective
agreements of the Company and Executive set forth below, the Company and
Executive, intending to be legally bound, agree as follows:

 

1.   Application of Agreement.   No amounts or benefits shall be payable or
provided for pursuant to this Agreement unless a Change in Control shall occur
during the Term of this Agreement.

 

2.   Involuntary Termination of Engagement.

 

(a)   Severance Benefits. If Executive’s engagement terminates by reason of an
Involuntary Termination by the Company without Cause, upon or after the First
Change in Control and prior to the end of the Transition Period, the Company
shall provide to Executive the benefits set forth in Sections 2(a) through 2(c)
below, subject to the limitations and conditions in Sections 2(b) and 4:

 

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(i)   The Company (or its Successor) shall pay to Executive in a lump sum on the
Termination Date, a cash payment equal to three (3) times Executive’s Average
Annual Compensation, less $1.00.

 

(ii)   If the Termination Date is any day other than the last day of the STIP
plan year, the Company (or its Successor) shall pay to Executive a pro rata
portion of the award (based on the number of days in the STIP plan year
occurring on or before, and after, the Termination Date) that would have been
payable to Executive under the STIP for such plan year had all performance
targets been met and Executive remained engaged by the Company until the end of
the Plan Year. The payment shall be made no later than the date awards under the
STIP for such plan year are or would have been paid to the participants in the
STIP.

 

(iii)   If Executive (and/or Executive’s covered dependents) is eligible and
properly elects under COBRA to continue group medical and/or dental insurance
coverage, as in place immediately prior to the Termination Date, the Company (or
its Successor) shall continue to pay the Company’s (Successor’s) portion of any
such premiums or costs of coverage until the earlier of:

 

(A)   The end of the Transition Period, or

 

(B)   The date Executive (and Executive’s covered dependents) is provided
essentially equivalent and no less favorable benefits by a subsequent employer
or service recipient, or

 

(C)   December 31 of the second calendar year following the calendar year in
which the Termination of Employment occurred.

 

All such Company-provided medical and/or dental premiums, or costs of coverage,
shall be paid directly to the insurance carrier or other provider by the
Company. To the extent that the coverage provided under this Section 2(a)(iii)
extends beyond the applicable continuation period under COBRA, the Company (or
its Successor), at its sole cost and expense, shall arrange to provide Executive
(and Executive’s covered dependents) with benefits that are no less favorable to
them than the benefits under the Company’s (Successor’s) group medical and/or
dental plans.

 

(iv)   If Executive is eligible under COBRA to continue group life insurance
coverage, as in place immediately prior to the Termination Date, if any, the
Company (or its Successor) shall pay to Executive an additional cash payment
equal to the Company’s monthly portion of any such premiums or costs of
coverage, as in effect on the Termination Date, times the number of complete
months up to and including the end of the Transition Period. The payment shall
be made as soon as administratively practicable after the Termination Date.

 

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(b)   Limitations.   Notwithstanding anything above to the contrary, the
benefits payable to Executive under Sections 2(a)(i), (ii) and (iv):

 

(i)   Shall not exceed two times the lesser of:

 

(A)   The Code § 401(a)(17) compensation limit for the year in which the
Termination Date occurs; or

 

(B)   Executive’s annual compensation (as defined in Treas. Reg. § 1.415-2(d))
for services to the Company for the calendar year prior to the calendar year in
which the Termination Date occurs.

 

(ii)   Shall be paid to Executive no later than December 31 of the second
calendar year following the calendar year in which the Termination Date occurs.

 

The Company and Executive intend these Sections 2(a) and 2(b) to be a
“separation pay plan due to involuntary separation from service” under Prop.
Treas. Reg. § 1.409A-1(b)(9)(iii) (or subsequent guidance). The parties further
intend that the Company’s payments of medical and dental premiums or costs under
Section 2(a)(iii) will not be considered a deferral of compensation by
application of Prop. Treas. Reg. § 1.409A-1(b)(9)(iv) (or subsequent guidance).

 

(c)   Additional Payments and Benefits.   This Section 2(c) shall apply to the
extent any benefits due to the Executive under Section 2(a) were limited or
reduced due to the requirements of Section 2(b) above.

 

(i)   Any benefit or payment otherwise due under Sections 2(a)(i), (ii) or (iv),
which was limited or reduced due to the requirements of Section 2(b), shall be
paid to the Executive on the later of the payment date specified under Section
2(a) or the first day of the seventh month following the Termination Date.

 

(ii)   To the extent Executive received benefits under Section 2(a)(iii) above,
which were limited due to the application of Section 2(a)(iii)(C), the Company’s
(or Successor’s) obligation to provide access to medical and/or dental coverage
shall continue until the earlier of the dates provided in Section 2(a)(iii)(A)
or (B) and the following additional provisions will apply:

 

(A)   Executive shall pay the full premiums or costs, as determined by the
Company, for such coverage to the Company on an after-tax basis, and

 

(B)   The Company (or Successor) shall pay to Executive, on a monthly basis, an
additional cash amount equal to the monthly COBRA rate in effect for such
coverage at Executive’s Termination Date.

 

3

 

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3.   Other Terminations.   If Executive’s engagement terminates during the Term
upon or after the First Change in Control and prior to the end of the Transition
Period, and if Section 2 does not apply, then Executive shall be entitled to the
following, as applicable, subject to the limitations and conditions in Section
4:

 

(a)   Termination for Good Reason During the Transition Period. If Executive’s
Termination of Employment is due to Executive’s resignation for Good Reason
following the First Change in Control and prior to the end of the Transition
Period, then:

 

(i)   The Company (or its Successor) shall pay to Executive, in a lump sum, a
cash payment equal to three (3) times Executive’s Average Annual Compensation,
less $1.00. The payment shall be paid to Executive on the first day of the
seventh month following the Termination Date.

 

(ii)   If the Termination Date is any day other than the last day of the STIP
plan year, the Company (or its Successor) shall pay to Executive a pro rata
portion of the award (based on the number of days in the STIP plan year
occurring on or before, and after, the Termination Date) that would have been
payable to Executive under the STIP for such plan year had all performance
targets been met and Executive remained employed by the Company until the end of
the plan year. The payment shall be made as of the later of:

 

(A)   The date awards under the STIP for such plan year are or would have been
paid to the participants in the STIP, or

 

(B)   The first day of the seventh month following Executive’s Termination Date.

 

(iii)   If Executive (and/or Executive’s covered dependents) is eligible and
properly elects under COBRA to continue group medical and/or dental insurance
coverage, as in place immediately prior to the Termination Date, the Company (or
its Successor) shall continue to pay the Company’s (Successor’s) portion of any
such premiums or costs of coverage until the earlier of:

 

(A)   The end of the Transition Period, or

 

(B)   The date Executive (and Executive’s covered dependents) is provided
essentially equivalent and no less favorable benefits by a subsequent employer
or service recipient.

 

All such Company-provided medical and/or dental premiums, or costs of coverage,
shall be paid directly to the insurance carrier or other provider by the
Company. To the extent that the coverage provided under this paragraph (iii)
extends beyond the applicable continuation period under COBRA, the Company (or
its Successor), at its sole cost and expense, shall arrange to provide Executive
(and Executive’s covered dependents) with benefits that are no less favorable to
them than the benefits under the Company’s (Successor’s) group medical and/or
dental plans. To the extent that benefits under Section 3(c)(iii) extend beyond
December 31 of the second calendar year following the calendar year in which the
Executive’s Termination of Employment occurred, Executive shall pay the full
premiums or costs, as determined by the Company, for such coverage to the
Company on an after-tax basis, and the Company (or Successor) shall pay to
Executive, on a monthly basis, an additional cash amount equal to the monthly
COBRA rate in effect for such coverage at Executive’s Termination Date.

 

4

 

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(iv)   If Executive is eligible under COBRA to continue group life insurance
coverage, as in place immediately prior to the Termination Date, if any, the
Company (or its Successor) shall pay to Executive an additional cash payment
equal to the Company’s monthly portion of any such premiums or costs of
coverage, as in effect on the Termination Date, times the number of complete
months up to and including the end of the Transition Period. The payment shall
be paid to Executive on the first day of the seventh month following the
Termination Date.

 

(b)   Termination During Window Period.   If Executive’s Termination of
Employment is due to Executive’s resignation during the Window Period following
the First Change in Control, and such resignation is not for Good Reason, then
the Company (or its Successor) shall pay to Executive the benefits provided in
Section 3(a) and subject to the requirements in Section 3(a), except as provided
below:

 

(i)   The cash payment in Section 3(a)(1) will equal one (1) times Executive’s
Average Annual Compensation, less $1.00.

 

(ii)   The benefit continuation in Section 3(a)(iii) will continue for twelve
(12) months.

 

(iii)   The cash payment in Section 3(a)(iv) will equal the Company’s monthly
portion of any such premiums or costs of coverage, as in effect on the
Termination Date, times twelve (12).

 

(c)   Death or Disability.   If Executive’s Termination of Employment is due to
Executive’s death or Disability, and Executive is not otherwise entitled to any
benefits under Section 2 or 3 above, the Company shall pay to Executive (or
Executive’s legal representative), in accordance with the Company’s regular
payroll practices, Executive’s then-current base salary through and including
the last day of the month in which the Termination Date occurs.

 

4.   Withholding of Taxes, Other Limitations.

 

(a)   Taxes. All payments to Executive hereunder are subject to withholding of
income and other taxes and all other amounts required by law.

 

(b)   Termination Notice.   Any notice of termination for Cause or Good Reason
shall, as applicable, specify whether such termination by the Company is with or
without Cause, or resignation by Executive is with or without Good Reason, and,
if with Cause or Good Reason, shall set forth in reasonable detail the basis
therefor. Upon Termination of Employment, Executive shall, in addition to any
other amounts owing under this Agreement, receive any Base Pay, earned and
unused vacation time, and STIP for the preceding year, to the extent such
amounts are earned but unpaid as of the Termination Date, in accordance with the
Company’s payroll practices and any applicable plans or programs.

 

5

 

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(c)   Offsets. Notwithstanding any other provision of this Agreement, the
payments required by Section 2 or Section 3 shall be reduced by any severance
pay that Executive is eligible to receive from the Company, its subsidiaries or
its successors under any policy, plan or agreement of the Company, other than
this Agreement, or under applicable law, in the event of the Company’s
termination of Executive’s services with the Company. The benefits provided to
Executive under this Agreement shall be in lieu of any other severance pay or
benefits available to Executive under any other agreement, plan or program of
the Company, or under applicable laws, except for offsets specifically provided
for in this Section 4(c).

 

(d)   Release Requirement.   Notwithstanding any other provision of this
Agreement, the Company shall not be obligated to make any payments to Executive
under Sections 2 or 3 hereof unless Executive shall have signed a release of
claims in favor of the Company in a form to be prescribed by the Company, all
applicable consideration periods and rescission periods provided by law shall
have expired and Executive is in strict compliance as of the dates of the
payments with the terms of this Agreement, the Services Agreement between
Executive and the Company, and the Restrictive Covenants Agreement entered into
by Executive and the Company dated as of the same date of this Agreement.

 

(e)   Code Section 280G.   Notwithstanding any provision to the contrary
contained herein except the last sentence of this Section 4(e), if the cash
payments due and the other benefits to which Executive shall become entitled
under this Agreement, either alone or together with other payments made pursuant
to this Agreement or any other agreement between Executive and the Company or
any compensation plan or program that are in the nature of compensation to
Executive and are contingent on a change in the ownership or effective control
of the Company or in the ownership of a substantial portion of the assets of the
Company or otherwise, would constitute a “parachute payment” as defined in Code
§ 280G (or any successor provision thereto), such lump sum payment and/or such
other benefits and payments shall be reduced (but not below zero) to the largest
aggregate amount as will result in no portion thereof being subject to the
excise tax imposed under Code § 4999 (or any successor provision thereto) or
being non-deductible to the Company for Federal Income Tax purposes pursuant to
Code § 280G (or any successor provision thereto). Within ten days after the
Company informs Executive of the necessity of reducing the payments or benefits
to avoid the excise tax or non-deductibility or promptly after Executive
otherwise becomes aware of the necessity of such a reduction, Executive in good
faith shall determine the amount of any reduction to be made pursuant to this
Section 4(e) and shall select from among the foregoing benefits and payments
those which shall be reduced. No modification of, or successor provision to,
Code § 280G or § 4999 subsequent to the date of this Agreement shall, however,
reduce the benefits to which Executive would be entitled under this Agreement in
the absence of this Section 4(e) to a greater extent than they would have been
reduced if Code § 280G and § 4999 had not been modified or superseded subsequent
to the date of this Agreement, notwithstanding anything to the contrary provided
in the first sentence of this Section 4(e).

 

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(f)   Code Section 409A.   This Agreement is intended to satisfy, or otherwise
be exempt from, the requirements of Code § 409A(a)(2), (3) and (4), including
current and future guidance and regulations interpreting such provisions. To the
extent that any provision of this Agreement fails to satisfy those requirements,
or fails to be exempt from Code § 409A, the provision shall automatically be
modified in a manner that, in the good-faith opinion of the Company, brings the
provisions into compliance with those requirements while preserving as closely
as possible the original intent of the provision and this Agreement.

 

5.   Definitions.   When used in this Agreement with initial capitalized
letters, the following terms have the meanings indicated below, unless context
requires otherwise:

 

(a)   Average Annual Compensation.   “Average Annual Compensation” means the
average of the annual compensation payable by the Company to Executive and
includible in the gross income for Federal Income Tax purposes of Executive
during the shorter of:

 

(i)   The most recent five (5) completed taxable years of Executive ending
before the First Change in Control (other than a Change in Control described in
Section 5(d)(v) unless Executive is terminated prior to the occurrence of a
Change in Control described in clause (i), (ii), (iii), or (iv) of Section
5(d)), or

 

(ii)   That portion of such five-year period during which Executive was employed
by the Company (with partial year compensation annualized before determining
average annual compensation for that period in accordance with the regulations
promulgated under Code § 280G, or successor thereto),

 

(b)   Board.   “Board” means the Board of Directors of the Company.

 

(c)   Cause.   “Cause” means:

 

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

 

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

 

(d)   Change in Control.   “Change in Control” means one of the following:

 

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

 

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

 

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

 

(ii)   5% or more of (1) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (“Outstanding Company Voting Securities”) or (2) the then outstanding
shares of common stock of the Company (“Outstanding Company Common Stock”) is
acquired or beneficially owned (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, or any successor rule thereto (the “Exchange
Act”)) by any individual, entity or group (within the meaning of Section 13d(3)
or 14(d)(2) of the Exchange Act), provided, however, that the following
acquisitions and beneficial ownership shall not constitute Changes in Control
pursuant to this Section 5(d)(ii):

 

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

 

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

 

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

 

(D)   any acquisition or beneficial ownership by a parent entity of the Company
(after giving effect to the merger or statutory shore exchange) or its
wholly-owned subsidiaries, as long as they shall remain wholly-owned
subsidiaries, directly or indirectly of 100% of the Outstanding Company Voting
Securities as a result of a merger or statutory share exchange that complies
with Section 5(d)(iii)(A)(1), (2) and (3) or the exception in Section
5(d)(iii)(B) in all respects;

 

(iii)   the Company consummates

 

(A)   a merger of the Company with or into another entity, other than a merger
in which

 

(1)   the persons who were the beneficial owners, respectively, of the
Outstanding Company Voting Securities and Outstanding Company Common Stock
immediately prior to such merger beneficially own, directly or indirectly,
immediately after the merger, more than 50% of, respectively, the then
outstanding common stock and the then outstanding voting power of the voting
securities (or comparable equity interests) of the surviving entity in the
merger or its direct or indirect parent entity in substantially the same
proportions (except for those exercising statutory dissenters rights) as their
ownership of the Outstanding Company Voting Securities and Outstanding Company
Common Stock immediately prior to the merger,

 

8

 

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(2)   if voting securities of the direct or indirect parent entity of the
Company (after giving effect to the merger) are exchanged for Outstanding
Company Voting Securities in the merger, all holders of any class or series of
Outstanding Company Voting Securities immediately prior to the merger have the
right to receive substantially the same per share consideration in exchange for
their Outstanding Company Voting Securities as all other holders of such class
or series (except for those exercising statutory dissenters rights), and

 

(3)   no individual, entity or group (other than a direct or indirect, parent
entity that, after giving effect to the merger, directly or indirectly through
one or more wholly owned subsidiaries, beneficially owns 100% of the outstanding
voting securities of the entity resulting from the merger) beneficially owns,
directly or indirectly, immediately after the merger, 35% or more of the voting
power of the outstanding voting securities or the outstanding common stock of
the entity (or comparable equity interests) resulting from the merger.

 

(B)   an exchange, pursuant to a statutory exchange of Outstanding Company
Voting Securities held by shareholders of the Company immediately prior to the
exchange, of shares of one or more classes or series of Outstanding Company
Voting Securities for cash, securities or other property, except for voting
securities of a direct or indirect parent entity of the Company (after giving
effect to the statutory share exchange) owning directly, or indirectly through
wholly-owned subsidiaries, both beneficially and of record 100% of the
Outstanding Company Voting Securities immediately after the statutory share
exchange if (1) the persons who were the beneficial owners, respectively, of the
Outstanding Company Voting Securities and the Outstanding Common Stock of the
Company immediately before such statutory share exchange own, directly or
indirectly, immediately after the statutory share exchange more than 50% of,
respectively, the voting power of the then outstanding voting securities and the
then outstanding common stock (or comparable equity interests) of such parent
entity, and (2) all holders of any class or series of voting stock of
Outstanding Company Voting Securities immediately prior to the statutory share
exchange have the right to receive substantially the same per share
consideration in exchange for their Outstanding Company Voting Securities as all
other holders of such class or series (except for those exercising statutory
dissenters’ rights),

 

(C)   a sale or other disposition of all of substantially all of the assets of
the Company (in one transaction or a series of transactions), unless a majority
of the voting power of voting stock (or the voting equity interest) of the
surviving entity or its parent entity or of any entity acquiring all or
substantially all of the assets of the Company (in the case of a merger,
consolidation or disposition of assets) or the Company or its parent entity (in
the case of a statutory share exchange) is, immediately following the merger,
consolidation, statutory share exchange or disposition of assets, beneficially
owned by the Executive or a group of persons, including the Executive, acting in
concert;

 

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

 

9

 

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

 

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

 

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

 

(e)   COBRA.   “COBRA” means the benefit continuation provisions under the
Consolidated Omnibus Budget Reconciliation Act of 1986. For purposes of this
Agreement, COBRA is deemed to include the group term life insurance continuation
requirements under Minnesota law.

 

(f)   Code.   “Code” means the Internal Revenue Code of 1986, as amended.

 

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

 

(h)   First Change in Control.   “First Change in Control” means the occurrence
of the earliest Change in Control to occur during the Term.

 

(i)   Good Reason.   “Good Reason” means any of the following actions by the
Company without Executive’s written consent:

 

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

 

(ii)   the assignment to Executive of duties and responsibilities that are
substantially inconsistent with, or materially diminish, Executive’s position
with the Company as in effect immediately prior to the First Change in Control,
other than for Cause or on account of Disability; or

 

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

 

(iv)   the Company fails to obtain assumption of this Agreement by any Successor
as contemplated by Section 6,

 

(v)   the Company requires Executive to relocate to any place other than a
location within twenty-five (25) miles of the location at which Executive
performed duties immediately prior to the First Change in Control or, if
Executive performed such duties at the Company’s principal executive offices,
the Company relocates its principal executive offices to any location other than
a location within twenty-five (25) miles of the location of the principal
executive offices immediately prior to the First Change in Control, or

 

(vi)   the Company requires that Executive travel on Company business to a
substantially greater extent than required immediately prior to the First Change
in Control.

 

Notwithstanding the foregoing, Good Reason shall not exist if the Company’s
action is isolated, insubstantial or inadvertent and such action is not taken in
bad faith and is promptly remedied by the Company following receipt of written
notice thereof from Executive.

 

(j)   Involuntary Termination.   “Involuntary Termination” means a Termination
of Employment instigated by the Company without the consent or agreement of
Executive, or which is otherwise considered an involuntary separation from
service under Code § 409A or guidance thereunder.

 

(k)   STIP.   “STIP” means the Company’s Short-Term Incentive Plan, as amended,
or any successor plan.

 

(l)   Successor.   “Successor” means any person or entity acquiring directly or
indirectly a majority of the Outstanding Company Voting Securities (by purchase,
merger, consolidation or otherwise) or all or substantially all of the assets of
the Company.

 

(m)   Term.   “Term” has the meaning set forth in Section 14 of this Agreement.

 

(n)   Termination Date.   “Termination Date” means the date on which Executive’s
Termination of Employment by the Company is effective.

 

(o)   Termination of Employment.   “Termination of Employment” means that the
common-law employer-employee relationship has ended between Executive and the
Company (and its affiliates). For purposes of payments of benefits under
Sections 2 and 3, the Termination of Employment must also be considered a
“separation from service” under Code § 409A and the guidance thereunder.

 

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(p)   Transition Period.   “Transition Period” means the three-year period
commencing on the date of the earliest to occur of a Change in Control described
in clause (i) through (iv) of Section 5(d) and ending on the third anniversary
of such date.

 

(q)   Window Period.   “Window Period” means the thirty-day period immediately
following the first anniversary of the First Change in Control that is a Change
in Control described in clause (i) through (iv) of Section 5(d).

 

6.   Successors and Assigns.

 

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

 

(b)   The Company will require any Successor, by agreement in form and substance
satisfactory to Executive, to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession (other than in the case of a merger or consolidation) shall be a
breach of this Agreement and shall entitle Executive to compensation from the
Company in the same amount and on the same terms as Executive would be entitled
hereunder if Executive had otherwise terminated Executive’s employment for Good
Reason, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Termination
Date. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any Successor that is required to execute and deliver
the agreement provided for in this Section 6(b) or that otherwise becomes bound
by all the terms and provisions of this Agreement by operation of law.

 

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

 

8.   Governing Law; Jurisdiction.   All matters relating to the interpretation,
construction, application, validity and enforcement of this Agreement shall be
governed by the laws of the State of Minnesota without giving effect to any
choice or conflict of law provision or rule, whether of the State of Minnesota
or any other jurisdiction, that would cause the application of laws of any
jurisdiction other than the State of Minnesota. Executive and the Company
consent to jurisdiction of the courts of the State of Minnesota and/or the
federal district courts, District of Minnesota, for the purpose of resolving all
issues of law, equity, or fact arising out of or in connection with this
Agreement. Any action involving claims of a breach of this Agreement shall be
brought in such courts. Each party consents to personal jurisdiction over such
party in the state and/or federal courts of Minnesota and hereby waives any
defense of lack of personal jurisdiction. Venue, for the purpose of all such
suits, shall be in Hennepin County, State of Minnesota.

 

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

 

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

 

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

 

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

 

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

 

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14.   Term.   This Agreement shall commence on the date of this Agreement and
shall terminate, and the term of this Agreement (the “Term”) shall end, on (A)
December 31, 2008, provided that such period shall be automatically extended for
one year, and from year to year thereafter, until written notice of termination
of this Agreement is given by the Company or Executive to the other party hereto
at least 60 days prior to December 31, 2008 or the extension year then in
effect, or (B) if the first day of the Transition Period occurs prior to
December 31, 2008 (or prior to the end of the extension year then in effect),
the third anniversary of the first day of the Transition Period.

 

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

 

 

EXECUTIVE

 

TENNANT COMPANY

 

 

 

/S/ Karel Huijser

 

/S/ H. Chris Killingstad

Name: Karel Huijser

 

Name: H. Chris Killingstad

 

 

 

Address: Belgium

 

Title: President and CEO

 

 

 

 

 

Address:

701 North Lilac Drive
Minneapolis, MN 55422

 

 

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