EXHIBIT

  10.14


  





 




MANAGEMENT AGREEMENT




 




AGREEMENT entered into as of this 23rd day of

September, 2002 by and between Tennant Company, a Minnesota corporation (the

“Company”), and Philip R. Hagberg (the “Executive”).




 




 




 




WITNESSETH:




 




WHEREAS, the Executive is a key member of the

management of the Company and is expected to devote substantial skill and

effort to the affairs of the Company, and the Board of Directors of the Company

desires to recognize the significant personal contribution that the Executive

has made and is expected to continue to make to further the best interests of

the Company and its shareholders; and




 




WHEREAS, it is desirable and in the best interests of

the Company and its shareholders to continue to obtain the benefits of the

Executive’s services and attention to the affairs of the Company; and




 




WHEREAS, it is desirable and in the best interests of

the Company and its shareholders to provide inducement for the Executive (A) to

remain in the service of the Company in the event of any proposed or

anticipated change in control of the Company and (B) to remain in the service

of the Company in order to facilitate an orderly transition in the event of a

change in control of the Company; and




 




WHEREAS, it is desirable and in the best interests of

the Company and its shareholders that the Executive be in a position to make

judgments and advise the Company with respect to proposed changes in control of

the Company without regard to the possibility that the Executive’s employment

may be terminated without compensation in the event of certain changes in

control of the Company; and




 




WHEREAS, the Executive desires to be protected in the

event of termination of the employment of the Executive by the Company without

Cause (as defined in Section 9) or termination of employment by the Executive

for Good Reason (as defined in Section 9); and




 




WHEREAS, for the reasons set forth above, the Company

and the Executive desire to enter into this Agreement.




 




NOW, THEREFORE, in consideration of the foregoing and

the mutual covenants and agreements contained herein, the Company and the

Executive agree as follows:




 




1.             Employment.

The Executive shall remain in the employ of the Company for the Term (as

defined in Section 22) of this Agreement, as Vice President, Global Manufacturing

of the Company and shall have all duties customarily associated with such

office and shall perform such other duties as may be specified by the Board of

Directors 





























 




and/or the Chief Executive Officer of the Company; provided, however,

that either the Executive or the Company may terminate the employment of the

Executive with the Company at any time prior to the expiration of the Term,

with or without Cause and for any reason whatever, in the manner provided in

Section 4, subject to the right of the Executive to receive any payment

and other benefits that may be due pursuant to the terms and conditions of

Section 5 or 6 (as the case may be). 

While the Executive is employed by the Company hereunder, the Executive

shall devote substantially all of Executive’s business time and energy to the

performance of the Executive’s duties hereunder and shall not accept other

employment with or engage in or render services to any other business or

enterprise.




 




                2.             Compensation.




 




                (a)           During

the Term, the Executive shall receive such base salary (the “Base Salary”) per

Employment Year (as defined in Section 9), prorated for any partial Employment

Year, as the Board of Directors shall from time to time determine.  Subject to all terms and conditions hereof,

while the Executive is employed by the Company hereunder during the Term, the

Company shall pay to the Executive an annual base salary (“Base Salary”) of

$160,000 per Employment Year (as defined in Section 9), prorated for any

partial Employment Year, or such higher amount as is from time to time

hereafter established by the Board of Directors of the Company.  The Executive’s Base Salary shall be payable

in accordance with the Company’s regular payroll practices.  The Board of Directors of the Company will

review the Executive’s Base Salary at the beginning of each Employment Year

commencing after December 31, 2000, to determine whether a change in the

annual amount thereof is merited.  In no

event shall the Board of Directors decrease the Executive’s Base Salary in any

Employment Year by more than 15% of the amount of Base Salary paid by the

Company to the Executive for the immediately preceding Employment Year.




 




 




                (b)           Subject

to all terms and conditions hereof, while the Executive is employed by the

Company hereunder, the Executive shall participate in the STIP, as defined in

Section 9.




 




                3.             Fringe Benefits.




 




                (a)           While the Executive is employed by the Company hereunder

during the Term, the Company shall provide to the Executive and the Executive’s

dependents such medical, dental and life insurance and disability, retirement

savings, vacation, sick leave and other employee and fringe benefits as are

provided from time to time by the Company to its senior executives and their

dependents, in accordance with the general benefits practices of the Company

then in effect; provided, however, that the benefits provided to the Executive

and the Executive’s dependents hereunder shall in no event be less favorable to

them, on a benefit–by–benefit basis, than the benefits provided by

the Company to its senior executives and their dependents on the date

hereof.  Notwithstanding anything stated

in this Section 3(a), coverage of the Executive and the Executive’s dependents

under medical, dental, and life insurance and disability plans, programs and

benefits shall be available only if the 




 




 





























 




Executive and the

Executive’s dependents satisfy applicable waiting periods under such plans,

programs and benefits.




 




                (b)           The

Company shall promptly reimburse the Executive for all reasonable travel and

other expenses that are incurred by the Executive during the Term in connection

with the conduct of the business of the Company while the Executive is employed

by the Company hereunder and for which the Executive furnishes appropriate

documentation in accordance with the Company’s general expense reimbursement

practices then in effect.




 




                4.             Termination.  The Executive’s employment by the Company

hereunder shall terminate and be effective upon:




 




(i)                                     receipt by the Company of the Executive’s

written resignation from the Company (which resignation shall specify whether

it is with or without Good Reason (as defined in Section 9) and, if with

Good Reason, shall set forth in reasonable detail the basis therefor);




 




(ii)                                  three business days following receipt by

the Executive of written notice from the Company of termination of the

Executive’s employment (which notice shall specify whether such termination is

with or without Cause and, if with Cause, shall set forth in reasonable detail

the basis therefor);




 




(iii)                               the Executive’s death or Disability (as

defined in Section 9); or




 




(iv)                              expiration of the Term,




 




and the date on which the

Executive’s employment by the Company hereunder ends shall be the “Termination

Date”.




 




                5.             Payments Upon Termination Prior to a Change in

Control.  If the Executive’s

employment by the Company hereunder ends pursuant to death or voluntary

termination prior to the occurrence of any Change in Control (as defined in

Section 9) and:




 




                (a)           if

such employment by the Company hereunder ends prior to the expiration of the

Term by reason of resignation by the Executive without Good Reason, then:




 




(i)                                     the Company shall pay to the Executive,

in accordance with Section 2(a), the Executive’s Base Salary through and

including the Termination Date and any accrued vacation pay;




 




(ii)                                  if the Termination Date occurs on or

after the last day of any Plan Year (as defined in Section 9) but prior to the

date payment of the Executive’s award, if any, under the STIP for such Plan

Year has been made, the Company shall pay the full amount of such award to the 




 





























 




Executive no later than

the date awards under the STIP for such Plan Year are paid to the other

participants in the STIP; and




 




(iii)                               the Company shall pay to the Executive,

in accordance with Section 3(b), all amounts due thereunder for

reimbursement of expenses.




 




                (b)           if such employment by the Company hereunder ends by reason

of the Executive’s death or Disability prior to the expiration of the Term or

if such employment terminates upon the expiration of the Term, then:




 




(i)                                     the Company shall pay to the Executive

(or the Executive’s legal representative), in accordance with

Section 2(a), the Executive’s Base Salary through and including the last

day of the month in which the Termination Date occurs and any accrued vacation

pay (in the event employment hereunder ends by reason of death or Disability)

or through and including the Termination Date (in the event employment

hereunder ends by reason of the expiration of the Term);




 




(ii)                                  if the Termination Date occurs on or

after the last day of any Plan Year but prior to the date payment of the

Executive’s award, if any, under the STIP for such Plan Year has been made, the

Company shall pay the full amount of such award to the Executive (or the

Executive’s legal representative) no later than the date awards under the STIP

for such Plan Year are paid to the other participants in the STIP;




 




(iii)                               if the Termination Date occurs on any day

of a Plan Year other than the last day, the Company shall pay to the Executive

(or the Executive’s legal representative) a pro rata portion of the award that

would have been payable to the Executive under the STIP for such Plan Year had

the Executive remained employed by the Company hereunder for the duration of

such Plan Year, which payment shall be made no later than the date awards under

the STIP for such Plan Year are paid to the other participants in the STIP; and




 




(iv)                              the Company shall pay to the Executive

(or the Executive’s legal representative), in accordance with Section 3(b),

all amounts due thereunder for reimbursement of expenses.




 




                (c)           if such employment by the Company hereunder ends prior to

the expiration of the Term by reason of resignation by the Executive for Good

Reason or termination by the Company with or without Cause, then:




 




(i)                                     the Company shall continue to pay to the

Executive, in accordance with, and at the times provided in, Section 2(a),

the Executive’s Base 




 





























 




Salary and any retirement

plan contributions through and including the first anniversary of the

Termination Date;




 




(ii)                                  if the Termination Date occurs on or

after the last day of any Plan Year but prior to the date payment of the

Executive’s award, if any, under the STIP for such Plan Year has been made, the

Company shall pay the full amount of such award to the Executive no later than

the date awards under the STIP for such Plan Year are paid to the other

participants in the STIP;




 




(iii)                               if the Termination Date occurs on any day

of a Plan Year other than the last day, the Company shall pay to the Executive

the full amount of the award that would have been payable to the Executive

under the STIP for such Plan Year had all Company performance targets been met

and the Executive remained employed by the Company hereunder for the duration

of such Plan Year, which payment shall be made no later than the date awards

under the STIP for such Plan Year are or would have been paid to the other

participants in the STIP;




 




(iv)                              the Executive and the Executive’s

dependents shall continue for a period ending on the first anniversary of the

Termination Date to have the right to participate in all medical, dental and

life insurance and disability plans, programs and benefits in which they were

entitled to, and did, participate immediately prior to the Termination Date as

if the Executive were an employee of the Company until the end of such period

(or, in the event their participation in any such plan, program or benefit is

barred by the terms of such plan, program or benefit because the Executive is

not an employee of the Company, the Company, at its sole cost and expense,

shall arrange to provide the Executive and the Executive’s dependents with

benefits that are no less favorable to them than the benefits under such plan,

program or benefit), except, with respect to medical and dental insurance

coverage, to the extent essentially equivalent and no less favorable benefits

are provided to them by a subsequent employer; and




 




(v)                                 the Company shall pay to the Executive,

in accordance with Section 3(b), all amounts due thereunder for

reimbursement of expenses.




 




                6.             Payments upon Termination in Connection with, or

Following, a Change in Control.  If

any Change in Control shall occur during the Term of this Agreement and the

Executive’s employment by the Company shall end at the time of, or at any time

after, the occurrence of the earliest Change in Control to occur (the “First

Change in Control”) and prior to the end of the Transition Period (as defined

in Section 9), then the Company or its successor (which term as used herein

shall include any person acquiring all or substantially 




 





























 




all of the assets

of the Company) shall pay cash to the Executive and provide other benefits on

the following basis (it being understood that if the Executive’s employment by

the Company terminates voluntarily or involuntarily during the Term, but prior

to the occurrence of the First Change in Control, the Executive shall be

entitled to no cash payment or benefits under this Section 6, but shall be

entitled to payments and benefits to the extent provided in Section 5):




 




(a)           If at the time of, or at any time

after, the occurrence of the First Change in Control and prior to the end of

the Transition Period, the employment of the Executive with the Company is

voluntarily or involuntarily terminated for any reason (unless such termination

is a voluntary termination by the Executive other than for Good Reason or is on

account of the death or Disability of the Executive or is a termination by the

Company for Cause), the Executive (or the Executive’s legal representative),

subject to the limitations set forth in Section 6(b),




 




(i)                                     shall be entitled to receive from the

Company or its successor, on the Termination Date (or, in the event of

termination by the Executive for Good Reason, within five days after the

Termination Date), a cash payment in an amount equal to (A) three times (or one

time in the case of a voluntary termination by the Executive during the Window

Period, as defined in Section 9(e)(iii)(E), which, but for Section

9(e)(iii)(E), would not constitute a termination for Good Reason) the average

annual compensation payable by the Company and includible in the gross income

for Federal Income Tax purposes of the Executive during the shorter of the

period consisting of (1) the most recent five completed taxable years of the

Executive ending before the First Change in Control (other than a Change in

Control described in Section 9(b)(iv) unless the Executive is terminated prior

to the occurrence of a Change in Control described in clause (i), (ii) or (iii)

of Section 9(b)) or (2) that portion of such five-year period during which

the Executive was employed by the Company (for which purpose compensation for a

partial year shall be annualized before determining average annual compensation

for the period in accordance with temporary or final regulations promulgated

under Section 280(G)(d) of the Internal Revenue Code of 1986 (the “Code”) or

any successor provision thereto), less (B) $1.00, such payment to be made to

the Executive by the Company or its successor in a lump sum; and




 




(ii)                                  shall, together with the Executive’s

dependents, be entitled until the end of the Transition Period or for one year

after the Termination Date in the case of a voluntary termination by the

Executive during the Window Period, as defined in Section 9(e)(iii)(E), which,

but for Section 9(e)(iii)(E), would not constitute a termination for Good

Reason to participate in any medical, dental and life insurance and disability

plans, programs and benefits in which they were entitled to, and did,

participate immediately prior to the First Change in Control as if the

Executive were an employee of the Company until the end of the Transition

Period or such one-year period, as the case may be (or, in the 




 





























 




event their participation in any such plan, program or benefit is

barred because the Executive is not an employee of the Company, the Company, at

its sole cost and expense, shall arrange to provide the Executive and the

Executive’s dependents with benefits that are no less favorable to them than

the benefits under such plan, program or benefit), except, with respect to

dental and medical insurance coverage, to the extent essentially equivalent and

no less favorable benefits are provided by a subsequent employer.




 




                (b)           Notwithstanding any provision to the

contrary contained herein except the last sentence of this Section 6(b), if the

lump sum cash payment due and the other benefits to which the Executive shall

become entitled under Section 6(a), either alone or together with other payments

made pursuant to this Agreement or any other agreement between the Executive

and the Company or any compensation plan or program that are in the nature of

compensation to the Executive and are contingent on a change in the ownership

or effective control of the Company or in the ownership of a substantial

portion of the assets of the Company or otherwise, would constitute a

“parachute payment” as defined in Section 28OG of the Code or any successor

provision thereto, such lump sum payment and/or such other benefits and

payments shall be reduced (but not below zero) to the largest aggregate amount

as will result in no portion thereof being subject to the excise tax imposed

under Section 4999 of the Code (or any successor provision thereto) or being non–deductible

to the Company for Federal Income Tax purposes pursuant to Section 280G of the

Code (or any successor provision thereto). 

Within ten days after the Company informs the Executive of the necessity

of reducing the payments or benefits to avoid the excise tax or

non-deductibility or promptly after the Executive otherwise becomes aware of

the necessity of such a reduction, the Executive in good faith shall determine

the amount of any reduction to be made pursuant to this Section 6(b) and shall

select from among the foregoing benefits and payments those which shall be

reduced. No modification of, or successor provision to, Section 280G or Section

4999 subsequent to the date of this Agreement shall, however, reduce the

benefits to which the Executive would be entitled under this Agreement in the

absence of this Section 6(b) to a greater extent than they would have been

reduced if Section 280G and Section 4999 had not been modified or superseded

subsequent to the date of this Agreement, notwithstanding anything to the

contrary provided in the first sentence of this paragraph 6(b).




 




                (c)           The

Company shall pay to the Executive, in accordance with Section 3(a), the

Executive’s Base Salary and any accrued vacation pay through and including the

Termination Date.




 




                (d)           If

the Termination Date occurs on or after the last day of any Plan Year but prior

to the date payment of the Executive’s award, if any, under the STIP for such

Plan Year has been made, the Company shall pay the full amount of such award to

the Executive (or the Executive’s legal representative) no later than the date

awards under the STIP for such Plan Year are paid to the other participants in

the STIP.




 





























 




                (e)           If

the Termination Date occurs on any day of a Plan Year other than the last day,

the Company shall pay to the Executive (or the Executive’s legal

representative) a pro rata portion of the target award that would have been

payable to the Executive under the STIP for such Plan Year had the Executive

remained employed by the Company hereunder for the duration of such Plan Year

and the company had achieved its financial goals, which payment shall be made

no later than the date awards under the STIP for such Plan Year are or would

have been paid to the other participants in the STIP.




 




                (f)            The

Company shall pay to the Executive (or the Executive’s legal representative),

in accordance with Section 3(b), all amounts due thereunder for

reimbursement of expenses.




 




                7.             Interpretations.




 




                (a)           For

purposes of determining any amounts payable under this Section 5 or

Section 6, the Executive’s Base Salary at any time after the Termination Date

shall be deemed to equal the Executive’s Base Salary as in effect on the

Termination Date.




 




                (b)           In

the event the Executive’s employment hereunder is terminated on any day of an

Employment Year or a Plan Year other than the last day and payment is required

hereunder of a pro rata portion of any sum due with respect to such Employment

Year or Plan Year, such pro rata portion shall be determined based on the

number of days in such Employment Year or Plan Year occurring on or before, and

after, the Termination Date.




 




                (c)           Nothing

in Section 5 or Section 6 shall limit any obligation of the Company

to the Executive or his dependents upon termination of the Executive’s employment

hereunder (i) as a matter of law, (ii) under any other provision of

this Agreement or, except as otherwise expressly provided in this Agreement,

any other agreement between the Executive and the Company, or (iii) in the

event of termination by reason of the Executive’s death or Disability, under

life or disability insurance policies then in effect.  Notwithstanding the foregoing, (x) if the Executive is receiving

payments pursuant to Paragraph G of the Employee Agreement attached hereto

as Exhibit A, then payments required by Section 5 or Section 6

shall be reduced to by an amount equal to the amounts paid pursuant to

Paragraph G of such Employee Agreement, and (y) the payments required by

Section 5 or Section 6 shall be reduced by any severance pay which the

Executive receives from the Company, its subsidiaries or its successors under

any policy or agreement of the Company, other than this Agreement, in the event

of the Company’s termination of the Executive’s employment with the Company.




 




                (d)           The

Executive shall not be required to mitigate the amount of any payment or other

benefit provided for in Section 5 or Section 6 by seeking employment

with another employer or otherwise; nor shall the amount of any payment or

other benefit provided for in Section 5 or 6 be reduced by any

compensation earned by the Executive as the result of the Executive’s

subsequent employment by another employer, except as otherwise expressly

provided in Section 5 or 6.




 





























 




                (e)           The

obligations of the Company under Section 5 and Section 6, if otherwise payable

thereunder because of the termination of the Executive’s employment with the

Company, shall survive any termination of employment of the Executive pursuant

to Section 4.




 




                8.             Directors’

and Officers’ Indemnification; Stock Based Compensation.  While the Executive is employed by the

Company hereunder, the Company shall not, without the prior written consent of

the Executive, amend its articles of incorporation or by–laws to prohibit

or limit the indemnification of, or advances of expenses to, its directors and

officers or to impose conditions on such indemnification or advances of

expenses in addition to those provided by law. 

While the Executive is employed by the Company hereunder, the Company

shall not modify any stock based incentive plan or agreement to which the

Executive is a party (or is subject) to limit or otherwise affect the

acceleration of vesting or exercisability of stock options of the Executive in

the event of a Change in Control, the lapse of restrictions on restricted stock

of the Executive in the event of a Change in Control, or any other acceleration

of, or increase in benefits under, any stock based benefit in the event of a

Change in Control.




 




                9.             Certain Definitions.  As used in this Agreement, the following defined terms have the

meanings indicated below:




 




                (a)           “Cause”

for termination of the Executive’s employment at the instance of the Company

means termination for:




 




(i)                                     prior to a Change in Control, the

Executive’s material breach of this Agreement, which is not remedied within 30

days after receipt of written notice thereof;




 




(ii)                                  prior to a Change in Control, an act or

acts of dishonesty undertaken by the Executive and intended to result in gain

or personal enrichment of the Executive at the expense of the Company;




 




(iii)                               persistent failure by the Executive to

perform the duties of the Executive’s employment, which failure is demonstrably

willful and deliberate on the part of the Executive and constitutes gross

neglect of duties by the Executive and which is not remedied within 90 days

after receipt of written notice thereof; or




 




(iv)                              the indictment or conviction of the

Executive for a felony if the act or acts constituting the felony are

substantially detrimental to the Company or its reputation.




 





























 




                (b)           “Change

in Control” shall be deemed to have occurred if:




 




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




 




(A)                              for whose election

proxies shall have been solicited by the Board of Directors of the Company, or




 




(B)                                who are then

serving as directors appointed by the Board of Directors to fill vacancies on

the Board of Directors caused by death or resignation (but not by removal) or

to fill newly created directorships,




 




(ii)                                  30% or more of the

outstanding voting stock of the Company is acquired or beneficially owned (as

defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, or

any successor rule thereto (the “Exchange Act”)) by any individual, entity or

group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act),

provided, however, that the following acquisitions and beneficial ownership

shall not constitute Changes in Control pursuant to this Section 9(a)(ii):




 




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




 




(B)                                any acquisition or

beneficial ownership by any employee benefit plan (or related trust) sponsored

or maintained by the Company or one or more of its subsidiaries, or




 




(C)                                any acquisition or

beneficial ownership by the Executive or any group that includes the Executive,

or




 




(D)                               any acquisition or

beneficial ownership by a parent corporation of the Company (after giving

effect to the merger or statutory share exchange) or its wholly-owned subsidiaries, as long as they shall remain wholly-owned subsidiaries, of 100% of

the outstanding voting stock of the Company as a result of a merger or

statutory share exchange that complies with Section 9(b)(iii)(A)(2) or the

exception in Section 9(b)(iii)(B) in all respects,




 




(iii)                               the shareholders of the Company

approve a definitive agreement or plan to




 




(A)                              merge or

consolidate the Company with or into another corporation (other than (1) a

merger or consolidation with a subsidiary of the Company or

(2) a merger in which




 





























 




(i)                                     the Company is the surviving corporation,




 




(ii)                                  no outstanding

voting stock of the Company (other than fractional shares) held by shareholders

immediately prior to the merger is converted into cash, securities, or other

property (except into (I) voting stock of a parent corporation of the Company

(after giving effect to the merger) owning directly, or indirectly through

wholly-owned subsidiaries, both beneficially and of record 100% of the voting

stock of the Company immediately after the merger or (II) cash upon the exercise

by holders of voting stock of the Company of statutory dissenters’ rights),




 




(iii)                              the persons who

were the beneficial owners, respectively, of the outstanding common stock and

outstanding voting stock of the Company immediately prior to such merger beneficially

own, directly or indirectly, immediately after the merger, more than 70% of,

respectively, the then outstanding common stock and the then outstanding voting

stock of the surviving corporation in the merger or its parent corporation, and




 




(iv)                             if voting stock of

the parent corporation of the Company (after giving effect to the merger) is

exchanged for voting stock of the Company in the merger, all holders of any

class or series of voting stock of the Company immediately prior to the merger

have the right to receive substantially the same per share consideration in

exchange for their voting stock of the Company as all other holders of such

class or series),




 




(B)                                exchange, pursuant

to a statutory exchange of shares of voting stock of the Company held by

shareholders of the Company immediately prior to the exchange, shares of one or

more classes or series of voting stock of the Company for cash, securities or

other property, except for (a) voting stock of a parent corporation of the

Company (after giving effect to the statutory share exchange) owning directly,

or indirectly through wholly-owned subsidiaries, both

beneficially and of record 100% of the voting stock of the Company immediately

after the statutory share exchange if (I) the persons who were the beneficial

owners, respectively, of the outstanding common stock and outstanding voting

stock of the Company immediately prior to such statutory share exchange own,

directly or indirectly, immediately after the 




 





























 




statutory share exchange more than 70% of,

respectively, the then outstanding common stock and the then outstanding voting

stock of such parent corporation, and (II) all holders of any class or series

of voting stock of the Company immediately prior to the statutory share

exchange have the right to receive substantially the same per share

consideration in exchange for their voting stock of the Company as all other

holders of such class or series or (b) cash with respect to fractional shares

of voting stock of the Company or payable as a result of the exercise by

holders of voting stock of the Company of statutory dissenters’ rights,




 




(C)                                sell or otherwise

dispose of all or substantially all of the assets of the Company (in one

transaction or a series of transactions), or




 




(D)                               liquidate or dissolve

the Company,




 




                                                                                                unless a majority

of the voting stock (or the voting equity interest) of the surviving

corporation or its parent corporation or of any corporation (or other entity)

acquiring all or substantially all of the assets of the Company (in the case of

a merger, consolidation or disposition of assets) or the Company or its parent

corporation (in the case of a statutory share exchange) is, immediately

following the merger, consolidation, statutory share exchange or disposition of

assets, beneficially owned by the Executive or a group of persons, including

the Executive, acting in concert, or




 




(iv)                              (A)          the Company enters into an agreement

in principle or a definitive agreement relating to a Change in Control

described in clause (i), (ii) or (iii) above which ultimately results in such a

Change in Control described in clause (i), (ii) or (iii) hereof,




 




(B)                                a tender or

exchange offer or proxy contest is commenced which ultimately results in a

Change in Control described in clause (i) or (ii) hereof, or




 




(C)                                there shall be an

involuntary termination of employment of Executive or a termination by the

Executive of employment for Good Reason prior to an event that would otherwise

constitute a Change in Control, and Executive reasonably demonstrates that such

event (x) was requested by a third party that has

previously taken other steps reasonably calculated to result in a Change in

Control described in clause (i), (ii) or (iii) above and which ultimately

result in a Change in Control described in clause (i), (ii) or (iii) hereof or

(y) otherwise arose in connection with or in anticipation of a Change in

Control described in clause (i), (ii) or (iii) above that ultimately occurs.




 





























 




                (c)           “Disability”

means the inability of Executive, with or without reasonable accommodation, to

perform the essential functions of Executive’s duties hereunder by reason of

illness or other physical or mental impairment or condition, if such inability

continues for an uninterrupted period of 90 business 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 30 calendar days.




 




                (d)           “Employment

Year” shall mean the 12–month period ending on December 31, 2002,

and each succeeding year during the Term, or such portion of such 12–month

period as the Executive is employed by the Company under this Agreement.




 




                (e)           “Good

Reason” for termination of the Executive’s employment at the instance of

Executive means termination for:




 




                (i)            Company’s material breach of this

Agreement, which is not remedied within 30 days after receipt of written notice

thereof;




 




                                                                (ii)           the assignment to the Executive,

without the Executive’s written consent, of duties and responsibilities that

are substantially inconsistent with, or materially diminish, the Executive’s

position as Vice President, Global Manufacturing of the Company other than for

Cause or on account of Disability; or




 




                                                                (iii)          in the event of a termination of the

Executive’s employment with the Company at the time of or after the First

Change in Control, and prior to the end of the Transition Period




 




(A)                              the Executive shall not be given

substantially equivalent or greater title, duties, responsibilities and

authority or substantially equivalent or greater salary and other remuneration

and fringe benefits (including paid vacation), in each case as compared with

the Executive’s status immediately prior to the First Change in Control, other

than for Cause or on account of Disability,




 




(B)                                the Company shall have failed to obtain

assumption of this Agreement by any successor as contemplated by Section 11,




 




(C)                                the Company shall require the Executive

to relocate to any place other than a location within twenty–five miles

of the location at which the Executive performed his duties immediately prior

to the First Change in Control or, if the Executive performed such duties at

the Company’s principal executive offices, the Company shall relocate its

principal executive offices to any location other than a location within twenty–five

miles of the 




 





























 




location of the principal executive offices immediately prior to the

First Change in Control,




 




(D)                               the Company shall require that the

Executive travel on Company business to a substantially greater extent than

required immediately prior to the First Change in Control, or




 




(E)                                 subject to the limitations contained in

Section 6(a)(i), the Executive shall terminate employment with the Company

during the thirty-day period (the “Window Period”) immediately following the

first anniversary of the First Change in Control (provided that for purposes of

this Section 9(e)(iii)(E) only, all references in the definition of Change in

Control in Section 9(b) (as used in the definition of “First Change in Control”

in Section 6) to 30% and 70% shall instead be deemed to be references to 50%),

and such termination would not otherwise constitute a termination for Good

Reason.




 




                (f)            “Plan

Year” shall mean the plan year with respect to which awards are determined

under the STIP.




 




                (g)           “person”

shall mean an individual, partnership, corporation, limited liability company,

estate, trust or other entity.




 




                (h)           “STIP”

shall mean the Company’s Short–Term Incentive Plan as in existence at the

date hereof or any successor plan.




 




                (i)            “Transition Period” shall mean the

three–year period commencing on the date of the earliest to occur of a

Change in Control described in clause (i), (ii) or (iii) of Section 9(b) (the

“Commencement Date”) and ending on the third anniversary of the Commencement

Date.




 




                (j)            “voting stock” shall mean all

outstanding shares of capital stock entitled to vote generally in the election

of directors, considered for purposes of this Agreement as one class, and all

references to percentages of the voting stock shall be deemed to be references

to percentages of the total voting power of the voting stock.




 




                10.           Non-Competition,

Non-Solicitation and Non-Disclosure. 

The Executive agrees to be bound by the terms of the Employee Agreement

attached hereto as Exhibit A, which Employee Agreement is incorporated

herein by reference.




 




                11.           Successors and Assigns.




 




                (a)           This

Agreement is binding on and inures to the benefit of the Executive and

Executive’s heirs, legal representatives and permitted assigns, and on the

Company and its 




 





























 




successors and permitted

assigns.  No rights or obligations of

the Executive or the Company hereunder may be assigned, pledged, disposed of or

transferred by such party to any other person or entity without the prior

written consent of the other party.




 




(b)           The

Company will require any successor (whether direct or indirect, by purchase of

a majority of the outstanding voting stock of the Company or all or

substantially all of the assets of the Company, or by merger, consolidation or

otherwise), by agreement in form and substance satisfactory to the Executive,

to assume expressly and agree to perform this Agreement in the same manner and

to the same extent that the Company would be required to perform it if no such

succession had taken place. Failure of the Company to obtain such agreement

prior to the effectiveness of any such succession (other than in the case of a

merger or consolidation) shall be a breach of this Agreement and shall entitle

the Executive to compensation from the Company in the same amount and on the

same terms as the Executive would be entitled hereunder if the Executive had

otherwise terminated the Executive’s employment for Good Reason, except that

for purposes of implementing the foregoing, the date on which any such

succession becomes effective shall be deemed the Termination Date. As used in

this Agreement, “Company” shall mean the Company as hereinbefore defined and

any successor to its business and/or assets as aforesaid which is required to

execute and deliver the agreement provided for in this Section 11(b) or

that otherwise becomes bound by all the terms and provisions of this Agreement

by operation of law.




 




                12.           Separate

Representation.  The Executive

hereby acknowledges that he has sought and received independent advice from

counsel of his own selection in connection with this Agreement and has not

relied to any extent on any officer, director or shareholder of, or counsel to,

the Company in deciding to enter into this Agreement.




 




                13.           Governing

Law.  This Agreement shall be

construed under and governed by the laws of the State of Minnesota.




 




                14.           Withholding

of Taxes, Etc.  All payments to the

Executive hereunder are subject to withholding of income and employment taxes

and all other amounts required by law.




 




                15.           Specific

Performance.  Each of the parties

acknowledges and agrees that the other party would be damaged irreparably in

the event any of the covenants contained in this Agreement are not performed in

accordance with their specific terms or otherwise are breached.  Accordingly, each of the parties agrees that

the other party shall be entitled to an injunction or injunctions to prevent

breaches of such covenants and to enforce specifically such covenants in any

action instituted before a proper forum in addition to any other remedy to

which such other party may be entitled under this Agreement or at law or in

equity.




 




                16.           Arbitration

and Attorney’s Fees and Costs.  The

Executive and the Company agree that any dispute or claim that relates to or

arises out of Executive’s employment with the Company shall be resolved by the

Rules of Arbitration set forth in Exhibit B to this 




 





























 




Agreement.  Disputes and claims encompassed by this

Agreement include all applicable federal and state employment related claims,

whether based on common law (such as breach of contract or defamation) or

statutes (such as the Americans With Disabilities Act, Title VII of the Civil

Rights Act of 1964, the Age Discrimination in Employment Act, and the Minnesota

Human Rights Act).  The Rules of

Arbitration are intended to be exclusive and awards issued pursuant to the

rules are final and binding.  The

Executive is entitled to retain independent representation of his or her

choosing for any dispute relating to Executive’s employment or interpretation

of this agreement.  All fees, costs, and

expenses of any nature whatsoever, including expert witnesses, arising out of

said representation shall be paid in a timely way (30 days or less after

presentation of invoice) by the Company. 

The Executive and the Company acknowledge and agree that this

arbitration provision is beneficial to both parties because it provides a

quick, less expensive and confidential manner of resolving finally any dispute

or claim.  The cost of any arbitration,

including attorneys’ fees and arbitration expenses of both the Company and the

Executive, and the cost of any court proceedings permitted by this Agreement,

including attorneys’ fees and court costs of both the Company and the

Executive, shall be paid by the Company. 

Notwithstanding anything to the contrary provided in this

Section 16 and without prejudice to the above procedures, either party may

apply to any court of competent jurisdiction for temporary injunctive or other

provisional judicial relief if in such party’s sole judgment such action is

necessary to avoid irreparable damage or to preserve the status quo until such

time as the arbitration award is rendered or the controversy is otherwise

resolved.




 




                17.           Notices.  All notices hereunder shall be delivered by

hand or sent by registered or certified mail, return receipt requested, postage

prepaid, to the party to receive the same at the address set forth with the

signature of such party hereto or at such other address as may have been

furnished to the sender by notice hereunder.




 




                18.           Counterparts.  This Agreement may be executed in

counterparts, each of which when so executed shall be deemed to be an original,

and such counterparts shall together constitute but one and the same

instrument.




 




                19.           Entire

Agreement.  This Agreement and the documents

and instruments referred to herein contain the entire understanding of the

parties hereto with respect to the employment of the Executive by the Company.




 




                20.           Amendments

and Waivers.  No provision hereof

may be altered, amended, modified, waived or discharged in any way whatsoever

except by written agreement executed by both parties.  No delay or failure of either party to insist, in any one or more

instances, upon performance of any of the terms and conditions of this

Agreement or to exercise any rights or remedies hereunder shall constitute a

waiver or a relinquishment of such rights or remedies or any other rights or

remedies hereunder.




 




21.           Severability;

Severance. In the event that any portion of this Agreement is held to be

invalid or unenforceable for any reason, it is hereby agreed that such

invalidity or unenforceability shall not affect the other portions of this

Agreement and that the remaining 




 





























 




covenants, terms and conditions or portions hereof shall remain in full

force and effect, and any court of competent jurisdiction or arbitrator, as the

case may be, may so modify the objectionable provision as to make it valid,

reasonable and enforceable. In the event that any benefits to the Executive

provided in this Agreement are held to be unavailable to the Executive as a

matter of law, the Executive shall be entitled to severance benefits from the

Company, in the event of an involuntary termination of employment of the

Executive by the Company (other than a termination on account of the death or

Disability of the Executive or a termination for Cause) or a termination by the

Executive for Good Reason during the Term occurring at the time of, or

following, the occurrence of a Change in Control, at least as favorable to the

Executive (when taken together with the benefits under this Agreement that are

actually received by the Executive) as the most advantageous benefits made

available by the Company to employees of comparable position and seniority to

the Executive during the five–year period prior to the First Change in

Control.




 




22.           Term.

This Agreement shall commence on the date of this Agreement and shall

terminate, and the term of this Agreement (the “Term”) shall end, on

(A) December 31, 2003, 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 the Executive to

the other party hereto at least 60 days prior to December 31, 2003 or the

extension year then in effect, or (B) if the Commencement Date occurs prior to

December 31, 2003 (or prior to the end of the extension year then in effect),

the third anniversary of the Commencement Date.




 




23.           Replacement

of Prior Agreement(s).  This

Agreement replaces and supersedes all prior Management Agreement(s) between the

Company and the Executive of any nature whatsoever, which Original Agreement(s)

shall be of no further force or effect.




 




 




                IN WITNESS WHEREOF, the parties hereto have caused

this Agreement to be duly executed on the date and year first above written.




 




	

  EXECUTIVE


  	

   


  	

  TENNANT COMPANY


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Name:  Philip R. Hagberg


  	

   


  	

  Name:


  	

   


  
	

   


  	

   


  	

   


  
	

  Address:


  	

   


  	

   


  	

  Title:


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  Address: