TENNANTS LONG-TERM INCENTIVE PLAN (LTIP) 2007

OBJECTIVE

To maximize Economic Profit Improvement.

LTIP DESIGN

It is essential for the management team to focus on common goals and objectives and to work towards the organization’s long-term success. One vehicle to help facilitate this is a Long-Term Incentive Plan (LTIP). Tennant’s LTIP has been designed to reward:

1.   Achievement of long-term financial objectives

2.   Improvement in Tennant stock price

ECONOMIC
PROFIT (EP)

For the 2007 LTIP, Tennant will be utilizing Economic Profit (EP) improvement as the primary driver of our business. As a result, objectives are tied directly to EP improvement over the three-year performance period (2007-2009).

The primary elements of EP are:

•     Sales

•     Operating Expenses

–     Cost of Sales

–     Selling and Administration Expenses

•     Tax Rates

•     Capital Charge on net assets, including:

–     Inventories

–     Receivables

–     Property, Plant and Equipment

Payout under the EP element is a function of how well the Company performs vs. target performance (i.e., actual three-year aggregate EP improvement vs. target EP improvement as shown in Attachment A).

LTIP Payout
Formula

LTIP Payout Formula =

Base Salary X LTIP Award % = Target Award

The target award is then converted into a target stock award (70% of the target award) and a target cash award (30% of the target award). Actual Awards will be based actual EP change over the three-year performance period vs. target change over the three-year performance period with a maximum payout of 2X the target cash and shares. For performance and corresponding award percentages, please refer to attachment A.

Example —

An LTIP participant has a base salary of $125,000 and a target award of 15% of base. The stock price at the beginning of the measurement period is $40 and at the end of the measurement period is $50.

Target Incentive: $125,000 X 15% = $18,750

Stock Target Award: ($18,750 X 70%)/$40 = 328 shares

Cash Target Award: ($18,750 X 30%) = $5,625

The Company achieves a 110% factor based on achievement in excess of targeted EP and the schedule outlined in Attachment A.

110% X 328 Shares = 361 shares (rounded to nearest share)

110% X $5,625 = $6,187

Total Award Value (paid in shares and cash):

Share Award: 361 shares X $50 share price: $18,047

Cash Award: $6,187

Total Award Value: $24,234

LTIP Administration

The Management Committee will determine the final amounts of LTIP Awards to participants, except with respect to Senior Management Team (SMT) members whose awards will be determined by the Board Compensation Committee. The Board Compensation Committee may exercise negative discretion to reduce the amount of, or eliminate, an LTIP Award that otherwise would be payable. Such determinations, except in the case of the LTIP Award for the Chief Executive Officer, shall be made after considering the recommendations of the Chief Executive Officer.

The Management Committee may impose additional performance measures or modify performance measures applicable to participants (other than SMT members, whose performance measures may be modified by the Board Compensation Committee), except in the case where the action would result in the loss of an otherwise available exemption under Section 162(m), if the Committee determines that the performance measures have become unsuitable as a result of certain events.

DEFINITIONS

BASE SALARY

The total base salary of an individual on March 31^st of the first year of the LTI plan performance period.

OBJECTIVES

Company goals will be developed, approved, and communicated prior to the first quarter of the Plan Performance Period.

MANAGEMENT COMMITTEE

The Management Committee will consist of Tennant’s CEO, VP of HR/Administration and CFO. This Committee has the responsibility for administration of the Plan, including without limitation adding or modifying performance measures applicable to participants and resolving any issues around Plan interpretation, provided that the Board Compensation Committee must approve any such actions that affect the members of the Company’s Senior Management Team.

PERFORMANCE PERIOD

The Performance Period is the three-year period over which the Actual and Goal EP Growth are measured.

MATERIAL CHANGES

In those instances where there are material changes in the business (e.g., mergers, acquisitions, divestitures), the Management Committee reserves the right, without limitation, to make corresponding adjustments to any or all aspects of the Plan (i.e., funding schedules, individual objectives, etc.). The Board Executive Compensation Committee must approve changes that affect the Senior Management Team.

AWARD DISTRIBUTION

Normally, payouts will occur near mid-March, following the end of the performance period.

TERMINATION

Should a participant’s employment terminate prior to the end of the Plan Performance Period for any reason other than retirement, death, or disability (as defined by the 1999 Stock Plan), the participant will not be entitled to an incentive payment.

If a participant’s employment with the Company terminates by reason of retirement, death, or disability, a prorated payment will be made within 90 days following the end of the performance period, based upon the time the participant served during the performance period. The final award will be based on the performance over the entire performance period.

CHANGE IN JOB WITHIN
THE COMPANY

A participant who changes jobs but is not eligible for this Plan in the future retains the right to payment under this Plan for any performance periods that have already begun.

DEFINITIONS (Cont’d)

EMPLOYMENT

AT WILL

Participation in the Incentive Plan does not constitute a guarantee of continued employment to individuals in the Plan. Employment with the Company remains “at will,” which means that all aspects of the job, including employment by the Company, may be changed or terminated by the Company at any time with or without cause. Likewise, the individual may terminate employment with Tennant.

PLAN INTERPRETATION

AND

IMPLEMENTATION

The Company reserves the right, without limitation, to interpret and implement this Plan in accordance with the 1999 Stock Incentive Plan. Interpretations of this Plan are generally made by the Management Committee.