<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TENNANT COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
TENNANT COMPANY
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
MAY 4, 2000
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Tennant Company will be held at the
corporate headquarters of Tennant Company, 701 North Lilac Drive, Minneapolis,
Minnesota, on Thursday, May 4, 2000, at 10:30 a.m., Central Daylight Time, for
the following purposes:
(1) To elect directors for a three-year term;
(2) To ratify the appointment of KPMG LLP as independent auditors of the
Company; and
(3) To act upon any other business that may properly come before the
meeting.
Only holders of Common Stock of record at the close of business on March 6,
2000, will be entitled to vote at the meeting or any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you plan to
come to the meeting, please sign, date and return your Proxy in the reply
envelope provided. Your cooperation in promptly signing and returning your Proxy
will help avoid further solicitation expense.
March 31, 2000 James J. Seifert, Secretary
TENNANT COMPANY
E S T A B L I S H E D 1 8 7 0
701 N. LILAC DRIVE, P.O. BOX 1452, MINNEAPOLIS, MINN. 55440
<PAGE>
[LOGO]
TENNANT COMPANY
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
Tennant Company (the "Company"), on behalf of its Board of Directors, of Proxies
for the Annual Meeting of Shareholders to be held Thursday, May 4, 2000, and any
adjournment thereof. Stock represented by Proxies will be voted as follows:
where specification is made in the Proxy, the stock will be voted in accordance
therewith. Where no specification is made in the Proxy, the stock will be voted
for all proposals. Proxies may be revoked at any time before being voted by
giving written notice of revocation at the mailing address noted or at the
meeting or by a later-dated Proxy delivered to an officer of the Company.
Personal attendance and voting in person does not revoke a written Proxy.
There were outstanding on March 6, 2000, the record date for shareholders
entitled to vote at the meeting, 9,039,092 shares of Common Stock, each entitled
to one vote.
Expenses in connection with the solicitation of Proxies will be paid by the
Company. Solicitation of Proxies will be principally by mail. In addition,
several of the officers or employees of the Company may solicit Proxies, either
personally or by telephone, or by special letter, from some of the shareholders.
The Company also will make arrangements with brokerage houses and other
custodians, nominees and fiduciaries to send Proxies and proxy material to their
principals, and will reimburse them for their expenses in so doing.
The mailing address of the principal executive office of the Company is 701
North Lilac Drive, P.O. Box 1452, Minneapolis, Minnesota 55440. This Proxy
Statement and form of Proxy enclosed are being mailed to shareholders commencing
March 31, 2000.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of February 29, 2000, certain
information with respect to all shareholders known to the Company to have been
beneficial owners of more than 5% of its Common Stock, and information with
respect to the Company's Common Stock beneficially owned by directors (and
director nominees) of the Company, the executive officers of the Company
included in the Summary Compensation Table set forth under the caption
"Executive Compensation" below and all directors and executive officers of the
Company as a group. Except as otherwise indicated, the shareholders listed in
the table have sole voting and investment powers with respect to the Common
Stock owned by them.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK
- ------------------- -------------------- ------------
<S> <C> <C>
U.S. Bank National Association(1) 862,166 shares(2) 9.5%
Minneapolis, MN
U.S. Bank National Association
has sole voting authority for
600 shares, shared voting
authority for 861,566(2)
shares, sole investment
authority for 600 shares, and
shared investment authority
for 861,566(2) shares.
Trimark Financial Corporation(1) 836,700 shares 9.3%
Toronto, Ontario
Mackenzie Financial Corporation(1) 636,000 shares 7.0%
Toronto, Ontario
U.S. Bank National Association(3) 567,960 shares 6.3%
Minneapolis, MN
Roger L. Hale 475,639 shares(4)(5) 5.2%
Janet M. Dolan 87,538 shares(5)(6) *
James H. Moar 19,646 shares(5)(7) *
Thomas J. Vander Bie 28,441 shares(8) *
Keith D. Payden 31,777 shares(5)(9) *
John T. Pain III 12,867 shares(5)(10) *
Andrew P. Czajkowski 10,979 shares(11) *
David C. Cox 10,887 shares(12) *
William I. Miller 9,827 shares(13) *
Arthur D. Collins, Jr. 8,754 shares(14) *
Edwin L. Russell 6,068 shares(15) *
Pamela K. Knous 3,846 shares(16) *
Frank L. Sims 2,468 shares *
All directors and executive officers as a 479,175 shares(5)(17) 5.2%
group (17 persons)
</TABLE>
* An asterisk in the column listing the percentage of shares beneficially
owned indicates the person owns less than 1% of total.
2
<PAGE>
(1) The information set forth above as to the Amount and Nature of Beneficial
Ownership is based upon Schedule 13G statements filed with the Securities
and Exchange Commission reflecting beneficial ownership as of December 31,
1999.
(2) This number includes 541,138 shares held in the "unallocated" account, as
of December 31, 1999, of the Tennant Company Profit Sharing and Employee
Stock Ownership Plan and Trust, as to which U.S. Bank National Association
acts as trustee. The number of "allocated" shares held in such trust
(1,124,813 shares as of December 31, 1999) is not included in this number.
The Securities and Exchange Commission has taken the position, with respect
to similar plans, that the plan trustee is the beneficial owner of shares
held in an unallocated reserve pending allocation to participants'
accounts. The plan trustee disclaims that it or the Trust is the beneficial
owner of shares held in the unallocated account.
(3) All shares are being held in trust for the Pennock family.
(4) Of these shares, Mr. Hale has an interest in 144,074 shares in a trust
established under the will of his mother, of which he is a beneficiary.
Includes 23,394 shares owned by or held in trust for members of his family,
in which he disclaims any beneficial ownership. Also includes 116,700
shares covered by currently exercisable options granted to Mr. Hale.
(5) Includes shares allocated to the individual or group under the Tennant
Company Profit Sharing and Employee Stock Ownership Plan.
(6) Includes 57,153 shares covered by currently exercisable options granted to
Ms. Dolan.
(7) Includes 17,765 shares covered by currently exercisable options granted to
Mr. Moar.
(8) Includes 12,725 shares covered by currently exercisable options granted to
Mr. Vander Bie.
(9) Includes 15,533 shares covered by currently exercisable options granted to
Mr. Payden.
(10) Includes 9,273 shares covered by currently exercisable options granted to
Mr. Pain.
(11) Includes 2,250 shares covered by currently exercisable options granted to
Mr. Czajkowski.
(12) Includes 2,250 shares covered by currently exercisable options granted to
Mr. Cox.
(13) Includes 2,250 shares covered by currently exercisable options granted to
Mr. Miller.
(14) Includes 2,250 shares covered by currently exercisable options granted to
Mr. Collins.
(15) Includes 1,500 shares covered by currently exercisable options granted to
Mr. Russell.
(16) Includes 500 shares covered by currently exercisable options granted to Ms.
Knous.
(17) Of these shares, 2,108 shares are held in the name of the wife of an
executive officer, and 143,777 shares are held in trusts for various family
members, in which such officer disclaims beneficial ownership. Includes
151,523 shares covered by currently exercisable options granted to ten
executive officers of the Company.
3
<PAGE>
DIRECTORS
ELECTION OF DIRECTORS
Pursuant to the Restated Articles of Incorporation of the Company,
directors are elected for staggered terms of three years, with approximately
one-third of the directors to be elected each year.
At the Annual Meeting, three directors are to be elected. The Board of
Directors has designated David C. Cox, William I. Miller, and Edwin L. Russell
as nominees for election to serve three-year terms ending at the time of the
Annual Meeting in 2003 and until their successors are elected and have
qualified. The nominees have indicated a willingness to serve, but in case any
of the nominees is not a candidate at the Annual Meeting, it is the intention of
the persons named in the enclosed form of Proxy to vote in favor of the other
nominees named and to vote for a substitute nominee in their discretion.
The affirmative vote of a majority of the outstanding shares of Common
Stock present and entitled to vote in person or by proxy on the election of
directors is necessary to elect each nominee. For this purpose, a shareholder
voting through a Proxy who abstains with respect to the election of directors is
considered to be present and entitled to vote on the election of directors at
the meeting, and is in effect a negative vote; but a shareholder (including a
broker) who does not give authority to a Proxy to vote, or withholds authority
to vote, on the election of directors shall not be considered present or
entitled to vote on the election of directors.
The following information is furnished with respect to each nominee for
election as a director and for each director whose current term of office will
continue after the meeting:
NOMINEES FOR ELECTION FOR TERMS EXPIRING IN 2003 (CLASS II DIRECTORS):
DAVID C. COX, 62 Director Since 1991
[PHOTO]
Mr. Cox retired in March 1998 as President
and Chief Executive Officer of Cowles Media
Company, in which capacity he had served
since 1985. Mr. Cox joined Cowles Media in
1982 and served as Executive Vice President,
Chief Operating Officer, Treasurer and
Corporate Secretary prior to being named as
President in 1984. Mr. Cox also serves as a
director of National Computer Systems, Inc.
and ReliaStar Financial Corp. His community
activities include serving as a director of
United Way of Minneapolis and a Trustee of
the Nature Conservancy of Minnesota. Mr. Cox
serves as Chair of the Board Affairs
Committee and as a member of the Executive
Committee and the Executive Compensation
Committee.
WILLIAM I. MILLER, 43 Director Since 1994
[PHOTO]
Mr. Miller became Chairman in 1990 and has
been a director since 1985 of Irwin
Financial Corporation, a publicly traded
diversified financial services company. He
was President of Irwin Management Company, a
family investment management company, from
1984 to 1990. Mr. Miller continues to serve
as Chairman of the Board of Irwin Management
Company and as Chairman of the Board of
Tipton Lakes Company, a real estate
development firm. Mr. Miller also serves as
a director of Cummins Engine Company, Inc.
He is a director or trustee of three mutual
funds, the New Perspective Fund, Inc., the
EuroPacific Growth Fund and the New World
Fund. Mr. Miller also is a Trustee of The
Taft School and a director of Public Radio
International. Mr. Miller serves as a member
of the Executive Committee and the Executive
Compensation Committee.
4
<PAGE>
EDWIN L. RUSSELL, 55 Director Since 1997
[PHOTO]
Mr. Russell has served as Chairman,
President and Chief Executive Officer since
1996 of Minnesota Power, Inc., a
multi-services company with holdings in
automotive, water, investments, and electric
businesses. Mr. Russell joined Minnesota
Power, Inc. as President in 1995. Mr.
Russell was previously Group Vice President
of J. M. Huber Corporation, a broadly
diversified manufacturing and natural
resources company. Mr. Russell also serves
as a director for Minnesota Power, Minnesota
Public Radio, Edison Electric Institute,
Duluth's Great Lakes Aquarium at Lake
Superior Center, and United Way of Greater
Duluth, Inc. Mr. Russell serves as a member
of the Audit Committee and the Executive
Compensation Committee.
DIRECTORS WHOSE TERMS EXPIRE IN 2001 (CLASS III DIRECTORS):
ARTHUR D. COLLINS, JR., 52 Director since 1995
[PHOTO]
Mr. Collins is President and Chief Operating
Officer of Medtronic, Inc., a leading
medical device company. Mr. Collins joined
Medtronic in 1992. He was elected to his
present position in 1996 and previously
served as Chief Operating Officer, Corporate
Executive Vice President, and President of
Medtronic International. Prior to joining
Medtronic, Mr. Collins served in a number of
senior executive positions with Abbott
Laboratories from 1978 through 1992, most
recently as Corporate Vice President
responsible for worldwide diagnostic
business units. He serves as a director of
Cargill, Incorporated, Medtronic, Inc., and
U.S. Bancorp. He is also a member of the
Board of Overseers of the Wharton School at
the University of Pennsylvania and on
numerous civic organizations, including the
Walker Art Center. Mr. Collins serves as
Chair of the Executive Compensation
Committee and as a member of the Board
Affairs Committee.
ANDREW P. CZAJKOWSKI, 64 Director Since 1992
[PHOTO]
Mr. Czajkowski retired in December 1999 as
Chief Executive Officer of Blue Cross and
Blue Shield of Minnesota and Aware
Integrated Inc., a non-profit holding
company. Mr. Czajkowski was a founder,
President and Chair of the Minnesota
Comprehensive Health Association, the
state-administered risk pool for those
individuals unable to afford private health
coverage. He served as Chairman of the Board
for Blue Cross and Blue Shield Association
from 1991 through 1994. Mr. Czajkowski
serves as Chair of the Audit Committee and
as a member of the Board Affairs Committee
and the Executive Committee.
PAMELA K. KNOUS, 46 Director Since 1998
[PHOTO]
Ms. Knous has served as Executive Vice
President and Chief Financial Officer of
SUPERVALU INC., a leading food distribution
business, since September 1997. Before
joining SUPERVALU, Ms. Knous served in a
number of senior executive positions with
The Vons Companies, Inc., a regional food
distributor, from 1991 to 1997, most
recently as Executive Vice President, Chief
Financial Officer and Treasurer. Ms. Knous
was employed by the accounting firm of KPMG
LLP for 14 years prior to assuming her
position at Vons. Ms. Knous also serves as a
director of the Minnesota Orchestral
Association. Ms. Knous serves as a member of
the Audit Committee.
5
<PAGE>
DIRECTORS WHOSE TERMS EXPIRE IN 2002 (CLASS I DIRECTORS):
JANET M. DOLAN, 50 Director Since 1998
[PHOTO]
Ms. Dolan has been President of the Company
since April 1998 and was elected as Chief
Executive Officer in April 1999. She previously
served as Chief Operating Officer from April 1998
to April 1999, Executive Vice President from
September 1996 to April 1998 and as Senior Vice
President and General Counsel from December 1994
to September 1996. Ms. Dolan has served in a
number of senior executive positions with the
Company from 1986 to 1996. Ms. Dolan also serves
as a director of Donaldson Company, Inc. and as
a Trustee of the William Mitchell College of
Law. Ms. Dolan serves as Chair of the Executive
Committee.
FRANK L. SIMS, 49 Director Since 1999
[PHOTO]
Mr. Sims serves as President of Cargill's Ag
Producer Services Unit and is a member of
the Management Operating Committee. Mr. Sims
joined Cargill in 1972 and has served in a
number of executive positions. Mr. Sims is
immediate past Chairman of the Board of the
North American Export Grain Association. He
is also a member of the Chicago Board of
Trade, Agriculture Future of America, and
the Minneapolis Medical Research Foundation.
He is a Trustee of the United Theological
Seminary and serves as a director of Ault,
Inc. Mr. Sims serves as a member of the
Audit Committee and the Executive
Compensation Committee.
Delbert W. Johnson, formerly a Class I Director, announced his retirement
from the Board of Directors effective February 11, 2000. The Company will be
seeking a replacement director.
The Board of Directors has an Audit Committee composed of Mr. Czajkowski,
Ms. Knous, Mr. Russell, and Mr. Sims, who joined the Company's Board in August
1999. The Committee met on five occasions during 1999. The primary function of
the Audit Committee is to assist the Board in fulfilling its fiduciary
responsibilities relating to the Company's internal control procedures and
accounting, financial and reporting practices.
The Board has an Executive Compensation Committee composed of Mr. Collins,
Mr. Cox, Mr. Miller, Mr. Russell, and Mr. Sims, which met on four occasions
during 1999. The primary function of the Executive Compensation Committee is to
review and develop executive compensation plans of the Company and determine the
compensation of officers.
The Board has designated an Executive Committee composed of Mr. Cox, Mr.
Czajkowski, Ms. Dolan, and Mr. Miller, which met once during 1999. The primary
function of the Executive Committee is to exercise the authority of the Board of
Directors and the management of the business of the Company in the intervals
between meetings of the Board of Directors.
The Board has designated a Board Affairs Committee composed of Mr. Cox, Mr.
Collins, and Mr. Czajkowski, which met on three occasions in 1999. The primary
function of the Board Affairs Committee is to set Board compensation and
recommend nominees for election to the Board. Shareholders who wish to suggest
qualified candidates to the Committee should write to James J. Seifert,
Secretary of the Company, at 701 North Lilac Drive, P.O. Box 1452, Minneapolis,
Minnesota 55440, stating in detail the candidate's qualifications for
consideration by the Committee. If a shareholder wishes to nominate a director
other than a person nominated by or on behalf of the Board of Directors, he or
she must comply with certain procedures set out in the Company's Restated
Articles of Incorporation. Under the Company's Restated Articles of
Incorporation, no person (other than a person nominated by or on behalf of the
Board of Directors) shall be eligible for election as a director at any annual
or special meeting of shareholders unless a written request that his or her name
be placed in nomination is received from a shareholder of record by the
Secretary of the Company not less than 75 days prior to the date fixed for the
meeting, together with the written consent of such person to serve as a
director.
During 1999, the Board of Directors met on five occasions. All incumbent
directors attended more than 75% of the aggregate numbers of meetings of the
Board and of committees on which they served during 1999, except for Mr.
Czajkowski and Mr. Russell who each attended more than 70 percent of the total
meetings held.
6
<PAGE>
COMPENSATION OF DIRECTORS
Non-employee directors are compensated solely with Restricted Stock and
stock options. Pursuant to the Tennant Company Restricted Stock Plan for
Non-employee Directors (the "Director Plan"), non-employee directors are
entitled to an annual retainer and attendance fees payable in the form of
Restricted Stock issued once every three Board Years (as defined in the
Director Plan). With respect to the annual retainer, the Director Plan
provides for the issuance of Restricted Stock in an amount equal to 1.5 times
the designated annual retainer for the Board Year then commencing and the
next two succeeding Board Years, based on the then Fair Market Value (as
defined in the Director Plan) of such Restricted Stock. For the three Board
years commencing January 1, 1999, this equated to a retainer of $63,000,
which is $14,000 per year (the amount of the annual retainer at that time)
times three years times 1.5. With respect to attendance fees for the three
Board years commencing January 1, 1999, a standard number of meetings for
directors was set at fourteen per year (Board and committee meetings) at a
designated amount of $750 per meeting. Fourteen times $750 equals $10,500
each year or $31,500 for three years. The total value of the Restricted Stock
Grant for the three years commencing January 1, 1999, was therefore $94,500
($63,000 for the retainer plus $31,500 for meeting fees). On May 7, 1999,
each non-employee director was issued 2,700 shares of Restricted Stock, based
on a Fair Market Value of $35.00 per share. Under the Director Plan,
non-employee directors who were elected or appointed to the Board on a date
other than a regular issue date would receive a prorated number of Restricted
Shares and stock options.
The Director Plan provides that the restrictions on the Restricted Stock
will lapse only upon the first to occur of (a) the death of the director, (b)
the disability of the director preventing continued service on the Board, (c)
retirement of the director from the Board in accordance with any policy on
retirement of Board members then in effect, (d) the termination of service as a
director by reason of resignation at the request of the Board, the director's
failure to have been nominated for reelection to the Board or to have been
re-elected by the shareholders, or the director's removal by the shareholders,
or (e) a change in control of the Company (as defined in the Director Plan). In
no event will the restrictions lapse prior to six months after the date of
issuance. Upon the occurrence of an event causing the restrictions to lapse,
Restricted Stock issued to the director in payment of the retainer for Board
Years commencing following the occurrence of the event is forfeited and returned
to the Company.
Pursuant to the Tennant Company Non-employee Director Stock Option Plan,
each non-employee director received an option grant for 2,000 shares at Fair
Market Value of $35.00 per share on May 10, 1999. Each non-employee director
will receive an option grant for 2,000 shares at Fair Market Value on May 4,
2000.
7
<PAGE>
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY. The Executive Compensation Committee of the Board
of Directors is composed entirely of outside directors and is responsible for
reviewing and developing executive compensation plans of the Company. In
addition, the Executive Compensation Committee, pursuant to authority delegated
by the Board, determines on an annual basis the compensation to be paid to the
Chief Executive Officer and each of the other executive officers of the Company.
The objectives of the Company's executive compensation program are to:
- Motivate executives to achieve corporate goals by placing a
significant portion of pay at risk.
- Provide a strong link between the Company's short- and long-term
goals and executive compensation.
- Provide competitive total compensation in order to attract and
retain high-caliber key executives critical to the long-term
success of the Company.
- Align the executives' interests with those of the shareholders by
providing a significant portion of compensation in Company Common
Stock.
The executive compensation program is intended to provide an overall level
of compensation opportunity that is competitive with other U.S. durable goods
manufacturing companies. To determine competitiveness, the Committee annually
uses sales volume adjusted data from a top-management compensation survey. This
data is verified every three to four years through the use of an outside
consultant which compares all aspects of the Company's executive compensation
with that of other similar companies. Actual compensation levels may be greater
or less than average competitive levels depending on annual and long-term
Company performance, individual performance against goals set at the beginning
of the year, and scope of responsibilities as compared to a similar position
within the surveys. The Executive Compensation Committee uses its discretion to
set executive compensation at levels warranted in its judgment by external,
internal or individual circumstances.
The Company currently has a general policy with respect to the limit under
Internal Revenue Code Section 162(m) on the deductibility of the qualifying
compensation paid to its executives. Certain of the Company's compensation plans
should qualify for exemption from the deduction limitations under this Section.
EXECUTIVE COMPENSATION PROGRAM. The Company's executive compensation
program is comprised of base salary, annual cash incentive compensation and
long-term incentive compensation in the form of cash-based awards, stock awards,
Restricted Stock grants, and stock options. The long-term plans have a
significant portion of their payout in Company Common Stock. In addition,
executives receive various benefits, including medical and retirement plans,
generally available to employees of the Company.
BASE SALARY. Base salary levels for the Company's executives are
competitively set relative to the average of other U.S. durable goods
manufacturing companies of similar size. In determining salaries, the Executive
Compensation Committee also takes into account individual experience,
performance, and scope of responsibility, although no particular weight is given
to any one factor.
ANNUAL CASH INCENTIVE COMPENSATION. The purpose of the annual cash
incentive program is to provide a direct financial incentive in the form of
annual cash incentives to executives to achieve their business units' and/or the
Company's annual goals. Target incentive awards are set at a level consistent
with the averages of other U.S. durable goods manufacturers, after adjusting for
sales volume. In fiscal 1999, the following performance measures were generally
used: Company economic profit; company or business unit sales growth; business
unit gross profit; and business unit operating income. Economic profit is based
on the Company's net operating profit after taxes less a charge for assets used
in the business. Executives can earn incentive compensation based on the level
of economic profit in the current year. A one-time program was instituted in
1999 whereby Tennant
8
<PAGE>
executives could elect to take all or part of their annual incentive in stock
options in lieu of cash. The executive was issued an option to purchase Company
common stock with a value of three dollars for every one dollar of incentive
amount that was exchanged. The exercise price of those options was the Fair
Market Value on the date of issue. This provides the Company's executives with
an opportunity to increase their future ownership in Tennant.
STOCK INCENTIVE PLANS. The stock incentive plans are the Company's
long-term incentive plans for executive officers and key managers. The
objectives of the program are to align executive and shareholder long-term
interests by creating a direct link between executive pay and shareholder
return, and to enable executives to develop and maintain a significant,
long-term ownership position in the Company's Common Stock. In order to better
define for executives the minimum amount of stock that should be held, the
Executive Compensation Committee established in 1993 executive stock holding
guidelines. These guidelines, which were revised late in 1997, identify the
amount of stock (restricted and unrestricted) each executive should hold as a
multiple of his or her base pay. The current guidelines are: CEO - 6 times base
salary and Vice Presidents - 3 times base salary. Each year, the Committee
reviews the progress of each executive towards those goals.
The Executive Compensation Committee annually grants a variety of
stock-based awards under the Company's stock incentive plans. The amount of the
awards increases as a function of higher salary and position in the Company. The
award amounts, as a percent of base salary, are reviewed and adjusted, as
necessary, every three to four years to ensure their competitiveness. The last
review, conducted in 1999, showed that the Company's executive pay was
competitive.
During 1999, the following types of awards were granted:
- Management Incentive Plan
Awards earned under this plan are placed in a bank and are paid
out 1/3 per year.
- Restricted Stock
These grants vest 100% at the end of the restriction period.
- Stock Options and Stock Appreciation Rights
These options and rights permit executives to purchase Company
stock during a ten-year period at the price in effect at the
beginning of that period.
CHIEF EXECUTIVE OFFICER COMPENSATION. Ms. Dolan's fiscal 1999 base salary
and incentive award were determined by the Executive Compensation Committee in
accordance with the methodology described above.
Base Salary - Ms. Dolan's total base salary for fiscal 1999 was
$327,500. This amount approximates the market average for
durable goods manufacturing companies of similar size.
Annual Incentive - For fiscal 1999, Ms. Dolan has elected stock options
in lieu of cash. Accordingly, options for 18,096 shares
were awarded to Ms. Dolan.
Long-Term Performance Grants - Ms. Dolan received in 1999 a Management
Incentive Plan award equal to 50% of her
total base salary and a Restricted Stock
grant equal to approximately 10% of her
total base salary. She also received a
stock option grant equal to 7 times her
total base salary which covers 1999, 2000,
and 2001.
Mr. Hale retired as Chief Executive Officer on April 5, 1999. Mr. Hale's 1999
compensation consisted of $121,276 in base salary and an annual incentive award
of $66,881.
Arthur D. Collins, Chairman Edwin L. Russell
David C. Cox Frank L. Sims
William I. Miller
Members of the Executive Compensation Committee
9
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Company and the four other most highly compensated executive
officers of the Company (the "named executive officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- ------------------------------- -------------------------------------- ------------------------------ --------------- -------------
RESTRICTED ALL OTHER
NAME AND STOCK LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) AWARD(S)(3) OPTIONS(4) PAYOUTS(5) SATION(6)
($) ($) ($) (#) ($) ($)
- ------------------------------- ---------- ------------- ------------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Roger L. Hale 1999 121,276 341,265 0 26,700 1,376,459(7) 6,566
Former President and 1998 463,697 274,384 46,538 48,793 771,249 29,806
Chief Executive Officer 1997 327,132 202,805 42,319 59,407 521,324 23,538
Janet M. Dolan 1999 327,500 38,415 35,000 95,073 185,958 17,599
President and 1998 288,003 166,358 28,288 21,696 218,388 18,463
Chief Executive Officer 1997 256,584 130,437 26,349 19,046 120,315 16,530
James H. Moar(8) 1999 268,763 13,939 27,520 25,665 0 9,072
Chief Operating Officer 1998 117,466 55,756 11,789 11,000 0 0
Thomas J. Vander Bie 1999 210,964 86,664 21,120 9,650 86,079 0
Senior Vice President, 1998 198,596 91,529 20,367 6,711 101,807 0
NA Commercial Sales 1997 189,816 86,376 115,747 6,964 75,137 0
Keith D. Payden 1999 191,330 44,667 19,120 10,343 111,990 32,667
Chief Information Officer 1998 191,326 79,274 19,199 6,437 133,094 34,112
1997 176,853 76,748 18,003 6,873 128,280 30,965
John T. Pain III 1999 178,200 7,770 17,840 11,473 12,063 11,262
Vice President, Chief 1998 136,251 53,126 5,693 1,900 16,761 7,079
Financial Officer and 1997 107,652 7,508 0 250 10,581 4,497
Treasurer
</TABLE>
(1) A deferral plan is provided for Tennant executives which allows them to
defer a portion of their salary. In 1997, the deferral was in the form of a
performance share grant and, therefore, the amounts shown in the above
table for such year do not include these deferral amounts. For 1998, a new
plan was put into place which provides for a cash deferral in lieu of such
performance shares. As a result, the amounts shown in the above table for
1998 and 1999 include the deferral.
Under the new plan, executives may elect to defer up to 25% of their
current year salary. Payout is made in cash within ten years of termination
of employment. Interest is paid on these deferred amounts at a rate set
annually by the Executive Compensation Committee. For 2000, the interest
rate has been set at 7% of the amounts deferred. Of the total 1999 salaries
shown in the table, the following deferral has been made: Mr. Payden,
$19,130.
(2) Amounts represent Management Incentive Plan payouts and any 1999 annual
incentive amounts that were not exchanged for stock options under a
one-time program in 1999 whereby executives could take all or part of their
annual incentive in stock options. The executive was issued an option to
purchase Company common stock with a value of three dollars for every one
dollar of incentive amount that was exchanged. The exercise price of those
options was the Fair Market Value on the date of issue. The Management
Incentive Plan amounts are as follows: Mr. Hale, $274,384; Ms. Dolan,
$38,415; Mr. Moar, $13,939; Mr. Vander Bie, $8,006; Mr. Payden, $7,572; and
Mr. Pain, $7,770. Amounts of annual incentive taken in cash are: Mr. Hale,
$66,881; Mr. Vander Bie, $78,658; and Mr. Payden, $37,095. Amounts taken
under the stock option program are reflected under the option column in
table.
10
<PAGE>
(3) The value of the Restricted Stock awards was determined by multiplying the
fair market value of the Company's Common Stock on the date of grant by the
number of shares awarded. As of December 31, 1999, and using the fair
market value of the Company's Common Stock as of that date, the number and
value of aggregate Restricted Stock award holdings were as follows: 0
shares ($0) by Mr. Hale; 875 shares ($28,656) by Ms. Dolan; 688 shares
($22,532) by Mr. Moar; 528 shares ($17,292) by Mr. Vander Bie; 478 shares
($15,655) by Mr. Payden; and 446 shares ($14,607) by Mr. Pain. These shares
of Restricted Stock have a two-year vesting period, from respective dates
of issuance. Dividends are paid on Restricted Stock awards at the same time
and rate as paid to all shareholders.
(4) Amounts include Management Incentive Plan payouts that were taken in stock
options under a one-time program in 1999 whereby executives could take all
or part of their payout in stock options. The executive was issued an
option to purchase Company common stock with a value of three dollars for
every one dollar of incentive amount that was exchanged. The exercise price
of those options was the Fair Market Value on the date of issue. The
following incentive payouts were taken in stock options: Ms. Dolan,
$193,778; Mr. Moar, $123,847; Mr. Payden, $37,095; and Mr. Pain, $78,950.
(5) Amounts represent the dollar value of Performance Shares paid out in each
fiscal year. Performance Shares were paid in Common Stock on a
share-for-share basis with respect to a minimum of 50% of the Performance
Shares earned (valued, for this purpose, as of December 31 of the
respective years of payment), and the balance was paid in cash.
Participants may elect to defer such payouts, and if so elected, payout is
made, in cash, within ten years of termination of employment. Interest is
paid on these deferred amounts at a rate set annually by the Executive
Compensation Committee. For 2000, the interest rate has been set at 7% of
the amounts deferred. Payments thus deferred are reported in the table for
the year in which they would have been paid but for such deferral election.
Of the total LTIP payouts set forth in the table, the following amounts
were deferred: Mr. Hale, $1,376,459 and Mr. Payden, $111,990.
(6) Amounts represent payments under the Company's Profit Sharing and Employee
Stock Ownership Plan and the Company's Excess Benefit Plan as follows: (a)
Profit Sharing Contributions (up to 5% of certified earnings, the first 2%
of which are contributed to participants' accounts through the allocation
of Company Common Stock from the unallocated ESOP reserve, with the
remainder (if any) of such contributions paid to the participants in cash)
were paid as follows for 1997, 1998, and 1998, respectively: $8,941.34,
$8,913.49, and $5,307.74 to Mr. Hale; $7,392.98, $6,717.21, and $9,039.35
to Ms. Dolan; $0, $0, and $5,320.66 to Mr. Moar; $5,947.55, $5,293.87, and
$6,174.34 to Mr. Payden; and $3,550.84, $4,665.96, and $6,080.60 to Mr.
Pain; (b) employer Matching Contributions relating to employee Individual
Shelter Contributions (Internal Revenue Code Section 401(k) contributions)
were paid as follows for 1997, 1998, and 1999, respectively, through the
allocation of Company Common Stock from the unallocated ESOP reserve:
$2,240.00, $2,240.00, and $695.01 to Mr. Hale; $2,240.00, $2,240.00, and
$1,310.00 to Ms. Dolan; $0, $0, and $1,274.15 to Mr. Moar; $2,240.00,
$2,240.00 and $2,240.00 to Mr. Payden; and $945.91, $1,775.04, and
$2,240.00 to Mr. Pain; (c) Profit Related Retirement Contributions were
paid as follows for 1997, 1998, and 1999, respectively: $12,544.00,
$13,520.00, and $12,409.60 to Mr. Payden; and (d) Excess Benefit Plan
payments were made as follows for 1997, 1998, and 1999, respectively:
$12,356.96, $18,652.66, and $563.15 to Mr. Hale; $6,896.82, $9,505.58, and
$7,249.95 to Ms. Dolan; $0, $0, and $2,476.94 to Mr. Moar; $10,233.15,
$13,057.80, and $11,842.90 to Mr. Payden; and, $0, $638.23, and $2,941.57
to Mr. Pain.
(7) This represents a pro rata payout of Mr. Hale's outstanding Performance
Share grants due to his April 5, 1999, retirement.
(8) Mr. Moar was first appointed as an executive officer in mid-1998.
11
<PAGE>
STOCK OPTION AWARDS IN LAST FISCAL YEAR
The following table summarizes Stock Option awards made during the last
fiscal year under the Tennant Company 1992, 1995, and 1999 Stock Incentive Plans
(collectively, the "Plan") for the named executive officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
% OF TOTAL FOR THE OPTION TERM
GRANTED TO --------------------------------
NAME OPTIONS EMPLOYEES EXERCISE
GRANTED DURING PRICE EXPIRATION 5%(5) 10%(5)
(#) FISCAL YEAR ($/SH)(4) DATE ($) ($)
- -------------------------------------- ----------- ----------------- ------------- --------------- ----------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Roger L. Hale 7,559(2) 2.6 35.1250 2/10/05 90,299 204,857
5,075(2) 1.8 35.1250 2/21/06 72,569 169,118
8,587(2) 3.0 35.1250 2/26/07 144,009 344,927
5,479(2) 1.9 33.6250 2/21/06 75,001 174,783
--------
26,700
Janet M. Dolan 32,000(1) 11.1 35.1250 2/24/09 706,878 1,791,367
1,222(2) 0.4 35.1250 2/10/05 14,598 33,118
1,252(2) 0.4 35.1250 2/21/06 17,903 41,721
983(2) 0.3 35.1250 8/26/06 14,056 32,757
3,498(2) 1.2 35.1250 2/26/07 58,664 140,510
38,022(1) 13.2 34.8750 5/6/09 833,925 2,113,330
18,096(3) 6.3 32.1250 2/24/10 365,598 926,497
------
95,073
James H. Moar 14,100(1) 4.9 35.1250 2/24/09 311,468 789,321
11,565(3) 4.0 32.1250 2/24/10 233,650 592,116
------
25,665
Thomas J. Vander Bie 7,300(1) 2.5 35.1250 2/24/09 161,256 408,655
691(2) 0.2 35.1250 2/10/05 8,255 18,727
590(2) 0.2 35.1250 2/21/06 8,437 19,661
1,069(2) 0.4 35.1250 2/26/07 17,928 42,940
-----
9,650
Keith D. Payden 4,400(1) 1.5 35.1250 2/24/09 97,196 246,313
729(2) 0.3 35.1250 2/10/05 8,709 19,757
622(2) 0.2 35.1250 2/21/06 8,894 20,727
1,128(2) 0.4 35.1250 2/26/07 18,917 45,310
3,464(3) 1.2 32.1250 2/24/10 69,984 177,353
-------
10,343
John T. Pain III 4,100(1) 1.4 35.1250 2/24/09 90,569 229,519
7,373(3) 2.6 32.1250 2/24/10 148,958 377,490
-------
11,473
</TABLE>
(1) All such options granted under the Plan are nonqualified options, and are
exercisable 25% per year, on a cumulative basis, beginning one year after
the date of the grant. Such options become immediately exercisable,
however, upon (a) death, disability, or retirement of the holder, or (b) a
change of control (defined as certain changes in the Company's Board of
Directors, certain concentrations of voting power, certain mergers, sales
of corporate assets, statutory share exchanges or similar transactions, or
liquidation or dissolution of the Company). The holder is permitted to pay
the exercise price and withholding taxes due upon exercise with either
cash, shares of Common Stock, a reduction in the number of shares delivered
to the holder, or a combination of these alternatives.
(2) Reload option grants contain the same features mentioned in footnote 1
except that they are immediately exercisable. Their exercise period is the
remainder of the initial ten-year option period.
12
<PAGE>
(3) These options were issued under a one-time program that was instituted in
1999 whereby executives could take all or part of their annual incentive in
stock options. The executive was issued an option to purchase Company
common stock with a value of three dollars for every one dollar of
incentive amount that was exchanged. The exercise price of those options
was the Fair Market Value on the date of issue. All such options contain
the same features as mentioned in footnote 1 except that they are
immediately exercisable.
(4) The exercise price of such options is not less than the Fair Market Value
(as defined in the Plan) of a share of Common Stock at the time of grant.
(5) The hypothetical potential appreciation shown in these columns reflects the
required calculations at annual rates of 5% and 10% set by the Securities
and Exchange Commission, and therefore are not intended to represent either
historical appreciation or anticipated future appreciation of the Company's
Common Stock price.
13
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES(1)
<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED ON VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
EXERCISE REALIZED(2) OPTIONS AT FISCAL YEAR-END (#) FISCAL YEAR-END ($)(3)
------------------------------- -----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ---------------- -------------- ----------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Roger L. Hale 9,427 327,969 116,700 0 216,337 0
Janet M. Dolan 2,340 82,231 40,893 91,682 46,502 69,425
James H. Moar 0 0 14,265 22,400 7,228 0
Thomas J. Vander Bie 834 29,344 7,825 13,900 11,361 20,600
Keith D. Payden 835 29,344 11,353 10,780 13,574 20,400
John T. Pain III 0 0 7,873 5,750 4,608 0
</TABLE>
(1) Last fiscal year ended December 31, 1999.
(2) Value realized equals the number of shares exercised multiplied by the
difference between market price and option price, before any provision for
taxes.
(3) Market value of underlying securities at fiscal year-end minus the exercise
price.
MANAGEMENT AGREEMENTS
The Company is a party to management agreements (the "Agreements") with
certain of the executive officers of the Company. The purpose of each of the
Agreements is to encourage the executive (a) to continue to carry out his or her
duties in the event of the possibility of a 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 an actual change in control of the Company.
Under the terms of each of the Agreements, if, between the occurrence of a
change in control of the Company and the three-year anniversary date of such
occurrence, an executive's employment is involuntarily terminated (for any
reason other than death, disability, or for cause), the executive will be
entitled to receive severance compensation. If an executive resigns after
certain changes in the executive's duties, compensation, benefits or work
location, the executive shall be deemed to have been involuntarily terminated.
Severance compensation is payable also if the termination occurs before the
change of control but after steps to change control have been taken. Severance
compensation consists of three times the executive's average annual taxable
compensation during the five taxable years preceding the change in control plus
the continuation of certain insurance benefits, minus $1.00, subject to
reduction for payments under employee benefit plans of the Company contingent
upon a change in control of the Company and for the amount of any other
severance compensation paid by the Company to the executive under any other
agreement of the Company providing compensation in the event of involuntary
termination. As of the date of this Proxy Statement, the total severance
compensation for Ms. Dolan would be $1,423,064; Mr. Moar, $937,678; Mr. Vander
Bie, $1,111,941; Mr. Pain, $403,799, and Mr. Payden, $882,976. The Company also
will reimburse an executive for legal fees and expenses incurred in resolving
disputes under the Agreement.
14
<PAGE>
TENNANT COMPANY DEFINED BENEFIT RETIREMENT PLAN
The Tennant Company Defined Benefit Retirement Plan provides fixed
retirement benefits for certain employees of the Company. Based upon certain
assumptions, including continuation of the Retirement Plan as of January 1,
2000, without amendment, the following table shows the annual retirement
benefits (including the additional retirement benefits described in the second
sentence under "Tennant Company Excess Benefit Plan" below) which would be
payable as a straight life annuity commencing at age 65 to persons at various
salary levels after specified years of service.
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------------------------------
ANNUAL
COMPENSATION 10 15 20 25 30
------------ -------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 4,986 $ 7,479 $ 9,973 $ 12,466 $ 14,959
100,000 11,986 17,979 23,973 29,966 35,959
150,000 18,986 28,479 37,973 47,466 56,959
200,000 25,986 38,979 51,973 64,966 77,959
250,000 32,986 49,479 65,973 82,466 98,959
300,000 39,986 59,979 79,973 99,966 119,959
350,000 46,986 70,479 93,973 117,466 140,959
400,000 53,986 80,979 107,973 134,966 161,959
450,000 60,986 91,479 121,973 152,466 182,959
500,000 67,986 101,979 135,973 169,966 203,959
550,000 74,986 112,479 149,973 187,466 224,959
600,000 81,986 122,979 163,973 204,966 245,959
650,000 88,986 133,479 177,973 222,466 266,959
</TABLE>
Under the Retirement Plan, benefits are payable based upon a percentage of
a participant's final average pay excluding bonus, overtime, or other special
forms of remuneration. Currently under ERISA, as amended, the maximum annual
amount that can be paid during 2000 to any individual is $130,000. Amounts in
excess of that maximum as well as amounts based on compensation that is excluded
from the Plan formula by ERISA or the terms of the Plan are covered under the
Tennant Company Excess Benefit Plan. The years of credited service under the
Retirement Plan for the named executive officers are: Mr. Hale 17.33333 years,
Mr. Pain 16 years, Ms. Dolan 13 years, and Mr. Moar 2 years. Mr. Hale retired
April 6, 1999. The final average pay used by the Plan for the purpose of his
calculation was $632,587. If Mr. Pain, Ms. Dolan, or Mr. Moar were to retire
currently, the final average pay used by the Plan to determine benefits payable
pursuant to the above table as of December 31, 1999, would be $134,790 for Mr.
Pain, $346,781 for Ms. Dolan, and $298,815 for Mr. Moar.
The figures above are not subject to deductions for Social Security or
other offset amounts.
TENNANT COMPANY EXCESS BENEFIT PLAN
An Excess Benefit Plan provides additional retirement benefits for highly
compensated employees participating in the Tennant Company Profit Sharing and
Employee Stock Ownership Plan or the Retirement Plan. Employees participating in
the Excess Benefit Plan will receive a retirement benefit equal to the
additional benefits which would have been provided under the Retirement Plan if
(a) the limitations imposed by Sections 401(a)(17) and 415 of the Internal
Revenue Code were not applicable, and (b) management bonuses were included in
certified earnings for the year in which they were earned, and (c) deferred
salary increases were included in certified earnings for the plan year in which
such amounts would have been paid in the absence of the deferral. Employees
participating in the Excess Benefit Plan also receive cash payments of amounts
which would have been contributed by the Company to the Tennant Company Profit
Sharing and Employee Stock Ownership Plan as Profit Related Retirement
Contributions or Matching Contributions if various limitations imposed by the
Internal Revenue Code were not applicable.
15
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Common Stock of the Company for the last five fiscal years with the cumulative
total return over the same period on the following indexes:
- Overall Stock Market Performance (Media General Composite Index)
- Industry Index (Media General Industry Groups Index 62 - Industrial
Goods, Manufacturing)
This assumes an investment of $100 in the Company's Common Stock, the Media
General Composite Index and the Media General Industry Index on December 31,
1994, with reinvestment of all dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
ASSUMES $100 INVESTED ON DECEMBER 31, 1994, WITH DIVIDENDS REINVESTED.
[GRAPH]
<TABLE>
<CAPTION>
--------------------------------------------- ----------- ------------ ----------- ----------- ----------- ------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
--------------------------------------------- ----------- ------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Tennant Company 100.00 101.66 120.44 162.91 183.13 152.80
--------------------------------------------- ----------- ------------ ----------- ----------- ----------- ------------
Overall Stock Market 100.00 129.66 156.58 203.33 248.56 303.21
Performance Index (Media General)
--------------------------------------------- ----------- ------------ ----------- ----------- ----------- ------------
Industry Index (Media General) 100.00 117.75 138.36 165.24 142.58 157.48
--------------------------------------------- ----------- ------------ ----------- ----------- ----------- ------------
</TABLE>
16
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission.
Directors and executive officers are required by Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms furnished to the Company and
written representations from the Company's directors and executive officers, all
Section 16(a) filing requirements were met for the year ended December 31, 1999,
except as follows: a late filing made on behalf of Richard Adams reporting a
sale of indirect holdings as co-trustee; a late filing made on behalf of Janet
Dolan reporting a 1998 stock option grant; and a late filing made on behalf of
Thomas Vander Bie reporting a sale of indirect holdings. All late reports were
promptly filed upon discovery of the oversight.
APPOINTMENT OF AUDITORS
At the meeting, a vote will be taken on a proposal to ratify the
appointment of KPMG LLP as independent auditors of the Company for the year
ending December 31, 2000. KPMG LLP are independent accountants and auditors who
have audited the accounts of the Company annually since 1954. The Company has
been advised that a representative of the firm will attend the shareholders'
meeting. The representative will be available to respond to appropriate
questions and will be given the opportunity to make a statement if the firm
desires to do so.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the year 2001 Annual
Meeting should be sent to the Secretary of the Company at 701 North Lilac Drive,
P.O. Box 1452, Minneapolis, Minnesota 55440, and must be received on or before
December 3, 2000, to be eligible for inclusion in the Company's Proxy Statement
and form of Proxy relating to that meeting. If notice of any other shareholder
proposal intended to be presented at the year 2001 Annual Meeting but not
intended to be included in the Company's Proxy Statement and form of Proxy for
such meeting is not received by the Company on or before February 4, 2001, the
Proxy solicited by the Board of Directors of the Company for use in connection
with that meeting may confer authority on the Proxies named to vote in their
discretion on such proposal without any discussion in the Company's Proxy
Statement for that meeting of either the proposal or how such Proxies intend to
exercise their voting discretion.
See "Directors--Election of Directors" with regard to certain requirements
for nomination of persons for election as directors.
OTHER MATTERS
So far as the management is aware, no matters other than those described in
this Proxy Statement will be acted upon at the meeting. If, however, any other
matters properly come before the meeting, it is the intention of the persons
named in the enclosed Proxy to vote the same in accordance with their judgment
on such other matters.
March 31, 2000 By Order of the Board of Directors
James J. Seifert, Secretary
17
<PAGE>
TENNANT COMPANY
[LOGO] 701 NORTH LILAC DRIVE
P.O. BOX 1452
PROXY MINNEAPOLIS, MN
55440
- -------------------------------------------------------------------------------
TENNANT COMPANY
[LOGO] 701 NORTH LILAC DRIVE
P.O. BOX 1452
MINNEAPOLIS, MN 55440 PROXY
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Janet M. Dolan, David C. Cox, and Andrew P.
Czajkowski, and each of them, as Proxies, each with the power to appoint
his/her substitute, and hereby authorizes them or any of them to represent
and to vote, as designated below, all the shares of Common Stock of Tennant
Company held of record by the undersigned on March 6, 2000, at the Annual
Meeting of Shareholders to be held on May 4, 2000, or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL PROPOSALS.
Furthermore, if I am a participant in the Tennant Company Profit Sharing and
Employee Stock Ownership Plan, I hereby instruct U.S. Bank National
Association, as Trustee of the Tennant Company Profit Sharing and Employee
Stock Ownership Plan, to "vote," in the manner specified in the Plan, at the
Annual Meeting of the Shareholders of Tennant Company (the "Company") to be
held on May 4, 2000, and at any and all adjournments of said meeting, all
shares of Common Stock of the Company held in the Plan with respect to which
I have authority to direct voting.
I understand that if I complete this card and return it to the Trustee by
April 14, 2000, the Trustee will vote, in accordance with my instructions,
the shares of the Company's Common Stock allocated to my account under the
Plan. The Trustee is hereby instructed to vote as indicated below on the
following proposals which are more fully described in the Company's Notice of
Annual Meeting of Shareholders and Proxy Statement dated March 31, 2000.
THESE INSTRUCTIONS, WHEN PROPERLY EXECUTED, WILL BE FOLLOWED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED PARTICIPANT. IF NO DIRECTION IS MADE, THE
TRUSTEE IS INTRUCTED TO VOTE FOR ALL PROPOSALS.
The undersigned understands that, in accordance with the terms of the Plan,
these instructions shall be held in the strictest confidence by the Trustee
and shall not be divulged or released to any person, including officers or
employees of Tennant Company.
SEE REVERSE FOR VOTING INSTRUCTIONS.
<PAGE>
---------------
COMPANY #
CONTROL #
---------------
THERE ARE THREE WAYS TO VOTE YOUR PROXY
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR
SHARES IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY
CARD.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK***EASY***IMMEDIATE
- - Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. on May 3, 2000.
- - You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
- - Follow the simple instructions the Voice provides you.
VOTE BY INTERNET -- http://www.eproxy.com/tant/ -- QUICK***EASY***IMMEDIATE
- - Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. on May 3, 2000.
- - You will be prompted to enter your 3-digit Company Number and your
7-digit Control Number which are located above to obtain your records and
create an electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid
envelope we've provided or return it to Tennant Company, c/o Shareowner
Services,-SM- P.O. Box 64873, St. Paul, MN 55164-0873.
IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD
PLEASE DETACH HERE
1. TO ELECT DIRECTORS: 01 David C. Cox 03 Edwin L. Russell
02 William I. Miller
/ / FOR all nominees / / WITHHOLD AUTHORITY
(except as marked) To vote for all nominees
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, WRITE
THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.)
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If elected, the nominees will serve for a term of three years.
2. TO RATIFY THE APPOINTMENT OF KPMG LLP as the independent
public accountants of the corporation.
/ / For / / Against / / Abstain
3. IN THEIR DISCRETION, the Proxies, the Trustee or the Trustee's
representative is authorized to vote upon such other business as may
properly come before the meeting.
Address Change? Mark Box / /
Indicate changes below:
Date , 2000
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Signature(s) in Box
Please sign exactly as name
appears to the left.
