TENNANT CO

14. Retirement Benefit Plans

Substantially all U.S. employees are covered by various retirement benefit plans, including defined contribution savings plans and postretirement medical plans. Retirement benefits for eligible employees in foreign locations are funded principally through defined benefit plans, annuity or government programs.

Defined Benefit Pension Plans

We have a U.S. nonqualified supplemental benefit plan (the “U.S. Nonqualified Plan”) to provide additional retirement benefits for certain employees whose benefits under our 401(k) plan or U.S. Pension Plan are limited by either the Employee Retirement Income Security Act or the Internal Revenue Code.

We also have defined benefit pension plans in the United Kingdom, Germany, France and Italy (the “U.K. Pension Plan”, the “German Pension Plan,” "French Pension Plan" and the "Italian Pension Plan"). The U.K. Pension Plan, French Pension Plan, German Pension Plan and Italian Pension Plan cover certain current and retired employees and all plans are closed to new participants.

In December 2018, the U.K. Pension Plan was amended to close all future accrual of benefits to existing active members.

In December 2024, the Trustees of the U.K. Pension Plan entered into an agreement with an insurer to acquire an insurance policy that operates as an investment asset, with the intent of matching part of the U.K. Pension Plan’s future cash outflow arising from the accrued pension liabilities of 26 non-insured pensioner members. Such an arrangement is commonly termed as a “partial buy-in.” The benefit obligation was not transferred to the insurer and remains with the Company. The partial buy-in insurance contract is classified as a Level 3 investment. The value of the insurance contract is based on significant unobservable inputs including plan participant demographics, in addition to observable inputs which include expected return on assets and estimated value premium.

The partial buy-in arrangement also allows for the possible future conversion into a buy-out arrangement where the insurance company would assume responsibility for paying the insured benefits directly to the members of the U.K. Pension Plan, at which time the Company would derecognize the assets and liabilities of the pension plan but would, however, remain responsible for any residual risks once the U.K. Pension Plan is wound-up.

The Italian Plan is an employee termination indemnity mandated by Italian law to all employees employed prior to 2008. Benefits are paid out when employees covered under the plan are terminated for any reason. Due to changes in Italian law, such termination indemnities are no longer available to new participants.

Retiree Health Care Plan

We have a U.S. postretirement medical benefit plan (the “U.S. Retiree Plan”) to provide certain healthcare benefits for U.S. employees hired before January 1, 1999. Eligibility for those benefits is based upon a combination of years of service with us and age upon retirement

Summarized financial information about our defined benefit pension plans and retiree health care plan is presented below:

The accumulated benefit obligation ("ABO") for all defined benefit pension plans was $11.9 million and $10.9 million as of December 31, 2025 and 2024, respectively. The ABO for plans that have plan assets was $7.2 million and $6.3 million as of December 31, 2025 and 2024, respectively.

The projected benefit obligation ("PBO") for all defined benefit pension plans was $4.8 million and $4.9 million as of December 31, 2025 and 2024, respectively.

By their nature, certain of our plans do not have plan assets. The accumulated benefit obligation for these plans was$4.6 million and$4.6 million as of December 31, 2025 and 2024, respectively.

Amounts recognized in other comprehensive income in 2025 and 2024 were as follows:

The components of the net periodic benefit expense (income) for the three years ended December 31 were as follows:

Health Care Cost Trend Rates

Assumed health care cost trend rates as of December 31 were as follows:

We review our health care cost trend rates annually. Our review is based on data we collect about our health care claims experience and information provided by our actuaries.

Assumptions

Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:

Weighted-average assumptions used to determine net periodic benefit costs as of December 31 were as follows:

The discount rate reflects the rate at which the benefit obligations could be effectively settled at the measurement date and is based on yields of high-quality corporate bonds with durations consistent with the plan liabilities. The Company works with its outside actuaries to estimate the timing and amount of expected future benefit payments and applies a yield curve derived from high-quality corporate bond yields to those expected cash flows to determine the discount rate. For 2025, the Company used the Mercer Above Mean Yield Curve for the U.S. plans and the Mercer Yield Curve for the Non-U.S. plans.

The expected long-term rate of return on plan assets reflects the target investment allocation and expected long-term portfolio returns for each Non-U.S. pension plan.

Fair Value of Plan Assets

Thefair value of our U.K. Pension Plan and the respective level in the fair value hierarchy as of December 31, 2025 were as follows:

(a)This category is comprised of investments in fixed income securities.

(b)This represents the U.K. Pension Plan partial buy-in assets comprised of investments in insurance contracts.

The fair value of our U.K. Pension Plan and the respective level in the fair value hierarchy as of December 31, 2024 were as follows:

(a)This category is comprised of investments in insurance contracts.

(b)This represents the U.K. Pension Plan partial buy-in assets comprised of investments in insurance contracts.

Estimates of the fair value of the U.K. Pension Plan are prepared in accordance with the framework established under the accounting guidance for fair value measurements. A summary of the three fair value hierarchy levels is provided in Note 12.

The Investment Account held by the U.K. Pension Plan primarily invests in insurance contracts to fund the plan and continues to be classified as Level 3. The fair value of these contracts is based on the cash surrender values determined by the provider, representing the amounts the plan would receive if the contracts were cashed out at year-end. The underlying assets of these contracts are primarily invested in instruments traded in active markets.

In 2025, $7.2 million was reallocated from the insurance contracts to a bond fund. This portion of the Investment Account is now classified as Level 1 reflecting its valuation based on observable market prices.

A reconciliation of the beginning and ending balances of the Level 3 investments of our U.K. Pension Plan during the years ended December 31 was as follows:

The primary objective of our U.K. Pension Plan is to meet retirement income commitments to plan participants at a reasonable cost to us and to maintain a sound actuarial funded status. This objective is accomplished through growth of capital and safety of funds invested. Assets are invested in securities to achieve growth of capital over inflation through appreciation and accumulation and reinvestment of dividend and interest income. Investments are diversified to control risk. The U.K. Pension Plan is invested in insurance contracts with underlying investments primarily in equity and fixed income securities. All other Pension Plans are unfunded, which is customary.

Future Contributions and Benefit Payments

We do not expect to be required to make contributions to our U.S. Nonqualified Plan in 2026. We expect to contribute $0.6 million to our U.S. Retiree Plan in 2026. We expect contributions to our U.K. Pension Plan, German Pension Plan, French Pension Plan and Italian Pension Plans to be $0.3 million in 2026.

Estimated benefit payments, which reflect expected future service, as appropriate, are expected to be paid from 2026 to 2035 as follows:

Defined Contribution Plans

Our defined contribution savings plan (“401(k) plan”) covers substantially all U.S. employees. Under this plan, we match up to 3% ofthe employee’s annual compensation in cash to be invested per their election. We also make a discretionary profit sharing contribution to the 401(k) plan for employees with more thanone year of service in accordance with our Profit Sharing Plan. This contribution is based upon our financial performance and can be funded in the form of a direct deposit into the employees 401(k) account, cash, or a combination of both. Expenses for the 401(k) plan, including profit sharing contributions, were $5.6 million, $10.0 million and $10.5 million during 2025, 2024 and 2023, respectively.