ATEX ZONE 2 HAZARDOUS DUTY™ MOTORS

1. ATEX ZONE 2 HAZARDOUS DUTY™ MOTORS

2. Background • ATEX = “Atmosphere Explosible” • European Union (EU) Directive 94/9/EC • Mandatory (by law) for covered equipment placed into service July 1, 2003 • Covers equipment with potential ignition source, or components of equipment, such as electric motors

3. Requirements for certification • “Notified Body” conformity assessment: • EC Type examination (inspection of design) • Production Quality Assurance • Product Verification • Internal Production Control • Must have CE mark to confirm compliance • ATEX directive based on CENELEC and IEC standards

4. Area Classification • Class I - Flammable gases, vapors & mists • Zone 0 “Explosive continuously” • Zone 1 “Explosive under normal conditions” • Zone 2 “Explosive under abnormal conditions” • Class II - Combustible dusts • Zone 20 (same as Zone 0, for dusts vs gases) • Zone 21 (same as Zone 1, for dusts vs gases) • Zone 22 (same as Zone 2, for dusts vs gases)

5. Categories of Use • Categories M1 and M2 refer to mining • Categories 1G and 1D refer to Zone 0 • Category 2G - Zone 1/Gas (non-mining) • Category 3G - Zone 2/Gas (non-mining) • Category 2D - Zone 21/Dust (non-mining) • Category 3D - Zone 22/Dust (non-mining)

6. Equipment Groups • Group I (applicable to mining equipment) • Group II (non-mining): • Group IIA (propane-type gases) • Gases covered under NFPA Group D • Group IIB (ethylene gases) • Gases covered under NFPA Group C • Group IIC (acetylene and hydrogen) • Gases covered under NFPA Groups A and B

7. Class IIFlammable gases,liquids and mists • Group IIA - Propane, acetone, ammonia, benzine, butane, ethanol, gasoline, hexane, methane, natural gas, naphtha • Group IIB - Ethylene, ether, ethyl • Group IIC - Acetylene, hydrogen, butadiene, ethylene oxide, propylene oxide, acrolein

8. Class IICombustible Dusts* • Group E - metal (N/A from Marathon) • Group F - coal, coke, carbon black, charcoal • Group G - grain, flour, wood, plastic, chemical • Noted as “D” on nameplate marking * ATEX does not define dust groups, as categorized for gases (eg. IIA, IIB, IIC)

9. Class IIIIgnitable Fibers & Flyings • Class III locations • Division 1: Easily ignitable fibers or materials producing combustible flyings are handled, manufactured or used. • Division 2: Easily ignitable fibers are stored or handled. • No material groups defined • Not available from Marathon Electric

10. Class I; Zone 0, 1 & 2Protection Methods • Zone 0 - not applicable to motors • Zone 1: • “Flameproof” (‘d’), IEC50018 compliant • “Increased Safety” (‘e’), IEC50019 compliant • Zone 2: • “Non-Sparking” (‘nA’), IEC50021 compliant

11. Temperature codes

12. Required markings CE Marking ID # of Notified Body (Intertek Testing & Certification, Ltd.) EU Explosive Atmosphere symbol Equipment Group (I=Mining, II=Above-ground/non-mining) Category (2=Zone 1, 3=Zone 2) Gas (G) or Dust (D); if both, may list D only 0359 II 3 G Explosion Protection Protection Method Gas Group (omit if Dust or if all gas groups included) Temperature Code (see previous slide) IP Code Ex nA IIC T3 IP56

13. ATEX markings CE Mark asserts that equipment meets all essential requirements of the relevant European Directive. It is often accompanied by the Notified Body identification number. “CE” may have originally stood for “Conformite Europeenne” (European Conformity). Ex Mark is the European Union (EU) Explosive Atmosphere Symbol, and is found on any equipment whose end use or installation may be within a hazardous location as determined by the authority having jurisdiction. 0359

14. Marathon Hazardous Duty™ ATEX Zone 2 Certified motors

15. Marathon ATEX motors • NEMA Design B (IEC Design N optional) • TEFC, IP56 (TENV/TEBC optional) • 143T-449T frame, 1-350 HP • EPACT efficiency (NEMA Premium® optional) • Explosion proof construction terminal box • Terminal block (single voltage motors only) • All cast iron construction • 1.0 Service Factor • External (foot) ground

16. Marathon ATEX™ motors • Inpro/Seal bearing isolator • Class F Max Guard® insulation system • Suitable for use with VFD • External frame ground • IEC60092-301 and IEEE45 “Marine Duty” • Equipped with thermistors and thermostats • Two year warranty • Made in U.S.A. • Dual-marked* for NA coverage * Requires investigation on a case-by-case basis.

17. Zone 2 Non-sparking “nA” • Non-sparking enclosure, low temperature • Gas groups IIA, IIB, IIC (marked IIC) • Temperature code varies by product line and power supply (VFD vs line power) • Class I (Gas) coverage • Compliant with IEC50021 • Ex nA IIC T3; Group II, Category 3G

18. Typical Nameplate

19. Marketing Strategy • Leverage existing relationships with NA-based OEMs that export equipment • Emphasize lead-time advantage • Target competitive weaknesses (not full line, unknown entity in NA, questionable support, exchange rate) • Sell credibility (knowledgeable sales force, 3rd Party Certification) • Pull through with existing XP business • Target Oil & Gas market, forecasted above-average market performance

20. Oil & Gas Machinery Marketcirca 2005

21. Oil & Gas Machinery - Overview • Machine Tools- SIC Code - 3533 • Market Growth Rate Projected - 6.3% • Customer Base - 22 customers • Potential Customers - 336/1026 • Market Size - $95 million • Marketshare Leader • Reliance/Baldor, and IEC mfg. • Products - Fractional to 50HP. Strong move to variable speed • Business Plan - Yes • GP % - 28.6%

22. Oil & Gas Machinery • Industry -This industry comprises establishments primarily engaged in manufacturing heavy machinery and equipment used by mining industries, such as coal breakers, mine cars, mineral cleaning machinery, concentration machinery, core drills, coat cutters, and rock crushing machinery. • Lead Companies - EaglePicher, J T Walker, Park Corp., MIC Industries, ESAB Group, Trumpf, Charles Machine Works, Hurco Co., Carl Zeiss IMT Corp., and Kennametal • Products Produced - Amalgamators, auger mining equipment, cages, car dumpers, clarifying machinery, cleaning machinery, concentration machinery crushers, feeders, grinders, hammer mills, loading machines, ore crushing, washing, screening, pellet mills, pulverizers, separating machinery, and stamping mills.

23. Oil & Gas Machinery • Market Trends - Market trends include embedding control and communications into the product along with providing faster machines, miniaturization, and sensors for machine diagnostics. • Market Size - Motor purchases for fractional and integral motors are approximately $95 million. $1,617 electric motor purchases per employee. • Market Growth Index -6.3% to 7.3% in 2006. • Market Concentration - The top 12 states in descending order based on shipments are: Michigan, Ohio, Illinois, Wisconsin, New York, California, Connecticut, Pennsylvania, New Jersey, Indiana, Missouri, and North Carolina.

24. Oil & Gas Machinery • Market Drivers - Technical capability/support, field service response, high quality product, on-time delivery, rapid response on product development, sales force available when needed, inside sales rep to respond as needed. • Major Competitors – Reliance/Baldor,and IEC motors • Product Range - Subfractional to integral motors with a strong emphasis on inverter duty and definite purpose motors. • Channels - 60% OEM direct with the remaining purchases through PTDA, Hi-Tech, or NAED distributors (40%) • Opportunities - High speed capabilities, microMAX, “Servo Induction” motors, PMDC, and IEC motors. • Business Plan and Target Customers Identified - Yes

25. ATEX ZONE 2 HAZARDOUS DUTY™ MOTORS