-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RUvQD79p/CJqLkupc+aRZOGPVWkzwoAqyKaulPISaHwZI9ivBsT9pm45x58QinM5 +U5zbmwpcgLdabmM7xi/fg== 0000950124-07-000442.txt : 20070125 0000950124-07-000442.hdr.sgml : 20070125 20070125155416 ACCESSION NUMBER: 0000950124-07-000442 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070119 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070125 DATE AS OF CHANGE: 20070125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TECUMSEH PRODUCTS CO CENTRAL INDEX KEY: 0000096831 STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [3585] IRS NUMBER: 381093240 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-00452 FILM NUMBER: 07553018 BUSINESS ADDRESS: STREET 1: 100 E PATTERSON ST CITY: TECUMSEH STATE: MI ZIP: 49286 BUSINESS PHONE: 5174238411 MAIL ADDRESS: STREET 1: 100 EAST PATTERSON STREET CITY: TECUMSEH STATE: MI ZIP: 49286 8-K 1 k11712e8vk.txt CURRENT REPORT DATED JANUARY 19, 2007 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): JANUARY 19, 2007 TECUMSEH PRODUCTS COMPANY (Exact name of registrant as specified in its charter) MICHIGAN 0-452 38-1093240 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.)
100 EAST PATTERSON STREET 49286 TECUMSEH, MICHIGAN (Zip Code) (Address of principal executive offices
Registrant's telephone number, including area code: (517) 423-8411 (NOT APPLICABLE) (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On January 19, 2007, in connection with the management changes described in Item 5.02, we entered into an addendum to our agreement with AP Services, LLC that, among other things, added additional tasks to be performed by AP Services, including providing the services of James J. Bonsall to serve as our interim President and Chief Operating Officer, and increased the hourly rate we pay for Mr. Bonsall's services. The addendum was approved by a special board committee consisting of all directors other than Mr. Koch. We are filing a copy of the addendum as an exhibit to this report. ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. On January 19, 2007, the special board committee described in Item 1.01 appointed James J. Bonsall interim President and Chief Operating Officer, a new position, effective immediately. As previously announced, a succession process is underway to select a new Chief Executive Officer to succeed Todd W. Herrick. Mr. Bonsall will function as our principal executive officer until a new Chief Executive Officer is appointed. Reflecting the succession process and Mr. Bonsall's expanded role, as of January 19, 2007, Todd W. Herrick, formerly our President and Chief Executive Officer, is no longer serving in a management role, nor is our former Executive Vice President, Kent B. Herrick. Todd W. Herrick retains his position as Chairman of the Board of Directors. The terms of their separation have not been finalized. Mr. Bonsall, 54, has served as the President of our Engine and Power Train Group since July 2005 and, in that position, became an executive officer effective March 29, 2006. He is not an employee of our company. Mr. Bonsall is a managing director of AlixPartners, LLP and an employee of its affiliate, AP Services, LLC, which provides his services to us under contract. For 2006 we paid AlixPartners and AP Services a total of approximately $22.6 million under our contracts with them, including approximately $1.8 million for Mr. Bonsall's services. The terms of our contracts with AlixPartners and AP Services are set forth in our agreement with them dated December 7, 2006, a copy of which was filed as an exhibit to the Current Report on Form 8-K we filed on December 14, 2006, and the addendum to that agreement described in Item 1.01 and filed as an exhibit to this report. Mr. Bonsall has been a managing director of AlixPartners throughout the past five years. During that time, his principal assignments with AlixPartners' clients were as follows: He has been president and chief executive officer of Peregrine, Inc. (an automotive parts supplier until it discontinued operations in 2001) since 1999. From February 2001 to March 2002, he served as chief restructuring officer for LTV Steel Company, Inc. From May 2002 to December 2002, he was chief financial officer of ish GmbH & Co. KG (a German supplier of cable analogue and digital television, telephone, and internet services), and from December 2002 to June 2005, he was its chief executive officer. Mr. Bonsall has been the President of our Engine and Power Train Group since July 2005 and will continue in that role until a successor is chosen. ITEM 7.01 REGULATION FD DISCLOSURE. On January 19, 2007, we issued a press release about the management changes described in Item 5.02. We are furnishing a copy of the press release as an exhibit to this report. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. The following exhibits are filed or furnished with this report:
Exhibit No. Description - ----------- ----------- 10.1 First addendum dated January 19, 2007 to agreement with AP Services, LLC dated December 7, 2006 99.1 Press release issued January 19, 2007
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TECUMSEH PRODUCTS COMPANY Date: January 25, 2007 By /s/ James S. Nicholson ------------------------------------- James S. Nicholson Vice President, Treasurer and Chief Financial Officer NOTE: The information in Item 7.01 of this report and the related exhibit (Exhibit 99.1) is not to be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section unless the registrant specifically incorporates it by reference into a filing under the Securities Act or the Exchange Act. EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 10.1 First addendum dated January 19, 2007 to agreement with AP Services, LLC dated December 7, 2006 99.1 Press release issued January 19, 2007
EX-10.1 2 k11712exv10w1.txt FIRST ADDENDUM DATED JANUARY 19, 2007 EXHIBIT 10.1 (APSERVICES LLC LOGO) Detroit New York Chicago Dallas January 19, 2007 Board of Directors Tecumseh Products Company 100 E. Patterson Street Tecumseh, MI 49286 Re: Interim Management, Final Advisory and Consulting Services - First Addendum Gentlemen: This letter represents the first addendum (the "First Addendum") to the agreement between AP Services, LLC, a Michigan limited liability company ("APS") and Tecumseh Products Company ("TPC" or the "Company") dated December 7, 2006 (the "Engagement Letter.") Unless otherwise modified herein, the terms and conditions of the Engagement Letter remain in full force and effect. THIS FIRST ADDENDUM ADDS THE FOLLOWING TASKS TO THE ENGAGEMENT LETTER, AMENDS THE RATES FOR MESSRS. BONSALL AND BUSCH AND INCREASES THE AMOUNT OF THE RETAINER. OBJECTIVES AND TASKS The following tasks are incremental to those outlined in the Engagement Letter: APS will provide James Bonsall to serve as the Company's President and Chief Operating Officer ("President"). Reporting relationships of the President and the other Company personnel will be as established by the Board of Directors. APS may provide additional resources including a cash manager and up to two operational consultants. Jim Bonsall as well as all APS personnel regardless of designation or title will be deemed to be temporary staff ("Temporary Staff") of the Company. Working collaboratively with the Board of Directors and other Company professionals, Mr. Bonsall will assist the Company in evaluating and implementing strategic and tactical options for performance improvement. Mr. Bonsall will: - - Perform functions typically assigned to the President and Chief Operating Officer in accordance with the Bylaws of the Company. - - Continue his role as President-Engine & Transmission Group until a replacement is found. In addition, the Temporary Staff will work with the Company and its team to do the following: 2000 Town Center | Suite 2400 | Southfield, MI | 48075 | 248.358.4420 | 248.358.1969 fax | www.alixpartners.com (APSERVICES LLC LOGO) Tecumseh Products Company January 19, 2007 Page 2 - - Analyze cash sources and identify potential additional sources of cash including opportunities to reduce worldwide inventories. - - Develop and oversee the implementation of an operational restructuring plan that is designed to streamline the Company's cost base and efficiency of operations. Our initial focus will be on the Company's compressor operations in Brazil and electrical operations in Mexico. - - Assist with such other matters as may be requested that fall within APS' expertise and that are mutually agreeable. - - Bob Busch shall continue his role as Vice President Finance, Engine & Transmission Group until a replacement is found. RETAINER AND FEES In addition to the Retainer paid in accordance with the Engagement Letter, the Company shall pay APS an additional $200,000 for a total Retainer of $800,000 to be applied against Fees and Expenses as set forth in the Engagement Letter and its General Terms and Conditions. Professional fees under this First Addendum are limited to $663,000 monthly plus expenses. For the purpose of clarity, fees for Bob Busch acting in his role of VP-Finance Engine and Transmission Group will not be subject to this maximum. Subject to the General Terms and Conditions, this First Addendum shall expire June 30, 2007. We confirm that neither APS nor any affiliate of APS shall participate in any sales transaction as a purchaser of the Company, its assets or any of its operating units. * * * (APSERVICES LLC LOGO) Tecumseh Products Company January 19, 2007 Page 3 If these terms meet with your approval, please sign and return the enclosed copy of the First Addendum and wire transfer the amount to increase the Retainer. We look forward to our continuing relationship with you. Sincerely yours, AP SERVICES, LLC James J. Bonsall Managing Director Acknowledged and Agreed to: TECUMSEH PRODUCTS COMPANY By: --------------------------------- Its: -------------------------------- Dated: ------------------------------ AP SERVICES, LLC EMPLOYMENT BY TECUMSEH PRODUCTS COMPANY FIRST ADDENDUM EXHIBIT A TEMPORARY EMPLOYEES INDIVIDUALS WITH EXECUTIVE OFFICER POSITIONS
COMMITMENT FULL(1) OR NAME DESCRIPTION HOURLY RATE PART(2)TIME - ------------- -------------------------------- ----------- ----------- James Bonsall President and Chief Operating $750 Full Officer
WITH THE EXCEPTION OF BOB BUSCH, ADDITIONAL TEMPORARY STAFF
COMMITMENT FULL(1) OR NAME DESCRIPTION HOURLY RATE PART(2)TIME - ------------- -------------------------------- ----------- ----------- Robert Busch Cash Management-Director $600 Full TBD Operations Consultation-Managing $500-$600 Full Director -Director (Juarez) TBD Operations Consultation-Managing $500-$600 Full Director -Director (Sao Carlos)
(1) Full time is defined as substantially full time. (2) Part time is defined as approximately 2-3 days per week, with some weeks more or less depending on the needs and issues facing the Company at that time. EX-99.1 3 k11712exv99w1.txt PRESS RELEASE ISSUED JANUARY 19, 2007 EXHIBIT 99.1 FOR IMMEDIATE RELEASE TECUMSEH PRODUCTS COMPANY (NASDAQ SYMBOLS: TECUA AND TECUB) TECUMSEH PRODUCTS COMPANY APPOINTS JAMES J. BONSALL PRESIDENT AND CHIEF OPERATING OFFICER - PREVIOUSLY ANNOUNCED SUCCESSION-PLANNING PROCESS CONTINUES - TECUMSEH, Mich., Jan. 19, 2007--Tecumseh Products Company (Nasdaq: TECUA, TECUB) today announced that James J. Bonsall, currently President of the Company's Engine and Power Train Group as well as a Managing Director of AlixPartners, has been named Tecumseh's interim President and Chief Operating Officer, a new position. In his newly expanded role, which is effective immediately, Mr. Bonsall will have primary responsibility for the Company's strategic direction, overall management and day-to-day operations. Under the previously announced succession-planning process that is currently under way, the Company's Board, assisted by an advisory committee formed pursuant to the terms of a new Second Lien Credit Agreement, has engaged an executive recruiting firm to identify candidates to succeed Todd W. Herrick as Chief Executive Officer. Reflecting that process and Mr. Bonsall's expanded role, Mr. Herrick, as of today, will no longer be serving in a management role, nor will the Company's executive vice president, Kent Herrick. Mr. Bonsall said, "I'm pleased to serve as Tecumseh's President and Chief Operating Officer while the search continues for a permanent CEO. I look forward to working with my colleagues on the Tecumseh management team and with the Company's Board as we continue to build upon Tecumseh's many strengths and to address its current challenges." Mr. Bonsall, 54, is an experienced executive with an extensive background in helping manufacturing and high technology companies improve their performance. He has more than twenty-five years of experience serving European and multinational public and privately owned companies. CAUTIONARY STATEMENT RELATING TO FORWARD-LOOKING STATEMENTS This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to the safe harbor provisions created by that Act. In addition, forward-looking statements may be made orally in the future by or on behalf of the Company. Forward-looking statements can be identified by the use of terms such as "expects", "should", "may", "believes", "anticipates", "will", and other future tense and forward-looking terminology. Readers are cautioned that actual results may differ materially from those projected as a result of certain risks and uncertainties, including, but not limited to, i) changes in business conditions and the economy in general in both foreign and domestic markets; ii) the effect of terrorist activity and armed conflict; iii) weather conditions affecting demand for air conditioners, lawn and garden products, portable power generators and snow throwers; iv) the success of our ongoing effort to bring costs in line with projected production levels and product mix; v) financial market changes, including fluctuations in interest rates and foreign currency exchange rates; vi) economic trend factors such as housing starts; vii) emerging governmental regulations; viii) availability and cost of materials, particularly commodities, including steel, copper and aluminum, whose cost can be subject to significant variation; ix) actions of competitors; x) the ultimate cost of resolving environmental and legal matters; xi) our ability to profitably develop, manufacture and sell both new and existing products; xii) the extent of any business disruption that may result from the restructuring and realignment of our manufacturing operations or system implementations, the ultimate cost of those initiatives and the amount of savings actually realized; xiii) the extent of any business disruption caused by work stoppages initiated by organized labor unions; xiv) the ability of the Company to maintain adequate liquidity in total and within each foreign operation; xv) potential political and economic adversities that could adversely affect anticipated sales and production in Brazil; xvi) potential political and economic adversities that could adversely affect anticipated sales and production in India, including potential military conflict with neighboring countries; xvii) our ability to reduce a substantial amount of costs in the Engine & Power Train group associated with excess capacity; xviii) the ongoing financial health of major customers; and xix) the continuing willingness of our domestic and foreign lenders to cooperate with us in modifying covenants and repayment terms as required to accommodate changes in our business. These forward-looking statements are made only as of the date of this report, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Press releases and other investor information can be accessed via the Investor Relations section of Tecumseh Products Company's Internet web site at http://www.tecumseh.com. Web site: http://www.tecumseh.com Contact: Roy Winnick Kekst and Company 1-212-521-4842 roy-winnick@kekst.com -----END PRIVACY-ENHANCED MESSAGE-----