-----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, Qy/ox/zj4lvISPuLnSkE8Mu5n1ujull73bw6ucsEOQNeou+BSf7sc1nSYwE9hOzq 7oV8WOHRoF890Z0zXBzT+Q== 0000950152-08-009800.txt : 20081126 0000950152-08-009800.hdr.sgml : 20081126 20081126170050 ACCESSION NUMBER: 0000950152-08-009800 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20081120 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20081126 DATE AS OF CHANGE: 20081126 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: 081218675 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 k47026e8vk.txt FORM 8-K 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): NOVEMBER 20, 2008 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.)
1136 OAK VALLEY DRIVE ANN ARBOR, MICHIGAN 48108 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (734) 585-9500 (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 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. On November 20, 2008, we entered into a letter agreement with Edwin L. Buker, our Chairman, President, and Chief Executive Officer, to induce him to remain in our employ if the Herrick family were to succeed in reasserting control over the company at the special meeting of shareholders to be held the following day. The principal terms of the letter agreement are: - Mr. Buker's employment agreement is amended to make it clear, as the parties originally intended, that selection of a majority of the board of directors by a person conducting an election contest - as would be the case if the Herricks are successful in electing two directors at the special meeting of shareholders held November 21, 2008 - would be a "change of control" under the employment agreement, but would not entitle Mr. Buker to voluntarily resign thereafter and receive compensation based on good reason on change of control. If following such a change of control, Mr. Buker resigns for good reason or is terminated without cause, he would be entitled to the compensation payable under the employment agreement based on such events. - We agreed to make cash retention payments to Mr. Buker in the amount of $500,000 on each of the 6-, 12-, and 18-month anniversaries of November 20, 2008 if, on each of those dates, his employment has not terminated for any reason. If his employment terminates for any reason before August 13, 2010, any retention payments he has received will be deducted from any termination payment to which he is entitled. - We awarded Mr. Buker $1.5 million of phantom shares under our Long-Term Incentive Cash Award Plan, of which one-third vest and become payable on each of the 9-, 15- and 21-month anniversaries of November 20, 2008. Vesting and payment is contingent on his continuing to be employed on each vesting and payment date, except that all of the phantom shares will vest and become payable if we terminate his employment without cause or if he resigns for good reason. This award is in addition to any annual awards to which Mr. Buker may be entitled. For more detailed information about the letter agreement's terms, please see the copy filed as an exhibit to this report. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. The following exhibit is filed with this report:
Exhibit No. Description - ----------- ----------- 10.1 Letter agreement dated November 20, 2008 between Tecumseh Products Company and Edwin L. Buker
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: November 26, 2008 By /s/ James S. Nicholson ----------------------------------- James S. Nicholson Vice President, Treasurer and Chief Financial Officer -2- EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 10.1 Letter agreement dated November 20, 2008 between Tecumseh Products Company and Edwin L. Buker
-3- EX-10.1 2 k47026exv10w1.txt EX-10.1 Exhibit 10.1 [Tecumseh Products Company Letterhead] November 20, 2008 Edwin L. Buker President & CEO Tecumseh Products Company 1136 Oak Valley Drive Ann Arbor, MI 48108 Re: Amendments to Employment Agreement and 2008 Retention Arrangements Dear Mr. Buker: You agreed to become the Company's CEO based on your understanding that in the event Todd and Kent Herrick and their affiliates reasserted control of the Company you would be entitled to resign your position and receive enhanced severance benefits under the terms of your Employment Agreement dated August 1, 2007, as amended by an agreement dated March 4, 2008 (the "Employment Agreement"). The Company understands that it is your view that the current effort by the Herricks, acting through Herrick Foundation, to remove two of the Company's directors and replace them with the Herricks' nominees at the shareholders' meeting to be held November 21, 2008 (the "Contested Election") would, if such effort is successful, constitute such a reassertion of control by the Herricks, possibly leading to your terminating your employment for Good Reason on Change of Control, with the meaning and effect provided in your Employment Agreement. The Company has determined your resignation at this point in the Company's turnaround and development efforts based on the Herricks' success in the Contested Election could have an adverse effect on the Company and its prospects. Moreover, any controversy over the interpretation of your Employment Agreement would be distracting and not be in the bests interests of the Company. In order to avoid those results, the Company is prepared to make certain payments and provide other benefits to you contingent on your remaining with the Company, notwithstanding the results of the Contested Election. In exchange, you would agree that success by the Herricks in the Contested Election, absent a subsequent termination by you for Good Reason or by the Company without Cause, would not provide a basis for you to terminate your employment and collect the enhanced severance benefits provided in Section 8(f) of your Employment Agreement, but you would retain all of the rights and benefits provided in your Employment Agreement arising from a resignation by you for Good Reason, or a termination of your employment by the Company without Cause, whether before or after a Change of Control (the definition of which would be changed to specifically include success by the Herricks in the Contested Election). Based on actions taken by the Company's Compensation Committee and Board, and the Company's discussions and negotiations with you, this Letter Agreement will memorialize the agreements reached between you and the Company concerning certain amendments to your Employment Agreement, and to set forth certain payments and benefits to you to encourage you to remain with, and focused on, the Company's business. 1. AMENDMENTS TO EMPLOYMENT AGREEMENT (a) Section 8(h)(v)(b) of the Employment Agreement is hereby deleted in its entirety and replaced with the following: "(b) Executive terminates his employment for Good Reason." (b) Section 8(h)(vi) of the Employment Agreement is hereby deleted in its entirety and replaced with the following: "(b) "Incumbent Board" shall mean the individuals who, as of November 1, 2008, constituted the entire Board of Directors of the Company, and any new director whose appointment by the Board of Directors or nomination for election by the shareholders of the Company is approved by the vote of at least the majority of directors then still in office who were either directors on November 1, 2008 or whose appointment or nomination for election was previously so approved, but excluding from any such determination (a) any individual elected as a director of the Company as a result of an actual or threatened solicitation of proxies or consents or otherwise by or on behalf of any person other than the Board of Directors ("Election Contest"), including by reason of any agreement intended to avoid or settle any Election Contest, (b) any individual nominated, appointed or otherwise selected (whether in connection with the Election Contest or any time prior to the Election Contest) by the person or entity who solicited proxies or consents in connection with the Election Contest or such person's or entity's affiliates, and (c) those individuals appointed to the Board of Directors pursuant to Section 1(b)(ii) and 1(c)(ii) of that certain Settlement and Release Agreement dated as of April 2, 2007." 2. RETENTION PAYMENTS: CASH AND PHANTOM SHARES (a) The Company shall pay you $1.5 million in cash, payable in installments as follows: $500,000 shall vest and be payable on the six month anniversary of the date of this Letter Agreement; $500,000 shall vest and be payable on the twelfth month anniversary of the date of this Letter Agreement; and $500,000 shall vest and be payable on the eighteenth month anniversary of the date of this Letter Agreement; provided, however, in each instance on the applicable payment date your employment by the Company has not terminated for any reason. All payments otherwise due according to the foregoing after your employment has been terminated for any reason shall lapse and be forfeited. In addition, it is understood and agreed that the amount of any cash payments due and paid to you in accordance with the foregoing shall be set off against the cash payments, if any, due you under Section 8 of your Employment Agreement in respect of any termination of your employment by the Company during the Employment Period (as defined in your Employment Agreement). (b) You will receive a grant of $1.5 million of phantom shares pursuant to the Company's Long Term Incentive Plan ("LTIP"), with the actual number of shares being determined on the basis of the closing price of the Company's Class A shares on the date of this Letter Agreement (the "Phantom Shares"). This grant is in addition to any annual grant under the LTIP to which you might be entitled. The Phantom Shares shall be issued in accordance with the LTIP, and shall vest and be payable in installments as follows: one-third shall vest and be payable on the nine month anniversary of the date of this Letter Agreement; one-third shall vest and be payable on the fifteenth month anniversary of the date of this Letter Agreement; and one-third shall vest and be payable on the twenty-first month anniversary of the date of this Letter Agreement. Vesting and payment for the Phantom Shares will, in each instance be contingent on your remaining in the employ of the Company on each applicable vesting and payment date, except that (i) if you are terminated by the Company without Cause (as defined in your Employment Agreement) or resign from the Company with Good Reason (as defined in your Employment Agreement), all Phantom Shares not then vested shall immediately vest and be payable as of the effective date of your termination. If your employment by the Company is terminated for any other reason, all Phantom Shares then not vested shall be canceled and forfeited. 3. EFFECT OF AGREEMENT Except as modified and supplemented herein, your Employment Agreement constitutes the entire agreement between Company and you with respect to the subject matter hereof. No change to this Letter Agreement shall be effective unless it is in writing and signed by both you and a duly authorized officer of the Company. 4. SUCCESSORS AND ASSIGNS This Letter Agreement shall inure to the benefit of and be binding upon the respective heirs, executors, administrators, representatives, successors and assigns of the parties hereto; provided, however, that you may not assign your rights or obligations hereunder without the prior written consent of the Company. The Company or its successors may assign its rights and obligations hereunder to any affiliate of the Company or its successor, as the case may be, provided, that the Company or its successor, as the case may be, remains jointly and severally liable for the performance by any such affiliate of its obligations hereunder. 5. SURVIVAL This Letter Agreement shall survive the termination of your employment with the Company or any successor thereof. 6. GOVERNING LAW; VENUE AND JURISDICTION; ENFORCEMENT (a) This Letter Agreement shall be governed by and construed in accordance with the internal laws of the State of Michigan. (b) The parties hereby consent to the jurisdiction of the state and federal courts located in or serving the County of Washtenaw, Michigan, which shall be the exclusive venue for any legal action or proceeding filed by either party with respect to this agreement. The parties hereby further agree and irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens that either of them may now or hereafter have to the bringing of any such action or proceedings in such jurisdictions. (c) In connection with any proceeding brought by you or your heirs or other successors or assigns, to enforce any provision of this Letter Agreement or your Employment Agreement, whether brought by you as plaintiff or as a counter- or cross-claim by you, the Company shall advance to you all cash amounts required to pay your costs, expenses and fees (including actual attorneys' fees) incurred by you in connection with such proceeding. This Letter Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. Please indicate your acceptance of these terms by countersigning a copy of this Letter Agreement and returning it to the undersigned at your earliest convenience. Very truly yours, TECUMSEH PRODUCTS COMPANY By: /S/ James S. Nicholson ------------------------------------ Its: Vice President, Treasurer and Chief Financial Officer ------------------------------- Accepted and agreed: /s/ Edwin L. Buker - ------------------------------------- Edwin L. Buker Dated: November 20, 2008 -----END PRIVACY-ENHANCED MESSAGE-----