SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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-12
Tecumseh Products Company
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[TECUMSEH PRODUCTS COMPANY LOGO]
[TECUMSEH LOGO]
March 21, 2003
Dear Shareholder:
We cordially invite you to attend our 2003 annual meeting of shareholders
next month in Tecumseh, Michigan.
Only Class B shareholders will vote at the meeting. However, all
shareholders are most welcome to attend. Starting today, we are sending the
enclosed proxy statement to all our shareholders and a form of proxy to Class B
shareholders only.
If you are a Class B shareholder, your vote is very important. Even if you
plan to attend in person, please complete and mail the enclosed proxy, or vote
by telephone or on the Internet, at your earliest convenience. Thank you.
Sincerely,
/s/ TODD W. HERRICK
Chairman of the Board of Directors,
President and Chief Executive Officer
[TECUMSEH PRODUCTS COMPANY LETTERHEAD]
[TECUMSEH PRODUCTS LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date: Wednesday, April 30, 2003
Time: 9:00 a.m.
Location: Tecumseh Country Club
Tecumseh, Michigan
From the center of Tecumseh, go north on the Tecumseh-Clinton
Road about one mile to Burt Street. Turn right. Tecumseh Country
Club is on the south side of Burt Street about one mile east of
the Tecumseh-Clinton Road.
The purposes of this year's annual meeting are:
- To elect directors for the following year.
- To consider any other matters properly presented at the meeting.
All shareholders are most welcome to attend the meeting, but only those who
held Class B shares at the close of business on March 7, 2003 will be entitled
to vote.
If you are a Class B shareholder, you will find enclosed a form of proxy
solicited by our Board of Directors. Whether or not you plan to attend the
meeting, please take the time to vote by completing and mailing the enclosed
proxy or by voting by telephone or on the Internet. Even if you sign a proxy or
vote by telephone or on the Internet, you may still attend the meeting and vote
in person. You may revoke your proxy any time before the voting begins.
YOUR VOTE IS VERY IMPORTANT.
Thank you.
TECUMSEH PRODUCTS COMPANY
Daryl P. McDonald
General Counsel and Secretary
March 21, 2003
PROXY STATEMENT
The Board of Directors of Tecumseh Products Company is soliciting proxies
to vote Class B shares at our 2003 annual meeting of shareholders. This proxy
statement contains information that may help you decide whether and how to vote.
Please read this proxy statement carefully. Appendices A, B, and C contain
important information about share ownership, executive compensation, and market
performance. You can obtain more information about Tecumseh Products Company
from our 2002 annual report to shareholders on Form 10-K and from the other
public documents that we file with the SEC.
VOTING
We have two classes of common stock: Class B, which has full voting rights,
and Class A, which generally has no voting rights. Nothing on the agenda for
this year's annual meeting will require a vote by Class A shareholders so we are
only soliciting proxies from Class B shareholders.
At the close of business on March 7, 2003 (the record date for the
meeting), 5,077,746 Class B shares and 13,401,938 Class A shares were
outstanding. Of the outstanding Class B shares, 4,564,169 currently are entitled
to vote. To have a quorum, a majority of the outstanding Class B shares that are
entitled to vote must be present at the meeting -- either in person or by proxy.
Instead of signing and returning a proxy, if you hold your shares in your
own name, you may vote by telephone or on the Internet by following the
instructions attached to your proxy. If your shares are held through a broker,
bank, or other nominee, you must contact the broker, bank, or other nominee to
find out whether you will be able to vote by telephone or on the Internet.
If you complete the enclosed proxy and return it before the meeting, or if
you vote by telephone or on the Internet, the persons named will vote your
shares as you specify.
You may revoke a proxy any time before voting begins at the meeting. A
later proxy by any means will cancel any earlier proxy. For example, if you vote
by telephone and later vote differently on the Internet, the Internet vote will
count, and the telephone vote will be canceled. If you wish to change your vote
by mail, you should write our Secretary to request a new proxy. The last proxy
we receive before the meeting will be the one we use. You also may change your
vote by voting in person at the meeting.
ELECTION OF DIRECTORS
ELECTION PROCEDURE
Our bylaws authorize the Board of Directors to determine the number of
directors that will make up the full board. We currently have seven directors.
The board has decided to keep the same number for the coming year and has
nominated all seven incumbent directors for reelection. If you return a proxy or
vote by telephone or on the Internet, your shares will be voted for all of the
board's nominees or, if you specify otherwise, as you specify. If a nominee
becomes unable to serve, which we do not expect to happen, your proxy will be
voted for a substitute determined in the best judgment of the proxy holders.
From the persons duly nominated, directors will be elected by plurality
vote of the Class B shareholders present or represented at the meeting. This
means that this year, regardless of the number of Class B shares not voted for a
nominee, the nominees who receive the highest through seventh highest numbers of
votes will be elected.
Early in 2003, Kenneth G. Herrick retired from the board and from his
position as Chairman of the Board and was given the honorary designation
Chairman Emeritus, and Todd W. Herrick was elected Chairman of the Board. John
W. Gelder resigned from the board during 2002 concurrently with his retirement
from Miller, Canfield, Paddock and Stone, P.L.C., the firm which served as our
principal outside legal counsel during 2002 and is continuing to do so this
year.
NOMINEES FOR DIRECTOR
Todd W. Herrick (director since 1973, age 60). Chairman of the Board of
Directors (since February 2003), President, and Chief Executive Officer,
Tecumseh Products Company. Mr. Herrick is a member of the Board of Directors of
Comerica Incorporated and a member of the Boards of Trustees of Howe Military
1
School and Herrick Foundation. He also is a member of the Advisory Boards to the
School of Business of the University of Michigan and the School of Business of
the University of Notre Dame.
David W. Kay (director since 2001, age 54). Vice President, Treasurer, and
Chief Financial Officer (since 2001) and Corporate Controller (1999 to 2001),
Tecumseh Products Company; Corporate Controller (1986 to 1999), RTI
International Metals, Inc. (manufacturing). Mr. Kay serves on our Pension and
Investment Committee.
J. Russell Fowler (director since 1967, age 84). Retired; Chairman Emeritus
(1992 to 1994) and Chairman of the Board of Directors and Chief Executive
Officer (1982 to 1992), Jacobson Stores, Inc. (mercantile business). Mr. Fowler
is a member of the Boards of Directors of Butterfield Investment Company and
Quanta, Inc. He serves on our Governance and Executive Compensation, Audit,
Nominating, and Strategic Planning Committees.
Stephen L. Hickman (director since 1991, age 60). Chairman of the Board of
Directors and Chief Executive Officer (since 2001) and President (until 2001) of
Brazeway, Inc. (manufacturer of aluminum extrusions and fabricator of aluminum
products). Mr. Hickman serves on our Governance and Executive Compensation,
Nominating, and Strategic Planning Committees.
Peter M. Banks (director since 1991, age 65). Partner (since September
2000), XR Ventures, L.L.C. (investments); Senior Executive (January 2000 to
April 2000), Veridian Corporation (research and development); President and
Chief Executive Officer (1997 to January 2000), ERIM International, Inc.
(research and development); President and Chief Executive Officer (1995 to
1997), Environmental Research Institute of Michigan (government research and
development services); Professor and Dean of the College of Engineering (1990 to
1994), University of Michigan. Dr. Banks is a member of the Boards of Directors
of X-Rite Corp., HandyLab, Inc., Chaos Technology, Inc., and Triformix, Inc. He
serves on our Governance and Executive Compensation, Pension and Investment,
Nominating, and Strategic Planning Committees and attends our research
laboratory engineering review meetings.
Jon E. Barfield (director since 1993, age 51). Chairman, President, and
Chief Executive Officer, The Bartech Group, Inc. (contract employment and
related staffing services). Mr. Barfield is a member of the Boards of Directors
of National City Corporation, Granite Broadcasting Corporation, BMC Software,
Inc., and Pantellos Group Limited Partnership, Inc. He also is a Trustee
Emeritus of Princeton University, a member of the Boards of Trustees of
Kettering University and Henry Ford Museum and Greenfield Village, and a
director of Blue Cross and Blue Shield of Michigan, the Community Foundation for
Southeastern Michigan, and Detroit Renaissance. He serves on our Pension and
Investment, Audit, and Strategic Planning Committees.
Ralph W. Babb, Jr. (director since 1998, age 54). President, and Chief
Executive Officer (since January 2002), Chairman (since October 2002), and Chief
Financial Officer (January 2002 to April 2002), Comerica Incorporated; President
and Chief Executive Officer (since January 2002) and Chairman (since October
2002), Comerica Bank; Vice Chairman and Chief Financial Officer (March 1999 to
December 2001) and Executive Vice President and Chief Financial Officer (June
1995 to March 1999), Comerica Incorporated and Comerica Bank. Mr. Babb is a
member of the Boards of Directors of Comerica Incorporated, Comerica Bank, the
Detroit Symphony Orchestra, and Oakland University Foundation, a member of the
Board of Trustees of William Beaumont Hospital -- Royal Oak, and Chairman of
United Way Community Services. He serves on our Governance and Executive
Compensation, Audit, Nominating, and Strategic Planning Committees.
DIRECTOR COMPENSATION
We do not pay employees any separate compensation for serving as directors.
We pay all other directors a monthly retainer of $1,000, a $1,500 fee for each
board meeting attended, and a $1,000 fee for each committee meeting attended,
and we pay Dr. Banks $1,000 for each research laboratory engineering review
meeting that he attends. We also reimburse those directors for travel expenses.
DIRECTORS' MEETINGS AND STANDING COMMITTEES
We held ten board meetings during 2002. The Audit Committee met five times
during the
2
year, the Governance and Executive Compensation Committee met four times, and
the Nominating Committee met once. Each incumbent director attended at least 75%
of the total of all board meetings and all meetings of board committees on which
he served that were held during his period of service.
NOMINATING COMMITTEE
The function of the Nominating Committee is to make recommendations on
nominations for the Board of Directors. The committee will consider shareholder
suggestions for nominees for director (other than self-nominations). If you wish
to make a suggestion, you should submit it in writing to Daryl P. McDonald,
General Counsel & Secretary, Tecumseh Products Company, 100 E. Patterson Street,
Tecumseh, Michigan 49286. The committee will consider suggestions received
before December 31 at a meeting in the following year, before we mail the proxy
materials for that year's annual meeting.
AUDIT COMMITTEE
The board has adopted a written charter specifying the powers and duties of
the Audit Committee. A copy of the charter is included as Appendix D.
All members of the Audit Committee are independent (as independence is
defined in the applicable National Association of Securities Dealers, Inc.
listing standards).
AUDIT COMMITTEE REPORT
Our committee oversees Tecumseh Products Company's financial reporting
process on behalf of the Board of Directors and is comprised of all outside
directors who are independent within the meaning of, and meet the experience
requirements of, the applicable rules of the NASD. Management has primary
responsibility for the financial statements, reporting processes, and system of
internal controls. In fulfilling our oversight responsibilities, we reviewed the
audited financial statements for the fiscal year ended December 31, 2002 and
discussed them with management, including a discussion of the quality, not just
the acceptability, of the accounting principles, reasonableness of significant
judgments, and clarity of disclosures in the financial statements.
In performing our oversight function, we also discussed with the
independent accountants the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU sec. 380) and considered
whether their provision of non-audit services is compatible with maintaining
their independence. In addition, we received from the independent accountants
the written disclosures and letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and we
discussed their independence with them.
In reliance on the reviews and discussions referred to above and such other
considerations as we determined to be appropriate, we recommended to the board
of directors (and the board of directors approved) that the audited financial
statements for the fiscal year ended December 31, 2002 be included in the annual
report to shareholders and Form 10-K for that year.
In addition to the current members of our committee (all of whom served
throughout 2002), John W. Gelder was a member until his resignation from the
Board of Directors on June 26, 2002.
Presented by the members of the Audit Committee of the Board of Directors
J. Russell Fowler, Chairman
Jon E. Barfield
Ralph W. Babb, Jr.
GOVERNANCE AND EXECUTIVE COMPENSATION COMMITTEE
The overall mission of the Governance and Executive Compensation Committee
is to assist the board in conducting our business successfully so as to maximize
long-term benefits to shareholders, including optimizing long-term financial
success. Its functions include:
- Actively developing and recommending to the board strategies for
achieving those goals.
- Monitoring and reporting to the board on the effectiveness of management
policies and decisions.
- Annually reporting to the board the committee's assessment of the board's
3
performance in light of the objectives described above.
- Annually reviewing with the board the appropriate skills and
characteristics required of board members in the context of the then
current composition and needs of the board, including issues of
diversity, age, and skills.
- Reviewing our policies for compensating outside directors and, if
appropriate, making recommendations for changes.
- Annually fixing the salaries of our Chief Executive Officer and other
executive officers, considering, developing, reviewing, and making
recommendations about programs for annual and long-term incentive
compensation for those executives and for other key employees, and
administering those programs, including our Management Incentive Plan.
No director on this committee can be an employee of Tecumseh Products
Company.
GOVERNANCE AND EXECUTIVE COMPENSATION COMMITTEE REPORT
Compensation Philosophy and Objectives
We follow a "pay for performance" philosophy designed to accomplish three
primary objectives:
- Encouraging teamwork among members of management and excellence in the
performance of individual responsibilities.
- Aligning the interests of key managers with the interests of shareholders
by offering an incentive compensation vehicle that is based on growth in
return on equity and shareholder value.
- Attracting, rewarding, and retaining strong management.
Our "pay for performance" strategy is intended to enhance shareholder
value:
- In the short term, by focusing management's attention on return on
equity, cash return on assets, and other measures of current financial
performance so as to challenge each business group to achieve and
maintain positions of market leadership, to reduce costs where
appropriate, and to continually seek to maintain and enhance Tecumseh
Products Company's reputation for excellence in product quality and
customer service.
- In the longer term, by causing a substantial portion of each executive's
potential compensation to be directly tied to market performance of the
Class A shares.
Management Incentive Plan Awards
The principal tool for implementing our "pay for performance" philosophy is
the Management Incentive Plan, which covers approximately 40 key executives,
including all executive officers. (We also have a plan for awarding annual cash
bonuses based on similar performance criteria, which covers lower level
management employees.) The Management Incentive Plan is structured to provide
both a short-term incentive tied to achievement of company-wide and business
unit annual performance goals and a long-term incentive tied to the market
performance of the Class A shares.
One third of each plan award granted for 2002 was payable in cash, and the
remainder was denominated in phantom stock "units" considered for record keeping
purposes as equivalents to Class A shares and valued accordingly. Half of the
phantom stock units granted under each 2002 award (that is, one-third of the
total award) vest after three full fiscal years, and the remaining units vest
after five full fiscal years. Except in cases of earlier employment termination
due to death, disability, or retirement, or in the event of a "change in
control" (as defined in the plan), these phantom stock units are subject to
forfeiture if the grantee does not remain with us until the units vest. As cash
dividends are paid on Class A shares, additional phantom stock units (also
subject to forfeiture), equal in value to the dividends paid, are credited to
employee accounts under the plan. Thus, the potential payout on an award,
although payable only in cash, is tied directly to the market value performance
of Class A shares over three- and five-year periods. For purposes of
computations under the plan, units are valued at the average of the closing
prices for the Class A shares on the first trading day of the month over the
eleven months preceding the valuation date rather than by the
4
method required by the SEC for the Summary Compensation Table.
The Management Incentive Plan affords us broad discretion to determine the
amounts of awards granted, subject only to a limitation setting the maximum
number of units awardable during a given year at 2% of the number of Class A
shares outstanding at the end of the year. We also have broad discretion under
the plan to establish criteria under which otherwise eligible employees may
receive awards. In general, however, as was true for 2002, before or early in
each year, we expect to establish objective company-wide and business group
performance criteria and, after year-end, to use actual performance (measured
against these criteria) as the principal basis for award decisions for that
year.
For 2002, the company-wide criteria established for the Corporate Office
Group, which includes Todd W. Herrick, David W. Kay, and Michael R. Forman,
related to return on equity, both in absolute terms and in relation to
historical performance. The same company-wide return on equity criteria also
applied to our business units, and additional group criteria relating to cash
return on assets (both absolute and relative to prior performance) also were
established for each business unit. Under the plan as implemented for 2002,
depending on the extent to which actual return on equity for that year (and, for
employees in a business unit, the extent to which the unit's actual cash return
on assets for the year) fell within or exceeded our pre-approved ranges, each
covered employee could have received an award of up to 80% of his 2002 salary.
Applying the criteria we established at the beginning of the year to these
measures of actual 2002 performance resulted in the plan awards shown in the
Summary Compensation Table. We believe those awards are appropriate in view of
last year's performance and that the plan is continuing to function as intended.
Salaries
In keeping with our "pay for performance" philosophy, we believe executive
officers should receive salaries that are reasonable, but modest, in light of
their experience, skills, and responsibilities, and that the opportunity to
achieve significantly greater total compensation should be tied to Tecumseh
Products Company's short- and long-term performance through the potential for
awards under the Management Incentive Plan. When we considered 2002 executive
salaries, it was our shared perception, based on our general business knowledge
and without review of any data specifically collected by us for that purpose,
that existing salary levels for our executive officers were too low given their
responsibilities. In our salary deliberations, we considered the CEO's
recommendations for increases for other executive officers and his strong
recommendation has his own salary not be increased. Fiscal 2001 performance also
was a factor, but not a controlling factor, in our decisions on 2002 salaries,
due to our belief that short-term performance generally is not appropriate for
consideration with respect to that form of compensation. Based on these
considerations, we decided to establish the 2002 salary for each executive
officer at the level reported in the Summary Compensation Table. We made our
salary determinations on the same basis for all executive officers.
Concluding Observations
We expect to continue our "pay for performance" strategy for the
foreseeable future. We intend to continue to closely monitor the impact of
compensation philosophy on financial performance and shareholder value and to
consider additional ways in which current plans and policies might be improved.
Section 162(m) of the Internal Revenue Code generally prohibits the
deduction of certain compensation in excess of $1 million per year paid by a
publicly-held corporation to any individual named in the corporation's summary
compensation table for the year. The compensation paid to each of our executive
officers was well below $1 million for 2002, and we expect the same will be true
for the current year. Therefore, we have decided to defer consideration of any
compensation policies related to Section 162(m) for the present.
Presented by the members of the Governance and Executive Compensation
Committee of the Board of Directors
Ralph W. Babb, Jr., Chairman
Peter M. Banks
J. Russell Fowler
Stephen L. Hickman
5
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All members served on the Governance and Executive Compensation Committee
throughout the period covered by its report. No one who served on the committee
is or ever has been an officer or employee of Tecumseh Products Company or any
of its subsidiaries.
Mr. Babb is an executive officer of Comerica Bank. In the normal course of
its business, Comerica has various banking relationships (both credit and
non-credit) with Tecumseh Products Company and with some of our executive
officers.
We employ Kent B. Herrick, the son of Todd W. Herrick, as Vice President
and Assistant to the President and CEO. His 2002 compensation was $75,000.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Ciulla, Smith & Dale, LLP, our independent accountants for the fiscal year
ended December 31, 2002 and for many years before, will continue to serve for
the fiscal year ending December 31, 2003. A representative of Ciulla, Smith &
Dale, LLP will be present at the annual meeting and available to respond to
appropriate questions from shareholders. He will have an opportunity to make a
statement if he so desires.
AUDIT FEES
The aggregate fees billed to us by Ciulla, Smith & Dale, LLP for
professional services rendered for the audit of our annual financial statements
for fiscal year 2002 and the reviews of our quarterly financial statements
included in our quarterly reports on Form 10-Q for that fiscal year were
approximately $405,000.
ALL OTHER FEES
Ciulla, Smith & Dale, LLP billed us approximately $18,000 for fees for all
other services it rendered in fiscal year 2002. None of those services involved
financial information systems design or implementation.
OTHER MATTERS
We know of no business to be acted on at the annual meeting other than the
matters listed in the accompanying notice. If any other matter does properly
come before the meeting, the proxy holders will vote on it in accordance with
their judgment.
SHAREHOLDER PROPOSALS IN OUR 2004 PROXY STATEMENT
In order for shareholder proposals for the 2004 annual meeting of
shareholders to be eligible to be included in our proxy statement, they must be
received at our principal office no later than November 22, 2003. We retain the
right to omit any proposal if it does not satisfy the requirements of SEC Rule
14a-8.
ADVANCE NOTICE REQUIREMENTS
Our bylaws contain advance notice procedures which a shareholder must
follow to nominate a person for election to our board or to present any other
proposal at an annual meeting of shareholders. In general, these provisions
require notice of a nomination or other proposal expected to be made at an
annual meeting to be in writing, to contain specified information about the
nominee or other proposal and the shareholder proponent, and to be delivered or
sent by first class U.S. mail to our Secretary and received at our principal
office.
Except when an annual meeting is called for a date that is not within 20
days before or after the first anniversary of the prior year's annual meeting
(in which case other time limits apply), we must receive the nomination or
proposal no later than 60 days nor earlier than 90 days before the first
anniversary of the prior year's annual meeting. This means that any nomination
or proposal for next year's annual meeting must be received no later than March
1, 2004 and no earlier than January 31, 2004.
Management proxies for the 2004 annual meeting may confer discretionary
authority to vote on an untimely proposal without express direction from
shareholders giving the proxies.
PROXY SOLICITATION EXPENSES
We will pay the expenses of this solicitation. We have engaged Georgeson
Shareholder
6
Communications Inc. to assist in soliciting proxies, for which we will pay
approximately $7,500 plus out-of-pocket expenses. We also may pay brokers,
nominees, fiduciaries, custodians, and other organizations performing similar
functions their reasonable expenses for sending proxy material to principals and
obtaining their instructions. In addition to solicitation by mail, our
directors, officers, and employees may solicit proxies in person or by
telephone, fax, or similar means.
YOUR VOTE IS VERY IMPORTANT.
If you are a Class B shareholder, please complete and return the enclosed
proxy, or vote by telephone or on the Internet, as soon as possible, even if you
currently plan to attend the annual meeting in person.
By Order of the Board of Directors,
/s/ DARYL P. McDONALD
Daryl P. McDonald
General Counsel and Secretary
Tecumseh, Michigan
March 21, 2003
7
APPENDIX A
SHARE OWNERSHIP
5% CLASS B SHAREHOLDERS
This table shows the Class B shares held by persons we know to be
beneficial owners of more than 5% of the class. We obtained the information
about AXA (which is as of January 31, 2003), Comerica Bank, and Franklin
Resources, Inc. (both as of December 31, 2002) from the Schedules 13G they filed
with the SEC. The other information is as of March 7, 2003.
<Table>
<Caption>
Amount and Nature of Beneficial Ownership
--------------------------------------------------------
Sole Sole Shared Shared
Voting Investment Voting Investment Percent
Power Power Power Power Total of Class
------ ---------- ------ ---------- ----- --------
Herrick Foundation
150 W. Jefferson
Suite 2500
Detroit, MI 48226 1,367,525 1,367,525 1,367,525 26.9%
Kenneth G. Herrick
Tecumseh Products Co.
100 E. Patterson St
Tecumseh, MI 49286 888,113 888,113 888,113 17.5%
Todd W. Herrick
Tecumseh Products Co.
100 E. Patterson St.
Tecumseh, MI 49286 21,906 21,906 1,440,075 1,440,075 1,461,981 28.8%
Comerica Bank
One Detroit Center
Detroit, MI 48275 6,400 11,690 1,179,209 1,173,919 1,185,609 23.3%
Michael A. Indenbaum
150 W. Jefferson
Suite 2500
Detroit, MI 48226 888,113 888,113 888,113 17.5%
AXA
25, avenue Matignon
75008 Paris, France 345,891 1,400 512,177 513,577 10.1%
Franklin Resources, Inc.
One Franklin Parkway
San Mateo, CA 94403 275,000 275,000 275,000 5.4%
</Table>
Todd W. Herrick, who is a director and nominee for director, Michael A.
Indenbaum, a principal in Miller, Canfield, Paddock and Stone, P.L.C., and
Kenneth G. Herrick are the members of the Board of Trustees of Herrick
Foundation.
Kenneth G. Herrick's shares are held as a trustee of trusts for the benefit
of himself and his descendants. The shares for which Mr. Indenbaum is shown as
having shared voting and investment power are held as a trustee of the Kenneth
G. Herrick trusts. Comerica Bank's shares include shares it held on the date of
its Schedule 13G as a trustee of the Kenneth G. Herrick trusts and of other
trusts.
Of the shares for which Todd W. Herrick is shown as having shared voting
and investment power, 72,550 are held as a member of the Board of Trustees of
Howe Military School and 1,367,525 are held as a member of the Board of Trustees
of Herrick Foundation.
A-1
The Schedule 13G filed by AXA and related entities states that AXA filed as
a parent holding company with respect to the holdings of its subsidiaries, AXA
Investment Managers UK Ltd and AXA Rosenberg Investment Management LLC, and by
AXA Financial, Inc. as a parent holding company with respect to the holdings of
its subsidiary, Alliance Capital Management L.P. The Schedule 13G also states
that AXA owns AXA Financial, Inc. and that the following entities, as a group,
control AXA: AXA Conseil Vie Assurance Mutuelle, AXA Assurances I.A.R.D.
Mutuelle, AXA Assurances Vie Mutuelle, and AXA Courtage Assurance Mutuelle.
The Schedule 13G filed by Franklin Resources, Inc. and related entities
states that Franklin Resources, Inc. filed as a parent holding company with
respect to the holdings of one or more investment companies or other managed
accounts advised by its subsidiary, Franklin Advisory Services, LLC, including
Franklin Balance Sheet Investment Fund, a series of Franklin Value Investors
Trust. The Schedule 13G also states that Charles B. Johnson and Rupert H.
Johnson, Jr. are the principal shareholders of Franklin Resources, Inc.
MANAGEMENT'S BENEFICIAL OWNERSHIP
<Table>
<Caption>
Shares Beneficially Owned as of March 7, 2003
----------------------------------------------------------------------------
Sole Voting Shared Voting
Class of and and
Common Investment Investment
Stock Power Power Total Percentage
-------- ----------- ------------- ----- ----------
Ralph W. Babb, Jr. Class B............... -0- 500 500 *
Class A............... -0- -0- -0- -0-
Peter M. Banks Class B............... -0- -0- -0- -0-
Class A............... -0- -0- -0- -0-
Jon E. Barfield Class B............... -0- -0- -0- -0-
Class A............... 659 -0- 659 *
J. Russell Fowler Class B............... 1,300 1,300 2,600 *
Class A............... 900 900 1,800 *
Todd W. Herrick Class B............... 21,906 1,440,075 1,461,981 28.8%
Class A............... -0- 561,324 561,324 4.2%
Stephen L. Hickman Class B............... 100 -0- 100 *
Class A............... 300 -0- 300 *
David W. Kay Class B............... 50 -0- 50 *
Class A............... -0- -0- -0- -0-
Michael R. Forman Class B............... -0- -0- -0- -0-
Class A............... -0- -0- -0- -0-
All directors and current Class B............... 23,356 1,441,875 1,487,137 29.3%
executive officers as a
group Class A............... 1,859 562,224 564,083 4.2%
(8 persons)
---------------------
* less than 1%
</Table>
Mr. Babb holds his shares jointly with his wife.
The shares for which Mr. Fowler is shown as having shared voting and
investment power are owned by his wife.
Herrick Foundation, of which Todd W. Herrick is one of the three
co-trustees, owns 1,367,525 Class B shares and 458,347 Class A shares. The
shared voting and investment power column includes those shares for Mr. Herrick.
He disclaims beneficial ownership of the shares.
A-2
Todd W. Herrick is a member of the Board of Trustees of Howe Military
School, which owns 72,550 Class B shares and 102,977 Class A shares. The shared
voting and investment power column includes those shares for Mr. Herrick. He
disclaims beneficial ownership of the shares.
In addition to the shares shown in the chart, Todd W. Herrick is an income
beneficiary of trusts that hold 888,113 Class B shares and 454,441 Class A
shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Directors, certain officers, and beneficial owners of more than 10% of the
Class B shares are required to file reports about their ownership of our equity
securities under Section 16(a) of the Securities Exchange Act of 1934 and to
provide copies of the reports to us. Based on the copies we received and on
written representations from the persons we know are subject to these
requirements, we believe all 2002 filing requirements were met, except that each
of Todd W. Herrick, David W. Kay, Michael R. Forman, and Stephen L. Hickman had
one late report of one transaction each.
A-3
APPENDIX B
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
This table provides compensation information for our Chief Executive
Officer and each other person who served as an executive officer at any time
during 2002 and whose total salary and bonus for that year exceeded $100,000.
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation Compensation
---------------------- ----------------
Awards
----------------
Restricted Stock All Other
Name and Principal Position Year Salary Bonus Award Compensation
- ------------------------------------------------------------------------------------------------------------
Todd W. Herrick 2002 $475,000 $10,608 $21,216 $6,000
President & Chief 2001 475,000 -0- -0- 5,100
Executive Officer 2000 475,000 16,783 33,066 4,800
David W. Kay 2002 $200,000 $ 4,467 $ 8,933 $6,000
Vice-President, Treasurer 2001 147,381 -0- -0- 4,024
& Chief Financial Officer
(since Oct. 1, 2001)
Michael R. Forman 2002 $120,000 $ 2,680 $ 5,360 $3,803
Vice-President & Director 2001 108,004 -0- -0- 3,765
of Corporate Human Resources
(since Oct. 1, 2001)
- ------------------------------------------------------------------------------------------------------------
</Table>
Salary includes any amounts deferred at the officer's election and
contributed on his behalf to our Retirement Savings Plan (a 401(k) plan).
Bonus consists of the one-third of awards under the Management Incentive
Plan payable in cash.
"Restricted Stock Awards" are restricted phantom stock units relating to
Class A shares that were awarded under the Management Incentive Plan, which
represent two-thirds of each total award for the years shown. As more fully
discussed in the Governance and Executive Compensation Committee Report, these
awards and any deemed dividend reinvestments that may be credited on them
generally are nontransferable and subject to forfeiture until three years (as to
half of the phantom stock units awarded) or five years (as to the other half)
after the end of the year for which they were granted. As required by SEC rules,
for purposes of attributing a dollar value to the units reported, values have
been calculated by multiplying the number of units awarded by the grant date
closing price for a Class A share on the Nasdaq Stock Market. Please note,
however, that plan awards are denominated in share units, not dollars, so that
the potential payout on an award, when and if vested, is tied directly to the
market value performance of Class A shares after the grant. Thus, the actual
dollar amount ultimately realized will depend on our future performance and on
general market conditions prevailing in the future.
As cash dividends are paid on Class A shares, additional phantom stock
units, which correspond to the dividends paid, are credited to employees'
accounts.
As of December 31, 2002, before the 2002 awards reported in the table, our
named executives held phantom stock units under the plan (valued based on the
Class A share closing price on the Nasdaq Stock Market on the last trading day
of 2002) as follows:
- Todd W. Herrick -- 9,671.52 share units valued at $426,804
- David W. Kay -- 227.60 share units valued at $10,043.99
- Michael R. Forman -- 2,142.89 share units valued at $94,565.74
B-1
Amounts shown under "All Other Compensation" are matching contributions to
the Retirement Savings Plan.
RETIREMENT PLANS
Our retirement plan, which is a broad-based defined benefit and (since
1985) noncontributory plan, and our supplemental retirement plan, which covers
certain executives, provide benefits in the event of normal (i.e., at age 65),
early, deferred, or disability retirement. Upon a participant's death, these
plans provide a surviving spouse pension and a refund of any pre-1985 employee
contributions. Participants are vested after five years of credited service. As
of January 1, 2003, our current executives named in the Summary Compensation
Table had the following years of credited service:
- Todd W. Herrick -- 38.5 years
- David W. Kay -- 3.2 years
- Michael R. Forman -- 12.9 years
These plans provide retirement benefits to a vested participant in the form
of a life-time pension, the amount of which is equal to a percentage of the
participant's average base salary over the 60 months immediately before his or
her retirement date, multiplied by years of credited service (up to a maximum of
35 years), and reduced in the case of some benefits payable under the
supplemental retirement plan by a percentage of Social Security benefits.
The table below shows the estimated annual pension benefit (which is not
subject to further deduction for Social Security benefits or other offset
amounts) payable under the plans on a straight life annuity basis to executive
officers retiring at age 65 in the earnings and years of service classifications
specified, without considering any benefits which in some cases may be payable
to a participant due to voluntary contributions made by the participant before
1985.
<Table>
<Caption>
Estimated Annual Benefit at Age 65
for Years of Service Indicated
Average --------------------------------------------------------------------
Annual 35 or
Base Salary 15 20 25 30 Longer
----------- -------- -------- -------- -------- --------
$ 90,000................... $ 16,875 $ 22,500 $ 28,125 $ 33,750 $ 39,375
100,000................... 18,750 25,000 31,250 37,500 43,750
125,000................... 23,437 31,250 39,062 46,875 55,177
150,000................... 28,526 38,035 47,593 57,052 68,302
175,000................... 34,151 45,535 56,918 68,032 81,427
200,000................... 39,776 53,035 66,293 79,552 94,552
225,000................... 45,401 60,535 76,073 90,802 107,680
250,000................... 51,026 68,035 85,043 102,052 120,802
275,000................... 56,651 75,535 94,418 113,302 133,927
300,000................... 62,276 83,035 103,793 124,552 147,052
400,000................... 84,776 113,035 141,293 169,552 199,552
450,000................... 96,026 128,035 160,043 192,052 225,802
500,000................... 107,276 143,035 178,198 214,552 252,052
550,000................... 118,526 158,035 197,543 237,052 278,302
600,000................... 129,776 173,035 216,293 259,552 304,552
</Table>
B-2
APPENDIX C
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The graph which follows compares the performance over the last five years
of our Class B shares (trading symbol TECUB) to the Standard & Poor's 500 Stock
Index and to a composite industry group index made up of two Standard & Poor's
indexes: Consumer Discretionary: Household Appliances (70%) and Industrials:
Industrial Machinery (30%). The graph assumes an investment of $100 in the Class
B shares and in each index on December 31, 1997 and reinvestment of all cash
dividends in shares of the same class.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG TECUMSEH PRODUCTS COMPANY, S&P 500 INDEX,
AND S&P COMPOSITE INDUSTRY INDEX
[GRAPH]
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
- ---------------------------------------------------------------------------------------------------------
TECUMSEH PRODUCTS COMPANY $100.00 $ 94.77 $ 89.69 $ 85.27 $110.88 $ 98.61
- ---------------------------------------------------------------------------------------------------------
S&P 500 INDEX 100.00 128.58 155.63 141.46 124.65 97.10
- ---------------------------------------------------------------------------------------------------------
S&P COMPOSITE INDUSTRY INDEX 100.00 109.85 112.78 94.85 116.50 104.85
- ---------------------------------------------------------------------------------------------------------
</Table>
C-1
APPENDIX D
AUDIT COMMITTEE CHARTER
GENERAL:
The audit committee (the "Committee") of the board of directors (the
"Board") of Tecumseh Products Company (the "Company") shall consist of a minimum
of three directors. Members of the Committee shall be appointed by the Board
annually upon the recommendation of the Company's Corporate Governance and
Executive Compensation committee and may be removed by the Board in its
discretion. All members of the Committee shall be independent directors under
the standards of the NASD, Inc., and shall also satisfy the NASD's independence
requirement for members of the Committee. All members shall have sufficient
financial experience and ability to be financially literate and to enable them
to discharge their responsibilities and at least one member shall be an audit
committee financial expert.
PURPOSE:
The purpose of the Committee shall be to assist the Board in its oversight
of:
- management's conduct of the Company's financial reporting process;
- the integrity of the financial statements of the Company;
- the Company's compliance with legal and regulatory requirements;
- the independence and qualifications of the independent auditor; and
- the performance of the Company's internal audit function and independent
auditors (by reviewing the financial reports and other financial
information provided by the Company to any governmental or regulatory
body, the public or other users thereof, the Company's systems of
internal accounting and financial controls, and the annual independent
audit of the Company's financial statements).
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain outside
counsel, auditors or other experts for this purpose. The Board and the Committee
are in place to represent the Company's shareholders; accordingly, the outside
auditor is ultimately accountable to the Board and the Committee. The Audit
Committee may request any officer or employee of the Company or the Company's
outside counsel or independent auditor to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee.
The Committee shall meet not less than 4 times per year and shall make
regular reports to the Board about Committee activities, issues, and related
recommendations. The Chairman of the Committee may call special meetings of the
Committee, as circumstances require. The Committee will invite members of
management, auditors or others to attend meetings and provide pertinent
information, as necessary. The Committee will hold private audit and executive
sessions. Meeting agendas will be prepared and provided in advance to members
along with appropriate briefing materials. The Committee will perform other
activities related to this charter as requested by the Board. The Committee will
keep minutes of its meetings. The minutes will be circulated among the members
of the Committee and the Board.
KEY RESPONSIBILITIES:
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditors are responsible for auditing those
financial statements. Additionally, the Committee recognizes that financial
management (including the internal audit staff), as well as the outside
auditors, have more time, knowledge and more detailed information on the Company
than do Committee members; consequently, in carrying out its
D-1
oversight responsibilities, the Committee is not providing any expert or special
assurance as to the Company's financial statements or any professional
certification as to the outside auditor's work.
The functions set forth below shall be the common recurring activities of
the Committee in carrying out its oversight purpose. These functions are set
forth as a guide with the understanding that the Committee may divert from this
guide as appropriate given the circumstances. In conducting its activities, the
Committee shall have the authority and responsibilities described herein:
1. To discuss with management and the independent auditor the annual
audited financial statements and quarterly financial statements, including
matters required to be reviewed under applicable legal, regulatory or NASD
requirements. In connection therewith:
- The Committee shall review with management and the outside auditors the
audited financial statements to be included in the Company's Annual
Report on Form 10-K (or the Annual Report to Shareholders if distributed
prior to the filing of the Form 10-K) and review and consider with the
independent auditors the matters required to be discussed by Statement of
Auditing Standards ("SAS") No. 61.
- As a whole, or through the Committee chair, the Committee shall review
with the outside auditors the Company's interim financial results to be
included in the Company's quarterly reports to be filed with the
Securities and Exchange Commission and the matters required to be
discussed by SAS No. 61. This review will occur prior to the Company's
filing of the Form 10-Q.
- The Committee shall discuss with management and the independent auditors
the quality and adequacy of the Company's internal controls.
- The Committee shall:
- Annually obtain from and review with the Company's independent
auditor(s) a formal statement from the independent auditors
delineating all relationships, financial interests, investments,
arrangements or non-audit consulting services being performed which
could impair or give the appearance of impairing the auditor's
independence. In assessing auditor independence, the Committee will
rely primarily on sound business judgment, and the guidelines
established for auditor independence by the Securities and Exchange
Commission's Rules as set forth in the Revisions of the Commission's
Auditor Independence Requirement issued November 21, 2000 (which may
be amended from time to time) and other generally accepted standards
or pronouncements which may govern or define standards of auditor
independence;
- discuss with the independent auditors any such disclosed relationships
and their impact on the outside auditor's independence; and
- recommend that the Board take appropriate action in response to the
independent auditor's report to satisfy itself of the auditor's
independence.
- The Committee, subject to any action that may be taken by the full Board,
shall have the ultimate authority and responsibility to select (or
nominate for shareholder approval), evaluate and, where appropriate,
replace the independent auditor to examine the Company's accounts,
controls and financial statements.
2. To review at least annually the adequacy of this charter and recommend
any proposed changes to the Board for approval.
3. To discuss with management and the independent auditor, as appropriate,
earnings press releases and financial information and earnings guidance provided
to analysts and to rating agencies.
4. To have the sole authority to approve all audit engagement fees and
terms and the Committee, or a member of the Committee, to pre-approve any
non-audit service provided to the Company by the Company's independent auditor.
D-2
5. To meet with the independent auditor prior to the audit to review the
proposed audit scope and approach, including coordination of the audit effort
with internal audit.
6. To discuss with management and the independent auditor, as appropriate,
any audit problems or difficulties and management's response, and the Company's
risk assessment and risk management policies, including the Company's major
financial risk exposure and steps taken by management to monitor and mitigate
such exposure.
7. To review the Company's financial reporting and accounting standards and
principles, significant changes in such standards or principles or in their
application and the key accounting decisions affecting the Company's financial
statements, including alternatives to, and the rationale for, the decisions
made.
8. To review the significant reports to management prepared by the internal
auditing department and management's responses.
9. To review and approve the Company's internal corporate audit staff
functions, including: (i) purpose, authority and organizational reporting lines;
(ii) annual audit plan, budget and staffing; (iii) concurrence in the
appointment, compensation and rotation of the corporate audit staff; (iv) review
and concur in the appointment and replacement of the senior internal auditing
executive; (v) ensure there are no unjustified restrictions, or limitations, on
the internal audit function; and (vi) audit of the application of the Code of
Ethics for Chief Executive Officer and senior financial officers.
10. To (i) review the process for communicating the Code of Ethics to
Company personnel, and for monitoring compliance therewith, and (ii) grant
waivers to the Code of Ethics, when appropriate.
11. To review, with the Chief Financial Officer, or such others as the
Committee deems appropriate, the Company's internal system of audit and
financial controls and the results of internal audits.
12. To obtain and review at least annually a formal written report from the
independent auditor delineating: the auditing firm's internal quality-control
procedures; any material issues raised within the preceding five years by the
auditing firm's internal quality-control reviews, by peer reviews of the firm,
or by any governmental or other inquiry or investigation relating to any audit
conducted by the firm. The Committee will also review steps taken by the
auditing firm to address any findings in any of the foregoing reviews. Also, in
order to assess auditor independence, the Committee will review at least
annually all relationships between the independent auditor and the Company.
13. To prepare and publish an annual Committee report in the Company's
proxy statement.
14. To set policies for the hiring of employees or former employees of the
Company's independent auditor.
15. To review and investigate any matters pertaining to the integrity of
management, including conflicts of interest, or adherence to standards of
business conduct as required in the policies of the Company. This should include
regular reviews of the compliance processes in general, effectiveness of the
system for monitoring compliance with laws and regulations, the findings of any
examinations by regulatory agencies, and any auditor observations, the results
of management's investigation and follow-up (including disciplinary action) of
any instances of noncompliance, and the Company's risk management process in
particular. In connection with these reviews, the Committee will meet, as deemed
appropriate, with the General Counsel and other Company officers or employees.
16. To establish procedures for (i) the receipt, retention and treatment of
complaints received by the Company, regarding accounting, internal accounting
controls or auditing matters, and (ii) confidential, anonymous submission by
employees of the Company of concerns regarding questionable accounting or
auditing matters.
OTHER DUTIES:
The Committee shall meet separately at least quarterly with management,
with the corporate audit staff and also with the Company's independent auditors.
D-3
The Committee shall have authority to retain such outside counsel, experts
and other advisors as the Committee may deem appropriate in its sole discretion.
The Committee shall have sole authority to approve related fees and retention
terms.
The Committee shall report its recommendations to the Board after each
Committee meeting and shall conduct and present to the Board an annual
performance evaluation of the Committee.
D-4
[TECUMSEH PRODUCTS COMPANY LOGO]
2003 ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 30, 2003
Tecumseh Country Club
5200 Milwaukee Road
Tecumseh, MI 49286
- ------------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS FOR VOTING YOUR PROXY
This proxy covers all Class B shares of Tecumseh Products Company held of record.
THERE ARE THREE WAYS TO VOTE YOUR PROXY
TELEPHONE VOTING INTERNET VOTING VOTING BY MAIL
This method of voting is Visit the Internet voting website at Simply mark, sign and date
available for residents of the HTTP://PROXY.GEORGESON.COM. your proxy card and return it in
U.S. and Canada. On a touch Enter the COMPANY NUMBER the postage-paid envelope. If
tone telephone, call TOLL FREE AND CONTROL NUMBER you are voting by telephone or
1-800-790-4577, 24 hours a day, shown below and follow the the Internet, please do not mail
7 days a week. You will be instructions on your screen. You your proxy card.
asked to enter ONLY the will incur only your usual
CONTROL NUMBER shown Internet charges. Available 24
below. Have your proxy card hours a day, 7 days a week until
ready, then follow the prerecorded 5:00 p.m. Eastern Time on April 29, 2003.
instructions. Your vote will be
confirmed and cast as you directed.
Available 24 hours a day, 7 days
a week until 5:00 p.m.
Eastern Time on April 29, 2003.
COMPANY NUMBER CONTROL NUMBER
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
- ------------------------------------------------------------------------------------------------------------------------------------
[x] PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE
ELECTION OF DIRECTORS.
FOR WITHHOLD FOR ALL
Todd W. Herrick, David W. Kay, J. Russell Fowler, Stephen L. Hickman, Peter M. Banks, EXCEPT
Jon E. Barfield, Ralph W. Babb, Jr. [ ] [ ] [ ]
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, check the "For All Except" box and write
that nominee's name in the space provided below.)
- ----------------------------------------------------------------------------------------------------------
If you sign and return this proxy, the proxies will vote your shares as specified above. IF YOU DO NOT SPECIFY HOW TO VOTE,
THE PROXIES WILL VOTE YOUR SHARES FOR THE ELECTION AS DIRECTORS OF ALL NOMINEES LISTED ABOVE AND IN THEIR DISCRETION ON ANY
OTHER MATTERS THAT MAY COME BEFORE THE MEETING.
WE APPRECIATE YOUR PROMPT ACTION IN SIGNING AND RETURNING THIS PROXY.
------------------------------------------
Signature
------------------------------------------
Signature
DATED:
------------------------------, 2003
NOTE: Please sign exactly as your name(s)
appear above. Joint owners should each
sign. When signing as an attorney,
executor, administrator, trustee or
guardian, please give your full title.
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND RETURN THIS PROXY CARD USING THE ENCLOSED ENVELOPE.
If you have any questions or need assistance, please contact Georgeson Shareholder Communications Inc., our Proxy Solicitor, at
1-800-223-2064.
- --------------------------------------------------------------------------------
PLEASE DETACH PROXY CARD HERE
- --------------------------------------------------------------------------------
P R O X Y
TECUMSEH PRODUCTS COMPANY
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD APRIL 30, 2003
By signing on the reverse, I (or, if more than one person signs, we)--
- - authorize either of Todd W. Herrick or David W. Kay to act as my (or our)
proxy at the Annual Meeting of Shareholders of Tecumseh Products Company to
be held on Wednesday, April 30, 2003 and at any adjournments of that
meeting,
- - give each proxy full power to name another person to substitute for him as
proxy,
- - authorize each proxy to vote any and all shares of Tecumseh Products
Company Class B Common Stock, $1.00 par value, registered in my name (or
our names) or which for any reason I (or we) may be entitled to vote, and
- - direct the proxies to vote as specified on the reverse side and to vote in
their discretion on any other matters that may come before the meeting.
CONTINUED AND TO BE VOTED AND SIGNED ON REVERSE