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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(4) 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.
[ ] 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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CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
[TECUMSEH PRODUCTS COMPANY LOGO]
[TECUMSEH LOGO]
March 18, 2005
Dear Shareholder:
We cordially invite you to attend our 2005 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 27, 2005
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 ratify the appointment of the accounting firm of
PricewaterhouseCoopers LLP as independent accountants for the current
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 4, 2005 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 18, 2005
PROXY STATEMENT
The Board of Directors of Tecumseh Products Company is soliciting proxies
to vote Class B shares at our 2005 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, C, and D
contain important information about share ownership, executive compensation,
market performance, and audit fees. You can obtain more information about
Tecumseh Products Company from our 2004 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 4, 2005 (the record date for the
meeting), 5,077,746 Class B shares were outstanding and entitled to vote, and
13,401,938 Class A shares were outstanding. To have a quorum, a majority of the
outstanding Class B shares 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.
PROPOSAL 1:
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. Shareholders elected six directors
at last year's annual meeting. In August, the board increased the number of
directors to seven and appointed Albert A. Koch to fill the newly created
vacancy.
The board has determined to continue the number of directors at seven and,
based on the Governance, Compensation, and Nominating Committee's
recommendation, has nominated all of the 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.
NOMINEES FOR DIRECTOR
Todd W. Herrick (director since 1973, age 62). Chairman of the Board of
Directors (since 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 School and
Herrick Foundation. He also is a member of the Advisory Boards to the School of
Engineering of the
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University of Michigan and the School of Business of the University of Notre
Dame. Mr. Herrick serves on our Pension and Investment and Strategic Planning
Committees.
J. Russell Fowler (Lead Director, director since 1967, age 86). 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. As our Lead Director, Mr. Fowler is
responsible for calling, establishing agendas for, and moderating executive
sessions of independent directors. He also serves on our Governance,
Compensation, and Nominating Committee and our Audit and Strategic Planning
Committees.
Peter M. Banks (director since 1991, age 67). President (since February
2004), Institute for the Future (non-profit technology forecasting and research
organization); Partner (September 2000 to February 2004), 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 Board of Directors of X-Rite Corp. He serves on our
Governance, Compensation, and Nominating Committee and our Audit, Pension and
Investment, and Strategic Planning Committees and attends our research
laboratory engineering review meetings.
Jon E. Barfield (director since 1993, age 53). Chairman, President, and
Chief Executive Officer, The Bartech Group, Inc. (professional staffing,
information technology, and outsourced vendor management services). Mr. Barfield
is a member of the Boards of Directors of National City Corporation, Granite
Broadcasting Corporation, and BMC Software, Inc. He also is a Trustee Emeritus
of Princeton University, a member of the Boards of Trustees of Kettering
University and The Henry Ford, and a director of Blue Cross and Blue Shield of
Michigan and Detroit Renaissance. He serves on our Governance, Compensation, and
Nominating Committee and our Audit, Pension and Investment, and Strategic
Planning Committees.
David M. Risley (director since 2003, age 60). Senior Vice President and
Chief Financial Officer (since 2001), La-Z-Boy Incorporated (residential
furniture); self-employed consultant (2000 to 2001); Vice President Finance and
Chief Financial Officer (1991 through 1999), Aeroquip-Vickers, Inc. (hydraulic
pumps, motors, valves, hoses, and fittings for industrial, automotive, and
aerospace markets and plastic components for automotive). Mr. Risley serves on
our Audit, Pension, and Strategic Planning Committees.
Virginia A. Kamsky (director since 2003, age 51). Chairman and Chief
Executive Officer (since 1980), Kamsky Associates, Inc. (China advisory and
merchant banking services); Executive Vice President (2003 to January 2004),
Foamex International, Inc. (specialty chemicals). Ms. Kamsky is a director of
Olin Corporation. She also is Chairman of the Board of Trustees of China
Institute in America, a member of the Advisory Board of Americares, a director
of the National Institute on U.S.-China Relations, a member of the Council on
Foreign Relations, a trustee of the Dalton School, and a former trustee of
Princeton University. She serves on our Governance, Compensation, and Nominating
Committee and our Audit and Strategic Planning Committees.
Albert A. Koch (director since 2004, age 62). Managing Director (since
1995) of AlixPartners (corporate turnaround, performance improvement and
financial advisory services); Managing Director (since 2002) of Questor
Management Co. (private-equity firm); Chairman, President, and Chief Executive
Officer (since Dec. 2004) of Polar Corporation (provider of tank trailers,
light-duty trailer parts, and tank trailer repair and maintenance services);
interim President and Chief Executive Officer (2003 to 2004) of Champion
Enterprises Inc. (manufactured homes); interim Chief Financial Officer (2002 to
2004) of Kmart Corporation (retailing). Mr. Koch is a member of the Board of
Directors of Numatics, Incorporated. He serves on our
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Governance, Compensation, and Nominating Committee and our Pension and
Investment and Strategic Planning Committees.
RECOMMENDATION OF THE BOARD
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE NOMINEES
NAMED ABOVE.
DIRECTOR COMPENSATION AND SHARE OWNERSHIP
Cash Compensation
We do not pay employees any separate compensation for serving as directors.
During 2004, we paid all other directors a monthly retainer of $1,000 (increased
to $1,250 beginning April 1, 2004), a $1,500 fee for each board meeting
attended, and a $1,000 fee (increased to $1,200 beginning April 1, 2004) for
each committee meeting attended. Beginning April 1, 2004, we increased the
retainer by $300 per month for the Chair of our Audit Committee and by $200 per
month for the Chair of our Governance, Compensation, and Nominating Committee,
and we increased the committee meeting fee for committee chairs by $200.
Effective January 1, 2005, we increased the monthly retainer for all
non-employee directors by $1,250. We also reimburse our directors for travel
expenses.
Phantom Share Awards
Our non-employee directors are eligible for phantom share awards under our
Director Retention Phantom Share Plan, which is administered by the Governance,
Compensation, and Nominating Committee. Under the plan as in effect during 2004,
each non-employee director was eligible to receive an annual award, denominated
in phantom Class A shares, in an amount of up to 50% of his or her annual
retainer fee. The Board of Directors makes the awards at its organizational
meeting following each annual meeting of shareholders on the basis of our actual
return on equity for the preceding year as compared to a target established by
the committee for that year. We credit awards to directors' accounts, together
with deemed dividends on the phantom shares in the accounts. Subject to some
limitations, the plan as in effect during 2004 provided that if a director left
the board, or if there was a "change in control" of Tecumseh Products Company,
we would pay the director cash in an amount equal to the fair market value of
the phantom shares in his or her account at that time. We compute all dollar
amounts using the average of the high and low sales prices of our Class A shares
on the Nasdaq Stock Market on the date of computation.
In 2004, based on our return on equity for 2003, non-employee directors
received no phantom share awards.
Effective January 1, 2005, we changed the plan to increase the maximum
award to 100% of the annual retainer fee and to provide for a minimum annual
award of $5,000 regardless of our return on equity. We also changed the payout
provisions so that one-half of each award will be paid out three years after
grant and the other half five years after grant.
Deferred Compensation Plan
Our non-employee directors can elect to defer receipt of a portion of their
retainers and meeting fees under our Outside Directors' Voluntary Deferred
Compensation Plan. The plan provides that deferred amounts are to be recorded in
bookkeeping accounts we maintain and that the amount in each account will be
adjusted from time to time to reflect the results of a hypothetical investment
in our Class A shares or based on the current yield of the Dow Jones Corporate
Bond Index, as selected by the director. Amounts payable to directors under the
plan are general unsecured claims against the company.
Share Ownership Policies
We have adopted share ownership policies that require each non-employee
director to achieve ownership of at least $50,000 worth of Tecumseh shares.
Current directors must attain this ownership level by 2010, and future directors
must do so within five years after they join our board.
DIRECTORS' MEETINGS AND STANDING COMMITTEES
We held ten board meetings during 2004. The Audit Committee met nine times,
and the Governance, Compensation, and Nominating Committee met six times. All
members of the Audit Committee and the Governance, Compensation, and Nominating
Committee are independent within the meaning of the applicable NASDAQ rules.
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Each incumbent director attended at least 75% of the total of all board
meetings and all meetings of board committees on which he or she served that
were held during his or her period of service.
AUDIT COMMITTEE
The board has adopted a written charter specifying the powers and duties of
the Audit Committee. We included a copy of the charter as an appendix to the
proxy statement for our 2003 annual meeting of shareholders.
The Board of Directors has determined that the chairman of the committee,
David M. Risley, is an audit committee financial expert, as defined in the SEC's
rules. Mr. Risley and all of the other committee members are independent, as
independence is defined in the applicable SEC rules.
AUDIT COMMITTEE REPORT
Our committee oversees Tecumseh Products Company's financial reporting
process on behalf of the Board of Directors and is comprised of 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, 2004 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), as amended, 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 approved) that the audited financial statements for
the fiscal year ended December 31, 2004 be included in the annual report to
shareholders and Form 10-K for that year.
Dr. Banks joined our committee in April 2004. All other members served
throughout the year.
Presented by the members of the Audit Committee of the Board of Directors
David M. Risley, Chairman
Jon E. Barfield
Peter M. Banks
J. Russell Fowler
Virginia A. Kamsky
GOVERNANCE, COMPENSATION, AND NOMINATING COMMITTEE
The overall mission of the Governance, Compensation, and Nominating
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
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.
- Making recommendations to the Board of Directors concerning candidates
for nomination to the board.
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- 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 and
our Director Retention Phantom Stock Plan.
The board has adopted a written charter for the committee, a current copy
of which is available to security holders at the Investor Relations section of
our website at www.tecumseh.com.
DIRECTOR NOMINATIONS
One function of the Governance, Compensation, and 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, 2005 before
we mail the proxy materials for next year's annual meeting.
In the past, the committee has identified potential nominees through
recommendations made by executive officers and non-management directors and has
evaluated them based on their resumes and through references and personal
interviews. No shareholder other than an officer or director has ever submitted
a suggestion for a nominee, but if the committee were to receive such a
suggestion, it expects it would evaluate that potential nominee in substantially
the same manner.
REPORT ON EXECUTIVE COMPENSATION
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 covered 71 key executives for 2004,
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.
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Some plan awards we granted in the past were payable in cash, and the
remainder were denominated in phantom stock units considered for record keeping
purposes as equivalents to Class A shares and valued accordingly. Phantom stock
units granted under past awards vest after a specified number of 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),
unless our committee decides otherwise, 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 the specified 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 method required by the SEC for the Summary
Compensation Table.
The Management Incentive Plan authorizes us to determine the amounts of
awards granted, subject 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, and to establish criteria under which otherwise eligible
employees may receive awards. We think the plan's purposes are best served by
basing awards on the achievement of objective, verifiable performance goals.
Accordingly, before or early in each year, we establish objective company-wide
and business group performance criteria, and after year-end we use actual
performance, measured against these criteria, as the basis for granting awards
for that year.
For 2004, the company-wide criteria established for the Corporate Office
Group, which includes Todd W. Herrick, James S. Nicholson, 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 2004,
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 or her 2004
salary.
Applying the criteria we established at the beginning of the year to these
measures of actual 2004 performance resulted in no plan awards for our executive
officers. We believe that result was 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 2004 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 the CEO and our other executive officers were
too low given their responsibilities. Fiscal 2003 performance also was a factor,
but not a controlling factor, in our decisions on 2004 salaries, due to our
belief that short-term performance generally is not appropriate for
consideration with respect to that form of compensation. In our salary
deliberations, we considered the CEO's recommendations for increases for other
executive officers and his strong recommendation that his own salary not be
increased in light of 2003 performance. Based on these considerations, we
decided to establish the 2004 salary for each executive officer at the level
reported in the Summary Compensation Table. Except as described above, we made
our salary determinations on the same basis for all executive officers.
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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 2004, 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.
Stephen L. Hickman left our committee on April 28, 2004 and did not take
part in our determination that executive officers were not entitled to
Management Incentive Plan awards for 2004. Mr. Koch joined on August 25, 2004
and did not take part in our deliberations concerning 2004 salaries or
establishing 2004 Management Incentive Plan performance standards.
Presented by the members of the Governance, Compensation, and Nominating
Committee of the Board of Directors
Jon E. Barfield, Chairman
Peter M. Banks
J. Russell Fowler
Albert A. Koch
Virginia A. Kamsky
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Stephen L. Hickman served on our Governance, Compensation, and Nominating
Committee until April 28, 2004. Mr. Koch joined on August 25, 2004. Except for
those changes, all current members have served continuously on the committee
performing compensation functions throughout the period covered by the Report on
Executive Compensation. 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.
We employ Kent B. Herrick, the son of Todd W. Herrick, as Executive Vice
President in the Office of the Chairman. His 2004 compensation was $75,000.
PROPOSAL 2:
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP were our independent accountants for the fiscal
year ended December 31, 2004, and the Audit Committee has selected the same firm
as our independent accountants for the fiscal year ending December 31, 2005. As
a matter of good corporate governance, the Audit Committee has determined to
submit its selection to shareholders for ratification. In the event the
committee's selection is not ratified by a majority of the Class B common shares
present or represented at the meeting, we will ask the Audit Committee to
reconsider its selection. Even if the selection is ratified, the Audit Committee
in its discretion may select a different public accounting firm at any time
during the year if it determines that such a change would be in the best
interests of Tecumseh Products Company and its shareholders.
ATTENDANCE AT ANNUAL MEETING
A representative of PricewaterhouseCoopers LLP will be present at the
annual meeting and available to respond to appropriate questions from
shareholders. The representative will have an opportunity to make a statement if
he or she so desires.
AUDIT AND NON-AUDIT FEES
Please see Appendix D for information about the fees billed by our
principal accountants for each of the last two fiscal years.
DECISION TO CHANGE ACCOUNTANTS IN 2003
On April 11, 2003, our Audit Committee determined to dismiss Ciulla, Smith
& Dale, LLP as our independent accountants to audit our books for fiscal year
2003. Ciulla, Smith & Dale, LLP continued in their role as our independent
accountants through the completion of their normal quarterly review of our first
quarter 2003 financial statements, which was completed on May 8, 2003.
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The audit reports issued by Ciulla, Smith & Dale, LLP on our consolidated
financial statements as of and for each of the two years ended December 31, 2001
and 2002 did not contain any adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope, or accounting
principles.
For the years ended December 31, 2001 and 2002 and during the subsequent
interim period until their work was completed, we had no disagreements with
Ciulla, Smith & Dale, LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Ciulla, Smith & Dale, LLP
would have caused Ciulla, Smith & Dale, LLP to make reference to the subject
matter of the disagreement in connection with its reports. During the same
periods, there were no "reportable events" defined in Item 304(a)(1)(v) of the
SEC's Regulation S-K.
The decision to change our independent accountants was approved by our
Audit Committee.
ENGAGEMENT OF NEW ACCOUNTANTS IN 2003
On April 11, 2003, our Audit Committee approved engaging
PricewaterhouseCoopers LLP to serve as our independent accountants for fiscal
year 2003.
During the two years ended December 31, 2001 and 2002, and during the
subsequent interim period prior to our engaging them, we did not consult with
PricewaterhouseCoopers LLP on the application of accounting principles to a
specific transaction, the type of opinion that may be rendered on our
consolidated financial statements, or any other matters listed in Item 304(a)(2)
of Regulation S-K.
Foreign offices of PricewaterhouseCoopers LLP served as auditors of some of
our foreign subsidiaries for the year ended December 31, 2002.
RECOMMENDATION OF THE BOARD
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT ACCOUNTANTS FOR
2005.
COMMUNICATIONS WITH BOARD OF DIRECTORS
You can find information about sending communications to our Board of
Directors at the Investor Relations section of our website at www.tecumseh.com.
We encourage our directors to attend our annual meetings of shareholders.
All six of the directors who held office at that time attended last year's
meeting.
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 2006 PROXY STATEMENT
In order for shareholder proposals for the 2006 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 18, 2005. 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
8
proposal for next year's annual meeting must be received no later than February
26, 2006 and no earlier than January 27, 2006.
Management proxies for the 2006 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 Communications Inc. to assist in soliciting proxies, for which we
will pay approximately $8,500 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 18, 2005
9
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 Comerica Bank and AXA (which is as of December 31, 2004) from the
Schedules 13G they filed with the SEC. The other information is as of March 14,
2005.
<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 1,340,025 1,340,025 1,340,025 26.4%
Todd W. Herrick
Tecumseh Products Co.
100 E. Patterson St.
Tecumseh, MI 49286 21,906 21,906 1,412,575 1,412,575 1,434,481 28.3%
Comerica Bank
One Detroit Center
Detroit, MI 48275 5,100 6,090 1,302,369 1,301,379 1,307,469 25.7%
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 114,403 327,260 327,260 6.4%
- --------------------------------------------------------------------------------------------------------------------
</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 Kent
B. Herrick are the members of the Board of Trustees of Herrick Foundation.
The shares for which Mr. Indenbaum is shown as having shared voting and
investment power are held as a trustee of Herrick family trusts for the benefit
of Todd W. Herrick, Mr. Herrick's sister, and their descendants. Comerica Bank's
shares include shares it held on the date of its Schedule 13G as a trustee of
the Herrick family 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 1,340,025 are held as a member of the Board of Trustees
of Herrick Foundation.
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 subsidiary, AXA
Rosenberg Investment Management LLC, and that AXA Financial, Inc. filed as a
parent holding company with respect to the holdings of its subsidiaries,
Alliance Capital Management L.P. and the Equitable Life Assurance Society of the
United States. The Schedule 13G also states that AXA owns AXA Financial, Inc.
and that the following entities, as a group, control AXA: AXA Assurances
I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, and AXA Courtage Assurance
Mutuelle.
A-1
MANAGEMENT'S BENEFICIAL OWNERSHIP
<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------
Shares Beneficially Owned as of March 14, 2005
----------------------------------------------------------------------------
Sole Voting Shared Voting
Class of and and
Common Investment Investment
Stock Power Power Total Percentage
-------- ----------- ------------- ----- ----------
Peter M. Banks Class B............... 100 -0- 100 *
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 1,412,575 1,434,481 28.3%
Class A............... -0- 503,324 503,324 3.8%
Virginia A. Kamsky Class B............... -0- -0- -0- -0-
Class A............... -0- -0- -0- -0-
Albert A. Koch Class B............... -0- -0- -0- -0-
Class A............... 1,100 -0- 1,100 *
David M. Risley Class B............... -0- -0- -0- -0-
Class A............... 1,200 -0- 1,200 *
James S. Nicholson Class B............... 100 -0- 100 *
Class A............... -0- -0- -0- -0-
Michael R. Forman Class B............... -0- -0- -0- -0-
Class A............... -0- -0- -0- -0-
All current directors and Class B............... 23,406 1,413,875 1,437,281 28.3%
current executive officers Class A............... 3,859 504,224 508,083 3.8%
as a group (9 persons)
----------------------
* less than 1%
--------------------------------------------------------------------------------------------------------------
</Table>
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 1,340,025 Class B shares and 400,347 Class A shares. The
shared voting and investment power column includes those shares for Mr. Herrick.
He disclaims beneficial ownership of Herrick Foundation's shares.
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 Howe Military School's shares.
In addition to the shares shown in the chart, Todd W. Herrick is an income
beneficiary of trusts that hold 444,057 Class B shares and 227,221 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 2004 filing requirements were met, except that the
Form 3 Mr. Nicholson filed when he became an executive officer contained an
error that was corrected by an amendment filed in 2005.
A-2
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 2004 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 2004 $475,000 $ -0- $ -0- $5,754
President & Chief 2003 475,000 -0- -0- 5,081
Executive Officer 2002 475,000 10,608 21,216 6,000
James S. Nicholson 2004 $180,000 $ -0- $ -0- $5,247
Vice-President, Treasurer
& Chief Financial Officer
(since Mar. 31, 2004)
Michael R. Forman 2004 $128,000 $ -0- $ -0- $4,303
Vice-President & Director 2003 125,000 -0- -0- 3,615
of Corporate Human Resources 2002 120,000 2,680 5,360 3,803
- --------------------------------------------------------------------------------------------------------------
</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 the 2002 awards under the Management
Incentive Plan paid 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 2002. As more fully discussed in
the Report on Executive Compensation, 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, 2004, 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 2004) as follows:
- Todd W. Herrick -- 908.79 share units valued at $43,440
- James S. Nicholson -- 136.18 share units valued at $6,509
- Michael R. Forman -- 212.72 share units valued at $10,168
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, 2005, our executives named in the Summary Compensation Table had
the following years of credited service:
- Todd W. Herrick -- 40.5 years
- James S. Nicholson -- 2.9 years
- Michael R. Forman -- 14.9 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 54,688
150,000................... 28,125 37,500 46,875 56,250 67,114
175,000................... 33,557 44,743 55,568 67,114 80,239
200,000................... 39,182 52,247 65,303 78,364 93,364
225,000................... 44,807 59,743 74,678 89,614 106,489
250,000................... 50,432 67,243 84,053 100,864 119,614
275,000................... 56,057 74,243 93,428 112,114 132,739
300,000................... 61,682 82,243 102,803 123,364 145,864
400,000................... 84,182 112,243 140,303 168,364 198,364
450,000................... 95,432 127,243 159,053 190,864 224,614
500,000................... 106,682 142,243 177,803 213,364 250,864
550,000................... 117,732 157,243 196,553 235,864 277,114
600,000................... 129,182 172,243 215,303 258,364 303,364
------------------------------------------------------------------------------------------------------------
</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, 1999 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>
- -----------------------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
- -----------------------------------------------------------------------------------------------------------------
TECUMSEH PRODUCTS COMPANY $100.00 $95.08 $ 90.40 $117.54 $104.53 $120.43
- -----------------------------------------------------------------------------------------------------------------
S&P 500 INDEX 100.00 90.90 80.09 62.39 80.29 89.03
- -----------------------------------------------------------------------------------------------------------------
S&P COMPOSITE INDUSTRY INDEX 100.00 93.65 103.89 95.20 124.31 149.06
- -----------------------------------------------------------------------------------------------------------------
</Table>
C-1
APPENDIX D
AUDIT AND NON-AUDIT FEES
The table below shows the fees billed to us by our principal accountants
for the last two fiscal years. All of the services either were performed under
engagements approved by our Audit Committee before we entered into them or were
"grandfathered" so as not to require pre-approval under the applicable SEC rules
on accountant independence. The fees included in the Audit category are fees
billed for the fiscal years for the audit of our annual consolidated financial
statements included in our annual report to shareholders on Form 10-K and review
of our consolidated financial statements included in Forms 10-Q and related
matters within that category. The fees included in each of the other categories
are fees billed in the fiscal years.
<Table>
<Caption>
CIULLA,
SMITH &
DALE, LLP PRICEWATERHOUSECOOPERS LLP
--------- --------------------------
2003 2003 2004
---- ---- ----
Audit fees.......................................... $ 7,525 $1,323,000 $3,666,000
Audit-related fees.................................. 27,770 130,000 67,000
Tax fees............................................ -0- 480,000 198,000
All other fees...................................... 124,100 201,000 3,000
-------- ---------- ----------
Total............................................... $159,395 $2,134,000 $3,934,000
</Table>
Audit fees were for professional services rendered for the audits of our
consolidated financial statements, quarterly reviews of the financial statements
included in our quarterly reports on Form 10-Q, and assistance with and review
of documents we filed with the SEC. In addition, 2004 audit fees included fees
for auditing our internal controls.
Audit-related fees billed by Ciulla, Smith & Dale, LLP were for audits of
our pension and 401(k) plans, internal control reviews, consultation concerning
financial accounting and reporting standards, and assistance with the transition
to our new principal accountants. Audit- related fees billed by
PricewaterhouseCoopers LLP were for assistance in identifying internal controls
and compiling an internal control questionnaire to assist the Company in its
readiness plan for compliance with the Sarbanes-Oxley Act of 2002 and for
foreign pension and other regulatory services.
Tax fees billed by PricewaterhouseCoopers LLP were for services related to
U.S. customs law and foreign tax compliance and consulting services.
All other fees billed by Ciulla, Smith & Dale, LLP were for management
consulting services concerning internal controls, disclosure controls and
procedures, and documentation practices relating to the requirements of the
Sarbanes-Oxley Act of 2002. All other fees billed by PricewaterhouseCoopers LLP
were for the completion of a needs assessment evaluation and assistance with the
development of vendor selection criteria related to an information technology
project, and for software licensing fees for accounting research software.
The Audit Committee's current policy requires pre-approval of all audit and
non-audit services provided by the independent accountants before the engagement
of the independent accountants to perform them. Audit, tax, and some types of
audit-related and other services may be pre-approved generally, through approval
of frameworks of services to be rendered. Services not covered by a general
pre-approval require specific pre-approval. The committee may delegate authority
to its chairman to pre-approve the engagement of independent accountants when
the entire committee is unable to do so. The chairman must report all such
pre-approvals to the entire committee at the next committee meeting.
D-1
2004 ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 27, 2005
Tecumseh Country Club
5200 Milwaukee Road
Tecumseh, MI 49286
(TECUMSEH PRODUCTS COMPANY LOGO)
- --------------------------------------------------------------------------------
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
This method of voting is available for residents of the U.S. and Canada. On a
touch tone telephone, call TOLL FREE 1-800-786-5219, 24 hours a day, 7 days a
week. You will be asked to enter ONLY the CONTROL NUMBER shown below. Have your
proxy card ready, then follow the prerecorded 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 26, 2005.
INTERNET VOTING
Visit the Internet voting website at HTTP://PROXY.GEORGESON.COM. Enter the
COMPANY NUMBER AND CONTROL NUMBER shown below and follow the instructions on
your screen. You will incur only your usual Internet charges. Available 24 hours
a day, 7 days a week until 5:00 p.m. Eastern Time on April 26, 2005.
VOTING BY MAIL
Simply mark, sign and date your proxy card and return it in the postage-paid
envelope. If you are voting by telephone or the Internet, please do not mail
your proxy card.
-------------- --------------
COMPANY NUMBER CONTROL NUMBER
-------------- --------------
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
- --------------------------------------------------------------------------------
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR ALL
FOR WITHHOLD EXCEPT
1. To elect a Board of Directors of the Corporation to
hold office until the next Annual Meeting of [ ] [ ] [ ]
Shareholders or until their successors are elected
and qualified.
Todd W. Herrick, J. Russell Fowler, Peter M. Banks, Jon E. Barfield, David
M. Risley, Virginia A. Kamsky, Albert A. Koch
(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.)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To ratify the Audit Committee's selection of [ ] [ ] [ ]
PricewaterhouseCoopers LLP as the Company's
independent accountants for 2005.
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, FOR PROPOSAL
NO. 2, 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: , 2005
-----------------------
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
- --------------------------------------------------------------------------------
PROXY
TECUMSEH PRODUCTS COMPANY
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD APRIL 27,2005
By signing on the reverse, I (or, if more than one person signs, we) --
o authorize either of Todd W. Herrick or James S. Nicholson to act as my (or
our) proxy at the Annual Meeting of Shareholders of Tecumseh Products
Company to be held on Wednesday, April 27, 2005 and at any adjournments of
that meeting,
o give each proxy full power to name another person to substitute for him as
proxy,
o 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
o 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