UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): DECEMBER 9, 2006
TECUMSEH PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 0-452 38-1093240
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 EAST PATTERSON STREET
TECUMSEH, MICHIGAN 49286
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (517) 423-8411
(NOT APPLICABLE)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 9, 2006, we entered into a letter agreement, dated December 7,
2006, with AlixPartners, LLP (formerly known as AlixPartners, LLC) and its
affiliate, AP Services, LLC, which replaced our previous separate letter
agreements with them, both of which had been entered into on July 20, 2005.
Under the new agreement, AP Services, LLC personnel will provide interim
management, financial advisory, and consulting services for our Engine and Power
Train Group, including the services of James Bonsall to continue to act as the
group's President. Under the agreement, we have agreed to pay specified hourly
rates for personnel supplied by AP Services and to reimburse it for expenses. We
paid AP Services a retainer of $350,000 (in addition to the $250,000 we paid
when we signed the July 20, 2005 agreement) to be applied against the fees and
expenses we incur.
All of the tasks AlixPartners was to perform under our July 20, 2005
agreement have been completed. Under the terms of the new letter agreement, we
agreed with AlixPartners that the remaining balance of the fees we owe for those
services is $4,176,000, and we agreed to a schedule for paying that amount in
installments between now and July 31, 2007. The agreement also provides for a
substantial additional fee if payments fall in arrears of the agreed upon
payment schedule. The purpose of entering into the revised agreement with
AlixPartners was to provide more certainty with respect to the amounts and
timing of payments that would be due to AlixPartners over the next nine months.
The new agreement replaces provisions that determined an amount of "success" fee
based upon computations of cost savings with a mutually agreed upon fixed
amount.
The foregoing is a summary description of certain terms of the agreement
and is qualified entirely by the text of the agreement, a copy of which is
attached to this report as Exhibit 10.1 and incorporated herein by reference.
Albert A. Koch, a member of our Board of Directors, is a Managing Director
of AlixPartners and will become a partner in AlixPartners as of January 1, 2007.
He will not be personally involved in rendering the services to be performed for
us by AP Services.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
As described in more detail under Item 1.01, our new letter agreement with
AlixPartners, LLP (formerly known as AlixPartners, LLC) and its affiliate, AP
Services, LLC replaced our previous separate letter agreements with them, both
of which had been entered into on July 20, 2005. Under the prior agreement with
AlixPartners, it provided us with financial and operational consulting services
designed to improve the operating performance of our Engine and Power Train
Group. Under the prior agreement with AP Services, it provided our Engine and
Power Train Group with interim management services. The circumstances
surrounding the replacement of those agreements with the new letter agreement
and the relationships one of our directors has with AlixPartners are described
under Item 1.01.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibit is filed with this report:
Exhibit No. Description
- ----------- -----------
10.1 Agreement with AP Services, LLC and AlixPartners, LLP dated
December 7, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TECUMSEH PRODUCTS COMPANY
Date: December 14, 2006 By /s/ James S. Nicholson
-------------------------------------
James S. Nicholson
Vice President, Treasurer and Chief
Financial Officer
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
10.1 Agreement with AP Services, LLC and AlixPartners, LLP dated
December 7, 2006