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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 17, 2007
TECUMSEH PRODUCTS COMPANY
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(Exact name of registrant as specified in its charter)
MICHIGAN 0-452 38-1093240
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 EAST PATTERSON STREET
TECUMSEH, MICHIGAN 49286
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (517) 423-8411
(NOT APPLICABLE)
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(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))
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ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
Annual Incentive Plan
On December 17, 2007, our board of directors adopted an Annual Incentive
Plan for executive employees selected by the Compensation Committee to
participate in the plan. We expect that our principal executive officer,
principal financial officer, and other named executive officers will all
participate. This new plan replaces our Key Employee Bonus Plan effective
January 1, 2008.
Under the plan, each participating executive will be eligible to earn a
cash bonus based on the Company's and the executive's performance during a given
calendar year. Before or within the first 90 days of each year, the Compensation
Committee will determine:
- performance measures and goals and a calculation methodology to be
used for calculating a total Company bonus pool for the year based
on the Company's performance;
- the executives who will participate for that year;
- a target bonus percentage for each participant; and
- Company and individual performance measures and goals to be used for
determining each participant's actual bonus percentage for the year
and the methodology to be used for calculating his or her actual
bonus percentage after the year is completed based on the Company's
and the participant's actual performance relative to those
performance measures and goals.
After the year is completed, each participant's actual bonus percentage
will be computed on the basis of actual Company and individual performance using
the performance measures and goals and the calculation methodology established
by the committee at the beginning of the year. Each participant will then
receive a cash bonus equal to his or her salary for the year multiplied by his
or her actual bonus percentage as so calculated. The actual bonus percentage
cannot exceed 200% of the participant's target bonus percentage, and the total
of all bonuses under the plan for a given year cannot exceed the total Company
bonus pool for that year calculated in the manner prescribed by the Compensation
Committee at the beginning of the year.
Performance measures used in determining the bonus of any participant
subject to Section 162(m) of the Internal Revenue Code must consist only of
performance measures specified for that purpose in the plan, and the bonus for
any such participant for any year cannot exceed $3,000,000.
The Compensation Committee expects to determine which executives will
participate in the plan for 2008, the applicable performance measures and goals
for that year, and the other matters described above during the first 90 days of
2008.
Outside Directors' Deferred Stock Unit Plan
On December 17, 2007, our board of directors adopted an Outside Directors'
Deferred Stock Unit Plan. This new plan replaces our Director Retention Phantom
Share Plan effective January 1, 2008.
For 2008, our non-employee directors will receive an annual retainer of
$80,000, payable one-half in cash and the other half in deferred stock units
under the new plan. Our Lead Director, if any (we do not currently have one),
will receive an additional annual retainer of $20,000, also payable one-half in
cash and the other half in deferred stock units. Members of our Audit Committee
will receive an additional annual retainer ($20,000 for the chair and $10,000
for other members), as will the members of our other standing committees
($10,000 for the chair and $5,000 for other members), all payable in cash. There
will be no meeting fees for up to ten full board meetings per year and up to six
meetings of each committee. Non-employee directors will receive a cash fee of
$1,500 for each board or standing committee meeting attended during a year in
excess of those numbers.
Under the Outside Directors' Deferred Stock Unit Plan, each non-employee
director holding office on the first day of the year will receive an allocation
of deferred stock units, structured to be the economic equivalents of shares of
our Class A stock. The dollar amount of the director's allocation will be equal
to the amount of his cash retainer (that is, one half of his total retainer) for
that year for serving on the board and, if applicable, for serving as Lead
Director. Retainers for serving on committees and meeting fees, if any, will be
payable in cash as described above and will not give rise to additional
allocations of deferred stock units under the plan. Non-employee directors
joining the board after the first day of the year will receive pro rata
allocations.
The number of units allocated to each director's account will be equal to
the dollar amount of the allocation divided by the closing price per share of
our Class A stock on the last trading day before the allocation date. If we pay
a cash dividend on our Class A stock, there will be allocated to each director's
account a number of additional units equal to the number of units in his or her
account on the record date for the dividend multiplied by the per share dollar
amount of the dividend and divided by the closing market price of our Class A
stock on the dividend payment date.
Deferred stock units are fully vested when allocated under the plan and
will not be forfeited if a director leaves office during the year unless his or
her service is terminated for certain reasons, enumerated in the plan, involving
bad acts on the director's part.
A director's account will be paid out in cash after he or she ceases to be
a director or if there is a Company Change in Control (as defined in the plan).
The amount will be equal to the number of units in the director's account
multiplied by the market price per share of our Class A stock at that time.
ITEM 5.03 AMENDMENTS TO THE ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN
FISCAL YEAR.
On December 17, 2007, our board of directors amended our bylaws to:
- eliminate the requirement for directors to retire at age 70;
- redefine the relative powers and duties of the Chief Executive
Officer and the President and specify how the Chief Executive
Officer is to be appointed;
- eliminate the position of Chief Operating Officer; and
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- require that our Lead Director, if any, be a director who meets all
applicable independence criteria for eligibility to serve on our
Audit Committee, as specified in applicable statutes, SEC rules, and
stock exchange listing standards.
For more detailed information about our amended bylaws, please see the
copy filed as an exhibit to this report.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibit is are filed with this report:
Exhibit No. Description
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3.1 Amended and Restated Bylaws of Tecumseh Products Company as
amended through December 17, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TECUMSEH PRODUCTS COMPANY
/s/ James S. Nicholson
Date: December 21, 2007 By ________________________________________
James S. Nicholson
Vice President, Treasurer and Chief
Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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3.1 Amended and Restated Bylaws of Tecumseh Products Company as
amended through December 17, 2007
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