UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): NOVEMBER 12, 2008
TECUMSEH PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 0-452 38-1093240
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1136 OAK VALLEY DRIVE
ANN ARBOR, MICHIGAN 48108
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (734) 585-9500
(NOT APPLICABLE)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS
OF CERTAIN OFFICERS.
On November 12, 2008, we entered into a retention bonus letter agreement
and an amended and restated change in control and severance agreement with James
S. Nicholson, our Vice President, Treasurer and Chief Financial Officer.
Under the retention bonus letter agreement:
- We will pay Mr. Nicholson a retention bonus in an amount equal to one
year's base salary if--
- at any time during the term of the agreement (which begins on the
date of the agreement and ends twelve months after the date of
our 2010 shareholders meeting) our current Chief Executive
Officer, Mr. Buker, is no longer employed by us (other than as a
result of his death, disability, or termination for cause under
the terms of his employment agreement), and
- Mr. Nicholson is employed by us on the one-year anniversary of
Mr. Buker's termination.
- If, during the term of the agreement and after Mr. Buker is no longer
employed by us (other than as a result of his death, disability, or
termination for cause under the terms of his employment agreement),
Mr. Nicholson's employment is terminated by us without cause (as
defined) or by him with good reason (as defined), Mr. Nicholson will
be entitled to--
- a retention severance benefit of six months of his base salary in
addition to any severance payments he is entitled to under any
other severance arrangement he has with us,
- full vesting of all outstanding awards under our Long-Term Cash
Incentive Plan, and
- the lesser of 180 days from the date of his termination or the
expiration of the term of the award to exercise any outstanding
awards under the Long-Term Cash Incentive Plan.
The amended and restated change in control and severance agreement replaced
the change in control and severance agreement we entered into with Mr. Nicholson
earlier this year. The only material change was the addition of the special
termination provision described below. The amended and restated agreement
provides for the following payments and benefits if Mr. Nicholson's employment
terminates in the circumstances described:
- Voluntary termination without good reason on change in control:
- cash payment equal to the sum of--
- accrued but unpaid salary, and
- unused vacation days;
- ability to exercise any vested SARs for period of 180 days; and
- all unvested SAR and phantom share awards canceled.
- Involuntary termination without cause:
- cash payment equal to the sum of--
- accrued but unpaid salary,
- unused vacation days,
- one year's base salary (paid in installments over
twelve-month period), and
- one times his then applicable annual target bonus under
annual incentive plan (paid at same time other bonuses
paid);
- ability to exercise any vested SARs for period of 180 days;
- all unvested SAR and phantom share awards canceled; and
- one year of medical insurance coverage for himself and his
family.
- Involuntary termination without cause following change in control, or
voluntary termination for good reason following change in control:
- cash payment equal to the sum of--
- accrued but unpaid salary,
- unused vacation days,
- one year's base salary (paid in lump sum), and
- one times his then applicable annual target bonus under
annual incentive plan (paid in lump sum);
- immediate vesting of 100% of existing SAR and phantom share
awards;
- ability to exercise vested SARs for period of 180 days; and
- one year of medical insurance coverage for himself and his
family.
- Involuntary termination with cause:
- cash payment equal to the sum of--
- accrued but unpaid salary, and
- unused vacation days; and
- all unvested SAR and phantom share awards, and all vested but
unexercised SARs, canceled.
- Termination on disability:
- cash payment equal to the sum of--
- accrued but unpaid salary,
- unused vacation days,
- pro rata portion of executive's then applicable annual
target bonus under annual incentive plan (paid in lump sum);
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- immediate vesting of next tranche of any SAR or phantom share
award that would have vested after termination date;
- ability to exercise vested SARs in accordance with their terms;
and
- one year of medical insurance coverage for himself and his
family.
- Special termination:
- Applies if--
- Mr. Nicholson is terminated without cause within one year
following the election of any individual as a director
between November 1, 2008 and the date of our 2010
shareholders meeting, as a result of an actual or threatened
proxy or consent solicitation or otherwise by or on behalf
of any person other than the board, including by reason of
any agreement intended to avoid or settle such an election
contest,
- following that election at least a majority of the directors
on the board would have been nominated, appointed, or
otherwise selected by the person who solicited proxies or
consents in connection with the election contest or that
person's affiliates, and
- either in connection with the election contest or under an
agreement intended to avoid or settle an election contest,
and during the one-year period following the election, the
Chief Executive Officer immediately before the election
contest is no longer employed by us (other than as a result
of us terminating the Chief Executive Officer for cause).
- If the special termination provision applies, Mr. Nicholson will
be entitled to the same payments described above under
"Involuntary termination without cause following change in
control, or voluntary termination for good reason following
change in control."
The agreement has a three-year term and will renew automatically for
successive three-year terms unless we give Mr. Nicholson notice of non-renewal
at least 60 days before the scheduled expiration date. It contains
confidentiality, noncompetition, and non-disparagement provisions.
Our board has approved entering into substantially identical retention
bonus letter agreements and amended and restated change in control and severance
agreements with several other top executives, including James Wainright, our
Vice President--Operations.
For more detailed information about the terms of the retention bonus letter
agreements and amended and restated change in control and severance agreements,
please see the forms of the agreements filed as exhibits to this report.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are filed with this report:
Exhibit No. Description
- ----------- ------------------------------------------------------------------
10.1 Form of retention bonus letter agreement
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10.2 Form of Amended and Restated Change in Control and Severance
Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TECUMSEH PRODUCTS COMPANY
Date: November 18, 2008 By /s/ James S. Nicholson
-------------------------------------
James S. Nicholson
Vice President, Treasurer and Chief
Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
- ----------- ------------------------------------------------------------------
10.1 Form of retention bonus letter agreement
10.2 Form of Amended and Restated Change in Control and Severance
Agreement
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