Tecumseh Products Company announces special meeting of shareholders November 21
ANN ARBOR — Tecumseh Products Company (Nasdaq: TECUA; TECUB), a leading global manufacturer of compressors and related products, announced last week that it would hold a special meeting of shareholders on Friday, Nov. 21. The Company expects to issue a notice of the special meeting, which will include, among other things, the location of the meeting and the matters to be brought before the special meeting. The record date for the meeting will be October 17, 2008.
The agenda for the meeting will include a proposal by the Herrick Foundation, a large holder of the Company’s voting shares, seeking the removal of Dr. Peter Banks and Mr. David Risley from the Company’s board of directors, and to the extent that removal is approved, the election of replacements for them. This proposal is being included in the agenda for the meeting in accordance with an agreement between the company and the Herrick Foundation and incorporated into an order of the Circuit Court for the County of Lenawee, Michigan, in connection with a lawsuit commenced in that court by the Herrick Foundation in June, 2008.
Dr. Banks and Mr. Risley were re-elected to the Company’s board of directors at the Company’s most recent Annual Meeting of Shareholders which was held on April 30 of this year. At that meeting, over 95 percent of the votes cast were voted in favor of each of Dr. Banks and Mr. Risley, including the votes submitted by the Herrick Foundation. In its filings in its lawsuit, the Herrick Foundation pointed to no actions taken or developments supporting the removal of Dr. Banks and Mr. Risley as Company directors subsequent to the Company’s 2008 Annual Meeting.
“Dr. Banks and Mr. Risley have made substantial contributions to the Company and its board of directors. The Company is completely opposed to their removal from the board,” said Ed Buker, Chairman, President and CEO of Tecumseh Products. “We see this special meeting as offering shareholders a clear choice between continuing to move forward with the company’s intensive efforts to increase shareholder value or turning back to the past. Shareholders will have an opportunity to choose between the plans and actions for improvement that have been laid out by the company’s new management team, or to follow the direction of the past family management under which the Company underperformed, experienced heavy losses, made non-accretive acquisitions and greatly diminished shareholder value.”
The Herrick Foundation President, Todd Herrick, was formerly Chairman and CEO of Tecumseh. In early 2007, after reporting significant losses for two years and under pressure from a significant debt load, the Board of Tecumseh took the extraordinary action, after careful consideration and to fulfill its fiduciary duties, of removing Mr. Herrick as CEO and installed new leadership, including three new independent directors, a new chairman and CEO and a new senior management team. Since that time, Mr. Herrick, through the Foundation, has instituted two legal actions against the Company.
In addition to the changes in the board’s composition and a strengthened management team, the company’s efforts have included strategies for improving profitability, reducing costs, eliminating debt and focusing on higher-margin products that leverage the company’s core competencies. Notably, these efforts have moved Tecumseh toward its objective of becoming a global company with best-in-class operations, processes and governance structure. Over the same period of time, the Company’s stock price has increased by more than 60 percent.
Under the agreement between the Company and the Herrick Foundation entered as an order by the court, before October 22, 2008, the Herrick Foundation must provide the Company with the information required by SEC rules about the Herrick Foundation’s nominees to replace Dr. Banks and Mr. Risley if they are removed. Under the Company’s advance notice bylaw, any other shareholder who wishes to nominate a candidate must give the Company written notice, containing all the information specified in the bylaws, by the close of business on August 23, 2008.
The Company currently expects that additional matters will be on the agenda for the special meeting of shareholders. Tecumseh Products Company plans to solicit proxies for the special meeting. Shareholders may obtain free copies of the proxy statement at the SEC’s website at www.sec.gov. They may also access a copy of the Company’s proxy statement, when available, at www.tecumseh.com.