Tecumseh sets record date for court-ordered special meeting; Herrick seeks to oust board members

By Lisa Kerner

Charlotte, N.C., Aug. 13 - Tecumseh Products Co. announced Oct. 17 as the record date for its special meeting to be held on Nov. 21.

As previously reported, Tecumseh was ordered by the Lenawee County Circuit Court to hold the special meeting in response to a complaint filed in June by the Herrick Foundation, a company shareholder.

Herrick said in a prior news release that the court failed to grant a requested injunction against the enforcement of a bylaws' amendment and has yet to rule on the validity of the bylaws' amendment.

On the special meeting agenda will be Herrick's proposal seeking the removal of Peter Banks and David Risley from the company's board of directors, as well as the election of their replacements, a Tecumseh news release noted.

Banks and Risley were elected to the board at Tecumseh's annual meeting in April.

According to Tecumseh, more than 95% of the votes cast at the meeting were voted in favor of each of Banks and Risley, including the votes submitted by Herrick.

Herrick's lawsuit filings do not point to any actions taken or developments supporting the removal of the two directors, said Tecumseh.

Tecumseh chairman, president and chief executive officer Ed Buker said the company is "completely opposed" to the removal of Banks and Risley from its board.

"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," Buker added.

"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."

Herrick Foundation president Todd Herrick was formerly chairman and chief executive officer of Tecumseh. He was removed by the board in 2007.

Under an agreement between Tecumseh and Herrick, as an order by the court, before Oct. 22 Herrick must provide the company with the information required by Securities and Exchange Commission rules about the foundation's nominees to replace Banks and if they are removed from the board.

Tecumseh noted that its advance notice bylaw requires shareholders to provide written notice of director candidate nominations by the close of business on Aug. 23.

In April Tecumseh reiterated its view that Herrick's proposal concerning the elimination of the class A protection provision in the company's 2008 proxy statement is not in the best interests of Tecumseh and its shareholders.

Tecumseh's board did authorize the governance committee to consider potential alternatives that could facilitate Herrick's desire to sell its class A and class B shares, it was previously reported.

The move is in response to Herrick's request that the board form a committee to consider potential transactions that would allow the foundation to liquidate its position in Tecumseh, it was stated in an SEC filing.

Tecumseh, based in Tecumseh, Mich., manufactures compressor and other products.

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