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EXHIBIT 10.2
AMENDED AND RESTATED
CHANGE IN CONTROL
AND
SEVERANCE AGREEMENT
This
Agreement, dated as of the _____ day of ______ 2008 (the
"Agreement")
by and between TECUMSEH PRODUCTS COMPANY, a Michigan corporation
(the
"Company"), and ____________________ ("Executive").
WITNESSETH:
WHEREAS, the Company desires to retain the services of the
Executive on
behalf of the Company as outlined in the employment letter, term
sheet or job
description and duties attached hereto as Exhibit A (collectively,
the "Assigned
Duties and Responsibilities"); and
WHEREAS, the Company and the Executive are entering into this
Agreement to
set forth their respective duties and obligations in the event of
the
termination of Executive's employment with the Company under
certain
circumstances.
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein,
the parties hereto agree as follows:
1.
Employment and Duties. Executive shall have the duties and
responsibilities outlined in the Assigned Duties and
Responsibilities as such
duties and responsibilities may be revised or supplemented in
written directives
from the Chief Executive Officer or the Board of Directors of the
Company (the
"Board"). So long as Executive is employed by the Company,
Executive shall
devote his business time, attention and energy on a full-time basis
exclusively
to the affairs of the Company and its affiliates and shall use his
best efforts
to promote the interests of the Company, and the Executive shall
not engage in
any other business activity without the approval of the Board.
2.
Term of Agreement; Termination of Agreement.
(a) Term. This Agreement shall commence on the date first set
forth
above and shall remain in effect for three (3) years (the "Initial
Term").
At
the end of the Initial Term, this Agreement shall thereafter be
automatically renewed for successive one (1) year periods (each a
"Renewal
Term"), unless the Company shall have given the Executive written
notice of
cancellation and termination at least sixty (60) days prior to the
end of
the
Initial term or the Renewal Term then
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in
effect that the Agreement shall terminate at the end of such
Initial
Term
or Renewal Term.
(b) Termination.
(1) In addition to termination under Subsection (a) of this
Section 2, this Agreement may be terminated, at any time, by
mutual
agreement of the parties.
(2) Notwithstanding anything herein to the contrary, except as
provided in Subsections 3(c) and (f) hereof, this Agreement
shall
terminate and be of no further force or effect on Executive's
death.
3. Termination
of Employment; Termination Payments.
(a) Termination of Executive's Employment. The Executive may
terminate
his
employment with the Company in accordance with this Section 3:
(i)
voluntarily; or (ii) with Good Reason on Change of Control (as
hereinafter
defined). The Company may terminate the Executive's employment with
the
Company, in accordance with this Section 3: (x) for Cause (as
hereinafter
defined); (y) without Cause; or (z) for Executive's Disability.
Any
termination of the Executive under this Agreement that would
trigger an
obligation to make any
payments to the Executive must constitute a
"separation from service" within the meaning of Section 409A of
the
Internal Revenue Code of 1986, as amended (the "Code").
(b) Payments - Termination by Executive. If Executive
voluntarily
terminates his employment without Good Reason on Change of Control,
then
Executive shall be entitled to receive: (A) a cash payment equal to
the
aggregate amount of (x) accrued but unpaid base salary and (y)
unused
vacation days; and (B)
for a period of 180 days beginning on the effective
date
of Executive's termination (the "Termination Date"), the ability
to
exercise any then vested awards ("Incentive Awards") under the
Company's
Long
Term Incentive Plan ("LTIP") in accordance with the terms of the
LTIP
and
any such Incentive Awards. All of Executive's unvested Incentive
Awards
will
be cancelled as of the Termination Date. All of Executive's
vested
Initial Incentive Award and Annual Awards not exercised on or
before the
180th day referred to above (the "Last Exercise Date"), will be
cancelled
as
of the Last Exercise Date. After the Termination Date, other than
the
foregoing, Executive will not be entitled to receive any other
post-termination payments or severance. Any cash payments due under
this
Section 3(b) shall be payable in a lump sum within sixty (60) days
of the
Termination Date, provided that, in the event that the Termination
Date is
a
date during the period beginning on December 16 and ending on
December
31,
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payment will occur no later than March 15 of the year following the
year in
which the Termination Date falls.
(c)
Payments - Termination - by the Company without Cause. In the
event that the Executive's employment is terminated by the Company
without
Cause, then Executive shall be entitled to: (A) cash payment in an
amount
equal to the aggregate of (i) accrued but unpaid base salary; (ii)
unused
vacation days; (iii) one year's base salary then in effect; (iv)
one times
the
Executive's then applicable annual target bonus under the
Company's
performance-based annual incentive plan ("Target Bonus"); (B) for a
period
of
180 days beginning on the Termination Date, the ability to exercise
any
vested Incentive Awards in accordance with their respective terms
for
exercise; and (C) for a period of twelve (12) months after the
Termination
Date, subject to any applicable co-payments and deductibles,
health
insurance coverage (medical, dental and vision) for Executive
and
Executive's eligible family members to the extent Executive is
a
participant in a Company health insurance plan as of the
Termination Date
and,
at least equal to the coverage provided to such persons under
the
Company's health insurance plans in effect on the Termination Date.
In the
event that Executive dies or incurs a Disability during such twelve
(12)
month period, the Company will continue to provide health
insurance
coverage for the Executive's eligible family members for the
balance of
such
twelve (12) months. All of Executive's vested Incentive Awards
not
exercised on or before the
Last Exercise Date, will be cancelled as of the
Last
Exercise Date.
After the Termination Date, other than the foregoing, Executive
will
not
be entitled to receive any other post-termination payments or
severance. Any cash payments
due under Section 3(c)(A)(i) and (ii) above
shall be paid within thirty (30) days of the Termination Date. Any
cash
payments due under Section 3(c)(A)(iii) above shall be paid in
installments
over
the twelve (12) months after the Termination Date in accordance
with
the
Company's normal payroll practices. Any cash payment due under
Section
3(c)(A)(iv) above shall be paid at the time bonuses are payable to
other
participants in the plan or program under which the applicable
Target Bonus
was
established.
(d) Payments - Termination Without Cause - Good Reason - Following
a
Change of Control. In the event that (A) following the effective
date of a
Change of Control, Executive's employment is terminated by the
Company
without Cause; or (B) within 180 days following the effective date
of a
Change in Control, Executive terminates his employment for Good
Reason on
Change of Control, then in either event as of the Termination
Date,
Executive shall be entitled to: (i) immediate vesting of one
hundred
percent (100%) of the Executive's Incentive Awards, if any; and
(ii)
receive the compensation and benefits specified
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under Section 3(c) of this Agreement (subject to the same time
periods and
conditions provided in Section 3(c)), but any cash payment due
under
Section 3(c)(A)(iii) and (iv) above shall be paid in a lump sum
within
thirty (30) days of the Termination Date. All of Executive's
vested
Incentive Awards not exercised on or before the Last Exercise Date,
will be
cancelled as of the Last Exercise Date.
After the Termination Date, other than the foregoing, Executive
will
not
be entitled to receive any other post-termination payments or
severance.
(e) Payments - Termination - Cause. If the Company terminates
Executive's employment for Cause, then Executive shall be entitled
to
receive a cash payment equal to the aggregate amount of (i) accrued
but
unpaid base salary and (ii) unused vacation days. All Incentive
Awards, if
any,
whether or not vested, which have not been exercised or paid, as
the
case
may be, will be forfeited and immediately cancelled effective on
the
date
notice of the for Cause termination is delivered to Executive.
After
the
Termination Date, other than the foregoing, Executive will not
be
entitled to receive any other post-termination payments or
severance. Any
cash
payments due under this Section 3(e) shall be payable in a lump
sum
within ninety (90) days of the Termination Date, provided that, in
the
event that the Termination Date is a date during the period
beginning on
December 16 and ending on December 31, payment will occur no later
than
March 15 of the year following the year in which the Termination
Date
falls.
(f) Termination Payments - Disability. If Executive is terminated
by
the
Company for a Disability (as hereinafter defined), then Executive
shall
be
entitled to receive: (i) a cash payment equal to the aggregate
amount of
(A)
accrued but unpaid Base Salary, (B) unused vacation days, and (C)
the
Target Bonus on a pro rata basis through the Termination Date;
(D)
settlement of any then vested Incentive Awards; (ii) the immediate
vesting
of
the next tranche of any Incentive Award that would have vested
after the
Termination Date; (iii) for a period of twelve (12) months after
the
Termination Date, subject to any applicable co-payments and
deductibles,
health insurance coverage (medical, dental and vision) for
Executive and
Executive's eligible family members to the extent Executive is
a
participant in a Company health insurance plan as of the
Termination Date
and,
at least equal to the coverage provided to such persons under
the
Company's health insurance plans in effect on the Termination Date;
(iv) in
the
event that Executive dies during such twelve (12) month period,
the
Company will continue to provide health insurance coverage for
the
Executive's eligible family members for the balance of such twelve
(12)
months; and (v) the ability to exercise any then vested Incentive
Awards in
accordance with their terms. All of Executive's unvested Incentive
Awards
or
other grants will be cancelled as of the Termination Date. After
the
Termination Date, other than the foregoing, Executive will not be
entitled
to
receive any other post-termination
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payments or severance. Any cash payments due under this Section
3(f) shall
be
payable in a lump sum within ninety (90) days of the Termination
Date,
provided that, in the e
