Document:

Exhibit 10.12

Exhibit 10.12

GENERAL RELEASE OF ALL CLAIMS

This General Release of All Claims (this “Agreement”) is entered into by James
Nicholson (the “Executive”) and Tecumseh Products Company (the “Company”),
effective as of January 19, 2010, in connection with the termination of the Executive’s employment
with the Company as of December 31, 2009.

In connection with the Executive’s employment with the Company, the Executive and the Company
executed the following documents: (i) Amended and Restated Change in Control and Severance
Agreement between the Executive and the Company, dated November 12, 2008, (ii) Letter Agreement
between the Executive and the Company, dated as of November 12, 2008, relating to the Company’s
2008 Retention Bonus, (iii) Award Agreement (SAR) between the Executive and the Company, made
effective as of March 4, 2008, (iv) Award Agreement (Phantom Shares) between the Executive and the
Company, made effective as of March 4, 2008, (v) Award Agreement (SAR) between the Executive and
the Company, made effective as of January 2, 2009, (vi) Award Agreement (Phantom Shares) between
the Executive and the Company, made effective as of January 2, 2009 (collectively, the
(“Employment Agreement”).

In consideration of the payments made pursuant to attached Exhibit A,
(“Consideration”), the Executive and the Company agree as follows:

1. Return of Property. All Company files, access keys and codes, desk keys, ID
badges, computers, records, manuals, electronic devices, computer programs, papers, electronically
stored information or documents, telephones and credit cards, and any other property of the Company
in the Executive’s possession must be returned no later than the date of the Executive’s
termination from the Company.

2. General Release and Waiver of Claims.

(a) Release. As required by the Employment Agreement and after consultation with
counsel, the Executive and each of the Executive’s respective heirs, executors, administrators,
representatives, agents, insurers, successors and assigns (collectively, the “Releasors”)
hereby irrevocably and unconditionally release and forever discharge the Company, its subsidiaries
and affiliates and each of their respective officers, employees, directors, shareholders and agents
(“Releasees”) from any and all claims, actions, causes of action, rights, judgments,
obligations, damages, demands, accountings or liabilities of whatever kind or character
(collectively, “Claims”, including, without limitation, any Claims under any federal,
state, local or foreign law, that the Releasors may have, or in the future may possess, arising out
of (i) the Executive’s employment relationship with and service as an employee, officer or director
of the Company or any subsidiaries or affiliated companies and the termination of such relationship
or service, and (ii) any event, condition, circumstance or obligation that occurred, existed or
arose on or prior to the date hereof; provided, however, that the Executive does not release,
discharge or waive any rights to (i) the Consideration and (ii) any indemnification rights the
Executive may have under the Employment Agreement.

 

 

 

(b) Specific Release of ADEA Claims. As condition to the payment of the
Consideration, the Releasors hereby unconditionally release and forever discharge the Releasees
from any and all Claims arising under ADEA that the Releasors may have as of the date the Executive
signs this Agreement. By signing this Agreement, the Executive hereby acknowledges and confirms
the following, (i) the Executive was advised by the Company in connection with his termination to
consult with an attorney of his choice prior to signing this Agreement and to have such attorney
explain to the Executive the terms of this Agreement, including, without limitation, the terms
relating to the Executive’s release of claims arising under ADEA, and the Executive has in fact
consulted with an attorney; (ii) the Executive was given a period of not fewer than 21 days to
consider the terms of this Agreement and to consult with an attorney of his choosing with respect
thereto; (iii) the Executive knowingly and voluntarily accepts the terms of this Agreement; and
(iv) the Executive is providing this release and discharge only in exchange for consideration in
addition to anything of value to which the Executive is already entitled. The Executive also
understands that he has seven days following the date on which he signs this Agreement within which
to revoke the release contained in this paragraph, by providing the Company with a written notice
of his revocation of the release and waiver contained in this paragraph. No Consideration will be
paid to the Executive until after the expiration of this seven (7) day period with a revocation.

(c) No Assignment. The Executive represents and warrants that he has not assigned any
of the Claims being released under this Agreement. The Company may assign this Agreement, in whole
or in part, to any affiliated company or subsidiary of, or any successor in interest to, the
Company.

3. General Agreement Relating to Proceedings. The Executive has not filed, and the
Executive agrees not to initiate or cause to be initiated on his behalf, any complaint, charge,
claim or proceeding against the Releasees before any local, state or federal agency, court or other
body, including, without limitation, such matters relating to his employment or the termination of
his employment, other than with respect to the obligations of the Company under this Agreement
(each, individually, a “Proceeding”), and agrees not to participate voluntarily in any
Proceeding. The Executive waives any right he may have to benefit in any manner from any relief
(whether monetary or otherwise) arising out of any Proceeding.

4. Remedies. In the event the Executive initiates or voluntarily participates in any
Proceeding in violation of this Agreement, or if he fails to abide by any of the terms of this
Agreement or his post-termination obligations contained in the Employment Agreement, or if he
revokes the ADEA release contained in paragraph 2(b) within the seven-day period provided under
paragraph 2(b), the Company may, in addition to any other remedies it may have, terminate any
benefits or payments that are subsequently due under the Employment Agreement, without waiving the
release granted herein, and the Executive shall reimburse the Company for any portion of the
Consideration which has been paid to the Executive. The Executive shall pay all of the Releasee’s
attorneys’ fees in connection with any Proceeding. The Executive acknowledges and agrees that the
remedy at law available to the Company for breach of any of his post-termination obligations under
the Employment Agreement or his obligations under paragraphs 2 and 3 herein would be inadequate and
that damages flowing from such a breach may not readily be susceptible to measurement in monetary
terms. Accordingly, the Executive acknowledges, consents and agrees that, in addition to any other
rights or remedies that the
Company may have at law or in equity or as may otherwise be set forth in the Employment
Agreement, the Company shall be entitled to seek a temporary restraining order or a preliminary or
permanent injunction, or both, without bond or other security, restraining the Executive from
breaching his post-termination obligations under the Employment Agreement or his obligations under
paragraphs 2 and 3 herein. Such injunctive relief in any court shall be available to the Company.

 

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The Executive understands that by entering into this Agreement he shall be limiting the
availability of certain remedies that he may have against the Company and limiting also his ability
to pursue certain claims against the Company.

5. Severability Clause. In the event that any provision or part of this Agreement is
found to be invalid or unenforceable, only that particular provision or part so found, and not the
entire Agreement, shall be inoperative.

6. Nonadmission. Nothing contained in this Agreement shall be deemed or construed as
an admission of wrongdoing or liability on the part of the Company or the Executive.

7. Governing Law and Forum. The Executive and the Company agree that this Agreement
and all matters or issues arising out of or relating to the Executive’s employment with the Company
and/or this Agreement shall be governed by the laws of the State of Michigan applicable to
contracts entered into and performed entirely therein. Any action to enforce this Agreement shall
be brought solely in the state or federal courts located in the Eastern District of Michigan. All
notices or communications hereunder shall be in writing, addressed as follows:

To the Company:

Tecumseh Products Company

1136 Oak Valley Drive

Ann Arbor, MI 48108

Attn: Lynn Dennison

with a copy to:

Honigman Miller Schwartz and Cohn LLP

660 Woodward Ave

2290 First National Building

Detroit, MI 48226

Attn: Patrick T. Duerr, Esq.

Fax: 313.465.7363

To the Executive:

James Nicholson

4827 Billmyer Hwy

Britton, MI 49229

 

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All such notices shall be conclusively deemed to be received and shall be effective (i) if
sent by hand delivery or nationally recognized courier, upon receipt or (ii) if sent by electronic
mail or facsimile, upon receipt by the sender of such transmission.

THE EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT AND THAT HE FULLY KNOWS,
UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT HE HEREBY EXECUTES THE SAME AND MAKES THIS
AGREEMENT AND THE RELEASE AND AGREEMENTS PROVIDED FOR HEREIN VOLUNTARILY AND OF HIS OWN FREE WILL.

IN WITNESS WHEREOF, the parties have executed this General Release of All Claims as of the
date first set forth above.

	 	 	 	 	 
	 	TECUMSEH PRODUCTS COMPANY

 	 
	 	By:  	 	 
	 	  	/s/ James Wainright
 	 
	 	 	President and Chief Executive Officer 	 
	 	 	 	 
	 	THE EXECUTIVE

 	 
	 	/s/ James Nicholson
 	 
	 	 	 
	 	Dated: January 19, 2010 	 
	 	 	 

 

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Exhibit A-James Nicholson

	 	 	 	 	 	 	 	 	 
	 	1	 	 	Cash payment in an amount equal
to the aggregate of accrued but
unpaid base salary

	 	Not applicable

	 	2	 	 	Cash payment in an amount equal
to the aggregate of unused
vacation days

	 	Not applicable

	 	3	 	 	Cash payment in an amount equal
to the aggregate of one year’s
base salary then in effect

	 	$	325,000	 
	 	4	 	 	Cash payment in an amount equal
to the aggregate of one time’s
the Executive’s then applicable
annual target bonus under the
Company’s performance-based
annual incentive plan (“Target
Bonus”)

	 	$	211,250	 
	 	5	 	 	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

	 	See Item #7

	 	6	 	 	For a period of 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.

	 	 	 	 
	 	7	 	 	Immediate vesting of one
hundred percent (100%) of the
Executive’s Incentive Awards

	 	See LTIP Grant History and
Estimated Value

For Illustrative Purposes Only-Actual value determined based on closing price of TECUA stock on
exercise date

LTIP Grant History and Estimated Value (Value estimated using 12/14/09 TECUA share price of
$12.55)

	 	 	 	 	 
	3/4/08: 4,060 Phantom Shares
	 	$	50,953	 
	3/4/08: 7,718 SARs ($28.82 Strike Price)
	 	 	—	 
	1/2/09: 13,313 Phantom Shares
	 	$	167,078	 
	1/2/09: 21,484 SARs ($10.07 Strike Price)
	 	$	53,280	 

 

5Exhibit 10.13

Exhibit 10.13

December 7, 2009

Mr. Michael A. Noelke

4443 Kerth Manor Drive

St. Louis, Missouri 63128

Dear Mike:

We appreciate your interest in joining Tecumseh Products Company. We are pleased to provide you
with the following proposed terms of employment:

	1.	 	Job Title: Executive Vice President of Global Sales, Marketing and Engineering.

	2.	 	Salary: $325,000 per year.

	3.	 	Term: Three (3) years.

	4.	 	Annual Incentive Plan: 100% of salary target award based on Company and individual
performance measures; Eligibility begins in 2010.

	5.	 	Long Term Incentive Plan: Annual grants of long-term incentives with a grant date present
value equal to 50% of the annual base salary rate plus target bonus then in effect. As the
plan is currently constructed, at the terms noted above the value of $325,000 would we awarded
50% in restricted stock units (with a three (3) year “cliff” vest) and 50% in share
appreciation rights (vesting 1/3 of value per year over three (3) years).

	6. 	 	 Payment and Award signing Bonus: Upfront payment of $75,000 and award of 7,500 phantom
 shares with a three (3) year vesting.

	7.	 	Relocation Package: A comprehensive relocation package will be provided according to Company
policy.

	8.	 	Vacation: Four (4) weeks (20 days) per year beginning 2010.

	9.	 	Start Date: Immediate, subject to your transition schedule.

	10.	 	Insurance/Benefits: Your group insurance will begin on the first of the month following your
hire date. Benefits offerings include (but are not limited to): medical, dental and vision
coverage and basic life insurance.

	11.	 	Pension and 401(k) Program Participation: Currently, our 401(k) plan includes a
discretionary employer contribution, which historically has been 3% of eligible pay. The
Company’s contribution is made whether or not you contribute individually. See attached brochure for
additional information on our current benefits, pension and 401(k) program offerings.

Tecumseh Products Company

1136 Oak Valley Drive

Ann Arbor, MI 48108

www.tecumseh.com

 

 

 

	12.	 	Additional Savings Plan: Participation in Savings Plan through 2014. The Company
contribution is subject to IRS regulatory limitation and will be re-calculated each year. In
2009, the Company’s discretionary contribution was 9% of eligible pay.

	13.	 	Attorneys’ Fees: The Company will reimburse attorneys’ fees incurred by you for reviewing
your employment agreement up to $5,000 upon your hire.

	14.	 	Definitive Agreement: Upon the execution of this term sheet, the parties would incorporate
these terms into a definitive employment agreement which would specify the rights and
obligations of the parties.

Upon review of this term sheet please inform me of your decision. Additionally, if you approve
these general terms, please sign in the designated area below and return one copy, with your
original signature, to Tim Atzinger, VP, Global Human Resources, prior to your start date.

Please be advised that this offer is contingent on the results of a drug screening. You must go to
a Cancentra Medical Center for a drug screening at our expense. Please take your consent form
along with the photo identification to the Concentra location. For your convenience, there is a
Concentra Medical Center located at 128 Matrix Commons, Fenton, MO 63026 (Phone Number: (636)
349-6850).

As part of our new hire process, you will be asked to complete a Form I-I in compliance with the
Immigration Reform and Control Act. As part of this compliance, on your first day of work we
request that you present us tih document(s) which identify you and indicate that you are eligible
to work in the United States (e.g., U.S. Passport, driver’s License, and Permanent Resident Car).
For a detailed listing of acceptable documents, please refer to the following link on the U.S.
Citizenship and Immigration Services website htt//www.uscis.gov/files/form/I-9.pdf.

We are excited about you joining the Tecumseh Products team.

Sincerely,

James Wainright

Interim President

Tecumseh Products Company

	 	 	 	 	 
	 	Approval of Term Sheet this 8, day of December, 2009

 	 
	 	/s/ Michael A. Noelke

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