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Exhibit 10.1
TENNECO INC. CHANGE IN CONTROL
SEVERANCE BENEFIT PLAN FOR KEY EXECUTIVES
As Amended and Restated Effective December 12, 2007
(the "Plan")
The
Plan as established by Tenneco Inc., a Delaware corporation,
effective
on November 4, 1999, has been amended and restated and renamed
effective
December 12, 2007 (the "Effective Date"). The purpose of the Plan
is to induce
key employees to enter into, or continue their services or
employment with, and
to steadfastly serve the Company if and when a Change in Control
(as defined
below) is threatened, despite attendant career uncertainties, by
committing the
Company to provide severance benefits in the event their employment
terminates
as a result of a Change in Control.
1.
Definitions
A.
"Change in
Control" means any of the following events (but no event
other than one of the following events):
(1) any person, alone
or together with any of its affiliates or
associates, becomes the beneficial owner, directly or
indirectly,
of securities of the Company representing twenty percent (20%)
or
more of either the Company's then outstanding shares of common
stock or the combined voting power of the Company's then
outstanding securities having general voting rights; provided,
however, that,
notwithstanding the foregoing, a Change in Control
shall not be deemed to occur pursuant to this clause (1) solely
because the requisite percentage of either the Company's then
outstanding shares of common stock or the combined voting power
of the Company's then outstanding securities having general
voting rights is acquired by one or more employee benefit plans
maintained by one or more Tenneco Companies; or
(2) members of the
Incumbent Board cease to constitute a majority of
the Company Board; or
(3) the consummation
of any plan of merger, consolidation, share
exchange or combination between the Company and any person,
including without limitation becoming a subsidiary of any other
person, or the consummation of any sale, exchange or other
disposition of all or substantially all of the Company's assets
(any such transaction, a "Business Combination") without all or
substantially all of the persons who are the beneficial owners
of
the then outstanding shares of the common stock of the Company
("Outstanding Common Stock") or of the combined voting power of
the then outstanding voting securities of the Company entitled
to
vote generally in the election of directors (the "Outstanding
Voting
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Securities") immediately prior to such Business Combination
constituting the beneficial owners, directly or indirectly, of
fifty percent (50%) or more of, respectively, the outstanding
shares of common stock and the combined voting power of the
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction
owns
the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the
Outstanding Common Stock and the Outstanding Voting Securities,
as the case may be; or
(4) the Company's
stockholders approve a plan of complete liquidation
or dissolution of the Company.
B.
"Committee"
means the Compensation/Nominating/Governance Committee of
the Company Board or any successor thereto.
C.
"Company" means
Tenneco Inc., a Delaware corporation, and any
successors thereto as provided in Section 11.
D.
"Company Board"
means the Board of Directors of the Company.
E.
"Competing
Business" means any business or activity that (1) competes
with any Tenneco Company for which the Key Executive performed
services or the Key Executive was involved in for the purposes
of
making strategic or other material business decisions and involves
(2)
(a) the
same or substantially similar types of products or services
(individually or collectively) manufactured, marketed or sold by
any
Tenneco Company during the term of such Key Executive's
employment
with the Tenneco Companies or (b) products or services so similar
in
nature to that of any Tenneco Company during the term of such
Key
Executive's employment with the Tenneco Companies (or that any
Tenneco
Company will soon thereafter offer) that they would be
reasonably
likely to displace substantial business opportunities or customers
of
the Tenneco Companies.
F.
"Confidential
Information" means Trade Secrets as well as information
acquired by the Key Executive in the course and scope of his or
her
activities during such Key Executive's employment with the
Tenneco
Companies, including information acquired from third parties,
that:
(1) is not generally
known or disseminated outside the Tenneco
Companies (such as non-public information);
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(2) is designated or
marked by any Tenneco Company as "confidential"
or reasonably should be considered confidential or proprietary;
or
(3) any Tenneco
Company indicates through its policies, procedures,
or other instructions should not be disclosed to anyone outside
the Tenneco Companies.
Without limiting
the foregoing definitions, some examples of
Confidential Information under the Plan include:
(1) matters of a
technical nature, such as scientific, trade or
engineering secrets, "know-how", formulae, secret processes,
inventions, and research and development plans or projects
regarding existing and prospective customers and products or
services;
(2) information about
costs, profits, markets, sales, customer lists,
customer needs, customer preferences and customer purchasing
histories, supplier lists, internal financial data, personnel
evaluations, non-public information about automotive devices or
products of any Tenneco Company (including future plans about
them), information and material provided by third parties in
confidence and/or with nondisclosure restrictions, computer
access passwords, and internal market studies or surveys; and
(3) any other
information or matters of a similar nature.
G.
"Constructive
Termination" will be deemed to have occurred if, upon or
following the Change in Control, a Key Executive separates from
service with all Tenneco Companies after the Tenneco Companies,
by
action or inaction, and without the Key Executive's express
prior
written consent:
(1) materially
diminish in any manner the Key Executive's status,
position, duties or responsibilities with the Tenneco Companies
from those in effect immediately prior to the Change in Control
(without limiting the generality of the foregoing, for purposes
of this clause (1) a material diminution will be deemed to have
occurred if the Key Executive does not maintain the same or
greater status, position, duties and responsibilities with the
ultimate parent corporation of a controlled group of
corporations
of which the Company is a member upon consummation of the
transaction or transactions constituting the Change in
Control);
(2) materially reduce
the Key Executive's then current annual cash
compensation from the Tenneco Companies below the sum of (a)
the
Key Executive's annual base salary or annual base compensation
from the Tenneco Companies in effect immediately
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prior to the Change in Control and (b) the Key Executive's
targeted annual award under the Executive Incentive
Compensation
Plan for the calendar year completed immediately prior to the
Change in Control; provided, however, a material reduction for
purposes of this clause (2) shall not be deemed to have
occurred
if the Key Executive's then current annual cash compensation is
reduced as part of an overall cost reduction program that
affects
all senior executives of the Tenneco Company and does not
disproportionately affect the Key Executive;
(3) cause a material
reduction in (a) the level of aggregate Tenneco
Companies-paid medical benefit, life insurance and disability
plan coverages; or (b) the aggregate rate of Tenneco
Companies-paid thrift/savings plan contributions and of Tenneco
Companies-paid defined benefit retirement plan benefit accrual,
from those coverages and rates in effect immediately prior to
the
Change in Control; provided, however, a material reduction for
purposes of this clause (3) shall not be deemed to have
occurred
if a reduction as described in subclause (a) or (b) occurs as
part of an overall cost reduction program that affects all
senior
executives of the Tenneco Company and does not
disproportionately
affect the Key Executive;
(4) effectively
require the Key Executive to relocate because of a
transfer of the Key Executive's place of employment with the
Tenneco Companies from the place where the Key Executive was
employed immediately prior to the Change in Control (for
purposes
of the foregoing, a transfer of place of employment shall be
deemed to require a Key Executive to relocate if such transfer
is
greater than 50 miles from the place where the Key Executive
was
employed immediately prior to the Change in Control); or
(5) materially breach
any provision of the Plan.
A Constructive Termination will be deemed to have occurred for all
Key
Executives if any successor to the Company in a Business
Combination
described in Section 1(A)(3) above constituting a Change in
Control
fails to
assume, in writing, all of the Company's obligations under
the Plan promptly upon consummation of such Change in Control.
Notwithstanding anything to the contrary in this Section 1(G),
a
Constructive Termination will not be deemed to have occurred
unless
the Key Executive delivers to the Company a written notice of
the
existence of a condition described in this Section 1(G) within 90
days
after the Key Executive has actual knowledge of the existence of
such
condition, and the Key Executive does not terminate his employment
due
to Constructive Termination until the Key Executive has given
the
Company at least 30
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days in which to cure the condition set forth in the written
notice
and if such condition is not cured by the 30th day, the Key
Executive's employment shall terminate on such date.
In addition, a determination that a Key Executive has been
Constructively Terminated for purposes of eligibility for
benefits
under this Plan shall be based solely on the criteria set forth
in
this Section 1(G) and the Key Executive's eligibility or
application
for, or receipt of, any retirement benefits from any Tenneco
Company
following separation from service shall have no bearing on such
determination.
H.
"Disability"
shall mean the permanent and total disability as
determined under the rules and guidelines established by a
Tenneco
Company in order to qualify for long-term disability coverage
under
the Tenneco Company's long-term disability plan in effect at the
time.
I.
"Discharge for
Cause" shall be deemed to have occurred only if,
following the Change in Control, a Key Executive is discharged by
any
of the Tenneco Companies from employment because:
(1) the Key Executive
has engaged in serious misconduct or willfully
or materially violated, or willfully or materially failed to
comply with, the Company's Corporate Compliance Policies or
Statement of Business Principles in his or her capacity as an
employee of any of the Tenneco Companies; or
(2) the Key Executive
has willfully and continually failed (unless
due to incapacity resulting from physical or mental illness) to
substantially perform the duties of his or her employment by
any
of the Tenneco Companies after written demand for substantial
performance is delivered to the Key Executive by any of the
Tenneco Companies specifically identifying the manner in which
the Key Executive has not substantially performed such duties.
Notwithstanding the foregoing, a Key Executive who, immediately
prior
to the Change in Control, is a member of Executive Group I or II
shall
not be deemed to have been Discharged for Cause unless a
written
notice has been delivered to the Key Executive stating that the
Tenneco Companies have terminated the Key Executive's
employment,
which notice shall include a resolution, adopted by at least a
three-quarter's vote of the Incumbent Board (after the Key
Executive
has been provided with reasonable notice and an opportunity,
together
with counsel, for a hearing before the entire Incumbent Board),
finding that the Key Executive has engaged in the conduct set forth
in
clause (1) or (2) of the preceding sentence.
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J.
"Executive Group
I," from and after the Effective Date, shall consist
of the Chief Executive Officer of the Company.
K.
"Executive Group
II," from and after the Effective Date, shall consist
of each individual,
(1) who is not a
member of Executive Group I, and
(2) who, immediately
prior to the Change in Control, is an employee
of a Tenneco Company who reports directly to the Chief
Executive
Officer of the Company and is in an executive salary grade of 6
or
higher.
L.
"Executive Group
III," from and after the Effective Date, shall
consist of each individual,
(1) who is not a
member of Executive Group I or II, and
(2) who, immediately
prior to the Change in Control, is an employee
of a Tenneco Company who is critical to the negotiation or
consummation of a corporate transaction and who has been
designated by the Chief Executive Officer of the Company, in
writing before the Change in Control, with the approval of the
Committee, as a member of Executive Group III. In no event
shall
Executive Group III contain more than ten (10) members.
M.
"Executive
Incentive Compensation Plan" means the Tenneco Inc. Value
Added Incentive Compensation Plan and any successor thereto.
N.
"Incumbent
Board" means
(1) the members of the
Company Board on the Effective Date, to the
extent that they continue to serve as members of the Company
Board; and
(2) any individual who
becomes a member of the Company Board after
the Effective Date, (a) upon the death or disability or
retirement of, and as the successor to or replacement for, a
member of the Company Board or (b) if his or her election or
nomination for election as a director is approved by a vote of
at
least a majority of the then Incumbent Board, except that a
director whose initial assumption of office is in connection
with
an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of
directors of the Company shall not be considered a member of
the
Incumbent Board for purposes of this subclause (b).
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O.
"Internal
Revenue Code" means the Internal Revenue Code of 1986, as
amended.
P.
"Key Executive"
means an individual who, immediately prior to the
Change in Control, is a member of Executive Group I, Executive
Group
II, or Executive Group III.
Q.
"Prohibited
Area" means countries in North America and Europe, Brazil,
Mexico, China, Russia and India, all of which are the geographic
areas
in which the Tenneco Companies conduct a preponderance of their
business and in which the Key Executive provides substantive
services
to the benefit of the Tenneco Companies.
R.
"Section 409A"
means Section 409A of the Internal Revenue Code and
regulations promulgated thereunder (and any similar or
successor
federal or state statute or regulations).
S.
"Stock Plans"
means the 1996 Tenneco Inc. Stock Ownership Plan, the
Tenneco Automotive Inc. Stock Ownership Plan, the Tenneco
Automotive
Inc. 2002 Long-Term Incentive Plan, the Tenneco Inc. 2006
Long-Term
Incentive Plan and any other equity-based or stock-based plan,
program
or arrangement of a Tenneco Company, and any successors
thereto.
T.
"Tenneco
Company" and "Tenneco Companies" mean the Company and any
stock corporation of
which a majority of the voting common or capital
stock is owned directly or indirectly by the Company.
U.
"Threatened
Change in Control" means (1) any publicly disclosed
proposal, offer, actual or proposed purchase of stock or other
action
which, if consummated, would, in the opinion of the Incumbent
Board,
constitute a Change in Control, including the Company entering into
an
agreement, the consummation of which would result in a Change
in
Control or (2) the adoption of a resolution by the Incumbent
Board
that a Threatened Change in Control has occurred.
V.
"Threatened
Change in Control Period" means the period beginning on
the date a Threatened Change in Control occurs and ending on
the
earlier of (1) the date the proposal, offer, actual or proposed
purchase of stock or other action is formally withdrawn or the
Incumbent Board has determined that the circumstances which
constituted the Threatened Change in Control no longer exist or
(2)
the date a Change in Control occurs.
W.
"Trade Secrets"
mean information of special value, not generally known
to the public that any Tenneco Company has taken steps to maintain
as
secret from persons other than those selected by any Tenneco
Company.
For
purposes of the definitions in Section 1 and the Plan, the
terms
"associate," "affiliate," "person," and "beneficial owner" shall
have the
respective meanings
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set
forth in Sections 3(a) and 13(d) of the Securities Exchange Act
of
1934, as amended (the "Exchange Act"), and the regulations
promulgated
thereunder, and the regulations promulgated under Section 12 of
the
Exchange Act. For purposes of the Plan, the terms "separation,"
"separation
from
service," termination" and "termination of employment," and
variations
thereof, as used in the Plan, are intended to mean a separation
from
service or termination of employment that constitutes a "separation
from
service" under Section 409A.
2. Eligibility
for Benefits.
If
(i) within two years after a Change in Control, a Key Executive
is
separated from service as an employee with the Tenneco Companies
(a)
because the Key Executive is discharged by the Tenneco Companies,
provided
that
such discharge is not a Discharge for Cause nor a discharge due to
the
death or Disability of the Key Executive, or (b) because of
Constructive
Termination, and (ii) throughout the period beginning with the
Change in
Control and ending with such separation from service with the
Tenneco
Companies, the Key Executive remains an employee of the Tenneco
Companies,
such
Key Executive shall be entitled to receive the benefits described
in
Sections 3 and 5 below, payable in accordance with Section 4 below
to the
extent applicable.
3. Severance
Benefits.
A. If the Key Executive is a
member of Executive Group I immediately
prior to the Change in Control - a cash amount equal to three
times
the sum of (a) the Key Executive's annual base salary in effect
immediately prior to the Change in Control, plus (b) the Key
Executive's targeted annual award under the Executive Incentive
Compensation Plan as in effect immediately prior to the Change
in
Control.
B.
If the Key
Executive is a member of Executive Group II immediately
prior to the Change in Control - a cash amount equal to two times
the
sum of (a) the Key Executive's annual base salary in effect
immediately prior to the Change in Control, plus (b) the Key
Executive's targeted annual award under the Executive Incentive
Compensation Plan as in effect immediately prior to the Change
in
Control.
C.
If the Key
Executive is a member of Executive Group III immediately
prior to the Change in Control -- a cash amount equal to one times
the
sum of (a) the Key Executive's annual base salary in effect
immediately prior to the Change in Control, plus (b) the Key
Executive's targeted annual award under the Executive Incentive
Compensation Plan as in effect immediately prior to the Change
in
Control.
D.
All deferred
compensation (and earnings accrued thereon) credited to
the account of a Key Executive under any deferred compensation
plan,
program or arrangement of the Tenneco Companies shall be paid to
such
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Key Executive pursuant to and in accordance with the terms of
such
plan, program or arrangement.
E.
A cash amount
equal to the sum of (a) any incentive compensation which
has been allocated or awarded to such Key Executive under the
Executive Incentive Compensation Plan for a completed calendar year
or
other measuring period preceding the Key Executive's separation
from
service but has not yet been paid and (b) a pro rata portion to
the
date of the Key Executive's separation from service with the
Tenneco
Companies of the aggregate value of all incentive compensation
awards
to such Key Executive under the Executive Incentive Compensation
Plan
for the current calendar year or other measuring period, calculated
as
if all conditions for receiving the targeted annual award amount
with
respect to all such awards had been met, notwithstanding any
provision
of the Executive Incentive Compensation Plan to the contrary.
F.
Any outstanding
awards under the Stock Plans held by the Key Executive
shall continue to be subject to the terms and conditions of the
applicable Stock Plan and award agreement.
G.
The Key
Executive and his or her eligible dependents, if any,
