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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
SEPTEMBER 9, 1998
(Date of earliest event reported)
TENNECO INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 1-12387 76-0515284
(State or Other Jurisdiction (Commission File Number) (IRS Employer Identification
of Number)
Incorporation)
1275 KING STREET, GREENWICH, CONNECTICUT 06831
(Address of Principal Executive Offices) (Zip Code)
(203) 863-1000
(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS
On September 9, 1998, the Board of Directors of Tenneco Inc. (the
"Registrant") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.01 per share,
of the Registrant (the "Common Stock"). The dividend is payable on September 21,
1998 (the "Record Date") to the shareowners of record on that date. Each Right
entitles the registered holder to purchase from the Registrant one
one-thousandth of a share of Series B Junior Participating Preferred Stock, par
value $.01 per share, of the Registrant (the "Preferred Stock") at a price of
$130.00 per one one-thousandth of a share of Preferred Stock (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in a Qualified Offer Plan Rights Agreement dated as of September 9, 1998,
as the same may be amended from time to time (the "Qualified Offer Rights
Plan"), between the Registrant and First Chicago Trust Company of New York, as
Rights Agent. The Rights will expire on September 9, 2008 (the "Final Expiration
Date"), unless the Final Expiration Date is advanced or extended or unless the
Rights are earlier redeemed or exchanged by the Registrant, in either case as
described below.
In connection with the adoption of the Qualified Offer Rights Plan, the
Board of Directors also adopted a "TIDE" (Three-year Independent Director
Evaluation) mechanism. Under the TIDE mechanism, an independent Board committee
will review, on an ongoing basis, the Qualified Offer Rights Plan and
developments in rights plans generally, and, if it deems appropriate, recommend
modification or termination of the Qualified Offer Rights Plan. This independent
committee will report to Tenneco's Board at least every three years as to
whether the Qualified Offer Rights Plan continues to be in the best interests of
Tenneco's shareowners.
The Rights are not exercisable until the "Distribution Date." Under the
Qualified Offer Rights Plan, a "Distribution Date" occurs upon the earlier of
(i) 10 days following a public announcement that a person or group of affiliated
or associated persons has become an "Acquiring Person" or (ii) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any person or group of affiliated or associated persons
becomes an Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of 20% or more of
the outstanding shares of Common Stock. Except in certain situations, a person
or group of affiliated or associated persons becomes an "Acquiring Person" upon
acquiring beneficial ownership of 20% or more of the outstanding shares of
Common Stock. Until the Distribution Date, the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate together with the Summary of Rights
transmitted to shareowners of record as of the Record Date.
The Rights will not become exercisable in connection with a "Qualified
Offer," which is an all-cash tender offer for all outstanding Common Stock that
is fully financed, remains open for a period of at least 60 business days,
results in the offeror owning at least 85% of the Common Stock after
consummation of the offer, assures a prompt second-step acquisition of shares
not purchased in the initial offer at the same price as the initial offer and
meets certain other requirements.
The Qualified Offer Rights Plan provides that, until the Distribution Date
(or earlier expiration of the Rights), the Rights will be transferred with and
only with the Common Stock. Until the Distribution Date (or earlier expiration
of the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation incorporating
the Qualified Offer Rights Plan by reference. Until the Distribution Date (or
earlier expiration of the Rights), the surrender for transfer of any
certificates for shares of Common Stock outstanding as of the Record Date, even
without such notation or a copy of the Summary of Rights, will also constitute
the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights is subject to
adjustment from time to time to prevent dilution (i) in the
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event of a stock dividend on, or a subdivision, combination or reclassification
of, the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock
of certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights is subject to adjustment in the event of a
stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will not
be redeemable. Each share of Preferred Stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of $25.00 per
share but will be entitled to an aggregate dividend of 1000 times the dividend
declared per share of Common Stock. In the event of liquidation, dissolution or
winding up of the Registrant, the holders of the Preferred Stock will be
entitled to a minimum preferential payment of $500.00 per share (plus any
accrued but unpaid dividends) but will be entitled to an aggregate payment of
1000 times the payment made per share of Common Stock. Each share of Preferred
Stock will have 1000 votes, voting together with the Common Stock. Finally, in
the event of any merger, consolidation or other transaction in which outstanding
shares of Common Stock are converted or exchanged, each share of Preferred Stock
will be entitled to receive 1000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right that number
of shares of Common Stock having a market value of two times the exercise price
of the Right.
In the event that, after a person or group has become an Acquiring Person,
the Registrant is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, proper
provisions will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person, which will have become void) will
thereafter have the right to receive upon the exercise of a Right that number of
shares of common stock of the person with whom the Registrant has engaged in the
foregoing transaction (or its parent) that at the time of such transaction have
a market value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and prior
to the earlier of one of the events described in the previous paragraph or the
acquisition by such Acquiring Person of 50% or more of the outstanding shares of
Common Stock, the Board of Directors of the Registrant may exchange the Rights
(other than Rights owned by such Acquiring Person which will have become void),
in whole or in part, for shares of Common Stock or Preferred Stock (or a series
of the Registrant's preferred stock having equivalent rights, preferences and
privileges), at an exchange ratio of one share of Common Stock, or a fractional
share of Preferred Stock (or other preferred stock) equivalent in value thereto,
per Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock or Common Stock
will be issued (other than fractions of Preferred Stock which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Registrant, be evidenced by depositary receipts), and in lieu
thereof an adjustment in cash will be made based on the current market price of
the Preferred Stock or the Common Stock.
At any time prior to the time an Acquiring Person becomes such, the Board
of Directors of the Registrant may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price")
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payable, at the option of the Registrant, in cash, shares of Common Stock or
such other form of consideration as the Board of Directors of the Registrant
shall determine. The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Registrant may, except
with respect to the Redemption Price, amend the Qualified Offer Rights Plan in
any manner. After the Rights are no longer redeemable, the Registrant may,
except with respect to the Redemption Price, amend the Qualified Offer Rights
Plan in any manner that does not adversely affect the interests of holders of
the Rights.
Until a Right is exercised or exchanged, the holder thereof, as such, will
have no rights as a shareowner of the Registrant, including, without limitation,
the right to vote or to receive dividends.
As of August 31, 1998, there were 170,168,041 shares of Common Stock
outstanding. Each outstanding share of Common Stock on the Record Date will
receive one Right. Until the Distribution Date, the Registrant will issue one
Right with each share of Common Stock that shall become outstanding so that all
such shares will have attached rights. Two million shares of Preferred Stock
have been reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to any person or group that attempts to acquire the
Registrant, other than pursuant to a Qualified Offer, without the approval of
the Registrant's Board of Directors. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors of the
Registrant since the Board of Directors may, at its option, at any time until an
Acquiring Person becomes such, redeem all, but not less than all, of the then
outstanding Rights at the applicable redemption price.
This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Qualified Offer Rights Plan
(which includes as Exhibit B the Form of Rights Certificate), as the same may be
amended from time to time, a copy of which is incorporated herein by reference
to Exhibit 4.1 to this current report. Copies of the Qualified Offer Rights Plan
will be available free of charge from the Registrant.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS. The following documents are filed as exhibits to this current
report.
4.1 Qualified Offer Plan Rights Agreement, dated as of September 9, 1998
between the Registrant and First Chicago Trust Company of New York, as
Rights Agent, which includes as Exhibit B thereto the Form of Right
Certificate.
99.1 Press Release issued by Tenneco Inc. on September 9, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
September 24, 1998 TENNECO INC.
By: /s/ KARL A. STEWART
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Karl A. Stewart
Vice President and Secretary
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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4.1 Qualified Offer Plan Rights Agreement, dated as of September
9, 1998 between the Registrant and First Chicago Trust
Company of New York, as Rights Agent, which includes as
Exhibit B thereto the Form of Right Certificate.
99.1 Press Release issued by Tenneco Inc. on September 9, 1998.
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