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Exhibit 10.14
TENNECO INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As Amended and Restated Generally Effective as of January 1, 1997)
PURPOSE
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The Tenneco Inc. Supplemental Executive Retirement Plan (the "Plan") is
maintained by Tenneco Inc. (the "Company") as an unfunded plan for the purpose
of providing retirement benefits with respect to certain employees that are
equal to retirement benefits lost under the Tenneco Inc. Retirement Plan (the
"Retirement Plan" or the "TRP") as a result of the imposition of the limitations
contained in the Internal Revenue Code of 1986, as amended (the "Code"). The
portion of the Plan that provides for benefits limited by Code Section 415 is
maintained as an "excess benefit plan" as described in Section 3(36) of the
Employee Retirement Income Security Act of 1974 as amended ("ERISA"). The other
benefits provided for under the Plan are only available to a "select group of
management or highly compensated employees" as determined by the Tenneco
Benefits Committee, and the portion of the Plan providing such benefits is
intended to satisfy the ERISA exemption requirements for a plan limited to such
a group.
THE PLAN
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1. Effective Date
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The effective date of this amendment and restatement of the Plan is January
1, 1997. The benefit entitlement, if any, under the Plan or under the Tenneco
Inc. Benefit Equalization Plan (the "BEP"), which has been merged into this
Plan, of any person who separated from service prior to that date shall be
governed by the provisions of the Plan or the BEP as either was in effect from
time to time prior to that date.
2. Eligibility
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An employee shall be eligible for benefits under this Plan if the employee
is a participant in the Retirement Plan or is provided a benefit under Section
11 hereof.
3. Amount of Benefit
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The benefit payable under this Plan to a Participant, or to the
Participant's Eligible Spouse, Eligible Child(ren), joint annuitant or other
beneficiary(ies), all as determined under the provisions of the Retirement Plan,
shall equal the excess, if any, of (a) over (b) where:
(a) is the benefit that would be paid under the Retirement Plan if the
provisions of the Retirement Plan were administered without regard to the
limitations imposed by the Code and, only with respect to Participants who,
at any time, were participants in the Tenneco Inc. Executive Incentive
Compensation Plan ("EICP"), if Final Average Compensation, as computed
under the Retirement Plan, were determined on the basis of compensation
paid during the three calendar years (of the five calendar year period
ending no later than the calendar year immediately preceding his or her
termination or retirement) for which such compensation is the highest, and
increased by the quotient of (i) the total of the cash bonuses, as defined
below, paid to the Participant in the three
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calendar years (during the same five calendar year period ending no later
than the calendar year immediately preceding his or her termination or
retirement) for which such total is the highest, divided by (ii) three or
such lesser number of calendar years (included in such period) in which
such bonuses were paid to the Participant; provided, that the calendar year
including his or her termination or retirement shall be included if such
event follows the payment of regular bonuses for that year; and provided,
that bonuses and salary, respectively, deferred at the election of the
Participant shall be counted only in the year that they would have been
paid absent such election, and provided further, that, effective with
respect to bonuses that relate to the period on and after January 1, 1998,
the foregoing language shall be applied to count bonuses which relate to a
calendar year as paid in that year, for example, 1998 bonuses will be
counted in 1998 notwithstanding the fact that they are actually paid in
1999; and
(b) is the benefit that is payable under the Retirement Plan.
Notwithstanding the foregoing, if, except as otherwise provided in writing,
an employee is granted credit for purposes of benefit accrual under the
Retirement Plan for service rendered prior to the time that the employee became
a participant in the Retirement Plan, such employee shall be credited with such
service under this Plan only if and to the extent determined by the Tenneco
Benefits Committee. Unless otherwise provided in writing, no benefit shall be
payable under the Plan unless a benefit also is payable under the Retirement
Plan.
Cash bonus means only cash bonuses paid under the EICP and the cash
special bonuses paid in January 1997.
4. Form of Benefit
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Any benefit under this Plan shall be paid in the same form and manner as
the benefit payments made to, or with respect to, the Participant under the TRP.
Notwithstanding the preceding sentence, no benefit is payable hereunder prior to
60 days after the Participant has separated from service, unless the Tenneco
Benefits Committee so determines. Prior to the commencement of benefits but, in
no event later than 24 months after the Participant has separated from service,
and only with respect to a Participant or beneficiary who at any time was a
participant in the EICP, such Participant or beneficiary may elect, but only
with the approval of the Tenneco Benefits Committee, to receive payment of such
benefit in the form of a lump sum or annuity, provided that in cases where a
Participant has chosen a lump sum and the exact amount of a Participant's
benefit cannot be determined by the date elected for payment, a preliminary lump
sum shall be paid with respect to amounts that can be clearly ascertained then,
with the remainder to be issued in a subsequent lump sum when that amount is
exactly determined by the Tenneco Benefits Committee or its delegee. In
addition, with respect to all Plan participants, if the benefit payable from
this Plan (expressed as an age 65 life annuity) would be less than $50 per
month, the benefit payable from this Plan automatically shall be paid as a lump
sum.
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The actuarial factors set forth in the TRP shall be used to compute
benefits hereunder, provided that, for purposes of any lump sum payment that may
be payable under the Plan, the interest rate used shall be the annual rate of
interest on 30-year Treasury securities as specified by the IRS for the second
calendar month preceding the first day of the Plan Year during which the annuity
starting date occurs, and the applicable mortality table described in Rev. Rul.
95-6, 1995-1 C.B. (page 80), or in such other formal guidance as may be issued
from time to time by the IRS.
5. Unfunded Plan
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This Plan shall be maintained as an unfunded non-qualified deferred
compensation plan. All benefits under this Plan shall be payable from the
general assets of Tenneco Inc. No person shall be entitled to receive any
benefits under this Plan from the funds of the Retirement Plan.
6. No Assignment
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No benefit under this Plan shall be assignable or alienable or subjected,
by attachment or otherwise, to the claims of creditors of any person.
7. No Guarantee of Employment
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This Plan shall not be construed to give any Participant the right to be
retained in the employment of Tenneco Inc. or any of its affiliates.
8. Operation and Administration
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This Plan shall be operated under the direction of the Compensation and
Benefits Committee of the Board of Directors of Tenneco Inc. and administered by
the Tenneco Benefits Committee.
The Tenneco Benefits Committee's decision in all matters involving the
interpretation and application of this Plan shall be final and binding. The
Tenneco Benefits Committee shall establish a claims procedure which is
consistent with the claims procedure employed under the TRP.
9. Governing Law
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To the extent not preempted by federal law, this Plan shall be construed,
administered and enforced in accordance with the laws of the State of Delaware.
10. Amendment and Discontinuance
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Tenneco Inc. expects to continue this Plan indefinitely but reserves the
right, by action of its Board of Directors, to amend or discontinue it. However,
no such amendment or discontinuance shall impair or adversely affect any
benefits accrued under this Plan as of the date of such action, and no such
amendment or discontinuance shall adversely affect any benefits described in any
document referred to in Section 11 hereof without the express written consent of
the Participant covered thereby.
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11. Special Appendix
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The Company may from time to time determine to provide certain persons
additional supplemental pension benefits, which may be reflected in a Special
Appendix hereto or in such other document as the Company shall determine.
References in a Special Appendix or such other document to the "Plan" are to
this Plan.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing, Tenneco Inc., a Delaware corporation, has caused these presents to be
duly executed in its name and behalf by its proper officers thereunto duly
authorized this 9th day of September, 1998.
TENNECO INC.
By: /s/ Barry R. Schuman
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Its: Senior Vice President - Human Resources
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MEAD SPECIAL APPENDIX
TO THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
This Special Appendix sets forth certain special provisions of the Plan
with respect to the benefits of Dana G. Mead ("Mead").
1. Mead shall be entitled to monthly pension benefits in the amount
determined under Section 2 hereof commencing on the first day of the
calendar month immediately following the termination of his employment with
the Tenneco Management Company (the "Company").
2. The monthly pension benefits to which Mead shall be entitled shall be
equal to the greater of (a) or (b), where
(a) equals the benefits to which Mead would be entitled under the
Tenneco Inc. Retirement Plan (the "TRP") and this Plan, computed
using Final Average Earnings, as defined in Section 3 hereof, and
Years of Credited Service, as defined in Section 4 hereof, and
substituting the rules of Sections 1, 5 and 6 hereof for the
generally applicable rules of such plans; and
(b) equals 2.48% of Mead's Final Average Earnings, as defined in
Section 3 hereof, times his Years of Credited Service, as defined
in Section 4 hereof, but not exceeding 20 Years of Credited
Service, and substituting the rules of Sections 1, 5 and 6 hereof
for the generally applicable rules of such plans.
3. "Final Average Earnings" means the quotient of (i) Mead's Earnings, as
defined below, for the 3 calendar years in which his Earnings were the
highest in the 5 consecutive calendar year period ending prior to his
termination of employment, divided by (ii) 36. "Earnings" means regular
base salary plus Executive Incentive Compensation Plan bonus earned
(regardless of when paid) with respect to that period.
4. "Years of Credited Service" means the total of (i) 14 2/3 plus (ii)
Mead's Actual Tenneco Service, as defined below. "Actual Tenneco Service"
means the period, in whole years and fractions thereof with each month or
portion thereof counting as one-twelfth of one year, from April 1, 1992
through the date of Mead's termination of employment with the Company.
5. The benefits provided hereunder shall be paid in the joint and 50%
survivor form of annuity if Mead is married at the time benefits are to
commence -- i.e., to Mead for life and, after his death, 50% of the monthly
amount payable during Mead's life continuing to the spouse, if any, to whom
he was legally married at the date of the
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commencement of payment of benefits hereunder and to whom he was so married
on the date of his death. There shall be no reduction in the amount of the
benefits payable during Mead's life on account of payment in the joint and
50% survivor form. The benefits provided hereunder shall be paid in the
life only form of annuity if Mead is not married at the time that benefit
payments are to commence. Subject to the rules stated in the immediately
following paragraph, Mead may elect to receive such benefits in another
form which is the actuarial equivalent of the normal form of benefit
specified above for his marital status at the time in question. At Mead's
election, the Company will purchase and distribute to him an annuity
contract issued by an insurance company acceptable to Mead to provide such
benefits.
If his termination of employment is effective after he attains age 62
or earlier with the consent of the Company, Mead may elect to receive such
benefits in the form of a lump sum distribution. If a lump sum distribution
is elected, it shall be computed under the assumptions then in use with
respect to the TRP, or its successor; provided, that in no event shall the
interest assumption be greater than the Pension Benefit Guaranty
Corporation immediate annuity interest rate in effect as of January 1 of
the year in which the payment is to be made, and provided further that the
mortality table shall be no less favorable to Mead or his Beneficiary than
the 1983 group annuity table, 50% male, 50% female mix.
Mead may elect that the lump sum benefit be paid at some date certain
which is later than the date specified for benefit commencement in Section
1 hereof. Any such election shall be irrevocable and must be filed no later
than 90 days prior to the date benefits would otherwise commence hereunder.
If he makes such an election, the lump sum amount computed above shall be
credited with interest at the prime rate prevailing from time to time from
the date specified in Section 1 above until the date of actual payment.
6. If Mead dies before commencing to receive the benefits described
hereunder, his Beneficiary will receive a death benefit in a lump sum
distribution which is the present value of the benefits which he has
accrued hereunder as of the date of his death computed in accordance with
the rules set forth herein, including the interest assumption specified in
Section 5 hereof. Without limiting the generality of the foregoing, it is
specifically provided that the special alternative death benefit called for
by the TRP as in effect on December 31, 1994, shall apply if that produces
a higher benefit.
7. The benefits provided hereunder are in lieu of any benefits to which
Mead might otherwise be entitled under the TRP, Tenneco Inc. Benefit
Equalization Plan or this Plan, but shall not adversely affect his
entitlement to benefits under any other plan, fund or program maintained by
the Company, nor shall benefits provided under any other such plan fund or
program be offset against or otherwise reduce the benefits provided for
hereunder.
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STECKO SPECIAL APPENDIX
TO THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
This Special Appendix sets forth certain special provisions of the Plan
with respect to the benefits of Paul T. Stecko ("Stecko").
The aggregate monthly pension benefits to which Stecko shall be
entitled under the Plan and this Special Appendix shall be computed as if
his participation in the TRP had commenced on his employment commencement
date and shall be no less than the amount to which Stecko would have been
entitled if Stecko's coverage under the International Paper defined benefit
plans in effect as of December 3, 1993 had continued until Stecko's
separation from service with Tenneco (the "Company"), less any benefits
Stecko is entitled to receive from such International Paper defined benefit
plans. In the event that Stecko's employment is terminated for any reason
other than cause before November 1, 1999, he shall nevertheless be deemed
to have attained age 55 for all purposes in this Special Appendix,
including without limitation, the computation of benefits under such
International Paper plans; provided, that only the amounts actually payable
from the International Paper plans shall be used as offsets. The amount of
the benefits payable under the International Paper defined benefit plans
shall be computed as a single life annuity based on the actuarial factors
applicable to each such plan. If Stecko would not otherwise meet the
service requirements for early retirement eligibility under the Tenneco
Inc. Retirement Plan ("TRP"), this Plan and this Special Appendix
(collectively, the "Tenneco Plans"), but he would meet such service
requirements counting his years of service with International Paper, he
shall be entitled to monthly benefits hereunder which, when taken together
with monthly benefits to which he is entitled under the Tenneco Plans and
the International Paper defined benefit plans, are no less than the
benefits to which he would have been entitled (subject to the rule stated
in the first sentence above) had he met such requirements.
For purposes of determining the amount to which Stecko would have been
entitled if Stecko's coverage under the International Paper defined benefit
plans in effect as of December 3, 1993 had continued until Stecko's
separation from service with the Company (i.e., the minimum benefit
described above), all of Stecko's service with International Paper and the
Company, shall be aggregated to determine whether Stecko has met the
service requirements for early retirement eligibility under the
International Paper defined benefit plans. If Stecko dies before commencing
to receive the benefits described hereunder, his beneficiary will receive a
death benefit which is the present value of the benefits which he has
accrued hereunder as of the date of his death.
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TETZLAFF SPECIAL APPENDIX
TO THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
This Special Appendix sets forth certain special provisions of the Plan
with respect to the benefits of Theodore R. Tetzlaff ("Tetzlaff").
The monthly pension benefits to which Tetzlaff shall be entitled shall
be equal to the benefits to which Tetzlaff would be entitled under the Plan
if he were a participant in the Tenneco Inc. Retirement Plan ("TRP"),
computed using the following special provisions:
(a) Tetzlaff's service and participation will be regarded as beginning
July 1, 1992.
(b) Tetzlaff's retainer and bonus for each calendar year will be
prorated for each month that Tetzlaff performs services for the
Company as an officer during the calendar year to arrive at a
covered monthly compensation under the TRP formula.
(c) If Tetzlaff reaches age 55 while performing services for the
Company as an officer, Tetzlaff will be eligible for an early
retirement benefit with subsidized reduction factors parallel to
the TRP factors, even though Tetzlaff does not have the service
or participation required under the TRP provisions.
(d) Tetzlaff's guaranteed minimum annual life only benefit will be as
follows:
Age at Commencement
Of Benefits
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Age 55 $100,000 per year
Age 60 $200,000 per year
Age 65 $300,000 per year
with a prorated guaranteed minimum annual life only benefit
between the above ages.
(e) In all other respects, the provisions of the Plan shall apply.
If Tetzlaff dies before commencing to receive the benefits described
hereunder, his beneficiary will receive a death benefit which is the
present value of the benefits which he has accrued hereunder as of the date
of his death.
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DICK SPECIAL APPENDIX
TO THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
This Special Appendix sets forth certain special provisions of the Plan
with respect to the benefits of Stacy S. Dick ("Dick").
The monthly pension benefits to which Dick shall be entitled hereunder
shall be equal to the benefits to which Dick would be entitled under the
Plan, except that, for all purposes, including without limitation benefit
accrual, death benefits, normal retirement and eligibility for early
retirement benefits, Dick shall be credited with five (5) additional years
of service. If Dick dies before commencing to receive the benefits
described hereunder, his beneficiary will receive a death benefit which is
the present value of the benefits which he has accrued hereunder as of the
date of his death.
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BLAKELY SPECIAL APPENDIX
TO THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
This Special Appendix sets forth certain special provisions of the Plan
with respect to the benefits of Robert T. Blakely ("Blakely").
The monthly pension benefits to which Blakely shall be entitled
hereunder shall be equal to the benefits to which Blakely would be entitled
under the Plan, except that, if Blakely retains his position as Executive
Vice President and Chief Financial Officer of Tenneco Inc. until the
earlier of (i) December 31, 1999 or (ii) the date that the Chief Executive
Officer of Tenneco Inc. determines that his services with respect to the
strategic review announced in 1998 and related transactions are completed,
for all purposes, including without limitation benefit accrual, death
benefits, normal retirement and eligibility for early retirement benefits,
Blakely shall be deemed to have 25 years of service and 25 years of
participation. If Blakely dies before commencing to receive the benefits
described hereunder, his beneficiary will receive a death benefit which is
the present value of the benefits which he has accrued hereunder as of the
date of his death. This benefit enhancement is consistent with those
provided to other senior executives.
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