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Exhibit 10.22
TENNECO INC. RABBI TRUST
This Agreement is made this 28th day of August, 1998, by and between
Tenneco Inc., a Delaware corporation (the "Company") and Dana G. Mead, Theodore
R. Tetzlaff, Paul T. Stecko and Robert T. Blakely, as trustee (collectively the
"Trustee"), effective as of the date indicated below.
WHEREAS, the Company has adopted the nonqualified deferred compensation
plan(s) and supplemental pension arrangements as listed in Appendix A
(collectively the "Plans" and each a "Plan.")
WHEREAS, the Company wishes to establish a trust (the "Trust") and to
contribute to the Trust assets that shall be held therein, subject to the claims
of the Company's creditors in the event of the Company's Insolvency, as herein
defined, until paid to Plan participants and their beneficiaries in such manner
and at such times as specified in the Plan(s);
WHEREAS, it is the intention of the parties that this Trust shall not
affect the status of the Plan(s) as an unfunded plan maintained for the purpose
of providing deferred compensation for a select group of management or highly
compensated employees for purposes of Title I of the Employee Retirement Income
Security Act of 1974; and
WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide itself with a source of funds to assist it in the meeting
of its liabilities under the Plan(s).
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
1. Establishment Of Trust
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(a) The Company hereby initially deposits with the Trustee in trust
1,921,900 shares of Tenneco Inc. common stock, which shall become the principal
of the Trust to be held, administered and disposed of by the Trustee as provided
in this Trust Agreement.
(b) Subject to the rules explicitly set forth herein, the Trust hereby
established is irrevocable.
(c) The Trust is intended to be a grantor trust, of which the Company is
the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
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(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of Plan participants and general creditors as herein
set forth. Plan participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan(s) and this Trust Agreement shall be mere
unsecured contractual rights of Plan participants and their beneficiaries
against the Company. Any assets held by the Trust will be subject to the claims
of the general creditors of the Company and any of the Company's domestic
subsidiaries.
(e) The Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in trust with the
Trustee to augment the principal to be held, administered and disposed of by the
Trustee as provided in this Trust Agreement (i) or (ii) substitute property of
equivalent value. Except as provided herein, neither the Trustee nor any Plan
participant or beneficiary shall have any right to compel such additional
deposits.
2. Payments to Plan Participants and Their Beneficiaries.
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(a) At least annually, the Company shall deliver to the Trustee a schedule
(the "Payment Schedule") that indicates the amounts payable in respect of each
Plan participant (and his or her beneficiaries), that provides a formula or
other instructions acceptable to the Trustee for determining the amounts so
payable, the form in which such amount is to be paid (as provided for or
available under the Plan(s)), and the time of commencement for payment of such
amounts. To the extent that any amounts are due to an employee (or beneficiary
of an employee) of a subsidiary of the Company, and the subsidiary fails to make
such payment, the Company shall do so. Except as otherwise provided herein if
the Company has failed to make payments to the Plan participants and their
beneficiaries in accordance with such Payment Schedule the Trustee shall do so.
The Company shall make provision for the reporting and withholding of any
federal, state or local taxes that may be required to be withheld with respect
to the payment of benefits pursuant to the terms of the Plan(s) and shall pay
amounts withheld to the appropriate taxing authorities.
(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan(s) shall be determined by the Company or such party as
it shall designate under the Plan(s), and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan(s).
Notwithstanding the foregoing, the Trustee may, without direction from the
Company, make payments to participants and beneficiaries in such manner and in
such amounts as the Trustee shall determine they are entitled to be paid under
the Plans (to the extent funded through the Trust) based on the most recent
information furnished to the Trustee by the Company and any supplemental
information furnished to the Trustee by a participant or beneficiary upon which
the Trustee may reasonably rely in making such determination.
(c) The Company may make payment of benefits directly to Plan participants
or their beneficiaries as they become due under the terms of the Plan(s). The
Company shall notify the
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Trustee of its decision to make payment of benefits directly prior to the time
amounts are payable to participants or their beneficiaries. In addition, if the
principal of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan(s), the Company
shall make the balance of each such payment as it falls due. the Trustee shall
notify the Company where principal and earnings are not sufficient.
(d) Some or all of the Plans may be fully or partially funded under the
Tenneco Benefits Protection Trust ("BPT"). Each participant and beneficiary
shall be entitled only to the benefits called for by the Plan and shall not be
entitled to additional benefits because of the existence of multiple funding
media. The Trustee shall take care that it pays benefits only to the extent not
paid by the Company or the BPT.
(e) The Company shall cause its actuary to determine the projected benefit
obligation ("PBO") under all of the Plans as of each January 1, commencing with
January 1, 1999. To the extent that the value of the assets of the Trust as of
the January 1 in question is less than the total PBO under all of the Plans as
so determined, the Company shall contribute additional assets to the Trust with
a value equal to the difference. To the extent that the assets of the Trust
exceed 110% of the PBO, the Company may withdraw assets with a value equal to
the excess of the value of the Trust's assets over 110% of such PBO.
(f) Notwithstanding any other provision hereof, promptly after a Change
in Control (as defined in Section 13 below), the Trustee shall sell Tenneco Inc.
common stock or other assets in order to provide cash to pay benefits hereunder.
Notwithstanding any other provision hereof, Trustee may sell Tenneco Inc. common
stock in order to provide cash to pay benefits hereunder.
3. Trustee Responsibility Regarding Payments to Trust Beneficiary When The
Company Is Insolvent.
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(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if the Company is Insolvent. The Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to
pay its debts as they become due, or (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) In the event of Insolvency of the Company the following rules shall
apply.
(1) The Company shall inform the Trustee in writing of the Company's
Insolvency. If a person claiming to be a creditor of the Company alleges in
writing to the Trustee that the Company has become Insolvent, the Trustee
shall determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payment of benefits to Plan
participants or their beneficiaries.
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(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person claiming to
be a creditor alleging that the Company is Insolvent, the Trustee shall
have no duty to inquire whether the Company is Insolvent. the Trustee may
in all events rely on such evidence concerning the Company's solvency as
may be furnished to the Trustee and that provides the Trustee with a
reasonable basis for making a determination concerning the Company's
solvency.
(3) If at any time the Trustee has determined that the Company is
Insolvent, the Trustee shall discontinue payments to Plan participants or
their beneficiaries and shall hold the assets of the Trust for the benefit
of the Company's general creditors. Nothing in this Trust Agreement shall
in any way diminish any rights of Plan participants or their beneficiaries
to pursue their rights as general creditors of the Company with respect to
benefits due under the Plan(s) or otherwise.
(4) Trustee shall resume the payment of benefits to Plan participants
or their beneficiaries in accordance with Section 2 of this Trust Agreement
only after the Trustee has determined that the Company is not Insolvent (or
is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan(s) for the
period of such discontinuance, less the aggregate amount of any payments made to
Plan participants or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
4. Payments to the Company.
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Except as provided in Section 1(e)(ii), 2 or 3 hereof, the Company shall
have no right or power to direct the Trustee to return to the Company or to
divert to others any of the Trust assets before all payment of benefits have
been made to Plan participants and their beneficiaries pursuant to the terms of
the Plan(s).
5. Trustee's Powers of Investment and Management
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The Trustee shall have the following powers with respect to any and all
assets at any time held by it and constituting part of the Trust Fund:
(a) The Trust shall hold the assets of the Trust exclusively in (i) shares
of the common stock of Tenneco Inc., and any assets distributed with respect
thereto; and (ii) cash equivalents pending reinvestment in Tenneco Inc. common
stock, except to the extent that the Company determines to substitute assets of
equivalent value.
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(b) Pending reinvestment in Tenneco Inc. common stock, to invest and
reinvest cash balances in interest-bearing deposits with the Trustee, or with a
bank or similar financial institution related to the Trustee if such bank or
other institution is a fiduciary with respect to the Plan as defined in ERISA,
including but not limited to investments in time deposits, savings deposits,
certificates of deposit or time accounts which bear a reasonable interest rate;
(c) All rights associated with Tenneco Inc. common stock shall be exercised
by the Trustee or the person designated by the Trustee, and shall in no event be
exercisable by or rest with Plan participants, except that voting rights with
respect to such Trust assets will be exercised by the Tenneco Inc. Benefits
Committee. This right is exercisable by the Tenneco Inc. Benefits Committee in a
nonfiduciary capacity without the approval or consent of any person in a
fiduciary capacity.
6. Disposition of Income.
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During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested in Tenneco Inc. common
stock.
7. Accounting by the Trustee.
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Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Company and the Trustee. Within 60 days following the close of each calendar
year and within 60 days after the removal or resignation of the Trustee, the
Trustee shall deliver to the Company a written account of its administration of
the Trust during such year or during the period from the close of the last
preceding year to the date of such removal or resignation, setting forth all
investments, receipts, disbursements and other transactions effected by it,
including a description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued interest paid
or receivable being shown separately), and showing all cash and securities held
in the Trust at the end of such year or as of the date of such removal or
resignation as the case may be.
8. Responsibility of the Trustee.
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(a) Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims, provided, however, that the Trustee shall
incur no liability to any person for any action taken pursuant to a direction,
request or approval given by the Company which is contemplated by, and in
conformity with, the terms of this Trust and is given in writing by the Company.
In the event of a dispute between the Company and a party, the Trustee may apply
to a court of competent jurisdiction to resolve the dispute.
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(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If the Company does not pay such costs, expenses and liabilities
in a reasonably timely manner, the Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for the
Company generally) with respect to any of its duties or obligations hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any of
its duties or obligations hereunder.
(e) Trustee shall have, without exclusion, all powers conferred on the
Trustees by applicable law, unless expressly provided otherwise herein.
(f) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or to applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
(g) Any action required to be taken by the Company, or direction given by
the Company, shall be by resolution of its board of directors or by written
direction of one or more of its president, any vice president or treasurer. The
Trustee may rely upon a resolution or direction filed with the Trustee and shall
have no responsibility for any action taken by the Trustee in accordance with
any such resolution or direction.
9. Compensation and Expenses of the Trustee.
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The Company shall pay all reasonable administrative and the Trustee's fees
and expenses. If not so paid, the fees and expenses shall be paid from the
Trust. Notwithstanding the foregoing, individuals shall serve without fee but
shall be entitled to reimbursement of expenses.
10. Trustee Resignation or Removal.
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(a) Trustee may resign at any time by written notice to the Company, which
shall be effective 30 days after receipt of such notice unless the Company and
the Trustee agree otherwise.
(b) Trustee may be removed by the Company on 30 days notice or upon shorter
notice accepted by the Trustee.
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(c) Upon a Change in Control, as defined herein, the Trustee may not be
removed by the Company for two years.
(d) If the Trustee resigns within two years of a Change in Control, as
defined herein, the Trustee shall select a successor Trustee in accordance with
the provisions of Section 11 hereof prior to the effective date of the Trustee's
resignation or removal.
(e) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within 30 days after receipt of notice
of resignation, removal or transfer, unless the Company extends the time limit.
(f) If the Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraph(s) (a), (b), (c) or (d) of this section.
11. Appointment of Successor.
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(a) If the Trustee resigns or is removed in accordance with Section 10(a)
or (b) hereof, the Trustee may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers under
state law, as a successor to replace the Trustee upon resignation or removal.
The appointment shall be effective when accepted in writing by the new Trustee,
who shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by the Company or the successor
Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets, subject to
Sections 7 and 8 hereof. The successor Trustee shall not be responsible for and
the Company shall indemnify, and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event or any condition existing at the time it becomes successor
Trustee.
(c) If the Trustee resigns or is removed pursuant to the provisions of
Section 10(d) hereof and selects a successor Trustee, the Trustee may appoint as
such successor Trustee any third Party such as a bank trust department or other
party that may be granted corporate trustee powers under state law. The
appointment of a successor Trustee shall be effective when accepted in writing
by the new Trustee. The new Trustee shall have all the rights and powers of the
former Trustee, including ownership rights in Trust assets. The former Trustee
shall execute any instrument necessary or reasonably requested by the successor
Trustee to evidence the transfer.
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12. Amendment or Termination.
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(a) This Trust Agreement may be amended by a written instrument executed by
the Trustee and the Company. Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Plan(s) or shall make the Trust revocable.
(b) The Trust shall not terminate until the date on which Plan participants
and their beneficiaries are no longer entitled to benefits pursuant to the terms
of the Plan(s). Upon termination of the Trust any assets remaining in the Trust
shall be returned to the Company.
(c) Upon written approval of Participants or beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan(s), the Company may
terminate this Trust prior to the time all benefit payments under the Plan(s)
have been made. All assets in the Trust at termination shall be returned to the
Company.
(d) This Trust Agreement may not be amended by the Company for two
years following a Change in Control, as defined herein.
13. Miscellaneous.
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(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment
levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
(d) "Change in Control" shall mean the first to occur of the following
events (but no event other than the following events), except as otherwise
provided below:
(i) any person and any of their affiliates or associates becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of the combined voting power of
the Company's then outstanding securities having general voting rights, and a
majority of the Incumbent Board (as hereinafter defined) does not approve the
acquisition before the acquisition occurs. Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur (i), solely because twenty-five
percent (25%) or more of 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 the Company; or
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(ii) members of the Incumbent Board cease to constitute a majority
of the board of directors of Tenneco Inc. (as hereinafter defined); or
(iii) the consummation of any plan of merger, consolidation or
combination between the Company and any person including becoming a subsidiary
of any other person without members of the Incumbent Board, as constituted
immediately prior to the merger, consolidation or combination constituting a
majority of the board of directors of (A) the successor corporation, or (B) if
the surviving or successor corporation is a majority-owned subsidiary of another
corporation or corporations, the ultimate parent company of the surviving or
successor corporation; or
(iv) the consummation of any sale, exchange or other disposition of
all or substantially all of the Company's assets without members of the
Incumbent Board immediately prior to any sale, exchange or disposition of all or
substantially all of the Company's assets constituting a majority of the board
of directors of (A) the corporation which holds such assets after such
disposition, or, (B) if such corporation is a majority-owned subsidiary of
another corporation or corporations, the ultimate parent company of the
successor corporation; or
(v) if any person and any of their affiliates and associates,
shall elect or have elected, during any period not exceeding 24 months, at least
25% of the members of the Tenneco Inc. board of directors, without the approval
of the Incumbent Board and such members are comprised of persons not serving as
members of the Tenneco Inc. board of directors immediately prior to the
formation of such group or the first solicitation of proxies by such
shareholder;
provided however, that the Incumbent Board may determine that
any transaction or event is not a Change in Control.
For purposes of this definition, the terms "person" and "beneficial
owner" shall have the meaning set forth in Sections 3(a) and 13(d) of the
Securities Exchange Act of 1934, as amended, and in the regulations promulgated
thereunder. If the Trustee requests in writing that the Company determine or
furnish evidence to enable the Trustee to determine whether a Change in Control
has occurred, the Company shall do so in writing as soon as practicable
following receipt of such request.
(e) "Incumbent Board" shall mean (i) the members of the Tenneco Inc. board
of directors on June 1, 1998, to the extent that they continue to serve, and
(ii) any individual who becomes a member of the Tenneco Inc. board of directors
after June 1, 1998, if his election or nomination for election as a director is
approved by a vote of at least three-quarters of the then Incumbent Board.
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14. Effective Date.
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The effective date of this Trust Agreement shall be August 1, 1998.
15. Corporate Restructuring.
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In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, extraordinary
dividend, spin-off, split-up, rights offering, share combination, or other
change in the corporate structure of the Company affecting the Tenneco Inc.
common stock, (other than a Change in Control), the Tenneco Inc. Benefits
Committee may, in its sole discretion, cause the transfer of all or a portion of
the Trust's assets to a comparable trust maintained by one or more of the
resulting corporate entities or otherwise cause such changes in the Trust or its
assets as it shall deem appropriate.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Agreement to be executed on their behalf by their respective officers thereunto
duly authorized, on the day and year first above written.
TENNECO INC.
By: /s/ K.A. Stewart
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Its: Vice President & Corp. Secretary
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/s/ Dana G. Mead
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Dana G. Mead
/s/ Theodore R. Tetzlaff
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Theodore R. Tetzlaff
/s/ Paul T. Stecko
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Paul T. Stecko
/s/ Robert T. Blakely
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Robert T. Blakely
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Appendix A
Tenneco Inc. Deferred Compensation Plan
1997 Tenneco Inc. Board of Directors Deferred Compensation Plan
Tenneco Inc. Pilots' Supplemental Retirement Plan
Tenneco Inc. Supplemental Executive Retirement Plan ("SERP")
Supplemental Pensions for individual executives outside the SERP
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