1
EXHIBIT 10.11
TENNECO AUTOMOTIVE INC.
KEY EXECUTIVE PENSION PLAN
PURPOSE
The Tenneco Automotive Inc. Key Executive Pension Plan (the "Plan") is
maintained by Tenneco Inc., a Delaware corporation to be renamed Tenneco
Automotive Inc. (the "Company"), as an unfunded plan for the purpose of
providing retirement benefits with respect to certain employees. The benefits
provided under the Plan are only available to a "select group of management or
highly compensated employees" as determined by the
Compensation/Nominating/Governance Committee of the Board of Directors of the
Company (the "Committee"), and the Plan is intended to satisfy the exemption
requirements of the Employee Retirement Income Security Act of 1974, as amended,
for a plan limited to such a group.
THE PLAN
1. Effective Date
The Plan as set forth herein is effective immediately following
completion of the spin-off of Tenneco Packaging Inc. (to be renamed Pactiv
Corporation) to the Company's stockholders on November 4, 1999 (the "Effective
Date").
2. Eligibility
The employees indicated in Appendix A, attached hereto, shall be
eligible to participate in the Plan as of the Effective Date. After the
Effective Date, the Committee, in its discretion, shall determine which other
employees are eligible to participate in the Plan, provided that such employees
also satisfy the eligibility and participation requirements of the Company's
qualified defined benefit plan for salaried employees. All employees that are
listed in Appendix A or that are selected by the Committee under this Section 2
shall be deemed "Participants" under the Plan.
3. Commencement & Amount of Benefit
The retirement benefit payable under this Plan, commencing at age 55 in
the form of a single life annuity, shall be an annual benefit in an amount equal
to the excess, if any, of (a) over (b), where
(a) is an amount equal to 4% of Compensation per year of participation
in the Company's qualified defined benefit plan for salaried employees,
including participation credited under the Tenneco Retirement Plan. In
no event shall the amount determined under this paragraph (a) exceed
50% of the Participant's Compensation. "Compensation" shall mean the
Participant's final three-year average base salary and bonus.
2
(b) is the total amount (if any) that is payable under the Tenneco
Retirement Plan (or any successor thereto), the Company's qualified
defined benefit plan for salaried employees and the Tenneco Automotive
Inc. Supplemental Executive Retirement Plan, including any special
supplemental benefit for the individual in question.
4. Form of Benefit
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
Company's qualified defined benefit plan for salaried employees. Notwithstanding
the preceding sentence, no benefit is payable hereunder prior to 60 days after
the Participant has separated from service, unless the Committee so determines.
Prior to the commencement of benefits, but in no event later than 24 months
after the Participant has separated from service, the Participant or beneficiary
may elect, but only with the approval of the 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 Committee or its delegatee. 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.
The actuarial factors set forth in the Company's qualified defined
benefit plan for salaried employees 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 Internal Revenue Service (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. 80, or in such other formal guidance as may be
issued from time to time by the IRS.
5. Unfunded Plan
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 the Company. No benefit hereunder shall be paid from the funds
of any qualified plan maintained by the Company.
6. No Assignment
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
This Plan shall not be construed to give any Participant the right to
be retained in the employment of the Company or any of its affiliates.
-2-
3
8. Operation and Administration
This Plan shall be operated under the direction of and administered by
the Committee.
The Committee's decision in all matters involving the interpretation
and application of this Plan shall be final and binding. The Committee shall
establish a claims procedure which is consistent with the claims procedure
employed under the Company's qualified defined benefit plan for salaried
employees.
9. Governing Law
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
Illinois.
10. Amendment and Discontinuance
The Company reserves the right, by action of its chief executive
officer, to amend or discontinue the Plan. However, no such amendment or
discontinuance shall impair or adversely affect any benefits accrued under this
Plan as of the date of such action.
-3-
4
IN WITNESS WHEREOF, the Tenneco Automotive Inc. Key Executive
Pension Plan is adopted as of this 4th day of November, 1999.
TENNECO INC. (to be renamed
TENNECO AUTOMOTIVE INC.)
/s/ Richard P. Schneider
-------------------------------
By: Richard P. Schneider
Its: SVP-Global Administration
-4-
5
Appendix A
Participants
Mark P. Frissora
Richard P. Schneider
Mark A. McCollum
Timothy R. Donovan
Timothy E. Jackson
-5-