EXHIBIT 10.27
TENNECO AUTOMOTIVE INC.
2002 LONG-TERM INCENTIVE PLAN
ARTICLE 1
GENERAL
1.1. Purpose. The Tenneco Automotive Inc. 2002 Long-Term Incentive Plan
(the "Plan") has been established by Tenneco Automotive Inc. (the "Company") to:
(i) promote the long-term success of the Company and its Subsidiaries (as
defined herein); (ii) attract and retain persons eligible to participate in the
Plan; (iii) motivate Participants (as defined herein), by means of appropriate
incentives, to achieve long-range goals; (iv) provide incentive compensation
opportunities that are competitive with those of other similar companies; (v)
further identify Participants' interests with those of the Company's other
stockholders through compensation that is based on the Company's common stock;
and (vi) thereby promote the long-term financial interest of the Company and its
Subsidiaries, including the growth in value of the Company's equity and
enhancement of long-term stockholder return.
1.2. Participation. Subject to the terms and conditions of the Plan, the
Committee (as defined herein) shall determine and designate, from time to time,
from among the Eligible Individuals (as defined herein), including without
limitation transferees of Eligible Individuals to the extent the transfer is
permitted by the Plan and the applicable Award Agreement (as defined herein),
those persons who will be granted one or more Awards (as defined herein) under
the Plan, and thereby become "Participants" in the Plan.
1.3. Operation and Administration. The operation and administration of the
Plan, including the Awards made under the Plan, shall be subject to the
provisions of Article 5 (relating to operation and administration).
ARTICLE 2
CERTAIN DEFINED TERMS
As used in this Plan, the following terms shall have the meanings set forth
or referenced below. In addition, other terms may be defined in the other
Articles and Sections of this Plan, and, unless the context otherwise requires,
shall have the specified meanings throughout the Plan:
(a) Award. The term "Award" means any award or benefit granted under
the Plan, including, without limitation, the grant of Options, SARs, Bonus
Stock Awards, Stock Equivalent Unit Awards, Restricted Stock Awards,
Restricted Stock Unit Awards and Performance Unit Awards.
(b) Board. The term "Board" means the Board of Directors of the
Company.
(c) Change in Control. The term "Change in Control" shall mean any of
the following events (but no event other than one of the following events):
(i) any person, alone or together with any of its affiliates or
associates, becoming the beneficial owner, directly or indirectly, of
securities of the Company representing (A) fifteen percent (15%) 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, and a majority of the Incumbent Board does
not approve the acquisition before the acquisition occurs, or (B) forty
percent (40%) 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 subparagraph (i) 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 benefits plans maintained by the Tenneco Companies; or
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(ii) members of the Incumbent Board ceasing to constitute a
majority of the Board; or
(iii) 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, without
members of the Incumbent Board, as constituted immediately prior to the
merger, consolidation, share exchange or combination, constituting a
majority of the board of directors of (A) the surviving or successor
corporation of such transaction, or (B) if the surviving or successor
corporation of such transaction 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 such 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 corporation which holds
such assets after such disposition; provided, however, that the Board
may determine conclusively that any transaction does not constitute a
sale, exchange or other disposition of substantially all of the
Company's assets; or
(v) if any person, alone or together with any of its affiliates or
associates, elects or has elected during any period not exceeding 24
months, at least 25% of the members of the Board, without the approval
of the Incumbent Board, and such members are comprised of persons not
serving as members of the Board immediately prior to the formation of
such group or the first solicitation of proxies by such person; or
(vi) the Company's stockholders approving a plan of complete
liquidation or dissolution of the Company.
(d) Code. The term "Code" means the Internal Revenue Code of 1986, as
amended. A reference to any provision of the Code shall include reference
to any successor provision of the Code.
(e) Common Stock. The term "Common Stock" means the Company's common
stock, par value $.01 per share.
(f) Covered Employee. The term "Covered Employee" means a Participant
who, as of the date of vesting and/or payout of an Award, as applicable, is
a "covered employee," as defined in Code section 162(m) and the regulations
promulgated under Code section 162(m).
(g) Effective Date. The term "Effective Date" has the meaning set
forth in Section 5.1.
(h) Eligible Individual. For purposes of the Plan, the term "Eligible
Individual" means any employee of the Company or a Subsidiary, any
consultant or other person providing services to the Company or a
Subsidiary and any member of the Board; provided, however, that an
incentive stock option may only be granted to an employee of the Company or
a Subsidiary.
(i) Fair Market Value. For purposes of determining the "Fair Market
Value" of a share of Common Stock as of any date, the following rules shall
apply:
(i) If the principal market for the shares of Common Stock is a
national securities exchange or the NASDAQ securities market, then the
"Fair Market Value" as of that date shall be the average of the highest
and lowest sales prices of a share of Common Stock on that date (or, if
such day is not a business day, the next preceding business day) on the
principal exchange or market on which the shares of Common Stock are
then listed or admitted to trading.
(ii) If the shares of Common Stock are not listed on a national
securities exchange and the shares of Common Stock are not quoted on the
NASDAQ securities market, then the "Fair Market Value" as of that date
shall be the average of the highest and lowest prices of a share of
Common Stock on that date (or, if such day is not a business day, the
next preceding business day) as reported
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on the NASDAQ OTC Bulletin Board Service or by the National Quotation
Bureau, Incorporated or a comparable service.
(iii) If subparagraphs (i) and (ii) next above are otherwise
inapplicable, then the Fair Market Value of the shares of Common Stock
shall be determined in good faith by the Committee.
(j) Incumbent Board. The "Incumbent Board" shall consist of the
following persons:
(i) the members of the Board as of the Effective Date, to the
extent they continue to serve as members of the Board; and
(ii) any individual who becomes a member of the Board after the
Effective Date, if his or her election or nomination for election as a
director is approved by a vote of at least three-quarters of the then
Incumbent Board, other than 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.
(k) Participants. The term "Participants" has the meaning set forth in
Section 1.2.
(l) Performance Measure. The term "Performance Measure" means any of
the following: (1) net earnings; (2) earnings per share; (3) net sales
growth; (4) net income (before or after taxes); (5) net operating profit;
(6) return measures (including, but not limited to, return on assets,
capital, equity or sales); (7) cash flow (including, but not limited to,
operating cash flow and free cash flow); (8) cash flow return on
investments, which equals net cash flows divided by owner's equity; (9)
earnings before or after taxes, interest, depreciation and/or amortization;
(10) internal rate of return or increase in net present value; (11)
dividend payments to parent; (12) gross margins; (13) gross margins minus
expenses; (14) operating margin; (15) share price (including, but no
limited to, growth measures and total stockholder return); (16) expense
targets; (17) working capital targets relating to inventory and/or accounts
receivable; (18) planning accuracy (as measured by comparing planned
results to actual results); (19) comparisons to various stock market
indices; (20) comparisons to the performance of other companies;
(21)technological achievement; (22) customer counts; (23) customer
satisfaction, quality management or customer service performance; and (24)
EVA(R). For purposes of this Plan, "EVA" means the positive or negative
value determined by net operating profits after taxes over a charge for
capital, or any other financial measure, as determined by the Committee in
its sole discretion. (EVA is a registered trademark of Stern Stewart & Co.)
(m) Subsidiary. The term "Subsidiary" means any corporation,
partnership, joint venture or other entity during any period in which at
least a fifty percent voting or profits interest is owned, directly or
indirectly, by the Company (or by any entity that is a successor to the
Company), and any other business venture designated by the Committee in
which the Company (or any entity that is a successor to the Company) has a
significant interest, as determined in the discretion of the Committee.
(n) Tenneco Companies. The term "Tenneco Companies" means the Company
and any Subsidiary of which a majority of the voting common stock or
capital stock is owned directly or indirectly by the Company.
ARTICLE 3
OPTIONS AND SARS
3.1. Certain Definitions.
(a) The grant of an "Option" entitles the Participant to purchase
shares of Common Stock at an Exercise Price (as defined herein) established
by the Committee. Any Option granted under this Article 3 may be either an
incentive stock option (an "ISO") or a non-qualified stock option (an
"NQO"), as determined in the discretion of the Committee. An "ISO" is an
Option that is intended to satisfy the requirements applicable to an
"incentive stock option" described in section 422(b) of the
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Code. An "NQO" is an Option that is not intended to be an "incentive stock
option" as that term is described in section 422(b) of the Code.
(b) A stock appreciation right (an "SAR") entitles the Participant to
receive, in cash or shares of Common Stock (as determined in accordance
with Section 5.2), value equal to (or otherwise based on) the excess of:
(i) the Fair Market Value of a specified number of shares of Common Stock
at the time of exercise; over (ii) an Exercise Price established by the
Committee.
3.2. Exercise Price. The "Exercise Price" of each Option and SAR granted
under this Article 3 shall be established by the Committee or shall be
determined by a method established by the Committee at the time the Option or
SAR is granted; provided, however, that the Exercise Price shall not be less
than 100% of the Fair Market Value of a share of Common Stock on the date of
grant (or, if greater, the par value of a share of Common Stock).
3.3. Exercise. An Option and an SAR granted under this Article 3 shall be
exercisable in accordance with such terms and conditions and during such periods
as may be established by the Committee; provided, however, that no Option or SAR
shall be exercisable after the tenth anniversary of the date as of which such
Award was granted.
3.4. Payment of Option Exercise Price. The payment of the Exercise Price of
an Option granted under this Article 3 shall be subject to the following:
(a) Subject to the following provisions of this Section 3.4, the full
Exercise Price for shares of Common Stock purchased upon the exercise of
any Option shall be paid at the time of such exercise (except that, in the
case of an exercise arrangement approved by the Committee and described in
Section 3.4(c), payment may be made as soon as practicable after the
exercise).
(b) The Exercise Price shall be payable to the Company in full either:
(i) in cash or its equivalent, (ii) by tendering (either by actual delivery
or attestation) previously acquired shares of Common Stock having an
aggregate Fair Market Value at the time of exercise equal to the total
Exercise Price (provided that the shares that are tendered must have been
held by the Participant for at least six (6) months prior to their tender
to satisfy the Exercise Price or must have been purchased on the open
market), (iii) by a combination of (i) and (ii), or (iv) by any other
method approved by the Committee in its sole discretion at the time of
grant and as set forth in the Award Agreement.
(c) The Committee may permit a Participant to elect to pay the
Exercise Price upon the exercise of an Option by irrevocably authorizing a
third party to sell shares of Common Stock (or a sufficient portion of the
shares of Common Stock) acquired upon exercise of the Option and remit to
the Company a sufficient portion of the sale proceeds to pay the entire
Exercise Price and any tax withholding resulting from such exercise.
3.5. Settlement of Award. Settlement of Options and SARs is subject to the
provisions of Section 5.7.
ARTICLE 4
OTHER STOCK-RELATED AWARDS
4.1. Certain Definitions.
(a) A "Bonus Stock" Award is a grant of shares of Common Stock in
return for previously performed services, or in return for the Participant
surrendering other compensation that may be due to such Participant from
the Company or a Subsidiary.
(b) A "Stock Equivalent Unit" Award is a grant of a right to receive
cash in an amount equal to the value of a specified number of shares of
Common Stock, in the future, which may be contingent on the achievement of
performance or other objectives, including without limitation continued
service, during a specified period.
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(c) A "Performance Unit" Award is a grant of a right to receive a
specified number of shares, or dollar amount of shares, of Common Stock, in
the future, which is contingent on the achievement of performance or other
objectives, including without limitation continued service, during a
specified period.
(d) A "Restricted Stock" Award is a grant of shares of Common Stock,
and a "Restricted Stock Unit" Award is a grant of a right to receive a
specified number of shares of Common Stock, or cash in an amount equal to
the value of a specified number of shares of Common Stock, in the future,
with such shares of Common Stock or right to future delivery of such shares
of Common Stock or payment of cash subject to a risk of forfeiture or other
restrictions that will lapse upon the achievement of one or more goals
relating to completion of service by the Participant, or achievement of
performance or other objectives, as determined by the Committee.
4.2. Restrictions on Awards. Each Bonus Stock Award, Stock Equivalent Unit
Award, Restricted Stock Award, Restricted Stock Unit Award and Performance Unit
Award shall be subject to such conditions, restrictions and contingencies as the
Committee shall determine. The Committee may designate whether any such Award
being granted to any Participant is intended to be "performance-based
compensation" as that term is used in section 162(m) of the Code. Any such
Awards designated as intended to be "performance-based compensation" shall be
conditioned on the achievement of one or more Performance Measures, to the
extent required by Code section 162(m). For Awards under this Section 4.2
intended to be "performance-based compensation," the grant of the Awards and the
establishment of the Performance Measures shall be made during the period
required under Code section 162(m). Any Performance Measure(s) may be used to
measure the performance of the Company as a whole or any business unit or
Subsidiary of the Company or any combination thereof, as the Committee may deem
appropriate, or any such performance as compared to the performance of a group
of comparator companies, or any published or special index that the Committee,
in its sole discretion, deems appropriate. The Committee also has the authority
to provide for accelerated vesting of any Award made under this Article 4 based
on the achievement of performance goals pursuant to the Performance Measures
specified herein. The Committee may provide in any such Award that any
evaluation of performance may include or exclude any of the following events
that occurs during a performance period: (a) asset write-downs, (b) litigation
or claim judgments or settlements, (c) the effect of changes in tax laws,
accounting principles, or other laws or provisions affecting reported results,
(d) accruals for reorganization and restructuring programs, (e) extraordinary
nonrecurring items as described in Accounting Principles Board Opinion No. 30
and/or in management's discussion and analysis of financial condition and
results of operations appearing in the Company's annual report to stockholders
for the applicable year, (f) acquisitions or divestitures, and (g) foreign
exchange gains and losses. To the extent such inclusions or exclusions affect
Awards to Covered Employees intended to qualify as "performance-based
compensation," they shall be prescribed in a form that meets the requirements of
Code section 162(m) for deductibility. Awards that are designed to qualify as
"performance-based compensation," and that are held by Covered Employees, may
not be adjusted upward (the Committee shall retain the discretion to adjust such
Awards downward). In the event that applicable tax and/or securities laws change
to permit Board or Committee discretion to alter the governing Performance
Measures without obtaining stockholder approval of such changes, the Board and
Committee shall have the discretion to make such changes without obtaining
stockholder approval. In addition, in the event that the Committee determines
that it is advisable to grant Awards under this Article 4 that shall not qualify
as "performance-based compensation," the Committee may make such grants without
satisfying the requirements of Code section 162(m).
ARTICLE 5
OPERATION AND ADMINISTRATION
5.1. Effective Date. Subject to the approval of the stockholders of the
Company, the Plan shall be effective as of March 12, 2002 (the "Effective
Date"). The Plan shall be unlimited in duration and, in the event of Plan
termination, shall remain in effect as long as any Awards under it are
outstanding; provided, however, that no Awards may be granted under the Plan
after the ten-year anniversary of the Effective Date (except for Awards granted
pursuant to commitments entered into prior to such ten-year anniversary).
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5.2. Plan and Other Limitations. The Awards that may be granted under the
Plan shall be subject to the following:
(a) The shares of Common Stock with respect to which Awards may be
made under the Plan shall be shares of Common Stock currently authorized
but unissued or currently held or, to the extent permitted by applicable
law, subsequently acquired by the Company as treasury shares, including
shares of Common Stock purchased in the open market or in private
transactions.
(b) Subject to the following provisions of this Section 5.2, the
maximum number of shares of Common Stock that may be delivered to
Participants and their beneficiaries under the Plan shall be equal to
2,000,000 (Two Million) shares of Common Stock. In addition, subject to the
following provisions of this Section 5.2, the maximum number of shares of
Common Stock that may be delivered to Participants and their beneficiaries
under the Plan pursuant to Full Value Awards (as defined below) shall be
equal to 500,000 (Five Hundred Thousand) shares of Common Stock. For the
purposes of this Plan, "Full Value Awards" shall be Awards of Bonus Stock,
Stock Equivalent Units, Performance Units, Restricted Stock or Restricted
Stock Units.
(c) To the extent provided by the Committee, any Award of Stock
Equivalent Units, Performance Units or Restricted Stock Units may be
settled in cash rather than shares of Common Stock. To the extent any
shares of Common Stock covered by an Award are not delivered to a
Participant or beneficiary because the Award is forfeited or canceled, or
the shares of Common Stock are not delivered because the Award is settled
in cash or used to satisfy the applicable tax withholding obligation, such
shares of Common Stock shall not be deemed to have been delivered for
purposes of determining the maximum number of shares of Common Stock
available for delivery under the Plan or, if applicable, pursuant to Full
Value Awards.
(d) If the exercise price of any Option granted under the Plan is
satisfied by tendering shares of Common Stock to the Company (by either
actual delivery or by attestation), only the number of shares of Common
Stock issued net of the shares of Common Stock tendered shall be deemed
delivered for purposes of determining the maximum number of shares of
Common Stock available for delivery under the Plan.
(e) Subject to Section 5.2(f), the following additional limitations
are imposed under the Plan.
(i) The maximum number of shares of Common Stock that may be
covered by Awards granted to any one individual pursuant to Article 3
(relating to Options and SARs) shall be 350,000 shares of Common Stock
during any one calendar year period. If an Option is in tandem with an
SAR, such that the exercise of the Option or SAR with respect to a share
of Common Stock cancels the tandem SAR or Option right, respectively,
with respect to such share, the tandem Option and SAR rights with
respect to each share of Common Stock shall be counted as covering only
one share of Common Stock for purposes of applying the limitations of
this clause (i).
(ii) For Awards granted pursuant to Article 4 that are intended to
be "performance-based compensation" (as that term is used for purposes
of Code section 162(m)), no more than 200,000 shares of Common Stock
and, if such Awards are denominated in cash value, no more than
$800,000, may be subject to such Awards granted to any one individual
during any one calendar year. If, after shares have been earned, the
delivery is deferred, any additional shares attributable to dividends or
other amounts attributable to earnings during the deferral period shall
be disregarded. Unless otherwise indicated by the Committee at the time
of grant, all Awards granted pursuant to Article 4 for which the vesting
or payment are conditioned on achievement of one or more Performance
Measures shall be deemed to be intended to be "performance-based
compensation" for the purposes of Code section 162(m).
(f) In the event of a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
Committee may adjust the terms of the Plan and Awards to preserve the
benefits or potential benefits of the Plan or the Awards.
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Action by the Committee with respect to the Plan or Awards under this
Section 5.2(f) may include: (i) adjustment of the number and kind of shares
which may be delivered under the Plan; (ii) adjustment of the number and
kind of shares subject to outstanding Awards; (iii) adjustment of the
Exercise Price of outstanding Options and SARs; and (iv) any other
adjustments that the Committee determines to be equitable.
5.3. General Restrictions. Delivery of shares of Common Stock or other
amounts under the Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the Company shall
have no liability to deliver any shares of Common Stock under the Plan or
make any other distribution of benefits under the Plan unless such delivery
or distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933, as amended),
and the applicable requirements of any securities exchange or similar
entity.
(b) To the extent that the Plan provides for issuance of certificates
to reflect the issuance of shares of Common Stock, the issuance may be
effected on a non-certificated basis, to the extent not prohibited by
applicable law or the applicable rules of any securities exchange.
5.4. Tax Withholding. All distributions under the Plan shall be subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. Except as otherwise provided by the
Committee, such withholding obligations may be satisfied (a) through cash
payment by the Participant, (b) through the surrender of shares of Common Stock
which the Participant already owns, or (c) through the surrender of shares of
Common Stock to which the Participant is otherwise entitled under the Plan;
provided, however, that such shares of Common Stock under this paragraph (c) may
be used to satisfy not more than the Company's minimum statutory withholding
obligation (based on minimum statutory withholding rates for Federal and state
tax purposes, including without limitation payroll taxes, that are applicable to
such supplemental taxable income).
5.5. Grant and Use of Awards. In the discretion of the Committee, a
Participant may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted to a Participant. Awards may be granted
as alternatives to or replacement of awards granted or outstanding under the
Plan, or any other plan or arrangement of the Company or a Subsidiary (including
a plan or arrangement of a business or entity, all or a portion shares of common
stock of which is acquired by the Company or a Subsidiary). The Committee may
use available shares of Common Stock hereunder as the form of payment for
compensation, grants or rights earned or due under any other compensation plans
or arrangements of the Company or a Subsidiary, including the plans and
arrangements of the Company or a Subsidiary assumed in business combinations.
5.6. Dividends and Dividend Equivalents. An Award (including without
limitation an Option or SAR Award) may provide the Participant with the right to
receive dividend payments, dividend equivalent payments or dividend equivalent
units with respect to shares of Common Stock subject to the Award (both before
and after the shares of Common Stock subject to the Award are earned, vested, or
acquired), which payments may be either made currently or credited to an account
for the Participant, and may be settled in cash or shares of Common Stock, as
determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Common Stock or
Common Stock equivalents, may be subject to such conditions, restrictions and
contingencies as the Committee shall establish, including the reinvestment of
such credited amounts in Common Stock equivalents.
5.7. Settlement of Awards. The obligation to make payments and
distributions with respect to Awards of Stock Equivalent Units, Performance
Units or Restricted Stock Units may be satisfied through cash payments, the
delivery of shares of Common Stock, the granting of replacement Awards, or any
combination thereof as the Committee shall determine. Satisfaction of any
obligations to make payments or distributions under an Award, which is sometimes
referred to as "settlement" of the Award, may be subject to such conditions,
restrictions and contingencies as the Committee shall determine. The Committee
may permit or
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require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest or dividend equivalents, and may include converting such credits
into deferred Common Stock equivalents. Each Subsidiary shall be liable for
payment of cash due under the Plan with respect to any Participant to the extent
that such benefits are attributable to the services rendered for that Subsidiary
by the Participant. Any disputes relating to liability of a Subsidiary for cash
payments shall be resolved by the Committee.
5.8. Transferability. Except as otherwise provided by the Committee, Awards
under the Plan are not transferable except as designated by the Participant by
will or by the laws of descent and distribution.
5.9. Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.
5.10. Agreement With Company. An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written document, if any,
as is determined by the Committee. A copy of such document shall be provided to
the Participant, and the Committee may, but need not, require that the
Participant sign a copy of such document. Such document is referred to in the
Plan as an "Award Agreement" regardless of whether any Participant signature is
required.
5.11. Action by Company or Subsidiary. Any action required or permitted to
be taken by the Company or any Subsidiary shall be by resolution of its board of
directors, or by action of one or more members of the board (including a
committee of the board) who are duly authorized to act for the board, or (except
to the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of such company.
5.12. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
5.13. Limitation of Implied Rights.
(a) Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any assets,
funds or property of the Company or any Subsidiary whatsoever, including,
without limitation, any specific funds, assets or other property which the
Company or any Subsidiary, in its sole discretion, may set aside in
anticipation of a liability under the Plan. A Participant shall have only a
contractual right to the shares of Common Stock or amounts, if any, payable
under the Plan, unsecured by any assets of the Company or any Subsidiary,
and nothing contained in the Plan shall constitute a guarantee that the
assets of the Company or any Subsidiary shall be sufficient to pay any
benefits to any person.
(b) The Plan does not constitute a contract of employment or continued
service, and selection as a Participant will not give any participating
individual the right to be retained in the employ or continued service of
the Company or any Subsidiary, nor any right or claim to any benefit under
the Plan, unless such right or claim has specifically accrued under the
terms of the Plan. Except as otherwise provided in the Plan, no Award under
the Plan shall confer upon the holder thereof any rights as a stockholder
of the Company prior to the date on which the individual fulfills all
conditions for receipt of such rights.
5.14. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
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ARTICLE 6
CHANGE IN CONTROL
Subject to the provisions of Section 5.2(f) (relating to certain
adjustments), upon the occurrence of a Change in Control, unless otherwise
specifically prohibited under applicable laws, or by the rules and regulations
of any applicable governmental agencies or national securities exchange, or
unless the Committee shall otherwise provide in the Award Agreement:
(a) any and all Options and SARs granted hereunder shall become
immediately vested and exercisable and shall remain exercisable for the
lesser of 36 months following such Change in Control or the remaining
maximum term of such Award (regardless of whether the applicable
Participant's employment or directorship is terminated upon or after such
Change in Control);
(b) any period of restriction and restrictions imposed on Restricted
Stock or Restricted Stock Units granted hereunder shall lapse and each
Participant holding any such Award shall be entitled to be paid in cash,
within 30 days after the Change in Control, the total of the fair market
value, determined as of immediately prior to such Change in Control, of any
such Award which he or she held immediately prior to such Change in
Control; and
(c) the target payout opportunities attainable under all Bonus Stock,
Stock Equivalent Unit and Performance Unit Awards granted hereunder shall
be deemed to have been fully earned as of the effective date of the Change
in Control (based on an assumed achievement of all relevant targeted
performance goals over any applicable performance period(s)) and each
Participant holding any such Award shall be entitled to be paid in cash,
within 30 days after the Change in Control, the total of the fair market
value, determined as of immediately prior to such Change in Control, of any
such Award which he or she held immediately prior to such Change in
Control.
ARTICLE 7
COMMITTEE
7.1. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the "Committee") in
accordance with this Article 7. The Committee shall be selected by the Board,
and shall consist solely of two or more members of the Board. From and after the
Effective Date, unless removed by the Board or unless said committee no longer
exists, the Company's Compensation/Nominating/Governance Committee shall be the
Committee for purposes of this Plan. If the Committee does not exist, or for any
other reason determined by the Board, the Board may take any action under the
Plan that would otherwise be the responsibility of the Committee.
7.2. Powers of Committee. The Committee's administration of the Plan shall
be subject to the following:
(a) Subject to the provisions of the Plan, the Committee will have the
authority and discretion to select from among the Eligible Individuals
those persons who shall receive Awards, to determine the time or times of
receipt, to determine the types of Awards and the number of shares of
Common Stock or other amounts covered by the Awards, to establish the
terms, conditions, performance criteria, restrictions and other provisions
of such Awards and (subject to the restrictions imposed by Article 8) to
cancel or suspend Awards.
(b) To the extent that the Committee determines that the restrictions
imposed by the Plan preclude the achievement of the material purposes of
the Awards in jurisdictions outside the United States, the Committee will
have the authority and discretion to modify those restrictions as the
Committee determines to be necessary or appropriate to conform to
applicable requirements or practices of jurisdictions outside of the United
States.
(c) The Committee will have the authority and discretion to
conclusively interpret the Plan, to establish, amend and rescind any rules
and regulations relating to the Plan, to determine the terms and
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provisions of any Award Agreement made pursuant to the Plan and to make all
other determinations that may be necessary or advisable for the
administration of the Plan.
(d) Any interpretation of the Plan by the Committee and any decision
made by it under the Plan is final and binding on all persons.
(e) In controlling and managing the operation and administration of
the Plan, the Committee shall take action in a manner that conforms to the
certificate of incorporation and by-laws of the Company, and applicable
state corporate law.
7.3. Delegation by Committee. Except to the extent prohibited by applicable
law or the applicable rules of a securities exchange, the Committee may allocate
all or any portion of its responsibilities and powers to any one or more of its
members and may delegate all or any part of its responsibilities and powers to
any person or persons selected by it. Any such allocation or delegation may be
revoked by the Committee at any time.
7.4. Information to be Furnished to Committee. The Company and Subsidiaries
shall furnish the Committee with such data and information as it determines may
be required for it to discharge its duties. The records of the Company and
Subsidiaries as to an individual's employment or service, termination of
employment or service, leave of absence, reemployment or recommencement of
service and compensation shall be conclusive on all persons unless determined to
be incorrect. Participants and other persons entitled to benefits under the Plan
must furnish the Committee such evidence, data or information as the Committee
considers desirable to carry out the terms of the Plan.
ARTICLE 8
AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan, and may amend any
Award Agreement, provided that no amendment or termination may, in the absence
of written consent to the change by the affected Participant (or, if the
Participant is not then living, the affected beneficiary), adversely affect the
rights of any Participant or beneficiary under any Award granted under the Plan
prior to the date such amendment is adopted by the Board; and further provided
that adjustments pursuant to Section 5.2(f) shall not be subject to the
foregoing limitations of this Article 8. Notwithstanding anything herein to the
contrary, (i) without the prior approval of the Company's stockholders, Options
issued under the Plan will not be repriced, replaced, or regranted through
cancellation, or by lowering the exercise price of a previously granted Option,
and (ii) no amendment of the Plan shall be made without stockholder approval if
stockholder approval is required by applicable law, regulation or stock exchange
rule.
ARTICLE 9
MISCELLANEOUS
9.1. Governing Law. The validity, construction and effect of the Plan, and
any actions taken or relating to the Plan, shall be determined in accordance
with the laws of the State of Illinois and applicable federal law.
9.2. Severability. If for any reason any provision or provisions of the
Plan are determined invalid or unenforceable, the validity and effect of the
other provisions of the Plan shall not be affected thereby.
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IN WITNESS WHEREOF, the Company has caused the Plan to be executed on its
behalf by its respective officer thereunder duly authorized, on the day and year
set forth below.
Date: As of March 12, 2002
TENNECO AUTOMOTIVE INC.
By: /s/ TIMOTHY R. DONOVAN
----------------------------------------------------
Timothy R. Donovan
Executive Vice President, General Counsel
and Managing Director -- International
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