EXHIBIT 10.28
TENNECO AUTOMOTIVE INC. SUPPLEMENTAL
STOCK OWNERSHIP PLAN
1. Purpose
The purpose of the Tenneco Automotive Inc. Supplemental Stock Ownership
Plan (the "Plan") is to promote the long-term success of Tenneco Automotive
Inc., formerly known as Tenneco Inc. (the "Company"), for the benefit of
shareholders by encouraging its directors, officers and key employees to have
meaningful investments in the Company so that, as stockholders themselves, those
individuals will be more likely to represent the views and interest of other
stockholders and by providing incentives to such directors, officers and key
employees for continued service. The Company believes that the possibility of
participation under the Plan will provide this group of directors, officers and
employees an incentive to perform more effectively and will assist the Company
in attracting and retaining people of outstanding training, experience and
ability. Shares to be distributed under this Plan are to be funded entirely by
shares held in the treasury of the Company or its subsidiaries.
2. Definitions
"Automotive Company" means the Company and any stock corporation of
which a majority of the voting common or capital stock is owned directly or
indirectly by the Company and any other company designated as such by the
Committee, but only during the period of such ownership or designation.
"Award" means an award or grant made to a Participant under Section 8.
"Award Agreement" means the agreement provided in connection with an
Award under Section 12.
"Award Date" means the date that an Award is made, as specified in an
Award Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation.
"Committee" means the Compensation/Nominating/Governance Committee of
the Board of Directors of the Company, or any successor committee thereto.
"Common Stock" means the Company's common stock.
"Dividend Equivalent" means an amount equal to the amount of the cash
dividends that are declared and become payable after the Award Date for the
Award to which it relates and on or before the Settlement Date for such Award.
"Fair Market Value" on any date means the average of the highest and
the lowest sales prices of a share of Common stock on the Composite Tape for
such date, as reported by the National Quotation Bureau Incorporated, provided
that if (i) no sales of Common Stock are included on the Composite Tape for such
date, or (ii) in the opinion of the Committee, the sales
of Common Stock on such date are insufficient to constitute a representative
market, then the Fair Market Value of a share of Common Stock on such date shall
be deemed to be the average of the highest and lowest prices of a share of
Common Stock as reported on said Composite Tape for the next preceding day on
which (x) sales of Common Stock are included and (y) the circumstances described
in this clause (ii) do no exist.
"Non-Qualified Stock Option" means any Stock Option that is not an
"Incentive Stock Option" within the meaning of Section 422 of the Code.
"Option Price" means the purchase price of one share of Common Stock
under a Stock Option.
"Participant" means a director, employee or officer of an Automotive
Company who has been selected by the Committee to receive an Award under the
Plan.
"Performance Unit" means an Award denominated in cash, the amount of
which may be based on the performance of the Participant, of an Automotive
Company or of any subsidiary or division thereof.
"Reload Stock Option" means a Stock Option (i) that is awarded, either
automatically in accordance with the terms of an Award Agreement in which one or
more other Awards are made or by Separate Award, upon the exercise of a Stock
Option granted under this Plan or otherwise where the Option Price is paid by
the option holder by delivery of shares of Common Stock on the Settlement Date
for such exercise and (ii) that entitles such holder to purchase the number of
shares so delivered for an Option Price equal to the Fair Market Value of a
share of Common Stock on such Settlement Date.
"Restricted Stock" means shares of Common Stock subject to restrictions
and conditions pursuant to Section 8(c).
"Settlement Date" means, (i) with respect to any Stock Option that has
been exercised in whole or in part, the date or dates upon which shares of
Common Stock are to be delivered to the Participant and the Option Price
therefore paid, (ii) with respect to any SARs that have been exercised, the date
or dates upon which a cash payment is to be made to the Participant, or in the
case of the SARs that are to be settled in shares of Common Stock, the date or
dates upon which such shares are to be delivered to the Participant, (iii) with
respect to Performance Units, the date or dates upon which cash or shares of
Common Stock are to be delivered to the Participant, (iv) with respect to
Dividend Equivalents, the date upon which payment thereof is to be made, and (v)
with respect to Stock Equivalent Units, the date upon which payment thereof is
to be made, in each case, determined in accordance with the terms of the Award
Agreement under which any Award was made.
"Stock Appreciation Right" or "SAR" means an Award that entitles the
Participant to receive on the Settlement Date an amount equal to the excess of
(i) The Fair Market Value of one share of Common Stock on the
date of exercise of the SAR over
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(ii) The Fair Market Value of one share of Common Stock on the
Award Date or any other higher amount specified in the Award Agreement.
"Stock Equivalent Unit" means an Award that entitles the Participant to
receive on the Settlement Date an amount equal to the Fair Market Value of one
share of Common Stock on such date.
"Stock Option" or "Option" means any right to purchase shares of Common
Stock (including a Reload Stock Option) awarded pursuant to Section 8(a).
"Treasury Shares" means authorized and issued shares of the Company's
Common Stock that have been reacquired by the Company or any of its subsidiaries
and are being held in treasury.
3. Term
The Plan shall be effective as of November 5, 1999 and shall remain in
effect through December 31, 2001. After termination of the Plan, no further
Awards may be granted other than Reload Stock Options granted in accordance with
award Agreements existing as of the termination of the Plan, but outstanding
Awards shall remain effective in accordance with their terms and the terms of
the Plan.
4. Plan Administration
(a) The Committee shall be responsible for administering the Plan.
(i) Composition of the Committee. The Committee shall be
comprised of two or more members of the Board of Directors.
(ii) Powers. The Committee shall have full and exclusive
discretionary power to interpret the Plan and to determine eligibility
for benefits and to adopt such rules, regulations and guidelines for
administering the Plan as the Committee may deem necessary or proper.
Such power shall include but not be limited to, selecting Award
recipients, establishing all Award terms and conditions and, subject to
Section 13, adopting modifications and amendments to the Plan or any
Award Agreement, including without limitation, any that are necessary
to comply with the laws of the countries in which the Company or its
affiliates operate.
(iii) Delegation. The Committee may delegate to one or more of
its members or to one or more agents or advisors such non-discretionary
administrative duties as it may deem advisable, and the Committee or
any person to whom it has delegated duties as aforesaid may employ one
or more persons to render advice with respect to any responsibility the
Committee or such persons may have under the Plan.
(b) The Committee may employee attorneys, consultants, accountants and
other persons, and the Committee, the Company and its officers and directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determinations made by
the Committee in good faith shall be final and
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binding upon the Participants, the Company and all other interested persons. No
member of the Committee shall be personally liable for any action,
determination, or interpretation made in good faith with respect to the Plan or
awards, and all members of the Committee shall be fully protected by the
Company, to the fullest extent permitted by applicable law, in respect to any
such action, determination and interpretation.
5. Eligibility
Awards will be limited to persons who are directors, officers, or key
employees of the Automotive Companies. In determining the persons to whom Awards
shall be made, the Committee shall, in its discretion, take into account the
nature of the person's duties, past and potential contributions to the success
of the Automotive Companies and such other factors as the Committee shall deem
relevant in connection with accomplishing the purposes of the Plan. A person who
has received an Award or Awards may receive an additional Award of Awards. For
purposes of this Section 5, the terms "director," "key employee" and "officer"
shall also include any former director, former key employee or former officer of
an Automotive Company eligible to receive a replacement Award as contemplated in
the third sentence of Section 8.
6. Authorized Awards: Limitation
(a) Except for adjustments pursuant to Section 7, the maximum number of
shares of Common Stock that shall be available for issuance under the Plan (the
"Authorized Plan Shares") shall be 1,500,000 Treasury Shares.
(b) If an Award expires unexercised or is forfeited, surrendered,
canceled, terminated or settled in cash in lieu of Common Stock, the shares of
Common Stock that were theretofore subject (or potentially subject) to such
Award may again be made subject to an Award Agreement.
(c) Common Stock that may be issued under the Plan may be either
authorized and unissued shares, or issued shares that have been reacquired by
the Company and that are being held as treasury shares. No fractional shares of
Common Stock shall be issued under the Plan; provided, however, that cash, in an
amount equal to the Fair Market Value of a fractional share of Common Stock as
of the Settlement Date of the Award, shall be paid in lieu of any fractional
shares in the settlement of Awards payable in shares of Common Stock.
7. Adjustments and Reorganizations
The Committee may make such adjustments to Awards granted under the
Plan (including the terms, exercise price and otherwise) as it deems appropriate
in the event of changes that impact the Company, the Company's share price or
the Company's share status.
In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, extraordinary
dividends, spin-off, split-off, rights offering, share combination, or other
change in the corporate structure of the Company affecting the Common Stock, the
number and kind of shares that may be delivered under the Plan shall be subject
to such adjustment as the Committee, in its sole discretion, may deem
appropriate, and the number and kind and price of shares subject to outstanding
Awards and any other terms of outstanding
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Awards shall be subject to such adjustment as the Committee, in its sole
discretion, may deem appropriate.
8. Awards
The Committee shall determine the type and amount of any Award to be
made to any Participant; provided, however, that, except as provided in
paragraph (g) no Awards granted pursuant to this Plan shall vest in less than
six months after the date the Award is granted. Awards may be granted singly, in
combination, or in tandem.. Awards may also be made in combination or in tandem
with, in replacement or, as alternatives to, or as the payment form for, grants
or rights under any other employee benefit or compensation plan of the
Automotive Companies, including any such employee benefit or compensation plan
of any acquired entity.
(a) Stock Options
(i) Awards. Stock Options (including Reload Stock Options)
granted under this Plan may be Non-Qualified Stock Options. The
Committee may grant any Participant one or more Non-qualified Stock
Options, with or without SARs or Reload Stock Options or any other form
of Award. Stock Options granted pursuant to this Plan shall be subject
to such additional terms, conditions, or restrictions as may be
provided in the Award Agreement relating to such Stock Option.
(ii) Option Price. The Option Price of a Stock Option shall
not be less than 100% of the Fair Market Value of a share of Common
Stock on the Award Date.
(iii) Manner of Payment of Option Price. The Option Price
shall be paid in full at the time of the exercise of the Stock Option
and may be paid in any of the following methods or combinations
thereof;
(A) In United States dollars in cash, check, bank
draft or money order payable to the order of the Company;
(B) By the delivery of shares of Common Stock having
an aggregate Fair Market Value on the date of such exercise
equal to the Option Price;
(C) Participants may simultaneously exercise the
Stock Option and sell their shares of Common Stock acquired
thereby and apply the proceeds to the payment of the Option
Price pursuant to the procedures established by the Committee;
and
(D) In any other manner that the Committee shall
approve.
Any shares of Common Stock required or permitted to be sold by an executive
officer of the Company in connection with the payment of the Option Price shall
be transferred to the Company.
(iv) Reload Stock Options. The Committee may award Reload
Stock Options to any Participant either in combination with other
Awards or in separate Award
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Agreements that grant Reload Stock Options upon exercise of outstanding
stock options granted under this Plan or otherwise.
(b) Stock Appreciation Rights.
(i) Awards. The Committee may award any Participant SARs,
which shall be subject to such additional terms, conditions, or
restrictions as may be provided in the Award Agreement relating to such
SAR Award, including any limits on aggregate appreciation. SARs may be
settled in Common Stock or cash or both.
(ii) Award Price. The award price per share of Common Stock of
an SAR shall be fixed in the Award Agreement and shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date of
the Award.
(iii) Distribution of SARs. SARs shall be exercisable in
accordance with the conditions and procedures set out in the Award
Agreement relating to such SAR Award.
(c) Restricted Stock. The Committee may award Restricted Stock to any
Participant. Awards of Restricted Stock shall be subject to such conditions and
restrictions as are established by the Committee and set forth in the Award
Agreement, which may include, but are not limited to, continued service with the
Company, achievement of specific business objectives, and other measurements of
individual or business unit or Company performance.
(d) Stock Equivalent Units. The Committee may award Stock Equivalent
Units to any Participant. All or part of any Stock Equivalent Units Award may be
subject to conditions and restrictions established by the Committee, and set
forth in the Award Agreement, which may include some or all of the following:
continued service with the Company, achievement of specific business objectives,
and other measurements of individual or business units or Company performance
that may include but shall not be limited to, earnings per share, net profits,
total shareholder return, cash flow, return on shareholders' equity, EVA, and
cumulative return on net assets employed.
(e) Dividend Equivalents. The Committee may provide in any Award
Agreement in which Stock Equivalent Units are awarded that such Stock Equivalent
Units may accrue Dividend Equivalents. In lieu of awarding Dividend Equivalents,
the Committee may provide for automatic Awards of additional Stock Equivalent
Units one each date that cash dividends are paid on the Common Stock in an
amount equal to (i) the product of the dividend per share on the Common stock
times the total number of Stock Equivalent Units then held by the Participant,
divided by (ii) the Fair Market Value of the Common Stock on the dividend
payment date.
(f) Performance Units. Performance Units shall be based on the
attainment, over a specified period, of individual performance targets, or on
other parameters that may include but shall not be limited to, earnings per
share, net profits, total shareholder return, cash flow, return on shareholders'
equity, EVA, and cumulative return on next assets employed. Performance Units
may be settled in Common Stock or cash or both.
(g) The Committee may also, in its sole discretion, shorten or
terminate the restricted period or waive any other conditions for the lapse of
restrictions with respect to all or any portion
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of any Award. Notwithstanding the foregoing, all restricted periods shall
terminate and the Awards shall be fully vested with respect to any Participant
upon the Participant's Retirement, death or Total Disability, coincident with
termination of employment with Automotive Companies. For purposes of this
Section 8:
"Retirement" means the Participant's termination of employment with all
Automotive Companies at a time that is determined by the Committee to be
retirement; and
"Total Disability" means the permanent inability of the Participant,
which is a result of accident or sickness, to perform such Participant's
occupation or employment for which the Participant is suited by reason of the
Participant's previous training, education and experience and which results in
the termination of the Participant's employment with all Automotive Companies.
9. Dividends
The Committee may provide in the appropriate Award Agreement that
dividends on Restricted Stock may be paid currently in cash or credited to a
Participant's account for subsequent distribution as determined by the
Committee. The Award Agreement may provide for the reinvestment of dividends
paid on Restricted Stock in shares of Common Stock.
10. Deferrals and Settlements
Settlement of Awards may be in the form of cash, Common Stock, other
Awards, or in combinations thereof as the Committee shall determine, and which
such other restrictions as it may impose. The Committee may also require or
permit Participants to defer the issuance or vesting of shares or the settlement
of Awards under such rules and procedures as it may establish under the Plan.
The Committee may also provide that deferred settlements include the payment or
crediting of interest on, the deferral amounts or the payment or crediting of
Dividend Equivalents on deferred settlements denominated in shares.
11. Transferability and Beneficiaries
No Awards under the Plan shall be assignable, alienable, saleable or
otherwise transferable other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order (as defined by
the Code) or Title I of the Employee Retirement Income Security Act, or the
rules thereunder unless otherwise determined by the Committee under the
following paragraph.
12. Award Agreements
Awards under the Plan shall be evidenced by Award Agreements that set
forth the details, conditions, and limitations for each Award, which may include
the term of an Award (exept that, except as provided in Section 8(g), no Award
shall vest in less than six months after the date the Award is granted), the
provisions applicable in the event the Participant's employment terminates, and
the Company's authority to unilaterally or bilaterally amend, modify, suspend,
cancel or rescind any Award.
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13. Amendments; Compliance with Applicable Laws
The Committee may suspend, terminate, or amend the Plan as it deems
necessary or appropriate to better achieve the purposes of the Plan.
14. Tax Withholding
The Company shall have the right to (i) make deductions from any
settlement of an Award made under the Plan, including the delivery of vesting of
shares, or require shares of cash or both be withheld from any Award, in each
case in an amount sufficient to satisfy withholding of any federal, state or
local taxes required by law, or (ii) take such other action as may be necessary
or appropriate to satisfy any such withholding obligations. The Committee may
determine the manner in which such tax withholding may be satisfied, and may
permit shares of Common Stock (rounded up to the next whole number) to be used
to satisfy required tax withholding based on the Fair Market Value of any such
shares of Common Stock as of the Settlement Date of the applicable Award.
15. Other Company Benefit and Compensation Programs
Unless otherwise specifically determined by the Committee, settlements
of Awards received by a Participant under the Plan shall not be deemed a part of
the Participant's regular, recurring compensation for purposes of calculating
payments or benefits from any Company benefit plan, severance program or
severance pay law of any country. Further, the Company may adopt other
compensation programs, plans or arrangements as it deems appropriate or
necessary.
16. Unfunded Plan
Unless otherwise determined by the Committee, the Plan shall be
unfounded and shall not create (or be construed to create) a trust or separate
fund or funds. The Plan shall not establish any fiduciary relationship between
the Company and any Participant or other person. To the extent any person holds
any rights by virtue of an Award granted under the Plan, such right (unless
otherwise determined by the Committee) shall be no greater than the right of an
unsecured general credit of the Company.
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