Exhibit 99.2
PERSONAL AND CONFIDENTIAL
Gregg Sherrill
2010 E. Windsor Place, #E
Milwaukee, WI 53202
Dear Gregg:
On behalf of the Board of Directors of Tenneco Inc. (the "Company"), I am
pleased to set forth and confirm the terms and conditions of your employment as
Chairman and Chief Executive Officer of the Company;
1. Term. Your employment will commence as of January 15, 2007. You will report
to and serve at the pleasure of the Board of Directors of the Company (the
"Board").
2. 2007 Cash Compensation. For 2007, you will be paid an annual base salary of
$875,000 and will be eligible for an annual performance bonus, with a
target bonus of $875,000, subject to fulfillment of applicable performance
goals.
3. 2007 Equity Awards. For 2007, you will receive the following awards under
the Company's 2006 Long-Term Incentive Plan: (i) 100,000 non-qualified
stock options with a seven year term, (ii) 55,000 shares of restricted
stock and (iii) stock equivalent units for the 2007-2009 performance period
with a value at target of $700,000. Such stock options and shares of
restricted stock awards will be awarded when 2007 awards are made to senior
executives at Tenneco Inc. generally (currently scheduled for January
2007), and shall each vest in three equal installments on each of the first
three anniversaries of the date of grant. Other terms and conditions will
be consistent with those offered to other senior executives at the Company.
The performance criteria and vesting of the stock equivalent units shall be
determined by the Compensation Committee at the time such terms are
established for other recipients of awards for the 2007-2009 performance
period.
4. Inducement Compensation. As an inducement to accept our offer of employment
and in consideration of compensation foregone from your current employer,
you shall receive (i) $1,325,000 payable within seven days of your first
day of employment with the Company and (ii) 125,000 shares of restricted
stock as of your first day of employment with the Company, such shares will
vest in three equal installments on each of the first three anniversaries
of the date of grant, or, if earlier, upon your involuntary termination of
employment by the Company for reasons other than Cause ("Cause" means your
(i) fraud, embezzlement, or theft in connection with your employment (ii)
gross negligence in the performance of your duties, or (iii) conviction,
guilty plea, or plea of nolo contendre with respect to a felony),
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5. Executive Benefit Plans. You will participate in the Company's Change in
Control Severance Benefit Plan for Key Executives (the "Change in Control
Plan") as a member of Executive Group I (as defined therein). You shall
participate in the Company's defined contribution retirement arrangements
applicable to senior executives; provided, however, that you shall be
entitled to a benefit under the Company's non-qualified defined
contribution plan which, prior to offset for amounts contributed to the
qualified plan, is equal to 150% of the standard age graded benefit. You
will be eligible to participate in all health, life and disability
insurance plans applicable to senior executives generally.
6. Perquisite Allowance, You will receive an annual perquisite allowance of
$50,000.00, paid when the perquisite allowance is paid to other senior
executives off the Company.
7. Vacation. You will receive four weeks vacation (with pay) per year.
8. Severance. If your employment is involuntarily terminated by the Company
for reasons other than disability or Cause (as defined above) and other
than under circumstances which would entitle you to benefits under the
Change in Control Plan, you will be entitled to severance equal to two
times your annual base salary payable in a lump sum, subject to your
execution of a general release and such other documents as the Company may
reasonably request.
9. Existing Obligations. You have represented to us that your acceptance of
our offer of employment and execution of the duties associated therewith
will not violate the terms of any other agreement or obligations to which
you are subject,
This offer is valid until December 31, 2006. Please acknowledge your agreement
with these terms by executing a copy of this letter in the space provided below
and returning it to me.
Sincerely,
TENNECO INC.
By: /s/ Paul T. Stecko
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Paul T. Stecko
Its: Interim Chairman-Board of Directors
ACKNOWLEDGED and ACCEPTED
/s/ Gregg M. Sherrill
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Date:
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