EXHIBIT 10.68
TENNECO INC. THREE YEAR
LONG TERM PERFORMANCE UNIT AWARD AGREEMENT
(2008 and future years)
, 20__
Dear Participant:
Pursuant to the provisions of the Tenneco Inc. (the "Company") 2006
Long-Term Incentive Plan (the "Plan"), you were granted an Award (the "Award")
of Long Term Performance Units (the "Units"), on , 20__. The Award
covers the three calendar years listed on Exhibit A (the "Performance Period").
1. Defined Terms.
(a) "Average Price" means the average of the closing prices of the
Company's common stock on the New York Stock Exchange ("NYSE") for each of
the ten NYSE trading days immediately following the Company's public
announcement of its results of operations for a particular year ("Average
Period").
(b) "Beginning Stock Price" means, as to any calendar year, the
Average Price calculated immediately following the Company's release of its
annual earnings for the prior calendar year. (For example, for 2008, the
Beginning Stock Price is the Average Price calculated immediately following
the Company's release of its 2007 annual earnings.)
(c) "Ending Stock Price" means, as to any calendar year, the Average
Price calculated immediately following the Company's release of its annual
earnings for that calendar year. (For example, for 2008, the Ending Stock
Price is the Average Price calculated immediately following the Company's
release of its 2008 annual earnings.)
(d) "Payout Stock Price" means the Average Price calculated
immediately following the Company's release of its annual earnings for the
last calendar year in the Performance Period.
(e) "Three Year Annualized TSR" means the sum of the TSR for each of
the three calendar years, divided by three."
(f) "Total Shareholder Return or TSR" means, as to any given calendar
year, the amount (expressed as a percentage) equal to (i) (A) Ending Stock
Price, minus (B) the Beginning Stock Price, plus (C) the amount of any
dividends per share of the Company's common stock declared during such year
and paid, divided by (ii) Beginning Stock Price.
2. Performance and Award Settlement.
(a) If the Company's Three Year Annualized TSR is zero or a positive
number, on December 31 of the last year of the Performance Period you will
earn that amount of your Units that is equal to (i) the number of Units,
multiplied by (ii) the Unit Payout Modifier as defined in and determined
pursuant to Exhibit A to this Award; provided, however, that the maximum
Unit Payout Modifier shall be ____. If the Company's Three Year Annualized
TSR does not equal or exceed zero, you will not earn any of your Units.
(b) Following the end of the Performance Period, the Company will pay
you cash in an amount equal to the total number of Units represented by
this Award which you earned for the Performance Period, if any, times the
cash value of one share of common stock of the Company. The cash value of a
share of the Company's common stock will be equal to the Payout Stock
Price. The payment will be made no later than the next regularly scheduled
payroll payment date that is at least five business days after the date on
which the Payout
Stock Price can first be calculated; provided, however, that if the
Company fails to announce publicly its results of operations for the final
year in the Performance Period before February 15 of 20__, you may elect to
receive your payment for the Performance Period on February 20 of 20__
based on an Average Period equal to the ten NYSE trading days ending two
business days before February 20, 20__.
(c) The provisions of this Paragraph 2 are subject to the provisions
of any written employment agreement you may have with the Company and the
Tenneco Inc. Change In Control Severance Benefit Plan for Key Executives or
any successor thereto (as the same may be amended from time to time, the
"Severance Plan").
3. Committee Discretion to Amend Award.
The Committee may amend or terminate this Award at any time in its
sole discretion (a) to exercise downward discretion in the amount payable
under this Award if the Committee determines that the payout yielded or
that would be yielded by this Award for the Performance Period does not
accurately reflect the Company's performance for the Performance Period
because the payout is too great, (b) to reflect changes in the number of
outstanding Long Term Performance Units (and similar awards) of the Company
outstanding for the Performance Period (as compared to the number of such
outstanding awards at the time when this Award Agreement was issued), and
(c) to reflect the effects of any corporate transaction as contemplated by
the Plan. Notwithstanding the foregoing, the Committee may not amend or
terminate this Award in a manner that adversely impacts your payment under
this Award at any time after your employment by Tenneco Inc. and its
Subsidiaries terminates due to your Retirement, death or Total Disability
(each as defined below).
4. Retirement, Death and Total Disability.
Notwithstanding anything to the contrary contained herein or in any
written employment agreement you may have with the Company (subject,
however, to any applicable provisions of the Severance Plan and the
provisions hereof related thereto), if your employment by Tenneco Inc. and
its Subsidiaries terminates on or before the end of the Performance Period
as a result of your Retirement, death or Total Disability, (A) you will be
deemed to have earned 100% of the Units initially assigned to you under
this Award and (B) within 60 days following such termination, you or your
beneficiary will be entitled to receive a cash payment equal to the total
number of Units initially assigned to you under this Award times the cash
value of one share of common stock of the Company (which shall be equal to
the average of the closing sales prices of the Company's common stock on
the NYSE for the ten trading days immediately following such termination)
and such amount shall be pro rated based upon your number of full months
employed during the Performance Period as a percentage of the number of
months in the Performance Period. For purposes hereof, the term
"Retirement" means termination of your employment after you have met the
eligibility requirements for early or normal retirement as established in
accordance with the retirement plan of the Company or its Subsidiaries
covering you at the time such termination occurs and the term "Total
Disability" means your permanent and total disability as determined under
the rules and guidelines established by the Company in order to qualify for
long-term disability coverage under the Company's long-term disability plan
in effect at the time of such determination.
5. Termination in Other Circumstances.
Notwithstanding anything to the contrary contained herein (subject,
however, to any applicable provisions of the Severance Plan or any written
employment agreement you may have with the Company and the provisions
hereof related thereto), if your employment with Tenneco Inc. and its
Subsidiaries terminates on or before the end of the Performance Period
other than as a result of your Retirement, death or Total Disability, you
will forfeit the Units evidenced by this Award, unless the Committee
determines otherwise.
6. Fair Market Value Payment in Certain Cases.
If you are entitled to receive payment for the fair market value of
this Award pursuant to the Plan or the Severance Plan, that fair market
value will be equal to, at least, the amount you would have received
hereunder (based on the then-current fair market value of the Company's
common stock as determined by reference to the average closing prices
therefor on the NYSE for the ten trading days prior to the date on which
you become entitled to payment) as if (1) your service had continued
through the end of the Performance Period and (2) you had earned 100% of
your Units.
7. Withholding Taxes.
As set forth in the Plan, the Company shall be entitled to withhold
from any payment due hereunder an amount sufficient to satisfy any federal,
state, local or other withholding taxes.
8. Miscellaneous.
As a condition of this Award, you are required to execute the
acknowledgment at the bottom of the enclosed copy of this Award notice and
return the acknowledged copy of this Award notice to the Human Resources
Department of Tenneco Inc. not later than [DATE], [____]. By accepting this
Award, you agree and acknowledge that you have received and read the copy
of the Plan and that you accept this Award subject to the terms and
conditions of the Plan. The Units are transferable only by will, the laws
of descent and distribution, pursuant to a qualified domestic relations
order, or by designation of beneficiary in the event of death (enclosed).
This Award is subject to all the definitions, terms and conditions of the
Plan, a copy of which is enclosed. To the extent any provision of this
Award conflicts with applicable law, the Committee shall have the
discretion to modify or amend this Award, or adopt additional terms and or
conditions, as may be deemed necessary or advisable in order to comply with
the local, state, federal or foreign laws and regulations of any
jurisdiction. In the event of any discrepancy between the provisions of the
Plan and this or any other communication regarding the Plan, the provisions
of the Plan control. This Award shall be binding upon and inure to the
benefit of the Company and its successors and assigns, on the one hand, and
you and your permitted transferees, on the other hand.
TENNECO INC.:
By:
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Name:
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Title:
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EMPLOYEE:
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Signature
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Type or Print Legal name
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Social Security Number of Natural ID
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Address
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City/State/Zip/Country
EXHIBIT A