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TENNECO
BENEFITS PROTECTION TRUST
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(as amended and restated
effective as of April 1, 1998)
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TABLE OF CONTENTS
ARTICLE PAGE
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FIRST: Definitions...........................................................1
SECOND: Creation of Trust....................................................3
THIRD: Payments from the Trust...............................................5
FOURTH: Management of Trust Assets...........................................5
FIFTH: Administrative Powers.................................................7
SIXTH: Taxes, Expenses and Compensation of Trustee...........................7
SEVENTH: General Duties of Trustee...........................................8
EIGHTH: Indemnification......................................................9
NINTH: No Duty to Advance Funds..............................................9
TENTH: Accounts..............................................................9
ELEVENTH: Administration of the Plans; Communications.......................10
TWELFTH: Resignation or Removal of Trustee..................................11
THIRTEENTH: Amendment of Agreement; Termination of Trust....................12
FOURTEENTH: Prohibition of Diversion........................................13
FIFTEENTH: Prohibition of Assignment of Interest............................13
SIXTEENTH: Miscellaneous....................................................13
SCHEDULE 1..................................................................16
SCHEDULE 1 SUPPLEMENT.......................................................17
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TENNECO BENEFITS PROTECTION TRUST AGREEMENT
(as amended and restated
effective as of April 1, 1998)
THIS AGREEMENT, made as of the 1st day of April 1998, by and between
Tenneco Inc., a corporation organized and existing under the laws of the State
of Delaware (hereinafter referred to as the "Company" or "Tenneco"), and Dana
G. Mead, Theodore R. Tetz1aff, Stacy S. Dick and Robert T. Blakely (hereinafter
referred to individually and collectively as the "Trustee").
WITNESSETH:
WHEREAS, the Company desires to amend and restate the Trust;
NOW, THEREFORE, the Company and the Trustee agree as follows:
FIRST: Definitions.
(a) "Affiliate" shall mean any corporation, partnership or other entity,
the majority interest in which is held by the Company, directly or through one
or more intermediaries.
(b) "Change in Control" shall mean the first to occur of the following
events (but no event other than the following events), except as otherwise
provided below:
(i) Any person and any of their affiliates or associates becomes the
beneficial owner, directly or indirectly, of securities of Tenneco representing
twenty-five percent (25%) or more of the combined voting power of Tenneco's
then outstanding securities having general voting rights, and a majority of the
Incumbent Board (as hereinafter defined) does not approve the acquisition
(other than in response to a Threatened Change in Control under circumstances
making it reasonably apparent that a change in control of Tenneco has become
inevitable) before the acquisition occurs. Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur (i), solely because twenty-five
percent (25%) or more of the combined voting power of Tenneco's then
outstanding securities having general voting rights is acquired by one or more
employee benefit plans maintained by Tenneco; or
(ii) Members of the Incumbent Board cease to constitute a majority of
the Tenneco Board (as hereinafter defined); or
(iii) The consummation of any plan of merger, consolidation or
combination between Tenneco and any person including becoming a subsidiary of
any other person without members of the Incumbent Board, as constituted
immediately prior to the merger, consolidation or combination constituting a
majority of the board of directors of (A) the successor corporation, or, (B) if
the surviving or successor corporation is a majority-owned subsidiary of
another corporation or corporations, the ultimate parent of the surviving or
successor corporation; or
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(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 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 of such corporation;
or
(v) if any person and any of their affiliates and associates, shall
elect or have elected, during any period not exceeding 24 months, at least 25%
of the members of the Tenneco Board, without the approval of the Incumbent
Board and such members are comprised of persons not serving as members of the
Tenneco Board immediately prior to the formation of such group or the first
solicitation of proxies by such shareholder;
provided however, that the Incumbent Board may determine that any
transaction is not a Change in Control.
For purposes of this definition, the terms "person" and "beneficial owner"
shall have the meaning set forth in Sections 3(a) and 13(d) of the Securities
Exchange Act of 1934, as amended, and in the regulations promulgated
thereunder. If the Trustee requests in writing that the Company determine or
furnish evidence to enable the Trustee to determine whether a Change in Control
has occurred, the Company shall do so in writing as soon as practicable
following receipt of such request.
(c) "Threatened Change in Control" shall mean each of the following events
(but no event other than the following events), except as otherwise provided
below:
(i) Any person, (as defined in Paragraph (b) above), and any of their
affiliates and associates without the prior approval of a majority of the
Incumbent Board
(A) becomes the beneficial owner, (as defined in
(b) above), directly or indirectly, of securities of
Tenneco representing fifteen percent (15%) or more of
the combined voting power of Tenneco's then
outstanding securities having general voting rights,
or
(B) initiates a tender offer to acquire (as the
beneficial owner as defined in (b) above) securities
of Tenneco representing fifteen (15%) or more of the
combined voting power of Tenneco's then outstanding
securities having general voting rights.
Notwithstanding the foregoing, a Threatened Change in
Control shall not be deemed to occur pursuant to this
(i) solely because fifteen percent (15%) or more of
the combined voting power of Tenneco's then
outstanding securities having general voting rights is
acquired by one or more employee benefit plans
maintained by Tenneco; or
(ii) Three or more directors, whose election or nomination for
election is not approved by a majority of the Incumbent Board, are elected
within any single twelve-month period to serve on the Tenneco Board; or
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(iii) The Company notifies the Trustee in writing that the Incumbent
Board has determined that a Threatened Change in Control exists;
provided however the Incumbent Board may determine that any transaction
is not a Threatened Change in Control.
(d) "Threatened Change in Control Period" shall mean the period beginning
on the date a Threatened Change in Control occurs and ending on the earliest
of:
(i) If the Threatened Change in Control was caused by an event
described in Subparagraph (c)(i), on the date first subsequent to the date on
which the person referred to therein does not own securities of Tenneco
representing fifteen percent (15%) or more of the combined voting power of
Tenneco's then outstanding securities having general voting rights, or
terminates the tender offer instituted by him as the case may be; or
(ii) If the Threatened Change in Control was caused by an event
described in Subparagraph (c)(ii), on the date first subsequent to the date on
which each member of the Tenneco Board shall be either a member of the
Incumbent Board or an individual whose election or nomination for election as a
director was approved by a majority of the Incumbent Board.
(iii) If the Threatened Change in Control shall be deemed to have
occurred by reason of the notice described in Subparagraph (c)(iii), on the
date the Trustee shall be notified by the Company in writing that the Incumbent
Board has determined that the circumstances which constituted the Threatened
Change in Control no longer exist; or
(iv) the date the Change in Control occurs.
(e) "Tenneco Board" shall mean the Board of Directors of Tenneco.
(f) "Incumbent Board" shall mean (i) the members of the Tenneco Board on
May 15, 1996, to the extent that they continue to serve as members of the
Tenneco Board, and (ii) any individual who becomes a member of the Tenneco
Board after May 15, 1996, if his election or nomination for election as a
director was approved by a vote of at least three quarters of the then
Incumbent Board.
(g) "Plan or Plans" means the plans, arrangements and structures set forth
on Schedule 1.
(h) "Plan Sponsor" means the corporate entity that maintains any of the
Plans set forth on Schedule 1.
SECOND: Creation of Trust.
(a) The Company hereby establishes with the Trustee and the Trustee hereby
accepts the Tenneco Benefits Protection Trust (the "Trust") consisting of:
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(i) an irrevocable letter of credit in an amount not less than three
million dollars ($3,000,000) obtained by the Company at its expense, and cash
in the amount of two million dollars ($2,000,000), as well as any earnings
thereon, and realized and unrealized gains (net of any losses) attributable
thereto, to the extent not withdrawn from the Trust by the Company pursuant
hereto. The Company shall continue to maintain such letter of credit in effect
until it is replaced by cash or another irrevocable letter of credit or this
Agreement terminates, whichever occurs first. The Company shall renew or
replace such letter of credit at least thirty (30) days before its expiration
for an additional period of one (1) year. If such letter of credit, or any
such renewal is not renewed or replaced by a letter of credit delivered to the
Trustee at least thirty (30) days before the expiration of the predecessor
letter of credit, the Trustee may draw down the full amount of such letter of
credit and hold the proceeds pursuant to the terms of this Agreement. The
Trustee may also draw down on such letter of credit at any time the Trustee
determines the proceeds of such letter of credit are necessary to allow the
Trustee to fulfill its obligations under this Agreement. The proceeds of such
letter of credit shall be available to the Trustee upon the Trustee's
presentation of its sight draft. The Company may, at any time, replace such
letter of credit with another irrevocable letter of credit having substantially
similar terms or an equal amount of cash or any combination thereof. Any
letter of credit shall be issued by a bank reasonably acceptable to the
Trustee, and shall be in a form reasonably acceptable to the Trustee; and
(ii) such additional cash or other property acceptable to the Trustee
as shall be paid or delivered to the Trustee as described herein from time to
time to provide benefits under one or more Plans, together with the earnings,
income, additions and appreciation thereon and thereto. At any time such
payments or deliveries are made, the Company shall designate to the Trustee, in
writing, the Plan or Plans to which the payment or delivery shall be allocated.
(b) The Trustee, for investment purposes only, may commingle all Trust
assets and treat them as a single fund, but the records of the Trustee at all
times shall show the percentages of the Trust allocable to each of the several
Plans.
(c) The Company and the Trustee agree that the Trust created herein shall
not be revocable by the Company or by any successor thereto during a Threatened
Change in Control Period or after a Change in Control, and is intended to be a
grantor trust under the provisions of Sections 671 through 678 of the Internal
Revenue Code of 1986, as amended.
(d) Except as provided in this subparagraph (d), the Company may, from
time to time, add to or withdraw from the assets of the Trust, but subject to
the termination provisions hereof, such withdrawal may not reduce the cash in
the Trust below two million dollars ($2,000,000) plus the letter of credit
described in Subparagraph (a)(i), above, or its proceeds. The Company may
direct that certain funds subsequently added to the Trust be available for the
payment of benefits under one or more designated Plans, but such additional
funds shall also be available to pay the fees and expenses of the Trustee if
the amounts transferred pursuant to Subparagraph (a)(i) are exhausted.
Notwithstanding the foregoing, the Company shall not make any withdrawal from
the Trust during a Threatened Change in Control Period or after a Change in
Control.
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(e) Within five business days following a Threatened Change of Control,
the Company shall deposit cash and stock to the Trust equal to the amounts
specified in Schedule 1 Supplement. Such deposits shall become irrevocable
upon the occurrence of a Change in Control or during a Threatened Change in
Control Period.
(f) Upon the expiration of the Threatened Change in Control Period and
absent a Change in Control, the amounts deposited into the Trust as described
in (e) above adjusted for investment experience and expenses shall be returned
to Tenneco.
THIRD: Payments from the Trust.
(a) Subject to the rules hereof, the Trustee, from time to time upon
receipt (other than during a Threatened Change in Control Period) of direction
from the Company prior to a Change in Control shall make payments from the
Trust, as specified in such direction to such persons, in such manner and in
such amounts as the Company shall direct.
(b) The Company shall, from time to time, furnish the Trustee with such
written information regarding the participants and beneficiaries under the
Plans and the amount and method of determination of benefits under the Plans
(hereinafter referred to as "Participant Data") as the Company deems relevant
or as the Trustee shall request in writing. The Company shall, during a
Threatened Change in Control Period, and after a Change in Control, furnish the
Trustee with Participant Data at least once each year or at such other times as
the Trustee reasonably requests. Such Participant Data will be for the Plans
set forth in Schedule 1. The Company, prior to a Change in Control, will, from
time to time, update Schedule 1 as Plans are added, terminated or amended.
During a Threatened Change in Control Period or after a Change in Control
and notwithstanding any other provisions of this Agreement, the Trustee may,
without direction from the Company, make payments to participants and
beneficiaries in such manner and in such amounts as the Trustee shall determine
they are entitled to be paid under the Plans and the terms hereof, including
without limitation, Schedule 1 Supplement (to the extent funded through the
Trust) based on the most recent Participant Data furnished to the Trustee by
the Company prior to a Change in Control and any supplemental information
furnished to the Trustee by a participant or beneficiary upon which the Trustee
may reasonably rely in making such determination.
(c) Any unpaid benefits due participants and beneficiaries shall be paid
by the Plan Sponsor.
FOURTH: Management of Trust Assets.
(a) Prior to a Change in Control, Trust assets will be invested by the
Trustee (i) in obligations of the United States or any agency thereof or in
obligations guaranteed by the United States or any agency thereof, having a
term of not more than five (5) years, or (ii) in shares of one or more mutual
funds which principally invest in such obligations. Prior to a Change in
Control, but not during a Threatened Change in Control Period, the Company may
change the requirement described in the first sentence of this Article.
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(b) After a Change in Control, the Trustee shall have exclusive authority
and discretion to manage and control the Trust assets and may employ investment
managers and other professionals including affiliates of the Trustee to manage
the investment of the Trust assets. Pursuant to such authority and discretion,
the Trustee may exercise, from time to time and at any time, the power:
(i) To invest and reinvest the Trust, without distinction between
principal and income, in shares of stock (whether common or preferred) or other
evidences of ownership, bonds, debentures, notes or other evidences of
indebtedness, unsecured or secured by mortgages on real or personal property
wherever situated (including any part interest in a bond and mortgage or note
and mortgage whether insured or uninsured) and other property, or part interest
in property, real or personal, foreign or domestic, and in order to reduce the
rate of interest rate fluctuations, contracts, as either buyer or seller, for
the future delivery of United States Treasury securities and comparable Federal
government-backed securities;
(ii) To sell, convey, redeem, exchange, grant options for the purchase
or exchange of, or otherwise dispose of, any real or personal property, at
public or private sale, for cash or upon credit, with or without security,
without obligation on the part of any person dealing with the Trustee to see to
the application of the proceeds of or to inquire into the validity, expediency
or propriety of any such disposition;
(iii) To exercise, personally or by general or limited proxy, the right
to vote any shares of stock, bonds or other securities held in the Trust; to
delegate discretionary voting power to trustees of a voting trust for any
period of time; and to exercise, personally or by power of attorney, any other
right appurtenant to any securities or other property of the Trust;
(iv) To join in or oppose any reorganization, recapitalization,
consolidation, merger or liquidation, or any plan therefor, or any lease,
mortgage or sale of the property of any organization the securities of which
are held in the Trust; to pay from the Trust any assessments, charges or
compensation specified in any plan of reorganization, recapitalization,
consolidation, merger or liquidation; to deposit any property with any
committee or depositary; and to retain any property allotted to the Trust in
any reorganization, recapitalization, consolidation, merger or liquidation;
(v) To exercise or sell any conversion or subscription or other
rights appurtenant to any stock, security or other property held in the Trust;
(vi) To borrow from any lender (including the Trustee in its
individual capacity) money, in any amount and upon any reasonable terms and
conditions, for purposes of this Agreement, and to pledge or mortgage any
property held in the Trust to secure the repayment of any such loan;
(vii) To compromise, settle or arbitrate any claim, debt, or obligation
of or against the Trust; to enforce or abstain from enforcing any right, claim,
debt or obligation; and to abandon any property determined by it to be
worthless;
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(viii) To make loans of securities held in the Trust to registered
brokers and dealers upon such terms and conditions as are permitted by
applicable law and regulations, and in each instance to permit the securities
so lent to be registered in the name of the borrower or a nominee of the
borrower, provided that in each instance the loan is adequately secured and
neither the borrower nor any affiliate of the borrower has discretionary
authority or control with respect to the assets of the Trust involved in the
transaction or renders investment advice with respect to those assets; and
(ix) To invest and reinvest any property in the Trust in any other
form or type of investment not specifically mentioned in this Paragraph, to the
extent permitted by law.
(x) To employ suitable agents including but not limited to
custodians, actuaries, accountants and counsel and to pay their reasonable
expenses and compensation.
FIFTH: Administrative Powers.
The Trustee shall have and in its sole and absolute discretion may
exercise from time to time and at any time the following administrative powers
and authority with respect to the Trust:
(a) To hold property of the Trust in its own name or in the name of a
nominee or nominees, without disclosure of the Trust, or in bearer form so that
it will pass by delivery, but no such holding shall relieve the Trustee of its
responsibility for the safe custody and disposition of the Trust in accordance
herewith; the Trustee's books and records shall at all times show that such
property is part of the Trust; and the Trustee shall be absolutely liable for
any loss occasioned by the acts of its nominee or nominees with respect to
securities registered in the name of the nominee or nominees;
(b) To organize and incorporate under the laws of any state it may deem
advisable one or more corporations (and to acquire an interest in any such
corporation that it may have organized and incorporated) for the purpose of
acquiring and holding title to any property, interests or rights that the
Trustee is authorized to acquire hereunder;
(c) To employ in the management of the Trust suitable agents;
(d) To make, execute and deliver, as Trustee, any deeds, conveyances,
leases, mortgages, contracts, waivers or other instruments in writing that the
Trustee may deem necessary or desirable in the exercise of its powers under
this Agreement; and
(e) To do all other acts that the Trustee may deem necessary or proper to
carry out any of the powers set forth herein hereof or otherwise in the best
interests of the Trust, provided further that a majority of any non-corporate
Trustee(s) shall be necessary to authorize any action under this Agreement.
SIXTH: Taxes, Expenses and Compensation of Trustee.
(a) The Company shall pay any Federal, state, local or other taxes imposed
or levied with respect to the corpus and/or income of the Trust or any part
thereof under existing or future
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laws, and the Company, in its discretion, or the Trustee, in its discretion,
may contest the validity or amount of any tax, assessment, claim or demand
respecting the Trust or any part thereof. The Trustee shall deduct any payroll
taxes required to be withheld with respect to any payments made pursuant to the
Trust.
(b) The Trustee, without direction from the Company, shall pay from the
Trust the reasonable and necessary expenses and compensation of counsel and all
other reasonable and necessary expenses of managing and administering the Trust
and Plans that are not paid by the Company including, but not limited to,
computer time charges, data retrieval and input costs, and charges for time
expended by personnel of the Trustee and those persons retained by the Trustee
in fulfilling the Trustee's duties.
(c) The Company shall pay to the Trustee from time to time such reasonable
compensation for its services as Trustee as is agreed to by the Company and the
Trustee from time to time, but until paid, such compensation and reimbursement
for expenses incurred by the Trustee pursuant hereto shall constitute a charge
upon the Trust, such charge to have priority over any payments due participants
or beneficiaries under the Plans; provided, that any officer of the Company
serving as Trustee shall serve without compensation but shall nevertheless be
entitled to reimbursement of expenses.
(d) After a Change in Control, the Trustee shall bill the Company
directly, on a monthly basis, for all expenses and fees which amounts shall be
immediately due and payable. The Trustee may commence legal action to recover
any amount not paid within thirty (30) days of the billing date, and shall be
obligated to commence such an action if the Company's failure to pay causes a
reduction below $2,000,000 in the assets of the Trust attributable to
contributions made pursuant to Subparagraph (a)(i) of Article SECOND.
SEVENTH: General Duties of Trustee.
(a) Subject to the rules hereof, the Trustee shall discharge its duties
under this Agreement solely in the interest of the participants in the Plans
and their beneficiaries and (i) for the exclusive purpose of providing benefits
to such participants and their beneficiaries and defraying reasonable expenses
of administering the Plans; and (ii) with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent man acting in
a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
(b) The Trustee may consult with counsel, who may be counsel for the
Trustee in its individual capacity, (or, prior to a Change in Control, for the
Company) and shall not be deemed imprudent by reason of its taking or
refraining from taking any action in accordance with the opinion of counsel.
(c) (1) Within ninety (90) days after a Change in Control, the Company
shall notify participants and beneficiaries of the Plans in writing of the
Trustee's availability to aid them in pursuing any claims they may have against
the Company under the terms of those of the Plans under which they are covered.
If the Company fails to do so, the Trustee shall provide such notification.
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(2) If, after a Change in Control, a participant or beneficiary
notifies the Trustee that the Company or an Affiliate or any other party, if
applicable has refused to pay a claim asserted by the participant or
beneficiary under any of the Plans, then, unless the Trustee shall determine
that the claim has no basis in law or fact (in which case the Trustee shall
notify the participant or beneficiary of such determination and shall take no
further action with respect to the claim), the Trustee shall, in its
discretion:
(A) pay the participant or beneficiary the
amount of the claim from the Trust assets; or
(B) commence negotiations and legal proceedings
to recover on the claim on behalf of the participant
or beneficiary in accordance with subsection C below.
(C) to the extent that the Trustee determines to
commence negotiations and legal proceeds, it:
(i) shall direct the course of the litigation and shall keep the
participant or beneficiary informed of the progress of the litigation as the
Trustee deems appropriate.
(ii) if the Trustee determines that all reasonable litigation efforts
have been exhausted but the participant or beneficiary has not received all
that he or she is entitled to receive, the Trustee may in its discretion pay
additional amounts to such person out of the assets of the Trust.
EIGHTH: Indemnification.
The Company agrees, to the extent permitted by law, to indemnify and hold
the Trustee harmless from and against any liability that it may incur in the
administration of the Trust and the Plans, unless arising from the Trustee's
own gross negligence or willful breach of its obligations under this Agreement.
The Trustee shall not be required to give any bond or any other security for
the faithful performance of its duties under this Agreement, except as required
by law.
NINTH: No Duty to Advance Funds.
The Trustee shall have no obligation to advance its own funds for the
purposes of fulfilling its responsibilities under this Agreement, and its
obligations to incur expenses shall at all times be limited to amounts in the
Trust available to be applied toward such expenses.
TENTH: Accounts.
(a)(i) The Trustee shall keep accurate and detailed accounts of all its
receipts, investments and disbursements under this Agreement on a calendar year
basis. Such person or persons as the Company shall designate shall be allowed
to inspect the books of account relating to the Trust upon request at any
reasonable time during the business hours of the Trustee.
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(ii) Within 120 days after the close of each calendar year, the
Trustee shall transmit to the Company, and certify the accuracy of, a written
statement of the assets and liabilities of the Trust, showing the current value
of each asset at that date, and a written account of all the Trustee's
transactions relating to the Trust during the period from the last previous
accounting to the close of that year. For the purposes of this Subparagraph,
the date of the Trustee's resignation or removal or the date of termination of
the Trust shall be deemed to be the close of a year.
(iii) Unless the Company shall have filed with the Trustee written
exceptions or objections to any such statement and account within 120 days
after receipt thereof, the Company shall be deemed to have approved such
statement and account; and in such case or upon the written approval by the
Company of any such statement and account, the Trustee shall be forever
released and discharged with respect to all matters and things contained in
such statement and account as though it had been settled by decree of a court
of competent jurisdiction in an action or proceeding to which the Company and
all persons having any beneficial interest in the Trust were parties.
(b) Nothing contained in this Agreement or in the Plans shall deprive the
Trustee of the right to have a judicial settlement of its accounts. In any
proceeding for a judicial settlement of the Trustee's accounts or for
instructions in connection with the Trust, the only other necessary party
thereto in addition to the Trustee shall be the Company. If the Trustee so
elects, it may bring in as a party or parties defendant any other person or
persons. No person interested in the Trust, other than the Company, shall have
a right to compel an accounting, judicial or otherwise, by the Trustee, and
each such person shall be bound by all accountings by the Trustee to the
Company, as herein provided, as if the account had been settled by decree of a
court of competent jurisdiction in an action or proceeding to which such person
was a party.
ELEVENTH: Administration of the Plans; Communications.
(a) The Plans shall be administered as provided therein and pursuant to
the terms hereof including, without limitation, Schedule 1 Supplement. The
Trustee shall not be responsible in any respect for administering the Plans nor
shall the Trustee be responsible for the adequacy of the Trust to meet and
discharge all payments and liabilities under the Plans. The Trustee shall be
further protected in relying upon any written notice, instruction, direction or
other communication signed by an officer of the Company who is authorized to
execute and deliver, in the name and on behalf of the Company, documents or
instruments relating to the Trust (hereinafter an "authorized officer"). The
Company, from time to time, shall furnish the Trustee with the names and
specimen signatures of the authorized officers and shall promptly notify the
Trustee of the termination of office of any authorized officer and the
appointment of a successor thereto. Until notified to the contrary, the
Trustee shall be fully protected in relying upon the most recent list of the
authorized officers furnished to it by the Company.
(b) Any action required by any provision of this Agreement to be taken by
the Tenneco Board shall be evidenced by a resolution of such Board certified to
the Trustee by the Secretary or an Assistant Secretary of the Company, and the
Trustee shall be fully protected in relying upon any resolution so certified to
it. Unless other evidence with respect thereto has been periodically
prescribed in this Agreement, any other action of the Company under any
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provision of this Agreement, including any approval of or exceptions to the
Trustee's accounts, shall be evidenced by a certificate signed by an authorized
officer, and the Trustee shall be fully protected in relying upon such
certificate. The Trustee may accept a certificate signed by an authorized
officer as proof of any fact or matter that it deems necessary or desirable to
have established in the administration of the Trust (unless other evidence of
such fact or matter is expressly prescribed herein), and the Trustee shall be
fully protected in relying upon the statements in the certificate.
(c) The Trustee shall be entitled conclusively to rely upon any written
notice, instruction, direction, certificate or other communication reasonably
believed by it to be genuine and to be signed by an authorized officer, and the
Trustee shall be under no duty to make investigation or inquiry as to the truth
or accuracy of any statement contained therein.
(d) Until written notice is given to the contrary, communications to the
Trustee shall be sent to it at Tenneco Inc., 1275 King Street, Greenwich,
Connecticut 06831, Attn: Dana Mead; communications to the Company shall be sent
to it at its office at 1275 King Street, Greenwich, Connecticut 06831, Attn:
Corporate Secretary.
TWELFTH: Resignation or Removal of Trustee.
(a) A Trustee may resign at any time other than during a Threatened Change
in Control Period or after a Change in Control upon 30 days written notice to
the Company or such shorter period as is acceptable to the Company. During a
Threatened Change in Control Period or after a Change in Control, a Trustee may
resign only under one of the following circumstances:
(i) In the case of a corporate Trustee only, the Trustee is no longer
in the business, or is actively in the process of removing itself from the
business, of acting as trustee for employee benefit plans.
(ii) The Trustee determines that a conflict of interest exists which
would prohibit it from fulfilling its duties under this Agreement in an
ethically proper manner. The Trustee shall use its best efforts to avoid the
creation of such a conflict.
(iii) The assets of the Trust have been exhausted or are insufficient
to pay accrued and reasonably anticipated fees and expenses of the Trustee
hereunder, the Company has refused to pay voluntarily the Trustee's accrued
fees and expenses as required hereunder and the Trustee has been unsuccessful
in obtaining a court order requiring the Company to make such payments or has
been unable to collect on a judgment for such accrued fees and expenses.
(iv) The death or incapacity of a Trustee. Notwithstanding the above,
a corporate Trustee may resign for reasons set forth in (i) or (ii) above only
if it has obtained the agreement of a bank with assets in excess of $2 billion
and net worth in excess of $100 million to replace it as trustee under the
terms of this Agreement.
In addition, upon the death, incapacity or resignation of a non-corporate
Trustee(s), the remaining non-corporate Trustee(s) shall appoint the successor
Trustee(s).
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(b) The Tenneco Board, may, other than during a Threatened Change in
Control Period, remove a Trustee before a Change in Control, upon 30 days
written notice to the Trustee, or upon shorter notice if acceptable to the
Trustee. The Company may not remove a Trustee during a Threatened Change in
Control Period or after a Change in Control. In the event a Trustee resigns or
is removed, the Trustee shall have a right to have its accounts settled as
provided herein.
(c) Each successor trustee shall have the powers and duties conferred upon
the Trustee in this Agreement, and the term "Trustee" as used in this Agreement
shall be deemed to include any successor trustee. Upon designation or
appointment of a successor trustee, the Trustee shall transfer and deliver the
Trust to the successor trustee, reserving such sums as the Trustee shall deem
necessary to defray its expenses in settling its accounts, to pay any of its
compensation due and unpaid and to discharge any obligation of the Trust for
which the Trustee may be liable. If the sums so reserved are not sufficient
for these purposes, the Trustee shall be entitled to recover the amount of any
deficiency from either the Company or from the Trust through the successor
trustee, or both. When the Trust shall have been transferred and delivered to
the successor trustee and the accounts of the Trustee have been settled as
provided herein, the Trustee shall be released and discharged from all further
accountability or liability for the Trust and shall not be responsible in any
way for the further disposition of the Trust or any part thereof.
THIRTEENTH: Amendment of Agreement; Termination of Trust.
(a) Subject to Paragraph (b) below, the Company expressly reserves the
right at any time to amend or terminate this Agreement of the Trust created
thereby to any extent that it may deem advisable by action of the Compensation
and Benefits Committee of the Tenneco Board. No amendment shall be made
without the Trustee's consent thereto in writing if, and to the extent that,
the effect of such amendment is to increase the Trustee's responsibilities
hereunder. Such proposed amendment shall be delivered to the Trustee as a
written instrument of amendment, duly executed and acknowledged by the Company
and accompanied by a certified copy of a resolution of the Compensation and
Benefits Committee of the Tenneco Board. The Company also shall deliver to the
Trustee a copy of any modifications or amendments to the Plans. The Trustee's
consent shall not be required for the termination of the Trust or its removal
as Trustee.
(b) Notwithstanding any other provision of this Agreement other than the
following sentence, the provisions of this Agreement and the Trust created
thereby may not be amended or terminated by the Company or the Trustee during a
Threatened Change in Control Period or after a Change in Control. The Company,
during a Threatened Change in Control Period, or the Trustee, after a Change in
Control, upon written advice of counsel, may amend the provisions of this
Agreement to the extent required by applicable law.
(c) In the event the Company terminates the Trust prior to the occurrence
of a Change in Control, other than during a Threatened Change in Control
Period, the Trustee shall reserve such sums it deems necessary to pay its fees
and expenses, and shall distribute all remaining assets of the Trust in
accordance with the written directions of the Company.
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(d) The Trust shall continue in effect until payment or provision has been
made for all benefits payable under the Plans. Upon termination of the Trust,
the Trustee shall have a right to have its accounts settled. Any assets
remaining in the Trust after payment or provision for all benefits payable
under the Plans, and after the Trustee has reserved such sums as it deems
necessary for the payment of its expenses and fees hereunder, shall be paid in
accordance with the written directions of the Company. When the Trust assets
shall have been so applied or distributed and the accounts of the Trustee shall
have been so settled, the Trustee shall be released and discharged from all
further accountability or liability respecting the Trust.
FOURTEENTH: Prohibition of Diversion.
(a) At no time prior to the satisfaction of all liabilities with respect
to the beneficiaries under this Trust shall any part of the corpus and/or
income of the Trust be used for, or diverted to, purposes other than for the
exclusive benefit of such beneficiaries or defraying the fees and reasonable
expenses of the Trustee hereunder, and the assets of the Trust shall never
inure to the benefit of the Company and shall be held for the exclusive
purposes of providing benefits to participants in the Plans and their
beneficiaries and defraying the fees and reasonable expenses of administering
the Plans or performing any of the Trustee's duties under this Agreement.
(b) Notwithstanding any provision of this Agreement to the contrary, the
assets of the Trust shall at all times be subject to claims of the creditors of
the Company. Upon notice that the Company may be insolvent, the Trustee shall
not pay benefits from such Trust assets, shall hold the assets for the general
creditors of the Company, shall promptly seek a judicial determination
regarding the insolvency of the Company, and shall deliver the assets of the
Trust to satisfy the claims of creditors, as directed by the court. The
Trustee shall resume payments from such Trust assets under the terms of the
Trust only after determining that the Company is not insolvent or after
receiving a judicial decision to that effect. The Company shall have the duty
to inform the Trustee of the insolvency of the Company. The Company shall be
considered insolvent if it is unable to pay its debts as they mature or if it
is subject to a pending proceeding as a debtor under the Bankruptcy Code.
FIFTEENTH: Prohibition of Assignment of Interest.
No interest, right or claim in or to any part of the Trust or any payment
therefrom shall be assignable, transferable or subject to sale, mortgage,
pledge, hypothecation, commutation, anticipation, garnishment, attachment
execution or levy of any kind, and the Trustee shall not recognize any attempt
to assign, transfer, sell, mortgage, pledge, hypothecate, commute or anticipate
the same, except to the extent required by law.
SIXTEENTH: Miscellaneous.
(a) This Agreement shall be interpreted, construed and enforced, and the
trust hereby created shall be administered, in accordance with the laws of the
United States and of the State of Delaware. Prior to a Change in Control,
nothing in this Agreement shall be construed to subject the Trust created
hereunder to the Employee Retirement Income Security Act of 1974, as amended.
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(b) The titles to Articles of this Agreement are placed herein for
convenience of reference only, and the Agreement is not to be construed by
reference thereto.
(c) This Agreement shall bind and inure to the benefit of the successors
and assigns of the Company and the Trustee, respectively, and the Plans.
(d) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute but one instrument, which may be sufficiently evidenced by any
counterpart.
(e) If any provision of this Agreement is determined to be invalid or
unenforceable, the remaining provisions shall not for that reason alone also be
determined to be invalid or unenforceable.
(f) This document supersedes in its entirety and amends and restates the
Tenneco Benefits Protection Trust made as of May 19, 1988 and as amended and
restated effective as of October 1, 1996.
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(g) IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their respective names as of the day and year first above
written.
TENNECO INC.
By: /s/ Karl A. Stewart
-------------------------------
Its: Vice President & Secretary
-------------------------------
TRUSTEE
/s/ Dana G. Mead
-------------------------------
Dana G. Mead
/s/ Theodore R. Tetzlaff
-------------------------------
Theodore R. Tetzlaff
/s/ Stacy S. Dick
-------------------------------
Stacy S. Dick
/s/ Robert T. Blakely
-------------------------------
Robert T. Blakely
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SCHEDULE 1
-------------------------------------------
I. EXECUTIVE NON-QUALIFIED PLANS
Tenneco Inc. Deferred Compensation Plan
1997 Tenneco Inc. Board of Directors Deferred Compensation Plan
Tenneco Inc. Pilots' Supplemental Retirement Plan
Tenneco Inc. Executive Incentive Compensation Plan
Tenneco Inc. Supplemental Executive Retirement Plan
1996 Tenneco Inc. Stock Ownership Plan
Supplemental Pensions For Dana Mead, Stacy Dick, Arthur House, Theodore
Tetzlaff, W.R. Phillips, Paul Stecko, Barry Schuman and Robert Blakely.
II. SALARY CONTINUATION ARRANGEMENTS
Tenneco Inc. Change in Control Severance Benefit Plan for Key Executives
III. OTHER
Health, life and disability plans.
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SCHEDULE 1
SUPPLEMENT
------------------------------------------
TENNECO INC.
BENEFITS PROTECTION PROGRAM
------------------------------------------
Set out below is a description of the special rights which will
arise with respect to the Plans, upon a Change in Control
(sometimes referred to as a "CIC") and which are to be protected
by this program.
I. EXECUTIVE NON-QUALIFIED PLANS
A. Tenneco Inc. Deferred Compensation Plan and 1997 Tenneco Inc. Board of
Directors Deferred Compensation Plan
1. Upon a threatened Change of Control, Tenneco will calculate the
account balance of each participant (estimated as at the end of the
then calendar year) and will deposit the aggregate amount so
calculated into the Benefits Protection Trust within five business
days of the Threatened Change in Control.
B. Tenneco Inc. Pilots' Supplemental Retirement Plan
1. Upon a Threatened Change in Control, Tenneco will estimate (as
of the end of the then calendar year) the amount of the benefits
payable under the plan and will deposit this amount into the
Benefits Protection Trust within five business days of the
Threatened Change in Control.
C. Tenneco Inc. Executive Incentive Compensation Plan
1. Upon a Threatened Change in Control, Tenneco will deposit into
the Benefits Protection Trust within five business days of a
Threatened Change in Control an amount equal to the aggregate
corporate and divisional individual target incentive award for the
current year (or for the immediately preceding year, if no such
target awards have been established for the current year), to be
paid out by the Trustee, on behalf of the Company, in accordance
with the provisions of the Plan.
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D. Tenneco Inc. Supplemental Executive Retirement Plan
1. Upon a Threatened Change in Control, Tenneco will estimate (as
of the end of the then calendar year) the amount of the benefits
payable under the plan and will deposit this amount into the
Benefits Protection Trust within five business days of a Threatened
Change in Control.
E. 1996 Tenneco Inc. Stock Ownership Plan.
1. (a) Upon a Change in Control, all Stock Options granted under
the plan shall become fully exercisable.
(b) Upon a Threatened Change in Control all Stock Appreciation
Rights granted under the plan shall become fully vested. Tenneco
will estimate the amount payable to employees holding Stock
Appreciation Rights and will deposit this amount into the Benefits
Protection Trust within five business days of the Threatened Change
in Control.
(c) Upon a Threatened Change in Control, certificates for all
Restricted Stock then held by Tenneco together with funds in an
amount estimated to be sufficient to pay the aggregate cash
settlement amounts payable upon reversion of such shares in the
event of a Change in Control and a subsequent discharge or
Constructive Termination of the participants (which estimate may
not be based on an assumed fair market value per share in excess of
150% of the fair market value on the date of the Threatened Change
in Control) will be deposited into the Benefits Protection Trust
within five business days of a Threatened Change in Control.
(d) Upon a Threatened Change in Control, Tenneco will estimate the
aggregate amount payable under the Performance Units, issued
pursuant to the plan and will deposit the amount so estimated into
the Benefits Protection Trust within five business days of the
Threatened Change in Control.
(e) Upon a threatened Change in Control, Tenneco will estimate the
aggregate amount payable under the Stock Equivalent Units and
Dividend Equivalent Units and will deposit the amount so estimated
into the Benefits Protection Trust within five business days of the
Threatened Change in Control.
(f) If after a Change in Control has occurred, a participant in the
1996 Tenneco Inc. Stock Ownership Plan is separated from service as
an employee, a non-employee officer or a director either because he
or she is discharged, provided such discharge is not a Discharge
for Cause, or because of Constructive Termination, such participant
shall be entitled to be paid in cash the total of the fair market
value, determined as of the date of such separation, of any
Restricted Stock, Performance Units, Stock Equivalent Units and
Dividend Equivalents which he or she held immediately prior to such
separation from service to the extent that he or she would not
otherwise receive the value thereof. The terms
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"Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Units, Stock Equivalent Units and Dividend Equivalents"
shall have the meaning ascribed to those terms in the 1996 Tenneco
Inc. Stock Ownership Plan, and the terms "Discharge for Cause" and
"Constructive Termination" shall have the meaning ascribed to those
terms in the Tenneco Inc. Change in Control Severance Benefit Plan
for Key Employees.
F. Supplemental Pensions.
1. Employees, and Officers Protected - Dana Mead, Stacy Dick,
Arthur House, John Castellani, Theodore Tetzlaff, W. R. Phillips,
Paul Stecko, Barry Schuman and Robert Blakely.
2. Plan Provision - Upon a Threatened Change in Control, Tenneco
will estimate (as of the end of the then calendar year) the amount
of the benefits payable under the supplemental pension agreements
and will deposit the amount so estimated into the Benefits
Protection Trust within five business days of the Threatened Change
in Control.
II. SALARY AND OTHER CONTINUATION ARRANGEMENTS
Upon a Threatened Change in Control, Tenneco will estimate the aggregate
amount that it reasonably anticipates may become payable under the
Tenneco Inc. Change in Control Severance Benefit Plan for Key Executives
and will deposit the amount so estimated into the Benefits Protection
Trust within five business days of the Threatened Change in Control.
III. OTHER
Persons who become entitled to payments under the Tenneco Inc. Change in
Control Severance Benefit Plan for Key Employees, and their eligible
dependents, shall continue to be covered by the health, life and
disability plans applicable to comparably situated active employees as in
effect from time to time and subject to the rules thereof for the period
described below. For persons entitled to Executive Group I benefits, and
their eligible dependents, the period is three (3) years from his or her
separation from service. For persons entitled to Executive Group II
benefits, the period is two (2) years from his or her separation from
service. This period of coverage will not count against the minimum
period of health coverage required by the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"), and persons covered by this
provision will be afforded their applicable COBRA rights at the end of
the health coverage provided for herein. The terms "Executive Group I"
and "Executive Group II" shall have the meaning ascribed to those terms
in the Tenneco Inc. Change in Control Severance Benefit Plan for Key
Employees.
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Upon a Threatened Change in Control, Tenneco shall estimate the amount
that it reasonably anticipates will be sufficient to defray these
obligations and will deposit that amount in the Benefits Protection Trust
within five business days of the Threatened Change in Control.
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