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EX-10.14
TENNECO INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As Amended and Restated Generally Effective as of January 1, 1997)
PURPOSE
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The Tenneco Inc. Supplemental Executive Retirement Plan (the "Plan") is
maintained by Tenneco Inc. (the "Company") as an unfunded plan for the purpose
of providing retirement benefits with respect to certain employees that are
equal to retirement benefits lost under the Tenneco Inc. Retirement Plan (the
"Retirement Plan" or the "TRP") as a result of the imposition of the limitations
contained in the Internal Revenue Code of 1986, as amended (the "Code"). The
portion of the Plan that provides for benefits limited by Code Section 415 is
maintained as an "excess benefit plan" as described in Section 3(36) of the
Employee Retirement Income Security Act of 1974 as amended ("ERISA"). The other
benefits provided for under the Plan are only available to a "select group of
management or highly compensated employees" as determined by the Tenneco
Benefits Committee, and the portion of the Plan providing such benefits is
intended to satisfy the ERISA exemption requirements for a plan limited to such
a group.
THE PLAN
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1. Effective Date
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The effective date of this amendment and restatement of the Plan is
January 1, 1997. The benefit entitlement, if any, under the Plan or under the
Tenneco Inc. Benefit Equalization Plan (the "BEP"), which has been merged into
this Plan, of any person who separated from service prior to that date shall be
governed by the provisions of the Plan or the BEP as either was in effect from
time to time prior to that date.
2. Eligibility
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An employee shall be eligible for benefits under this Plan if the
employee is a participant in the Retirement Plan or is provided a benefit under
Section 11 hereof.
3. Amount of Benefit
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The benefit payable under this Plan to a Participant, or to the
Participant's Eligible Spouse, Eligible Child(ren), joint annuitant or other
beneficiary(ies), all as determined under the provisions of the Retirement Plan,
shall equal the excess, if any, of (a) over (b) where:
(a) is the benefit that would be paid under the Retirement
Plan if the provisions of the Retirement Plan were administered without
regard to the limitations imposed by the Code and, only with respect to
Participants who, at any time, were participants in the Tenneco
Inc. Executive Incentive Compensation Plan ("EICP"), if Final Average
Compensation, as computed under the Retirement Plan, were determined on
the basis of compensation paid during the three calendar years (of the
five calendar year period ending no later than the calendar year
immediately preceding his or her termination or retirement) for which
such compensation is the highest, and increased by the quotient of (i)
the total of the cash bonuses, as defined below, paid to the
Participant in the three calendar years (during the
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same five calendar year period ending no later than the calendar year
immediately preceding his or her termination or retirement) for which
such total is the highest, divided by (ii) three or such lesser number
of calendar years (included in such period) in which such bonuses were
paid to the Participant; provided, that the calendar year including his
or her termination or retirement shall be included if such event
follows the payment of regular bonuses for that year; and provided,
that bonuses and salary, respectively, deferred at the election of the
Participant shall be counted only in the year that they would have been
paid absent such election, and provided further, that, effective with
respect to bonuses that relate to the period on and after January 1,
1998, the foregoing language shall be applied to count bonuses which
relate to a calendar year as paid in that year, for example, 1998
bonuses will be counted in 1998 notwithstanding the fact that they are
actually paid in 1999; and
(b) is the benefit that is payable under the Retirement Plan.
Notwithstanding the foregoing, if, except as otherwise provided in
writing, an employee is granted credit for purposes of benefit accrual under the
Retirement Plan for service rendered prior to the time that the employee became
a participant in the Retirement Plan, such employee shall be credited with such
service under this Plan only if and to the extent determined by the Tenneco
Benefits Committee. Unless otherwise provided in writing, no benefit shall be
payable under the Plan unless a benefit also is payable under the Retirement
Plan.
Cash bonus means only cash bonuses paid under the EICP and the cash
special bonuses paid in January 1997.
4. Form of Benefit
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Any benefit under this Plan shall be paid in the same form and manner
as the benefit payments made to, or with respect to, the Participant under the
TRP. Notwithstanding the preceding sentence, no benefit is payable hereunder
prior to 60 days after the Participant has separated from service, unless the
Tenneco Benefits Committee so determines. Prior to the commencement of benefits
but, in no event later than 24 months after the Participant has separated from
service, and only with respect to a Participant or beneficiary who at any time
was a participant in the EICP, such Participant or beneficiary may elect, but
only with the approval of the Tenneco Benefits Committee, to receive payment of
such benefit in the form of a lump sum or annuity, provided that in cases where
a Participant has chosen a lump sum and the exact amount of a Participant's
benefit cannot be determined by the date elected for payment, a preliminary lump
sum shall be paid with respect to amounts that can be clearly ascertained then,
with the remainder to be issued in a subsequent lump sum when that amount is
exactly determined by the Tenneco Benefits Committee or its delegee. In
addition, with respect to all Plan participants, if the benefit payable from
this Plan (expressed as an age 65 life annuity) would be less than $50 per
month, the benefit payable from this Plan automatically shall be paid as a lump
sum.
The actuarial factors set forth in the TRP shall be used to compute
benefits hereunder, provided that, for purposes of any lump sum payment that may
be payable under the Plan, the interest rate used shall be the annual rate of
interest on 30-year Treasury securities as specified by the IRS for the second
calendar month preceding the first day of the Plan Year during which the annuity
starting date occurs, and the applicable mortality table described in Rev. Rul.
95-6, 1995-1 C.B. (page 80), or in such other formal guidance as may be issued
from time to time by the IRS.
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5. Unfunded Plan
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This Plan shall be maintained as an unfunded non-qualified deferred
compensation plan. All benefits under this Plan shall be payable from the
general assets of Tenneco Inc. No person shall be entitled to receive any
benefits under this Plan from the funds of the Retirement Plan.
6. No Assignment
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No benefit under this Plan shall be assignable or alienable or
subjected, by attachment or otherwise, to the claims of creditors of any person.
7. No Guarantee of Employment
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This Plan shall not be construed to give any Participant the right to
be retained in the employment of Tenneco Inc. or any of its affiliates.
8. Operation and Administration
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This Plan shall be operated under the direction of the Compensation and
Benefits Committee of the Board of Directors of Tenneco Inc. and administered by
the Tenneco Benefits Committee.
The Tenneco Benefits Committee's decision in all matters involving the
interpretation and application of this Plan shall be final and binding. The
Tenneco Benefits Committee shall establish a claims procedure which is
consistent with the claims procedure employed under the TRP.
9. Governing Law
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To the extent not preempted by federal law, this Plan shall be
construed, administered and enforced in accordance with the laws of the State of
Delaware.
10. Amendment and Discontinuance
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Tenneco Inc. expects to continue this Plan indefinitely but reserves
the right, by action of the Compensation and Benefits Committee of its Board of
Directors, to amend or discontinue it. However, no such amendment or
discontinuance shall impair or adversely affect any benefits accrued under this
Plan as of the date of such action.
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11. Special Appendix
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The Company may from time to time determine to provide certain persons
additional supplemental pension benefits, which may be reflected in a Special
Appendix hereto or in such other document as the Company shall determine.
References in a Special Appendix or such other document to the "Plan" are to
this Plan.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing, Tenneco Inc., a Delaware corporation, has caused these presents to be
duly executed in its name and behalf by its proper officers thereunto duly
authorized this 9th day of September, 1998.
TENNECO INC.
By: /s/ Barry R. Schuman
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Its: Senior Vice President - Human Resources
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MEAD SPECIAL APPENDIX
TO THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
This Special Appendix sets forth certain special provisions of
the Plan with respect to the benefits of Dana G. Mead ("Mead").
1. Mead shall be entitled to monthly pension benefits in the amount
determined under Section 2 hereof commencing on the first day of the
calendar month immediately following the termination of his employment
with the Tenneco Management Company (the "Company").
2. The monthly pension benefits to which Mead shall be entitled shall
be equal to the greater of (a) or (b), where
(a) equals the benefits to which Mead would be entitled
under the Tenneco Inc. Retirement Plan (the "TRP")
and this Plan, computed using Final Average Earnings,
as defined in Section 3 hereof, and Years of Credited
Service, as defined in Section 4 hereof, and
substituting the rules of Sections 1, 5 and 6 hereof
for the generally applicable rules of such plans; and
(b) equals 2.48% of Mead's Final Average Earnings, as
defined in Section 3 hereof, times his Years of
Credited Service, as defined in Section 4 hereof, and
substituting the rules of Sections 1, 5 and 6 hereof
for the generally applicable rules of such plans.
3. "Final Average Earnings" means the quotient of (i) Mead's Earnings,
as defined below, for the 3 calendar years in which his Earnings were
the highest in the 5 consecutive calendar year period ending prior to
his termination of employment, divided by (ii) 36. "Earnings" means
regular base salary plus Executive Incentive Compensation Plan bonus
earned (regardless of when paid) with respect to that period.
4. "Years of Credited Service" means the total of (i) 14 2/3 plus (ii)
Mead's Actual Tenneco Service, as defined below. "Actual Tenneco
Service" means the period, in whole years and fractions thereof with
each month or portion thereof counting as one-twelfth of one year, from
April 1, 1992 through the date of Mead's termination of employment with
the Company.
5. The benefits provided hereunder shall be paid in the joint and 50%
survivor form of annuity if Mead is married at the time benefits are to
commence -- i.e., to Mead for life and, after his death, 50% of the
monthly amount payable during Mead's life continuing to the spouse, if
any, to whom he was legally married at the date of the commencement of
payment of benefits hereunder and to whom he was so married on the date
of his death. There shall be no reduction in the amount of the benefits
payable during Mead's life on account of payment in the joint and 50%
survivor form. The benefits provided hereunder shall be paid in the
life only form of annuity if Mead is not married at the time that
benefit
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payments are to commence. Subject to the rules stated in the
immediately following paragraph, Mead may elect to receive such
benefits in another form which is the actuarial equivalent of the
normal form of benefit specified above for his marital status at the
time in question. At Mead's election, the Company will purchase and
distribute to him an annuity contract issued by an insurance company
acceptable to Mead to provide such benefits.
If his termination of employment is effective after he attains
age 62 or earlier with the consent of the Company, Mead may elect to
receive such benefits in the form of a lump sum distribution. If a lump
sum distribution is elected, it shall be computed under the assumptions
then in use with respect to the TRP, or its successor; provided, that
in no event shall the interest assumption be greater than the Pension
Benefit Guaranty Corporation immediate annuity interest rate in effect
as of January 1 of the year in which the payment is to be made, and
provided further that the mortality table shall be no less favorable to
Mead or his Beneficiary than the 1983 group annuity table, 50% male,
50% female mix.
Mead may elect that the lump sum benefit be paid at some date
certain which is later than the date specified for benefit commencement
in Section 1 hereof. Any such election shall be irrevocable and must be
filed no later than 90 days prior to the date benefits would otherwise
commence hereunder. If he makes such an election, the lump sum amount
computed above shall be credited with interest at the prime rate
prevailing from time to time from the date specified in Section 1 above
until the date of actual payment.
6. If Mead dies before commencing to receive the benefits described
hereunder, his Beneficiary will receive a death benefit in a lump sum
distribution which is the present value of the benefits which he has
accrued hereunder as of the date of his death computed in accordance
with the rules set forth herein, including the interest assumption
specified in Section 5 hereof. Without limiting the generality of the
foregoing, it is specifically provided that the special alternative
death benefit called for by the TRP as in effect on December 31, 1994,
shall apply if that produces a higher benefit.
7. The benefits provided hereunder are in lieu of any benefits to which
Mead might otherwise be entitled under the TRP, Tenneco Inc. Benefit
Equalization Plan or this Plan, but shall not adversely affect his
entitlement to benefits under any other plan, fund or program
maintained by the Company, nor shall benefits provided under any other
such plan fund or program be offset against or otherwise reduce the
benefits provided for hereunder.
8. For the purpose of calculating Mead's Final Average Earnings, the
Company shall determine an amount that shall be used as a cash bonus
number (the "Hypothetical Bonus") for any year in which Mead has
received something in lieu of a cash bonus. Notwithstanding the
foregoing, a Hypothetical Bonus shall be counted only in circumstances
in which it would yield larger monthly pension benefits.
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STECKO SPECIAL APPENDIX
TO THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
This Special Appendix sets forth certain special provisions of
the Plan with respect to the benefits of Paul T. Stecko ("Stecko").
The aggregate monthly pension benefits to which Stecko shall be entitled
under the TRP, the Plan and this Special Appendix shall be no less than the
amount to which Stecko would have been entitled if Stecko's coverage under
International Paper defined benefit plans in effect as of December 3, 1993 had
continued from his date of hire with International Paper through October 21,
2002; provided, that (i) assumed final three-year average pay shall be
substituted for final five-year average pay; (ii) the Social Security offset
shall be disregarded; (iii) he shall be deemed to have attained age 55 except
that he shall be deemed to have attained age 58 for purposes of determining
early retirement reduction factors; and (iv) adjustment for TRP benefits shall
be determined by subtracting TRP normal retirement benefit from the
International Paper normal retirement benefit prior to applying early retirement
and other factors.
If Stecko dies before commencing to receive the benefits described
hereunder, his beneficiary will receive a death benefit which is the present
value of the benefits which he has accrued hereunder as of the date of his
death.
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BLAKELY SPECIAL APPENDIX
TO THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
This Special Appendix sets forth certain special provisions of the Plan
with respect to the benefits of Robert T. Blakely ("Blakely").
The monthly pension benefits to which Blakely shall be
entitled hereunder shall be equal to the benefits to which Blakely
would be entitled under the Plan, except that, if Blakely retains his
position as Executive Vice President and Chief Financial Officer of
Tenneco Inc. until the earlier of (i) December 31, 1999 or (ii) the
date that the Chief Executive Officer of Tenneco Inc. determines that
his services with respect to the strategic review announced in 1998 and
related transactions are completed, for all purposes, including without
limitation benefit accrual, death benefits, normal retirement and
eligibility for early retirement benefits, Blakely shall be deemed to
have 25 years of service and 25 years of participation. If Blakely dies
before commencing to receive the benefits described hereunder, his
beneficiary will receive a death benefit which is the present value of
the benefits which he has accrued hereunder as of the date of his
death. This benefit enhancement is consistent with those provided to
other senior executives.
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TETZLAFF SPECIAL APPENDIX
TO THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
This Special Appendix sets forth certain special provisions of
the Plan with respect to the benefits of Theodore R. Tetzlaff ("Tetzlaff").
The monthly pension benefits to which Tetzlaff shall be
entitled shall be equal to the benefits to which Tetzlaff would be
entitled under the Plan if he were a participant in the Tenneco Inc.
Retirement Plan ("TRP"), computed using the following special
provisions:
(a) Tetzlaff's service and participation will be
regarded as beginning July 1, 1992.
(b) Tetzlaff's retainer and bonus for each calendar year
will be prorated for each month that Tetzlaff
performs services for the Company as an officer
during the calendar year to arrive at a covered
monthly compensation under the TRP formula.
(c) If Tetzlaff reaches age 55 while performing services
for the Company as an officer, Tetzlaff will be
eligible for an early retirement benefit with
subsidized reduction factors parallel to the TRP
factors, even though Tetzlaff does not have the
service or participation required under the TRP
provisions.
(d) Tetzlaff's guaranteed minimum annual life only
benefit will be as follows:
Age at Commencement
Of Benefits
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Age 55 $100,000 per year
Age 60 $200,000 per year
Age 65 $300,000 per year
with a prorated guaranteed minimum annual life only
benefit between the above ages.
(e) In all other respects, the provisions of the Plan
shall apply.
If Tetzlaff dies before commencing to receive the benefits
described hereunder, his beneficiary will receive a death benefit which
is the present value of the benefits which he has accrued hereunder as
of the date of his death.
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J. CASTELLANI BENEFITS
UNDER THE
TENNECO INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("PLAN")
The benefits of John J. Castellani ("Castellani") under the Plan will be
adjusted as follows:
The monthly normal retirement pension benefits to which Castellani shall be
entitled hereunder shall be equal to the normal retirement pension benefits to
which Castellani would be entitled under the Plan, deeming him to have a total
of 20 years of service and 20 years of participation (including both actual and
deemed service and participation), for all purposes (including without
limitation benefit accrual, death benefits, normal retirement and eligibility
for early retirement benefits). If Castellani dies before commencing to receive
the benefits described hereunder, his beneficiary will receive a death benefit
which is the present value of the benefits which he has accrued hereunder as of
the date of his death.
Castellani shall be entitled to benefits hereunder prior to his normal
retirement under the following rules. If Castellani becomes entitled to
benefits under the Tenneco Inc. Retirement Plan ("TRP") under its generally
applicable rules prior to Castellani attaining normal retirement, Castellani
shall be entitled to a benefit hereunder equal to the benefit that would be
payable under the TRP at the time in question if the benefit stated in the
foregoing paragraph were Castellani's normal retirement benefit under the TRP.
APPROVED ON THIS 27TH DAY OF MAY, 1999
/s/ Stephen J. Smith
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Stephen J. Smith
Vice President, Human Resources