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EXHIBIT 10.1
FORM OF
HUMAN RESOURCES AGREEMENT
THIS HUMAN RESOURCES AGREEMENT is made and entered into as of this
day of , 19 , by, between and among TENNECO INC., a Delaware
corporation to be renamed Tenneco Automotive Inc. ("Tenneco" or "Automotive
Company"), and Tenneco Packaging Inc. (to be renamed), a Delaware corporation
("Packaging Company").
WHEREAS, pursuant to the terms of that certain Distribution Agreement by
and between Tenneco and Packaging Company and dated as of (the
"Distribution Agreement"), the parties have entered into this Agreement
regarding certain labor, employment, compensation and benefit matters occasioned
by the Distribution.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement and the Distribution Agreement, each of
the parties hereto, on behalf of itself and each other entity over which it has
direct or indirect legal or effective control, hereby agrees as follows:
SECTION 1. DEFINITIONS. The following terms, when capitalized herein, shall
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have the meanings set forth below in this Section 1. All other capitalized terms
which are used but are not otherwise defined herein shall have the meanings
ascribed to them in the Distribution Agreement.
"ACTIVE EMPLOYEES" means, with respect to each Group, all employees
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regularly engaged in the performance of services to, for or on behalf of
any member of such Group as of the close of business on the Distribution
Date; provided, that all such employees of Tenneco Management Company
("TMC") who are employed by a member of the Automotive Group immediately
after the Distribution shall, for all purposes hereunder, be treated as
Active Employees of the Automotive Group.
"COMMON STOCK" means Tenneco Common Stock or Packaging Common Stock,
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as applicable.
"FORMER EMPLOYEES" means, with respect to each Group, all former
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employees of Tenneco and/or its Subsidiaries (including, but not limited
to, such employees who, as of the close of business on the Distribution
Date, are on leave of absence, long-term disability or layoff with recall
rights) who, if they were regularly engaged in the performance of services
to, for or on behalf of Tenneco or any of its Subsidiaries at the close of
business on the Distribution Date, would be an Active Employee of such
Group, determined on a basis consistent with the determination of the
Active Employees of such Group.
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"Tenneco Salaried Welfare Plans" means, collectively, the Tenneco Inc.
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Health Care Plan, the Tenneco Inc. Group Life Insurance Plan, the Tenneco
Inc. Long Term Disability Plan, the Tenneco Inc. Travel Accident Insurance
Plan, the Tenneco Inc. Health Care Flexible Spending Account Program and
the Tenneco Inc. Dependent Day Care Flexible Spending Account Plan.
SECTION 2. General Employment Matters.
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2.01 General Obligations. From and after the Distribution Date, each of
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Automotive Company and Packaging Company shall (and shall, as applicable, cause
each of the other members of its respective Group over which it has direct or
indirect legal or effective control to) (a) continue the employment of all of
the Active Employees of its respective Group, subject, however to the terms of
Section 2.03 below and (b) except as otherwise specifically provided herein,
pay, perform and discharge any and all labor, employment, compensation and
benefit liabilities, whether arising prior to, on or after the Distribution
Date, with respect to all such Active Employees and all Former Employees of its
respective Group. Notwithstanding the foregoing, all payments to be made to
Active Employees and Former Employees of TMC who are not employed by the
Automotive Group or the Packaging Group (excluding TMC) immediately after the
Distribution out of general corporate assets shall be made, processed and
administered by Tenneco Business Services Inc. ("TBS") (rather than by Packaging
Company or another member of the Packaging Group). Packaging Group shall
maintain one or more rabbi trusts to facilitate such payments.
2.02 Initial Compensation of Active Employees. The initial compensation
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(base salary or wage level) of each Active Employee of each such Group as of the
Distribution Date shall be the same as the compensation (base salary or wage
level) of such Active Employee immediately prior to the Distribution Date.
2.03 No Additional Employment Rights Created. Nothing in this Agreement
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shall give any Active Employee of any Group any right to continued employment by
any member of that Group or the other Group beyond the Distribution Date, which
is in addition to or supplemental to any such right he or she may have arising
under contract or otherwise.
SECTION 3. Collective Bargaining.
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3.01 Continuation of Existing Collective Bargaining Agreements. Each of
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Automotive Company and Packaging Company shall (and shall cause, as applicable,
each other member of its Group over which it has direct or indirect legal or
effective control to) continue to honor all collective bargaining agreements
covering the Active Employees of its respective Group which are in effect as of
the close of business on the Distribution Date, in accordance with and subject
to the terms of each such collective bargaining agreement.
3.02 Recognition of Incumbent Labor Organizations. Each of Automotive
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Company and Packaging Company shall (and shall cause, as applicable, each other
member of its Group over which it has direct or indirect legal or effective
control to) continue to recognize all
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incumbent labor organizations which, as of the close of business on the
Distribution Date, have established collective bargaining relationships in
respect of the Active Employees of its respective Group.
3.03 Continued Sponsorship of Hourly Employee Benefit Plans. Except as
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otherwise specifically provided herein, each of Automotive Company and Packaging
Company shall continue (and shall, as applicable, cause each other member of its
respective Group over which it has direct or indirect legal or effective control
to continue) to sponsor all employee benefit plans for hourly employees which,
as of the close of business on the Distribution Date, are in existence and
relate to the Active Employees and/or Former Employees of its respective Group,
subject to its rights under such plans to amend or terminate such plans.
3.04 Provisions of Wages, Rights and Other Employment Benefits Required
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Under Existing Collective Bargaining Agreements. Without limiting the generality
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of the foregoing, each of Automotive Company and Packaging Company shall (and
shall cause each other member of its respective Group over which it has direct
or indirect legal or effective control to) provide those of its Active Employees
whose employment is subject to collective bargaining agreements and/or
established collective bargaining relationships as of the close of business on
the Distribution Date with the wages, benefits, and terms and conditions of
employment required by such agreements or relationships, except that (i)
participation in the Tenneco Inc. Employee Stock Purchase Plan will be suspended
as provided in Section 4.06 hereof, and (ii) the provisions of any defined
contribution plan calling for contributions or investment in the common stock of
Tenneco Inc. shall be amended in accordance with Section 4.05 hereof.
3.05 Limitation on Obligations. Each of the parties hereto hereby agrees
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and acknowledges that nothing contained in this Agreement, including its
obligation to continue its applicable collective bargaining agreements or
relationships, shall be construed to restrict any right it, or any other member
of its respective Group, may have to terminate, renegotiate, reopen or otherwise
seek changes in any of its collective bargaining agreements or relationships.
SECTION 4. United States Salaried Pension and Thrift Benefits and Stock
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Purchase Plan.
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4.01 Tenneco Retirement Plan. Effective as of the Impact Date (as defined
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below), Automotive Company and all other members of that Group shall cease to be
sponsors of the Tenneco Retirement Plan (the "TRP"), and Packaging Company shall
become the sponsor of the TRP; provided that Packaging's sponsorship shall be
subject to the terms and conditions of the TRP. The TRP shall retain liability
for all pension benefits accrued by the Active Employees and Former Employees of
the Automotive Group who are or were formerly participants in the TRP through
the last day of the calendar month in which the Distribution Date occurs (the
"Impact Date"). Following the Distribution Date, Automotive Group will have no
liability, contingent or otherwise, with respect to the TRP, including without
limitation any liability for benefits accrued through the Impact Date (including
early retirement benefits and related subsidies, as to which all age, service
and participation requirements were satisfied on or before
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the Impact Date) for Active Employees or Former Employees of the Automotive
Group, and Packaging Company shall assume or retain, as the case may be, all
such liabilities.
Packaging Company shall succeed Tenneco Inc. under and with respect to
the Tenneco General Employee Benefit Trust (the "GEBT"). As soon as practicable
after the Distribution Date, Packaging Company shall cause the GEBT to transfer
to a trustee designated by Automotive Company the assets of the GEBT
attributable to the Automotive Group's hourly defined benefit pension plans.
Such transfer shall be in cash, except that Tenneco Common Stock may be
transferred, subject to the limitations of applicable law, and the assets
managed by one of more managers may be transferred.
Packaging Company shall create an investment committee (the "New
Committee") to manage the assets of the GEBT, equivalent to the committee which
performed those functions as of the Distribution Date (the "Old Committee"), and
the New Committee shall have as members, the members of the Old Committee as of
the Distribution Date until the earlier of March 31, 2000 or the date such
persons die, resign or are removed in accordance with rules equivalent to the
rules applicable to the Old Committee.
4.02 Amendment of TRP. The sponsor of the TRP shall amend the TRP to (a)
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"freeze" the benefit accruals of the Active Employees of the Automotive Group as
of the Impact Date, and (b) provide that all benefits accrued as of the Impact
Date by the Active Employees of the Automotive Group shall be fully vested and
non-forfeitable (as will the benefits to Former Employees of the Automotive
Group to the extent required by applicable laws) and the sponsor shall inform,
in writing, as soon as practicable following the Impact Date, each such Employee
of his or her accrued benefits under the TRP as of the Impact Date.
4.03 No Credit for Post-Impact Date Service. Except as may be required by
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law, the TRP shall not be required to count service with any entity other than a
member of the Packaging Group after the Impact Date for any purpose, nor shall
there be any requirement that Active Employees of the Automotive Group be
permitted to "grow into" normal or early retirement benefits under the TRP based
upon events occurring after the Impact Date.
4.04 Tenneco Thrift Plan. The active participation in the Tenneco Thrift
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Plan and the Tenneco Thrift Plan for Hourly Employees (collectively the "Tenneco
DC Plan") by persons other than the Active Employees of the Packaging Group
shall cease effective as of January 31, 2000 (the "Transition Date"). In
addition, Automotive Company and all other members of that Group shall cease to
be sponsors of the Tenneco DC Plan as of the Transition Date, and Packaging
Company shall become the sponsor of the Tenneco DC Plan from and after the
Transition Date. Automotive Group shall bear the costs of employer matching
contributions attributable to the participation of its employees in the Tenneco
DC Plan for the period commencing with the Distribution Date.
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4.05 Establishment of DC Plans.
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(a) Automotive Thrift Plan. Automotive Company shall (and/or cause its
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respective Group members to) establish or make available on or with effect from
the Transition Date, one or more defined contribution plans for the benefit of
its Active Employees (collectively, the "Automotive Thrift Plan") which may,
subject to Section 4.05(d) hereof, be subject to amendment or termination by
Automotive Company or the applicable member of the Automotive Group.
(b) Transfer of Account Balances to Automotive Thrift Plan. As soon as
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practicable following the Transition Date, Packaging Company shall cause the
Tenneco DC Plan to transfer to the Automotive Thrift Plan, the account balances
of each Active Employee of the Automotive Group and each Former Employee of the
Automotive Group with respect to whom the Tenneco DC Plan maintains an account
as of the close of business on the Transition Date. Such transfers shall be in
cash, except that the Automotive Thrift Plan will accept the following: (i)
Tenneco Common Stock, Packaging Common Stock received in the Distribution, stock
of Newport News Shipbuilding Inc. (if any remains in such account balances) and
stock of El Paso Energy Corporation (if any remains in such account balances)
for the Tenneco Common Stock fund portion of such account balances; (ii) amounts
credited to the Tenneco DC Plan which are held in mutual funds which are also
investment media in the Automotive Thrift Plan; and (iii) participant loans.
(c) Investment Options. Tenneco Common Stock shall not be offered as
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an investment option with respect to contributions made after the Distribution
Date by the Packaging Group employees to the thrift plans of the Packaging
Group. The sponsor of each of the Tenneco DC Plan and the Automotive Thrift Plan
shall cause the plan to afford each participant therein, for a period of at
least 90 days following the Distribution Date, an election to sell the Common
Stock of the entities held in the plan's stock fund which does not directly or
indirectly employ him or her immediately following the Distribution Date. From
and after the Distribution Date employer stock contributions with respect to
Packaging Group employees shall be in Packaging Common Stock and employer stock
contributions with respect to the Automotive Group employees shall be in Tenneco
Common Stock.
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(d) Certain Automotive Obligations. The Automotive Company shall (and
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shall cause each member of its Group over which it has legal or effective
direct or indirect control to) sponsor, establish, administer, maintain,
amend and otherwise deal with one or more defined contribution pension
plans (including the Automotive Thrift Plan) in a manner consistent with
any and all representations which Tenneco or its affiliates at the time
makes or has made to the Internal Revenue Service, including without
limitation, any actions that may be required to increase and/or maintain
the amount of Tenneco Common Stock held by such plans.
4.06 Tenneco Stock Purchase Plan. Participation in the Tenneco Inc.
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Employee Stock Purchase Plan will be suspended effective June 30, 1999 and will
not resume prior to the Distribution Date.
SECTION 5. Pension Matters Outside the United States. With respect to the
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business and operations of each Group in jurisdictions outside the United
States, each of the parties hereto shall (and, as applicable, shall cause each
other member of its Group over which it has direct or indirect legal or
effective control to) assume and retain any and all pension liabilities and
attendant plans and their assets related to its Active Employees and Former
Employees.
SECTION 6. Executive and Directors' Compensation.
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6.01 Tenneco Supplemental Executive Retirement Plan. Effective upon the
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Distribution Date, Tenneco and Packaging Company shall cause the Tenneco Inc.
Supplemental Executive Retirement Plan and the Tenneco Inc. Pilots' Supplemental
Retirement Plan (collectively, the "SERP") to be amended to cause the separation
of participation in, and liabilities under, the SERP as follows: (1) Packaging
Company shall (a) become the sponsor of the SERP with respect to all Active
Employees and Former Employees of its respective Group and, subject to the terms
of the 1996 Benefits Agreement (as defined below), all active and former
employees of the Shipbuilding Group and Energy Group (each as defined below),
and all other participants in the SERP not specifically allocated to Automotive
Company below and (b) assume and agree to pay, perform and discharge all
liabilities under the SERP with respect to such employees, whether accrued
before, on or after the Distribution Date; and (2) Automotive Company shall
continue sponsorship of the SERP with respect to all Active Employees and Former
Employees of its respective Group and shall assume and agree to pay, perform and
discharge all liabilities under the SERP with respect to such employees, whether
accrued before, on or after the Distribution Date. All accrued benefits under
the SERP as of the close of business on the Distribution Date shall be fully
vested and nonforfeitable; provided, that this rule shall not be applied to
grant an employee an amount equal to the benefit he or she has accrued under the
Tenneco Retirement Plan but only the amount provided by the SERP, nor shall it
be applied to alter or diminish any service requirement contained in any special
appendix or other document providing benefits in addition to those called for by
the SERP generally.
6.01A Pullman Supplemental Pension Benefits. Notwithstanding any other
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provision hereof, the Automotive Company shall retain and succeed to any and all
liabilities for non-qualified defined benefit pension benefits for Active
Employees and Former Employees of its
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respective Group who were formerly employed by The Pullman Company, Peabody
International Corporation or any predecessor of either, including without
limitation, benefits under the Peabody Special Benefits Plan, the Peabody
Supplemental Plan and the Pullman Supplemental Plan (the "Pullman Plans").
Automotive Company shall retain sponsorship of the rabbi trust created in
connection with the Pullman Plans.
6.02 Tenneco Inc. Deferred Compensation Plan. The participation of the
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Active Employees and Former Employees of the Automotive Group in the Tenneco
Inc. Deferred Compensation Plan (the "DC Plan") shall cease as of the
Distribution Date. As of the Distribution Date, (i) Automotive Company shall
assume the liability for the accounts of its Active Employees and Former
Employees in the DC Plan, (ii) Packaging Company shall assume the liability for
the accounts of the Active Employees and Former Employees of the Packaging Group
in the DC Plan, and (iii) Packaging Company shall succeed to sponsorship of the
DC Plan. The Automotive Group Active Employee's or Former Employee's account in
the DC Plan as of the Distribution Date shall become the opening balance of such
Active Employee's or Former Employee's account in a nonqualified deferred
compensation plan created, as of the Distribution Date by the Automotive Group.
Such opening balances shall become fully vested as of the close of business on
the Distribution Date.
6.03 Tenneco Benefits Protection Program and Rabbi Trust. The Tenneco Inc.
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Benefits Protection Trust (the "BPT") and the Tenneco Inc. Rabbi Trust
(collectively the "Trusts") shall be terminated prior to the Distribution, and
neither Packaging Company nor Automotive Company shall have any liability with
respect to either of the Trusts or any of the terms of either.
6.04 Tenneco Restricted Stock. [TO COME]
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6.05 Stock Options. Effective as of the Distribution Date, Tenneco shall
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cause all outstanding options to purchase Tenneco Common Stock held by employees
other than (i) Active Employees and Former Employees of Automotive Group, (ii)
employees of Packaging Corporation of America and (iii) employees of the folding
carton division (or persons who have succeeded to the rights of any persons
described in (i), (ii) or (iii) with respect to options to purchase Tenneco
Common Stock) to be replaced by options to purchase Packaging Common Stock.
Subject to the requirements of applicable law and generally accepted accounting
principles, the number, exercise price and other terms of such replacement
options shall be determined in a manner consistent with that described in
Exhibit A attached hereto. Options held by persons described in clause (ii) or
(iii) above, not exercised prior to the Distribution Date shall be canceled
effective as of the Distribution Date.
Options held by Active Employees and Former Employees of Automotive
Group (or persons who have succeeded to the rights of such persons) shall,
unless exercised prior to the Distribution Date, remain outstanding as adjusted
as provided herein after the Distribution Date, subject to the requirements of
applicable law and generally accepted accounting principles. The parties
recognize that in some jurisdictions, Automotive employees were granted rights
other than stock options in lieu of the Special Stock Option Award of 100
options per grantee, and in
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those jurisdictions, the outstanding rights will be adjusted comparably. The
Automotive Company options and rights shall have the same terms and conditions
as prior to the Distribution Date except that the number of options and the
option exercise price shall be adjusted as described in Exhibit A attached
hereto.
To the extent that the exercisability of options to purchase Tenneco
Common Stock currently is subject to the attainment of share price hurdles,
those hurdles will also be adjusted with respect to both options to purchase
Packaging Common Stock and Tenneco Common Stock.
Tenneco may grant special pre-Distribution Date exercisability with
respect to some or all options which are not otherwise exercisable.
6.06 Directors. Stock options held by directors of Tenneco and/or Packaging
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Company shall be treated as provided in Section 6.05 hereof as if the director
in question were an employee. Notwithstanding the foregoing, stock options held
by directors who do not continue on the board of Packaging Company or Automotive
Company will be replaced by Packaging Company options in accordance with Section
6.05 hereof. Except as provided in Section 6.04 hereof, the 1997 Tenneco Inc.
Board of Directors Deferred Compensation Plan shall be treated as provided in
Section 6.02 hereof, and the directors' accounts shall be treated as if the
directors were employees. If an individual becomes a director of both Packaging
Company and Automotive Company immediately after the Distribution Date, his or
her options and deferred compensation account shall be split and maintained
one-half by Packaging Company and one-half by Automotive Company.
Any continuing liabilities under the terminated Outside Directors'
Retirement Plan including the obligation to grant restricted stock in lieu of
such plan shall be retained and performed by Automotive Company.
SECTION 7. Welfare Plans.
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7.01 Tenneco Salaried Welfare Plans. Effective on December 31, 1999, each
member of the Automotive Group shall cease to be a sponsor of the Tenneco
Salaried Welfare Plans, Active Employees and Former Employees of the Automotive
Group shall cease to participate in the Tenneco Salaried Welfare Plans as of
that date, and Packaging Company shall serve as the sponsor of the Tenneco
Salaried Welfare Plans from and after that date. Automotive Company shall
reimburse Packaging Company for all claims paid with respect to the
participation of its employees in such plans.
SECTION 8. General.
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8.01 Post-Distribution Administration of Plans. The parties hereto agree to
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administer all plans consistently herewith, and to the extent necessary to amend
plans accordingly.
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8.02 Cost and Expenses. Except as otherwise expressly provided herein, each
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party shall bear all costs and expenses, including but not limited to legal,
administrative and actuarial fees, incurred in the design, drafting,
administration and implementation of any and all plans and compensation
structures which it enables or creates and the amendment of its existing plans
or compensation structures.
8.03 RESERVED
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8.04 Human Resources Support Services. Subject to the rules set forth
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below, Packaging Company shall provide (or have provided by TBS or otherwise to)
Automotive Company or its Affiliates the following corporate-wide human resource
support services that are currently being provided to the Automotive Company
and/or members of the Automotive Group:
a. Benefits administration by Xxxxxx & Associates LLC
and other outside administrators. Packaging Company
will provide management of the services that are
outsourced and continue benefits administration
services currently being provided by TBS.
b. Assistance in executive compensation plans, including
stock options, restricted stock, performance shares,
deferred compensation, director's stock options, and
director's restricted stock.
c. Generation of EEO reports.
d. Packaging Company will prepare, process and disburse
invoices and check requests for Prudential
relocations or cause such services to be provided.
Packaging Company shall provide the services described in this Section 8.04
for the period from the Distribution Date through the earlier of (i) December
31, 2000 and (ii) the date as of which Automotive Company no longer desires such
services, provided that Automotive Company shall have given Packaging Company at
least 60 days' advance written notice of such date.
In consideration for such services, other than third party fees as
described in the next sentence, Automotive Company shall pay Packaging Company
per . Any third party fees for such services for outsourced
providers utilized with respect to the Automotive Group as of the date hereof,
or for new outsourced providers selected with prior consent of Automotive
Company (which consent shall not be unreasonably withheld or delayed), will be
billed directly by the third party to Automotive Company; provided, that if the
third party refuses to xxxx Automotive Company directly, Automotive Company
shall reimburse Packaging Group for all amounts which it pays such third party
on behalf of Automotive Company. Reference is made to the Transition Services
Agreement between Tenneco and Packaging Company of even date herewith (the
"Transition Services Agreement"). The services described in this Section 8.04
shall be considered Packaging Services (as such term is defined in the
Transition Services Agreement) for purposes of Sections 2.3, 3, 4, 5 and 7 of
the Transition
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Services Agreement and shall be provided in accordance with and subject to the
terms and conditions thereof. The provisions of Sections 4.2, 4.3, 4.4 and 7 of
the Transition Services Agreement shall survive termination of the provision of
services hereunder.
SECTION 9. Miscellaneous.
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9.01 1996 Benefits Agreement. Effective on the Distribution Date, Tenneco
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shall assign to Packaging Company all of its rights under, and Packaging Company
shall assume and agree to pay, perform and discharge when due (and will
thereafter indemnify each member of the Automotive Group against) all
obligations, liabilities and responsibilities of Industrial Company under, the
certain Benefits Agreement (the "1996 Benefits Agreement"), dated as of December
11, 1996, by and among New Tenneco Inc., Newport News Shipbuilding Inc. and the
company then known as Tenneco Inc. The rights Tenneco shall assign to Packaging
Company under the 1996 Benefits Agreement shall include, without limitation, the
right to receive and retain all reimbursements for the payment of SERP benefits
to employees and former employees of the Shipbuilding Group and Energy Group
(capitalized terms used in this Section 9.01 and in Section 6.01 and not
otherwise defined in this Agreement shall have the meanings ascribed to such
terms in the 1996 Benefits Agreement).
9.02 Complete Agreement; Construction. This Agreement and the Distribution
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Agreement shall constitute the entire agreement between the parties with respect
to the subject matter hereof and shall supersede all previous negotiations,
commitments and writings with respect to such subject matter. Notwithstanding
any other provisions in this Agreement or the Distribution Agreement to the
contrary, in the event and to the extent that there shall be a conflict between
the provisions of this Agreement and the provisions of the Distribution
Agreement or any other Ancillary Agreement, this Agreement shall
control.
9.03 Other Ancillary Agreements. This Agreement is not intended to address,
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and should not be interpreted to address, the matters specifically and expressly
covered by any of the other Ancillary Agreements.
9.04 Counterparts. This Agreement may be executed in one or more
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counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
9.05 Survival of Agreements. Except as otherwise expressly provided herein,
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all covenants and agreements of the parties contained in this Agreement shall
survive the Distribution Date.
9.06 Notices. All notices and other communications to a party hereunder
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shall be in writing and hand delivered or mailed by registered or certified mail
(return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to such party (and
will be deemed given on the date on which the notice is received by such party)
at the address for such party set forth in the Distribution Agreement (or at
such other
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address for the party as the party shall, from time to time, specify by like
notice to the other parties).
9.07 Waivers. The failure of any party hereto to require strict performance
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by any other party of any provision in this Agreement will not waive or diminish
the party's right to demand strict performance thereafter of that or any other
provision hereof.
9.08 Amendments. This Agreement may not be modified or amended except by an
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agreement in writing signed by the parties hereto.
9.09 Assignment. This Agreement shall be assignable in whole in connection
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with a merger or consolidation or the sale of all or substantially all the
assets of a party hereto so long as the resulting, surviving or transferee
entity assumes all the obligations of the relevant party hereto by operation of
law or pursuant to an agreement in form and substance reasonably satisfactory to
the other parties to this Agreement. Otherwise this Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any party hereto
without the prior written consent of the other (which consent shall not be
unreasonably withheld or delayed), and any attempt to assign any rights or
obligations arising under this Agreement without such consent shall be void.
9.10 Successors and Assigns. The provisions of this Agreement shall be
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binding upon, inure to the benefit of and be enforceable by the parties and
their respective permitted successors and permitted assigns.
9.11 No Third Party Beneficiaries. This Agreement is solely for the benefit
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of the parties hereto and the members of their respective Groups, after giving
effect to the Distribution, and should not be deemed to confer upon other third
parties any remedy, claim, liability, right of reimbursement, claim of action or
other right in excess of those existing without reference to this
Agreement.
9.12 Attorney Fees. A party determined to be in breach of this Agreement
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shall, on demand, indemnify and hold harmless the other party hereto for and
against all out-of-pocket expenses, including, without limitation, reasonable
legal fees, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement; provided, that such determination
shall be effective only when made by the court having final jurisdiction of the
matter and the period for appeal from that court, if any, shall have expired.
The payment of such expenses is in addition to any other relief to which such
other party may be entitled hereunder or otherwise.
9.13 Title and Headings. Titles and headings to sections herein are
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inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
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9.14 Governing Law. ALL QUESTIONS AND/OR DISPUTES CONCERNING THE
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CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS
HERETO SHALL BE GOVERNED BY THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF
THE STATE OF DELAWARE. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
AND UNCONDITIONALLY (i) AGREES TO BE SUBJECT TO, AND HEREBY CONSENTS AND SUBMITS
TO, THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND THE FEDERAL
COURTS SITTING IN THE STATE OF DELAWARE, (ii) TO THE EXTENT SUCH PARTY IS NOT
OTHERWISE SUBJECT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE, HEREBY
APPOINTS THE CORPORATION TRUST COMPANY, AS SUCH PARTY'S AGENT IN THE STATE OF
DELAWARE FOR ACCEPTANCE OF LEGAL PROCESS AND (iii) AGREES THAT SERVICE MADE ON
ANY SUCH AGENT SET FORTH IN (ii) ABOVE SHALL HAVE THE SAME LEGAL FORCE AND
EFFECT AS IF SERVED UPON SUCH PARTY PERSONALLY WITHIN THE STATE OF DELAWARE.
9.15 Severability. In the event any one or more of the provisions contained
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in this Agreement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
9.16 Subsidiaries. Each of the parties hereto shall cause to be performed,
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and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party
which is contemplated to be a Subsidiary of such party on and after the
Distribution Date.
-12-
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TENNECO INC.
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
----------------------------------------
TENNECO PACKAGING INC. (to be renamed)
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
-13-
14
EXHIBIT A
OPTION CONVERSION FORMULA*/
Formula
-------
Original option exercise price x New = New
------------------------------
Original market price of Tenneco market price of Tenneco option exercise price
Common Stock**/ Common Stock or Packaging ("New Option Price")
Common Stock, as applicable***/
No. of shares underlying original option x original option exercise price = Number of shares
-------------------------------------------------------------------------
New Option Price underlying new option
Assume
------
1,000 No. of shares Tenneco Common Stock underlying original option
$ 45.31 Original option exercise price
$ 25.00 Original market price of Tenneco Common Stock
$ 7.00 New market price for Tenneco Common Stock
$ 18.00 New market price for Packaging Common Stock
Adjusted Tenneco Options (for Automotive Group employees)
------------------------
$45.31 x $7.00 = $12.69 New Option Price
------
$25.00
1,000 x $45.31 = 3,571 shares Tenneco Common Stock
-------------- underlying new option
$12.69
----------------------------
*/ May be adjusted, as necessary, to reflect a reverse stock split by Tenneco
which becomes effective after the Distribution.
**/ Based on the closing sale price of the "full value" Tenneco Common Stock
(i.e. not giving effect to the declaration of any dividend) on the New York
Stock Exchange ("NYSE") on the day immediately prior to the Distribution Date.
***/ For the new market price of Tenneco Common Stock: Based on the closing sale
price of Tenneco Common Stock "without due bills" on the day immediately prior
to the Distribution Date, unless "when issued" trading for Tenneco Automotive
Inc. Common Stock exists on such date, in which case the new market price of the
Tenneco Common Stock would be based on the closing "when issued" market sale
price of Tenneco Automotive Inc. Common Stock on such date. For the new market
price of Packaging Common Stock: Based on the closing "when issued" market sale
price of Packaging Common Stock on the day immediately prior to the Distribution
Date, as applicable.
-14-
15
New Packaging Company Options (for Packaging Group employees)
-----------------------------
$45.31 x $18.00 = $32.62 New Option Price
------
$25.00
1,000 x $45.31 = 1,389 shares Packaging Common Stock
-------------- underlying new option
$32.62
-15-
