EXHIBIT 99.3
TENNECO AUTOMOTIVE INC. 2002 LONG-TERM INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT
(Non-Employee Directors)
(7 Year Option Term)
THIS AWARD AGREEMENT (the "Agreement") is made and entered into as of
the [___] day of [________], [___] by and between Tenneco Automotive Inc., a
Delaware corporation (the "Company"), and [____] (the "Participant").
WITNESSETH:
WHEREAS, the Board of Directors of the Company has adopted the Tenneco
Automotive Inc. 2002 Long-Term Incentive Plan (as the same may be amended from
time to time in accordance with its terms, the "Plan") (capitalized terms used
and not otherwise defined herein shall have the meanings given thereto in the
Plan, a copy of which is attached hereto and incorporated by reference herein);
and
WHEREAS, pursuant to the authority vested in it under the Plan, the
Compensation/Nominating/Governance Committee of the Board of Directors of the
Company (the "Committee") has approved the granting of the Award hereinafter
described to the Participant.
NOW, THEREFORE, the Company and the Participant hereby agree as
follows:
1. Award of Option. The Company hereby grants the Participant an option
(the "Option"), which shall be an NQO (a non-qualified stock option), to
purchase [_______] shares (the "Option Shares") of Common Stock of the Company
at the Exercise Price of [$FAIR MARKET VALUE] per share, subject to adjustment
in accordance with the Plan, on the terms and subject to the conditions set
forth herein and in the Plan (the "Award Date" for the Option shall be the date
of this Agreement).
2. Term of Option. Except in the event of the earlier lapse or
termination of the Option in accordance with this Agreement or the Plan, as to
all Option Shares for which the Option has not theretofore been exercised, the
Option shall be in effect during the period commencing on the Award Date and
until 3:00 p.m., Lake Forest, Illinois, time on the day that immediately
precedes the seventh anniversary of the date of the Award Date; provided
however, that the Participant's right to exercise the Option and purchase the
Option Shares shall be subject to the conditions set forth in this Agreement.
3. Conditions of Exercise.
(a) The Option shall vest, and the Options Shares shall become
available for purchase as to all such Option Shares for which the
Option has not theretofore been exercised, on the date which is six
months after the Award Date.
(b) Other Limitations and Provisions.
(i) Notwithstanding the foregoing, all Option Shares for which
the Option has not theretofore been exercised shall become available
for purchase if the participant's service as a director of the Company
terminates by (A) Retirement, (B) Total Disability of the Participant,
or (C) death of the Participant while a director of the Company;
provided however, the Committee may allow the Participant to exercise
the Option at any time, in the Committee's sole discretion. For
purposes hereof, the term "Retirement" means termination of service as
a director after the Participant has met the eligibility requirements
for early or normal retirement as established in
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accordance with the retirement plan of the Company at the time such
termination occurs (determined as if the Participant were an employee
of the Company at the time) and the term "Total Disability" means
permanent and total disability as determined under the rules and
guidelines established by the Company in order to qualify for long-term
disability coverage under the Company's long-term disability plan in
effect at the time of such determination.
(ii) At any time the Option is in effect and Option Shares are
available for purchase thereunder, the Option may be exercised in whole
or in part.
4. Manner of Exercise. Each Option shall be exercisable in whole or in
part, and any such exercise shall be deemed to have occurred on the latest of
(i) the date of exercise designated in the written notice referred to in
subparagraph (a) below, (ii) if the date so designated is not a business day,
the first business day following such date, or (iii) the earliest business day
by which the Company has received all of the following:
(a) Written notice, in such form as the Company may require,
designating, among other things, the date of exercise and the number of Option
Shares to be purchased.
(b) Payment of the aggregate Exercise Price for the Option Shares to be
purchased with respect to such exercise by delivery of:
(i) cash, a personal check or bank draft; or
(ii) at the option of the Participant, shares of Common
Stock having a Fair Market Value on the date of
exercise equal to such aggregate Exercise Price;
provided however, that the shares that are tendered
must have been held by the Participant for at least
six (6) months prior to their tender to satisfy the
Exercise Price or must have been purchased on the
open market; or
(iii) a combination of the methods described in clauses (i)
and (ii) above; or
(iv) payment pursuant to any arrangement that the Company
maintains to enable the Participant to elect to pay
the Exercise Price upon the exercise of the Option by
irrevocably authorizing a third party to sell shares
of Common Stock (or a sufficient portion of the
shares of Common Stock) acquired upon exercise of the
Option and remit to the Company a sufficient portion
of the sale proceeds to pay the entire Exercise Price
and any tax withholding resulting from such exercise;
or
(v) such other form of payment as the Committee shall
authorize on or before the exercise date.
(c) Any other documentation that the Company may reasonably require.
5. Delivery by the Company. As promptly as practicable after receipt of
all items described in Paragraph 4, the Company shall deliver to the Participant
certificates issued in Participant's name for the number of shares of Common
Stock purchased by the Participant (and not sold or withheld as contemplated by
Paragraph 4) upon exercise of all or any applicable portion of the Option.
6. Lapse of Options. Unless otherwise determined by the Committee in
its sole discretion, the Option shall lapse at (and shall not be exercisable
after) the time specified below:
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(a) If the Participant's service as a director of the Company
terminates by (A) Retirement, (B) Total Disability of the Participant, or (C)
death of the Participant while a director of the Company, the Option shall lapse
at 3:00 p.m. Lake Forest, Illinois, time on the third anniversary of the date of
such termination of employment (subject to earlier termination pursuant to
Paragraph 2 hereof or as otherwise provided in the Plan); and
(b) If the Participant's service as a director of the Company
terminates for any reason not specified in Paragraph 6(a), the Option shall
lapse immediately upon such termination unless the Committee determines
otherwise.
7. Adjustments. The Option granted hereby, the number and kind of
shares subject to the Option and the purchase price per share shall be subject
to adjustments by the Committee in accordance with Section 5.2(f) of the Plan.
8. Taxes. All distributions under the Plan, including any distribution
in respect of this Option, are subject to withholding of all applicable taxes,
and the delivery of any shares or other benefits under the Plan or this Option
is conditioned on satisfaction of the applicable tax withholding obligations.
Except as otherwise provided by the Committee, such withholding obligations may
be satisfied (a) through cash payment by the Participant, (b) through the
surrender of shares of Common Stock which the Participant already owns, or (c)
through the surrender of shares of Common Stock to which the Participant is
otherwise entitled under the Plan; provided, however, that such shares of Common
Stock under this paragraph (c) may be used to satisfy not more than the
Company's minimum statutory withholding obligation (based on minimum statutory
withholding rates for Federal and state tax purposes, including without
limitation payroll taxes, that are applicable to such supplemental taxable
income).
9. Rights as Stockholder. The Participant shall have no rights as a
stockholder with respect to any shares of Common Stock subject to the Option
until and unless the Participant becomes the stockholder of record of such
shares. Except as provided in Paragraph 7, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date on
which the Participant becomes such shareholder of record.
10. Employment or Service. Neither the granting of the Option or any
term or provision of this Agreement shall constitute or be evidence of any
understanding, expressed or implied, on the part of the Company or any of its
Subsidiaries to employ the Participant or retain the Participant in service as a
director for any period of time.
11. Nontransferability. During the Participant's lifetime, the Options
shall not be transferable (voluntarily or involuntarily) and are exercisable
only by the Participant or, during his disability, by his legal representative.
The Options shall pass, upon death, to the beneficiary designated by the
Participant on a form provided by, and filed prior to death with, the Company.
If no designation is made or if the designated beneficiary does not survive the
Participant's death, the Option shall pass by will or the laws of descent and
distribution. Following the Participant's death, the Option, if exercisable in
accordance with this Agreement, may be exercised by the person to whom such
option or right passes according to the foregoing or by such person's estate,
heirs or devisees.
12. Amendment. This Agreement may be amended, without the consent of
the Participant, as follows:
(a) The Agreement may be cancelled or amended by the Committee at any
time if the Committee determines that cancellation or amendment is necessary or
advisable because of any change or clarification after the Award Date of any
applicable law or governmental regulation, including any applicable federal or
state securities law; and
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(b) Subject to any required approval by Company stockholders, the
Committee may amend or cancel this Agreement at any time for reasons other than
those stated in subparagraph (a) above; provided, that no amendment or
cancellation may, in the absence of written consent to the change by the
Participant (or, if the Participant is not then living, the affected
beneficiary), adversely affect the rights of the Participant or any beneficiary
under this Award prior to the date such amendment is adopted by the Board (it
being understood that adjustments pursuant to Section 5.2(f) of the Plan shall
not be subject to the foregoing limitations).
13. Miscellaneous.
(a) Headings. The headings in this Agreement are inserted for
convenience only and shall have no significance in the interpretation of this
Agreement.
(b) Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the transactions contemplated hereunder and
supersedes any prior arrangements or understandings with respect thereto,
written or oral. No agreements or representations, oral or otherwise expressed
or implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement (including the Plan).
(c) Successors. The terms and conditions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representative and successors.
(d) Governing Documents and Law. In the event of any inconsistency
between the terms of this Agreement and the Plan, the terms of the Plan shall
control. The validity, construction and effect of this Agreement, and any
actions taken or relating to this Agreement, shall be determined in accordance
with the laws of the State of Illinois and applicable federal law.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the date and year first above written.
ATTEST:
ACCEPTED: TENNECO AUTOMOTIVE INC.
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Type or Print Legal Name (Date) Sr. Vice President
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Signature Corporate Secretary
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Social Security Number or National ID
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Street Address
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City/State/Zip/Country
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