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Exhibit 10.24
Tenneco Automotive [TENNECO LOGO]
500 North Field Drive
Lake Forest, IL 60045
Tel 847-482-5000
Fax 847-482-5940
July 27, 2000
PERSONAL AND CONFIDENTIAL
Mr. Mark P. Frissora
1170 Elm Tree Road
Lake Forest, IL 60045
Dear Mr. Frissora:
On behalf of Tenneco Automotive Inc. (the "Company"), I am pleased to set
forth and confirm the terms and conditions of your continued service as Chief
Executive Officer of the Company:
1. COMMENCEMENT. Except as specifically provided herein, the terms and
conditions hereof will be effective immediately upon the signing hereof.
You will report to and serve at the pleasure of the Board of Directors of
the Company (the Board ).
2. BASE SALARY. Effective on January 1, 2000, you will be paid a base
salary of $640,000.00 per year, which will be subject to such increases as
may from time to time be approved by the Board or such committee of the
Board to which such power has been delegated (the "Committee"), payable
according to the regular pay schedule for salaried employees.
3. ANNUAL BONUS. You will be eligible for an annual performance bonus.
Commencing with calendar year 2000, your annual target bonus will be, at
least, $590,000.00 subject to fulfillment of performance goals as
determined by the Board or Committee.
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Mr. Mark P. Frissora
July 27, 2000
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4. PERFORMANCE UNITS, STOCK OPTIONS, RESTRICTED STOCK AND STOCK
EQUIVALENT UNITS. At the time of the spin-off of Pactiv Corporation
(formerly Tenneco Packaging Inc.) by the Company (the "Spin-off"), you were
granted 75,000 performance units under the Company's Stock Ownership Plan
(the Plan ), payable in shares of the Company's stock in January 2003,
subject to fulfillment of performance goals as determined by the Committee
and the other terms of the grant determined by the Committee. At the time
of the Spin-off, you were granted under the Plan an option to purchase
375,000 shares of Company stock, subject to terms and conditions set by the
Committee under the Plan. You have received a restricted stock grant of
68,385 shares and one-third of such restricted stock will vest on each of
the first three anniversaries of the Spin-off if you continue to be
employed by the Company on such anniversary. The number of shares set forth
above with respect to the performance unit, restricted stock and stock
option awards is after giving effect to the one-for-five reverse stock
split completed in November 1999. In January 2000 (effective November 5,
1999), you were granted 150,000 stock equivalent units under the Plan for
the one-year period ending December 31, 2000. This grant is payable in
cash, subject to and in accordance with the terms and conditions of the
grant determined by the Committee. The grants described herein are without
prejudice to your receipt of additional grants as determined by the Board
or the Committee under the Plan and/or any other similar benefit plan or
compensation program or arrangement of the Company. The vesting terms and
the other conditions, events and circumstances under which you will be
entitled to receive the Performance Units, Stock Options, Restricted Stock
and Stock Equivalent Units shall be the terms, conditions, events and
circumstances set forth in your grant agreements for the Performance Units,
Stock Options, Restricted Stock and Stock Equivalent Units as of the date
of this letter.
5. EXECUTIVE BENEFIT PLANS. You will be eligible to participate in all
employee benefit plans applicable to salaried employees generally and all
executive compensation structures applicable to senior executives
generally.
6. PERQUISITE ALLOWANCE. You will receive an annual perquisites allowance
of $40,000.00 which you may receive in either cash, perquisites, or a
combination at your election.
7. VACATION. You will receive four weeks vacation (with pay) per year.
8. KEY EXECUTIVE PENSION PLAN AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN.
You will be a participant in the Company's Key Executive Pension Plan and
Supplemental Executive Retirement Plan (the "SERP"), which includes your
SERP special benefit. The vesting terms and other conditions, events and
circumstances under which you are entitled to receive benefits under the
SERP, including your SERP special benefit, and the Key Executive Pension
Plan shall be the terms, conditions, events and circumstances set forth in
such plans as of the date of this letter.
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Mr. Mark P. Frissora
July 27, 2000
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9. CHANGE IN CONTROL. You will participate in the Company's Change in
Control Severance Benefit Plan for Key Executives (the "Change in Control
Plan"); provided, that your cash severance benefit under Section 3A or 3B,
as applicable, of the Change in Control Plan will be 3 times the total of
(i) your annual base salary in effect immediately prior to the Change in
Control (as defined in the Change in Control Plan), plus (ii) the higher of
(a) your highest target bonus over the last 3 years of your employment, and
(b) the average of your annual awards under any bonus plan of the Company
or its subsidiaries, including any special awards, for the last three years
of your employment (or such shorter period as you have been employed by the
Company or its subsidiaries); and provided further that all of your
outstanding awards under the Plan or any other similar benefit plan or
compensation arrangement or program of the Company or its subsidiaries will
be treated as exercisable, earned at target and vested, as the case may be,
immediately upon the Change in Control (as that term is currently defined
in the Change in Control Plan) and shall be paid to you or otherwise
treated in the manner currently specified in, and in accordance with the
current terms of, the Change in Control Plan.
10. SEVERANCE. Subject to the provisions of paragraph 9, if your
employment is terminated other than by you voluntarily or for death,
disability, or non-performance of your duties, subject to your execution of
a general release and such other documents as the Company may reasonably
request: (a) you will be paid a severance benefit in an amount equal to two
times the total of your then current annual base salary plus your bonus for
the immediately preceding year; (b) subject to Board and/or Committee
approval, all your outstanding awards under the Plan (or any other similar
benefit plan or compensation program or arrangement of the Company or its
subsidiaries) may vest and/or become exercisable on the date of your
termination; (c) vested stock options you hold will remain exercisable for
a period of not less than 90 days from your termination; and (d) the
Company will continue to provide to you, for one year following the date of
the termination of your employment, health and welfare benefits amounting
to no less than the amount of health and welfare benefits you receive at
the time your employment commences. COBRA continuation coverage will begin
following this one year period.
11. TAX GROSS-UP PAYMENT. If any portion of the payments described herein,
and/or any other payments, shall be subject to the tax imposed by Section
4999 of the Internal Revenue Code (the portion of such payments which are
subject to the Excise Tax being referred to herein as the "Payments"), the
Company shall pay you, not later than the 30th day following the date you
become subject to the Excise Tax, an additional amount (the "Gross-Up
Payment") such that the net amount retained by you after deduction of the
Excise Tax on such Payments and all federal, state, and local income tax,
interest and penalties, and Excise Tax on the Gross-Up Payment, shall be
equal to the amount which would have been retained by you had the payments
not been subject to the Excise Tax.
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Mr. Mark P. Frissora
July 27, 2000
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12. GOVERNING LAW. This letter agreement shall be governed by, and shall
be construed in accordance with, the internal laws (and not the laws of
conflicts) of the State of Illinois.
13. EFFECT ON JANUARY 2000 AGREEMENT. This letter agreement supercedes the
terms and provisions of the agreement dated January 11, 2000 between you
and the Company.
Please acknowledge your agreement with these terms by executing a
copy of this letter in the space provided below and returning it to me.
Sincerely,
TENNECO AUTOMOTIVE INC.
By: /s/ Roger Porter
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Its: Chairman - Compensation/Nominating/
Governance Committee
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ACKNOWLEDGED AND ACCEPTED
/s/ Mark P. Frissora Date:
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