<PAGE>
Rule 424(b)(2)
Registration Statement Nos. 33-54184
and
33-64797
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 13, 1995)
$300,000,000
Tenneco Inc.
6 1/2% NOTES DUE 2005
----------------
Interest payable June 15 and December 15
----------------
THE NOTES WILL BE REDEEMABLE IN WHOLE OR IN PART, AT THE OPTION OF TENNECO
INC. AT ANY TIME, AT A REDEMPTION PRICE EQUAL TO THE GREATER OF (I) 100% OF
THEIR PRINCIPAL AMOUNT AND (II) THE SUM OF THE PRESENT VALUES OF THE
REMAINING SCHEDULED PAYMENTS OF PRINCIPAL AND INTEREST THEREON
DISCOUNTED TO THE DATE OF REDEMPTION ON A SEMIANNUAL BASIS (ASSUMING A
360-DAY YEAR CONSISTING OF TWELVE 30-DAY MONTHS) AT THE TREASURY
YIELD (AS DEFINED HEREIN) PLUS 10 BASIS POINTS, PLUS IN EACH CASE
ACCRUED INTEREST TO THE DATE OF REDEMPTION. THE NOTES WILL BE
REPRESENTED BY ONE OR MORE GLOBAL SECURITIES REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR ITS
NOMINEE. BENEFICIAL INTERESTS IN THE GLOBAL SECURITIES WILL
BE SHOWN ON, AND TRANSFERS THEREOF WILL BE EFFECTED
THROUGH, RECORDS MAINTAINED BY THE DEPOSITARY OR ITS
PARTICIPANTS. EXCEPT AS DESCRIBED HEREIN, NOTES IN
DEFINITIVE FORM WILL NOT BE ISSUED. SEE "DESCRIPTION
OF NOTES".
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
PRICE 99.490% AND ACCRUED INTEREST
----------------
<TABLE>
<S> <C> <C> <C>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
------------ -------------- -------------
Per Note.............................. 99.490% .650% 98.840%
Total................................. $298,470,000 $1,950,000 $296,520,000
</TABLE>
- ------------
(1) Plus accrued interest from December 15, 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3)Before deducting expenses payable by Tenneco Inc. estimated at $300,000.
----------------
The Notes are offered by the several Underwriters named herein, subject to
prior sale, when, as and if accepted by the Underwriters, and subject to
approval of certain legal matters by Cahill Gordon & Reindel, counsel for the
Underwriters. It is expected that delivery of the Notes will be made on or
about December 18, 1995, through the book-entry facilities of the Depositary
against payment therefor in immediately available funds.
----------------
MORGAN STANLEY & CO.
Incorporated
CS FIRST BOSTON
LEHMAN BROTHERS
SALOMON BROTHERS INC
December 13, 1995
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE NOTES OFFERED
HEREBY AND/OR ANY OTHER DEBENTURES OR NOTES OF THE COMPANY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY
BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR IN THE OVER-THE-COUNTER MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS NOT AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN
ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
S-2
<PAGE>
DESCRIPTION OF NOTES
The 6 1/2% Notes due 2005 (the "Notes") offered hereby are a series of
"Securities" as defined and described in the accompanying Prospectus dated
December 13, 1995 (the "Prospectus"), and the following description of terms of
the Notes supplements the description of the general terms and provisions of
the Securities set forth in the Prospectus.
The Notes are to be issued pursuant to the provisions of an Indenture dated
as of March 15, 1988, between the Company and The Chase Manhattan Bank
(National Association), as Trustee (hereinafter called the "Trustee"), as
supplemented by supplemental indentures (such Indenture as supplemented and
amended from time to time in accordance with the terms thereof being
hereinafter referred to as the "Indenture").
The Notes will mature on December 15, 2005. The Notes are to bear interest
from December 15, 1995 (at the rate per annum referred to on the cover of this
Prospectus Supplement) payable on June 15 and December 15 of each year at the
office of the Trustee in The City of New York, commencing on June 15, 1996.
Subject to certain exceptions therein set forth, the Indenture provides for the
payment of interest on any interest payment date only to holders of the Notes
in whose names the Notes are registered on the interest record date, which is
the May 31 or November 30, as the case may be, next preceding such interest
payment date if such date is a business day or the business day immediately
preceding such date if such date is not a business day.
OPTIONAL REDEMPTION
The Notes will be redeemable as a whole or in part, at the option of the
Company at any time, at a redemption price equal to the greater of (i) 100% of
their principal amount and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the date of
redemption on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Yield plus 10 basis points, plus in each case
accrued interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury Price
for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining
term of the Notes. "Independent Investment Banker" means Morgan Stanley & Co.
Incorporated or, if such firm is unwilling or unable to select the Comparable
Treasury Issue, an independent investment banking institution of national
standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is
not published or does not contain such prices on such business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
S-3
<PAGE>
"Reference Treasury Dealer" means each of Morgan Stanley & Co. Incorporated,
CS First Boston Corporation, Lehman Brothers Inc. and Salomon Brothers Inc;
provided however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"),
the Company shall substitute therefor another Primary Treasury Dealer.
Holders of Notes to be redeemed will receive notice thereof by first-class
mail at least 30 and not more than 60 days prior to the date fixed for
redemption.
GLOBAL SECURITIES
The Notes will be issued in the form of one or more Global Securities that
will be deposited with, or on behalf of, The Depository Trust Company, New
York, New York (the "Depositary"). Unless and until it is exchanged in whole or
in part for Securities in definitive form, a Global Security may not be
transferred except as a whole to a nominee of the Depositary for such Global
Security, or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
BOOK-ENTRY SYSTEM
Initially, the Notes will be registered in the name of Cede & Co., the
nominee of the Depositary. Accordingly, beneficial interests in the Notes will
be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants.
The Depositary has advised the Company and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
United States Securities Exchange Act of 1934, as amended. The Depositary holds
securities that its participants ("Direct Participants") deposit with the
Depositary. The Depositary also facilitates the settlement among Direct
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in such
Direct Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations, and certain other organizations. The Depositary is owned
by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the Depositary's book-entry system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to the Depositary and its Direct and Indirect Participants are on
file with the United States Securities and Exchange Commission.
The Depositary advises that its established procedures provide that (i) upon
issuance of the Notes by the Company, the Depositary will credit the accounts
of Participants designated by the Underwriters with the principal amounts of
the Notes purchased by the Underwriters and (ii) ownership of interests in the
Global Securities will be shown on, and the transfer of the ownership will be
effected only through, records maintained by the Depositary, the Direct
Participants and the Indirect Participants. The laws of some states require
that certain persons take physical delivery in definitive form of securities
which they own. Consequently, the ability to transfer beneficial interests in
the Global Securities is limited to such extent.
So long as a nominee of the Depositary is the registered owner of the Global
Securities, such nominee for all purposes will be considered the sole owner or
holder of such Global Securities under the Indenture. Except as provided below,
owners of beneficial interests in the Global Securities will not be entitled to
have Notes registered in their names, will not receive or be entitled to
receive physical delivery of Notes in definitive form and will not be
considered the owners or holders thereof under the Indenture.
S-4
<PAGE>
Neither the Company, the Trustee, any paying agent nor the registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the Global
Securities, or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Principal and interest payments on the Notes registered in the name of the
Depositary's nominee will be made in immediately available funds to the
Depositary's nominee as the registered owner of the Global Securities. Under
the terms of the Notes, the Company and the Trustee will treat the persons in
whose names the Notes are registered as the owners of such Notes for the
purpose of receiving payment of principal and interest on such Notes and for
all other purposes whatsoever. Therefore, neither the Company, the Trustee nor
any paying agent has any direct responsibility or liability for the payment of
principal or interest on the Notes to owners of beneficial interests in the
Global Securities. The Depositary has advised the Company and the Trustee that
its current practice is, upon receipt of any payment of principal or interest,
to credit Direct Participants' accounts on the payment date in accordance with
their respective holdings of beneficial interests in the Global Securities as
shown on the Depositary's records, unless the Depositary has reason to believe
that it will not receive payment on the payment date. Payments by Direct and
Indirect Participants to owners of beneficial interests in the Global
Securities will be governed by standing instructions and customary practices,
as is the case with securities held for the accounts of customers in bearer
form or registered in "street name", and will be the responsibility of such
Direct and Indirect Participants and not of the Depositary, the Trustee, or the
Company, subject to any statutory requirements that may be in effect from time
to time. Payment of principal and interest to the Depositary is the
responsibility of the Company or the Trustee, disbursement of such payments to
the owners of beneficial interests in the Global Securities shall be the
responsibility of the Depositary and Direct and Indirect Participants.
Notes represented by a Global Security will be exchangeable for Notes in
definitive form of like tenor as such Global Security in denominations of
$1,000 and in any greater amount that is an integral multiple if the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time the Depositary ceases to be a
clearing agency registered under applicable law and a successor depositary is
not appointed by the Company within 90 days or the Company in its discretion at
any time determines not to require all of the Notes to be represented by a
Global Security and notifies the Trustee thereof. Any Notes that are
exchangeable pursuant to the preceding sentence are exchangeable for Notes
issuable in authorized denominations and registered in such names as the
Depositary shall direct. Subject to the foregoing, a Global Security is not
exchangeable, except for a Global Security or Global Securities of the same
aggregate denominations to be registered in the name of the Depositary or its
nominee.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Depositary continues to make its Same-Day Funds
Settlement System available to the Company, all payments of principal and
interest on the Notes will be made by the Company in immediately available
funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Notes
will trade in the Depositary's Same-Day Funds Settlement System until maturity,
and secondary market trading activity in the Notes will therefore be required
by the Depositary to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
S-5
<PAGE>
UNDERWRITERS
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date hereof, the Underwriters named below have severally
agreed to purchase, and the Company has agreed to sell to them, severally, the
principal amounts of Notes set forth below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
NAME NOTES
---- ------------
<S> <C>
Morgan Stanley & Co. Incorporated............................... $ 75,000,000
CS First Boston Corporation..................................... 75,000,000
Lehman Brothers Inc. ........................................... 75,000,000
Salomon Brothers Inc ........................................... 75,000,000
------------
Total......................................................... $300,000,000
============
</TABLE>
The nature of the Underwriters' obligation is such that they are committed to
take and pay for all of the Notes if any are taken.
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Notes are subject to, among
other things, the approval of certain legal matters by their counsel and to the
conditions that no stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose are pending before
or threatened by the Securities and Exchange Commission and that there has been
no material adverse change (not in the ordinary course of business) in the
condition of the Company and its subsidiaries taken as a whole from that set
forth in or contemplated by the Registration Statement.
The Underwriters propose to offer part of the Notes directly to the public at
the public offering price set forth on the cover page hereof and part to
dealers at a price which represents a concession, not in excess of .40% of the
principal amount under the public offering price of the Notes. Any Underwriter
may allow and such dealers may reallow a concession, not in excess of .25% of
the principal amount of the Notes, to certain other dealers. After the initial
offering of the Notes, the public offering price of the Notes and such
concessions may be changed.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
The Company has agreed not to offer, sell, contract to sell or otherwise
dispose of any of its debt securities substantially similar to the Notes during
the period beginning on the date of this Prospectus Supplement and continuing
to and including the date the Notes are delivered to the Underwriters, without
the prior written consent of Morgan Stanley & Co. Incorporated.
In the ordinary course of their respective businesses, the Underwriters or
affiliates of the Underwriters have engaged and may in the future engage in
commercial banking or investment banking transactions with the Company.
S-6
<PAGE>
$1,000,000,000
DEBT SECURITIES
TENNECO INC.
Tenneco Inc. (the "Company") directly, through agents designated from time to
time, or through dealers or underwriters also to be designated, may sell from
time to time up to $1,000,000,000 aggregate principal amount (or its
equivalent) of its debt securities (the "Securities") on terms to be determined
at the time of sale. The specific designation, aggregate principal amount,
maturities, rate (or method of calculation) and time of payment of interest,
purchase price, any terms for redemption and the agent, dealer or underwriter,
if any, in connection with the sale of the Securities in respect of which this
Prospectus is being delivered and other terms of the Securities are set forth
in the accompanying Prospectus Supplement (the "Prospectus Supplement"). The
Company reserves the sole right to accept and, together with its agents from
time to time, to reject in whole or in part any proposed purchase of Securities
to be made directly or through agents.
If an agent of the Company or a dealer or underwriter is involved in the sale
of the Securities in respect of which this Prospectus is being delivered, the
agent's commission, dealer's purchase price, or underwriter's discount is set
forth in, or may be calculated from, the Prospectus Supplement, and the net
proceeds to the Company from such sale will be the purchase price of such
Securities less such commission in the case of an agent, the purchase price of
such Securities in the case of a dealer or the public offering price less such
discount in the case of an underwriter, and less, in each case, the other
attributable issuance expenses. The aggregate proceeds to the Company from all
the Securities will be the purchase price of Securities sold less the aggregate
of agents' commissions and underwriters' discounts and other expenses of
issuance and distribution. See "Plan of Distribution" for possible
indemnification arrangements for the agents, dealers and underwriters.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
December 13, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................................................ 2
Incorporation of Certain Documents by Reference...................... 2
Tenneco Inc. ........................................................ 3
Use of Proceeds...................................................... 3
Description of Securities............................................ 3
Plan of Distribution................................................. 9
Legal Opinions....................................................... 10
Experts.............................................................. 10
</TABLE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission.
Reports, proxy statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Securities and Exchange Commission at Room 1024, 450 5th Street, N.W.,
Washington, D.C., and at regional offices of the Commission at the following
addresses: Seven World Trade Center, 13th Floor, New York, New York 10048, and
500 West Madison, Suite 1400, Chicago, Illinois 60661. Copies of such material
can also be obtained from the Public Reference Section of the Commission at 450
5th Street, N.W., Washington, D.C. 20549, at prescribed rates. Such reports,
proxy statements and other information can also be inspected at the offices of
the New York, Chicago and Pacific Stock Exchanges.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the information that has
been incorporated by reference in the Prospectus (not including exhibits to the
information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that the Prospectus
incorporates). Requests for such copies should be directed to Mr. Karl A.
Stewart, Vice President and Secretary, Tenneco Inc., P.O. Box 2511, Houston,
Texas 77252-2511, telephone number (713) 757-2131.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission. The following
documents filed with the Securities and Exchange Commission by the Company are
incorporated as of their respective dates in this Prospectus by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1994;
(b) Definitive Proxy Statement for the Annual Meeting of Stockholders
held on May 9, 1995;
(c) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995,
June 30, 1995, and September 30, 1995.
(d) Current Reports on Form 8-K dated October 2, 1995 and November 17,
1995; and
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior to the
termination of the offering hereunder, shall be deemed incorporated in this
Prospectus by reference and to be a part of this Prospectus from the date of
the filing of such documents.
2
<PAGE>
TENNECO INC.
Tenneco Inc. is a holding company conducting all of its operations through
subsidiaries. As used herein, the term "Tenneco" refers to the Company and its
consolidated subsidiaries.
The major businesses of Tenneco are natural gas transportation and marketing;
manufacture and sale of automotive exhaust system parts and ride control
products; construction and repair of ships; and manufacture and sale of
packaging materials, cartons, containers and specialty packaging products.
Tenneco also owns 21% of Case Corporation, a manufacturer of farm and
construction equipment.
Because the Company is a holding company rather than an operating company,
its ability to pay interest on its outstanding indebtedness depends primarily
upon the availability of funds from its operating subsidiaries.
The address of the Company, a Delaware corporation, is P.O. Box 2511,
Houston, Texas 77252-2511, and its telephone number is (713) 757-2131.
USE OF PROCEEDS
Unless otherwise indicated in a Prospectus Supplement, the net proceeds from
the sale of the Securities will be added to the general funds of the Company
and will be used for working capital and capital expenditures or to reduce
indebtedness incurred for such purposes and to refinance long term debt
maturing over the next several years and to refinance short term debt incurred
to acquire businesses and assets. Any additional funds required for any of the
foregoing purposes may be derived from internal sources, additional borrowings
or other financial arrangements.
DESCRIPTION OF SECURITIES
The Securities are to be issued pursuant to the provisions of an indenture
(hereinafter called the "Indenture") dated as of March 15, 1988, between the
Company and The Chase Manhattan Bank (National Association), as Trustee
(hereinafter called the "Trustee"). The following statements are summaries of
certain provisions contained in the Indenture, a copy of which is filed as an
exhibit to the registration statement of which this Prospectus is a part. They
do not purport to be complete statements of all the terms and provisions of the
Indenture, and reference is made to the Indenture for full and complete
statements of such terms and provisions.
GENERAL
The Indenture does not limit the amount of securities that can be issued
thereunder, nor does it restrict the payment of dividends or the acquisition of
capital stock by the Company or any subsidiary of the Company or the amount of
debt which the Company or any subsidiary of the Company can incur. Additional
securities may be issued under the Indenture from time to time and offered on
terms determined by market conditions at the time of sale.
The Securities will be unsecured and will rank equally and ratably with other
unsecured and unsubordinated debt of the Company.
The Prospectus Supplement sets forth the following terms of the Securities in
respect of which this Prospectus is delivered: (i) the designation of such
Securities, (ii) the aggregate principal amount of such Securities, (iii) the
percentage of principal amount at which such Securities will be issued, (iv)
the date or dates on which such Securities will mature, (v) the rate or rates,
if any, per annum (which may be fixed or variable) at which such Securities
will bear interest or the method of determining such rate or rates, (vi) the
times at which such interest, if any, will be payable, (vii) the date, if any,
after which such Securities may be redeemed, or any applicable sinking fund
requirements, and the redemption price or prices, (viii) the currency in which
the Securities will be denominated (if other than U.S. dollars), and (ix) any
other special terms.
3
<PAGE>
Principal, premium, if any, and interest, if any, will be payable at the
principal corporate trust office of the Trustee in The City of New York, or
that of its agent, provided that payment of interest, other than interest
payable at maturity or upon redemption, may be made at the option of the
Company by check mailed to the address of the person entitled thereto as it
appears on registry books of the Company. Unless otherwise indicated in the
Prospectus Supplement, payment of interest on any interest payment date will be
made only to holders of the Securities in whose names the Securities are
registered on the record date specified in the Securities.
The Securities will be in registered form, without coupons, issuable in
denominations of $1,000 (unless otherwise specified in the Prospectus
Supplement) or any authorized multiple thereof.
LIENS
So long as any Securities are outstanding, neither the Company nor any
Subsidiary (as defined below) will create, assume or suffer to exist any Lien
(as defined below) which secures Debt (as defined below) and which is on any
capital stock of any Subsidiary owned by it; provided, however, that this
prohibition does not apply to or prevent the creation or existence of any Lien
upon any capital stock (i) created at the time of the acquisition of such
capital stock by the Company or any Subsidiary or within one year after such
time to secure all or a portion of the purchase price for such capital stock or
Debt incurred to finance such purchase price; (ii) held by a person existing on
such capital stock at the time such person becomes a Subsidiary; or (iii) of a
foreign Subsidiary held directly or indirectly by another foreign Subsidiary to
secure Debt of such other foreign Subsidiary.
The Indenture provides that so long as any Securities are outstanding, the
Company will not, and will not permit any Subsidiary, other than a Finance
Subsidiary (as defined below) to, pledge, mortgage or hypothecate, or permit
any Lien upon, any property or assets at any time owned by the Company or any
Subsidiary, other than a Finance Subsidiary, to secure any Debt, without making
effective provision whereby the Securities shall (so long as such other Debt
shall be so secured) be equally and ratably secured with any and all such Debt
and with any other Debt similarly entitled to be equally and ratably secured;
provided, however, that such restriction shall not apply to nor prevent the
creation or existence of any encumbrance upon capital stock permitted under the
provision described in the preceding paragraph or:
(a) any Lien upon any property or assets of the Company or any Subsidiary
in existence on March 15, 1988, or created pursuant to an "after-acquired
property" clause or similar term (including any Liens created upon
substitution of cash or collateral of similar value) in existence at March
15, 1988, of any mortgage, pledge agreement, security agreement or other
similar instrument in existence on March 15, 1988;
(b) any Lien upon any property or assets created at the time of the
acquisition of such property or assets by the Company or any Subsidiary or
within one year after such time to secure all or a portion of the purchase
price for such property or assets or Debt incurred to finance such purchase
price;
(c) any Lien upon any property or assets existing thereon at the time of
the acquisition thereof by the Company or any Subsidiary (whether or not
the obligations secured thereby are assumed by the Company or any
Subsidiary);
(d) any Lien upon any property or assets of a person existing thereon at
the time such person becomes a Subsidiary by acquisition or otherwise;
(e) the assumption by the Company or any Subsidiary of obligations
secured by any Lien existing at the time of the acquisition by the Company
or any Subsidiary of the property or assets subject to such Lien or at the
time of acquisition of the person which owns such property or assets;
(f) any extension, renewal or refunding of any permitted Liens on capital
stock or any Lien permitted by paragraphs (a), (b), (c), (d) or (e) above
on substantially the same property or assets theretofore subject thereto or
any part thereof, securing Debt not in excess of the amount outstanding on
the date of such extension, renewal or refunding;
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(g) any Lien on any oil, gas, mineral and processing and other plant
properties to secure the payment of costs, expenses or liabilities incurred
under any lease or grant or operating or other similar agreement in
connection with or incident to the exploration, development, maintenance or
operation of such properties;
(h) any Lien arising from or in connection with a conveyance by the
Company or any Subsidiary of any production payment with respect to oil,
gas, natural gas, carbon dioxide, sulphur, helium, coal, metals, minerals,
steam, timber or other natural resources;
(i) any Lien in favor of the Company or any Subsidiary;
(j) any Lien created or assumed by the Company or any Subsidiary in
connection with the issuance of Debt the interest on which is excludable
from gross income of the holder of such Debt pursuant to the Internal
Revenue Code of 1986, as amended, or any successor statute, for the purpose
of financing, in whole or in part, the acquisition or construction of
property or assets to be used by the Company or any Subsidiary;
(k) Liens upon rights-of-way for pipeline purposes;
(l) any governmental Lien, mechanics', materialmen's, carriers' or
similar Lien incurred in the ordinary course of business which is not yet
due or which is being contested in good faith by appropriate proceedings
and any undetermined Lien which is incidental to construction;
(m) the right reserved to, or vested in, any municipality or public
authority by the terms of any right, power, franchise, grant, license,
permit or by any provision of law, to purchase or recapture or to designate
a purchaser of, any property;
(n) Liens of taxes and assessments which are (i) for the then current
year, or (ii) not at the time delinquent or (iii) delinquent but the
validity of which is being contested at the time by the Company or any
Subsidiary in good faith;
(o) Liens of, or to secure performance of, leases;
(p) any Lien upon, or deposits of, any assets in favor of any surety
company or clerk of court for the purpose of obtaining indemnity or stay of
judicial proceedings;
(q) any Lien upon property or assets acquired or sold by the Company or
any Subsidiary resulting from the exercise of any rights arising out of
defaults on receivables;
(r) any Lien incurred in the ordinary course of business in connection
with workmen's compensation or unemployment insurance, or to secure
obligations imposed by statute or governmental regulations;
(s) any Lien upon property or assets of any foreign Subsidiary to secure
Debt of that foreign Subsidiary;
(t) any Lien upon any property or assets in accordance with customary
banking practice to secure any Debt incurred by the Company or any
Subsidiary in connection with the exporting of goods to, or between, or the
marketing of goods in, or the importing of goods from, foreign countries;
(u) any Lien upon any additions, improvements, replacements, repairs,
fixtures, appurtenances or component parts thereof attaching to or required
to be attached to property or assets pursuant to the terms of any mortgage,
pledge agreement, security agreement or other similar instrument, creating
a Lien upon such property or assets permitted by paragraphs (a) through (v)
inclusive; or
(v) any Lien securing any Debt in an amount which, together with all
other Debt secured by a Lien that is not otherwise permitted by the
provisions of any other provision set forth above, does not at the time of
the incurrence of the Debt so secured exceed 10% of Consolidated Net
Tangible Assets (as defined below), as shown on a balance sheet as of the
end of the most recent fiscal quarter prior to the incurrence of such Debt
for which a balance sheet is available. At September 30, 1995, 10% of
Consolidated Net Tangible Assets was $918 million.
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If the Company or any of its Subsidiaries (other than a Finance Subsidiary)
shall propose to so pledge, mortgage or hypothecate any assets or property at
any time owned by it to secure any Debt, other than as permitted by
subdivisions (a) through (v) inclusive above, the Company will prior thereto
give written notice thereof to the Trustee, and the Company will prior to or
simultaneously with such pledge, mortgage or hypothecation, by supplemental
indenture executed to the Trustee (or to the extent legally necessary to an
additional or separate trustee), in form satisfactory to the Trustee, cause all
the Securities effectively to be secured equally and ratably with such Debt,
pledge, mortgage or hypothecation of such assets or property.
MODIFICATION OF INDENTURE
The Indenture provides that, with the consent of the holders of not less than
a majority in principal amount of Securities of all series at the time
outstanding which will be affected by the modification or amendment to the
Indenture (voting as a single class), the Company and the Trustee may enter
into supplemental indentures for the purposes of modifying or amending any of
the provisions of the Indenture or of any supplemental indenture, or of
modifying the rights of the holders of the Securities affected by such
modification or amendment, but may not, without the consent of the holders of
all outstanding Securities affected by such modification or amendment, (i)
extend the maturity, reduce the interest rate or modify in any other way the
terms of payment of principal, premium, if any, or interest upon the
Securities, or (ii) reduce the aforesaid percentage of Securities, the holders
of which are required to consent to any such supplemental indenture.
DEFAULTS AND RIGHTS UPON DEFAULT
The Indenture defines the term "default" with respect to a series of
Securities to mean a default in the payment of interest or the making of any
sinking fund redemption for 30 days on such series, a default in the payment of
principal of or premium, if any, on such series (other than failure to make a
sinking fund redemption), and a default in the performance of any of the
Company's covenants in the Indenture for 60 days after written notice of such
default.
The term "default" also includes certain events involving the Company or
Tennessee Gas Pipeline Company, a wholly-owned subsidiary of the Company
("Tennessee"), but not any of the Company's other Subsidiaries, in bankruptcy,
reorganization, receivership or other insolvency proceedings, or an assignment
by the Company or Tennessee for the benefit of creditors; provided that at the
time of such event Tennessee is a Subsidiary of the Company. The assets of
Tennessee presently consist primarily of its interstate gas pipeline system,
assets utilized in its automotive business and capital stock, held directly or
indirectly, of substantially all of the other Subsidiaries of the Company. The
Indenture contains no restriction upon the transfer, sale or other disposition
by Tennessee of all or a portion of its assets, whether to the Company or to
unaffiliated parties, nor does it require that Tennessee's corporate existence
continue.
In addition, the term "default" includes default by the Company in the
payment of principal of or interest on any obligation for money borrowed beyond
any period of grace specified therefor or default by the Company in the
performance of any of the terms of any agreement under which such obligation is
created if the effect is to cause such obligation to become due prior to its
stated maturity, if any such default is not waived by the required percentage
of the holders of such obligations. In addition, the term "default" includes
any default, of the type described in the preceding sentence, (i) by a domestic
Subsidiary (other than a Finance Subsidiary) if such default results in
acceleration of Debt of that Subsidiary in excess of 1% of the consolidated
Debt of the Company and its Subsidiaries (excluding Debt of Finance
Subsidiaries) or (ii) by two or more domestic Subsidiaries (other than a
Finance Subsidiary) if such default results in acceleration of Debt of those
Subsidiaries in excess of 5% of the consolidated Debt of the Company and its
Subsidiaries (excluding Debt of Finance Subsidiaries).
On or before May 1 in each year, the Company must file with the Trustee an
officers' certificate stating whether or not, to the knowledge of the signers,
the Company is in default in the performance of any of the terms of the
Indenture.
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If a default shall have occurred and be continuing with respect to (i) the
payment of principal of, premium, if any, or interest or sinking fund
redemption payment on, any series of Securities or (ii) the performance of any
other covenant of the Company relating to that series of Securities, the
Trustee or the holders of at least 25% in principal amount of the Securities of
the series affected in the case of clause (i) (or 25% in principal amount of
all series affected in the case of clause (ii), treated as a single class) then
outstanding may declare the principal of all the Securities of such series (or
all such series, as the case may be) to be due and payable, but the holders of
a majority in principal amount of the Securities then outstanding of that
series (or all such series treated as a single class, as the case may be) may
rescind such declaration if the default is cured. No Securityholder may enforce
the Indenture except in the case of a refusal or neglect of the Trustee to act
for 30 days after notice of default and after request by the holders of a
majority in principal amount of the outstanding Securities of any series as to
which a default has occurred in the case of a payment default and all other
series affected thereby in the case of any other default, and the offer to the
Trustee of indemnity and security satisfactory to it, but this provision does
not prevent any Securityholder of that series from enforcing payment of
principal of, or premium, if any, or interest or sinking fund redemption
payment on, his Security. Holders of a majority in principal amount of the
Securities of any and all series affected (treated as a single class) and then
outstanding may direct the Trustee as to proceedings available to it under the
Indenture. Prior to declaration of acceleration, any past non-payment default
with respect to a particular series of Securities may be waived by the holders
of a majority in principal amount of the Securities of all series then
outstanding affected thereby (treated as a single class).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indenture provides that the Company will not consolidate with or merge
into, or sell, lease, transfer or otherwise dispose of its assets as, or
substantially as, an entirety to any person unless the person resulting from
such consolidation or into which the Company is merged or which acquired or
leased the assets of the Company as, or substantially as, an entirety assumes
the obligations of the Company under all the Securities then outstanding and,
in the case of any such merger or consolidation, unless the person resulting
from such consolidation or into which the Company is merged is a corporation
existing under the laws of the United States, one of the States thereof or the
District of Columbia.
DEFEASANCE
Defeasance and Discharge of Securities of any Series
The Company has the right at any time to be discharged from its obligations
under the Securities of any series (except for certain obligations to register
the transfer or exchange of the Securities of such series, to replace stolen,
lost or mutilated Securities of such series, to maintain paying agencies and
hold monies for payment in trust), subject to certain conditions, by depositing
in trust with the Trustee an amount, in cash or securities of the United States
government or securities issued by government agencies backed by the full faith
and credit of such government ("U.S. Government Obligations"), sufficient to
pay or provide for payment of all principal and interest and premium, if any,
due and to become due on the Securities of such series and paying all other
sums payable by it under the Indenture with respect to the Securities of such
series.
In order to be so discharged of its obligations, the Company must first
deliver to the Trustee either a ruling from the Internal Revenue Service or an
opinion of counsel to the effect that any such satisfaction and discharge will
not result in recognition by holders of the Securities of such series of
income, gain or loss for federal income tax purposes (other than income, gain
or loss that would have been recognized in the same amount and in the same
manner and at the same time or times as would have been the case absent such
satisfaction and discharge). Notwithstanding the foregoing, the obligation of
the Company to pay when due the principal of, any premium, if any, and interest
on the Securities of such series will be reinstated if the Trustee is unable to
pay when due any such amount from the money or U.S. Government Obligations as a
result of any legal proceeding or order of any court or governmental authority.
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Defeasance of Certain Covenants
The Company also has the right to be discharged of its covenant under the
Indenture described under "Liens" above, insofar as the Securities of such
series are concerned, by depositing in trust with the Trustee an amount, in
cash or U.S. Government Obligations, sufficient to pay or provide for payment
of all principal and interest and premium, if any, due and to become due on the
Securities of such series and paying all other sums payable by it under the
Indenture with respect to the Securities of such series. The Company is not
required to deliver any ruling of the Internal Revenue Service or opinion of
counsel with respect to the federal income tax consequences of any such
discharge as described above under the caption "Defeasance and Discharge of
Securities of any Series".
DEFINITIONS
As used in the Indenture,
(i) the term "Consolidated Assets" means at any date the consolidated
assets of the Company and its consolidated Subsidiaries including all
investments by the Company or its consolidated Subsidiaries in other
entities (less applicable reserves and other properly deductible items),
determined on a consolidated basis as of such date;
(ii) the term "Consolidated Net Tangible Assets" means at any date
Consolidated Assets after deducting therefrom (a) all current liabilities
of the Company and its consolidated Subsidiaries (excluding any which are,
by their terms unconditionally extendible or renewable at the option of the
obligor thereon to a time more than 12 months after the time as of which
the amount thereof is being computed) and (b) Goodwill, all determined on a
consolidated basis as of such date;
(iii) the term "Debt", as applied to any person, means any obligation
created or assumed by such person for the repayment of money borrowed and
any purchase money obligation created or assumed by such person. All such
Debt guaranteed in any manner by such person or in effect guaranteed by
such person through a contingent agreement to purchase said Debt and all
such Debt secured by mortgage or other lien upon property owned by such
person and upon which such person customarily pays interest, although such
person has not assumed or become liable for the payment of such Debt, shall
for all purposes hereof be deemed to be "Debt" of such person;
(iv) the term "Domestic Subsidiary" means any Subsidiary which is not a
foreign Subsidiary;
(v) the term "Finance Subsidiary" means any Subsidiary which is
principally engaged in the business of financing the sale or lease of the
goods or services of the Company and its consolidated Subsidiaries and
third parties. At September 30, 1995, the Company's only Finance Subsidiary
was Tenneco Credit Corporation;
(vi) the term "foreign Subsidiary" means any Subsidiary which is
organized under the laws of a jurisdiction other than the United States of
America or any State thereof or the District of Columbia and (determined on
a consolidated basis) more than 66 2/3% of its sales or earnings are
derived from operations located in, or more than 66 2/3% of its assets are
located in, territories of the United States of America and jurisdictions
outside the United States of America.
(vii) the term "Goodwill" means at any date the amount of the Company's
investment in consolidated Subsidiaries in excess of the net assets of such
Subsidiaries at the time of acquisition of such assets, less amortization
on such excess amount from the time of acquisition thereof, all as
reflected on the consolidated balance sheet of the Company and its
consolidated Subsidiaries as of such date;
(viii) the term "Lien" means any mortgage, pledge, security interest,
lien or other encumbrance; and
(ix) the term "Subsidiary" means any corporation or other person of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other
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individuals performing similar functions are at the time owned by the
Company or by one or more Subsidiaries or by the Company and one or more
Subsidiaries.
THE TRUSTEE
The Chase Manhattan Bank (National Association), the Trustee under the
Indenture, is trustee under the indentures under which the Company's presently
outstanding debentures and certain of its notes are issued and under indentures
under which certain obligations of subsidiaries of the Company are outstanding.
The Chase Manhattan Bank (National Association) is a party to bank loan
agreements with the Company and certain of its subsidiaries, and is a
depositary of funds of the Company and for many years has served as a
depositary of funds of subsidiaries of the Company.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in four ways: (i)
directly to purchasers, (ii) through agents, (iii) through underwriters and
(iv) through dealers.
Offers to purchase Securities may be solicited directly by the Company or by
agents designated by the Company from time to time. Any such agent, who may be
deemed to be an underwriter as that term is defined in the Securities Act of
1933, as amended, involved in the offer or sale of the Securities in respect of
which this Prospectus is delivered will be named, and any commissions payable
by the Company to such agent will be set forth, in the Prospectus Supplement.
Agents may be entitled under agreements which may be entered into with the
Company to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, and may be
customers of, engage in transactions with, or perform services for, the Company
in the ordinary course of business.
If an underwriter or underwriters are utilized in the sale of Securities, the
Company will execute an underwriting agreement with such underwriters at the
time of sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be used
by the underwriters to make resales of the Securities in respect of which this
Prospectus is delivered to the public. The underwriters may be entitled, under
the relevant underwriting agreement, to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.
Dealers may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain institutions to purchase
Securities from the Company at the public offering price set forth in the
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date specified in the Prospectus
Supplement. Each Contract will be for an amount not less than, and unless the
Company otherwise agrees the aggregate principal amount of Securities sold
pursuant to Contracts shall be not less nor more than, the respective amounts
specified in the Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions but shall in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions except
that the purchase by an institution of the Securities covered by its Contract
shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject and that
the issuance of the Securities covered by any Contract shall not result in the
breach of any of the provisions of or constitute a default under any other
agreement or instrument of the Company. A commission indicated in the
Prospectus Supplement will be paid to underwriters and agents soliciting
purchases of Securities pursuant to Contracts accepted by the Company.
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The place and time of delivery for the Securities in respect of which this
Prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
LEGAL OPINIONS
Certain legal matters in connection with the Securities offered hereby are
being passed upon for the Company by Mr. M. W. Meyer, Vice President and Deputy
General Counsel of the Company, and for any agents or underwriters, as the case
may be, by Messrs. Cahill Gordon & Reindel (a partnership including a
professional corporation), 80 Pine Street, New York, New York. The Company has
been advised by Mr. Meyer that at November 30, 1995, he beneficially owned
24,850 shares of Common Stock of the Company (including options to purchase
4,001 shares of Common Stock, which options are either presently exercisable or
exercisable within 60 days of such date). Cahill Gordon & Reindel from time to
time performs legal services for the Company and its subsidiaries and members
of Cahill Gordon & Reindel are the beneficial owners of securities of the
Company.
EXPERTS
The financial statements and schedules of the Company and its consolidated
subsidiaries included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, incorporated by reference in this Prospectus, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report. Reference is made to said report, which includes an
explanatory paragraph that describes certain litigation discussed in Note 6 of
those statements, the outcome of which impacts Tennessee Gas Pipeline Company's
ongoing customer settlement discussions over the recoverability of its contract
reformation costs. Further reference is made to said report, which also
includes an explanatory paragraph with respect to the change in the methods of
accounting for postemployment benefits, income taxes and postretirement
benefits other than pensions.
The combined financial statements of Mobil Plastics Division of Mobil
Corporation appearing in the Current Report of Tenneco Inc. on Form 8-K dated
November 17, 1995, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such financial statements have been
incorporated herein by reference and included herein in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
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