<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Tenneco Inc.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange ActRule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------
(5) Total Fee Paid:
--------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
TENNECO INC
LOGO LOGO
April 1, 1995
To the Stockholders of Tenneco Inc.:
The Annual Meeting of Stockholders of the Company will be held Tuesday, May
9, 1995, at 10:30 a.m. in the Imperial Ballroom of the Hyatt Regency Hotel,
1200 Louisiana Street, Houston, Texas. A Notice of the meeting, a Proxy and a
Proxy Statement containing information about the matters to be acted upon are
enclosed.
Holders of $7.40 Cumulative Preferred Stock and Common Stock are entitled to
vote at the Annual Meeting on the basis of one vote for each share held.
A record of the Company's activities for the year 1994 is contained in the
Annual Report to Stockholders. We urge each stockholder who cannot attend the
Annual Meeting to please assist us in preparing for the meeting by completing,
executing and returning your Proxy promptly.
Very truly yours,
LOGO
DANA G. MEAD
Chairman and Chief Executive Officer
<PAGE>
TENNECO INC
LOGO
LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS MAY 9, 1995
The Annual Meeting of Stockholders of Tenneco Inc. will be held in the
Imperial Ballroom of the Hyatt Regency Hotel, 1200 Louisiana Street, Houston,
Texas, on Tuesday, May 9, 1995, at 10:30 a.m., Houston time.
The purposes of the meeting are:
1. To elect four Directors for a term to expire at the 1998 Annual Meeting
of Stockholders;
2. To approve the appointment of Arthur Andersen LLP as independent public
accountants for the year 1995;
3. To act upon a proposal of a stockholder that may be introduced at the
meeting, as set forth in the accompanying Proxy Statement; and
4. To act upon such other matters as may be brought before the meeting
affecting the business and affairs of the Company.
The Board of Directors knows of no other matters at this time that may be
brought before the meeting. Holders of $7.40 Cumulative Preferred Stock and
Common Stock of record at the close of business on March 17, 1995, are entitled
to vote at the meeting. A list of these stockholders will be available for
inspection for 10 days preceding the meeting at the office of the Secretary of
the Company at the address set out above, and will also be available for
inspection at the meeting.
Each stockholder who does not expect to attend the meeting is urged to
complete, date and sign the enclosed Proxy and return it to the Company in the
enclosed envelope, which requires no postage if mailed in the United States.
By Order of the Board of
Directors
KARL A. STEWART
Secretary
Houston, Texas
April 1, 1995
<PAGE>
TENNECO INC
LOGO
LOGO
April 1, 1995
PROXY STATEMENT
This statement is furnished in connection with the solicitation on behalf of
the Board of Directors of the Company of Proxies to be voted at the Annual
Meeting of Stockholders on May 9, 1995, for the purposes set forth in the
accompanying Notice of the meeting. Holders of $7.40 Cumulative Preferred Stock
and Common Stock of record at the close of business on March 17, 1995, will be
entitled to vote at the Annual Meeting. Each share is entitled to one vote.
Shares represented by Proxies will be voted at the Annual Meeting. At March 17,
1995, there were 587,280 shares of $7.40 Cumulative Preferred Stock and
181,867,683 shares of Common Stock outstanding and entitled to vote.
ELECTION OF DIRECTORS
(ITEM 1)
The Board of Directors presently consists of 11 members, divided into three
classes. The following four nominees (Class II) are proposed to be elected at
this Annual Meeting to serve for a term to expire at the 1998 Annual Meeting of
Stockholders and until their successors are chosen and have qualified. The
remaining seven directors will continue to serve as set forth below. The
persons named as proxy voters in the accompanying Proxy, or their substitutes,
will vote for the nominees for directors, each of whom has been designated as
such by the Board of Directors. If, for any reason not presently known, any of
the nominees is not available for election, another person or other persons who
may be nominated will be voted for at the discretion of the proxy voters.
Directors are elected by the affirmative vote of the holders of a majority of
the shares present, in person or by Proxy, and authorized to vote on the
matter.
Brief statements setting forth the age (at April 1, 1995), the principal
occupation, and employment during the past five years, the year in which first
elected a director, and other information concerning each nominee and the
remaining directors appear below.
1
<PAGE>
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR THREE-YEAR TERM EXPIRING AT THE 1998 ANNUAL MEETING OF STOCKHOLDERS (CLASS
II)
M. Kathryn Eickhoff has been President of Eickhoff
Economics, Inc., a consulting firm, since 1987. From
1985 to 1987 she was Associate Director for Economic
Policy for the U.S. Office of Management and Budget, and
prior to 1985 was Executive Vice President and Treasurer
of Townsend-Greenspan & Co., Inc., an economic
consulting firm. She is also a director of AT&T Corp.,
The Upjohn Company and National Westminster Bancorp Inc.
Ms. Eickhoff is 55 and has been a Director of the
Company since 1987 and is a member of the Executive
Committee and Audit Committee. She previously served as
a member of the Board of Directors from 1982 until her
resignation to join the Office of Management and Budget
in 1985.
---------------------------
Peter T. Flawn is a former President of The University
of Texas at Austin, having served in such capacity for
more than five years preceding his retirement in 1985.
He is also a director of Harte-Hanks Communications,
Inc., Global Marine Inc., Input/Output, Inc. and Radian
Corporation.
Dr. Flawn is 69 and has been a Director of the Company
since 1980. He is a member of the Executive Committee
and is a member and the Chairman of the Audit Committee.
---------------------------
John B. McCoy is Chairman and Chief Executive Officer of
BANC ONE Corporation, a bank holding company, and has
served in that position since 1987, prior to which he
was President of that company from 1983. He is a
director of Cardinal Distribution, Inc., the Federal
Home Loan Mortgage Corporation, and Ameritech Corp. He
also serves on the advisory council of the American
Bankers Association.
Mr. McCoy is 51 and has been a Director of the Company
since 1992. He is a member of the Compensation and
Benefits Committee.
2
<PAGE>
Dana G. Mead is Chariman and Chief Executive Officer of
the Company and has served as an executive officer of
the Company since April 1992, when he joined the Company
as Chief Operating Officer. Prior to joining the
Company, Mr. Mead served as an Executive Vice President
of International Paper Company from 1988, and served as
Senior Vice President of that company from 1981. He is
also a director of Alco Standard Corporation, Baker
Hughes Incorporated, Cummins Engine Company, Inc. and
National Westminster Bancorp Inc., and is a Director and
Chairman of Case Corporation.
Mr. Mead is 59 and has been a Director of the Company
since April 1992. He is a member and Chairman of the
Executive Committee and an ex officio member of the
Audit, Compensation and Benefits, and Nominating and
Management Development Committees.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING AT THE 1997 ANNUAL MEETING OF STOCKHOLDERS (CLASS I)
Mark Andrews has been Chairman of Andrews Associates,
Inc., a government consulting firm, since February 1987.
From 1963 to 1980, he served in the U.S. House of
Representatives, and from 1980 to 1986 he served in the
U.S. Senate. He is also a Director of Union Storage Co.
and Case Corporation.
Mr. Andrews is 68 and has been a Director of the Company
since 1987. He is a member of the Compensation and
Benefits Committee and the Nominating and Management
Development Committee.
---------------------------
W. Michael Blumenthal has been a consultant to Lazard
Freres & Co., an investment banking firm, since January
1995 and was a limited partner of that firm from April
1990 through December 1994. Prior to that time he was
Chairman of Unisys Corporation and had been an executive
officer of that company for more than five years. He is
also a director of Daimler-Benz InterServices.
Mr. Blumenthal is 69 and has been a Director of the
Company since 1985. He is a member and the Chairman of
the Nomination and Management Development Committee.
3
<PAGE>
Belton K. Johnson is engaged in farming, ranching and
investments and has pursued such interests for more than
five years. He is also a director of AT&T Corp.
Mr. Johnson is 65 and has been a Director of the Company
since 1979. He is a member of the Executive Committee
and the Compensation and Benefits Committee.
---------------------------
William L. Weiss retired in June 1994 as Chairman and
Chief Executive Officer of Ameritech Corporation, a
telecommunications and information services company,
after having served in that capacity for more than five
years. Mr. Weiss is a director of Abbott Laboratories,
Inc., Merrill Lynch & Co., Inc. and the Quaker Oats
Company.
Mr. Weiss is 65 and has been a Director of the Company
since January 1994. He is a member of the Audit
Committee.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING AT THE 1996 ANNUAL MEETING OF STOCKHOLDERS (CLASS III)
Henry U. Harris, Jr., since 1992, has been Vice Chairman
Emeritus of Smith Barney Inc., an investment banking
firm, and for more than five years prior to which he
served as an executive officer of that firm.
Mr. Harris is 68 and has been a Director of the Company
since 1968. He is a member of the Audit Committee and
the Nominating and Management Development Committee.
4
<PAGE>
Joseph J. Sisco has been a partner of Sisco Associates,
a management consulting firm, since January 1980. From
1976 until January 1980 he served as President of The
American University, and, until February 1981 he was
Chancellor of that University. Prior to 1976 Dr. Sisco
was employed by the United States Department of State
for 25 years, last serving as Under Secretary of State
for Political Affairs. He is also a director of The
Interpublic Group of Companies, Inc., Raytheon Company,
and Braun AG.
Dr. Sisco is 75 and has been a Director of the Company
since 1977. He is a member of the Executive Committee,
the Nominating and Management Development Committee, and
is a member and the Chairman of the Compensation and
Benefits Committee.
---------------------------
Clifton R. Wharton, Jr., served as Chairman and Chief
Executive Officer of Teachers Insurance and Annuity
Association and the College Retirement Equities Fund
from 1987 to 1993 and as Deputy Secretary of State, U.S.
Department of State, from January to November of 1993.
From 1978 to 1987 he served as Chancellor of the State
University of New York System. From 1970 to 1978 Mr.
Wharton served as President of Michigan State
University. Prior to 1970 he spent 22 years working in
foreign economic and agricultural development in Latin
America and Southeast Asia for the Rockefeller family
philanthropic interests. He is also a director of the
Ford Motor Company, the New York Stock Exchange, Inc.
and Harcourt General.
Mr. Wharton is 68 and has been a Director of the Company
since June 1994. He is a member of the Compensation and
Benefits Committee.
5
<PAGE>
STOCK OWNERSHIP
MANAGEMENT
At January 31, 1995, the number of shares of Common Stock of the Company
beneficially owned by (i) each director or nominee for director, (ii) each of
the executive officers whose names are set forth on the Summary Compensation
Table at page 9, and (iii) all executive officers, directors, and nominees for
director as a group, were as follows:
<TABLE>
<CAPTION>
SHARES OF COMMON
DIRECTORS STOCK OWNED(1)(2)
--------- -----------------
<S> <C>
Mark Andrews.................................................. 5,069
W. Michael Blumenthal......................................... 3,148
M. Kathryn Eickhoff........................................... 3,350
Peter T. Flawn................................................ 3,550
Henry U. Harris, Jr........................................... 11,227
Belton K. Johnson............................................. 5,811
John B. McCoy................................................. 2,550
Dana G. Mead.................................................. 114,830
Joseph J. Sisco............................................... 3,524
William L. Weiss.............................................. 4,550
Clifton R. Wharton, Jr........................................ 2,050
<CAPTION>
EXECUTIVE OFFICERS
------------------
<S> <C>
Theodore R. Tetzlaff.......................................... 22,303
Robert T. Blakely............................................. 46,270
Stacy S. Dick................................................. 27,559
Stephen D. Chesebro .......................................... 58,362
All executive officers and directors or nominees as a group... 701,889(3)
</TABLE>
---------
(1) Each director or nominee and executive officer has sole voting and
investment power over the shares beneficially owned (or has the right to
acquire shares as set forth in note (2) below) as set forth in this column,
except for (i) shares that are held in trust for each director and
executive officer under the Company's restricted stock plans, and (ii)
shares that executive officers of the Company have the right to acquire
pursuant to the Company's 1981 Tenneco Inc. Key Employee Stock Option Plan
and the 1994 Tenneco Inc. Stock Ownership Plan.
The percent of the class of Common Stock owned by each director or nominee
and by all executive officers and directors as a group was less than one
percent.
(Notes continued on following page)
6
<PAGE>
(2) Includes shares that are: (i) held in trust under the Company's restricted
stock plans; at January 31, 1995, Messrs. Mead, Tetzlaff, Blakely, Dick,
and Chesebro held 24,500; 15,000; 14,560; 22,000; and 31,350 restricted
shares, respectively, under the Tenneco Inc. Key Employee Restricted Stock
and Restricted Unit Plan or under the 1994 Tenneco Inc. Stock Ownership
Plan, and Ms. Eickhoff and Messrs. Andrews, Blumenthal, Flawn, Harris,
Johnson and Sisco each held 1,550 restricted shares, Mr. McCoy held 1,050
restricted shares, and Messrs. Weiss and Wharton held 550 restricted
shares, respectively, under the Tenneco Inc. Directors Restricted Stock and
Restricted Unit Program and (ii) subject to options, which were granted
under the 1994 Tenneco Inc. Stock Ownership Plan, and are exercisable at
January 31, 1995 or within 60 days of said date, for Messrs. Mead,
Tetzlaff, Blakely, Dick and Chesebro' to purchase 50,000, 5,333, 5,700,
4,000, and 5,333 shares, respectively.
(3) Includes 119,970 shares that are subject to options that are exercisable by
all executive officers and directors of the Company as a group, and
includes 351,115 shares that are held in trust under the Tenneco Inc. Key
Employee Restricted Stock and Restricted Unit Plan, the 1994 Tenneco Inc.
Stock Ownership Plan, and the Tenneco Inc. Directors Restricted Stock and
Restricted Unit Program, for all executive officers and directors of the
Company as a group.
7
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1994 the Board of Directors held eleven meetings, and each director
attended more than 75% of the aggregate of all meetings of the Board of
Directors and all meetings of the committees of the Board on which the director
served.
There are four standing committees of the Board of Directors, which have the
following described responsibilities and authority.
The Audit Committee has the responsibility, among other things, to (i)
recommend the selection of the Company's independent public accountants, (ii)
review and approve the scope of the independent public accountants' audit
activity and extent of non-audit services, (iii) review with management and
such independent public accountants the adequacy of the Company's basic
accounting system and the effectiveness of the Company's internal audit plan
and activities, (iv) review with management and the independent public
accountants the Company's certified financial statements and exercise general
oversight of the Company's financial reporting process and (v) review with the
Company litigation and other legal matters that may affect the Company's
financial condition and monitor compliance with the Company's business ethics
and other policies. Three meetings of the Audit Committee were held in 1994.
The Compensation and Benefits Committee has the responsibility, among other
things, to (i) establish the salary rate of officers and employees of the
Company and its subsidiaries, (ii) examine periodically the compensation
structure of the Company and (iii) supervise the welfare and pension plans and
compensation plans of the Company. Four meetings of the Compensation and
Benefits Committee were held in 1994.
The Nominating and Management Development Committee has the responsibility,
among other things, to (i) review possible candidates for members of the Board
of Directors and recommend a slate of nominees for election as directors at the
Company's annual stockholders' meeting, (ii) review the function and
composition of the other committees of the Board of Directors and recommend
membership on such committees and (iii) review the qualifications and recommend
candidates for election as officers of the Company. Five meetings of the
Nominating and Management Development Committee were held in 1994.
The Executive Committee has, during the interval between the meetings of the
Board of Directors, the authority to exercise all the powers of the Board that
may be delegated legally to it by the Board in the management and direction of
the business and affairs of the Company. No meetings of the Executive Committee
were held in 1994.
A stockholder of the Company may nominate persons for election to the Board
of the Company if the stockholder submits such nomination, together with
certain related information required by the Company's By-Laws, in writing to
the Secretary of the Company not less than 50 days nor more than 75 days prior
to the date of any annual meeting of stockholders.
8
<PAGE>
(Notes continued on following page)
EXECUTIVE COMPENSATION
The following table sets forth the remuneration paid by the Company (i) to
the Chairman of the Board and Chief Executive Officer and (ii) to each of the
four most highly compensated key executive officers of the Company whose salary
and bonus exceeded $100,000, for the years indicated:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ ------------------
OTHER
ANNUAL RESTRICTED ALL OTHER
NAME AND PRINCIPLE COMPEN- STOCK COMPEN-
POSITION YEAR SALARY(1) BONUS SATION(2) AWARDS(3) OPTIONS SATION(4)
------------------ ---- ---------- ---------- --------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Dana G. Mead(5) 1994 $ 878,177 $ 900,000 $149,110 $ 647,256 100,000 $ 142,966
Chairman and Chief 1993 $ 664,839 $ 700,000 $ 60,007 $ 582,813 50,000 $ 93,979
Executive Officer 1992 $ 455,208 $ 600,000 $401,783 $2,110,625 -- $1,529,122
Michael H. Walsh(6) 1994 $ 363,166 -- $ 75,535 $ 889,977 100,000 $ 119,692
Chairman and Chief 1993 $1,005,006 $1,000,000 $ 10,472 $ 815,938 25,000 $ 122,655
Executive Officer 1992 $ 903,272 $1,600,000 $212,910 $1,990,650 -- $ 119,740
Theodore R. Tetzlaff 1994 $ 400,000 $ 300,000 $ 307 $ 539,380 16,000 --
General Counsel 1993 $ 350,000 $ 250,000 -- $ 243,440 -- --
1992 $ 250,000 -- -- -- -- --
Robert T. Blakely 1994 $ 407,640 $ 230,000 $ 582 $ 230,585 15,675 $ 44,144
Senior Vice President 1993 $ 393,846 $ 200,000 $ 823 $ 163,188 -- $ 45,119
and Chief Financial
Officer 1992 $ 374,672 $ 120,000 $ 49,151 $ 139,545 -- $ 48,491
Stacy S. Dick 1994 $ 343,560 $ 235,000 $ 582 $ 215,752 12,000 $ 24,926
Senior Vice President-- 1993 $ 325,214 $ 200,000 $ 95,392 $ 139,875 -- $ 23,744
Strategy 1992 $ 125,000 $ 150,000 $603,960 $ 587,820 -- $ 452,476
S. D. Chesebro 1994 $ 437,880 $ 210,000 $ 5,355 $ 242,721 16,000 $ 62,410
President and Chief 1993 $ 423,006 $ 300,000 $ 537 $ 279,750 -- $ 60,945
Executive Officer of 1992 $ 376,070 $ 415,000 $ 75,095 $ 854,889 -- $ 52,088
Tenneco Gas Inc.
</TABLE>
---------
(1) Includes base salary plus amounts paid in lieu of Company matching
contributions to the Thrift Plan.
(2) Includes amounts attributable to (i) the value of personal benefits
provided by the Company to its executive officers, which have an aggregate
value in excess of $50,000, such as the personal use of Company owned
property, membership dues, assistance provided to such
9
<PAGE>
persons with regard to financial, tax and estate planning, and (ii)
reimbursement for taxes. The amount of each such personal benefit that
exceeds 25% of the estimated value of the total personal benefits provided
by the Company to the individuals named in the table was as follows: During
1994: $57,540 for use of Company owned property and $50,606 for
reimbursement for taxes for Mr. Mead; $34,327 for use of Company owned
property, $28,600 for financial planning services, and $1,123 for
reimbursement for taxes for Mr. Walsh; $307, $582, $582 and $5,355 for
reimbursement for taxes for Messrs. Tetzlaff, Blakely, Dick and Chesbro ,
respectively; During 1993: $34,832 for use of Company owned property and
$19,950 for financial planning services for Mr. Mead; $823 and $537 for
reimbursement for taxes for Messrs. Blakely and Chesebro ; and $50,000 in
relocation expenses and $35,266 for reimbursement for taxes for Mr. Dick;
respectively; and During 1992: $319,643 and $102,431 in relocation expenses
for Messrs. Mead and Walsh, respectively; $552,346 in relocation expenses
and $21,942 for reimbursement for taxes for Mr. Dick; and $30,029 for use of
Company owned property and $16,355 for reimbursement for taxes for Mr.
Chesebro .
(3) Includes the dollar value of grants of restricted stock made pursuant to
the Company's benefit plans based on the price of the Company's Common
Stock on the date of grant. At December 31, 1994, Messrs. Mead, Tetzlaff,
Blakely, Dick, and Chesebro held 24,500; 15,000; 14,560; 22,000; and
31,350 shares, respectively, under such plans. The value at December 31,
1994, (based on a per share price of $42.50 on that date) of all restricted
shares held was $1,041,250 for Mr. Mead; $637,500 for Mr. Tetzlaff;
$618,800 for Mr. Blakely; $935,000 for Mr. Dick; and $1,332,375 for Mr.
Chesebro . Dividends will be paid on the restricted shares held by each
individual.
(4) Includes amounts attributable during 1994 to benefit plans of the Company
as follows:
(a) The amounts contributed pursuant to the Thrift Plan for the account of
Messrs. Mead, Walsh, Blakely, Dick, and Chesebro were $4,666; $6,000;
$9,240; $5,880; and $9,240, respectively.
(b) The amounts accrued under the Deferred Compensation Plan, together with
adjustments based upon changes in the Consumer Price Index for All
Urban Households, as computed by the Bureau of Labor Statistics, for
Messrs. Mead, Walsh, Blakely, Dick, and Chesebro were $106,020;
$65,473; $31,861; $16,237; and $38,001, respectively.
(c) Amounts imputed as income for federal income tax purposes under the
Company's group life insurance plan for Messrs. Mead, Walsh, Blakely,
Dick, and Chesebro were $32,279; $3,115; $3,043; $2,809; and $15,169,
respectively.
(5) Mr. Mead was elected Chairman and Chief Executive Officer on May 10, 1994,
having served as President and Chief Executive Officer since February 24,
1994, prior to which he served as President and Chief Operating Officer
since May 1992.
(Notes continued on following page)
10
<PAGE>
(6) Mr. Walsh served as Chairman and Chief Executive Officer of the Company
until February 24, 1994, when he resigned as Chief Executive Officer so
that he could devote his full attention to his medical treatment. Mr. Walsh
served as Chairman of the Company until his death on May 6, 1994.
----------------
OPTION GRANTS IN 1994
The following table sets forth the number of stock options that were granted
during 1994 to the persons named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(4)
-------------------------------------------------- ---------------------
% OF
TOTAL
OPTIONS
OPTIONS GRANTED
GRANTED TO
(NO. OF EMPLOYEES EXERCISE OR
SHARES) IN FISCAL BASE PRICE EXPIRATION
NAME (1)(2) YEAR PER SHARE(3) DATE 5% 10%
---- ------- --------- ------------ ---------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dana G. Mead............ 100,000 5.8% $53.938 January 11, 2004 $3,392,000 $8,596,000
Michael H. Walsh........ 100,000(5) 5.8% $53.938 January 11, 2004 $3,392,000 $8,596,000
Theodore R. Tetzlaff.... 16,000 .9% $53.938 January 11, 2004 $ 542,720 $1,375,360
Robert T. Blakely....... 15,675 .9% $53.938 January 11, 2004 $ 531,696 $1,347,423
Stacy S. Dick........... 12,000 .7% $53.938 January 11, 2004 $ 407,040 $1,031,520
S.D. Chesebro .......... 16,000 .9% $53.938 January 11, 2004 $ 542,720 $1,375,360
</TABLE>
---------
(1) The options reported in this column and in the Summary Compensation Table
consist of Non-Qualified Options granted under the 1994 Tenneco Inc. Stock
Ownership Plan. The options become exercisable at the rate of one-third per
year on January 11 of 1995, 1996, and 1997, respectively.
(2) These options provide that a grantee who delivers shares of Common Stock to
pay the option exercise price will be granted, upon such delivery and
without further action by the Company, an additional option to purchase the
number of shares so delivered. These "reload" options are granted at 100%
of the fair market value (as defined in the plan) on the date they are
granted, become exercisable six months from that date and expire coincident
with the options they replace. Grantees are limited to 10 reload options
and the automatic grant of such reload options is limited to twice during
any one calendar year.
(3) All options were granted at 100% of the fair market value on the date of
grant.
(4) The dollar amounts under these columns are the result of calculations for
the period from the date of grant to the expiration of the option at the 5%
and 10% annual appreciation rates set by the Securities and Exchange
Commission and, therefore, are not intended to forecast possible future
appreciation, if any, in the price of the Common Stock. No gain to the
optionee is possible without an increase in price of the Common Stock. In
order to realize the potential values set forth in the 5% and 10% columns
of this table, the per share price of the Company's Common Stock would be
$87.86 and $139.90, respectively, or 63% and 160%, respectively, above the
exercise or base price.
(5) Options held by Mr. Walsh's beneficiary.
11
<PAGE>
OPTIONS/SARS EXERCISED IN 1994 AND
1994 YEAR-END VALUES
The following table sets forth the number of stock options and related stock
appreciation rights held, as of December 31, 1994, by the persons named in the
Summary Compensation Table. No options to acquire shares or related stock
appreciation rights were exercised during 1994.
<TABLE>
<CAPTION>
TOTAL NO. OF UNEXERCISED
OPTIONS HELD AT
DECEMBER 31, 1994(1)
-------------------------
NAME EXERCISABLE UNEXERCISABLE
---- ----------- -------------
<S> <C> <C>
Dana G. Mead.................................... 16,667 133,333
Michael H. Walsh(2)............................. 375,000 --
Theodore R. Tetzlaff............................ -- 16,000
Robert T. Blakely............................... 475 15,675
Stacy S. Dick................................... -- 12,000
Stephen D. Chesebro ............................ -- 16,000
</TABLE>
---------
Notes:
(1) There were no unexercised in-the-money options held at December 31, 1994,
except for those held by Mr. Walsh's beneficiary and Mr. Blakely who held
exercisable options on that date valued at $1,515,500 and $653,
respectively (based on the fair market value of $42.50). Mr. Blakely's
exercisable options also represent 475 exercisable stock appreciation
rights.
(2) Options held by Mr. Walsh's beneficiary.
----------------
12
<PAGE>
The following table sets forth the aggregate estimated annual benefits
payable upon normal retirement pursuant to the Company's Retirement Plan,
Benefit Equalization Plan, and Supplemental Executive Retirement Plan to
persons in specified remuneration and years of credited participation
classifications.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF CREDITED PARTICIPATION
---------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
------------ -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
$ 350,000 $ 82,500 $110,000 $137,500 $165,000 $192,500
400,000 94,300 125,700 157,100 188,600 220,000
450,000 106,100 141,400 176,800 212,100 247,500
500,000 117,900 157,100 196,400 235,700 275,000
550,000 129,600 172,900 216,100 259,300 302,500
600,000 141,400 188,600 235,700 282,900 330,000
650,000 153,200 204,300 255,400 306,400 357,500
700,000 165,000 220,000 275,000 330,000 385,000
750,000 176,800 235,700 294,600 353,600 412,500
800,000 188,600 251,400 314,300 377,100 440,000
850,000 200,400 267,100 333,900 400,700 467,500
900,000 212,100 282,900 353,600 424,300 495,000
950,000 223,900 298,600 373,200 447,900 522,500
1,000,000 235,700 314,300 392,900 471,400 550,000
1,100,000 259,300 345,700 432,100 518,600 605,000
1,200,000 282,900 377,100 471,400 565,700 660,000
1,300,000 306,400 408,600 510,700 612,900 715,000
1,400,000 330,000 440,000 550,000 660,000 770,000
1,500,000 353,600 471,400 589,300 707,100 825,000
1,600,000 377,100 502,900 628,600 754,300 880,000
1,700,000 400,700 534,300 667,900 801,400 935,000
1,800,000 424,300 565,700 707,100 848,600 990,000
1,900,000 447,900 597,100 746,400 895,700 1,045,000
2,000,000 471,400 628,600 785,700 942,900 1,100,000
</TABLE>
---------
Notes:
1. The benefits set forth above are computed as a straight life annuity and
are based on years of credited participation in the Retirement Plan and
the employee's average base salary during the final five years of credited
participation in the Plan; such benefits are not subject to any deduction
for Social Security or other offset amounts. At the time of his death, Mr.
Walsh had 3.8 years of credited participation under the Company's
Retirement Plan. The years of credited participation under the Retirement
Plan for Messrs. Mead, Blakely, Dick, and Chesebro are 2, 12, 2, and 30,
respectively (See: Note 2 below for additional information relating to
Messrs. Mead, Walsh and DIck; and the "Summary Compensation Table" on page
9 for salary and bonus information for Messrs. Mead, Walsh, Blakely, Dick,
and Chesebro).
2. Pursuant to employment agreements with Messrs. Mead, Walsh and Dick
described under the heading "Employment Contracts and Termination of
Employment and Change-in-Control Arrangements", the Company has agreed to
pay Messrs. Mead, Walsh and Dick
13
<PAGE>
such supplemental payments (in addition to any benefits payable under the
Company's qualified and nonqualified pension plans) as may be necessary to
make each person's total payments equal to the amount each would have
received had he continued to be covered under pension plans maintained by
his former employer (based on his credited service with the Company plus
14.6, 13 and 5 years, respectively, of credited service with each person's
former employer, and on the compensation received from the Company as
salary and bonuses).
3. The Company provides Mr. Tetzlaff with an individual pension plan. The
plan is based on Mr. Tetzlaff's salary and bonus and also provides for
guaranteed graduated minimum annual benefits of $100,000 beginning in
1998, $200,000 per year beginning in 2003 and $300,000 per year beginning
in 2008 (see: "Summary Compensation Table" on page 9 for salary and bonus
information on Mr. Tetzlaff).
---------------
COMPENSATION OF DIRECTORS
Directors who are also officers of the Company or its subsidiaries do not
receive additional directors' fees or amounts for committee participation. All
other directors annually are each paid a director's fee of $32,000 per annum
and receive 300 restricted shares of the Company's Common Stock (discussed
below) and are paid an attendance fee of $1,500 plus expenses for each meeting
of the Board of Directors attended. Each director who serves as a Chairman of
the Audit, Compensation and Benefits, or Nominating and Management Development
Committees of the Board of Directors is paid an additional fee of $7,000 per
Chairmanship, and directors who serve as members of such committees are paid
an additional fee of $4,000 per committee membership. Members of the Executive
Committee receive an additional $1,500 attendance fee plus expenses for each
meeting of that committee attended. Payment of all or a portion of such fees,
together with interest and an adjustment based upon changes in the Consumer
Price Index For All Urban Households as computed by the Bureau of Labor
Statistics, may be deferred at the election of the director until the earliest
of (i) the year next following the date upon which he or she ceases to be a
director of the Company, (ii) the year selected by the director for
commencement of payment of the deferred amount, or (iii) the director's
attainment of age 74.
Each director who is not also an officer of the Company and retires with at
least 5 years of service will be eligible to receive monthly retirement
payments based on years of service and the aggregate amount of director and
committee fees being received at the time of retirement. Such retirement
payments will continue for a period of time equal to the number of years such
person served as a director, except that a director who served for more than
15 years will be entitled to receive retirement payments for life. In the
event a director dies prior to the expiration of the retirement payment
period, any remaining payments will be paid to such director's estate or
designated beneficiary. For a director who is entitled to receive life-time
retirement payments and received such retirement payments for less than 15
years at the time of death, payments will be made for the remainder of the 15
year period to such director's estate or designated beneficiary.
14
<PAGE>
Directors who are not also officers of the Company receive annually 300
restricted shares of the Company's Common Stock. Such restricted shares may not
be sold, transferred, assigned, pledged, or otherwise encumbered and are
subject to forfeiture should the director cease to serve on the Board prior to
the expiration of the restricted period that ends upon such director's normal
retirement from the Board, unless such director is disabled, dies, or the
Compensation and Benefits Committee of the Board, at its discretion, determines
otherwise. During such restricted period, holders of restricted shares are
entitled to vote the shares and receive dividends.
----------------
The report of the Compensation and Benefits Committee and the performance
graphs that appear immediately below are not deemed to be soliciting material
or to be filed with the Securities and Exchange Commission under the Securities
Act of 1933 or the Securities Exchange Act of 1934 or incorporated by reference
in any document so filed.
----------------
TENNECO INC. COMPENSATION AND BENEFITS COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The executive compensation philosophy, policies, plans, and programs of the
Company are under the supervision of the Compensation and Benefits Committee
(the "Committee"), which is composed of the directors named below, none of whom
is an officer or employee of the Company. The Committee has furnished the
following report on executive compensation:
Compensation Philosophy
The basic philosophy underlying Tenneco's executive compensation policies,
plans, and programs is that executive and stockholder financial interests
should be aligned as closely as possible, and the compensation package should
be based on delivering pay in line with performance. As much emphasis should be
placed on the worth of an individual's contributions as on his/her position.
The cornerstone of Tenneco's program is to provide common plans for the Company
and its operating divisions in terms of design, but with performance goals that
are customized for each division, thereby effectively permitting each operating
unit to influence its own earnings opportunities.
Accordingly, the executive compensation program for the Company's Chief
Executive Officer ("CEO") and the other executives named in this proxy
statement ("Named Executives"), as well as other executives of the Company, has
been structured to:
--Reinforce a results-oriented management culture with executive pay that
varies according to corporate, division, and individual performance
against extraordinarily aggressive goals.
15
<PAGE>
--Provide incentives, in the form of substantial long-term reward
potential, for senior executives to remain employees of the Company.
--Focus on annual and long-term business results that include growth in
earnings per share as well as growth in stockholder value, divisional net
income, cash flow, and economic value added (EVA) with improvement in
cost of quality, safety, environmental, risk management, effective
leadership, and equal employment opportunities performance.
--De-emphasize fixed compensation in the form of base salary and place
greater emphasis on variable performance-based compensation.
--Align the interests of the Company's executives and stockholders by
accelerating the acquisition and encouraging the retention of Tenneco
shares by those executives.
--Extend stock acquisition programs into lower organizational levels
through the use of stock options.
--Provide plans that are simple and easy to describe and understand.
Based on these objectives, the executive compensation program has been
designed to generate compensation from several sources--salaries, annual cash
incentive awards, deferred compensation payments, long-term incentive
opportunities, and other benefits typically offered to executives by major
corporations.
The Company's policy is to provide total compensation to its executives based
on performance that is competitive and at market levels when financial and
qualitative targets are met. Tenneco's compensation plans provide that as an
executive's level of responsibility increases, (i) a greater portion of his/her
potential total compensation is based on performance (both individual and
corporate), and a lesser portion is comprised of salary, causing potentially
greater variability in the individual's total compensation from year-to-year,
and (ii) the mix of compensation for that executive shifts to a greater portion
being derived from compensation plans that result in stock ownership.
In designing and administering the components of the executive compensation
program, the Committee strives to balance short and long-term incentive
objectives and to employ prudent judgment when establishing performance
criteria, evaluating performance, and determining actual incentive payments.
The following is a description of each of the components of the executive
compensation program along with a discussion of the decisions and actions taken
by the Committee with regard to 1994 compensation; there also follows a
discussion regarding the CEO's compensation.
16
<PAGE>
Annual Cash Compensation Program
An executive's annual cash compensation consists of a base salary plus
amounts paid in lieu of Company matching contributions to the Thrift Plan,
bonuses under the Company's Executive Incentive Compensation Plan, and deferred
compensation payments under the Company's deferred compensation plan. Certain
senior executives may receive annual cash compensation under the 1994 Tenneco
Inc. Stock Ownership Plan (the "1994 Stock Ownership Plan") described below.
Each year the Committee reviews with the CEO and the senior human resources
executive of the Company an annual salary plan for the Company's executives and
other key management personnel (excluding the CEO) following which the
Committee approves that plan with changes that the Committee deems appropriate.
The salary plan that is developed is based in part on competitive market data
and on assessments of past and anticipated future performance. The Committee
employs competitive market data for directional and guideline purposes in
combination with corporate, divisional, and individual performance results. The
competitive market data used by the Committee includes several of the companies
comprising the Peer Group on the Performance Graph, which follows this report.
However, their inclusion in this data is a function of their participation in
the various nationally recognized compensation surveys in which the Company
participates, rather than an alignment of companies in similar industry groups.
Salary levels are structured within a range of reputable survey data for
comparable companies without regard to the performance of the companies
surveyed. The range is used to allow judgments as to the quality of Tenneco's
performance and individual executive performance. The Committee also reviews,
with the assistance of the senior human resources executive, and sets the
salary of the CEO based on similar information and criteria and the Committee's
assessment of his past performance and its expectations as to his future
contributions in leading the Company.
Annual performance goals (operating income, cash flow, economic value added
(EVA) and other qualitative objectives that have been assigned to division and
individual participants) are established under the Executive Incentive
Compensation Plan at the beginning of each year for purposes of determining
incentive awards for that year. At the conclusion of each year, the Committee
approves incentive and deferred award payments to employees based on the degree
of achievement of the goals established at the beginning of that year and on
judgments of individual performance. Using operating income, cash flow, and EVA
as a starting point, each organization receives incentive compensation funds
based on judgmental considerations including the degree of difficulty in
meeting targets, contribution to overall corporate performance, capital and
asset management, safety performance, quality and risk management initiatives,
equal employment opportunities performance, and leadership. The Committee does
not place a greater value on any particular one of these considerations;
rather, the performance against such goals is considered as part of the overall
information considered by the Committee. The Committee makes individual awards
based upon its evaluation of the individual's contribution to the overall
performance results of his division. The Committee
17
<PAGE>
believes that the Company performed very well in relation to the goals set for
1994, as set out below.
Effective for 1994 and subsequent years, the CEO, the Named Executives and
other senior executives of the Company, its subsidiaries and divisions may
receive performance units under the 1994 Stock Ownership Plan. The performance
units will permit these executives to earn cash bonuses based upon the
attainment of specified goals relating to earnings per share from continuing
operations or shareholder returns. The performance units are discussed further
below under the captions "$1 Million Tax Limitation".
Long Term Incentives--Stock Awards
The Company's long-term stock incentive plan (1994 Stock Ownership Plan) is
designed to align a significant portion of the executive compensation plan with
stockholder interests. This plan, approved by shareholders at the 1994 annual
stockholders' meeting, permits the granting of a variety of long-term awards
including stock options, restricted stock, and performance shares. See a
separate discussion below under "$1 Million Tax Limitation". Shares of stock
(stock options and restricted stock) are allocated to the divisions based on
operating performance and the Committee's judgment. Corporate performance
defines the overall amount of shares to be awarded. Each division's performance
is reviewed to determine the number of shares allocated to such division for
distribution to award recipients within that division. These are adjusted on a
discretionary basis, based on the quality of these results and on internal
equity. The Committee believes that the Company performed very well in relation
to its goals during 1994, as set out below. In addition, in 1994 a plan was
initiated that sets forth either stock ownership requirements or guidelines for
stock ownership, depending on an individual's organization level, for employees
of the Company and its subsidiaries.
CEO Compensation
In order to recognize the leadership that Mr. Mead demonstrated as CEO in
1994, effective January 1, 1995, his base salary was increased from $900,000 to
$925,000. The amount of his increase was consistent with the salary increases
for other executives in the Company.
The Committee determined that the level of the Company's performance during
1994 represented a significant achievement. Factors considered by the Committee
included the following achievements and improvements in 1994 from the results
of the prior year:
--An increase of $1.13, or 48%, in earnings per share from continuing
operations.
--A $282 million increase in operating income, up 26%.
--Progress on the implementation of the Case Corporation restructuring
program including a $232 million increase in operating earnings at Case,
as a stand-alone, publicly-held company, to $315 million.
18
<PAGE>
--Approval of the CVN-76 carrier contract and the first order from a
foreign shipowner for a U.S. shipyard for commercial vessels since 1957.
--A successful initial public offering of 29% of Case Corporation stock
followed late in the year with a secondary offering of 27% of the Common
Stock.
--A decrease in consolidated debt of approximately $2.0 billion.
--A reduction in the industrial debt to capitalization ratio from 49.3% at
year-end 1993 to 46.4% at year-end 1994, the lowest level in more than a
decade.
--A Company-wide quality improvement program that provided approximately
$240 million in operating income for 1994.
--A year-over-year improvement in operating income in 4 of 5 divisions.
--Significant acquisitions in long-term growth platforms: Gillet (European
Exhaust), Products for Power (aftermarket catalytic converters
manufacturer).
The Committee's assessment is that the Company, under the CEO's leadership,
and the initiatives and programs he put in place, has produced significant
improvements in Tenneco's overall performance including the factors set forth
above, which were specifically considered by the Committee in formulating his
compensation. Moreover, Mr. Mead successfully managed the leadership transition
during Mike Walsh's illness and following his death in May.
During 1994 Mr. Mead's base salary was increased from $700,000 to $900,000 to
reflect added responsibility resulting from his promotion to Chief Executive
Officer in February and Chairman of the Board in May of that year.
In 1994 the incentive award to the CEO was $900,000, which has been deferred
until Mr. Mead's retirement. The amount of this deferral was put into a stock
index account that tracks the performance of Tenneco Common Stock. The CEO also
received for 1994 a $100,000 deferred compensation award under the Company's
executive deferred compensation plan. The size of this award is consistent with
awards to other senior executives who are participants in this plan and
reflects the Committee's judgment based on its evaluation of Mr. Mead's
contribution to the Company's 1994 operating results, which are set out above.
In 1994 the CEO received a grant of 12,000 shares of restricted stock and an
option to purchase 100,000 shares of Common Stock. The size of the restricted
stock award is consistent with awards given to other senior executives who are
participants in this plan and reflects the Committee's judgment based on its
evaluation of Mr. Mead's contribution to the Company's 1994 operating results,
which are set out above.
19
<PAGE>
$1 Million Tax Limitation
Effective in 1994 the Internal Revenue Code of 1986, as amended, imposes a $1
million limit on the amount that a publicly-traded corporation may deduct for
compensation paid to the CEO or a Named Executive who is still employed on the
last day of the year; provided, however, "performance-based compensation" is
excluded from this $1 million limitation.
The Company desires both to compensate its executives adequately and to
safeguard its tax deduction for compensation. Consequently, the 1994 Stock
Ownership Plan subjects stock options, stock appreciation rights ("SARs"),
stock equivalent units, and performance unit grants to certain conditions
designed to make the cash or stock that an executive receives under such awards
"performance-based compensation"; however, restricted stock awards under that
plan will not qualify as "performance-based compensation" and therefore will be
subject to the $1 million limitation. In 1995 a total of ten senior executives
will receive awards of performance shares (stock equivalent units) rather than
restricted stock. These shares will vest based on the attainment of specific
performance objectives and will ensure that the Company receives a tax
deduction for compensation at the time the shares are vested.
The 1994 Stock Ownership Plan limits the number of stock options and SARs
that may be granted to any one participant. Also the plan provides that covered
executives may receive a bonus pursuant to performance unit grants only upon
the attainment of specific performance objectives. The plan limits the number
of stock equivalent units that may be granted to a participant in any one year,
and it provides that the covered executives as determined by the Committee may
earn the stock equivalent units only upon the attainment of such target levels
of either earnings or shareholder return as may be specified by the Committee.
The Compensation Committee has established the specific targets applicable to
performance based awards that may be made under the plan for 1995. The cash or
stock that the executives receive under this plan will be fully deductible by
the Company for federal income tax purposes.
Compensation and Benefits Committee
Joseph J. Sisco--Chairman
Mark Andrews
B. K. Johnson
John B. McCoy
Clifton R. Wharton, Jr.
20
<PAGE>
PERFORMANCE GRAPHS
The following performance graph compares the yearly percentage change in the
Cumulative Total Return (as defined below for the following graph) on a share
of Common Stock of the Company with (i) the Standard & Poor's 500 Stock Index;
and (ii) an industry peer group index based on a combination of the six
Standard & Poor's sub-indices described below.
[TO FOLLOW]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
12/1989 12/1990 12/1991 12/1992 12/1993 12/1994
----------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Tenneco Inc. 100 80.5 56.9 76.9 103.9 86.8
-----------------------------------------------------------------------------------
S&P 500 100 96.9 126.4 136.1 149.8 151.7
-----------------------------------------------------------------------------------
Peer Group 100 86.7 104.9 110.4 142.6 141.1
</TABLE>
-------------------------------------------------------------------------
BASE - DECEMBER 31, 1989 = 100
---------
Notes:
1. "Cumulative Total Return" on a share of Common Stock of the Company is
measured by dividing (a) the sum of (i) the cumulative amount of
dividends for the five years from December 31, 1989, through December
31, 1994, (assuming the reinvestment of dividends over such period) and
(ii) the difference between the price of a share of Common Stock of the
Company at December 31, 1989, and December 31, 1994, by (b) the price
of a share of such Common Stock at December 31, 1989.
2. Based on the identifiable assets of each of the Company's six business
segments at December 31, 1994, adjusted in each case to exclude
discontinued operations (other than the chemicals segment), the six
Standard & Poor's sub-indices included in the combined industry peer
group have been weighted as follows for the years:
(Notes continued on following page)
21
<PAGE>
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Machinery--Diversified......................... 56% 58% 54% 50% 45% 37%
Aerospace/Defense.............................. 10% 9% 9% 10% 9% 10%
Natural Gas.................................... 16% 15% 18% 20% 22% 24%
Auto Parts--Aftermarkets....................... 6% 6% 6% 6% 8% 11%
Containers--Paper.............................. 6% 7% 8% 9% 11% 11%
Chemicals...................................... 6% 5% 5% 5% 5% 7%
</TABLE>
3. The stock price performance shown on this graph is not necessarily
indicative of future price performance of the Company's Common Stock.
The Company believes that its performance from December 31, 1991 to December
31, 1994 is relevant since senior management of the Company changed with the
election of Mr. Walsh as President of the Company in September 1991, his
election as Chief Executive Officer in January 1992 and Chairman in May 1992,
together with the election of Mr. Mead as President and Chief Operating
Officer in May 1992, his election as President and Chief Executive Officer in
February 1994 and his election as Chairman and Chief Executive Officer in May
1994. The following chart illustrates the 52.5% increase in Tenneco's
Cumulative Total Return (as defined below for the following graph) from
December 31, 1991, to December 31, 1994, and the S&P 500 and Peer Group
increase of 20.0% and 33.5%, respectively, during the same period.
[Chart to Come]
<TABLE>
<S> <C> <C> <C> <C>
12/1991 12/1992 12/1993 12/1994
Tenneco
Inc. 100 135.1 182.5 152.5
----------------------------------------------------
S&P 500 100 107.6 118.5 120.0
----------------------------------------------------
Peer Group 100 105.4 136.5 133.5
</TABLE>
BASE - DECEMBER 31, 1991 = 100
(See notes on following page)
22
<PAGE>
---------
Notes:
1. "Cumulative Total Return" on a share of Common Stock of the Company is
measured by dividing (a) the sum of (i) the cumulative amount of
dividends for the three years from December 31, 1991, through December
31, 1994, (assuming the reinvestment of dividends over such period) and
(ii) the difference between the price of a share of Common Stock of the
Company at December 31, 1991, and December 31, 1994, by (b) the price
of a share of such Common Stock at December 31, 1991.
2. Based on the identifiable assets of each of the Company's six business
segments at December 31, 1994, adjusted in each case to exclude
discontinued operations (other than the chemicals segment), the six
Standard & Poor's sub-indices included in the combined industry peer
group have been weighted as follows for the years:
<TABLE>
<CAPTION>
1991 1992 1993 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Machinery--Diversified................................ 54% 50% 45% 37%
Aerospace/Defense..................................... 9% 10% 9% 10%
Natural Gas........................................... 18% 20% 22% 24%
Auto Parts--Aftermarkets.............................. 6% 6% 8% 11%
Containers--Paper..................................... 8% 9% 11% 11%
Chemicals............................................. 5% 5% 5% 7%
</TABLE>
3. The stock price performance shown on this graph is not necessarily
indicative of future price performance of the Company's Common Stock.
The additional performance graph that follows compares the yearly Cumulative
Total Return on a share of Common Stock of the Company with a "New Peer Group"
that includes representative companies from the industries in which the
Company's pipeline, automotive, packaging, and shipbuilding divisions compete.
The Company believes that this performance graph is relevant since the Company
has divested itself of its chemicals division and substantially reduced its
investment in its farm and construction equipment division. The performance of
companies comprising the New Peer Group is measured on the basis of market
capitalization, weighted for each year.
23
<PAGE>
[Chart to Come]
<TABLE>
<S> <C> <C> <C> <C>
12/1991 12/1992 12/1993 12/1994
Tenneco Inc. 100 135.1 182.5 152.5
------------------------------------------------------
S&P 500 100 107.6 118.5 120.0
------------------------------------------------------
New Peer Group 100 116.7 138.4 132.2
</TABLE>
---------
Notes:
1. "Cumulative Total Return" on a share of Common Stock of the Company is
measured in the same manner as set out in Note 1 to the preceding
chart.
2. The New Peer Group, constructed by the Company and comprised of the
following companies (which are competitors of the Company's pipeline,
automotive, packaging, and shipbuilding divisions), is based on market
capitalization, weighted for each year:
Pipeline Portfolio: The Coastal Corporation, The Columbia Gas System,
Inc., Consolidated Natural Gas Company, Enron Corp., Panhandle Eastern
Corporation, Sonat, Inc., Transco Energy Company, and The Williams
Companies; Automotive Parts Portfolio: Arvin Industries, Inc., A.O.
Smith Company, Cooper Tire & Rubber Company, Cummins Engine Co., Inc.,
Dana Corporation, Genuine Parts Company, Goodyear Tire & Rubber Co.,
Eaton Corporation, Echlin Inc., Federal-Mogul Corporation, Modine
Manufacturing Company, Navistar International Corporation, Paccar Inc.,
Standard Motor Products Company, Standard Products Co., Superior
Industries International, Inc., and Varity Corporation; Packaging/Forest
& Paper Products Portfolio: Abitibi-Price Company, Bemis Company, Inc.,
Boise Cascade Corporation, Bowater Incorporated,
24
<PAGE>
Champion International Corporation, Chesapeake Corporation, Consolidated
Papers, Inc., Federal Paper Board Company, Inc., Georgia-Pacific
Corporation, International Paper Company, James River Corporation of
Virginia, Louisiana-Pacific Corporation, Longview Fibre Company, The
Mead Corporation, Potlatch Corporation, Stone Container Corporation, St.
Joe Paper Company, Temple-Inland Inc., Union Camp Corporation, Wausau
Paper Mills Company, Westvaco Corp., Weyerhaeuser Company, and
Willamette Industries Inc.; and Defense Portfolio: Litton Industries,
Inc., General Dynamics Corporation, Rockwell International Corporation,
United Technologies Corporation.
3. The stock price performance shown on this graph is not necessarily
indicative of future price performance of the Company's Common Stock.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has an agreement with Mr. Mead for his employment with the
Company providing for the payment to Mr. Mead of a salary of not less than
$575,000 per year (with such increases, as determined by the Compensation and
Benefits Committee of the Board). Also the Company has agreed that in the event
Mr. Mead's employment is terminated for any reason other than for cause, death,
or permanent disability, the Company will pay to Mr. Mead an amount equal to
three times his annual salary plus $300,000. In the event the Company
terminates Mr. Mead for nonperformance of his duties prior to age 60, the
Company will guarantee a payment to him of an amount equal to the full
retirement benefit he would be entitled to at age 60 (including services with
his prior employer and bonus included in the calculation of such benefit). In
the event of Mr. Mead's death prior to retirement, all restrictions remaining
on any outstanding awards under the Restricted Stock Plan will lapse and the
shares distributed to his estate or his beneficiary, as so designated.
The Company had an agreement with Mr. Walsh, who served as Chairman of the
Board until his death on May 6, 1994, which provided for salary and bonus
thresholds during the term of his employment. Such agreement also provided
that, upon his death, all restrictions remaining on Restricted Shares would
lapse, all stock options would become immediately exercisable, and all amounts
credited to his deferred compensation plan would be due and payable.
The Company has an agreement with Mr. Dick for his employment with the
Company providing for the payment to Mr. Dick of a salary of not less than
$325,000 per year (with such increases as determined by the Compensation and
Benefits Committee of the Board). Also the Company has agreed that in the event
Mr. Dick's employment is terminated for any reason other than for cause, death,
or permanent disability the Company will pay to Mr. Dick an amount equal to his
annual salary.
25
<PAGE>
The Company has established a Benefits Protection Program (the "Program") to
enable the Company to continue to attract, retain and motivate highly qualified
employees by eliminating (to the maximum practicable extent) any concern on the
part of such employees that their job security or benefit entitlements will be
jeopardized by a "Change-in-Control" of the Company (as such term is defined in
the Program). The Program is designed to achieve this purpose through (i) the
establishment of a severance plan for the benefit of certain employees whose
employment is terminated by the Company or an affiliate (or, in the case of
certain employees, is deemed to have been so terminated) without cause within
two years following such Change-in-Control, (ii) the establishment of a trust
fund designed to ensure the payment of benefits accrued under certain employee
benefit plans, (iii) the amendment of certain employee benefit plans to ensure
that, during a minimum specified period following the Change-in-Control, such
plans continue in effect on a basis not less favorable to the employees than
was the case immediately prior to the Change-in-Control, and (iv) the amendment
of the Company's Retirement Plan to ensure that for a five-year period
following the Change-in-Control "surplus assets" in such plan are utilized
exclusively to satisfy benefit obligations to active and retired employees.
Under the Program, Messrs. Mead, Blakely, Dick, and Chesebro would have become
entitled to receive payments from the Company in the amount of $4,082,500;
$1,422,500; $1,327,500; and $1,805,000 respectively, had their employment been
terminated on December 31, 1994, without cause and after a Change-in-Control,
and, in addition, restricted shares held in the name of such individuals under
the Company's Restricted Stock Plans would have automatically reverted to the
Company, and the Company would have been obliged to pay such individuals the
fair market value thereof all as provided by such plans. Such severance
payments are, however, subject to limitations set forth in the Program designed
to ensure that all payments are fully deductible by the Company for federal
corporate income tax purposes.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
During 1994 the Company and its subsidiaries paid the law firm of Jenner &
Block, of which Mr. T.R. Tetzlaff, General Counsel of the Company, is a
partner, approximately $7.1 million for legal services (pursuant to an
agreement with the Company, Mr. Tetzlaff has agreed to devote whatever time is
necessary to attend to the responsibilities of General Counsel of the Company,
and will not receive from Jenner & Block any part of the fees paid by the
Company to that firm during such period he serves as General Counsel) and paid
the firm of Eickhoff Economics, Inc., of which Ms. Eickhoff is a partner,
approximately $97,000 for financial consulting services (which amount was
greater than 5% of such firm's gross revenues during that year). Additionally,
during 1994 the Company engaged the firm of Lazard Freres & Co., of which
Mr. Blumenthal was a Limited Partner, to provide investment banking services,
and the Company proposes to engage such firm for similar services during the
current fiscal year (the amount paid for these services did not exceed 5% of
such firm's consolidated gross revenues for 1994).
26
<PAGE>
All such transactions discussed above were in the ordinary course of
business.
As a result of two public offerings in 1994 by subsidiaries of the Company of
the Case Corporation common stock, the Company and its subsidiaries hold as of
the date hereof approximately 44% of the outstanding Common Stock of Case
Corporation of which Mr. Mead is a director and an executive officer. In June
1994, pursuant to a Reorganization Agreement between the Company, Case
Corporation, and Tenneco Equipment Corporation (the "Reorganization
Agreement"), Case Corporation and its subsidiaries acquired the business and
assets of the farm and construction equipment business (other than
approximately $1.1 billion of United States retail receivables) of the Company
and its subsidiaries (the "Case Business") in exchange for the following:
(i) the assumption by Case Corporation and/or certain of its subsidiaries of
all liabilities of the Case Business existing prior to the Reorganization,
except as described below, (ii) demand notes in the aggregate principal amount
of $1.552 billion (the "Demand Notes"), (iii) 70 million shares of Common Stock
of Case Corporation, (iv) 1,500,000 shares of Series A Cumulative Convertible
Preferred Stock of Case Corporation, and (v) $250 million aggregate principal
amount of 10 1/2% Senior Subordinated Notes due 2002. Additionally, the Company
retained certain liabilities for pension benefits, post-retirement health and
life insurance benefits, taxes, and indebtedness, as provided by the
Reorganization Agreement. Subsequent to the Reorganization, the Company
received additional payments of $10.6 million from Case Corporation, as an
adjustment to the purchase price of assets transferred pursuant to the
Reorganization Agreement, and $12.9 million, consisting of dividend payments
made in accordance with the Reorganization Agreement. Further, during 1994, the
Company received payments from Case Corporation of approximately $19 million in
corporate overhead expenses arising out of the Company's affiliation with Case
Corporation during 1994. The Company has agreed with Case Corporation's lenders
that the Company will continue to own, directly or indirectly, at least 30% of
the outstanding common stock of Case Corporation until (i) the term loan to
Case Corporation has been reduced from $1 billion to $500 million and (ii)
senior debt of Case Corporation has been rated at least investment grade by at
least two nationally recognized credit rating agencies (of which one must be
either Standard and Poor's Ratings Group or Moody's Investors Service, Inc.).
Case Corporation provides retail receivable services to a subsidiary of the
Company for a fee based on the amount of outstanding receivables. It is
estimated that such services will be provided through 1997. Additionally,
pursuant to the Reorganization Agreement, the Company and Case Corporation have
entered into an agreement providing for the allocation of obligations for
income and franchise taxes with respect to Case Corporation and its
subsidiaries.
Transactions involving Messrs. McCoy and Andrews are set out below under the
caption "Compensation Committee Interlocks and Insider Participation".
27
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Andrews, Johnson, McCoy, Sisco, and Wharton are members of the
Compensation and Benefits Committee of the Board of Directors. Mr. Mead, as CEO
of the Company, is designated by the Company's By-Laws as an ex officio member
of the Compensation and Benefits Committee (as well as all of the Board's
Committees, except for the Executive Committee in which he is a member and
Chairman). As an ex officio member, he may attend meetings of such committee;
however, he has no authority to vote for or against any action taken or
contemplated to be taken by such committee, and his attendance is for the sole
purpose of providing information to the committee in order to assist the
members in making informed decisions. Mr. Mead does not participate in any
deliberations of the Compensation and Benefits Committee relating to his
compensation.
During 1994 the Company and its subsidiaries paid to a subsidiary of BANC ONE
Corporation, of which Mr. McCoy is a director and an executive officer,
approximately $113,000 for general banking services; and Mr. Andrews was
indebted to Case Credit Corporation, a subsidiary of the Company until November
23, 1994, in connection with the financing of agricultural machinery purchased
from an independent dealer in 1993 and 1994. That indebtedness bears interest
at the rate of 5.9% per year and is for a term of 60 months, maturing August
12, 1998 and December 15, 2000, respectively. At January 1, 1994, $100,000 was
outstanding (being the largest amount of indebtedness outstanding during 1994).
At November 23, 1994, the date that Case Corporation and its subsidiaries were
no longer consolidated with the Company's operations, $84,212.43 was
outstanding.
All such transactions discussed above involving Messrs. McCoy and Andrews
were in the ordinary course of business.
28
<PAGE>
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(ITEM 2)
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THIS PROPOSAL
Financial statements of the Company and its consolidated subsidiaries are
included in the Company's Annual Report furnished to all stockholders. Upon
recommendation of the Audit Committee of the Board of Directors, the Board of
Directors has appointed Arthur Andersen LLP as independent public accountants
for the Company to examine its consolidated financial statements for the year
1995 and has determined that it would be desirable to request that the
stockholders approve such appointment. If the stockholders should not approve
such appointment, the Audit Committee and the Board would reconsider the
appointment. Arthur Andersen LLP also acted as the Company's principal
accountants for the fiscal year ended December 31, 1994. Representatives of
Arthur Andersen LLP are expected to be present at the Annual Meeting and will
have the opportunity to make a statement if they desire to do so and are also
expected to be available to respond to appropriate questions.
STOCKHOLDER PROPOSAL
(ITEM 3)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL
The Company has been informed that The New York City Teachers' Retirement
System, c/o Comptroller of the City of New York, Trustee, 1 Centre Street, New
York, New York 10007-2341, intends to submit a proposal for action at the
Annual Meeting of Stockholders.
The affirmative vote of the holders of a majority of the shares present, in
person or by Proxy, and authorized to vote on such proposal is required to
approve the stockholder proposal. The Board of Directors is opposed to this
proposal.
STOCKHOLDER PROPOSAL.
"WHEREAS, the board of directors is meant to be an independent body elected
by shareholders and charged by law and shareholders with the duty, authority
and responsibility to formulate and direct corporate policies, and
"WHEREAS, this company has provided that the board may designate from among
its members one or more committees, each of which to the extent allowed, shall
have certain designated authority, and
"WHEREAS, we believe that there must be a link between corporate performance
and executive compensation, and that it is important that our company's
executive compensation structure become more closely tied to performance, and
29
<PAGE>
"WHEREAS, we believe that directors independent of management are best
qualified to act in the interests of shareholders and can take steps necessary
to evaluate management performance, establish executive compensation and
establish a better relationship between company performance and executive pay,
NOW THEREFORE BE IT
"RESOLVED, that the shareholders request the company establish a Compensation
Committee to evaluate and establish executive compensation. The Committee shall
be composed solely of independent directors and shall have access to outside
advice, such as, but not restricted to, compensation consultants.
"For these purposes, an independent director is one who: (1) has not been
employed by the Company or an affiliate in an executive capacity within the
last five years; (2) is not a member of a company that is one of this company's
paid advisors or consultants; (3) is not employed by a significant customer or
supplier; (4) does not have a personal services contract with the company; (5)
is not employed by a tax-exempt organization that receives significant
contributions from the company; (6) is not a relative of the management of the
company; (7) has not had any business relationship that would be required to be
disclosed under Regulation S-K. Also, to the extent possible within the
standards stated above, no individual shall serve on the Committee in the year
preceding the expiration of that individual's terms as a director.
"STATEMENT OF SUPPORT
"As long-term shareholders we are concerned about our company's prospects for
profitable growth. This is intended to address the issue of pay vs. performance
and to provide shareholders with an independent committee which will represent
their interests. We urge you to vote FOR this proposal."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL
The Company has had for many years a Compensation and Benefits Committee
composed exclusively of outside directors whose duties are, among other things,
to evaluate and establish executive compensation. The Company's By-Laws require
that this Committee consist of at least four members, none of whom may be
officers of the Company or any of its subsidiaries. In fact, of the 11 members
of the Board of Directors, the Chief Executive Officer of the Company is the
only inside director serving on the entire Board of Directors. The membership
on the Compensation and Benefits Committee is reviewed annually by the
Company's Nominating and Management Development Committee--one of whose
functions is to insure the independence of the members of the Compensation and
Benefits Committee.
The Compensation and Benefits Committee believes there must be a link between
Company performance and executive compensation, and that executive compensation
should be tied strongly to performance. The Board believes that this strong
link is reflected in the
30
<PAGE>
Report of Compensation and Benefits Committee set forth above in this Proxy
Statement. Further, this Committee has always had access to, and regularly
utilizes, outside compensation consultants in the discharge of its duties.
This Stockholders' Proposal, which is the same as the one that was defeated
at the 1994 Stockholders' meeting by over 74% and which the Company continues
to oppose, outlines specific criteria to determine whether a member of the
Committee is independent. The Company believes these standards are reasonable
(and in fact are met by the current membership of the Compensation and Benefits
Committee), except as relates to "business relationships". As may be expected,
certain of the Company's outside directors are associated with major
corporations with which the Company may have, from time-to-time, business
transactions in the ordinary course of business (see the discussion in this
Proxy Statement under the captions "Transactions with Management and Others"
and "Compensation Committee Interlocks and Insider Participation"). To exclude
arbitrarily persons of integrity and competence from serving on the
Compensation and Benefits Committee simply because the Company may do business
with one of these companies, as this Proposal would require, is in the opinion
of the Board too restrictive and inappropriate.
Accordingly, the Board believes that the Proposal needlessly restricts the
Company from including on the Compensation and Benefits Committee highly
qualified individuals whose advice and counsel would benefit the Company and
its stockholders, and therefore, the Board recommends a vote AGAINST this
Proposal.
OTHER MATTERS
The Board of Directors is not aware of any other matters that may properly
come before the Annual Meeting. However, should any such matters come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote all proxies (unless otherwise directed by stockholders)
in accordance with their judgment on such matters.
EFFECT OF ABSTENTIONS AND BROKER NON-VOTE
The Company's By-Laws require a majority of the shares authorized to vote at
the Annual Meeting of Stockholders be present, in person or by Proxy, to
establish a quorum. Shares abstaining with regard to a matter to be presented
to the stockholders constitute part of the quorum present with respect to such
matter; however, shares for which voting power has been withheld, such as
broker non-votes, do not constitute part of the quorum present with respect to
such matter. Consequently, the number of shares representing the quorum present
for the meeting may be greater than the shares present for action on a
particular proposal.
31
<PAGE>
SOLICITATION OF PROXIES AND VOTING
A Proxy may be revoked by notice in writing to the Secretary at any time
prior to the exercise thereof.
The cost of solicitation of proxies will be borne by the Company.
Solicitation will be made by mail, and may be made by directors, officers, and
employees, personally, or by telephone or telegram. Proxy cards and material
also will be distributed to beneficial owners of stock through brokers,
custodians, nominees, and other like parties, and the Company expects to
reimburse such parties for their charges and expenses. Georgeson & Co. Inc.,
New York, New York, has been retained to assist the Company in the solicitation
of proxies at a fee estimated not to exceed $25,000.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal to be presented by a stockholder at the Company's 1996 Annual
Meeting of Stockholders must be received by the Company by December 1, 1995, so
that it may be considered by the Company for inclusion in its proxy statement
and form of proxy relating to that meeting.
KARL A. STEWART
Vice President and Secretary
------------------
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO. REQUESTS FOR COPIES OF SUCH REPORT SHOULD BE
DIRECTED TO KARL A. STEWART, VICE PRESIDENT AND SECRETARY, TENNECO INC., P.O.
BOX 2511, HOUSTON, TEXAS 77252-2511.
32
<PAGE>
NOTICE OF ANNUAL
MEETING AND
PROXY STATEMENT
-------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS MAY 9, 1995
TENNECO INC
P.O. Box 2511 HOUSTON, TEXAS 77252-2511
LOGO
<PAGE>
P R O X Y
TENNECO INC
LOGO
ANNUAL MEETING OF STOCKHOLDERS MAY 9, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned does hereby appoint D. G. MEAD, P. T. FLAWN and K. A. STEWART,
and any of them, with full power of substitution, as Proxies to vote, as
directed on the reverse side of this card, or, if not so directed, in
accordance with the Board of Directors' recommendations, all shares of Tenneco
Inc. held of record by the undersigned at the close of business on March 17,
1995 and entitled to vote at the Annual Meeting of Stockholders of Tenneco Inc.
to be held at 10:30 a.m., May 9, 1995, in the Imperial Ballroom of the Hyatt
Regency Hotel, 1200 Louisiana Street, Houston, Texas, or at any adjournment
thereof, and to vote, in their discretion, upon such other matters as may
properly come before the Annual Meeting.
Election of Directors Nominees:
M. Kathryn Eickhoff
Peter T. Flawn
John B. McCoy
Dana G. Mead
You are encouraged to specify your choices by marking the appropriate boxes,
SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The Proxies cannot
vote your shares unless you sign and return this card.
Please mark -
X yourvotes
as in
thisexample.
1. Election ofDirectors. (see reverse)
2. Approval 3. Approval
of of
Independent Proposal
Accountants. concerning
modification
of
Compensation
Committee.
For, except vote withheld from the following nominee(s):
-----------------
4. In the discretion of
the Proxies named
herein, the Proxies
are authorized to vote
upon other matters as
may properly come
before the meeting.
----------------------------------
--------------------------------------------------------------------------------
2000
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXYWILL BE VOTED FOR ITEMS 1 AND 2 AND
AGAINST ITEM 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE
AGAINST THE STOCKHOLDER PROPOSAL
(ITEM 3).
--------------------------------------------------------------------------------
FOR
WITHHELD
FOR
FOR
AGAINST
ABSTAIN
AGAINST
ABSTAIN
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SIGNATURE DATE
<PAGE>
TENNECO INC
LOGO LOGO
April 1, 1995
Dear Benefit Plan Participant:
The Annual Meeting of Stockholders of Tenneco Inc. is scheduled to be held in
Houston, Texas, at 10:30 a.m., on Tuesday, May 9, 1995. A copy of the Notice
and Proxy Statement, which is being sent to all registered stockholders in
connection with the Annual Meeting is enclosed for your information.
Also enclosed with this letter is a form of proxy card which designates the
number of shares held in your benefit plan account. By executing this proxy
card you instruct the benefit plan trustee (the "Trustee") how to vote the
shares of Tenneco Inc. Stock in your account which you are entitled to vote.
The Trustee will vote all shares eligible to be voted by benefit plan
participants in accordance with their instructions.
If you return your form of proxy executed but without furnishing voting
instructions, the eligible shares in your account will be voted by the Trustee,
as holder of record of the shares in your account, FOR the election of the
nominees for Directors named in the Proxy Statement, FOR the approval of the
appointment of Arthur Andersen LLP as the Company's independent public
accountants for the year 1995, AGAINST the Stockholder Proposal, and as
recommended by Management on all other matters to be considered at the Annual
Meeting.
If you do not return your executed form of proxy to the Trustee, then your
shares can be voted by the Trustee only in accordance with the requirements of
your benefit plan, which may or may not reflect your views.
YOUR VOTE IS IMPORTANT. PLEASE SEND YOUR EXECUTED FORM OF PROXY CARD WITH
YOUR VOTING INSTRUCTIONS AT YOUR EARLIEST OPPORTUNITY. For your convenience, a
return envelope is enclosed.
YOUR BENEFITS COMMITTEE
