UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 5, 2007
TENNECO INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-12387 76-0515284
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
|
500 NORTH FIELD DRIVE, LAKE FOREST, ILLINOIS 60045
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (847) 482-5000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
/ / Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
/ / Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
/ / Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
/ / Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
On January 5, 2007, Tenneco Inc. announced that Gregg M. Sherrill will be appointed Chairman of the Board and Chief Executive Officer. Mr. Sherrill's appointment will be effective January 15, 2007, his first day of employment with Tenneco. At that time, the size of Tenneco's board will be increased to eleven and Paul T. Stecko's term as interim Chairman will be complete. A copy of Tenneco's press release announcing this appointment is filed as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Mr. Sherrill, 53, has 30 years of automotive industry experience. Most recently, he served as president of the power solutions division of Johnson Controls, Inc., a global market leader in automotive systems and facility management and control, since 2003. Prior to that, he served as group vice president and general manager of Europe, South Africa and South America for the automotive business from 2001 to 2003, as vice president and general manager of North American automotive operations from 2000 to 2001 and as head of Johnson Controls' Ford, Chrysler and Honda business units from 1998 to 2000. Prior to joining Johnson Controls, Mr. Sherrill spent 22 years at Ford Motor Company, where he held various engineering and manufacturing assignments with increasing responsibilities, including plant manager of Ford's Dearborn, MI engine plant and director of Supplier Technical Assistance.
In connection with his appointment, Tenneco entered into a letter agreement with Mr. Sherrill that governs various terms and conditions of his employment. The agreement provides, among other things, for an annual salary for 2007 of $875,000 and a target bonus for 2007 of $875,000. As an inducement for Mr. Sherrill to accept his offer, Tenneco agreed to (i) pay Mr. Sherrill $1,325,000 within seven days of his first day of employment and (ii) grant Mr. Sherrill 125,000 shares of restricted stock on his first day of employment (which will vest in three equal installments on each of the first three anniversaries of the date of grant or, if earlier, upon his involuntary termination of employment for reasons other than cause). The agreement also provides that he will be entitled to specified equity incentive awards when made for the Company's other executives for 2007 (100,000 options, 55,000 restricted shares and stock equivalent units covering a three-year performance period with a targeted value of $700,000) and for severance, change in control and other benefits. A copy of the agreement is filed as Exhibit 99.2 to this Form 8-K and is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description 99.1 Press Release, dated January 5, 2007. 99.2 Letter Agreement between Tenneco Inc. and Gregg M. Sherrill. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TENNECO INC.
Date: January 5, 2007 By: /s/ Timothy R. Donovan
----------------------------
Timothy R. Donovan
Executive Vice President and
General Counsel
|
news release [TENNECO LETTERHEAD]
Contacts: Jane Ostrander Leslie Hunziker Media Relations Investor Relations 847 482-5607 847 482-5042 jostrander@tenneco.com lhunziker@tenneco.com
TENNECO NAMES GREGG SHERRILL AS NEW CHAIRMAN AND CEO
THIRTY-YEAR INDUSTRY VETERAN CURRENTLY RUNS JOHNSON CONTROL'S POWER
SOLUTIONS GROUP
Lake Forest, Illinois, (January 5, 2007) -- Tenneco Inc. (NYSE: TEN) announced today that its board of directors has named Gregg Sherrill as the company's new chairman and chief executive officer. Sherrill, 53, is President, Power Solutions at Johnson Controls Inc. His appointment is effective January 15, 2007.
"Gregg is a proven leader with the broad industry experience and strong global perspective required to lead a Tier-1 supplier in today's challenging environment," said Paul T. Stecko, who has served as non-executive chairman of Tenneco on an interim basis since July. "He has considerable experience on both the OEM and components side of this industry, and fully understands the operational principles and disciplines necessary to grow a global business while continuously reducing costs. Most importantly, he is results driven with an established record for delivering outstanding performance in both the OE and aftermarket segments."
Sherrill, a 30-year industry veteran, has been responsible for Johnson Control's global automotive battery business since 2003. Under his leadership, the Power Solutions business -- the world's largest manufacturer of lead acid automotive batteries -- experienced strong growth. Revenues grew to $3.5 billion as the group expanded its global manufacturing footprint with new operations in North America and Europe, and by establishing its first manufacturing operations in China and Korea. From 2001 to 2003, he was group vice president and managing director of Europe, South Africa and South America for Johnson Control's Automotive Systems Group, which at the time was a $4.5 billion seating and interiors business in these regions.
Prior to joining Johnson Controls in 1998, Sherrill spent 22 years at Ford Motor Company, where he held various engineering and manufacturing assignments with increasing responsibilities, including plant manager of Ford's Dearborn, MI engine plant and director of Supplier Technical Assistance.
"Tenneco has achieved industry leadership by successfully executing on proven strategies for generating growth, entering new markets and improving the company's operational performance," Sherrill said. "I am eager to continue this tradition and build on our successes globally, working with an extremely strong senior management team and employees whose dedication and capabilities are well recognized."
Sherrill received his B.S degree in mechanical engineering from Texas A&M University and his MBA degree from Indiana University.
Tenneco is a $4.4 billion manufacturing company with headquarters in Lake Forest, Illinois and approximately 19,000 employees worldwide. Tenneco is one of the world's largest designers, manufacturers and marketers of emission control and ride control products and systems for the automotive original equipment market and the aftermarket. Tenneco markets its products principally under the Monroe(R), Walker(R), Gillet(R) and Clevite(R) Elastomer brand names.
###
Exhibit 99.2
PERSONAL AND CONFIDENTIAL
Gregg Sherrill
2010 E. Windsor Place, #E
Milwaukee, WI 53202
Dear Gregg:
On behalf of the Board of Directors of Tenneco Inc. (the "Company"), I am pleased to set forth and confirm the terms and conditions of your employment as Chairman and Chief Executive Officer of the Company;
1. Term. Your employment will commence as of January 15, 2007. You will report to and serve at the pleasure of the Board of Directors of the Company (the "Board").
2. 2007 Cash Compensation. For 2007, you will be paid an annual base salary of $875,000 and will be eligible for an annual performance bonus, with a target bonus of $875,000, subject to fulfillment of applicable performance goals.
3. 2007 Equity Awards. For 2007, you will receive the following awards under the Company's 2006 Long-Term Incentive Plan: (i) 100,000 non-qualified stock options with a seven year term, (ii) 55,000 shares of restricted stock and (iii) stock equivalent units for the 2007-2009 performance period with a value at target of $700,000. Such stock options and shares of restricted stock awards will be awarded when 2007 awards are made to senior executives at Tenneco Inc. generally (currently scheduled for January 2007), and shall each vest in three equal installments on each of the first three anniversaries of the date of grant. Other terms and conditions will be consistent with those offered to other senior executives at the Company. The performance criteria and vesting of the stock equivalent units shall be determined by the Compensation Committee at the time such terms are established for other recipients of awards for the 2007-2009 performance period.
4. Inducement Compensation. As an inducement to accept our offer of employment
and in consideration of compensation foregone from your current employer,
you shall receive (i) $1,325,000 payable within seven days of your first
day of employment with the Company and (ii) 125,000 shares of restricted
stock as of your first day of employment with the Company, such shares will
vest in three equal installments on each of the first three anniversaries
of the date of grant, or, if earlier, upon your involuntary termination of
employment by the Company for reasons other than Cause ("Cause" means your
(i) fraud, embezzlement, or theft in connection with your employment (ii)
gross negligence in the performance of your duties, or (iii) conviction,
guilty plea, or plea of nolo contendre with respect to a felony),
5. Executive Benefit Plans. You will participate in the Company's Change in Control Severance Benefit Plan for Key Executives (the "Change in Control Plan") as a member of Executive Group I (as defined therein). You shall participate in the Company's defined contribution retirement arrangements applicable to senior executives; provided, however, that you shall be entitled to a benefit under the Company's non-qualified defined contribution plan which, prior to offset for amounts contributed to the qualified plan, is equal to 150% of the standard age graded benefit. You will be eligible to participate in all health, life and disability insurance plans applicable to senior executives generally.
6. Perquisite Allowance, You will receive an annual perquisite allowance of $50,000.00, paid when the perquisite allowance is paid to other senior executives off the Company.
7. Vacation. You will receive four weeks vacation (with pay) per year.
8. Severance. If your employment is involuntarily terminated by the Company for reasons other than disability or Cause (as defined above) and other than under circumstances which would entitle you to benefits under the Change in Control Plan, you will be entitled to severance equal to two times your annual base salary payable in a lump sum, subject to your execution of a general release and such other documents as the Company may reasonably request.
9. Existing Obligations. You have represented to us that your acceptance of our offer of employment and execution of the duties associated therewith will not violate the terms of any other agreement or obligations to which you are subject,
This offer is valid until December 31, 2006. Please acknowledge your agreement with these terms by executing a copy of this letter in the space provided below and returning it to me.
Sincerely,
TENNECO INC.
By: /s/ Paul T. Stecko ----------------------------------------- Paul T. Stecko Its: Interim Chairman-Board of Directors |
ACKNOWLEDGED and ACCEPTED
/s/ Gregg M. Sherrill
--------------------------
Date:
---------------------
|