Document:

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                       AMENDMENT NO. 2 TO RIGHTS AGREEMENT

         THIS AMENDMENT NO. 2 TO RIGHTS AGREEMENT (this "AMENDMENT"), dated as
of February 5, 2001, is between Tenneco Automotive Inc. (formerly known as
Tenneco Inc.), a Delaware corporation (the "COMPANY"), and First Union National
Bank as Rights Agent ("FIRST UNION"), as successor to First Chicago Trust
Company of New York as Rights Agent ("FIRST CHICAGO").

         WHEREAS, the Company has selected First Union to succeed First Chicago
as Rights Agent under the Rights Agreement between the Company and First Chicago
dated as of September 9, 1998, as amended on March 14, 2000 (the "RIGHTS
AGREEMENT") and First Union has agreed to so act as Rights Agent; and

         WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company
and the First Chicago desire to amend the Rights Agreement as set forth below;

NOW, THEREFORE, the Rights Agreement is hereby amended as follows:

1.       Amendment of the Title of the Rights Agreement.

         (a) The title set forth on the cover page of the Rights Agreement is
amended in its entirety as follows:

                      -------------------------------------
                             TENNECO AUTOMOTIVE INC.
                        (formerly known as TENNECO INC.)
                                       and
                   FIRST UNION NATIONAL BANK, as Rights Agent
   (as successor to FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Rights Agent)
                      -------------------------------------
                                RIGHTS AGREEMENT
                    Dated as of September 9, 1998, as amended
                   as of March 14, 2000 and February 5, 2001.

          (b) The first paragraph on page 1 of the Rights Agreement is amended
to read in its entirety as follows:

                  RIGHTS AGREEMENT Rights Agreement, dated as of September 9,
         1998, as amended as of March 14, 2000 and February 5, 2001
         ("Agreement"), between Tenneco Automotive Inc., a Delaware corporation,
         formerly known as Tenneco Inc. (the "Company"), and First Union
         National Bank, as Rights Agent (the "Rights Agent"), as successor to
         First Chicago Trust Company of New York as rights agent.

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         2.       Amendment of Section 3(c). The legend set forth in
Section 3(c) of the Rights Agreement is amended to read in its entirety as
follows:

         This certificate also evidences and entitles the holder hereof to
         certain rights as set forth in a Rights Agreement between Tenneco
         Automotive Inc., formerly known as Tenneco Inc. (the "Company"), and
         First Union National Bank, as Rights Agent (as successor to First
         Chicago Trust Company of New York), dated as of September 9, 1998 and
         as amended from time to time (the "Rights Agreement"), the terms of
         which are hereby incorporated herein by reference and a copy of which
         is on file at the principal executive offices of the Company. Under
         certain circumstances, as set forth in the Rights Agreement, such
         Rights will be evidenced by separate certificates and will no longer be
         evidenced by this certificate. The Company will mail to the holder of
         this certificate a copy of the Rights Agreement without charge after
         receipt of a written request therefor. Under certain circumstances, as
         set forth in the Rights Agreement, Rights owned by or transferred to
         any Person who is or becomes an Acquiring Person (as defined in the
         Rights Agreement) and certain transferees thereof will become null and
         void and will no longer be transferable.

         3.       Amendment to Section 26. The notice provision in respect of
the Rights Agent set forth in Section 26 of the Rights Agreement is amended to
read in its entirety as follows:

                           First Union National Bank
                           Shareholder Services Administration
                           1525 W. WT Harris Blvd.; 3C3
                           Charlotte, North Carolina 28288-1153
                           Attention: Steven M. Turner, Assistant Vice
                              President- Equity Services
                           Corporate Trust Group

         4.       Amendment of Form of Rights Certificate.

         (a) The first paragraph of the form of rights certificate attached as
Exhibit B to the Rights Agreement is amended to read in its entirety as follows:

                               RIGHTS CERTIFICATE
                            TENNECO AUTOMOTIVE INC.

         This certifies that ____________________________ or registered assigns,
         is the registered owner of the number of Rights set forth above, each
         of which entitles the owner thereof, subject to the terms, provisions
         and conditions of the Rights Agreement, dated as of September 9, 1998,
         as the same may be amended from time to time (the "Rights Agreement"),
         between Tenneco Automotive Inc., a Delaware corporation (the
         "Company"), and First Union National Bank, as Rights Agent (the "Rights
         Agent"), as successor to First Chicago Trust Company of New York as
         rights agent, to purchase from the Company at any time after the
         Distribution Date (as such term is defined in the Rights
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         Agreement) and prior to 5:00 P.M., New York City time, on September 9,
         2008 at the office or agency of the Rights Agent designated for such
         purpose, or of its successor as Rights Agent, one one-thousandth of a
         fully paid non-assessable share of Series B Junior Participating
         Preferred Stock, par value $.01 per share (the "Preferred Stock"), of
         the Company at a purchase price of $8.80 per one one-thousandth of a
         share of Preferred Stock (the "Purchase Price"), upon presentation and
         surrender of this Right Certificate with the Form of Election to
         Purchase duly executed. The number of Rights evidenced by this Rights
         Certificate (and the number of one one-thousandths of a share of
         Preferred Stock which may be purchased upon exercise hereof) set forth
         above, and the Purchase Price set forth above, are the number and
         Purchase Price as of March 14, 2000, based on the Preferred Stock as
         constituted at such date. As provided in the Rights Agreement, the
         Purchase Price, the number of one one-thousandths of a share of
         Preferred Stock (or other securities or property) which may be
         purchased upon the exercise of the Rights and the number of Rights
         evidenced by this Right Certificate are subject to modification and
         adjustment upon the happening of certain events.

         (b) The signature block of the Rights Agent set forth on the form of
rights certificate attached as Exhibit B to the Rights Agreement is amended to
read in its entirety as follows:

         FIRST UNION NATIONAL BANK, as Rights Agent

         By__________________________________
          Its

         5.       Certification.  The Company certifies that this Amendment
complies with Section 27 of the Rights Agreement.

         6.       Effectiveness.  This Amendment shall be deemed effective as
of February 5, 2001. Except as amended hereby, the Rights Agreement shall
remain in full force and effect and shall be otherwise unaffected hereby.

         7. Miscellaneous. This Amendment shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state. This Amendment
may be executed in any number of counterparts, each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. If any term, provision,
covenant or restriction of this Amendment is held by a court of competent
jurisdiction or other authority to be invalid, illegal, or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Amendment
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date set forth above.

TENNECO AUTOMOTIVE INC.

By: /s/ TIMOTHY R. DONOVAN
Name: Timothy R. Donovan
Title: Senior Vice President and General Counsel

FIRST UNION NATIONAL BANK

By:  /s/ KENNETH E.STAUB
Name: Kenneth E. Staub
Title: Vice President

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                                                                    EXHIBIT 10.4

                    CALTON, INC. INCENTIVE COMPENSATION PLAN

1.       PURPOSE

         Pursuant to Calton's ("Calton" or the "Company") philosophy of
providing compensation to its employees which is competitive with the
compensation offered by similar companies operating in the same regions, the
Company has established the Calton, Inc. Incentive Compensation Plan (the
"Plan") to promote the interests of Calton and its shareholders by enhancing the
Company's ability to attract, retain and motivate highly qualified individuals
to serve the Company and any of its 80% or greater owned subsidiaries by
providing such individuals the opportunity to earn meaningful additional
compensation based on the operating results of the Company. This Plan is
consistent with the Plan that has been in effect and renewed since 1995.

2.       EFFECTIVE DATE AND TERM OF THE PLAN

         The Plan shall be effective as of December 1, 2000, subject to the
approval of the Company's Board of Directors (the "Board"), and it shall
terminate on November 30, 2002 (the "Term"). The Board, in its sole discretion,
may renew, for up to two (2) fiscal years upon each such renewal, the Term of
the Plan and the provisions hereunder.

3.       PARTICIPATION

         All officers of the Company and any of its 80% or greater owned
subsidiaries are eligible for participation in the Plan. In addition, up to 10%
of the Incentive Pool (as defined below) may be used for bonuses to other full
time employees of the Company and any of its 80% or greater owned subsidiaries
who are not otherwise eligible for commissions or bonuses. The employees that
are eligible to participate in the Plan (the "Eligible Employees") shall be
determined each fiscal year by the Compensation Committee of the Board (the
"Committee") based on the recommendations of the President and Chief Executive
Officer of the Company. The determination of Eligible Employees entitled to
participate in the Plan shall be made by the Committee no later than the end of
the first quarter of any fiscal year; provided, however, that an Eligible
Employee hired after the end of the first quarter of any fiscal year may be
considered by the Committee for participation in the Plan. Participation in the
Plan during any one fiscal year does not imply or guarantee participation in any
other fiscal year during the Term of the Plan.

4.       INCENTIVE COMPENSATION

         The available pool of incentive compensation (the "Incentive Pool")
under this Plan during any particular fiscal year shall be equal to ten percent
(10%) of the Company's pre-tax income as reported in the Company's Form 10-K for
a particular fiscal year, subject to certain non-operating adjustments (the
"Adjustments") that may be made to the Incentive Pool at the discretion of the
Committee to remove the effect of events or transactions not in the ordinary
course of the Company's operations.

5.       DISTRIBUTION OF INCENTIVE COMPENSATION

         The President and Chief Executive Officer of the Company shall
recommend the dollar amount of an award from the Incentive Pool (the "Incentive
Award') to be granted to each Eligible Employee participating in the Plan;
provided, however, that the Eligible Employee participating in the Plan may not
receive an Incentive Award during any particular fiscal year that exceeds the
lesser of twenty percent (20%) of the Incentive Pool or one hundred percent
(100%) of the Eligible Employee's base salary compensation for the same fiscal
year; provided,

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however, that the Committee reserves the right to make special, supplemental
grants that exceed one hundred percent (100%) of an Eligible Employee's base
salary for the same fiscal year.

         The Committee shall then review and approve, with the power to alter,
modify or disapprove in whole or in part, the proposed Incentive Award for each
Eligible Employee participating in the Plan no later than February 15 of the
succeeding fiscal year, or the fifteenth day of the last month of the first
quarter of the succeeding fiscal year if the end of such preceding fiscal year
is other than November 30.

         An Eligible Employee selected for participation in the Plan who was
hired by the Company or one of its 80% or greater owned subsidiaries subsequent
to the commencement of the relevant fiscal year shall only be entitled to a
pro-rata portion of any Incentive Award. An Eligible Employee participating in
the Plan shall not be entitled to receive any Incentive Award until the grant of
any such Incentive Award has been approved by the Committee. Any Incentive Award
shall be distributed and paid to an Eligible Employee in accordance with the
Company's ordinary payroll policies and procedures during the last pay period of
February of each fiscal year, or during the last pay period of the last month of
the first quarter of the fiscal year if the end of such preceding fiscal year is
other than November 30. All approved and paid Incentive Awards shall be subject
to all tax withholding and reporting requirements.

6.       TERMINATION

         Upon the termination of employment of an Eligible Employee selected to
participate in the Plan for a particular fiscal year for any reason, the
Committee shall not grant, and the Eligible Employee shall not be entitled to,
an Incentive Award for the fiscal year in which termination occurred, unless
otherwise determined by the Board of Directors.

7.       AMENDMENT OR DISCONTINUANCE

         At any time during the Term of the Plan, the Committee may alter,
amend, suspend or discontinue the Plan.

8.       OTHER AGREEMENTS

         In the event that any term or condition of the Plan varies from, or is
in any way dissimilar to or in contrast with, any term, condition or provision
of any other agreement between the Company and an Eligible Employee, such as an
employment agreement, the relevant terms, conditions and/or provisions of such
other agreement will control.

9.       SUCCESSORS

         The provisions of the Plan shall be binding upon all successors of any
Eligible Employee granted an Incentive Award under the Plan, including, without
limitation, the estate of any such Eligible Employee and the executors,
administrators or trustees of such estate, and any receiver, trustee in
bankruptcy or representative of the creditors of any such Eligible Employee. Any
obligations with respect to Incentive Awards granted pursuant to the Plan shall
be expressly assumed by any successor in interest to the Company.

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10.      GOVERNING LAW AND JURISDICTION OF NEW JERSEY COURTS

         The Plan and any agreement entered into in connection therewith shall
be construed and its provision enforced and administered in accordance with the
laws of the State of New Jersey.

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