Document:

Document

Exhibit 10.4

                             

                    REVISED
July 6, 2020

[Redacted]

Dear Matti:

I am pleased to provide for your consideration this letter offering you employment to be Tenneco’s Executive Vice President and Chief Financial Officer. 

The key terms of Tenneco’s offer of employment are described below.

Outline of Employment Offer

1.Position:  As an executive officer of Tenneco Inc., your position will be Executive Vice President and Chief Financial Officer, reporting directly to Brian Kesseler, Chief Executive Officer.  Your work location will be Lake Forest, Illinois with an expected hire date of August 10, 2020.  

2.Base Salary:  Your initial base salary will be $775,000 per year ($64,583.33 per month) less appropriate taxes and withholding, paid in accordance with the company’s normal payroll practices.  Beginning in 2021 and each year thereafter, your base salary will be reviewed and, in turn, may be adjusted, subject to approval by the Compensation Committee of Tenneco Inc.’s Board of Directors (the “Compensation Committee”).

3.Annual Incentive Compensation:  You will be eligible to participate in Tenneco’s annual incentive plan in a manner consistent with other Tenneco executives assigned to the Enterprise.  The terms of the annual incentive plan are currently set forth in the Tenneco Inc. Annual Incentive Plan (“AIP” – copy attached).  Your initial target bonus opportunity for the 2020 calendar year performance period under the AIP will be 85% of your annual base salary (or $658,750 based on the offered salary), provided that your bonus for the 2020 calendar year, if any, will be pro-rated based on your hire date.  The payment of annual bonuses under the AIP are subject to achievement of pre-defined performance goals, the approval by the Compensation Committee, and the terms of the AIP. 

4.Sign-on Bonus:  This offer includes a $220,000 (two hundred and twenty thousand dollar) signing bonus, which is subject to regular withholding taxes and deductions, with the full amount paid on or as soon as practicable after February 28, 2021 (but in no event later than March 15, 2021) provided that you remain employed by the company through February 28, 2021. If your employment is involuntarily terminated by the company (other than for cause) before February 28, 2021, this amount will be paid at the time of termination. 

In addition, the signing bonus is subject to the terms described below:

Matti Masanovich
July 6, 2020
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REPAYMENT AGREEMENT – SIGNING BONUS

A.The offered signing bonus is subject to state and federal income tax laws and is collectively reported by the company to the Internal Revenue Service via form W-2 as taxable wages subject to withholding.  

B.If you voluntarily resign your employment with the company at any time during the two-year period immediately following your date of employment, you hereby agree to repay to the company the gross amount of the signing bonus paid to you prior to your termination.  This payment must be made within thirty (30) days after the termination of your employment.  Further you authorize the company to withhold any and all monies due to you from the company to recover this amount, including earnings, as follows:

1.If your resignation occurs within twelve months of your date of employment, you will repay 100% of the gross amount of the signing bonus paid to you by the company.
2.If your resignation occurs more than twelve months following your date of employment, but prior to the end of the two year period described above, you agree to repay half (1/2) of the gross amount of the signing bonus paid to you.

3.Long-Term Incentive Compensation: You will be eligible to participate in Tenneco’s long-term incentive plan in a manner consistent with other similarly-situated Tenneco executives.  The terms of the long-term incentive plan are currently set forth in the Tenneco Inc. 2006 Long-Term Incentive Plan, as amended (“LTIP”), a copy of which has been attached.  

Each year the Compensation Committee will determine and approve the mix of long-term incentive (LTI) awards that will be granted to you and the aggregate target value of these awards.  Your first eligibility for a full LTI award will be in February 2021.  The final award size, award type, performance conditions and other terms of this award will be approved by the Compensation Committee at the same time the terms of these awards are established for other similarly-situated executives of the company.  Your 2021 LTI award is currently estimated to have a $1,800,000 value. 

For 2020, you will be eligible to participate in the 2020–2022 LTPU award cycle with a targeted LTPU award of $1,100,000 and assigned to the Enterprise, subject to the performance goals and other criteria that have been established under the LTIP for the performance cycle.  The LTPU award will be subject to the terms of the LTIP and the applicable award agreement.

4.Inducement Award:  To replace the value of foregone compensation from your previous employer and to provide additional incentives to you, you will receive the following awards:

Tenneco will grant you a Restricted Stock Unit award with a value of $1,100,000 granted on your start date of August 10, 2020, with 27% of the award vesting on 

Matti Masanovich
July 6, 2020
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August 10, 2021, 27% of the award vesting on August 10, 2022 and the remaining shares vesting on August 10, 2023.  When vested, the restricted stock units (RSUs) will settle in Tenneco shares.  The number of shares subject to the award will be based on a 10-trading day stock price average of Tenneco Inc. as of market close on July 2, 2020.  If you are involuntarily separated by the company (other than for cause) before August 10, 2023, the unvested RSUs will vest at the time of separation.  The award will also be subject to the terms and conditions of the applicable award agreement.

5.Retirement Plans:  You will be eligible to participate in the Tenneco 401(k) Plan that currently provides a 100% company match on your first 3%, and 50% of your next 2%, of base pay contributions subject to Plan and IRS maximums and provides a base pay.  The plan also generally provides a company retirement contribution of between 2.5% and 4% of salary (depending on your age at the relevant time and after you have completed a year of service, subject to 401(k) Plan and IRS maximums).   

You will also be eligible to participate in the Tenneco Excess Benefit Plan that will provide you with a benefit of between 2.5% and 4% of your annual incentive compensation and matching contributions and company retirement contributions at the rate applicable under the 401(k) plan on your compensation in excess of the IRS limitation on compensation under section 401(a)(17) of the Internal Revenue Code.  All benefits are subject to the terms of the Tenneco Excess Benefit Plan.

6.Change-In-Control (CIC) Protection:  You will be eligible to participate in Tenneco’s Change-In-Control Severance Benefit Plan for Key Executives (the “CIC Plan”) at the Executive Group II level.  Benefits under the CIC Plan are payable if you are discharged (either actually or constructively) within two years after a change-in-control.  The CIC Plan generally provides a lump-sum payment equal to two times base salary and targeted annual bonus in effect immediately prior to the change-in-control for Executive Group II level participants.  Continuing participation in certain insurance plans and outplacement services are also provided.  All benefits are subject to the terms of the CIC Plan.
7.Severance (not related to CIC):  You will be eligible to participate in the Tenneco Automotive Operating Company Inc. Severance Benefit Plan, as amended (the “Severance Plan”) as a member of Group 1.  Benefits are payable under the Severance Plan if you are discharged by the company other than for Cause or if you terminate due to Constructive Termination (and, in any case, other than under circumstances which would entitle you to benefits under the CIC Plan).  For Group 1 participants, the Severance Plan currently generally provides a one times annual base salary severance, payable in substantially equal installments in accordance with the normal payroll practices continuing during the severance period, and your targeted annual bonus for the year in which the termination occurs, subject to your execution of a general release and such other documents as the company may reasonably request.  The Severance Plan also provides a medical coverage subsidy in certain cases and outplacement benefits.  “Cause” and “Constructive Termination” have the meanings specified in the Severance Plan and all benefits under the Severance Plan are subject to the terms and conditions of the Severance Plan. 

Matti Masanovich
July 6, 2020
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8.Benefits Generally:  The company reserves the right to modify or terminate its benefit plans and arrangements at any time.  Your participation in the plans will be subject to the terms and conditions thereof as in effect at the relevant time.
9.Stock Ownership Guidelines:  Upon employment, you will be subject to Tenneco’s stock ownership guideline policy, requiring that you hold qualifying shares of Tenneco equal to four times base salary, to be attained by the first month of January following five years of employment.
10.Insider Trading Policy:  Upon employment, you will be subject to Tenneco’s Insider Trading Policy, which, among other things, limits the timing and types of transactions you may make with respect to Tenneco securities and related derivatives.
11.Health and Welfare Benefits:  You will be eligible to participate in Tenneco’s broad-based health and welfare plans in a manner consistent with other similarly-situated Tenneco employees. Please refer to benefit plan documents for specific terms and eligibility. Attached for your convenience is the Tenneco 2020 Benefits At A Glance for Salaried Employees.

12.Vacation and Holiday Paid Time Off:   You will be entitled to a total of four weeks of paid vacation per year:  two weeks in accordance with the provisions of the company’s vacation policy and two additional negotiated weeks.  Your vacation accrual will thereafter increase only in accordance with the vacation schedule in the policy (i.e., you will accrue five weeks of vacation upon reaching 25 years of service).  In addition, the company is typically closed during the week between Christmas and New Year’s Day holidays.  You will also be eligible for paid holidays and personal floating holidays in accordance with the company’s policies.  When you leave employment with the company, you will receive a payment for any vacation you have accrued and not used.  Vacation is prorated to your date of employment and accrued on a monthly basis.

13.Relocation: A copy of the Renter Relocation Policy, Renter Addendum and Repayment Agreement are enclosed for your review.  This benefit will be made available to you for one year from employment date.  Use of a Company provided T&E credit card for any relocation assignment related expenses is prohibited.

14.Employment at Will:  This offer does not constitute a contract of employment for any specific period of time, but will create an employment at-will relationship that may be terminated at any time by you or the company, with or without cause.

In addition, your offer is contingent upon the verification of the information you have provided to the company, successful completion of employment paperwork, the completion of a Combined Disclosure Notice & Authorization Regarding Background Consumer Reports and background authorization forms and execution of the Tenneco Confidentiality Agreement (this will be part of your “on-boarding” process).  

On or before your first day of employment, you must provide documentation that you have authorization to work in the United States. The offer is contingent upon you providing appropriate I-9 documentation (see enclosed).  Two copies of this offer letter have been provided.  

Matti Masanovich
July 6, 2020
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Please sign the offer letter and return it to me as soon as possible.  The second copy should be retained for your personal records.

Matti, we look forward to you joining Tenneco and are excited for you to contribute and share in its future success.  Please contact me to acknowledge your acceptance or with any other questions or concerns.

Sincerely,

/s/ Kaled Awada

Kaled Awada
Senior Vice President and Chief Human Resources Officer
Tenneco Inc.

______________________________________________________________________________                                                                                            

I have read, understood and accept this offer of employment at a subsidiary of Tenneco Inc.

By:  /s/ Matti Masanovich          Date:  July 6, 2020

Print Name:  Matti MasanovichDocument

Exhibit 10.5
3 year vesting

RESTRICTED STOCK UNIT INDUCEMENT GRANT AWARD AGREEMENT

Matti Masanovich (“Executive”)

As a material inducement for the Executive to commence employment as the Executive Vice President and Chief Financial Officer of Tenneco Inc. (the “Company”) effective as of August 10, 2020 in accordance with the New York Stock Exchange Listing Company Manual Rule 303A.08, effective as of August 10, 2020, the Executive is hereby granted an award of restricted stock units (“Restricted Stock Units”) with respect to 146,472 shares of the Company’s class A voting common stock, par value $0.01 per share (“Common Stock”).  The Award is subject to the following terms and conditions (sometimes referred to as this “Award Agreement”).  Terms used in this Award Agreement are defined elsewhere in this Award Agreement; provided, however, that, solely for convenience, capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Tenneco Inc. 2006 Long-Term Incentive Plan (the “Incentive Plan”).  Notwithstanding any provision of this Award Agreement, this Award is not granted under the Incentive Plan.
1.Dividend Cash Amounts.   This Award contains the right to receive cash credits to a hypothetical bookkeeping account (a “Dividend Cash Account”) in respect of dividends paid with respect to shares of Common Stock in accordance with the following:
(a)If a dividend with respect to shares of Common Stock is payable in cash, then, as of the applicable dividend payment date, the Executive’s Dividend Cash Account shall be credited with an amount (a “Dividend Cash Amount”) equal to (i) the cash dividend payable with respect to a share of Common Stock, multiplied by (ii) the number of Restricted Stock Units outstanding on the applicable dividend record date. 
(b)If a dividend with respect to shares of Common Stock is payable in shares of Common Stock, then, as of the applicable dividend payment date, the Executive’s Dividend Cash Account shall be credited with a Dividend Cash Amount in an amount equal to (i) the number of shares of Common Stock distributed in the dividend with respect to a share of Common Stock, divided by (ii) the Fair Market Value of a share of Common Stock on the dividend payment date, multiplied by (iii) the number of Restricted Stock Units outstanding on the applicable dividend record date. 
The Dividend Cash Amounts credited to the Executive’s Dividend Cash Account shall be subject to the same vesting provisions as the Restricted Stock Units to which the Dividend Cash Amounts relate and shall be settled in accordance with Paragraph 3.  No Dividend Cash Amounts with respect to a Restricted Stock Unit shall be credited under this Award Agreement for any period after the Vesting Date (as defined in Paragraph 2) applicable to such Restricted Stock Unit.  Amounts credited to the Executive’s Dividend Cash Account shall not be credited with any investment earnings. 

2.Vesting and Forfeiture of Restricted Stock Units and Dividend Cash Amounts.   
(a)All Restricted Stock Units and Dividend Cash Amounts credited to the Executive’s Dividend Cash Account shall be unvested unless and until they become vested and nonforfeitable in accordance with this Paragraph 2.  Subject to the terms and conditions of this Award Agreement, twenty seven percent (27%) of the Restricted Stock Units and associated Dividend Cash Amounts awarded hereunder shall vest on August 10, 2021, twenty seven percent (27%) of the Restricted Stock Units and associated Dividend Cash Amounts will vest on August 10, 2022 and forty six percent (46%) of the Restricted Stock Units and associated Dividend Cash Amounts will vest on August 10, 2023 (each of such dates being referred to as a “Vesting Date”), provided, in either case, that the Executive is continuously employed by the Company or a Subsidiary through the applicable Vesting Date.  Notwithstanding the foregoing, if the Executive’s Termination Date occurs by reason of termination by the Company other than for Cause (as defined below), any unvested Restricted Stock Units that are outstanding on the Termination Date (and associated Dividend Cash Amounts) shall immediately vest on the Termination Date and the Termination Date shall be the “Vesting Date” for purposes of this Award Agreement.  All Restricted Stock Units and associated Dividend Cash Amounts that are not vested upon the Executive’s Termination Date shall immediately expire and shall be forfeited and the Executive shall have no further rights thereto.  In the event of forfeiture for any reason, the balance in the Executive’s Dividend Cash Account shall be reduced by the amount of any Dividend Cash Amounts that are forfeited.  
(b)For purposes of this Award Agreement, “Cause” means, with respect to the Executive, (i) fraud, embezzlement, or theft in connection with his or her employment, (ii) gross negligence in the performance of his or her duties, (iii) his or her conviction, guilty plea, or plea of nolo contendere with respect to a felony, (iv) the willful and continued failure to substantially perform his or her duties for the Company or any of its Subsidiaries (except where the failure results from incapacity due to disability), (v) the failure to meet the obligations required by his or her position, as determined in the reasonable discretion of the Committee, or (vi) the willful or negligent engagement in conduct which is, or could reasonably be expected to be, materially injurious to any of the Company or any of its Subsidiaries, monetarily or otherwise.  For purposes of the foregoing, no act, or failure to act, on the part of the Executive shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that his or her act, or failure to act, was in the best interest of the Company and its Subsidiaries.
3.Settlement and Payment.  Subject to the terms and conditions of this Award Agreement, Restricted Stock Units and associated Dividend Cash Amounts that have become vested in accordance with Paragraph 2 shall be paid and settled as of the applicable Vesting Date.  The date on which payment and settlement occurs is referred to as the “Settlement Date.”  
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Unless otherwise determined by the Committee, (a) settlement of the vested Restricted Stock Units on a Settlement Date shall be made in the form of shares of Common Stock with one share of Common Stock being issued in settlement of each Restricted Stock Unit, plus an amount of cash equal to the Fair Market Value of any fractional Restricted Stock Unit being settled as of such Settlement Date and (b) settlement of the vested Dividend Cash Amounts on a Settlement Date shall be paid in a cash lump sum payment.  Upon the settlement of any vested Restricted Stock Units such Restricted Stock Units shall be cancelled and upon payment of any Dividend Cash Amounts the balance in the Executive’s Dividend Cash Account shall be reduced by the amount paid to the Executive pursuant to subparagraph 3(b). 
4.Withholding.  This Award and any distribution in respect of this Award, are subject to withholding of all applicable taxes, and the delivery of any cash or other benefits under this Award is conditioned on satisfaction of the applicable tax withholding obligations.  Such withholding obligations may be satisfied, at the Executive’s election, (a) through cash payment by the Executive or (b) through the surrender of cash or shares of Common Stock to which the Executive is otherwise entitled under this Award; provided, however, that any withholding obligations with respect to any Executive shall be satisfied by the method set forth in subparagraph 4(b) (through the withholding of shares otherwise payable pursuant to this Award) unless the Executive otherwise elects in accordance with this Paragraph 4; and provided further that any withholding with respect to payments of Dividend Cash Amounts shall be satisfied by the method set forth in subparagraph 4(a).  The amount withheld in the form of shares of Common Stock under this Paragraph 4 may not exceed the minimum statutory withholding obligation (based on the minimum statutory withholding rates for Federal and state purposes, including, without limitation, payroll taxes) unless otherwise elected by the Executive, in no event shall the Executive be permitted to elect less than the minimum statutory withholding obligation, and in no event shall the Executive be permitted to elect to have an amount withheld in the form of shares of Common Stock pursuant to this Paragraph 4 that exceeds the maximum individual tax rate for the employee in applicable jurisdictions.
5.Transferability.  This Award is not transferable except as designated by the Executive by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order.
6.Heirs and Successors.  If any benefits deliverable to the Executive under this Award Agreement have not been delivered at the time of the Executive’s death, such benefits shall be delivered to the Executive’s Designated Beneficiary, in accordance with the provisions of this Award Agreement.  The “Designated Beneficiary” shall be the beneficiary or beneficiaries designated by the Executive in a writing filed with the Company in such form and at such time as the Company shall require and in accordance with such rules and procedures established by the Company.  If a deceased Executive fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Executive, any rights that would have been exercisable by the Executive and any benefits distributable to the Executive shall be distributed to the legal representative of the estate of the Executive.  
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7.Administration.  The authority to administer and interpret this Award and this Award Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Award and this Award Agreement as it would have if the Award was made under the Incentive Plan.  Any interpretation of this Award or this Award Agreement by the Committee and any decision made by it with respect to this Award or this Award Agreement is final and binding on all persons.  
8.Adjustment of Award. The number of Restricted Stock Units awarded pursuant to this Award may be adjusted by the Committee in a manner consistent with Section 5.2 of the Incentive Plan to reflect certain corporate transactions which affect the number, type or value of the Restricted Stock Units. 
9.Notices.  Any notice required or permitted under this Award Agreement shall be deemed given when delivered personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Committee or the Company at the Company’s principal offices, to the Executive at the Executive’s address as last known by the Company or, in any case, such other address as one party may designate in writing to the other.
10.Amendments.  The Committee may amend this Award Agreement, provided that, no amendment or termination may, in the absence of written consent to the change by the affected Executive (or, if the Executive is not then living, the affected beneficiary), adversely affect the rights of any Executive or beneficiary under this Award Agreement prior to the date such amendment or termination is adopted by the Committee.  Adjustments described in Paragraph 8 shall not be subject to the terms of this Paragraph 10. 
11.Unfunded Obligation.  The Award shall not be funded, no trust, escrow or other provisions shall be established to secure payments and distributions due hereunder and this Award shall be regarded as unfunded for purposes of the Employee Retirement Income Security Act of 1974, as amended, and the Code.  The Executive shall be treated as a general, unsecured creditor of the Company with respect to amounts payable hereunder, and shall have no rights to any specific assets of the Company.  Without limiting the generality of the foregoing, any amounts credited to the Dividend Cash Account will remain general assets of the Company and shall be payable solely from the general assets of the Company.
12.Severability.  If a provision of this Award Agreement is held invalid by a court of competent jurisdiction, the remaining provisions shall nonetheless be enforceable according to their terms.  Further, if any provision is held to be overbroad as written, that provision shall be amended to narrow its application to the extent necessary to make the provision enforceable according to applicable law and enforced as amended.
13.Other Terms.  
(a)The Award does not constitute a contract of employment or continued service, and the grant of the Award shall not give the Executive the right to be retained in the employ or service of the Company or any Subsidiary, nor any right or claim to 
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any benefit under this Award Agreement, unless such right or claim has specifically accrued under the terms of this Award Agreement.
(b)Notwithstanding any other provision of this Award Agreement, (i) this Award is subject to the Company’s recoupment or clawback policies as applicable and as in effect from time to time and (ii) if the Committee determines, in its sole discretion, that the Executive at any time has willfully engaged in any activity that the Committee determines was or is harmful to the Company or any of its Subsidiaries, any unpaid portion of the Award shall be forfeited and the Executive shall have no rights with respect thereto.
(c)If the Committee determines that the Executive has (i) used for profit or disclosed to unauthorized persons, confidential or trade secrets of the Company or any Subsidiary; (ii) breached any contract with or violated any fiduciary obligation to the Company or any Subsidiary; or (iii) engaged in any conduct which the Committee determines is injurious to the Company or its Subsidiaries, the Committee may cause the Executive to forfeit this Award; provided, however, that following the occurrence a Change in Control, the Award will not be subject to forfeiture pursuant to the provisions of this subparagraph 13(c). 
(d)The Executive shall not, by reason of this Award, acquire any right in or title to any assets, funds or property of the Company or any Subsidiary whatsoever, including, without limitation, any specific funds, assets or other property which the Company or any Subsidiary, in its sole discretion, may set aside in anticipation of a liability under this Award.  The Executive shall have only a contractual right to the shares of Common Stock or amounts, if any, payable under this Award, unsecured by any assets of the Company or any Subsidiary, and nothing contained in this Award Agreement shall constitute a guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person.
(e)The validity, construction and effect of this Award Agreement shall be determined in accordance with the laws of the State of Illinois and applicable federal law.
14.Counterparts. This Award Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.
15.Special Section 409A Rules.  It is intended that any amounts payable under this Award Agreement shall either be exempt from or comply with section 409A of the Code.  The provisions of this Award shall be construed and interpreted in accordance with section 409A of the Code.  Notwithstanding any other provision of this Award Agreement to the contrary, if any payment or benefit hereunder is subject to section 409A of the Code, and if such payment or benefit is to be paid or provided on account of the Executive’s termination of employment (or other separation from service):
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(a)and if the Executive is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Executive’s separation from service or termination of employment, such payment or benefit shall be delayed until the first day of the seventh month following the Executive’s termination of employment or separation from service; and 
(b)the determination as to whether the Executive has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder.

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EXECUTIVE:                        TENNECO INC.:
                            
  /s/ Matti Masanovich                     /s/ Kaled Awada 
Electronic Signature                    Senior Vice President and Chief Human Resources Officer 
 
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