Guiding Principle – You may not buy or sell — or assist others in buying or selling — securities of Tenneco or any other company if you have material inside information about the company that you learned while at Tenneco.
Tenneco Inc. and its subsidiaries (“Tenneco” or the “Company”) oppose the misuse of material nonpublic information in the trading of securities and it is the intent of this policy to implement procedures designed to prevent trading based on material nonpublic information regarding the Company or others with whom the Company does business. Further, this policy is designed to prevent insider trading or allegations of insider trading, and to protect the Company’s reputation for integrity and ethical conduct. It is your obligation to understand and comply with this policy. Should you have any questions regarding this policy, please contact the Company’s General Counsel.
The policy covers officers, directors and all other employees of, or consultants or contractors to, the Company, as well as their immediate families, and members of their households (“Insider(s)”).
This policy applies to all transactions in a company’s securities, including common stock, options to purchase common stock and any other debt or equity securities, as well as to derivative securities relating to a company’s stock, whether or not issued by the company, such as publicly-traded options.
Trading While in Possession of Material Non-Public Information. No Insider shall engage in any transaction involving a purchase or sale of the Company’s securities, including any offer to purchase or offer to sell, during any period commencing with the date that the Insider possesses material nonpublic information concerning the Company, and ending upon completion of one full trading day following the public disclosure of that information, or at such time as such nonpublic information is no longer material.
No Insider may disclose (“tip”) material nonpublic information about the Company to any other person where such information may be used by such person to his or her profit by trading in the securities of companies to which such information relates. Further, no Insider or related person may make recommendations or express opinions on the basis of material nonpublic information as to trading in the Company’s securities.
No Insider shall engage in any transaction involving the purchase or sale of another company’s securities while in possession of material nonpublic information about such company when that information is obtained in the course of employment with, or the performance of services on behalf of, the Company.
Definition of Material Information. It is not possible to define all categories of material information. However, information should be regarded as material if there is a substantial likelihood that it would be considered important to a reasonable investor in making an investment decision regarding the purchase or sale of securities. Information is nonpublic if it has not yet been generally disclosed to the investing public.
While it may be difficult under this standard to determine whether particular information is material, there are various categories of information that are particularly sensitive and therefore more likely to be considered material. Examples of such information include:
- Quarterly financial results
- Known but unannounced future earnings or losses
- News of a pending or proposed merger
- News of the disposition or acquisition of significant assets
- New significant litigation
- A significant engineering issue or warranty claim
- The loss of a significant customer
- A significant governmental investigation, audit or review
- Changes in dividend policy
- Stock splits
- New equity or debt offerings
Either positive or negative information may be material. Questions concerning whether nonpublic information is material can be directed to the Company’s General Counsel.
Transactions that are Prohibited Regardless of Possession of Material Non-public Information. Certain types of transactions increase the Company’s exposure to legal risks and may create the appearance of improper or inappropriate conduct. Therefore, Insiders may not engage in any of the following transactions, even if they do not possess material nonpublic information:
- Short sales of Tenneco stock. “Short” sales of stock are transactions where you borrow stock, sell it, and then buy stock at a later date to replace the borrowed shares.
- Transactions to hedge or offset the risks and benefits of ownership of Tenneco securities. Insiders may not engage in transactions that are designed to hedge or offset, or that have the effect of hedging or offsetting, any change in the value of Tenneco securities. The prohibition includes the purchase or sale of options, warrants, puts, calls, prepaid variable forwards, equity swaps, collars, exchange funds and other derivatives. The prohibition also applies to any other transaction that is designed to hedge or offset, or that has the effect of hedging or offsetting, any change in the value of Tenneco securities. This does not apply to your receipt of stock options or any other form of equity as part of a Company benefit plan.
- Trading in Tenneco securities on margin.
- Short-term trading in Tenneco securities. The Company believes that any Tenneco securities held by Insiders should be treated as long-term investments, as this encourages an alignment of interests between directors, officers, employees, the Company and the Company’s stockholders.
PLEDGING TENNECO SECURITIES
Securities pledged as collateral can be sold without your consent in certain circumstances. This means that a sale may occur at a time when the pledgor is aware of material nonpublic information. Consequently, Tenneco’s executive officers and directors are prohibited from pledging Tenneco securities as collateral and any other person wishing to enter into such an arrangement must first obtain pre-clearance from the Company’s General Counsel.
It is the duty of all directors, officers and employees of Tenneco to maintain the confidentiality of nonpublic information belonging or relating to Tenneco or obtained through any relationship of confidence. As described above, nonpublic information should be treated as confidential and confined to personnel who must have such information to carry out their duties, on a "need to know" basis. This prohibition on the disclosure of nonpublic information applies specifically (but not exclusively) to inquiries about the Company which may be made by the financial press, investment analysts or others in the financial or investment community. It is important that all such communications on behalf of the Company be through an appropriately designated officer under carefully controlled circumstances. If you receive any inquiries of this nature, you should follow the procedures described in the Compliance Policy Manual under the section entitled "Dissemination of Corporate Information."
The Company has determined that all officers, directors and those other persons identified on Attachment 1 (as may be amended from time to time by the Company’s General Counsel), shall be prohibited from buying, selling or otherwise effecting transactions in any stock or other securities of the Company during the following period:
Beginning on the 15th day of the last month of a calendar quarter and ending upon the completion of one full trading day following the public disclosure of the Company’s financial results for the preceding calendar quarter or year (the “Blackout Period”).
In addition, the Company, through the General Counsel, may designate longer or additional periods in which buying, selling or otherwise effecting transactions in the Company’s securities shall be prohibited pursuant to this policy as if it were the “Blackout Period.” If a special black-out period is imposed, the Company will notify affected individuals, who should thereafter not engage in any transaction involving the Company’s securities and should not disclose to others the fact of such suspension of trading.
It should be noted that, even when the Company is not in a Blackout Period, no person possessing material nonpublic information may engage in any transactions in the Company’s securities until the completion of one full trading day following public disclosure of such information, whether or not the Company has recommended a suspension of trading to that person.
STOCK TRANSACTIONS BY EXECUTIVE OFFICERS, DIRECTORS AND CERTAIN ASSOCIATED PARTIES
This portion of the policy applies to all executive officers and directors of the Company, as well as other persons designated from time to time by the General Counsel (“Section 16 Reporting Persons”), including family members and others in their households (“Covered Persons”). This portion of the policy applies to any and all transactions involving Company securities, including without limitation open market or private purchases and sales, stock plan transactions such as an option exercise, a gift, a contribution to trust or any other transfer.
Mandatory Preclearance and Reporting. Each Covered Person must refrain from engaging in any transaction in the Company’s securities, even when the Company is not subject to the Blackout Period, without first contacting the Company’s General Counsel and obtaining pre-clearance to transact in the Company’s securities. A request for preclearance should be submitted to the General Counsel’s office at least two days in advance of the proposed transaction. The General Counsel or his designee will then determine whether the transaction may proceed.
In addition, all Section 16 Reporting Persons are required to comply with Section 16 of the Securities Exchange Act of 1934, and related rules and regulations, which set forth reporting obligations as well as limitations on “short swing” transactions. The Company is available to assist in Section 16 reporting, however, the obligation to comply with Section 16 is personal. Please direct any inquiries concerning compliance to the Company’s General Counsel.
Powers of Attorney. It is critical that all Section 16 Reporting Persons have a Section 16 Power of Attorney on file with the Company. These Powers of Attorney enable the Company to prepare and file the Section 16 reports on a timely basis. A form of Power of Attorney can be obtained from the General Counsel’s office.
ADOPTION AND EFFECT OF 10B5-1 TRADING PLANS AND DIVIDEND REINVESTMENT
Trades in Company securities that are executed pursuant to an approved trading plan meeting the requirements of Rule 10b5-1 of the Securities Exchange Act of 1934 (a "Rule 10b5-1 Trading Plan") are not subject to pre-clearance procedures and blackout periods. Company policy requires Rule 10b5-1 Trading Plans to (i) be written, (ii) specify the amount of, date(s) on, and price(s) at which the securities are to be traded or establish a formula for determining such items, (iii) satisfy in all respects the conditions set forth in Rule 10b5-1(c) under the Securities Exchange Act of 1934, and (iv) receive written prior approval from the Company’s General Counsel. Rule 10b5-1 Trading Plans may be adopted, amended and replaced only during periods when trading is permitted and under no circumstances when the individual is in possession of material, nonpublic information about the Company. Section 16 Reporting Persons are responsible for notifying the Company immediately of any trade under a Rule 10b5-1 Trading Plan, to help facilitate Section 16 compliance.
EXEMPTIONS FROM THIS POLICY
The exercise of stock options for cash under the Company’s stock option plan are exempt from this policy, since the other party to these transactions is the Company itself and the price does not vary with the market, but is fixed by the terms of the option agreement. This exemption does not apply to the sale of any shares issued upon such exercise and it does not apply to a cashless exercise of options, which is accomplished by a sale of a portion of the shares issued upon exercise of an option.
The Company’s General Counsel has the authority to grant other exemptions from this policy.
Every officer, director and other employee, consultant and contractor has the individual responsibility to comply with this policy and all applicable securities laws. An Insider may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of the material nonpublic information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting. Trading in the Company’s securities outside a Blackout Period should not be considered a “safe harbor,” and all directors, officers and other persons should use good judgment at all times.
CONSEQUENCES OF VIOLATION
Pursuant to federal and state securities laws, Insiders may be subject to criminal and civil fines and penalties as well as imprisonment for engaging in transactions in the securities at a time when they have knowledge of material nonpublic information. In addition, Insiders may be liable for improper transactions by any person (commonly referred to as a “tippee”) to whom they have disclosed material nonpublic information regarding the Company or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in the Company’s securities.
Employees who violate this policy shall also be subject to disciplinary action by the Company, which may include ineligibility for future participation in the Company’s equity incentive plans or termination of employment.
- All officers and directors of Tenneco Inc. and their administrative assistants.
- All employees who work at Lake Forest, Monroe, Grass Lake, Brussels, Shanghai (Headquarters only), St. Truiden (OE Ride Performance Headquarters only) and Edenkoben (OE Clean Air Headquarters only).
- All general managers, country managers, plant managers, controllers and their respective administrative assistants.