LAKE FOREST, Ill.--(BUSINESS WIRE)--March 16, 2000--Tenneco Automotive Inc. (NYSE: TEN) announced today that its Board of Directors has approved certain amendments to the company's stockholder rights plan.
"The amendments adopted by the Board will help ensure that the rights plan remains effective in preserving the company's long-term value for its stockholders," said Mark P. Frissora, chairman and CEO of Tenneco Automotive. "The amendments were not made in response to any specific proposal to acquire the company."
The amendments are being made in light of the company's November 1999 spin-off of its packaging businesses and reverse stock split. The original rights plan was adopted in September 1998 when the company was known as Tenneco Inc. In connection with the spin-off, a new executive team was installed and the company changed its name to Tenneco Automotive Inc.
"The rights plan was originally designed to meet the needs of a Tenneco Inc., which at the time was a company with a $5.8 billion market capitalization," Frissora said. " The Board believes these amendments more appropriately align the rights plan for stockholders with Tenneco Automotive's smaller market capitalization."
The amendments decrease the exercise price under the rights plan from $130.00, which was the price established in 1998 when each share of common stock carried one right, to an aggregate exercise price of $44 for the five rights that attach to each share of common stock after giving effect to the one-for-five reverse stock split. As amended, upon being exercised, these five rights will entitle the company's stockholders to purchase a specified amount of Series B Junior Participating Preferred Stock at an aggregate price of $44.00, subject to further adjustment from time to time in accordance with the rights plan. The amendments also decrease the stock ownership level at which the rights become exercisable from 20% or more of the company's outstanding common stock to 15% or more of the company's outstanding common stock. The qualified offer exception has been eliminated and certain other technical changes were also made. An independent Board committee will continue to review the plan at least every three years and report to the full Board regarding whether it continues to be in the stockholders' best interests.
Under the amended rights plan, the rights will become exercisable if a person or group acquires beneficial ownership of 15% or more of the company's outstanding common stock or commences a tender offer for 15% or more of the company's outstanding common stock. Rights held by the 15% or greater beneficial owner will become void and not be exercisable.
Tenneco Automotive's stockholder rights plan is designed to assure that all stockholders of the company receive fair and equal treatment in the event of any proposed takeover and to guard against partial tender offers, open market accumulations and other tactics designed to gain control of the company without paying all stockholders a fair price.
Tenneco Automotive is a $3.3 billion manufacturing company headquartered in Lake Forest, Ill., with 24,000 employees worldwide. Tenneco Automotive is one of the world's largest producers and marketers of ride control and exhaust systems and products, which are sold under the Monroe(R) and Walker(R) global brand names. Among its products are Sensa-Trac(R) and Reflex(TM)shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(TM)mufflers and DynoMax(TM)performance exhaust products, and Monroe(R) Clevite(TM)vibration control components.