UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

Check the appropriate box:

Tenneco Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Proxy Statement and

Notice of 2019 Annual Meeting

Pioneering global ideas for cleaner air and

smoother, quieter and safer transportation

Wednesday, May 15, 2019 at 1:00 p.m. Eastern Time

Detroit Foundation Hotel, 250 West Larned Street

Detroit, MI 48226

To the Stockholders of Tenneco Inc.:

We are pleased to inform you that Tenneco’s 2019 Annual Meeting of Stockholders will be held Wednesday, May 15, 2019, at 1:00 p.m., Eastern Time, at Detroit Foundation Hotel, 250 West Larned Street, in Detroit, Michigan. A record of our activities for the year 2018 is contained in our Form 10-K, but as we prepare for the Annual Meeting, we want to share with you our thoughts on our 2018 performance, and the bright future ahead for Tenneco.

Our results for 2018 demonstrate the effectiveness of our strategies and the progress we’re making on realizing our vision for Tenneco by investing to achieve long-term success with profitable growth. Some of the key highlights for 2018 include:

Looking ahead, we expect continued revenue growth that outpaces industry production, driven by the strength of our diversified portfolio. We are working diligently ahead of the expected spin-off to ensure a smooth and effective transition, and we are thrilled about the potential value that we can deliver to our stockholders by creating these two purpose-built companies.

Thank you for your confidence and continued support.

NOTICE OF

ANNUAL MEETING OF STOCKHOLDERS

Items of

By Order of the Board of Directors

Brandon B. Smith

Corporate Secretary

Lake Forest, Illinois

April 3, 2019

TABLE OF CONTENTS

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IMPORTANT NOTICE REGARDING THE

AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 15, 2019

PROXY STATEMENT

The Board of Directors of Tenneco Inc. has made these proxy materials available to you on the Internet or, upon your request, has delivered printed versions of these materials to you by mail. We first released these proxy materials to our stockholders on or about April 3, 2019. We are furnishing this proxy statement in connection with the solicitation by our Board of Directors of proxies to be voted at the Annual Meeting of Stockholders on May 15, 2019, or at any adjournment or postponement thereof.

The following summary sets forth certain performance highlights, as well as information contained elsewhere in this proxy statement. You should read the entire proxy statement before casting your vote.

2018 Highlights

Annual Meeting of Shareholders

You are entitled to vote at the meeting if you were a holder of record of our class A common stock at the close of business on March 18, 2019. Please see pages 4-5 for instructions on how to vote your shares.

Voting Recommendations of the Board

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Director Nominees

The Board has nominated the following individuals to stand for election for a one-year term expiring at the annual meeting of stockholders in 2020. Each nominee is independent, other than Messrs. Kesseler, Sherrill and Wood. You can find additional information under “Election of Directors (Item 1)” beginning on page 8.

Key Features of Our Executive Compensation Program

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Governance Highlights

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What is the purpose of the Annual Meeting?

At the Annual Meeting, stockholders will consider and vote on the following matters:

The stockholders will also act on any other business that may properly come before the Annual Meeting.

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

If your shares are registered directly in your name with our transfer agent, EQ Shareowner Services, you are considered, with respect to those shares, the “stockholder of record.” If your shares are held in a stock brokerage account or by a bank or other record holder, you are considered the “beneficial owner” of shares held in “street name.” As the beneficial owner, you have the right to direct your broker, bank or other record holder on how to vote your shares, and you are also invited to attend the Annual Meeting. Your broker, bank or other record holder should have enclosed or provided voting instructions for you to use in directing the voting of your shares.

Who may attend the Annual Meeting?

Anyone who was a holder of class A common stock as of the close of business on March 18, 2019 may attend the Annual Meeting.

Who is entitled to vote at the Annual Meeting?

Only holders of record of our class A common stock at the close of business on March 18, 2019 are entitled to vote. There were 57,126,127 shares of class A common stock outstanding on March 18, 2019. Stockholders are entitled to cast one vote per share on all matters.

How do I vote my shares in person at the Annual Meeting?

Shares held in your name as the stockholder of record may be voted in person at the Annual Meeting. Shares held beneficially in street name may be voted in person at the Annual Meeting only if you obtain a legal proxy from the broker, bank or other record holder that holds your shares giving you the right to vote the shares. Even if you plan to attend the Annual Meeting, we recommend that you also submit your proxy or voting instructions as described below so that your vote will be counted if you later decide not to attend the Annual Meeting.

How do I vote my shares without attending the Annual Meeting?

There are three ways to vote by proxy:

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If you received a proxy card in the mail but choose to vote by Internet or by telephone, you do not need to return your proxy card.

If your shares are held in the name of a bank, broker or other record holder, follow the voting instructions on the form that you receive from them. The availability of telephone and Internet voting will depend on the bank’s, broker’s or other record holder’s voting process. Your bank, broker or other record holder may not be permitted to exercise voting discretion as to some of the matters to be acted upon. Therefore, please give voting instructions to your bank, broker or other record holder.

Unless you hold your shares through the company’s 401(k) plans, you may vote via the Internet or by phone until 11:59 p.m. Eastern Time, on May 14, 2019, or the company’s agent must receive your paper proxy card on or before May 14, 2019. If you hold your shares through the company’s 401(k) plans, you may vote via the Internet or by phone until 11:59 p.m., Eastern Time, on May 12, 2019, or the company’s agent must receive your paper proxy card on or before May 12, 2019.

How will my proxy be voted?

All properly completed, unrevoked proxies that are timely received will be voted in accordance with the specifications made.

If a properly executed, unrevoked written proxy card does not specifically direct the voting of shares covered, the proxy will be voted:

The Board of Directors is not aware of any other matters that may properly come before the Annual Meeting. However, should any such matters come before the Annual Meeting, it is the intention of the persons named in the enclosed form of proxy card to vote all proxies (unless otherwise directed by stockholders) in accordance with their judgment on such matters.

May I revoke or change my vote?

If you are a stockholder of record, you may revoke your proxy at any time before it is actually voted by giving written notice of revocation to our Corporate Secretary, by delivering a proxy bearing a later date (including by telephone or by Internet) or by attending and voting in person at the Annual Meeting. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request. If you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other record holder or, if you have obtained a legal proxy from your bank, broker or other record holder giving you the right to vote your shares, by attending the Annual Meeting and voting in person.

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Will my vote be made public?

All proxies, ballots and voting materials that identify the votes of specific stockholders will generally be kept confidential, except as necessary to meet applicable legal requirements and to allow for the tabulation of votes and certification of the vote.

What constitutes a quorum, permitting the Annual Meeting to conduct its business?

The presence at the Annual Meeting, in person or by proxy, of holders of a majority of the issued and outstanding shares of class A common stock as of the record date is considered a quorum for the transaction of business. If you submit a properly completed proxy or if you appear at the Annual Meeting to vote in person, your shares of class A common stock will be considered part of the quorum.

Abstentions and “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A broker non-vote occurs when a bank, broker or other record holder holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. The election of directors (Item 1) and the advisory vote on executive compensation (Item 3) are “non-discretionary” items. If you do not instruct your bank, broker or other record holder how to vote with respect to any of these items, your bank, broker or other record holder may not vote with respect to the applicable proposal and those votes will be counted as “broker non-votes.”

How many votes are needed to approve a proposal?

Assuming the presence of a quorum, each director nominee receiving a majority of the votes cast at the Annual Meeting (in person or by proxy) will be elected as a director. A “majority of the votes cast” means the number of “For” votes cast exceeds the number of “Against” votes cast. A proxy marked “Abstain” with respect to any director will not be counted in determining the total number of votes cast. Because the election of directors is determined on the basis of a majority of the votes cast, abstentions and broker non-votes have no effect on the election of directors.

Assuming the presence of a quorum, the affirmative vote of a majority of the shares present, in person or by proxy, at the Annual Meeting and entitled to vote is required to ratify the appointment of PricewaterhouseCoopers LLP as our independent public accountants for 2019 and to approve our executive compensation in an advisory vote. Because the vote standard for the approval of these proposals is a majority of shares present and entitled to vote, abstentions have the effect of a vote against the proposals and broker non-votes have no effect on the proposals.

Who will count the vote?

Representatives of Broadridge Financial Solutions, Inc. will tabulate the votes and act as inspectors of election.

How can I find the voting results of the Annual Meeting?

We will report the voting results in a Current Report on Form 8-K within four business days after the end of the Annual Meeting.

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How is the solicitation being made?

The cost of solicitation of proxies will be borne by us. Solicitation will be made by mail, and may be made by directors, officers and employees, personally or by telephone, email or fax. Proxy cards and materials also will be distributed to beneficial owners of stock through brokers, custodians, nominees and other like parties, and we expect to reimburse such parties for their charges and expenses. We have engaged Alliance Advisors to assist us in the solicitation of proxies, at an estimated cost of $8,000 to $15,000 plus expense reimbursement.

Does Tenneco allow stockholders to have proxy access for the nomination of directors?

Yes. The Board has adopted proxy access By-Law provisions to permit eligible stockholders to include nominees in the company’s proxy statement and form of proxy. See “Submission of Stockholder Proposals” for further information.

Where can I find more information about Tenneco?

We file reports and other information with the U.S. Securities and Exchange Commission (“SEC”). This information is available at our website at http://www.tenneco.com and at the Internet site maintained by the SEC at http://www.sec.gov.

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Our Board of Directors is currently comprised of 12 individuals, all of whom, except for Mr. Stecko, are proposed to be elected at this Annual Meeting to serve for a one-year term to expire at the annual meeting of stockholders to be held in 2020 and until their successors are chosen and have been duly elected and qualified.

Unless otherwise indicated in your proxy, the persons named as proxy voters in the accompanying proxy card, or their substitutes, will vote your proxy for all the nominees, each of whom has been designated as such by the Board of Directors. In the event that any nominee for director withdraws or for any reason is not able to serve as a director, we will vote your proxy for the remainder of those nominated for director (except as otherwise indicated in your proxy) and for any replacement nominee designated by the Nominating and Governance Committee of the Board of Directors.

You may vote “For” or “Against” any or all of the director nominees, or you may “Abstain” from voting. Assuming a quorum, each director nominee receiving a majority of the votes cast at the Annual Meeting (in person or by proxy) will be elected as director. A “majority of the votes cast” means the number of “For” votes cast exceeds the number of “Against” votes cast. A proxy marked “Abstain” with respect to any director will not be counted in determining the total number of votes cast.

If an incumbent director is not elected, that director remains in office until the director’s successor is duly elected and qualified or until the director’s death, resignation or retirement. To address this potential outcome, the Board adopted a director resignation policy in Tenneco’s By-Laws. Under this policy, the Board of Directors will nominate for directors only those incumbent candidates who tender, in advance, irrevocable resignations, and the Board has obtained such conditional resignations from the nominees in this year’s proxy statement. The irrevocable resignations will be effective upon the failure to receive the required vote at any annual meeting at which they are nominated for re-election and Board acceptance of the resignation. If a nominee fails to receive the required vote, the Nominating and Governance Committee will recommend to the Board whether to accept or reject the tendered resignation. The Board will publicly disclose its decision within 90 days following certification of the stockholder vote. The director whose resignation is under consideration will not participate in the recommendation of the Nominating and Governance Committee or the Board’s decision with respect to the resignation. If the Board does not accept the resignation, the director will continue to serve until the next annual meeting and until his or her successor is duly elected, or until his or her earlier resignation or removal. If the Board accepts the resignation, then the Board, in its sole discretion, may fill any resulting vacancy or may decrease the size of the Board (but not below the minimum number of directors required under our Certificate of Incorporation).

In connection with the closing of the Federal-Mogul acquisition, on October 1, 2018, the company, Icahn Enterprises L.P. (“IEP”), American Entertainment Properties Corp.(“AEP”) and Icahn Enterprises Holdings L.P. (“IEH”) entered into a Shareholders Agreement (the “Shareholders Agreement”). Mr. Cho, who is the chief financial officer of IEP, was elected to our board as the representative of IEP and is nominated for election at the Annual Meeting pursuant to the terms of the Shareholders Agreement. See “Corporate Governance — Related Party Transactions”.

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Nominees for Election to the Board of Directors

The Board of Directors recommends that you vote FOR all of the nominees listed below.

		SungHwan Cho Age: 44

Mr. Cho has served as Chief Financial Officer of IEP, a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, food packaging, metals, mining, real estate and home fashion, since March 2012. Prior to that time, he was Senior Vice President and previously Portfolio Company Associate at IEP since October 2006. Mr. Cho has been a director of: Hertz Global Holdings, Inc., a company engaged in the car rental business, since May 2017; IEP, since September 2012; and CVR Energy, Inc., a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries, since May 2012 (and has been Chairman of the Board of CVR Energy since June 2018). In addition, Mr. Cho serves as a director of certain wholly-owned or majority-owned subsidiaries of IEP, including: Icahn Automotive Group LLC, an automotive parts installer, retailer and distributor; Ferrous Resources Limited, an iron ore mining company; PSC Metals, LLC, a metal recycling company; and WestPoint Home LLC, a home textiles manufacturer. Mr. Cho was previously: a director (from January 2013) and Chairman of the Board (from June 2018) of CVR Refining, LP, an independent downstream energy limited partnership, until January 2019; a member of the Executive Committee of American Railcar Leasing LLC, a lessor and seller of specialized railroad tank and covered hopper railcars, from September 2013 to June 2017; a director of CVR Partners LP, a nitrogen fertilizer company, from May 2012 to April 2017; a director of Viskase Companies, Inc., a meat casing company, from November 2006 to April 2017; a director of Take-Two Interactive Software Inc., a publisher of interactive entertainment products, from April 2010 to November 2013; a director (from June 2011) and Chairman of the Board (from July 2014) of American Railcar Industries, Inc., a railcar manufacturing company, until December 2018, and a director of Federal-Mogul Holdings LLC until October 2018. Mr. Cho received a B.S. in Computer Science from Stanford University and an MBA from New York University, Stern School of Business. Mr. Cho became a director of our company on April 1, 2019.

Mr. Cho’s broad range of directorships and executive positions over his career brings valuable experience to our board.

		Thomas C. Freyman Age: 64 Committee: Audit, Compensation

Mr. Freyman served as Executive Vice President, Finance and Administration for Abbott from June 2015 until his retirement in February 2017. Prior to that, he served as Chief Financial Officer and Executive Vice President, Finance for Abbott since 2004. He was first appointed Chief Financial Officer and Senior Vice President, Finance in 2001. From 1999 to 2001, he served as Vice President and Controller of Abbott’s Hospital Products Division. Prior to that, he held a number of financial planning and analysis positions with Abbott including Treasurer for Abbott’s international operations and Corporate Vice President and Treasurer. Mr. Freyman holds a bachelor’s degree in accounting from the University of Illinois and a master’s degree in management from Northwestern University. Mr. Freyman is a director of Hanger, Inc. and Allergan plc. He has been a director of our company since 2013.

As a former Chief Financial Officer of a Fortune 200 company^†, Mr. Freyman brings substantial expertise in finance and accounting to our Board and the Audit Committee. Throughout his more than 30-year career with Abbott, Mr. Freyman served in diverse financial and accounting roles throughout Abbott’s global organization. Prior to his career with Abbott, he was a certified public accountant with the firm of Ernst & Whinney (now Ernst & Young) where he gained substantial experience in auditing, tax and financial reporting. The Board has designated Mr. Freyman as an “audit committee financial expert” as that term is defined in the SEC’s rules adopted pursuant to the Sarbanes-Oxley Act of 2002.

 

 

 

 

 

†	At the time of his retirement.

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		Denise Gray Age: 56

Ms. Gray is currently president of LG Chem Michigan Inc. Tech Center in Troy, Michigan overseeing the North American subsidiary of South Korean LG Chem Ltd., one of the world’s largest lithium-ion battery manufacturers. Prior to that she was President and Chief Executive Officer of LG Chem Power, Inc., a company focused on bringing lithium-ion polymer battery technology to North America for applications in the automotive and commercial markets from September 2015 until March 2018. From March 2013 until September 2015 she was Vice President, Powertrain Electrification at AVL List GMBH in Graz, Austria and North America. She also spent 30 years at General Motors in roles of increasing responsibility including heading up Global Battery Systems Engineering where she was recognized as “the battery czar,” and a driving force behind General Motors’ Chevrolet Volt vehicle. She holds a Bachelor’s degree in Electrical Engineering from Kettering University and a Master’s degree in Engineering Management Technology from Rensselaer Polytechnic Institute.

With over 30 years of experience in the automotive industry, Ms. Gray has substantial understanding of the opportunities and needs of our business. Her current and former leadership roles as a President and Chief Executive Officer of companies at the forefront of battery technology bring valuable insight into the future direction of the automotive industry to our company.

		Brian J. Kesseler Age: 52

Mr. Kesseler was named our Co-Chief Executive Officer in October 2018. Mr. Kesseler joined Tenneco in January 2015 as our Chief Operating Officer until his appointment in May 2017 as our Chief Executive Officer. Prior to that, Mr. Kesseler was president of Johnson Controls Power Solutions, and served as Chief Operating Officer for that business from May 2012 until January 2013. He originally joined Johnson Controls in 1994 and served in leadership roles of increasing responsibility including, from 2009 to 2012, in the Building Efficiency division, where he was Vice President and General Manager with responsibility for Europe Systems & Services, North America Service and the Unitary Products Group. Prior to Johnson Controls, he was with Ford Motor Company, serving in the North America Assembly operations. Mr. Kesseler holds a bachelor’s degree in finance from Michigan State University and an M.B.A. from Baldwin-Wallace College. He has been a director of our company since October 2016.

He brings to our Board more than 25 years of experience in the automotive industry in increasingly senior management roles. As Chief Operating Officer, he oversaw our global operations for over two years, including in key growth areas. Mr. Kesseler has extensive knowledge of our company and its global operations. That, together with his passion for our industry, leadership qualities and track record of elevating performance, makes him a particular asset to our company, both as a member of the Board and as our Co-Chief Executive Officer.

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		Dennis J. Letham Age: 67 Committee: Audit (Chair), Compensation

From 1995 until his retirement in June 2011, Mr. Letham served as Executive Vice President, Finance and Chief Financial Officer of Anixter International Inc., where he oversaw the company’s finance, accounting, tax, legal, human resource and internal audit activities in 50 countries. Before assuming his role as Chief Financial Officer in 1995, Mr. Letham served as Executive Vice President and Chief Financial Officer of Anixter, Inc., the principal operating subsidiary of Anixter International, which he joined in 1993. Previously, he had a 10-year career with National Intergroup Inc., where he was Senior Vice President and Chief Financial Officer, as well as Vice President and Controller, Director of Corporate Accounting and Manager for Internal Audit. Mr. Letham began his career at Arthur Andersen & Co. in 1973 where he held progressive responsibilities in the Audit Department. Mr. Letham holds a bachelor’s degree from Pennsylvania State University’s Accounting Honors program. He also is a Certified Public Accountant. Mr. Letham is a director of Extra Space Storage Inc. and Chairman of its Audit Committee and was a director of Interline Brands, Inc. and Chairman of its Audit Committee through August 2015 when it was sold to The Home Depot, Inc. He has been a director of our company since 2007.

Mr. Letham’s substantial experience in finance and accounting makes him a valuable asset to our Board and our Audit Committee. Throughout his more than 40-year career, Mr. Letham has gained a deep understanding of the operations and financial reporting and accounting functions of large organizations. His 15 years of experience as the Chief Financial Officer of Anixter, a large international public company, give him substantial insight into the complex financial, accounting and operational issues that a large multinational company such as ours can encounter. Further, with his background in public accounting, he brings particular insight to the external and internal audit functions. The Board has designated Mr. Letham as an “audit committee financial expert” as that term is defined in the SEC’s rules adopted pursuant to the Sarbanes-Oxley Act of 2002.

		James S. Metcalf Age: 61 Committee: Audit, Nominating and Governance

Mr. Metcalf is Chairman of the Board and Chief Executive Officer of NCI Building Systems, Inc. He retired in October 2016 as the Chairman, President and Chief Executive Officer of USG Corporation. At the time of his retirement, he had served as Chairman since December 2011 and had served as Chief Executive Officer and President since January 2011. From January 2006 through January 2011, he was President and Chief Operating Officer of USG. Prior to that Mr. Metcalf held many positions at USG including President, Building Systems; President and Chief Executive Officer, L&W Supply; Senior Vice President, Sales and Marketing, USG Interiors, Inc.; Vice President, National Accounts, United States Gypsum Company; Director, Retail Marketing, USG Corporation; Director, Retail Sales, USG Interiors, Inc.; and National Accounts Manager, United States Gypsum Company. He also serves as a board member for the National Association of Manufacturers and as a policy advisory board member for the Joint Center for Housing Studies at Harvard University. Mr. Metcalf holds a bachelor’s degree from The Ohio State University. He also holds a master’s degree in business administration from Pepperdine University and completed the Stanford Executive Program. He has been a director of our company since 2014.

As a current and former Chief Executive Officer of major manufacturers of construction materials, Mr. Metcalf brings substantial executive leadership experience to our Board and the Audit Committee. Further, Mr. Metcalf’s service in leadership roles in multiple areas within a large manufacturing company gives him particular insight into the types of strategic, operational and financial issues faced by companies such as ours.

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		Roger B. Porter Age: 72 Committee: Nominating and Governance (Chair)

Mr. Porter is the IBM Professor of Business and Government at Harvard University. He has served on the faculty at Harvard University since 1977. He also held senior economic policy positions in the Ford, Reagan and George H.W. Bush White Houses, serving as special assistant to the President and executive secretary of the Economic Policy Board from 1974 to 1977, as deputy assistant to the President and director of the White House Office of Policy Development from 1981 to 1985, and as assistant to the President for economic and domestic policy from 1989 to 1993. He received a B.A. from Brigham Young University and M.A. and Ph.D. degrees from Harvard University. He was also a Rhodes Scholar at Oxford University where he received his B.Phil. degree. He is also a director of Zions Bancorporation, Extra Space Storage Inc. and Packaging Corporation of America. He has been a director of our company since 1998.

Mr. Porter brings a distinctive background to his service on our Board of Directors. He is the author of several books on economic policy, including Presidential Decision Making and Efficiency, Equity and Legitimacy: The Multilateral Trading System at the Millennium. His significant policy roles for various White Houses, as well as his scholarly research and teaching as the IBM Professor of Business and Government at Harvard, give him a unique perspective on the impact of general economic, political and market conditions on our business and operations. His background and experience is unlike that of any other Board member, making him a valuable addition to a well-rounded Board. In addition, his service on the Board of Directors of a variety of major public companies provides him an understanding of the strategic, operational and financial issues faced by large public companies.

		David B. Price, Jr. Age: 73 Committee: Compensation (Chair)

Since his retirement from Noveon, Inc. in 2001, Mr. Price has worked as an independent consultant, providing investment and operational advice primarily to financial and strategic buyers of businesses. Previously, Mr. Price was President of Noveon, Inc. from February 2001 until May 2001. Noveon was formerly the Performance Materials segment of BF Goodrich Company before its sale to an investor group in February 2001. While with BF Goodrich from July 1997 to February 2001, Mr. Price served as Executive Vice President of BF Goodrich and President and Chief Operating Officer of BF Goodrich Performance Materials. Before joining BF Goodrich, Mr. Price held various executive positions over a 25-year span at Monsanto Company, including President of the Performance Materials Division of Monsanto from 1995 to July 1997. From 1993 to 1995, he was Vice President and General Manager of commercial operations for the Industrial Products Group and was also named to the management board of Monsanto’s Chemical Group. Mr. Price received a B.S.C.E. from the University of Missouri and an M.B.A. from Harvard University. Mr. Price is a Director of St. Luke’s Hospital in St. Louis. He has been a director of our company since 1999.

Mr. Price is an experienced businessman, having managed major chemicals businesses for Monsanto and BF Goodrich over a 30-year period. His experience as president and chief operating officer of various Monsanto and BF Goodrich business units gives Mr. Price an understanding of the strategic, operational and financial issues facing major industrial companies and a perspective beyond traditional automotive manufacturing.

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		Gregg M. Sherrill Age: 66   Chairman

Mr. Sherrill served as our Chairman and Chief Executive Officer from January 2007 to May 2017 and as our Executive Chairman until May 2018. Mr. Sherrill joined us from Johnson Controls Inc., where he served since 1998, most recently as President, Power Solutions. From 2002 to 2003, Mr. Sherrill served as the Vice President and Managing Director of Europe, South Africa and South America for Johnson Controls’ Automotive Systems Group. Before joining Johnson Controls, Mr. Sherrill held various engineering and manufacturing assignments over a 22-year span at Ford Motor Company. Mr. Sherrill holds a B.S. degree in mechanical engineering from Texas A&M University and an M.B.A. from Indiana University’s Graduate School of Business. Mr. Sherrill is a director of The Allstate Corporation and of Snap-on Incorporated, where he is the Chairperson of the Organization and Executive Compensation Committee. Mr. Sherrill serves on the National Governing Council of The Wilderness Society and is Honorary Vice Chair of the National Association of Manufacturers. He has been a director of our company since 2007.

Mr. Sherrill brings to our Board over 40 years of experience in the automotive industry, including ten years as our Chairman and Chief Executive Officer. Before joining our company, he held increasingly senior management roles at both a major automotive parts supplier and a major original equipment manufacturer, giving him unique perspective and insight. His extensive experience managing international operations is also of key value to a global company such as ours. Under his leadership, in addition to delivering strong financial results, our company established a long-term vision and strategic direction that capitalizes on the distinct strengths and opportunities of each of our product lines. His extensive knowledge of our business and industry, together with his proven talents and leadership, position him well to continue to serve as our Chairman.

		Jane L. Warner Age: 72 Committee: Audit, Compensation

From August 2007 until her retirement in March 2013, Ms. Warner served as Executive Vice President at Illinois Tool Works Inc., a Fortune 200^† diversified manufacturer of highly engineered components and industrial systems and consumables, where she had worldwide responsibility for its Decorative Surfaces and Finishing Systems businesses. Ms. Warner joined Illinois Tool Works in December 2005 as Group President of its Worldwide Finishing business. She was previously the President of Plexus Systems, L.L.C., a manufacturing software company, from June 2004 to December 2005, and a Vice President with Electronic Data Systems from 2000 through June 2004, where she led their global manufacturing group. Ms. Warner served as Executive Vice President for first tier supplier Textron Automotive from 1994 through 1999, where she was President of its Kautex North America and Randall divisions. Previously, Ms. Warner held executive positions in manufacturing, engineering and human resources over a 20-year span at General Motors Corporation. Ms. Warner received a B.A. and an M.A. from Michigan State University. She also received an M.B.A. from Stanford University where she was a Sloan Fellow. Ms. Warner is a board member of Brunswick Corporation and Regal Beloit Corporation. Ms. Warner served on the board of directors of MeadWestvaco Corporation through August 2014. She is also a Trustee for John G. Shedd Aquarium and chairs its Long Range Planning Committee. She has been a director of our company since 2004.

With over 20 years of automotive industry experience, Ms. Warner has particular appreciation of the challenges facing our customers. Her automotive industry expertise is supplemented by her leadership roles in global manufacturing and manufacturing information systems businesses, both of which are of particular relevance to a global manufacturing company such as ours. She also brings to us the financial understanding she has gained through her business unit leadership and as a member of the audit committee of both MeadWestvaco and Regal Beloit.

 

†	At the time of her retirement.

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		Roger J. Wood Age: 56

Mr. Wood was named our Co-Chief Executive Officer in October 2018. Prior to that he was Chief Executive Officer and Chairman of Fallbrook Technologies Inc. since February 2018. He previously retired as President and Chief Executive Officer of Dana Holding Corporation (now known as Dana Incorporated) in 2015, having served in those positions since 2011 when he joined Dana. Prior to joining Dana Holding Corporation, Mr. Wood served as Executive Vice President and Group President for the Engine Group at BorgWarner Inc. In his 26-year career at BorgWarner, Mr. Wood served in various leadership roles with global operations responsibilities. Mr. Wood holds a bachelor’s degree in engineering technology from State University College in Buffalo, N.Y., and an M.B.A. from Syracuse University. He is a member of the board of directors of Brunswick Corporation and Fallbrook Technologies. Prior to Mr. Wood’s retirement from Dana, he served as a member of the boards for the Business Leaders of Michigan, the Ohio Business Roundtable, the board of trustees of the Manufacturer’s Alliance/MAPI and the CEO Council for the Original Equipment Suppliers Association (OESA). Mr. Wood is a fellow of the National Association of Corporate Directors. He has been a director of our company since 2016.

Mr. Wood’s 30-year career at other Tier-1 automotive suppliers gives him distinct knowledge of the businesses and operations of companies such as ours, particularly in the areas of manufacturing operations, business management and strategic planning. In addition, his several roles as Chief Executive Officer for multiple companies, he brings his significant leadership experience to our company and Board

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Members of the Board of Directors in 2018 Not Continuing in Office

Paul J. Stecko. Mr. Stecko, age 74, will end his many years of distinguished service to our company at the Annual Meeting. Mr. Stecko has been a director of our company since 1998. He has served as a director of Packaging Corporation of America (“PCA”) since March 1999, including as Chairman from 1999 through 2015. He served as Executive Chairman of PCA from July 2010 through December 2013 and as Chief Executive Officer of PCA from January 1999 through June 2010. Mr. Stecko served as President and Chief Operating Officer of Tenneco from November 1998 to April 1999 and as Chief Operating Officer of Tenneco from January 1997 to November 1998. From December 1993 through January 1997, Mr. Stecko served as Chief Executive Officer of Tenneco Packaging Inc. Before that, Mr. Stecko spent 16 years with International Paper Company in roles of increasing responsibility, most recently serving as Vice President and General Manager of the Publication Papers, Bristols and Converting Papers businesses. Mr. Stecko received a B.S. degree in metallurgy from Penn State University and an M.S. in metallurgical engineering and an M.B.A. from the University of Pittsburgh. He is a director of State Farm Mutual Insurance Company and served as a director of Smurfit Kappa Group through October 2015.

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Overview

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The Board of Directors and Its Committees

Board Leadership Structure

Our Board of Directors currently is comprised of 12 members, nine of whom are independent and two of whom are officers of our company. Assuming all nominees presented in this proxy statement are elected at the Annual Meeting, eight of our 11 directors will be independent. The Board of Directors believes that our ratio of outside directors to inside directors represents a commitment to the independence of the Board and a focus on matters of importance to our stockholders.

Mr. Sherrill was our Executive Chairman from May 2017 to May 2018 and our non-executive Chairman of the Board since his retirement as an employee on May 16, 2018. Mr. Sherrill has presided and will continue to preside at all meetings of stockholders and the Board. During Mr. Sherrill’s tenure as Chief Executive Officer, the Board determined it was appropriate to have the roles of Chairman and Chief Executive Officer combined in recognition of Mr. Sherrill’s unified leadership and deep experience with our company and the efficiency and effectiveness of Board conduct and proceedings gained from this leadership and experience. With Mr. Kesseler’s appointment as Chief Executive Officer in May 2017, the Chairman and Chief Executive Officer roles were split between Mr. Sherrill, who remained as our Executive Chairman, and Mr. Kesseler. By having separate roles, the two executives were able to focus on key aspects of our enterprise, with the Chief Executive Officer having general charge of the day-to-day business and affairs of the company and the Executive Chairman focusing on key strategic issues, Board leadership and communication, and transition. Both continue to serve as a valuable bridge between the Board and management. Mr. Sherrill has continued to provide strategic insight on key issues and provide valuable leadership and communication in his role as non-executive Chairman. Upon Tenneco’s completion of the acquisition of Federal-Mogul on October 1, 2018, Mr. Kesseler and Mr. Wood were appointed Co-Chief Executive Officers in anticipation of our planned separation into two independent publicly traded companies. Our Board of Directors believes this leadership structure is in the best interests of our company and its stockholders.

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We also have a lead independent director, Mr. Stecko. As lead independent director, Mr. Stecko presides at all executive sessions of the Board, consults with management and the other members of the Board regarding Board meeting agendas and serves as the principal liaison between management and the independent directors. Following the Annual Meeting, the chair of the Nominating and Governance Committee, expected to be Mr. Porter, subject to his re-election, will preside at all executive sessions of the Board.

Our Board of Directors has three standing committees — the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. Each of these committees consists solely of independent directors and has its own chair who is responsible for directing the work of the committee in fulfilling its responsibilities.

The independent directors on the Board and each of these committees meet in regularly scheduled executive sessions without any members of management present. The purpose of these executive sessions is to promote open and candid discussion among the independent directors. Our system has provided and will continue to provide appropriate checks and balances to protect stockholder value and allows for efficient management of our company.

Role of Board of Directors in Risk Oversight

Our Board of Directors recognizes that, although risk management is primarily the responsibility of the company’s management team, the Board of Directors plays a critical role in the oversight of risk, including the identification and management of risk. The Board of Directors believes that an important part of its responsibilities is to assess the major risks we face and review our strategies for monitoring and controlling these risks. The Board of Directors’ involvement in risk oversight involves the full Board of Directors, the Audit Committee, the Compensation Committee and the Nominating and Governance Committee.

We perform an annual enterprise risk assessment, which originates within our internal audit department and is performed in accordance with the standards adopted by the Committee of Sponsoring Organizations of the Treadway Commission (CSO). As part of its assessment, our internal audit department interviews each of our directors, as well as members of management, regarding the strategic, operational, compliance and financial risks that our company faces. Our Vice President of Internal Audit and Chief Financial Officer review the results of this annual enterprise risk assessment with our Board of Directors. In addition, throughout the year, the Board of Directors meets with senior management to discuss:

The Board of Directors receives presentations throughout the year from senior management and leaders of our business units and functional groups regarding specific risks that we face. Finally, on an annual basis, management provides a comprehensive strategic review to the Board of Directors, which includes a discussion of the major risks faced by our company and our strategies to manage and minimize these risks.

The Audit Committee meets frequently during the year with senior management, our Vice President of Internal Audit and our independent public accountants and discusses the major risks facing us, and the steps management has taken to monitor and control such risks, as well as the adequacy of internal controls that could mitigate risks that could significantly affect our financial

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statements. At each regularly scheduled meeting, our Vice President of Internal Audit reviews with the Audit Committee the results of internal audit activities and testing since the Audit Committee’s prior meeting. In addition, at each regularly scheduled Audit Committee meeting, the company’s General Counsel provides a report to the Audit Committee regarding any significant litigation, environmental and regulatory risks faced by our company. The Audit Committee also maintains oversight over the company’s compliance programs, including compliance with the company’s Code of Conduct. The Chair of the Audit Committee provides the Board of Directors with a report concerning its risk oversight activities at each Board meeting. The Compensation Committee reviews our compensation structures and programs to ensure that they do not encourage excessive risk-taking.

Director Independence

The Board of Directors has determined that all of our non-management directors, except for Mr. Sherrill, are “independent” as that term is defined under the listing standards of the NYSE. As part of its analysis, the Board determined that none of the outside directors has a direct or indirect material relationship with our company. Under written guidelines adopted by the Board, the following commercial or charitable relationships are not considered to be material relationships that would impair a director’s independence:

Mr. Cho is Chief Financial Officer of IEP, which indirectly owns more than 5% of our class A common stock. Certain subsidiaries of IEP have entered into transactions with our company that are described in “Related Party Transactions” below. In finding Mr. Cho to be independent, the Board of Directors has determined that these transactions are immaterial to both our company and IEP and that the director’s interest in these transactions is not material (as his interest in these transactions is primarily as an officer of IEP). Mr. Sherrill was an officer of our company until May 16, 2018 and is therefore not considered “independent” under the listing standards of the NYSE.

Board Meetings

During 2018, the Board of Directors held eleven meetings. All of our directors who served in 2018 attended at least 90% of all meetings of the Board of Directors and the committees of the Board on which the director served. The Board of Directors is scheduled to meet in executive session,

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without management, after every regularly scheduled Board meeting. Mr. Stecko acts as lead independent director to chair these executive sessions and as primary spokesperson in communicating matters arising out of these sessions to our management. Following the Annual Meeting, the chair of the Nominating and Governance Committee, expected to be Mr. Porter, subject to his re-election, will preside at all executive sessions of the Board.

All of our directors serving at the time attended last year’s annual meeting of stockholders. The Board of Directors has a policy that, absent unusual circumstances, all directors attend our annual stockholder meetings.

Compensation Committee

The members of the Compensation Committee are Mr. Freyman, Mr. Letham, Ms. Warner and Mr. Price, who is the Chair of the Committee. The Compensation Committee is comprised solely of outside directors who meet the independence standards for compensation and nominating committee members as set forth in the NYSE listing standards. This committee was formed in July 2018 upon the split of the former combined Compensation/Nominating/Governance Committee.

The Compensation Committee has the responsibility, among other things, to:

The Compensation Committee operates pursuant to a written charter, the current version of which was adopted by the Board of Directors and the Compensation Committee, respectively, in July 2018 in connection with the split of the former Compensation/Nominating/Governance Committee into separate Compensation and Nominating and Governance Committees. The Compensation/Nominating/Governance Committee held three meetings, and the Compensation Committee held three meetings, during 2018. For purposes hereof, references to the Compensation Committee include, for periods prior to July 2018, the Compensation/Nominating/Governance Committee.

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For 2018, the Compensation Committee retained the services of Meridian Compensation Partners, LLC (“Meridian”) as its principal outside compensation consultant. Meridian reports directly to the Compensation Committee with the assignment to:

From time to time, the Compensation Committee will review materials prepared by other consultants to assist them with specific compensation matters. For a discussion of the role of our executive officers in the establishment of executive officer compensation, see “Executive Compensation — Compensation Discussion and Analysis.” Our executive officers do not participate in the process for establishing director compensation.

A report of the Compensation Committee regarding executive compensation appears elsewhere in this proxy statement. For a more detailed discussion of the processes and procedures for considering and determining executive compensation, see “Executive Compensation — Compensation Discussion and Analysis.”

Nominating and Governance Committee

The members of the Nominating and Governance Committee are Messrs. Metcalf, Stecko and Porter, who is the Chair of the Committee. The Nominating and Governance Committee is comprised solely of outside directors who meet the general independence standards as set forth in the NYSE listing standards. This committee was formed in July 2018 upon the split of the former combined Compensation/Nominating/Governance Committee.

The Nominating and Governance Committee has the responsibility, among other things, to:

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The Nominating and Governance Committee operates pursuant to a written charter, the current version of which was adopted by the Board of Directors and the Compensation Committee, respectively, in July 2018 in connection with the split of the former Compensation/Nominating/Governance Committee into separate Compensation and Nominating and Governance Committees. The Compensation/Nominating/Governance Committee held three meetings, and the Nominating and Governance Committee held three meetings, during 2018. For purposes hereof, references to the Nominating and Governance Committee include, for periods prior to July 2018, the Compensation/Nominating/Governance Committee.

For 2018, the Nominating and Governance Committee retained the services of Meridian its principal outside compensation consultant with respect to director compensation. Meridian reports directly to the Nominating and Governance Committee in connection with apprising the committee members regarding best practices and pay levels in association with director compensation.

For our director compensation, Meridian prepares comparative market data and presents that information directly to the Nominating and Governance Committee. The Nominating and Governance Committee reviews this data and establishes director compensation in consultation with Meridian.

Other than its services as a compensation consultant, Meridian provides no other services to the Nominating and Governance Committee, the Compensation Committee or our company.

Consideration of Director Nominees

The Nominating and Governance Committee regularly assesses the size of the Board of Directors, the need for expertise on the Board of Directors and whether any vacancies are expected on the Board of Directors. The Nominating and Governance Committee’s process for identifying and evaluating nominees is as follows:

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In evaluating and determining whether to recommend a person as a candidate for election as a director, the Nominating and Governance Committee considers each candidate’s experience, qualifications, attributes and skills as well as the specific qualification standards set forth in our By-Laws and Corporate Governance Principles, including:

The Nominating and Governance Committee and the Board of Directors value diversity, and believe that a diverse Board composition provides significant benefit to our company. Each candidate is reviewed in light of the overall composition and skills of the entire Board of Directors at the time, including the varied characteristics of the Board members and candidate in terms of opinions, perspectives, personal and professional experiences and backgrounds. The nominees selected are those whose experience and background are deemed to provide the most valuable contribution to the Board.

Our By-Laws permit, under certain circumstances, a stockholder or group of no more than 20 stockholders (meeting our continuous ownership requirement of 3% or more of our outstanding common stock held continuously for at least the previous three years) to nominate a candidate or candidates for election to the Board of Directors at an annual meeting, constituting up to two directors or 20% of the number of directors then serving on the Board (rounded down to the nearest whole number), whichever is greater. In order to require us to include such candidate or candidates in our proxy statement and form of proxy, stockholders and nominees must submit a notice of proxy access nomination together with certain related information required by our By-Laws.

Our By-Laws also permit stockholders entitled to vote at the meeting to nominate directors for consideration at an annual meeting of stockholders without requiring that their nominees be included in our proxy statement and form of proxy. Stockholders may nominate persons for election to the Board of Directors at an annual meeting by submitting a letter of nomination, together with certain related information required by our By-Laws.

Correspondence related to stockholder proposals must be sent in writing to our Corporate Secretary at our principal executive offices, 500 North Field Drive, Lake Forest, Illinois 60045. For more information on submitting a nomination, visit www.tenneco.com or see “Submission of Stockholder Proposals.”

Audit Committee

The members of the Audit Committee are Ms. Warner and Messrs. Freyman, Metcalf, and Letham, who is the Chair of the Committee. The Audit Committee is comprised solely of directors who meet all of the independence standards for audit committee membership as set forth in the Sarbanes-Oxley Act of 2002 and the SEC rules adopted thereunder and the NYSE listing

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standards. The Board of Directors has designated each of Messrs. Freyman and Letham as an “audit committee financial expert” as that term is defined in the SEC rules adopted pursuant to the Sarbanes-Oxley Act of 2002.

Management is responsible for maintaining our internal controls over financial reporting. Our independent public accounting firm is responsible for performing an independent audit of our consolidated financial statements in accordance with generally accepted auditing standards and for issuing a report on its audit. The Audit Committee’s duty is to oversee and monitor these activities on behalf of the Board of Directors. Specifically, the Audit Committee has the responsibility, among other things, to:

In fulfilling its responsibilities, the Audit Committee reviewed with management and our independent public accountants:

In addition, the Audit Committee has discussed our major risk exposures and the steps that management has taken to monitor and control such exposures. Management is required to advise the Audit Committee of any instances of fraud relating to employees who have a significant role in our internal controls.

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The Audit Committee operates under a written charter, the current version of which was reaffirmed by the Board of Directors and the Audit Committee in February 2019 as part of their annual review process. The Audit Committee held twelve meetings in 2018. A report of the Audit Committee appears elsewhere in this proxy statement.

Accounting Complaints and Communications with the Directors

Anyone with concerns about our conduct, or about our accounting, internal accounting controls or auditing matters, may communicate that concern directly to the Board of Directors, any non-employee director or the Audit Committee. All such concerns will be forwarded to the appropriate directors for their review, and all material concerns related to audit or accounting matters will be forwarded to the Audit Committee. All reported concerns will be simultaneously reviewed and addressed by each of our Chief Compliance Officer and General Counsel or his or her respective designee (unless he or she is alleged to be involved in the matter at issue). The status of all outstanding concerns addressed to the Board, the non-employee directors or the Audit Committee will be reported to the Board or the Audit Committee (as applicable) on at least a quarterly basis. The Board or any committee may direct special treatment, including the retention of outside advisors or counsel, for any concern addressed to them. Our corporate policies prohibit retaliatory action against any employee who raises concerns or questions in good faith about these matters.

Stockholders wishing to communicate with the Board of Directors, any outside director or the Audit Committee may do so by writing to our Corporate Secretary at 500 North Field Drive, Lake Forest, Illinois 60045. The Corporate Secretary will forward any communications as directed by the stockholder. We maintain a separate, internal system for the receipt of communications from employees.

Transactions with Related Persons

The Board of Directors has adopted a Policy and Procedures for Transactions with Related Persons. As a general matter, the policy requires the Audit Committee to review and approve or disapprove the entry by us or our subsidiaries into certain transactions with related persons. The policy only applies to transactions, arrangements and relationships where the aggregate amount involved will or may reasonably be expected to exceed $120,000 in any calendar year and in which a related person has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A related person is:

If advance approval of a transaction subject to the policy is not obtained, it must be promptly submitted to the Audit Committee for possible approval, amendment, termination or rescission. In reviewing any transaction, the Audit Committee will take into account, among other factors the Audit Committee deems appropriate, whether the transaction is on terms no less favorable than terms generally available to a third party in similar circumstances and the extent of the related person’s interest in the transaction.

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The policy provides that the following transactions are pre-approved for the purposes of the policy:

Related Party Transactions

In connection with the closing of the Federal-Mogul acquisition, on October 1, 2018, the company, IEP, AEP and IEH entered into the Shareholders Agreement.

Pursuant to the Shareholders Agreement, prior to the earlier of the date the Spin-Off (as defined in the Shareholders Agreement) is consummated and the date on which IEP and its affiliates cease to own at least 10% of the outstanding class A Common Stock and class B Common Stock, measured as a single class, the Board will nominate for election the then-serving chief executive officer of IEP (or another designee of IEP, if applicable) at each annual meeting of stockholders. If the Spin-Off has not occurred by the date that is 18 months after the closing of the acquisition of Federal-Mogul, IEP must cause its designee to resign from the Board at least 30 days prior to IEP taking certain specified actions with respect to the company.

The Shareholders Agreement also contains a standstill covenant, which prohibits IEP and its affiliates from taking certain actions until the earlier of the date that is (i) 18 months after the closing of the acquisition of Federal-Mogul, if the Spin-Off has not occurred by such date, and (ii) one year after the date on which IEP and its affiliates cease to own at least 5% of the outstanding class A Common Stock and class B Common Stock, measured as a single class. Prohibited actions include: (i) acquisitions of stock or other securities or any material assets of the company or any subsidiaries (subject to some exceptions); (ii) participating in a proxy solicitation; (iii) announcing or proposing any extraordinary business combination transaction; and (iv) otherwise seeking to control or influence control of the management, the Board of the policies of the company.

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Furthermore, until the later of (i) the expiration of the standstill restrictions discussed above and (ii) the time when IEP and its affiliates cease to own at least 10% of the outstanding class A Common Stock and class B Common Stock, measured as a single class, IEP and its affiliates may not transfer any shares (a) to certain specified types of investors and (b) in an amount equal to 5% or more of the class A Common Stock issued and outstanding at the time of such transfer (subject to certain carve outs for transfers to certain passive institutional investors).

For so long as IEP and its affiliates own at least 10% of the outstanding class A Common Stock and class B Common Stock, measured as a single class, and the company proposes to issue any equity securities (other than in an excluded issuance), IEP and its affiliates have certain preemptive rights. The Shareholders Agreement also includes registration rights for IEP.

Prior to its acquisition, Federal-Mogul was party to supply contracts with The Pep Boys—Manny, Moe & Jack (“Pep Boys”) and IEH Auto Parts LLC (“Auto Plus”). Pep Boys and Auto Plus are owned by IEP. IEP indirectly holds more than 5% of our class A common stock, and Mr. Cho is chief financial officer of IEP. In connection with the acquisition of Federal-Mogul, we negotiated modifications to the supply contracts with Pep Boys and Auto Plus which we believe are favorable to us. We assumed these contracts in the acquisition of Federal-Mogul. Prior to the acquisition, we had sales to Pep Boys and Auto Plus unrelated to Federal-Mogul which are ongoing. Sales to Pep Boys and Auto Plus in 2019 were less than $75 million and $145 million, respectively. Such sales were made and are continuing to be made in the ordinary course of our business.

Federal-Mogul is party to certain other minor arrangements with IEP subsidiaries: (i) leases of office space and warehouse facilities (under $0.5 million in 2018); (ii) a distribution services agreement (under $1.5 million in 2018); (iii) sales in the ordinary course of our business to PSC Metals, Inc. (under $2.5 million in 2018); and (iv) a supply chain management arrangement with Insight Portfolio Group (under $0.5 million in 2018).

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our directors and executive officers and beneficial owners of 10% or more of a registered class of our equity securities to file with the SEC initial reports of beneficial ownership (Form 3) and reports on changes in beneficial ownership (Form 4 or 5). SEC rules adopted pursuant to Section 16(a) require that such persons furnish us with copies of all such forms they file with the SEC.

Based solely upon our review of such forms furnished to us for 2018, and upon the written representations received by us from certain of our directors and executive officers that no Forms 5 were required, we believe that our directors, executive officers and 10% or greater stockholders complied with all Section 16(a) filing requirements on a timely basis during 2018.

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Management

The following table shows, as of March 18, 2019, the number of shares of our class A common stock, par value $.01 per share (the only class of voting securities outstanding), beneficially owned by: (1) each director and nominee for director; (2) each person who is named in the Summary Compensation Table below; and (3) all directors and executive officers as a group.

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Certain Other Stockholders

The following table sets forth, as of March 18, 2019, certain information regarding the persons known by us to be the beneficial owner of more than 5% of our outstanding class A common stock (the only class of voting securities outstanding).

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Compensation Discussion and Analysis

Our executive compensation philosophy, policies, plans and programs are under the supervision of the Compensation Committee of our Board of Directors. For a description of the composition, authority and responsibilities of the committee, see “Corporate Governance — The Board of Directors and Its Committees — Compensation Committee.” Unless the context requires otherwise, in this Compensation Discussion and Analysis when we refer to the “committee,” we are referring to the Compensation Committee (or, for periods prior to July 20, 2018, our Compensation/Nominating/Governance Committee) and when we refer to “named executive officers,” we are referring to the named executive officers whose compensation is shown in this proxy statement under “— Summary Compensation Table.”

Executive Summary

Our compensation policies are based on the belief that executive and stockholder financial interests should be aligned as closely as possible, and compensation should be designed such that company performance drives the level of pay that our named executive officers and all management employees receive.

Significant 2018 Events

During 2018, we undertook various transactions designed to transform our company. In April 2018, we announced that we had entered into a definitive agreement to acquire Federal-Mogul LLC (“Federal-Mogul”), along with the intention to separate into two independent public companies following the acquisition – a powertrain technology company and an aftermarket and ride performance company (the “Spin-off”). In anticipation of the Spin-off, we appointed Roger J. Wood as Co-Chief Executive Officer upon consummation of the acquisition on October 1, 2018 with the expectation that he would lead the powertrain technology company and Mr. Kesseler would lead the aftermarket and ride performance company. Accordingly, most of the committee’s 2018 determinations for named executive officer compensation were made prior to Mr. Wood joining our company as an employee in late 2018.

Company Performance in 2018

The committee believes that 2018 compensation for our named executive officers was appropriate in light of our financial performance for 2018, as well as over the 2016 through 2018 performance period for our long-term performance units.

Executive Compensation Decisions for 2018

Key pay outcomes under our 2018 executive compensation program included:

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The mix of the key elements of compensation (expressed as a proportion of total compensation) awarded to our named executive officers at the beginning of 2018 was as follows (excluding compensation of the type that would fall under “All Other Compensation” in our Summary Compensation Table). The table below does not include Mr. Wood, who was appointed as Co-Chief Executive Officer in October 2018 and only served three months of the year or Mr. Sherrill, who retired as an employee in May 2018 (due to rounding, percentages may not precisely reflect the absolute figures):

As the table and charts show, at the targeted level, our incentive compensation awards made at the beginning of 2018 represented approximately 85% of the total compensation awarded to our Chief Executive Officer for 2018 and an average of approximately 72% of the total compensation awarded to the other named executive officers shown above for 2018. The table above does not include (i) for Messrs. Hollar and Smith promotion-related increases in base salary (or the related impact on annual incentive opportunity) and equity awards made in mid-2018 or (ii) for Messrs. Kesseler, Hollar and Smith, supplemental awards made to Mr. Kesseler, Hollar and Smith later in 2018 in connection with the acquisition of Federal-Mogul and anticipated Spin-off. See “— Compensation Discussion and Analysis — Design and Elements of Compensation — Certain Other 2018 Compensation Actions.” We have also excluded our former Chief Executive Officer

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Mr. Sherrill, as his retirement as an executive of our company occurred in May 2018 and we believe the inclusion of his information with the other named executive officers for purposes of the chart and data above would skew the presentation of the compensation mix for such group as a whole.

Results of Say-on-Pay Vote

Our stockholders hold an annual advisory vote on executive compensation (the “say-on-pay proposal”). At our annual meeting held in May 2018, over 91% of the shares present and entitled to vote on our say-on-pay proposal were voted in favor of the proposal. The committee believes this affirms stockholders’ support of our approach to executive compensation for 2018. The committee will continue to consider the outcome of the annual say-on-pay proposal when making future compensation decisions for our executives.

Highlights of our Executive Compensation Practices

What we do

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What we don’t do

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Compensation Objectives

Our compensation policies are based on the belief that executive and stockholder financial interests should be aligned as closely as possible, and compensation should be designed such that company performance drives the level of pay that our named executive officers and all management employees receive. Our executive compensation program has been structured to:

Based on the guiding principle of aligning executive compensation with the financial interests of our stockholders, our executive compensation program provides competitive levels of compensation derived from several sources: salaries, annual cash incentive awards, stock ownership opportunities through restricted stock awards, restricted stock unit awards and stock-settled long-term performance share units, and cash-settled long-term performance units.

We also offer other benefits typically offered to executives by major U.S. corporations, including defined benefit retirement plans (under which future benefit accruals were substantially eliminated for senior management in 2006 as described below), defined contribution retirement plans, limited perquisites, employment agreements (in limited cases), severance and change in control benefits, and health and welfare benefits.

Compensation Process

In determining competitive compensation, the committee engages Meridian Compensation Partners LLC (“Meridian”), a nationally recognized compensation consulting firm that, in order to maintain its independence, reports directly to the committee. For our Co-Chief Executive Officers, Meridian provided market data regarding salary, annual cash incentive award targets, and equity-based and other long-term incentive compensation awards directly to the committee as it makes decisions with respect to compensation. For the other named executive officers, Mr. Kesseler formulated the initial recommendations regarding salary, annual cash incentive award targets and equity-based and other long-term incentive compensation awards. The committee reviewed these recommendations in light of market data prepared by Meridian. For other forms of compensation and benefits, management generally makes initial recommendations that are considered by the committee.

Our general policy is to provide salary, annual cash incentive payments and equity-based and other long-term incentive compensation to named executive officers that is competitive with the market and comparable companies when financial and qualitative performance targets are met (i.e., in the range of the median compensation for target performance). In making its determinations regarding these elements of compensation, the committee regularly reviews data regarding compensation practices at other companies that it determines to be relevant to compensation matters affecting our company.

The benchmarking information we use in establishing salary, annual cash incentive payments and equity-based and other long-term incentive compensation typically includes the most recently

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available data regarding publicly traded companies comparable to our company in terms of industry, proximity, market capitalization and/or other factors. For 2018 compensation determinations, specific data was reviewed regarding a comparison group consisting of the following twenty companies:

2018 Compensation Peer Group

In addition, the committee reviewed aggregate data regarding a broader group of durable goods manufacturers (that were not specifically identified to the committee). This data was prepared by Meridian and compared targeted and actual compensation paid by these companies to their executive officers in specified positions to the compensation we pay to named executive officers in the same or similar positions.

In addition to looking at the competitiveness of the elements of pay, the committee uses “tally sheets” to review the total amount of compensation and benefits provided to the named executive officers annually as well as over a period of years. The tally sheets also help the committee consider pay decisions in the context of an executive’s total compensation.

For 2018, Mr. Kesseler reviewed with and recommended to the committee the annual salary, incentive plan target and equity-based and other long-term compensation for each of our named executive officers and other key management personnel (excluding the Co-Chief Executive Officers). The committee reviewed those recommendations and made a final determination with respect to such compensation. In general, the compensation that is developed for each of these named executive officers is based on competitive market data and on recommendations regarding the executive’s overall contributions, past performance and anticipated future contributions. The committee also reviews the executive’s performance separately and sets the salary, incentive plan target and equity-based and other long-term compensation of the Co-Chief Executive Officers based on competitive market data as well as the committee’s assessment of the Co-Chief Executive Officers’ respective past performance and anticipated future contributions.

Design and Elements of Compensation

Our compensation program generally provides that, as an employee’s level of responsibility increases, a greater portion of his or her potential total compensation is based on company performance and varies in accordance with the market price of our common stock. This results in greater potential variability in the individual’s total compensation from year to year. In designing and administering the components of the executive compensation program, the committee strives to balance short- and long-term incentive objectives and to employ prudent judgment when establishing performance criteria, evaluating performance and determining actual incentive payments.

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In general, we use the benchmarking data described above to allocate between annual compensation and long-term compensation (excluding retirement benefits) and between cash compensation and equity compensation. The following is a description of each element of our executive compensation program, along with a discussion of the decisions of, and actions taken by, the committee with respect to each such aspect of compensation for 2018.

Salary and Annual Cash Incentive Compensation

For 2018, an executive’s basic annual cash compensation package consisted primarily of a base salary and the opportunity to earn payments under the Tenneco Annual Incentive Plan (the “AIP”).

The 2018 salary levels established for our named executive officers were designed to be, in general, in the 50th percentile range when compared to the salaries set by the companies in the compensation surveys reviewed as set forth above. For 2018, salary increases were 5% for Mr. Kesseler, 5% for Mr. Hollar (and then another 16.2% in connection with his mid-year promotion to Chief Financial Officer), 2.8% for Mr. Bolt, 3.8% for Mr. Guo, 35.6% for Mr. Smith (and another 25% in June, reflecting step-ups towards a market rate of salary for a General Counsel in connection with his promotion), 3.1% for Mr. Trammell and 0% for Mr. Sherrill over 2017 levels and consistent with market movement and appropriate equity adjustments.

The following table shows the base salary and 2018 annual AIP bonus target for each named executive officer for 2018:

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The AIP target payment levels established for our named executive officers for 2018 were also designed to be, in general, in the 50th percentile range when compared to target levels for similar payments set by the companies in the compensation surveys reviewed as described above. Like executives at peer companies, our named executive officers had the potential to earn payouts above or below the target under the AIP based on our actual company performance. We have used performance metrics based on EBIT and cash flow for the AIP because we believe that strong EBIT and cash flow performance are correlated with stockholder returns and that making business and investment decisions based on EBIT and cash flow balances cash-oriented and earnings-oriented results.

Under the AIP, our management developed EBIT and cash flow goals and recommended them to the committee. The committee reviewed those goals, other information provided by management and performance data provided by Meridian and adopted the goals the committee determined appropriate. At the conclusion of the year, the committee approved incentive award payments to named executive officers based on the degree of achievement of the goals established for the year. Under the AIP, 60% of an individual’s award is based on a formula tied to our corporate achievement of pre-established EBIT performance goals and the other 40% of an individual’s award is based on a formula tied to our corporate achievement of pre-established cash flow goals. The terms of the AIP allow the committee to adjust the award based on factors that the committee considers relevant. Each participant’s payout under the AIP is capped at two times his or her target, except as the committee otherwise determines.

For 2018, target performance under the AIP was $656 million for EBIT and $202 million for cash flow. An executive would have been eligible to receive an AIP bonus equal to 200% of target if EBIT had been at least $40 million better than target and cash flow had been at least $50 million better than target. Our EBIT performance for 2018 was $637 million and our cash flow was $176 million, which was the level of performance required for the EBIT-based portion of the AIP bonus to be paid at 53% of the target level and the cash flow-based portion of the AIP bonus to be paid at 48% of the target level. In view of these results, the committee declared that AIP bonuses be paid at the 50% of target level. See “— Calculations Under Various Plans — Calculations Under Our Annual Incentive Plan” for a description of how our EBIT and cash flow are calculated under the AIP.

The following table illustrates the target, maximum and actual AIP payments for our named executive officers for 2018:

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Long-Term and Stock-Based Incentives

Our long-term and stock-based incentive plans have been designed to align a significant portion of executive compensation with stockholder interests. The current plan — the 2006 Long-Term Incentive Plan — permits a variety of awards including stock options, restricted stock, restricted stock units, stock equivalent units and performance units. These awards are based on an analysis of competitive levels of similar awards.

The company’s long-term and stock-based compensation program has been comprised of:

Each year, typically at its meeting in February, the committee reviews and approves LTPU award amounts earned for the most recent performance period, and determines the size, nature and distribution of long-term and stock-based grants for our named executive officers for the new year. In addition, during the course of the year the committee may award additional LTPUs/PSUs covering partially completed performance periods in connection with new hires or promotions.

Historically, the amount of these awards has been designed to target value for our named executive officers in the range of the 50th percentile when compared to the value of similar awards granted by peer companies to their executives, based on the committee’s assumptions regarding future company performance and other factors. The value actually realized from these awards could be above or below the 50th percentile based on our actual company performance.

LTPUs have historically been denominated in dollar targets (“Target Value”) and are payable 50% based on our total stockholder return (stock price appreciation adjusted for any dividends) (“TSR”) relative to the TSR of the companies in the S&P 500, 30% based on our EBITDA (as described in “— Calculations Under Various Plans — Calculations Under Our LTPUs”) and 20% based on our FCF (See “— Calculations Under Various Plans — Calculations Under Our LTPUs”) during the performance period. The performance is applied against a multiplier that determines the percentage of the dollar target that is earned based on that level of performance. The committee included EBITDA and FCF as part of our LTPU program so that our program would incorporate multiple metrics that are key to our delivering sustainable performance. The LTPUs are payable at the end of a three-year performance period. The LTPUs granted in 2016 were paid in early 2019 based on our 2016 through 2018 performance, as described below.

In 2018, we began issuing PSUs in lieu of LTPUs. The PSUs were designed to be earned 50% based on three-year Economic Value Added (“EVA ^®”) performance and 50% based on three-year total stockholder return against a peer group. In addition, the PSUs will be paid in shares of our class A common stock rather than cash. The committee believes that our compensation program has served us well to date, and that the adjustments implemented in 2018 further aligned

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our program with business strategies, market practices and our ability to engage our teams to achieve results. EVA ^® is defined as net operating profit after taxes minus the annual cost of capital and is a registered trademark of Stern Value Management.

For the LTPUs granted in 2016, a named executive officer earned a percentage of the LTPUs Target Value based on performance as set forth below.

For Relative TSR Performance — 50% of Total Target Value (“TSR Target Value”)

For Cumulative EBITDA Performance — 30% of Total Target Value (“EBITDA Target Value”)

For Cumulative FCF Performance — 20% of Total Target Value (“FCF Target Value”)

For the PSUs granted in 2018, a named executive officer could earn a percentage of the LTPUs Target Value based on performance as set forth below:

For Relative TSR Performance — 50% of Total Target Value (“TSR Target Value”)

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For EVA Performance — 50% of Total Target Value (“EVA Target Value”)

Payouts are prorated for performance between the levels presented above.

For the LTPUs granted in 2016, the committee’s target levels of performance for the 2016 through 2018 period and our actual level of performance were as follows:

Based on this performance, the scheduled cash payment under these LTPUs was made in early 2019, with award holders receiving payouts equal to 44.7% of the target amount of the applicable award.

Certain Other 2018 Compensation Actions

In May 2018, the committee granted Mr. Kesseler 5,013 additional restricted stock units and an additional PSU award with a target of $360,000 for the 2018 through 2020 performance period in recognition of his contributions to the Federal-Mogul transaction. In June 2018, Mr. Hollar received an increase in his base salary, 5,673 additional restricted stock units and an additional PSU award with a target of $390,000 for the 2018 through 2020 performance period in connection with his promotion to Chief Financial Officer and Mr. Smith received an increase in his base salary, 2,181 additional restricted stock units and an additional PSU award with a target of $150,000 for the 2018 through 2020 performance period as part of plan to bring his compensation in line with other public company general counsels.

In October 2018, the committee granted additional benefits to Mr. Bolt in recognition of his contributions to the Federal-Mogul acquisition. Provided Mr. Bolt remains continuously employed by us through December 31, 2019, he will, upon his retirement (i) be treated as having met the definition of “Retirement” under each of the AIP and the Long-Term Incentive Plan (and all award agreements thereunder), and (ii) receive a one-time special recognition award equal to 75% of his base salary (at the time the award is granted).

In October 2018 we entered into an offer letter with Mr. Wood that is described on page 55. The intent of this letter was to offer the same level of compensation to Mr. Wood in his role as Co-Chief Executive Officer as we have provided to Mr. Kesseler in his role as Chief Executive Officer. Mr. Wood was granted a pro-rata award with the same long-term incentive target as Mr. Kesseler, but Mr. Wood’s award was entirely in restricted stock units rather than in a mix of PSUs and restricted stock units that Mr. Kesseler received in early 2018 (which was done for administrative ease in light of the pending Spin-off). Additionally, to compensate Mr. Wood for the

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loss of incentive compensation opportunity from his previous employer, Mr. Wood will be able to retire under our plans at age 60 regardless of his length of service.

Mr. Kesseler’s offer letter was amended when he became our Co-Chief Executive Officer on October 1, 2018 to provide that, other than in connection with a change in control, if Mr. Kesseler’s employment is terminated by us other than for disability or for cause, he will be paid two times his then current annual base salary and target bonus for the year in which termination occurs. Prior to this amendment, Mr. Kesseler was entitled to two times his then current annual base salary if his employment was terminated by us other than in connection with a change in control, for disability or for cause.

In October 2018, the committee granted an additional award of restricted stock units to Mr. Guo in recognition of the importance of Mr. Guo’s expected contributions to the Clean Air division of our company.

In December, 2018, the committee granted additional awards to Messrs. Hollar and Smith, in recognition of the work they completed in connection with the company’s acquisition of Federal-Mogul, as well as the work the company anticipates in connection with the Spin-off. Each award consists of a 23,020 restricted stock units that vest on the third anniversary of the grant date (50% of which convert into restricted stock units of the company to be spun off) and a $250,000 and $200,000 cash award for Messrs. Hollar and Smith, respectively to be paid within 30 days after the successful separation. Both the restricted stock unit and cash awards are in each case subject to their respective continued employment.

Employment Agreements and Arrangements

In January 2015, we entered into an offer letter with Mr. Kesseler that was amended on October 1, 2018 in connection with Roger J. Wood joining us as Co-Chief Executive Officer and is described on page 59.

In October 2018, we entered into an offer letter with Mr. Wood that is described on page 59.

In December 2012, we entered into an offer letter with Mr. Bolt that is described on page 60.

We have certain arrangements with Mr. Guo relating to his former expatriate assignment that are described on page 60.

In April 2017, we entered into an offer letter with Mr. Hollar that is described on pages 59-60.

In January 2007, Mr. Sherrill joined us as our Chief Executive Officer. We entered into an employment agreement with him that is described on page 60. Mr. Sherrill retired as our Chief Executive Officer on May 17, 2017, and continued to serve as our Executive Chairman from that date until his retirement as an employee on May 16, 2018. His employment agreement was not altered as a result of his change from Chief Executive Officer to Executive Chairman and remained in full force and effect until his retirement as an employee.

Retirement Plans

We offer to our U.S.-based salaried employees, including our U.S.-based named executive officers, a customary, tax-qualified defined contribution retirement (401(k)) plan. For 2018, we provided a company match on employee contributions of 100% on the first 3% of an employee’s pay and 50% on the next 2% of an employee’s pay, which we believe to be in line with prevailing practices for major U.S. corporations. In addition to this matching contribution, we also provide an additional company contribution equal to 2% of salary for persons hired on or after April 1, 2005

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who have completed at least one year of service. We established this company contribution when we closed our defined benefit retirement plans to new participants in 2005. Beginning in 2019, our additional contributions will be provided on an age-graded schedule.

For those U.S.-based executives hired before April 1, 2005, we offered defined benefit retirement plans that we believed were customary for the automotive industry and were consistent with similar plans maintained by the consolidated Tenneco Inc. prior to our becoming a stand-alone public company in 1999. These plans included:

Effective December 31, 2006, we froze our defined benefit retirement plans for certain employees and replaced them with additional benefits under defined contribution retirement plans. Prior earned benefits under the defined benefit retirement plans were, however, preserved.

To address the loss of future benefits associated with the freeze, we amended our qualified defined contribution retirement plans, effective January 1, 2007, to provide for additional annual company contributions in amounts that increase with the employee’s age. These additional contributions, which we refer to as “Company Retirement Contributions,” are payable for each employee who ceased to accrue benefits or whose benefits were otherwise modified under any defined benefit retirement plan in connection with the freeze. Company Retirement Contributions are also provided to employees hired after the freeze in an amount equal to 2% of compensation. In addition, effective January 1, 2007, we implemented an unfunded non-qualified defined contribution retirement plan. Our named executive officers and other senior managers are eligible to participate in this plan, with allocations under the plan generally calculated in the same manner as under the applicable existing defined contribution retirement plan, except that (i) Company Retirement Contributions under the plan are made based on compensation that includes bonus compensation payable in accordance with the AIP formula (or other annual bonus formula as in effect at the relevant time) and (ii) contributions under this plan are based on compensation in excess of the Section 401(a)(17) limitations of the Internal Revenue Code. The level of the Company Retirement Contributions under the 401(k) plans was modified effective for periods after 2018 to provide for a different age-weighted formula with a one year grandfathered period for participants who would have received higher Company Retirement Contributions under the formula in effect prior to 2019.

Under the terms of their offers, Mr. Kesseler and Mr. Wood received an additional contribution under this plan of 3% of compensation (including bonus compensation) through December 31, 2018. Thereafter, they will be entitled to receive an age-weighted contribution under this plan based on the same formula that applies to the Company Retirement Contribution under the 401(k) plan. In addition, in December 2007, the committee granted Mr. Trammell an enhanced benefit under this plan equal to an age-graded benefit based on his total compensation (including bonus compensation) in excess of the limitations under Section 401(a)(17) of the Internal Revenue Code and a multiple of 2.0. The committee granted these enhanced benefits based on competitive data provided by our compensation consultant. Under the terms of his employment agreement, Mr. Sherrill was entitled to an age-graded benefit under this plan based on his total compensation (including bonus compensation) in excess of the limitations under Section 401(a)(17) of the Internal Revenue code and a multiple of 1.5.

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Perquisites

In connection with Mr. Wood’s move from South Carolina to the Detroit area, we reimbursed Mr. Wood for certain relocation expenses and provided a tax gross up on those expenses, consistent with our general policies applicable to relocation of our senior executives. We provided Mr. Guo with certain tax preparation services and a tax gross up on those services in connection with his former expatriate assignment. We also provided Mr. Sherrill with a gift (and a tax gross up thereon) in recognition of his long service to our company in connection with his retirement. In addition, we provided reimbursement for spousal travel to a corporate function to certain executives. For each named executive officer other than Mr. Sherrill, the aggregate value of any such perquisites to each such executive was less than $10,000.

Severance Benefits

We have agreed to pay each of our Co-Chief Executive Officers two times his then current salary and target bonus for the year in which termination occurs if we terminate his employment other than for disability, cause or in connection with a change in control. We view these benefits as customary and a key element of the recruiting and retention of executives in light of company and industry specific factors.

Otherwise, we maintain a Severance Benefit Plan that applies to all salaried, full-time employees with at least one month of service who are terminated by us in connection with a reduction in force or similar layoff. The benefits payable under this plan are described under “— Other Potential Post-Employment Compensation — Severance Benefits.” We most recently amended the plan in August 2018 to reflect prevailing practices.

Change in Control

We maintain a Change in Control Severance Benefit Plan for Key Executives to enable us to retain and motivate highly qualified employees by eliminating, to the maximum practicable extent, any concern that their job security or benefit entitlements will be jeopardized by a “change in control” of our company.

Our plan applies to sixteen members of management and generally provides for cash benefits consisting primarily of a multiple (two or three times) of an officer’s annual salary and annual targeted cash incentive if the executive officer is actually terminated (other than for cause, death or disability) or constructively terminated within two years following a change in control. See “Post-Employment Compensation — Other Potential Post-Employment Compensation — Change in Control Severance Benefit Plan for Key Executives.” Our current Change in Control Severance Benefit Plan for Key Executives was adopted in 2007. Each of Mr. Kesseler’s and Mr. Wood’s cash payment in connection with a change in control termination will equal three times the total of his then current base salary plus his targeted annual bonus in effect immediately prior to the change in control. Each of Mr. Hollar’s, Mr. Bolt’s, Mr. Guo’s and Mr. Smith’s cash payment in connection with a change in control termination will equal two times the total of his then current base salary plus his targeted annual bonus in effect immediately prior to the change in control.

In addition, the terms of our 2006 Long-Term Incentive Plan, as amended (and our prior plans), provide for awards to vest upon a change in control, unless the committee otherwise provides in an award agreement.

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Certain 2019 Compensation Determinations

In February 2019, the committee set annual incentive targets for 2019 under the AIP. In general, the awards will be earned by an executive based on the performance of business by which he will be employed following the Spin-off. The portion of the target under the AIP that was based on EBIT performance for 2018 will be based on EBITDA performance in 2019.

Concurrently with the separation of the company into two separate companies, holders of equity-based awards, whether vested or unvested, will generally receive an adjusted award of the same type with respect to the stock of the company for whom the individual is employed (e.g., employees of the company will retain awards on our stock and employees of the newly formed company (“Spinco”) will receive replacement awards with respect to Spinco stock). Adjustments to the type and number of shares and, in the case of stock options, the exercise price will be made to preserve the value of the awards and the adjusted or replacement awards will otherwise generally retain the same terms and conditions of the corresponding pre-separation awards. With respect to performance-based awards, the current plan is to determine performance at the end of the quarter prior to the Spin-off (regardless of when the actual performance period would otherwise end) and to convert the awards thereafter to service-based awards that will vest at the time the performance period would otherwise end subject to continued service, with such adjustments as the committee in its discretion deems prudent.

Equity Award Policy

Our Board of Directors has adopted a formal policy regarding compensatory awards in the form of our common stock or any common stock derivative, such as restricted stock, options, stock appreciation rights and stock equivalent units. Under the policy, in general, equity awards must be approved by the committee or the Board of Directors. Typically, the committee will make annual awards that it determines to be appropriate at its meeting held in February. The committee also has the authority to make interim awards in its discretion. The strike price of any option or stock appreciation right must be the fair market value of a share of our common stock on the date of grant as determined under the 2006 Long-Term Incentive Plan (which is the average of the highest and lowest sales price of a share of our common stock on the date of grant).

Our policy also permits a committee of management to make awards in certain cases. The management committee consists of our Co-Chief Executive Officers, General Counsel and our most senior human resources executive. The management committee has the authority to make equity awards to (i) newly hired employees and (ii) employees who are promoted during the course of a year. The awards can be made only in amounts necessary to provide the employee with awards consistent with the amount of awards most recently made to employees of the same salary grade level, prorated based on when the employee was hired or promoted. The total number of shares that the management committee can issue under this policy is 100,000. The management committee is not authorized to make awards to new or promoted employees whom we would typically consider to be at the most senior management or executive officer level.

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Stock Ownership Guidelines

We maintain stock ownership guidelines that apply to all of our directors and our senior officers. We believe our guidelines further align management’s and stockholders’ interests and we based the guidelines on practices at comparable companies. The individual guidelines are:

The committee may, from time to time, temporarily suspend or reevaluate and revise participants’ guidelines to give effect to changes in our common stock price or other factors the committee deems relevant. Shares that count towards satisfaction of the guidelines include: (i) shares owned outright by the participant or an immediate family member that shares the same household; (ii) shares held in our defined contribution plans; (iii) restricted stock issued by us, whether or not vested; (iv) unvested time-vesting restricted stock units issued and held as part of long-term compensation; (v) shares issued upon stock option exercises or vesting of any long-term compensation award that the participant continues to hold; and (vi) shares or share equivalent units underlying deferred fees paid to directors.

Participants are required to achieve their guideline within five years of becoming subject to the guidelines. The committee reviews each participant’s compliance (or progress towards compliance) with the guidelines annually, typically at its meeting in February. In its discretion, the committee may impose conditions, restrictions or limitations on any non-compliant participant as the committee determines to be necessary or appropriate.

All of our non-management directors and executive officers, including the named executive officers, are in compliance with the guidelines either through maintaining the requisite level of ownership or being within the “ramp-up” period to achieve the requisite level of ownership under the policy.

Anti-Hedging Policy and Trading Restrictions

Our insider trading policy limits the timing and types of transactions in our securities by our directors, officers and other employees. These persons are permitted to trade in our securities only during window periods (following earnings releases) and, in some cases, only after they have pre-cleared transactions with our General Counsel. In addition, the policy provides that none of our directors, officers or other employees may engage in the following transactions:

For purposes of our policy, “stock” or “securities” includes stock or securities of Tenneco or any of its subsidiaries.

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Anti-Pledging Policy

We have adopted a policy under which our directors and executive officers are prohibited from pledging our securities as collateral for a loan.

Clawback Policy

We have a policy whereby we will, in all appropriate circumstances, require reimbursement of any annual incentive payment or long-term incentive payment to an executive officer where: (1) the payment was predicated upon achieving certain financial results that were subsequently the subject of a substantial restatement of our financial statements filed with the SEC; (2) our Board determines the executive engaged in intentional misconduct that caused or substantially caused the need for the substantial restatement; and (3) a lower payment would have been made to the executive based upon the restated financial results. In each such instance, we will, to the extent practicable, seek to recover from the individual executive the amount by which the individual executive’s incentive payments for the relevant period exceeded the lower payment that would have been made based on the restated financial results.

Impact of Regulatory Requirements on Compensation

Section 162(m) of the Internal Revenue Code imposes a $1 million limit on the amount that a publicly-traded corporation may deduct for compensation paid to each of the company’s principal executive officer, principal financial officer and the company’s three next most highly compensated executives (“covered employees”). The Tax Reform and Jobs Act of 2017 (the “Act”) eliminated the ability of companies to rely on the “performance-based“ compensation exception under Section 162(m) and extended the application of Section 162(m) to compensation payable to any person who was a covered employee at any time after 2016 (including compensation payable after termination of employment). As a result, beginning in 2018, we will no longer be able to take a deduction for any compensation paid to our named executive officers in excess of $1 million unless the compensation originally qualified for the “performance-based” compensation exception and qualifies for transition relief applicable to certain arrangements in place on November 2, 2017. Despite the committee’s efforts to structure the executive compensation in a manner intended to be exempt from Section 162(m) and therefore not subject to its deduction limits, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the guidance issued thereunder as amended by the Act, it is expected that the application of the transition rule will be of limited future value with respect to the preservation of deductions for compensation payable to covered employees in excess of the Section 162(m) limits. In any event, the committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with Tenneco’s business needs.

In general, our philosophy is to seek to preserve the tax deductibility of executive compensation only to the extent practicable and consistent with our overall compensation philosophies. We do not make compensation determinations based on the accounting treatment of any particular type of award.

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Calculations Under Various Plans

Calculations Under Our Annual Incentive Plan:

“EBIT” is Tenneco’s GAAP earnings before interest expense, income taxes and non-controlling interests for the performance year, adjusted, if material, for (i) gains or losses on sales of assets, (ii) restructuring charges, (iii) asset impairments, (iv) asset write-downs, (v) litigation or claim judgments or settlements, (vi) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results, (vii) accruals for reorganization and restructuring programs, (viii) gains and losses that are treated as unusual in nature or that occur infrequently as defined under Accounting Standards Codification Topic 225 and/or in management’s discussion and analysis of financial condition and results of operations appearing in Tenneco’s annual report to stockholders for the applicable year, (ix) acquisitions or divestitures, and (x) other significant adjustments approved by the administrator.

“cash flow” is Tenneco’s GAAP earnings before interest expense, income taxes and non-controlling interests for the performance year, (i) plus depreciation and amortization expenses, (ii) plus (gain)/loss on asset sales, (iii) plus the expense of stock-based compensation, (iv) minus the increase/(decrease) in operating working capital, (v) plus other operating cash flows, (vi) minus cash paid for property, plant and equipment, (vii) minus cash paid for software-related intangibles, (viii) plus proceeds from asset sales, (ix) plus payments for net assets purchased, (x) plus changes in other long-term operating assets and liabilities, (xi) minus cash interest payments, (xii) minus net cash tax payments, (xiii) plus adjustments to exclude the impact of acquisitions and divestitures, (xiv) plus adjustments to exclude the impact of litigation or claim judgments and settlements, and (xv) other significant adjustments approved by the administrator.

Calculations Under Our LTPUs:

“EBITDA” is Tenneco’s earnings before interest, taxes, depreciation, amortization and non-controlling interests, adjusted for (a) asset writedowns, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) accruals for reorganization and restructuring programs, (e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the company’s annual report to stockholders for the applicable year, and (f) acquisitions or divestitures.

“FCF” is Tenneco’s operating cash flow less cash interest payments, net cash tax payments and distributions to non-controlling interest partners, excluding the impact of acquisitions and divestitures.

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Summary Compensation Table

The following table shows the compensation that we paid to: (1) our current Co-Chief Executive Officers; (2) our current Chief Financial Officer; (3) each of our next three most highly compensated executive officers who were serving at the end of 2018 based on total compensation less the increase in actuarial value of defined benefits and any above market or preferential earnings on non tax-qualified deferred compensation; (4) the individual who served as our Chief Financial Officer until July 1, 2018; and (5) a former executive who would have been among the group described in clause (3) but for the fact that he was no longer serving as an executive at the end of 2018. We refer to these individuals collectively as the “named executive officers.” The table shows amounts paid to the named executive officers for all services provided to our company and its subsidiaries for 2016, 2017 and 2018 (except in the case of Messrs. Bolt, Guo, and Hollar, for whom information is presented only for 2017 and 2018, as they were not named executive officers in 2016, and in the case of Mr. Wood and Mr. Smith, for whom information is presented only for 2018 as they were not named executive officers in 2016 or 2017). The table does not include amounts paid to Mr. Wood in his capacity as an outside director before October 1, 2018 and Mr. Sherrill in his capacity as an outside director from his retirement as an executive on May 16, 2018.

Summary Compensation Table