Tenneco Receives Favorable IRS Ruling

23 August 1999

Tenneco Receives Favorable IRS Ruling On Tax-Free Spin-Off of Packaging Company, Announces Special Shareowners Meeting On Vote of Reverse Stock Split

    GREENWICH, Conn.--Aug. 23, 1999--Tenneco today announced that it has received a private letter ruling from the Internal Revenue Service (IRS), which states that Tenneco's planned spin-off of Tenneco Packaging will be tax free to Tenneco and its shareowners. Receipt of the ruling is a key step in the planned separation of Tenneco Automotive and Tenneco Packaging that the company announced April 29.
    "We are pleased to receive a favorable ruling from the IRS on the planned tax-free spin-off of Tenneco Packaging to our shareowners," said Dana G. Mead, Tenneco chairman and chief executive officer. "The ruling enables Tenneco to continue to proceed with the ultimate separation of Tenneco Automotive and Tenneco Packaging."
    Separately, Tenneco also said that its Board of Directors has set October 25th for a shareowner vote to approve a reverse stock split of the company's common stock and to provide for the annual election of directors. Because both would become effective after the spin-off of the company's packaging business to shareowners, they would affect only the company's remaining Automotive operations. The reverse stock split ratio is currently being determined and will be announced at a later date. The annual election of directors will be phased in as the terms of current directors expire.
    Approval of the proposed amendments will not be conditions to completing the spin-off, which is expected to occur this fall. If adopted, both actions, offered as amendments to Tenneco's Restated Certificate of Incorporation, would not take effect until after Tenneco completes the spin-off of the packaging business and the separation of the Automotive and Packaging companies.
    In its draft proxy materials filed with the Securities and Exchange Commission, Tenneco also said that following the spin-off, it would be renamed Tenneco Automotive, thus retaining the Tenneco corporate name. Tenneco Packaging currently is reviewing possible new corporate names.
    The special shareowners meeting will take place on Monday, October 25, 1999 at the offices of Tenneco Automotive located at 500 North Field Drive, Lake Forest, Ill., at 10:30 a.m., local time. The record date for shareowners to vote at the meeting is September 13, 1999, and the company expects to mail proxy materials for the meeting in mid-September.
    Tenneco is a $6 billion manufacturing company with 38,000 employees worldwide. With 1998 revenue of $3.2 billion, Tenneco Automotive is one of the world's largest producers and marketers of ride control and exhaust systems and products, which are sold under the Monroe(R) and Walker(R) global brand names. Among its products are Sensa-Trac(R) shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(TM) mufflers and DynoMax(TM) performance exhaust products, and Monroe(R) Clevite(TM) vibration control components. Tenneco Packaging, with 1998 revenue of $2.8 billion, is among the world's leading and most diversified packaging companies. Among its products are Hefty(R) trash bags, Hefty OneZip(R) and Baggies(R) food storage bags, E-Z Foil(R) single-use aluminum cookware and Hexacomb paper honeycomb products.