Tenneco Inc. recognizes that sound principles of corporate governance are essential to obtaining and retaining the trust and respect of investors and other persons and groups interested in the company and its activities, including employees, customers, suppliers, communities in which it does business, government officials and the public generally.

The Board of Directors has approved the following Charter of the Compensation/ Nominating/Governance Committee that, together with the company's Corporate Governance Principles and charter of the Executive Compensation Subcommittee, is intended to provide a framework for the governance of the company with respect to the matters involving compensation, director and executive officer selection and succession and general corporate governance.

I.

Compensation/Nominating/Governance (CNG) Committee Designation
There is a committee of the Board of Directors called the Compensation/ Nominating/Governance Committee (the "CNG Committee").

II.

CNG Committee Purpose
The purpose of the CNG Committee is to:

 

assist the Board of Directors in discharging the Board of Directors' responsibilities relating to compensation of the company's executives and other employees;

 

produce an annual report on executive compensation for inclusion in the company's proxy statement in accordance with applicable rules and regulations of the Securities and Exchange Commission;

 

identify individuals qualified to become Board of Directors members, recommend to the Board of Directors the slate of nominees to be recommended by the Board for election at applicable meetings of stockholders and recommend to the Board of Directors the composition of its several committees; and

 

develop and recommend to the Board of Directors, review and, as appropriate, from time to time recommend to the Board of Directors revisions to Corporate Governance Principles applicable to the company.

III.

CNG Membership and Procedure
The CNG Committee consists of at least three members, all of whom shall be "independent" as described below. The Board of Directors appoints the members of the CNG Committee annually, considering the recommendation of the CNG Committee, and further considering the views of the Chairman of the Board and the Chief Executive Officer, as appropriate. The members of the CNG Committee serve until their successors are appointed and qualify. The Board of Directors has the power at any time to change the membership of the CNG Committee and to fill vacancies in it, subject to such new member(s) satisfying the requirements described herein.

Each member of the CNG Committee must be "independent" as determined under the applicable rules of the New York Stock Exchange (NYSE), no later than the end of any applicable grace or "phase-in" period adopted by the NYSE with respect to those rules. Further, if deemed appropriate from time to time, each member of the CNG Committee will be required to meet the definition of "non-employee director" under Rule 16b-3 under the Securities Exchange Act of 1934 and "outside director" for purposes of Section 162(m) of the Internal Revenue Code of 1986.

If a CNG Committee Chair is not designated by the Board of Directors or present, the members of the CNG Committee may designate a Chair by majority vote of the CNG Committee membership.

The CNG Committee holds regular meetings each year as often as the committee deems appropriate. The CNG Committee Chair approves an agenda in advance of each meeting.

Except as expressly provided in this Charter, the by-laws of the company or the Corporate Governance Principles of the company, the CNG Committee may fix its own rules of procedure.

IV.

CNG Committee Authority and Responsibilities
In performing its functions, the CNG Committee undertakes those tasks and responsibilities that, in its judgment, would most effectively contribute to and implement the purposes of the CNG Committee. The following functions are some of the common recurring activities of the CNG Committee in carrying out its duties:

 

Compensation-Related

 

1.

Except as expressly delegated to and performed by the Executive Compensation Subcommittee, the CNG Committee reviews and approves corporate goals and objectives relevant to CEO compensation, evaluates the CEO's performance in light of those goals and objectives and, as a Committee (or, if so directed by the Board, together with the Company's other independent directors) determines and approves the CEO's compensation level based on this evaluation.

 

2.

Except as expressly delegated to and performed by the Executive Compensation Subcommittee, in determining the long-term incentive component of CEO compensation, the CNG Committee should, as it determines appropriate, consider the company's performance and relative stockholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the company's CEO in past years.

 

3.

Except as expressly delegated to and performed by the Executive Compensation Subcommittee, the CNG Committee establishes the salary rates and compensation structure for other executive officers of the company and its affiliated companies, subject to the right of the CNG Committee to delegate to the Chief Executive Officer the fixing of compensation below certain levels determined by the CNG Committee, and may periodically examine the compensation structure of the company and its affiliated companies for other employees.

 

4.

The CNG Committee has, to the extent permitted by law and the applicable rules of the New York Stock Exchange and except as expressly delegated to and performed by the Executive Compensation Subcommittee, the authority to administer, establish, terminate or amend and to otherwise act for and on behalf of the Board of Directors with respect to the employee benefit plans of the company and its affiliated companies, including both welfare and pension plans (hereinafter referred to as the "Benefit Plans"), including any supplemental Benefit Plans, severance plans of limited duration and any other similar plans which the CNG Committee deems desirable to establish, terminate or amend from time to time.

 

5.

The CNG Committee has, to the extent permitted by law and the applicable rules of the New York Stock Exchange and except as expressly delegated to and performed by the Executive Compensation Subcommittee, the authority to administer, establish, terminate or amend and to otherwise act for and on behalf of the Board of Directors with respect to executive and director compensation, incentive compensation, deferred compensation and stock option and restricted stock plans and programs of the company and its affiliated companies (hereinafter referred to as the "Compensation Plans"), including other similar compensation plans the CNG Committee deems desirable to establish, terminate or amend from time to time, such authority hereby granted to the CNG Committee to include, without limitation, the power and authority to authorize the issuance of stock pursuant to such Compensation Plans, in such manner as the CNG Committee will deem best for the interests of the company, in all cases in which specific directions have not been given by the Board.

 

6.

Except as expressly delegated to and performed by the Executive Compensation Subcommittee, the CNG Committee ensures that qualified firms are advising the company on compensation matters, managing diversity and related matters. The CNG Committee should meet privately in executive session as often as it deems necessary, but at least annually, with any compensation or similar consultants to the company to discuss any matters that the CNG Committee or these consultants believe should be discussed. If a compensation consultant is engaged to assist in the evaluation of director, CEO or senior executive compensation, the CNG Committee has the sole authority to retain and terminate that consultant, including sole authority to approve its fees and other retention terms.

 

7.

The CNG Committee reviews and approves the list of a peer group of companies to which the company compares itself for compensation purposes, either alone or together with the Executive Compensation Subcommittee.

 

Nominating/Governance-Related

 

8.

Subject to the qualification requirements for the Board of Directors set forth in the company's Corporate Governance Principles, the CNG Committee is responsible for reviewing and proposing to the Board of Directors additional qualifications for directors as determined to be necessary or appropriate, taking into account the desirable balance of experience, qualifications and expertise among members of the Board of Directors.

 

9.

The CNG Committee reviews possible candidates for membership on the Board, and assists in attracting qualified candidates to fill vacant or newly created directorships.

 

10.

It is the responsibility of the CNG Committee to review and recommend to the Board of Directors a management slate of directors to be proposed for election at the annual stockholders' meeting and included in the proxy statement for such meeting, as well as to review and recommend to the Board of Directors any directors to fill vacancies that may exist on the Board of Directors.

 

11.

It is the responsibility of the CNG Committee to review the function and composition of the several committees of the Board of Directors and to recommend to the Board of Directors qualified persons for membership on such committees.

 

12.

It is the responsibility of the CNG Committee to review the qualifications of candidates for election as officers of the company and to recommend those candidates for election by the Board of Directors at least annually.

 

13.

It is the responsibility of the CNG Committee to review annually the availability of qualified replacements for key executive positions in the company and its subsidiaries and the nature and adequacy of the company's plans for developing and providing necessary replacements both on a current and on a long-term basis, so as to ensure continuity and orderly succession of capable and qualified management for the company.

 

14.

The CNG Committee oversees the evaluation of the executive management of the company and makes recommendations to the Board of Directors as it determines appropriate.

 

15.

The CNG Committee reviews and reassesses at least annually the adequacy of the Corporate Governance Principles of the company and recommends any proposed changes to the Board of Directors for approval.

 

16.

The CNG Committee serves in an advisory capacity to the Board of Directors and Chairman of the Board on matters of organizational and governance structure of the company and the conduct of the Board of Directors.

 

17.

The CNG Committee receives comments from all directors and, as directed by the Board of Directors, reports orally annually to the Board of Directors with an assessment of the Board of Director's performance, to be discussed with the full Board of Directors following the end of each fiscal year.

 

Other

 

18.

It is the responsibility of the CNG Committee to maintain minutes of its meetings and report, through its Chair, to the Board of Directors on significant results of each meeting.

 

19.

The CNG Committee has the ability to retain, at the company's expense, special legal, accounting or other consultants or experts it deems necessary in the performance of its duties.

 

20.

It is the responsibility of the CNG Committee to review and reassess the adequacy of this Charter at least annually and to recommend any proposed changes to the Board of Directors for approval. It is the responsibility of the CNG Committee to cause the Charter to be published in accordance with applicable NYSE regulations.

 

21.

It is the responsibility of the CNG Committee to annually review its own performance.

 

22.

The CNG Committee may form and delegate authority to subcommittees when appropriate and to the extent permitted by applicable law and the rules of the NSYE. Once a subcommittee of this Committee is so formed, the CNG Committee may exercise any authority in its discretion that is granted to such subcommittee.

 

23.

In performing its duties, the CNG Committee is not providing any expert, professional or special assurances as to the matters addressed herein. CNG Committee members are not deemed to have accepted a duty of care greater than the duty of other directors. Nothing contained in this Charter is intended to alter the operation of the "business judgment rule" as interpreted under Delaware law.