AEROJET ROCKETDYNE HOLDINGS, INC.
10-Qs and 10-Ks
PROXIES
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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
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
GenCorp 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):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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determined):
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5) Total fee paid:
o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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P.O. Box 537012 Sacramento, CA 95853-7012 |
February 26, 2010
Dear Shareholder:
You are cordially invited to attend the 2010 Annual Meeting of
Shareholders of GenCorp Inc., which will be held on
March 24, 2010 at 9:00 a.m. Eastern time, at the
Omni Berkshire Place, 21 East 52nd Street, New York, New York.
Details of the business to be presented at the meeting can be
found in the accompanying Notice of Annual Meeting and Proxy
Statement. Your vote is important. Whether or not you are able
to attend, it is important that your shares be represented at
the meeting. Accordingly, we ask that you please complete, sign,
date and return the enclosed proxy card at your earliest
convenience.
On behalf of the Board of Directors and the management of
GenCorp Inc., I extend our appreciation for your continued
support.
Very truly yours,
/s/ James
R. Henderson
JAMES R. HENDERSON
Chairman of the Board
Chairman of the Board
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P.O. Box 537012 Sacramento, CA 95853-7012 |
| TIME: | 9:00 a.m. Eastern time on Wednesday, March 24, 2010 | |
| PLACE: | The Omni Berkshire Place, 21 East 52nd Street, New York, New York | |
| ITEMS OF BUSINESS: |
1. To elect eight
directors to our Board of Directors to serve until the 2011
annual meeting of shareholders and until their respective
successors have been duly elected and qualified;
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2. To amend the
Company’s Amended Articles of Incorporation to restrict
certain transfers of the Company’s common stock to preserve
the value of certain tax assets associated with net operating
loss carryforwards under Section 382 of the Internal
Revenue Code;
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3. To approve certain
amendments to the GenCorp 2009 Equity and Performance Incentive
Plan to increase the number of shares authorized and reserved
for issuance thereunder by 1,500,000 shares and increase
the maximum individual award limits set forth therein;
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4. To ratify the
appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm of the Company for the fiscal
year ending November 30, 2010; and
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5. To consider and act
on such other business as may properly be brought before the
meeting or any adjournments or postponements thereof.
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| RECORD DATE: | This Notice of Annual Meeting and Proxy Statement and the enclosed proxy card are first being sent on or about February 26, 2010 to each holder of record of GenCorp common stock, par value $0.10 per share, at the close of business (5:00 p.m. Eastern time) on January 29, 2010 (the “Record Date”). You are entitled to vote at the 2010 annual meeting of shareholders (the “Annual Meeting”) if you were a shareholder of record at the close of business on the Record Date. | |
| ANNUAL MEETING ADMISSION: | In addition to a form of personal photo identification, you must bring evidence of your ownership of GenCorp common stock (which, if you are a beneficial holder, can be obtained from your bank, broker or other record holder of your shares) in order to be admitted. | |
| PROXY VOTING: | It is important that your shares be represented and voted at the meeting. You may vote your shares by voting in person at the meeting, by completing and returning the enclosed proxy card, by Internet or by telephone. See details under the heading “How do I vote?” | |
| INSPECTION OF LIST OF SHAREHOLDERS OF RECORD: | A list of the shareholders of record as of the Record Date will be available for inspection at the Annual Meeting. |
By Order of the Board of Directors,
/s/ KATHLEEN
E. REDD
Vice President,
Chief Financial
Officer
and Secretary
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P.O. Box 537012 Sacramento, CA 95853-7012 |
PROXY
STATEMENT
FOR THE 2010 ANNUAL MEETING OF SHAREHOLDERS
FOR THE 2010 ANNUAL MEETING OF SHAREHOLDERS
To Be
Held On March 24, 2010
GENERAL
INFORMATION
The Board of Directors (the “Board”) of GenCorp Inc.,
an Ohio corporation (“GenCorp” or the
“Company”) solicits the enclosed proxy for use at the
Company’s 2010 annual meeting of shareholders (the
“Annual Meeting”) to be held at the Omni Berkshire
Place, 21 East 52nd Street, New York, New York on March 24,
2010 at 9:00 a.m. Eastern time.
FREQUENTLY
ASKED QUESTIONS
WHY DID I
RECEIVE THIS PROXY STATEMENT?
The Board is soliciting your proxy to vote at the Annual Meeting
because you were a shareholder of the Company’s common
stock, par value $0.10 per share (“Common Stock”), at
the close of business (5:00 p.m. Eastern time) on
January 29, 2010, (the “Record Date”) and
therefore you are entitled to vote at the Annual Meeting. This
Proxy Statement contains information about the matters to be
voted on at the meeting and the voting process, as well as
information about the Company’s directors
(“Directors”) and executive officers. This Proxy
Statement and the accompanying proxy card are being made
available to shareholders beginning on or about
February 26, 2010.
WHAT AM I
VOTING ON?
You are voting on the following items of business at the Annual
Meeting:
| • | The election of eight directors to our Board (the Board’s nominees are: Thomas A. Corcoran; James R. Henderson; Warren G. Lichtenstein; David A. Lorber; James H. Perry; Scott J. Seymour; Martin Turchin; and Robert C. Woods ) to serve until the 2011 annual meeting of shareholders and until their respective successors have been duly elected and qualified (“Proposal 1”); | |
| • | To amend the Company’s Amended Articles of Incorporation (the “Charter”) to restrict certain transfers of the Company’s Common Stock to preserve the value of certain tax assets associated with net operating loss carryforwards under Section 382 of the Internal Revenue Code (“Proposal 2”); | |
| • | To approve certain amendments to the GenCorp 2009 Equity and Performance Incentive Plan (the “2009 Incentive Plan”) to increase the number of shares authorized and reserved for issuance thereunder by 1,500,000 shares and increase the maximum individual award limits set forth therein (“Proposal 3”); | |
| • | The ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for the fiscal year ending November 30, 2010 (“Proposal 4”); and | |
| • | Any other matter that may properly be brought before the Annual Meeting. |
WHO IS
ENTITLED TO VOTE?
Shareholders of record as of the Record Date are entitled to
vote at the Annual Meeting. Each share of Common Stock is
entitled to one vote.
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WHAT ARE
THE VOTING RECOMMENDATIONS OF THE BOARD?
The Board recommends that you vote your shares “FOR”
each of the Board’s eight nominees standing for election to
the Board, “FOR” the approval to amend the
Company’s Charter to restrict certain transfers of the
Company’s Common Stock to preserve the value of certain tax
assets associated with net operating loss carryforwards under
Section 382 of the Internal Revenue Code, “FOR”
the approval of certain amendments to the 2009 Incentive Plan
to increase the number of shares authorized and reserved for
issuance thereunder by 1,500,000 shares and increase the
maximum individual award limits set forth therein, and
“FOR” the ratification of PwC as the Company’s
independent registered public accounting firm.
HOW DO I
VOTE?
It is important that your shares are represented at the Annual
Meeting whether or not you attend the meeting in person. To make
sure that your shares are represented, we urge you to vote as
soon as possible.
SHARES HELD
IN THE GENCORP RETIREMENT SAVINGS PLAN
Please follow the voting instructions provided by Fidelity
Management Trust Company, (the “Trustee”). You
may sign, date and return a voting instruction card to the
Trustee or submit voting instructions by telephone or the
Internet. If you provide voting instructions by mail, telephone,
or the Internet, the Trustee will vote your shares as you have
directed (or not vote your shares, if that is your direction).
If you do not provide voting instructions, the Trustee will vote
your shares in the same proportion as shares for which the
Trustee has received voting instructions. You must submit voting
instructions to the Trustee by no later than March 19, 2010 at
11:59 p.m. Eastern time in order for your shares to be
voted as you have directed by the Trustee at the Annual Meeting.
Plan participants may not vote their Plan shares in person at
the Annual Meeting.
SHARES HELD
BY YOU, YOUR BROKER, BANK OR OTHER HOLDER OF RECORD
You may vote in several different ways:
In person
at the Annual Meeting
You may vote in person at the Annual Meeting. You may also be
represented by another person at the meeting by executing a
proxy properly designating that person. If you are the
beneficial owner of shares held in “street name,” you
must obtain a legal proxy from your broker, bank or other holder
of record and present it to the inspectors of election with your
ballot to be able to vote at the meeting.
By
telephone
You may vote by calling the toll-free telephone number indicated
on your proxy card.
Easy-to-follow
voice prompts allow you to vote your shares and confirm that
your voting instructions have been properly recorded.
By
Internet
You may vote by going to the Internet web site indicated on your
proxy card. Confirmation that your voting instructions have been
properly recorded will be provided.
By
mail
You may vote by completing, signing, dating and returning a
proxy card.
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Telephone and Internet voting for shareholders of record will be
available until 11:59 p.m. Eastern time on March 23,
2010.
If your shares are held in a brokerage account in your
broker’s name, please follow the voting directions provided
by your broker or nominee. You may sign, date and return a
voting instruction card to your broker or nominee or, in most
cases, submit voting instructions by telephone or the Internet
to your broker or nominee. If you provide specific voting
instructions by mail, telephone, or Internet, your broker or
nominee will vote your shares as you have directed.
If you choose to vote by telephone or by Internet, you do not
have to return your proxy card or voting instruction card.
However, even if you plan to attend the Annual Meeting, we
recommend that you vote your shares in advance so that your vote
will be counted if you later decide not to attend the meeting.
MAY I
ATTEND THE MEETING?
All shareholders and properly appointed proxy holders may attend
the Annual Meeting. Shareholders who plan to attend must present
valid photo identification. If you hold your shares in a
brokerage account, please also bring proof of your share
ownership, such as a broker’s statement showing that you
owned shares of the Company on the Record Date, or a legal proxy
from your broker or nominee. A legal proxy is required if you
hold your shares in a brokerage account and you plan to vote in
person at the Annual Meeting. Shareholders of record will be
verified against an official list available at the Annual
Meeting. The Company reserves the right to deny admittance to
anyone who cannot adequately show proof of share ownership as of
the Record Date.
WHAT IS
THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF
RECORD AND AS A BENEFICIAL OWNER?
If your shares are registered directly in your name with
GenCorp’s transfer agent, BNY Mellon Shareowner Services,
you are considered a “shareholder of record” or a
“registered shareholder” of those shares. The Proxy
Statement, Annual Report and proxy card have been made available
directly to shareholders of record by the Company. If your
shares are held in a stock brokerage account or by a bank, trust
or other nominee or custodian, you are considered the
“beneficial owner” of those shares, which are held in
“street name.” The proxy materials will be forwarded
to you by your broker, bank or nominee who is considered, with
respect to those shares, the shareholder of record.
As the beneficial owner, you have the right to direct your
broker, bank, trustee or other holder of record as to how to
vote your shares by following its instructions for voting.
However, since you are not a shareholder of record, you may only
vote your shares at the Annual Meeting if you bring a legal
proxy from your broker, bank or nominee. Your broker, bank or
nominee will enclose a voting instruction card to use in
directing the broker, bank or other nominee on how to vote your
shares.
WHAT ARE
BROKER NON-VOTES AND HOW ARE THEY COUNTED?
Broker non-votes occur when nominees, such as brokers and banks
holding shares on behalf of the beneficial owners, are
prohibited from exercising discretionary voting authority for
beneficial owners who have not provided voting instructions at
least ten days before the Annual Meeting. If no instructions are
given within that time frame, the nominees may vote those shares
on matters deemed “routine” by the New York Stock
Exchange (“NYSE”). On non-routine matters such as
Proposal Nos. 1, 2 and 3, nominees cannot vote without
instructions from the beneficial owner, resulting in so-called
“broker non-votes.” Broker non-votes are not counted
for the purposes of determining the number of shares present in
person or represented by proxy on a voting matter. For these
reasons, please promptly vote by telephone, or Internet, or
sign, date and return the voting instruction card your broker or
nominee has enclosed, in accordance with the instructions on the
card.
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MAY I
CHANGE MY VOTE?
If you are a shareholder of record, you may revoke your proxy at
any time before it is voted at the Annual Meeting by:
| • | Returning a later-dated, signed proxy card; | |
| • | Sending written notice of revocation to the Company, c/o the Secretary; | |
| • | Submitting a new, proper proxy by telephone, Internet or paper ballot, after the date of the earlier voted proxy; or | |
| • | Attending the Annual Meeting and voting in person. |
If you are a beneficial owner of shares, you may submit new
voting instructions by contacting your broker, bank or other
nominee. You may also vote in person at the Annual Meeting if
you obtain a legal proxy as described above.
WHAT VOTE
IS REQUIRED TO APPROVE EACH PROPOSAL?
Directors are elected by a plurality of the votes cast at the
Annual Meeting. Votes cast for a nominee will be counted in
favor of election. Abstentions and broker non-votes will not
count either in favor of, or against, election of a nominee.
Proxies cannot be voted for a greater number of persons than the
number of Directors set by the Board for election. The
affirmative vote of at least a majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting is
necessary to approve Proposal 2, the amendment to the
Charter. Broker non-votes and abstentions will be counted for
purposes of determining whether there is a quorum and will have
the same effect as a vote against Proposal 2.
Proposal 3, the amendments to the 2009 Incentive Plan, and
Proposal 4, the ratification of the appointment of the
Company’s independent auditors, will require the
affirmative vote of a majority of all of the votes cast.
Abstentions and broker non-votes will have no effect on the
outcome of the vote on Proposal 3 and Proposal 4.
DO
SHAREHOLDERS HAVE CUMULATIVE VOTING RIGHTS WITH RESPECT TO THE
ELECTION OF DIRECTORS?
No. Shareholders do not have cumulative voting rights with
respect to the election of Directors.
WHAT
CONSTITUTES A QUORUM?
As of the Record Date, 58,782,480 shares of Common Stock
were outstanding. A majority of the outstanding shares entitled
to vote at the Annual Meeting, represented in person or by
proxy, will constitute a quorum. Shares represented by a proxy
that directs that the shares abstain from voting or that a vote
be withheld on a matter will be included at the Annual Meeting
for quorum purposes. Shares represented by proxy as to which no
voting instructions are given as to matters to be voted upon
will be included at the Annual Meeting for quorum purposes.
WHAT DOES
IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
If you hold your shares in more than one account, you will
receive a proxy card for each account. To ensure that all of
your shares are voted, please complete, sign, date and return a
proxy card for each account or use the proxy card to vote by
telephone or Internet.
WHAT IF I
SHARE AN ADDRESS WITH ANOTHER SHAREHOLDER?
If you share an address with another shareholder, you may
receive only one set of proxy materials (including this Proxy
Statement and the Company’s 2009 Annual Report on
Form 10-K)
unless you have
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provided contrary instructions. If you wish to receive a
separate set of proxy materials now or in the future, you may
contact us at the address set forth below. Similarly, if you
share an address with another shareholder and have received
multiple copies of our proxy materials, you may contact us at
the below address to request delivery of a single copy of these
materials.
WHAT IS
THE COMPANY’S INTERNET ADDRESS?
The Company’s Internet address is www.GenCorp.com.
You can access this Proxy Statement and the Company’s 2009
Annual Report on
Form 10-K
at this Internet address. The Company’s filings with the
SEC are available free of charge via a link from this address. A
copy of the Company’s 2009 Annual Report on
Form 10-K
is also available in print to any shareholder or other
interested person who requests it by writing to Secretary,
GenCorp Inc., P.O. Box 537012, Sacramento, California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742).
WILL ANY
OTHER MATTERS BE VOTED ON?
As of the date of this Proxy Statement, our management knows of
no other matter that will be presented for consideration at the
Annual Meeting other than those matters discussed in this Proxy
Statement. If any other matters properly come before the Annual
Meeting and call for a vote of the shareholders, validly
executed proxies in the enclosed form will be voted in
accordance with the recommendation of the Board.
WHO IS
SOLICITING PROXIES UNDER THIS PROXY STATEMENT?
The proxies being solicited hereby are being solicited by our
Board. The cost of soliciting proxies in the enclosed form will
be borne by the Company. Officers and regular employees of the
Company may, but without compensation other than their regular
compensation, solicit proxies by further mailing or personal
conversations, or by telephone, telex, facsimile or electronic
means. The Company will, upon request, reimburse brokerage firms
and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of stock.
ARE THERE
DISSENTER’S OR APPRAISAL RIGHTS?
The Company’s shareholders are not entitled to
dissenter’s or appraisal rights under Ohio law in
connection with any of the Proposals.
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PROPOSAL 1
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
The Company’s Amended Code of Regulations provides for a
Board of not less than seven or more than seventeen Directors,
and authorizes the Board to determine from time to time the
number of Directors within that range that will constitute the
Board by the affirmative vote of a majority of the members then
in office. The Board has fixed the number of Directors to be
elected at the Annual Meeting at eight.
The Board has proposed the following nominees for election as
Directors at the Annual Meeting: Thomas A. Corcoran; James R.
Henderson; Warren G. Lichtenstein; David A. Lorber; James H.
Perry; Scott J. Seymour; Martin Turchin; and Robert C. Woods.
Each nominee elected as a Director will continue in office until
the next annual meeting of shareholders at which his successor
has been elected, or until his resignation, removal from office,
or death, whichever is earlier.
Each nominee is currently serving as a Director and each has
consented to serve for the new term. On January 5, 2010,
the Board unanimously authorized an increase in the size of the
Board from seven to eight members. Effective January 6,
2010, the Board elected Mr. Seymour to serve as a Director
to fill the vacancy created by the increase in the size of the
Board. With the exception of Mr. Seymour, all nominees have
previously been elected as Directors by the Company’s
shareholders.
The Board recommends a vote FOR the election of these nominees
as Directors.
Set forth below are the names and ages of the nominees for
Directors and their principal occupations at present and for the
past five years. There are, to the knowledge of the Company, no
agreements or understandings by which these individuals were so
selected. No family relationships exist between any Directors or
executive officers, as such term is defined in Item 402 of
Regulation S-K
promulgated under the Securities and Exchange Act of 1934, as
amended (the “Exchange Act”). The information
concerning the nominees set forth below is given as of
December 31, 2009.
THOMAS A.
CORCORAN
Director since 2008
Mr. Corcoran has been a Senior Advisor of The Carlyle
Group, a private equity investment firm, and the President of
Corcoran Enterprises, LLC, a management consulting company,
since 2001. Previously Mr. Corcoran was also the President
and Chief Executive Officer (“CEO”) of Gemini Air
Cargo, Inc., a cargo airline owned by The Carlyle Group, from
2001 to 2004. Prior to that, Mr. Corcoran was President and
CEO of Allegheny Teledyne Incorporated, a specialty metals
producer from 1999 to 2000. Prior to that, Mr. Corcoran was
President and Chief Operating Officer (“COO”) of
Lockheed Martin’s Electronics and Space Sectors from 1993
to 1999. Mr. Corcoran began his career in 1967 at General
Electric Company in various positions. In 1990,
Mr. Corcoran was elected a corporate officer and rose to
the number two position in G.E. Aerospace as Vice President and
General Manager of G.E. Aerospace Operations. Mr. Corcoran
is a director with three U.S. listed public companies; L-3
Communications Holdings, Inc. (Chairman of the Board and Audit
Committee member), REMEC, Inc. and LaBarge, Inc. (Audit
Committee member). Mr. Corcoran is also a director with Aer
Lingus, Ltd. based in Dublin, Ireland and Serco, Ltd. based in
Surry, UK. Mr. Corcoran serves as a director of American
Ireland Fund, on the board of trustees of Stevens Institute of
Technology and is a trustee emeritus at Worcester Polytechnic
Institute. Mr. Corcoran currently serves as a member of the
Organization & Compensation Committee. Age 65.
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JAMES R.
HENDERSON
Director since 2008
Mr. Henderson is a Managing Director and operating partner
of Steel Partners LLC, a global management firm (“Steel
Partners”), which is the manager of Steel Partners Holdings
L.P., a global diversified holding company that engages or has
interests in a variety of operating businesses through its
subsidiary companies (“SPH”). He has been associated
with Steel Partners and its affiliates since August 1999. He has
been the Chairman of the Board of Point Blank Solutions, Inc., a
designer and manufacturer of protective body armor, since August
2008, CEO since September 2009 and was Acting CEO from April
2009 to August 2009. Mr. Henderson was an Executive Vice
President of SP Acquisition Holdings, Inc., a company formed for
the purpose of acquiring one or more businesses or assets
(“SP Acquisition”), from February 2007 until October
2009. Mr. Henderson has been a director of Del Global
Technologies Corp., a designer, manufacturer, and marketer of
medical imaging and diagnostic systems and power conversion
subsystems and components, since November 2003. He has been a
director of BNS Holding, Inc., a holding company that owns the
majority of Collins Industries, Inc., a manufacturer of school
buses, ambulances and terminal trucks, since June 2004.
Mr. Henderson has been a director of SL Industries,
Inc., a designer, manufacturer, and marketer of power
electronics, motion control, power protection, and specialized
communication equipment (“SL Industries”), since
January 2002. He was a director of Angelica Corporation, a
provider of healthcare linen management services, from August
2006 to August 2008. Mr. Henderson was a director and CEO
of the predecessor entity of SPH from June 2005 to April 2008,
President and COO from November 2003 to April 2008, and was the
Vice President of Operations from September 2000 to December
2003. He was also the CEO of WebBank, a wholly-owned subsidiary
of SPH, from November 2004 to May 2005. He was a director of ECC
International Corp., a manufacturer and marketer of computer
controlled simulators for training personnel to perform
maintenance and operation procedures on military weapons, from
December 1999 to September 2003 and was acting CEO from July
2002 to March 2003. Mr. Henderson has been the President of
Gateway Industries, Inc., a provider of database development and
web site design and development services, since December 2001.
From January 2001 to August 2001, he was President of MDM
Technologies, Inc., a direct mail and marketing company.
Mr. Henderson currently serves as Chairman of the Board and
Chairman of the Corporate Governance & Nominating
Committee. Age 52.
WARREN G.
LICHTENSTEIN
Director since 2008
Mr. Lichtenstein is the Chairman and CEO of Steel Partners.
Mr. Lichtenstein has been associated with Steel Partners
and its affiliates since 1990. He currently serves as the
Chairman and CEO of SPH. Mr. Lichtenstein is a Co-Founder
of Steel Partners Japan Strategic Fund (Offshore), L.P., a
private investment partnership investing in Japan, and Steel
Partners China Access I LP, a private equity partnership
investing in China. He also co-founded Steel Partners II, L.P.
(“SPII”) in 1993, a private investment partnership
which is now a wholly-owned subsidiary of SPH.
Mr. Lichtenstein was the Chairman of the Board, President
and CEO of SP Acquisition from February 2007 to October 2009.
Mr. Lichtenstein was a director (formerly Chairman of the
Board) of SL Industries from January 2002 to May 2008 and served
as CEO from February 2002 to August 2005. Mr. Lichtenstein
has served as Chairman of the Board of WHX Corporation, a
diversified industrial products manufacturing company, since
July 2005. He served as a director of KT&G Corporation,
South Korea’s largest tobacco company, from March 2006 to
March 2008. He was a director (formerly Chairman of the Board)
of United Industrial Corporation, a company principally focused
on the design, production and support of defense systems, which
was acquired by Textron Inc., from May 2001 to November 2007. He
served as a director of the predecessor entity of SPH from 1996
to June 2005, as Chairman and CEO from December 1997 to June
2005 and as President from December 1997 to December 2003.
Mr. Lichtenstein currently serves as a member of the
Organization & Compensation Committee. Age 44.
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DAVID A.
LORBER
Director since 2006
Mr. Lorber is a Co-Founder and Portfolio Manager for
FrontFour Capital Group LLC, a hedge fund since 2007.
Previously, Mr. Lorber was a Senior Investment Analyst at
Pirate Capital LLC, a hedge fund from 2003 to 2006. Prior to
that, Mr. Lorber was an Analyst at Vantis Capital
Management LLC, a money management firm and hedge fund from 2001
to 2003 and an Associate at Cushman & Wakefield, Inc.
Mr. Lorber also serves as a Director of Fisher
Communications Inc. and Huntingdon Real Estate Investment Trust.
Mr. Lorber currently serves as Chairman of the
Organization & Compensation Committee and as a member
of the Audit Committee. Age 31.
JAMES H.
PERRY
Director since 2008
Mr. Perry has been a self employed financial consultant
since 2008. Previously, Mr. Perry served as Vice President
of United Industrial Corporation, who through its wholly-owned
subsidiary AAI Corporation designs, produces and supports
aerospace and defense systems, from 1998 to 2007, as Chief
Financial Officer (“CFO”) from 1995 to 2007, as
Treasurer from 1994 to 2005, and as Controller from 2005 to
2007. Mr. Perry served as CFO of AAI Corporation from 2000
to 2007, as Treasurer from 2000 to 2005, and as Vice President
from 1997 to 2007. Mr. Perry held various positions in the
Assurance practice of Ernst & Young LLP, a global
leader in assurance, tax, transaction and advisory services,
from 1987 to 1994. Mr. Perry currently serves as Chairman
of the Audit Committee and as a member of the
Organization & Compensation Committee. Age 48.
SCOTT J.
SEYMOUR
Director since January 2010
Mr. Seymour joined the Company on January 6, 2010, as
President and Chief Executive Officer of the Company and was
appointed President of Aerojet-General Corporation
(“Aerojet”) on January 26, 2010. Mr. Seymour
has served as a consultant to Northrop Grumman Corporation, a
global defense and technology company (“Northrop”),
since March 2008. Mr. Seymour joined Northrop in 1983.
Prior to becoming a consultant in March 2008, Mr. Seymour
most recently served as Corporate Vice President and President
of Integrated Systems Sector of Northrop from 2002 until March
2008. Mr. Seymour also served as Vice President, Air Combat
Systems, Vice President and B-2 Program Manager and Vice
President, Palmdale Operations, of Northrop, from 1998 to 2001,
1996 to 1998 and 1993 to 1996, respectively. Prior to joining
Northrop, Mr. Seymour was involved in the manufacture and
flight-testing of F-14A, EF-111A and
F/A-18A
aircraft for each of Grumman Aerospace Corporation and McDonnell
Aircraft Company. Mr. Seymour is a member of the National
Museum United States Air Force Board of Managers and the Board
of the Air Warrior Courage Foundation. He is also a member of
the Florida Institute of Technology Board of Trustees.
Age 59.
MARTIN
TURCHIN
Director since 2008
Mr. Turchin is a Vice-Chairman of CB Richard Ellis, the
world’s largest real estate services company, a position he
has held since 2003. Previously, Mr. Turchin served as a
Vice-Chairman of a subsidiary of Insignia Financial Group, a
real estate brokerage, consulting and management firm from 1996
to 2003. Prior to that, Mr. Turchin was a principal and
Vice-Chairman of Edward S. Gordon Company, a real estate
brokerage, consulting and management firm from 1985 to 1996.
Mr. Turchin has been a director of Boston Properties, a
real estate investment trust, for more than ten years.
Mr. Turchin held various positions with Kenneth E.
Laub & Company, Inc., a real estate company, where he
was involved in real estate acquisition, financing, leasing and
consulting from 1971 to 1985. Mr. Turchin also serves as a
trustee for the Turchin Family Charitable Foundation.
Mr. Turchin currently serves as a member of the Audit
Committee and as a member of the Corporate
Governance & Nominating Committee. Age 68.
8
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ROBERT C.
WOODS
Director since 2006
Mr. Woods has been an Investment Banker at Cornerstone
Capital Advisors (“Cornerstone”), a real estate
investment bank, since 1987. Mr. Woods has also been a real
estate developer for Palladian Partners (“Palladian”),
a real estate development company since 1983. At both
Cornerstone and Palladian, Mr. Woods’ experience
includes developing and financing master planned communities.
Previously, Mr. Woods was the Vice President of Development
for the Cullen Center in Houston, Texas from 1982 to 1983, a
Project Manager and Vice President of Development for Hines
Interests LLC, a real estate development company from 1980 to
1983, a Project Manager for Trammell Crow, a real estate
development company from 1979 to 1980. Mr. Woods was also a
consulting professor of real estate finance at Stanford
University from 2000 to 2005. Mr. Woods is a Chartered
Financial Analyst. Mr. Woods currently serves as a member
of the Audit Committee and as a member of the Corporate
Governance & Nominating Committee. Age 57.
Our Board unanimously recommends that shareholders vote FOR
each of these nominees as Directors by executing and returning
the proxy card or voting by one of the other ways indicated
thereon. Proxies solicited by the Board will be so voted unless
shareholders specify otherwise.
Voting
for Directors
The Company has no provision for cumulative voting in the
election of Directors. Therefore, holders of Common Stock are
entitled to cast one vote for each share held on the Record Date
for each of the candidates for election. Directors are elected
by a plurality of the votes cast at the Annual Meeting; however,
the Board has adopted a majority vote policy. Pursuant to such
policy, in an uncontested election, any nominee for Director who
receives a greater number of votes “withheld” for his
election than votes “for” such election (a
“Majority Withheld Vote”) shall promptly tender his
resignation after such election for consideration by the
Corporate Governance & Nominating Committee (the
“Corporate Governance Committee”). In determining its
recommendation to the Board, the Corporate Governance Committee
will consider all factors deemed relevant by its members. These
factors may include the underlying reasons why shareholders
“withheld” votes for election from such Director (if
ascertainable), the length of service and qualifications of the
Director whose resignation has been tendered, the
Director’s contributions to the Company, whether by
accepting such resignation the Company will no longer be in
compliance with any applicable law, rule, regulation or
governing document, and whether or not accepting the resignation
is in the best interests of the Company and our shareholders.
Within 90 days thereafter, the Board, taking into account
the recommendation of the Corporate Governance Committee and
such additional information and factors that the Board believes
to be relevant, must determine whether to accept or reject the
resignation. The Director that tendered the resignation shall
not participate in the consideration or determination of whether
to accept such resignation. The Board shall disclose by press
release its decision to accept or reject the resignation and, if
applicable, the reasons for rejecting the resignation. If a
majority of the Corporate Governance Committee members receive a
Majority Withheld Vote at the same election, then the
independent Directors who did not receive a Majority Withheld
Vote will appoint a committee of independent Directors to
consider the resignation offers and recommend to the Board
whether to accept or reject them.
Votes cast for a nominee will be counted in favor of election.
Abstentions and broker non-votes will not count either in favor
of, or against, election of a nominee. It is the intention of
the persons named in the accompanying form of proxy to vote for
the election of the Board’s nominees, unless authorization
to do so is withheld. Proxies cannot be voted for a greater
number of persons than the number of Directors set by the Board
for election. If, prior to the Annual Meeting, a nominee becomes
unable to serve as a Director for any reason, the proxy holders
reserve the right to substitute another person of their choice
in such nominee’s place and stead. It is not anticipated
that any nominee will be unavailable for election at the Annual
Meeting.
9
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Retirement
Policy
Under the Board’s retirement policy, a Director’s term
of office normally expires at the annual meeting of shareholders
following his 70th birthday. The Board’s retirement policy
also provides that the Board may waive immediate compliance with
the policy and request that a Director postpone his retirement
until a subsequent date.
Meetings
of the Board
The Board held 12 meetings during fiscal year 2009. All of the
Directors who served during fiscal year 2009 attended at least
75% of the regularly scheduled and special meetings of the Board
and Board committees on which they served and to which they were
invited in fiscal year 2009. All of the Board’s nominees
for election at the Annual Meeting are expected to attend the
Annual Meeting. All but one of the Directors nominated for
election at the 2009 annual meeting of shareholders were present
at such meeting.
Meetings
of Non-Employee Directors
Non-employee Directors meet in executive session as part of each
regularly scheduled Board meeting. In 2009, the Chairman of the
Board, presided at all such executive sessions. In the event of
the Chairman’s absence, a non-employee Director would have
been chosen on a rotating basis.
Determination
of Independence of Directors
The Board has determined that to be considered independent, a
Director may not have a direct or indirect material relationship
with the Company. A material relationship is one which impairs
or inhibits, or has the potential to impair or inhibit, a
Director’s exercise of critical and disinterested judgment
on behalf of the Company and its shareholders. In making its
assessment of independence, the Board considers any and all
material relationships not merely from the standpoint of the
Director, but also from that of persons or organizations with
which the Director has or has had an affiliation, or those
relationships which may be material, including commercial,
industrial, banking, consulting, legal, accounting, charitable
and familial relationships, among others. The Board also
considers whether a Director was an employee of the Company
within the last five years. The Board consults with the
Company’s counsel to ensure that the Board’s
determinations are consistent with all relevant securities and
other laws and regulations regarding the definition of
“independent” Director, including those set forth in
pertinent listing standards of the NYSE as in effect from time
to time. The NYSE’s listing standards require that all
listed companies have a majority of independent directors. For a
director to be “independent” under the NYSE listing
standards, the board of directors of a listed company must
affirmatively determine that the director has no material
relationship with the company, or its subsidiaries or
affiliates, either directly or as a partner, shareholder or
officer of an organization that has a relationship with the
company or its subsidiaries or affiliates. In accordance with
the NYSE listing standards, the Board has affirmatively
determined that each of the Board’s nominees, other than
Mr. Seymour, have no material relationships with the
Company, either directly or as a partner, shareholder or officer
of an organization that has a relationship with the Company.
Additionally, each of the Board’s nominees, other than
Mr. Seymour, has been determined to be
“independent” under the following NYSE listing
standards, which provide that a director is not independent if:
| • | the director is, or has been within the last three years, an employee of the Company, or an immediate family member is, or has been within the last three years, an executive officer, of the Company; |
10
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| • | the director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service); | |
| • | (a) the director is a current partner or employee of a firm that is the Company’s internal or external auditor; (b) the director has an immediate family member who is a current partner of such a firm; (c) the director has an immediate family member who is a current employee of such a firm and personally works on the Company’s audit; or (d) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the Company’s audit within that time; | |
| • | the director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee; or | |
| • | the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues. |
Board
Committees
The Board maintains three standing committees: Audit Committee;
Corporate Governance & Nominating Committee; and the
Organization & Compensation Committee
(“Compensation Committee”). In addition, a CEO Search
Committee, Pricing Committee, and Special Committee were
established as special committees. Assignments to, and chairs
of, the committees are recommended by the Corporate
Governance & Nominating Committee and approved by the
Board. All committees report on their activities to the Board.
Each standing committee operates under a charter approved by the
Board. The charters for each of the standing committees are
posted on the Company’s web site at www.GenCorp.com
and in print to any shareholder or interested party who
requests them by writing to Secretary, GenCorp Inc.,
P.O. Box 537012, Sacramento, California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742).
The following table provides the membership and total number of
meetings held by each standing committee of the Board in fiscal
year 2009:
|
Corporate |
|||||||||
|
Governance & |
Organization & |
||||||||
| Name | Audit | Nominating | Compensation | ||||||
|
Thomas A. Corcoran
|
X | ||||||||
|
James R. Henderson
|
X* | ||||||||
|
Warren G. Lichtenstein
|
X | ||||||||
|
David A. Lorber
|
X | X* | |||||||
|
James H. Perry
|
X* | X | |||||||
|
Martin Turchin
|
X | X | |||||||
|
Robert C. Woods
|
X | X | |||||||
|
Total meetings in fiscal year 2009
|
6 | 3 | 7 | ||||||
| * | Committee Chairperson |
11
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The Audit Committee is a separately designated standing
committee established in accordance with
Section 3(a)(58)(A) of the Exchange Act. The Board has
determined that each member of the Audit Committee meets all
applicable independence and financial literacy requirements
under the NYSE listing standards. The Board has also determined
that Mr. Perry is an “audit committee financial
expert” under the applicable rules promulgated pursuant to
the Exchange Act. The Audit Committee reviews and evaluates the
scope of the audits to be performed by, the adequacy of services
performed by, and the fees and compensation of, the independent
auditors. The Audit Committee also reviews the Company’s
audited financial statements with management and with the
Company’s independent auditors and recommends to the Board
to include the audited financial statements in the Annual Report
on
Form 10-K;
approves in advance all audit and permitted non-audit services
to be provided by the independent auditors; reviews and
considers matters that may have a bearing upon continuing
auditor independence; prepares the report of the Audit Committee
to be included in the Company’s proxy statement; appoints
the independent auditors to examine the consolidated financial
statements of the Company; reviews and evaluates the scope and
appropriateness of the Company’s internal audit function,
internal audit plans and system of internal controls; reviews
and evaluates the appropriateness of the Company’s
selection or application of accounting principles and practices
and financial reporting; receives periodic reports from the
internal audit and law departments; and reviews and oversees the
Company’s compliance with legal and regulatory requirements.
The Corporate Governance Committee periodically reviews and
makes recommendations to the Board concerning the criteria for
selection and retention of Directors, the composition of the
Board (including the Chairman of the Board), the structure and
function of Board committees, and the retirement policy of
Directors. The Corporate Governance Committee also assists in
identifying, and recommends to the Board, qualified candidates
to serve as Directors of the Company and considers and makes
recommendations to the Board concerning Director nominations
submitted by shareholders. The Corporate Governance Committee
also periodically reviews and advises the Board regarding
significant matters of public policy, including proposed actions
by foreign and domestic governments that may significantly
affect the Company; reviews and advises the Board regarding
adoption or amendment of major Company policies and programs
relating to matters of public policy; monitors the proposed
adoption or amendment of significant environmental legislation
and regulations and advises the Board regarding the impact such
proposals may have upon the Company and, where appropriate, the
nature of the Company’s response thereto; periodically
reviews and advises the Board regarding the status of the
Company’s environmental policies and performance under its
environmental compliance programs; and periodically reviews and
reports to the Board regarding the status of, and estimated
liabilities for, environmental remediation. The Board has
determined that each member of the Corporate Governance
Committee meets all applicable independence requirements under
the NYSE listing standards.
The Compensation Committee advises and recommends to the
independent Directors the total compensation of the President
and CEO. In addition, the Compensation Committee, with the
counsel of the CEO, considers and establishes base pay and
incentive bonuses for the other executive officers of the
Company. The Compensation Committee also administers the
Company’s deferred compensation plan, the 2009 Incentive
Plan and the GenCorp 1999 Equity and Performance Incentive Plan
(the “1999 Incentive Plan”). The Compensation
Committee periodically reviews the organization of the Company
and its management, including major changes in the organization
of the Company and the responsibility of management as proposed
by the CEO; monitors executive development and succession
planning; reviews the effectiveness and performance of senior
management and makes recommendations to the Board concerning the
appointment and removal of officers; periodically reviews the
compensation philosophy, policies and practices of the Company
and makes recommendations to the Board concerning major changes,
as appropriate; annually reviews changes in the Company’s
employee benefit, savings and retirement plans and reports
thereon to the Board; and approves, and in some cases recommends
to the Board for approval, the compensation of officers, and
executives of the Company. The Compensation
12
Table of Contents
Committee also reviews and makes recommendations to the Board
regarding the compensation and benefits for Directors.
From time to time, the Board forms special committees when
specific matters need to be addressed. During fiscal year 2008,
a CEO Search Committee was established to identify and select a
new CEO, consisting of Messrs. Corcoran, Lichtenstein, and
Woods, with Mr. Lichtenstein serving as the Chairman of the
committee. During fiscal year 2009, the CEO Search Committee
continued to interview and evaluate candidates presented by
Korn/Ferry International. In December 2009, the CEO Search
Committee recommended to the full Board the appointment of
Mr. Seymour as CEO of the Company. In December 2009, the
Board authorized the Compensation Committee to negotiate an
employment agreement with Mr. Seymour. After extensive
negotiations, on an arms-length basis, with Mr. Seymour,
and upon the recommendation of the CEO Search Committee and
Compensation Committee, in January 2010 the Board unanimously
approved the terms of the employment agreement with
Mr. Seymour to serve as the President and CEO of the
Company.
Also during fiscal year 2009, a Pricing Committee and Special
Committee of the Board were established in connection with the
Company’s debt refinancing efforts.
Director
Nominations
The Corporate Governance Committee identifies potential director
candidates through a variety of means, including recommendations
from members of the Corporate Governance Committee, the Board,
management and shareholders. The Corporate Governance Committee
also may retain the services of a consultant to assist in
identifying candidates. The Corporate Governance Committee will
consider nominations submitted by shareholders. A shareholder
who would like to recommend a nominee should write to the
Chairman of the Corporate Governance Committee,
c/o Secretary,
GenCorp Inc., P.O. Box 537012, Sacramento, California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742). Any such recommendation must
include (i) the name and address of the candidate;
(ii) a brief biographical description, including his or her
occupation for at least the last five years, and a statement of
the qualifications of the candidate; and (iii) the
candidate’s signed consent to serve as a Director if
elected and to be named in the proxy statement.
Such nominations must be received by the Chairman of the
Corporate Governance Committee no later than
December 1st immediately preceding the date of the
annual meeting of shareholders at which the nominee is to be
considered for election. Since the date of the Company’s
2009 proxy statement, there have been no material changes to the
procedures by which shareholders of the Company may recommend
nominees to the Board.
The Corporate Governance Committee seeks to create a Board that
is, as a whole, strong in its collective knowledge and diversity
of skills and experience and background with respect to
accounting and finance, management and leadership, business
judgment, industry knowledge and corporate governance. When the
Corporate Governance Committee reviews a potential new
candidate, it looks specifically at the candidate’s
qualifications in light of the needs of the Board and the
Company at that time, given the then-current mix of Director
attributes.
Communications
with Directors
Shareholders and other interested parties may communicate with
the Board or individual Directors by mail addressed to: Chairman
of the Corporate Governance Committee,
c/o Secretary,
GenCorp Inc., P.O. Box 537012, Sacramento, California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742). The Secretary may initially
review communications to the Board or individual Directors and
transmit a summary to the Board or individual Directors, but has
discretion to exclude from transmittal any communications that
are, in the reasonable judgment of the Secretary, inappropriate
for submission to the intended recipient(s). Examples of
communications that
13
Table of Contents
would be considered inappropriate for submission to the Board or
a Director include, without limitation, customer complaints,
solicitations, commercial advertisements, communications that do
not relate directly or indirectly to the Company’s business
or communications that relate to improper or irrelevant topics.
Compensation
Committee Interlocks and Insider Participation
The Compensation Committee is composed entirely of non-employee
independent Directors. As of November 30, 2009, the members
of the Compensation Committee included David A. Lorber
(Chairman), Thomas A. Corcoran, Warren G. Lichtenstein and James
H. Perry. All non-employee independent Directors participate in
decisions regarding the compensation of the President and CEO.
None of the Company’s executive officers serve as a member
of the Board or compensation committee of any entity that has
one or more of its executive officers serving as a member of the
Company’s Compensation Committee. In addition, none of the
Company’s executive officers serve as a member of the
compensation committee of any entity that has one or more of its
executive officers serving as a member of the Company’s
Board.
Director
Compensation
The compensation of the Company’s non-employee Directors is
determined by the Board upon the recommendations made by the
Compensation Committee.
Annual
Cash Compensation
Under our Director compensation program in effect for fiscal
year 2009, each non-employee Director received an annual
retainer fee of $50,000. The Chairman of the Board receives an
annual retainer fee of $104,000. In addition, in fiscal year
2009 each non-employee Director received $4,000 for each
Committee membership. Non-employee Directors who served as
Chairperson of a Committee also received an additional annual
fee of $8,000 with the exception of the Chairman of the Audit
Committee who received $15,000.
Equity
Grants
All non-employee Directors receive an annual grant of restricted
shares of Common Stock under the 1999 Incentive Plan, which
expired in August 2009, or the 2009 Incentive Plan as
applicable, typically in March. In March 2009, each non-employee
Director then in office received a grant of 1,750 restricted
shares, with the exception of the Chairman of the Board, which
received 3,500 restricted shares. Provided that the grantee
remains in continuous service as a Director of the Company, the
restricted shares vest and become non-forfeitable on the third
anniversary of the grant. Non-employee Directors also receive a
one-time award of 500 restricted shares of Common Stock as part
of their initial election to the Board. All shares may be voted,
but ownership may not be transferred until such shares are
vested. Unless otherwise approved by the Board, unvested shares
will be forfeited in the event of a voluntary resignation or
refusal to stand for re-election.
All non-employee Directors receive an annual grant of 6,000
stock appreciation rights (“SARs”) or stock options at
the Board’s discretion. The Chairman of the Board receives
12,000 SARs or stock options. In March 2009, each non-employee
Director then in office received a grant of 6,000 SARs and the
Chairman of the Board received 12,000 SARs. Special grants of
SARs or stock options may be made from time to time at the
recommendation of the Compensation Committee and approval from
the Board. In addition, in October 2009 each non-employee
Director received 12,000 SARs. Fifty percent of SARs vest six
months from the date of grant with the remaining SARs vesting
one year from the date of grant. All SARs have a ten-year term,
under the 1999 Plan and a seven-year term under the 2009
Incentive Plan.
14
Table of Contents
Equity
Ownership Guidelines for Non-employee Directors
In October 2007, the Board adopted equity ownership guidelines
under which non-employee Directors are required to own equity in
the Company in an amount equal to $150,000. In calculating the
amount of equity owned by a Director, the Board looks at the
value of Common Stock owned by such Director (restricted stock
and stock owned outright), the value of any phantom stock owned
by such Director as part of the Director Deferred Compensation
Plan, and the value of any vested “in the money”
options or SARs (i.e. market value of Company stock in excess of
the strike price for the stock option or SAR). Directors have
five years to meet the thresholds set forth in these equity
ownership guidelines. The Board reviews these guidelines
periodically, and considers adjustments when appropriate,
including adjustments for material fluctuations in the
Company’s stock price. The following table shows the
current status of equity ownership for each non-employee
Director as of November 30, 2009.
|
Value of Equity |
|||||||||||||||
| Name | Ownership(*) | Date of Election | Years as a Director | ||||||||||||
|
Thomas A. Corcoran
|
$ | 41,776 | 09/24/08 | 1 | |||||||||||
|
James R. Henderson
|
91,095 | 03/05/08 | 2 | ||||||||||||
|
Warren G. Lichtenstein
|
27,498,190 | 03/05/08 | 2 | ||||||||||||
|
David A. Lorber
|
55,310 | 03/31/06 | 4 | ||||||||||||
|
James H. Perry
|
47,500 | 05/16/08 | 1 | ||||||||||||
|
Martin Turchin
|
47,500 | 03/05/08 | 2 | ||||||||||||
|
Robert C. Woods
|
55,310 | 03/31/06 | 4 | ||||||||||||
| * | Value is based on the stock price on November 30, 2009 of $7.81. |
Director
Deferred Compensation Plan
Directors annually may elect to defer all or a percentage of
their cash compensation pursuant to the Deferred Compensation
Plan for Non-employee Directors. The plan is unfunded, and
deferred amounts if any, are deemed to be invested in, at the
election of the Director, phantom shares in the GenCorp Stock
Fund, a Standard & Poor’s 500 index fund, or a
cash deposit program at the election of the Director. Deferred
amounts and earnings thereon are payable at or commencing at a
future date, in either a lump sum or installments as elected by
the Director at the time of deferral. No deferrals were elected
for fiscal year 2009. In addition, the GenCorp Stock Fund was
eliminated as an investment option in 2009.
Other
The GenCorp Foundation matches employee and Director gifts to
accredited, non-profit colleges, universities, secondary and
elementary public or private schools located in the United
States. Gifts made were matched dollar for dollar up to $7,500
per calendar year per donor until April 1, 2009, when the
maximum match per donor per calendar year was changed to $3,000.
Non-employee Directors may also elect to participate in the same
health benefits programs at the same cost as are offered to all
of the Company’s employees. One Director participated in
this plan in fiscal 2009. The Company also reimburses Directors
for actual travel and other expenses incurred in attending Board
and Committee meetings.
15
Table of Contents
2009
DIRECTOR COMPENSATION TABLE
The following table sets forth information regarding
compensation for fiscal year 2009 for each of the individuals
who served as a non-employee Director for the Company in fiscal
year 2009.
|
Fees Earned or |
Stock |
Option/SARs |
All Other |
||||||||||||||||||||||
|
Paid in Cash |
Awards |
Awards |
Compensation |
Total |
|||||||||||||||||||||
| Name | ($)(1) | ($)(2)(3) | ($)(2)(3)(4) | ($) | ($) | ||||||||||||||||||||
|
Thomas A. Corcoran
|
$ | 54,000 | $ | 4,339 | $ | 52,152 | $ | — | $ | 110,491 | |||||||||||||||
|
James R. Henderson
|
116,000 | 15,279 | 170,571 | — | 301,850 | ||||||||||||||||||||
|
Warren G. Lichtenstein
|
54,000 | 9,403 | 117,600 | — | 181,003 | ||||||||||||||||||||
|
David A. Lorber
|
66,000 | 7,638 | 126,933 | — | 200,571 | ||||||||||||||||||||
|
James H. Perry
|
73,000 | 7,268 | 117,600 | — | 197,868 | ||||||||||||||||||||
|
Martin
Turchin(5)
|
58,000 | 9,403 | 117,600 | 3,000 | 188,003 | ||||||||||||||||||||
|
Robert C. Woods
|
58,000 | 7,638 | 126,933 | — | 192,571 | ||||||||||||||||||||
| (1) | The amounts reported in this column for each non-employee Director reflect the dollar amount of the Board and Committee fees paid in fiscal year 2009. | |
| (2) | The amounts reported in these columns for each non-employee Director reflect the compensation costs for financial reporting purposes for fiscal year 2000 without the affects of estimated forfeitures. A description of these awards can be found under the section entitled Long-Term Incentives (Equity-Based Compensation) on page 27. A discussion of the assumptions used in calculating these values may be found in Note 9(c) in the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2009. |
16
Table of Contents
| (3) | The following table shows the shares of restricted stock and SARs granted during fiscal year 2009 to each non-employee Director who served as a Director in fiscal year 2009, and the aggregate grant date fair value for each award. A discussion of the assumptions used in calculating these values may be found in Note 9(c) in the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2009. |
|
Grant Date |
||||||||||||||||||||
|
Grant |
Stock
Awards(A) |
SARs Awards |
Fair Value |
|||||||||||||||||
| Name | Date | (#) | (#) | ($) | ||||||||||||||||
|
Thomas A. Corcoran
|
3-25-09 | 1,750 | $ | 4,183 | ||||||||||||||||
| 3-25-09 | 6,000(B | ) | 9,840 | |||||||||||||||||
| 10-06-09 | 12,000(C | ) | 46,320 | |||||||||||||||||
|
James R. Henderson
|
3-25-09 | 3,500 | 8,365 | |||||||||||||||||
| 3-25-09 | 12,000(B | ) | 19,680 | |||||||||||||||||
| 10-06-09 | 12,000(C | ) | 46,320 | |||||||||||||||||
|
Warren G. Lichtenstein
|
3-25-09 | 1,750 | 4,183 | |||||||||||||||||
| 3-25-09 | 6,000(B | ) | 9,840 | |||||||||||||||||
| 10-06-09 | 12,000(C | ) | 46,320 | |||||||||||||||||
|
David A. Lorber
|
3-25-09 | 1,750 | 4,183 | |||||||||||||||||
| 3-25-09 | 6,000(B | ) | 9,840 | |||||||||||||||||
| 10-06-09 | 12,000(C | ) | 46,320 | |||||||||||||||||
|
James H. Perry
|
3-25-09 | 1,750 | 4,183 | |||||||||||||||||
| 3-25-09 | 6,000(B | ) | 9,840 | |||||||||||||||||
| 10-06-09 | 12,000(C | ) | 46,320 | |||||||||||||||||
|
Martin Turchin
|
3-25-09 | 1,750 | 4,183 | |||||||||||||||||
| 3-25-09 | 6,000(B | ) | 9,840 | |||||||||||||||||
| 10-06-09 | 12,000(C | ) | 46,320 | |||||||||||||||||
|
Robert C. Woods
|
3-25-09 | 1,750 | 4,183 | |||||||||||||||||
| 3-25-09 | 6,000(B | ) | 9,840 | |||||||||||||||||
| 10-06-09 | 12,000(C | ) | 46,320 | |||||||||||||||||
| (A) | Shares of restricted stock vest in full on the third anniversary of the grant date if the Director is then serving on the Board. |
| (B) | 50% of such SARs vest six months from the date of grant with the remaining SARs vesting one year from date of grant if the Director is then serving on the Board. All such SARs were granted under the 1999 Incentive Plan and have a ten-year term. |
| (C) | 50% of such SARs vest six months from the date of grant with the remaining SARs vesting one year from date of grant if the Director is then serving on the Board. All such SARs were granted under the 2009 Incentive Plan and have a seven-year term. |
17
Table of Contents
| (4) | The following table shows the amount of outstanding and unexercised SARs awards as of November 30, 2009 for each non-employee Director who served as a Director in fiscal year 2009. No Director held stock options as of November 30, 2009. |
|
Outstanding and |
|||||
|
Unexercised |
|||||
| Name | SARs | ||||
|
Thomas A. Corcoran
|
21,000 | ||||
|
James R. Henderson
|
48,000 | ||||
|
Warren G. Lichtenstein
|
36,000 | ||||
|
David A. Lorber
|
41,000 | ||||
|
James H. Perry
|
36,000 | ||||
|
Martin Turchin
|
36,000 | ||||
|
Robert C. Woods
|
41,000 | ||||
| (5) | All other compensation for Mr. Turchin represents matching donations made by the GenCorp Foundation for gifts made in fiscal year 2009. |
18
Table of Contents
Security
Ownership of Officers and Directors
The following table lists share ownership of Common Stock by the
Company’s current Directors and the Named Executive
Officers, as well as the number of shares beneficially owned by
all of the current Directors and executive officers as a group.
Unless otherwise indicated, share ownership is direct. Amounts
owned reflect ownership as of February 19, 2010 (except for
Messrs. Whitney and Lau, where total amounts owned are as
of the date they terminated employment with the Company).
|
Amount and Nature of |
||||||||
| Beneficial Owner | Beneficial Ownership(1)(2) | Percent of Class | ||||||
|
Directors
|
||||||||
|
Thomas A. Corcoran
|
3,125 | * | ||||||
|
James R.
Henderson(3)
|
7,500 | * | ||||||
|
Warren G.
Lichtenstein(4)
|
4,059,737 | 6.9% | ||||||
|
David A. Lorber
|
5,000 | * | ||||||
|
James H. Perry
|
4,000 | * | ||||||
|
Martin
Turchin(5)
|
15,000 | * | ||||||
|
Robert C. Woods
|
5,000 | * | ||||||
|
Executive Officers
|
||||||||
|
J. Scott Neish
|
28,418 | * | ||||||
|
Kathleen E.
Redd(6)
|
35,920 | * | ||||||
|
Chris W. Conley
|
58,127 | * | ||||||
|
Robert E. Shenton
|
13,678 | * | ||||||
|
Former Executive Officers
|
||||||||
|
Mark A. Whitney
|
35,422 | * | ||||||
|
William M. Lau
|
11,216 | * | ||||||
|
All Directors and Executive Officers as a group
(13 persons)
|
4,272,068 | 7.3% | ||||||
| * | Less than 1.0% |
| (1) | Includes restricted shares granted under the 1999 Incentive Plan, the 2009 Incentive Plan, and shares owned outright. The number of shares beneficially owned by a current or former officer of the Company includes shares credited in the GenCorp Retirement Savings Plan as of February 19, 2010, (except for Messrs. Whitney and Lau, where amounts are as of the date they terminated employment with the Company). |
| (2) | Includes shares issuable upon the exercise of stock options that may be exercised within 60 days of January 6, 2010 as follows: Mr. Neish — 2,200 shares, Ms. Redd — 3,999 shares, and Mr. Conley — 27,000 shares, and all current executive officers as a group — 50,199 shares. No Director held outstanding stock options. |
| (3) | As a member of a “group” for the purposes of Rule 13d-5(b)(1) of the Exchange Act, Mr. Henderson may be deemed a beneficial owner of all 3,714,813 shares of Common Stock owned by SPII. |
| (4) | Includes shares beneficially owned by Messrs. Lichtenstein and Henderson and various affiliated entities, including SPII, SPH, and Steel Partners. All of the foregoing information is according to Amendment No. 19 to a Schedule 13D dated February 18, 2010, and filed with the SEC on February 19, 2010. |
19
Table of Contents
| (5) | 7,500 shares are held in the name of Martin Turchin IRA Rollover, 1,500 shares are held in the name of Peter Turchin Trust, 1,000 shares are held in the name of Coulter Turchin Trust, and 1,000 shares are held in the name of Tyler Turchin Trust. |
| (6) | 1,285 shares are held through the Revocable Trust of Paul K. and Kathleen E. Redd. |
Code of
Ethics and Corporate Governance Guidelines
The Company has adopted a code of ethics known as the Code of
Business Conduct that applies to the Company’s employees
including the principal executive officer and principal
financial officer. Copies of the Code of Business Conduct and
the Company’s Corporate Governance Guidelines are available
on the Company’s web site at www.GenCorp.com (copies
are available in print to any shareholder or other interested
person who requests them by writing to Secretary, GenCorp Inc.,
P.O. Box 537012, Sacramento, California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742)).
Related
Person Transaction Policy
The Company has a written policy for the review of transactions
in which the Company is a participant, the amount exceeded the
lesser of $120,000 or 1% of the average of the Company’s
total assets at year end for the last two completed fiscal
years, and in which any of the Company’s Directors or
executive officers, or their immediate family members, had a
direct or indirect material interest. Any such related party
transaction was to be for the benefit of the Company and upon
terms no less favorable to the Company than if the related party
transaction was to an unrelated party. The Company’s Board
is responsible for approving any such transactions and the
Company’s CEO is responsible for maintaining a list of all
existing related party transactions.
The Company had no transaction, nor are there any currently
proposed transactions, in which the Company was or is to be a
participant, where the amount involved exceeded the lesser of
$120,000 or 1% of the average of the Company’s total assets
at the year end for the last two completed fiscal years, and any
Director, executive officer or any of their family members had a
material direct or indirect interest reportable under applicable
SEC rules or that required approval of the Board under the
Company’s related party transaction policy.
20
Table of Contents
REPORT OF
THE AUDIT COMMITTEE
The Audit Committee assists the Board of Directors in fulfilling
its responsibilities for general oversight of (i) the
quality and integrity of the Company’s financial
statements, (ii) the performance of the Company’s
financial reporting process, internal control system, internal
audit function, (iii) the Company’s compliance with
legal and regulatory requirements, all areas for which
management has the primary responsibility, and (iv) the
independent auditors’ performance, qualifications and
independence. The Audit Committee manages the Company’s
relationship with its independent auditors, who report directly
to the Audit Committee. The Audit Committee has the authority to
obtain advice and assistance from outside legal, accounting or
other advisors as the Audit Committee deems necessary to carry
out its duties, with funding from the Company for such advice
and assistance. Management is primarily responsible for
establishing and maintaining the Company’s system of
internal controls and preparing financial statements in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”).
In fulfilling its responsibilities, the Audit Committee reviewed
and discussed with management the audited financial statements
in the Annual Report including a discussion of the
reasonableness of significant judgments and the clarity of
disclosures in the financial statements.
The Audit Committee reviewed and discussed the Company’s
financial statements with the independent auditors, who are
responsible for expressing an opinion on the conformity of those
audited financial statements with GAAP, and discussed such other
matters as are required to be discussed with the Audit Committee
under generally accepted auditing standards. In addition, the
Audit Committee discussed with the independent auditors matters
required to be discussed by Statement on Auditing Standards
No. 61, as amended. PwC also provided to the Audit
Committee the written disclosures and the letter required by
applicable requirements of the Public Company Accounting
Oversight Board regarding communications with the Audit
Committee concerning independence, and the Audit Committee
discussed with PwC their independence from management and the
Company.
The Audit Committee also reviewed with management and the
independent auditors the preparation of the financial statements
and related disclosures contained in the Company’s earnings
announcements and quarterly reports.
The Audit Committee discussed with the Company’s internal
and independent auditors the overall scope and plans for their
respective audits. The Audit Committee met with the internal and
independent auditors, with and without management present, to
discuss the results of their examinations, their evaluations of
the Company’s internal controls, and the overall quality of
the Company’s financial reporting. The Audit Committee also
received PwC’s report on the Company’s internal
controls over financial reporting. The Company outlined these
reports in its Annual Report on
Form 10-K
for the fiscal year ended November 30, 2009.
The Audit Committee met six times during fiscal year 2009.
In reliance on the reviews and discussions referred to in the
foregoing paragraphs, the Audit Committee recommended to the
Board of Directors (and the Board approved) that the audited
financial statements be included in the Company’s Annual
Report on
Form 10-K
for the fiscal year ended November 30, 2009 for filing with
the SEC. The Audit Committee appointed PwC as the Company’s
independent registered public accounting firm for fiscal year
2010.
Submitted by the Audit Committee,
James H. Perry, Chairman
David A. Lorber
Martin Turchin
Robert C. Woods
January 26, 2010
21
Table of Contents
ORGANIZATION &
COMPENSATION COMMITTEE REPORT
The Organization & Compensation Committee has reviewed
and discussed the Compensation Discussion and Analysis required
by Item 402(b) of
Regulation S-K
with management and, based on such review and discussion, the
Organization & Compensation Committee recommended to
the Board that the Compensation Discussion and Analysis be
included in this Proxy Statement. The Board has approved that
recommendation.
Submitted by the Organization & Compensation Committee,
David A. Lorber, Chairman
Thomas A. Corcoran
Warren G. Lichtenstein
James H. Perry
Thomas A. Corcoran
Warren G. Lichtenstein
James H. Perry
January 26, 2010
EXECUTIVE
COMPENSATION
Executive
Officers of the Registrant
The following information is given as of January 20, 2010
and, except as otherwise indicated, each individual has held the
same office during the preceding five-year period.
| Name | Title | Other Business Experience | Age | |||||
|
Scott J. Seymour
|
President and Chief Executive Officer of the Company and President of Aerojet (since January 2010) | Consultant to Northrop Grumman Corporation (“Northrop”) March 2008 — January 2010; Corporate Vice President and President of Integrated Systems Sector of Northrop 2002 — March 2008; Vice President, Air Combat Systems of Northrop 1998 — 2001; Vice President and B-2 Program Manager of Northrop 1996 — 1998; and Vice President, Palmdale Operations, of Northrop 1993 — 1996. | 59 | |||||
|
Kathleen E. Redd
|
Vice President, Chief Financial Officer (since January 2009), and Secretary (since February 2009) | Vice President, Controller and Acting Chief Financial Officer September 2008 — January 2009; Vice President, Finance 2006 — 2008; Assistant Corporate Controller, 2002 — 2006; Acting Vice President Controller GDX Automotive, 2003 — 2004 (concurrent with Assistant Corporate Controller position during divestiture activities); Vice President, Finance, for Grass Valley Group, 2001 — 2002; Vice President, Finance for JOMED, Inc., 2000 — 2001; Controller for EndoSonics Corporation, 1996 — 2000. | 48 | |||||
22
Table of Contents
| Name | Title | Other Business Experience | Age | |||||
|
Chris W. Conley
|
Vice President Environmental, Health and Safety (since October 1999) | Director Environmental, Health and Safety, March 1996 — October 1999; Environmental Manager, 1994 — 1996. | 51 | |||||
|
Robert E. Shenton
|
Vice President and Chief Operating Officer of Aerojet-General Corporation (since February 2008) | Vice President Operations and Tactical Programs, May 2000 — February 2008. | 54 | |||||
The Company’s executive officers generally hold terms of
office of one year
and/or until
their successors are elected.
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
and Compensation Objectives
Our compensation program is designed to support our business
goals and promote both short-term and long-term growth. In this
section of the Proxy Statement, we explain how our compensation
program is designed and operates with respect to our Named
Executive Officers. The 2009 compensation program covered our
former Interim President and CEO, CFO and Secretary, two of our
most highly compensated Named Executive Officers who were
officers as of the end of fiscal year 2009, plus our former
Senior Vice President, General Counsel and Secretary, and our
former Vice President, Treasurer who would have been Named
Executive Officers had they been officers of the Company at the
end of fiscal year 2009. The 2009 compensation program also
covered other key employees of the Company.
We have designed our executive compensation program, under the
direction of the Compensation Committee of our Board, to attract
and retain highly qualified executive officers and directly link
pay to performance. The Company’s strategic goals include
improving the Company’s financial performance. Accordingly,
as discussed in more detail below, the Compensation Committee
set performance targets for annual cash bonuses for 2009 for our
officers related to contract profit, cash flow, pre-tax
earnings, awards, and certain other goals that include
individual performance and accomplishments of a particular
executive.
The Compensation Committee determines all matters of executive
compensation and benefits, although our President and CEO
provide input and initial recommendations to the Compensation
Committee with respect to the Named Executive Officers other
than the President and CEO. Our former Interim President and
CEO, J. Scott Neish, and our Vice President and CFO, Kathleen E.
Redd, provided input to the Compensation Committee with respect
to the 2009 compensation program. The Compensation Committee
advises and makes compensation recommendations to the
independent members of the Board with respect to compensation
for the President and CEO.
The objectives of our executive compensation program are as
follows:
| • | Performance Incentives — provides a compensation structure under which a meaningful portion of total compensation is based on achievement of performance goals; | |
| • | Competitive Compensation — provides compensation that is competitive with compensation for executive officers providing comparable services, taking into account our size and complexity and the markets we serve; | |
| • | Retention Incentives — provides incentives for long-term continued employment with us; and | |
| • | Stakeholder Incentives — promotes an ownership interest that aligns management and shareholders. In this regard, the Compensation Committee approved share ownership guidelines that apply to our Named Executive Officers, where over a period of time, each Named Executive Officer is expected |
23
Table of Contents
| to own shares of our Common Stock equal in total market value to a designated multiple of such executive officer’s annual salary. |
Compensation
Elements
The Compensation Committee sets base salaries, target annual
cash incentive levels and target annual long-term incentive
award values generally at the
50th
percentile of competitive market levels as set forth in broad
based industry surveys. The Compensation Committee does not
identify specific companies for comparative purposes and no
specific element of compensation is tied to benchmarking. In
assessing competitive overall compensation, the Compensation
Committee reviewed a combination of relevant data acquired from
outside sources including Towers Watson (executive compensation
database for annual revenue scope of less than $1 billion),
Hewitt & Associates (executive survey for annual
revenue scope of $500 million to $1 billion), and
Mercer Human Resource Consulting (executive survey for annual
revenue scope of $500 million to $1 billion).
The compensation program for executive officers has historically
consisted of the following principal elements:
| • | Short-term compensation, including base salaries and annual cash incentive (bonus) awards; | |
| • | Long-term compensation equity incentive awards, including restricted stock, stock options and cash-settled SARs; and | |
| • | In-service and post-retirement/employment benefits — Pension and 401(k) Savings Plans. |
The Committee believes that these elements of compensation
create a flexible package that reflects the long-term nature of
the Company’s businesses and rewards both short and
long-term performance of the Company and individual in
accordance with the objectives of the compensation program.
Short-term
Compensation
Base
Salaries
Base salaries are used to provide a fixed amount of compensation
for the executive’s regular work. Each year, the
Compensation Committee holds a meeting (typically in January),
where it reviews and, in some cases, makes adjustments to base
salaries. Typically, the effective date of merit increases in
base salaries is in April of each year. Base salary increases
can also occur upon an executive’s promotion. Any base
salary increase for the Company’s executive officers must
be approved by the Compensation Committee. In determining the
amount of any increases in salaries, the Compensation Committee
(i) compares current cash compensation with compensation
for relevant executive positions set forth in broad-based
industry studies and data described under Compensation
Elements, (ii) assesses the individual performance of
each of the executives, and (iii) takes into account the
timing and amount of the last salary increase for each of the
executives.
Annual
Cash Incentive Program
The primary objective of our annual cash incentive program is to
reward fiscal year performance and achievement of designated
business strategic goals to provide competitive compensation to
our senior management team. To those ends, the Compensation
Committee sets performance targets such that total cash
compensation (base salary plus annual cash bonus) will be within
a competitive range of total cash compensation (generally at the
50th percentile level for comparable executives) if performance
targets are met. In addition, our senior management team has
individual performance targets. The annual cash incentive
program follows our “pay for performance” philosophy.
If individual or business targets are met, cash bonuses are
paid; if minimum targets are not met, we will pay less or
nothing at all. If targets
24
Table of Contents
are exceeded, the Compensation Committee has discretion to
adjust payments to the executives. The Compensation Committee
has discretion to increase, reduce or eliminate payments.
The Compensation Committee set performance targets for annual
cash incentive program for our Named Executive Officers for
fiscal year 2009. These targets consist of contract profit, cash
flow, pre-tax earnings, contract awards, and certain other
individual goals.
In the first quarter of each fiscal year, the Compensation
Committee approves the annual cash incentive program for the
executive officers of the Company. The target annual incentive
bonus is established through an analysis of compensation for
other relevant executive positions as noted in the broad-based
studies described under Compensation Elements and is
intended to provide a competitive level of compensation when the
executives achieve their performance objectives. Combined
salaries and target bonus levels, on an aggregate basis, are
intended to approximate the
50th
percentile level set forth in the broad-based studies. In the
first quarter of each fiscal year, with the input of our
President and CEO, CFO and Vice President, Human Resources, the
Compensation Committee determines the following:
| • | sets the overall Company and performance objectives and payout ranges for the fiscal year; | |
| • | sets performance measures for the fiscal year; | |
| • | establishes a target, threshold, and maximum bonus opportunity for each executive officer; and | |
| • | measures performance and determines awards for the prior fiscal year. |
Annual cash incentive bonuses are paid at the beginning of each
fiscal year for the prior fiscal year’s performance.
Bonuses paid are based upon the Compensation Committee’s
(with input from the President and CEO and CFO) assessment of
actual performance (individually and Company-wide) against
pre-established Company and business segment performance
objectives to determine the appropriate amount payable with
respect to the applicable target bonus opportunity. The
Compensation Committee has discretion to increase, reduce or
eliminate payments.
The Compensation Committee tailors both performance measures and
targets in order to most accurately approximate success criteria
for both of our business segments and the Company’s
performance overall. For fiscal year 2009, our current Named
Executive Officers had the opportunity to earn up to the
following percentages of their base salaries if all of their
performance measures were met at the (100%) target levels:
| • | President and CEO* — 125% | |
| • | Business Unit Presidents* — 100% | |
| • | Vice Presidents — up to 50% |
| * | The position of President and CEO and Business Unit President for the Real Estate segment was vacant during fiscal year 2009. Also, the Business Unit President for Aerojet served as our Interim CEO for fiscal year 2009, however, there was no adjustment to his target level bonus opportunity for fiscal year 2009. |
25
Table of Contents
The criteria used in fiscal year 2009 applicable to our Named
Executive Officers were the following:
| Executive Targets |
Target |
|||||||
| (Dollars in millions) | Opportunity | Achievement | ||||||
|
Contract
Profit(1)
|
11.25% | 22.50% | ||||||
|
• Threshold — under
$47.9 — 0%
|
||||||||
|
• Target — $47.9 to
$56.4 — 1% to 100%
|
||||||||
|
• Maximum — $56.5 to
$67.7 — 101% to 200%
|
||||||||
|
Cash
Flow(2)
|
30.00% | 18.00% | ||||||
|
• Threshold — under
$39.8 — 0%
|
||||||||
|
• Target — $39.8 to
$49.8 — 1% to 100%
|
||||||||
|
• Maximum — $49.9 to
$64.7 — 101% to 200%
|
||||||||
|
Pre-tax
Earnings(3)
|
11.25% | 22.50% | ||||||
|
• Threshold — under
$32.0 — 0%
|
||||||||
|
• Target — $32.0 to
$38.0 — 1% to 100%
|
||||||||
|
• Maximum — $38.1 to
$46.0 — 101% to 200%
|
||||||||
|
Awards(4)
|
22.50% | 40.10% | ||||||
|
• Threshold — under
$617.0 — 0%
|
||||||||
|
• Target — $617.0 to
$771.0 — 1% to 100%
|
||||||||
|
• Maximum — $771.1 to
$925.0 — 101% to 200%
|
||||||||
|
Personal
Factors(5)
|
25.00% | 35.00% — 50.00% | ||||||
|
• Threshold — 0 x
multiplier — 0%
|
||||||||
|
• Target — 1 x
multiplier — 1% to 100%
|
||||||||
|
• Maximum — 2 x
multiplier — 101% to 200%
|
||||||||
|
Totals
|
100.00% | 138.10% — 153.10% | ||||||
| (1) | We defined Contract Profit to be net sales recognized for our Aerospace and Defense segment less cost of sales of our Aerospace and Defense segment, exclusive of certain corporate, certain retirement benefit costs and other non-contract related costs. | |
| (2) | We defined Cash Flow to be the Aerospace and Defense segment performance before environmental remediation provision adjustments, retirement benefit plan income and expense and unusual items, further adjusted for depreciation and amortization, capital expenditures, changes in working capital balances and changes in long-term assets and liabilities and certain other adjustments. | |
| (3) | We defined Pre-Tax Earnings to be the Company’s income from continuing operations before income taxes, adjusted further for certain other items. | |
| (4) | We defined Awards to be the amount of money to be received for a contract of our Aerospace and Defense segment that has been directly appropriated by the U.S. Congress or for which a purchase order has been received from a commercial customer. In certain circumstances adjustments may be made for the timing of when Awards are received. | |
| (5) | Personal Factors include individual performance and accomplishments surrounding items which are of operating and/or strategic importance to the Company. |
The fiscal year 2009 cash incentive bonus paid to each of the
Named Executive Officers are shown in the “Non-Equity
Incentive Plan Compensation” column of the Summary
Compensation Table, which follows this Compensation
Discussion and Analysis.
26
Table of Contents
Long-Term
Incentives (Equity-Based Compensation)
The Company, upon the recommendation and approval of the
Compensation Committee, established the performance objectives
and other terms of the Company’s 2009 Long-Term Incentive
Program (the “2009 LTIP”) for executive officers and
other eligible employees of the Company. The 2009 LTIP has a
three year performance period. The Company uses long-term
incentive compensation for executives to reinforce four
strategic objectives:
| • | to focus on the importance of returns to shareholders; | |
| • | to promote the achievement of long-term performance goals; | |
| • | to encourage executive retention; and | |
| • | to promote higher levels of Company stock ownership by executives. |
Historically, the Company has strived to set a sizeable portion
of the Named Executive Officer’s compensation in an
equity-based form. This type of compensation, coupled with the
Company’s share ownership guidelines, will result in the
executives becoming shareholders with considerable personal
financial interest in the fiscal health and performance of the
Company.
The amount of equity-based awards granted to executives has been
determined by subtracting the executive’s annual cash
compensation opportunity from the total targeted annual
compensation that is competitive with the market (generally in
the 50th
percentile range) based on broad based industry studies. The
ultimate value of these equity-based awards has been driven in
part by the executive’s performance in the past fiscal year
and in part by their ability to increase the value of the
Company going forward.
Our equity-based compensation in fiscal year 2009 included
awards of restricted stock and stock options and are described
as follows:
| • | Restricted stock — A grant of restricted stock is an award of shares of Common Stock that typically vests over a two- to five-year period after the grant date (depending upon the vesting conditions set by the Compensation Committee), provided that underlying goals are met in the case of performance-based grants or that the participant remains employed with the Company for the specified amount of time in the case of non-performance time-based grants. Restricted stock awards are designed to attract and retain executives by providing them with some of the benefits associated with stock ownership during the restriction period, while incentivizing them to remain with the Company. During the restricted period, the executives may not sell, transfer, pledge, assign or otherwise convey their restricted stock. However, executives may vote their shares and are entitled to receive dividend payments, if any are made. Executives who voluntarily resign or are terminated for cause prior to the end of the restriction period forfeit their restricted stock unless otherwise determined by the Compensation Committee. | |
| • | Stock options — A grant of stock option awards represents the right to purchase the Company’s stock at a fixed price for a defined period of time. The value of stock options reflect the difference between the value of shares of Common Stock at the time of exercise of the stock options and a predetermined exercise price. Stock options are designed to attract and retain executives by compensating them for increases in shareholder value over time. Stock options are generally exercisable in one-third increments at one year, two years, and three years from the date of grant provided that underlying goals are met in the case of performance-based grants and have a ten-year contractual life if granted under the 1999 Incentive Plan or a seven-year contractual life if granted under the 2009 Incentive Plan. As with restricted stock grants, executives who voluntarily resign or are terminated immediately forfeit all unvested stock options unless otherwise determined by the Compensation Committee. |
27
Table of Contents
In order to promote improvement in the Company’s financial
performance, the restricted stock and stock option grants made
in fiscal year 2009 were performance awards and will vest upon
the achievement of long-term financial performance goals set by
the Compensation Committee. The performance targets for
restricted stock and stock option vesting were revenue growth
and pre-tax earnings as adjusted for certain items with vesting
over 29 months from the date of grant, each with a
weighting of 50%.
A review was conducted by the Compensation Committee in fiscal
year 2009 to determine the appropriate mix of restricted stock
and stock options granted in fiscal year 2009. The split was
approximately one-half stock options and one-half restricted
stock. We believe that this allocation is conducive to creating
a balanced risk and reward profile for our Named Executive
Officers. Stock options, are more sensitive to changing
perceptions in the stock market as well as the Company’s
performance during the life of the stock options. We believe the
risk inherent in stock options and the relative level of
stability implicit in restricted stock appropriately motivates
our Named Executive Officers to achieve financial and operating
goals that are aggressive, but achievable.
Annual restricted stock and stock option grants are typically
made by the Compensation Committee to executives at the
Compensation Committee’s first meeting of the fiscal year,
usually in January or February. However, grants under the 2009
Incentive Plan were not made until August 2009. All such grants
of stock options are made with an exercise price equal to the
fair market value of a share of stock on the date of grant,
which is defined generally as the closing price on the NYSE on
the date of grant.
In order to strengthen the alignment between the interests of
shareholders and the interests of executives of the Company, the
Compensation Committee approved share ownership guidelines that
apply to the Company’s executive officers. Under these
guidelines, each executive officer is expected to have equity in
the Company equal in aggregate market value to a designated
multiple of such officer’s annual salary (CEO —
five times base salary; Senior Vice Presidents and Business Unit
Presidents if applicable — three times base salary;
and Vice Presidents — one times base salary). In
calculating the amount of equity owned by an executive, the
Compensation Committee looks at the value of Company stock owned
by the executive (regardless of whether it is restricted stock
or vested), and the value of any vested “in the money”
stock options or SARs (i.e. market value of stock in excess of
the strike price for the stock option or SAR). Newly appointed
executives are expected to be in compliance with the ownership
guidelines within five years of their appointments. As of
January 6, 2010, because of the significant drop in the
Company’s stock price and the amount of time the Named
Executive Officers have been in his or her position, none of the
Named Executive Officers who are currently employed by the
Company held equity in the Company equal in market value to
these guidelines; however, all of such Named Executive Officers
are in the transition period set forth in these guidelines. The
Compensation Committee reviews these guidelines periodically,
and considers adjustments when appropriate.
Pension
Plans, 401(k) Savings Plan and Benefit Restoration
Plans
Pension
Plans
On November 25, 2008, Company amended the GenCorp
Consolidated Pension Plan (the “Qualified Pension
Plan”), and on December 31, 2008, effective
January 1, 2009, the Company entered into the 2009 Benefits
Restoration Plan for GenCorp Inc. Pension Plan (the “2009
Pension BRP Plan”) to replace the predecessor
plan — The Benefits Restoration Plan for Salaried
Employees of GenCorp Inc. and Certain Subsidiary Companies, as
amended (the “Prior Pension BRP”), in each case to
freeze future benefit accruals. Effective February 1, 2009,
future benefit accruals for all current salaried employees were
discontinued, including the Named Executive Officers under the
Qualified Pension Plan and the 2009 Pension BRP Plan. Effective
July 31, 2009, future benefit accruals for all current
bargaining unit and hourly employees were discontinued. Upon
vesting, no employee will lose their previously earned pension
28
Table of Contents
benefit, which will be paid to the employee upon retirement in
accordance with the terms of these pension plans.
The Named Executive Officers participate in the same
tax-qualified pension plans as other employees. These plans
include the Qualified Pension Plan, a tax-qualified defined
benefit plan, and the 2009 Pension BRP Plan, a non-qualified
defined benefit plan. The purpose of the 2009 Pension BRP Plan
was to restore the pension plan benefits which executives and
other highly compensated management personnel and their
beneficiaries would otherwise lose as a result of the
limitations under Section 401(a)(17) or 415 of the Internal
Revenue Code of 1986, as amended (the “Code”) or any
successor provisions from a tax-qualified pension plan, upon
accrual
and/or
payment of benefits from the Qualified Pension Plan. By
restoring such benefits, the 2009 Pension BRP Plan permits the
total benefits to be provided on the same basis as applicable to
all other employees under the Qualified Pension Plan. Effective
January 1, 2009, obligations with respect to benefits that
were earned or vested under the Prior Pension BRP after
December 31, 2004, and which related to the restoration of
pension plan benefits which executives and their beneficiaries
would otherwise have lost as a result of Code limitations upon
accrual
and/or
payment of benefits from a tax-qualified pension plan, along
with all associated earnings, were transferred to, and will be
maintained under and paid from the 2009 Pension BRP Plan.
Accordingly, only benefits that are exempt from
Section 409A of the Code will be maintained under and paid
from the Prior Pension BRP, in accordance with the terms of the
Prior Pension BRP. There are no employee contributions required
in order to participate in these defined benefit plans.
Eligibility to participate in the 2009 Pension BRP Plan is
designated by the Compensation Committee.
The Qualified Pension Plan includes several formulas for the
determination of benefits. Pension benefits are calculated under
formulas based on compensation and length of service for
salaried employees and under negotiated non-wage based formulas
for bargaining unit and hourly employees. Participants receive
the highest benefit calculated under any of the formulas for
which they are eligible to participate. The formulas applicable
to the Named Executive Officers are the “career average
formula”, the “five-year average compensation
formula”, the “update formula” and the
“final average compensation formula.” These formulas
define compensation to include base salary and annual incentive
(cash bonus) compensation, except for the “final average
compensation formula” which does not include incentive
payments in compensation. Compensation and service earned on or
after February 1, 2009, the pension freeze date applicable
to the Named Executive Officers, is not considered in any of the
benefit formulas.
| • | The “career average formula” provides that for each year of service prior to attainment of 35 years of service the employee will be credited 1.625% of annual compensation up to the Average Social Security Wage Base (“ASSWB”) for such year plus 2.0% of annual compensation in excess of the ASSWB; plus 2.0% of annual compensation after attainment of 35 years of service. | |
| • | The “five-year average compensation formula” is the sum of (A) and (B) where (A) equals the sum of (i) 1.125% of the participant’s highest five-year average compensation up to the ASSWB which is determined as of the earlier of (1) the participant’s termination date or (2) January 31, 2009, and (ii) 1.5% of such five-year average compensation in excess of the ASSWB, which sum is multiplied by the total of such years of service up to 35 years, and (B) equals 1.5% of such five-year average compensation multiplied by the total years of service in excess of 35 years. | |
| • | The “update formula” is the sum of (A) and (B) where (A) equals the sum of (i) 1.125% of the participants highest annual average compensation over 60 consecutive months up to the ASSWB which is determined as of the earlier of (1) the participant’s termination date or (2) January 31, 2009, and (ii) 1.5% of such annual average compensation in excess of the ASSWB, which sum is multiplied by the total of such years of service up to 35 years, and (B) equals 1.5% of such annual compensation multiplied by the total years of service in excess of 35 years. | |
| • | The “final average compensation formula” is the sum of (A) and (B), less (C), where (A) equals the sum of (i) 0.95% of the participant’s highest final average compensation up to the participant’s |
29
Table of Contents
| Covered Compensation, as defined in the plan, and (ii) 0.65% of such final average compensation in excess of the participant’s Covered Compensation, which sum is multiplied by the total of such years of service up to 25 years, and (B) equals 0.40% of such final average compensation multiplied by the total years of service in excess of 25 years, and less (C) an offset (if applicable) which is the value of the participant’s Normal Retirement Benefit under the former Atlantic Research Corporation Employee Pension Plan for employees who were previously employed at a former Atlantic Research Corporation location and became an Aerojet employee, as a result of Aerojet’s acquisition of those locations. |
The ASSWB is the 35 year average of the Social Security
Taxable Wage Base. The ASSWB for the “career average
formula”, the “five-year average compensation
formula”, and the “update formula” is determined
as of the earlier of (1) the participant’s termination
date or (2) January 31, 2009. The published ASSWB
applicable to the Named Executive Officers for the plan year
ended November 30, 2009 is $54,000. The Covered
Compensation for the “final average compensation
formula” is the ASSWB based on the year the participant
attains their Social Security Retirement Age (“SSRA”),
hence may vary by participant.
Further details regarding benefits under these plans, including
the estimated value of retirement benefits for each Named
Executive Officer, are found in the section entitled 2009
Pension Benefits on page 36. The change in the
actuarial pension value from fiscal year 2008 to fiscal year
2009 is presented in the “Change in Pension Value”
column of the Summary Compensation Table on page 32.
401(k)
Savings Plan
The Named Executive Officers are also eligible to participate in
the GenCorp Retirement Savings Plan, a 401(k) tax-qualified
defined contribution savings plan which is available to all
Company employees. Prior to January 15, 2009, the Company
matched a portion of participating employee’s contributions
to the GenCorp Retirement Savings Plan, however, the Company has
suspended the employer matching contributions to the GenCorp
Retirement Savings Plan for any non-union eligible employees.
2009
401(k) Benefits Restoration Plan
On December 31, 2008, effective January 1, 2009, the
Company entered into a non-qualified, unfunded 2009 Benefit
Restoration Plan for the GenCorp Inc. 401(k) Plan (the
“2009 401(k) BRP Plan”), to replace the predecessor
plan — the Prior Pension BRP. The Named Executive
Officers participate in the 2009 401(k) BRP Plan. The 2009
401(k) BRP Plan permits personal savings on a pre-tax basis.
Effective January 15, 2009, the Company suspended employer
contributions to the 2009 401(k) BRP Plan. Details about the
2009 401(k) BRP Plan are presented in the section entitled
2009 Non-qualified Deferred Compensation on page 39.
Severance
Agreements and Plan Provisions
The Company and the Named Executive Officers (other than
Ms. Redd and Mr. Shenton) and other senior executive
officers are parties to severance agreements. As described in
more detail in the section entitled Severance Agreements
on page 40, in the event of a qualifying termination of
employment of any of these individuals within three years after
a change in control of the Company (as defined in the severance
agreements), the Company would be required to pay such affected
individual severance and other benefits as provided in the
severance agreements. As a result of the Shareholder Agreement
with SPII for itself and its affiliates dated March 5, 2008
(the “Shareholder Agreement”), a change in control (as
defined in the severance agreements) occurred (the “2008
Change in Control”). In 2009, Mark A. Whitney and William
M. Lau left the Company and their severance payments and other
benefits in accordance with the terms of their executive
severance agreement were paid six months after their
30
Table of Contents
departure date. Effective January 6, 2010, Mr. Neish
left the Company and his severance payment and other benefits
will be paid six months after this date.
On October 6, 2009, the Board, upon the recommendation and
approval of the Compensation Committee, approved certain
amendments to the Prior Pension Plan, the 2009 Pension BRP Plan,
2009 401(k) BRP Plan, the Deferred Bonus Plan of GenCorp Inc.
and Participating Subsidiaries, the GenCorp Inc. Deferred
Compensation Plan for Nonemployee Directors, and the GenCorp
Inc. 1996 Supplemental Retirement Plan for Management Employees
(collectively, the “Company Plans”). Pursuant to the
amendments, the definition of “Change in Control” in
each of the Company Plans was amended to mean the occurrence of
any of the following events (i) all or substantially all
(meaning having a total gross fair market value at least equal
to 50.1% of the total gross fair market value of all of the
Company’s assets immediately before such acquisition or
acquisitions) of the assets of the Company are acquired by a
person (during a twelve-month period ending on the date of the
most recent acquisition by such person); or (ii) the
Company is merged, consolidated or reorganized into or with
another corporation or entity during a twelve-month period with
the result that upon the conclusion of the transaction less than
50.1% of the outstanding securities entitled to vote generally
in the election of directors or other capital interests of the
surviving, resulting or acquiring corporation are beneficially
owned (as that term is defined in
Rule 13-d
3 under the Securities Exchange Act of 1934, as amended) by the
shareholders of the Company immediately prior to the completion
of the transaction. The purpose of the amendments was to make
the definition of “Change in Control” consistent in
each of the Company Plans.
The members of the current Board and the Compensation Committee
believe executive severance agreements are in the best interest
of our shareholders to foster the continuous employment and
dedication of key executives without potential distraction or
personal concern.
Other
Effective April 15, 2009, the Company entered into a
retention agreement with Mr. Conley our Vice President of
Environmental, Health and Safety in which he will receive a
retention bonus equal to $200,000 if he continues to be employed
by the Company on March 6, 2011.
The GenCorp Foundation matches employee and Director gifts to
accredited, non-profit colleges, universities, secondary and
elementary public or private schools located in the United
States. Gifts made were matched dollar for dollar up to $7,500
per calendar year per donor until April 1, 2009, at which
time the maximum match per donor per calendar year changed to
$3,000.
Tax
Deductibility under Section 162(m)
Section 162(m) of the Code imposes limits on the
deductibility of certain compensation in excess of
$1 million paid to the CEO and other executive officers of
public companies. Management and the Compensation Committee have
reviewed the regulations and feel that the current compensation
program and policies are appropriate. Depending upon a variety
of factors (including Company performance), it is possible for
one current executive officer to surpass the $1 million
dollar threshold under the executive officer compensation
program. In addition, severance payments paid to certain of the
former executive officers and which may be paid to other
executive officers in the event of qualified terminations under
the executive severance agreements may exceed the
$1 million threshold. At this time, the Compensation
Committee believes that accommodating the Internal Revenue
Service regulations will not produce material benefits or
increases in shareholder value. However, the Compensation
Committee intends to review this issue regularly and may change
its position in future years.
31
Table of Contents
SUMMARY
COMPENSATION TABLE
The following table sets forth information regarding
compensation for each of the Named Executive Officers. As
previously noted, Mr. Seymour became our President and CEO
in January 2010. His compensation arrangements are described
below under Compensation Committee Actions After Fiscal Year
2009. Mr. Neish resigned as our Interim President and
Interim CEO in January 2010.
|
Non-Equity |
Change in |
||||||||||||||||||||||||||||||||||||||||||||
|
Stock |
Options/SARs |
Incentive Plan |
Pension |
All Other |
|||||||||||||||||||||||||||||||||||||||||
| Name and Principal Position | Year | Salary(1) | Bonus | Awards(2) | Awards(2) | Compensation(3) | Value(4) | Compensation(5) | Total | ||||||||||||||||||||||||||||||||||||
| Executive Officers as of 11/30/09 | |||||||||||||||||||||||||||||||||||||||||||||
|
J. Scott Neish
|
2009 | $ | 350,088 | $ | — | $ | — | $ | 147,164 | $ | 536,000 | $ | 174,386 | $ | 19,704 | $ | 1,227,342 | ||||||||||||||||||||||||||||
| Interim President and CEO and Vice | 2008 | 340,137 | 350,000 | (6) | 135,718 | (60,251 | ) | 357,000 | 112,505 | 29,603 | 1,264,712 | ||||||||||||||||||||||||||||||||||
| President; and President, | 2007 | 304,427 | — | 187,281 | 60,251 | 275,203 | 96,602 | 29,041 | 952,805 | ||||||||||||||||||||||||||||||||||||
| Aerojet-General Corporation | |||||||||||||||||||||||||||||||||||||||||||||
|
Kathleen E. Redd
|
2009 | 294,308 | 70,000 | 6,106 | 88,718 | 230,000 | 73,100 | 2,600 | 764,832 | ||||||||||||||||||||||||||||||||||||
| Vice President, CFO and Secretary(7) | 2008 | 228,533 | — | 19,861 | 9,205 | 133,000 | 14,531 | 10,332 | 415,462 | ||||||||||||||||||||||||||||||||||||
|
Chris W.
Conley(8)
|
2009 | 212,328 | — | 1,526 | 67,437 | 148,000 | 240,190 | 1,840 | 671,321 | ||||||||||||||||||||||||||||||||||||
| Vice President, Environmental, Health & | 2008 | 205,361 | — | 29,889 | — | 106,000 | 10,645 | 8,162 | 360,057 | ||||||||||||||||||||||||||||||||||||
| Safety | |||||||||||||||||||||||||||||||||||||||||||||
|
Robert E. Shenton
|
2009 | 251,059 | — | 2,035 | 25,917 | 169,000 | 51,915 | 1,731 | 501,657 | ||||||||||||||||||||||||||||||||||||
| Vice President and COO, Aerojet-General Corporation | |||||||||||||||||||||||||||||||||||||||||||||
|
Former Executive Officers as of 11/30/09
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Mark A. Whitney
|
2009 | $ | 76,287 | $ | — | $ | — | $ | (4,599 | ) | $ | — | $ | 77,034 | $ | 1,772,830 | $ | 1,921,552 | |||||||||||||||||||||||||||
| Senior Vice President, | 2008 | 290,581 | — | 68,617 | (43,571 | ) | 259,000 | 309,795 | (9) | 31,079 | 915,501 | ||||||||||||||||||||||||||||||||||
| General Counsel and Secretary | 2007 | 280,237 | — | 100,862 | 43,571 | 163,013 | 21,533 | 15,498 | 624,714 | ||||||||||||||||||||||||||||||||||||
|
William M. Lau
|
2009 | 172,183 | — | — | 14,433 | — | 89,690 | 808,046 | 1,084,352 | ||||||||||||||||||||||||||||||||||||
| Vice President, Treasurer | 2008 | 225,164 | — | 160,650 | — | 100,000 | 253,794 | (9) | 12,727 | 752,335 | |||||||||||||||||||||||||||||||||||
| (1) | The amount reported in this column for each Named Executive Officer reflects the dollar amount of base salary earned in each listed fiscal year. Messrs. Whitney and Lau’s 2009 salary includes a vacation payout of $42,326 and $23,294, respectively. |
| (2) | The amounts reported in these columns for each Named Executive Officer reflect the compensation costs for financial reporting purposes for the fiscal year without the impact of estimated forfeitures, rather than amounts paid to or realized by the Named Executive Officer for outstanding equity awards granted in and prior to fiscal year 2009. Cash settled SARs awards are revalued to fair value at each reporting date until the date of settlement. Due to the Company’s common stock price decline in fiscal year 2008, the SARs’ fair value declined for this year. The decrease in fair value is included only the extent of what was previously reported as compensation. A discussion of the assumptions used in calculating these values may be found in Note 9(c) in the audited financial statements in the Company’s Annual Report on Form 10-K for fiscal year 2009. A description of these awards can be found under the section entitled Long-Term Incentives (Equity-Based Compensation) on page 27. |
| (3) | The amount reported in this column for each Named Executive Officer reflects annual cash incentive compensation, which is based on performance in each listed fiscal year. This annual incentive compensation is discussed further under the section entitled Short-Term Compensation on page 24. |
| (4) | The amount reported in this column for each Named Executive Officer reflects the aggregate increase in the actuarial present value of their accumulated benefits under all pension plans from August 31, 2008 to November 30, 2009 for 2009 (the pension measurement dates for purposes of the Company’s financial statements), from August 31, 2007 to August 31, 2008 for 2008, and from August 31, 2006 to August 31, 2007 for 2007. The change in measurement dates was effective November 30, 2009, and was due to the Company adopting accounting standards which require the measurement of the pension and postretirement plans assets and benefit obligations at the Company’s fiscal year end, November 30. | |
| The increase in pension value for 2009 is primarily due to the decrease in the discount rate used to measure the present value of accumulated benefits as well as the additional benefits from credited service accumulated between August 31, 2008, the previous measurement and February 1, 2009, the plan freeze date. |
| These amounts were determined using the actuarial assumptions consistent with those used in the Company’s financial statements with the exception of assumed retirement age and the absence of pre-retirement mortality and termination assumptions. A discussion of the assumptions used for financial reporting purposes may be found in Note 6 in the audited financial statements in the Company’s Annual Report on Form 10-K for fiscal year 2009. Information regarding these pension plans is set forth in further detail under the section entitled 2009 Pension Benefits on page 36. |
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Table of Contents
| (5) | The amounts reported in this column for each Named Executive Officer include the following for fiscal year 2009: |
|
Company |
||||||||||||||||||||||||||||||
|
Matching |
||||||||||||||||||||||||||||||
|
Contribution to |
||||||||||||||||||||||||||||||
|
Company |
Benefits |
Perquisites |
||||||||||||||||||||||||||||
|
Matching |
Restoration |
Matching Gift |
And Other |
|||||||||||||||||||||||||||
|
Contribution to |
Plan- |
by the GenCorp |
Personal |
|||||||||||||||||||||||||||
| Name | Severance | 401(k) Plan | Savings Plan | Foundation | Benefits(A) | Total | ||||||||||||||||||||||||
|
Executive Officers as of 11/30/09
|
||||||||||||||||||||||||||||||
|
J. Scott Neish
|
$ | — | $ | 606 | $ | 16,962 | $ | — | $ | 2,136 | $ | 19,704 | ||||||||||||||||||
|
Kathleen E. Redd
|
— | 450 | 800 | 1,350 | — | 2,600 | ||||||||||||||||||||||||
|
Chris W. Conley
|
— | 360 | 720 | 760 | — | 1,840 | ||||||||||||||||||||||||
|
Robert E. Shenton
|
— | 410 | 821 | 500 | — | 1,731 | ||||||||||||||||||||||||
|
Former Executive Officers as of 11/30/09
|
||||||||||||||||||||||||||||||
|
Mark A. Whitney
|
$ | 1,644,535 | $ | 2,414 | $ | 1,019 | $ | — | $ | 124,862(B | ) | $ | 1,772,830 | |||||||||||||||||
|
William M. Lau
|
725,131 | 307 | 788 | — | 81,820(C | ) | 808,046 | |||||||||||||||||||||||
| (A) | This column includes items that are accrued or paid by the Company and will be included as compensation to the Named Executive Officer in the year the amounts are paid. | |
| (B) | This amount represents $34,298 for Life and Health insurance benefits, $15,000 for financial counseling, $58,865 for outplacement services, and $16,699 for legal fees paid or accrued by the Company in accordance with a severance agreement executed by Mr. Whitney. | |
| (C) | This amount represents $14,062 for Life and Health insurance benefits, $15,000 for financial counseling, $45,542 for outplacement services, and $7,216 for legal fees paid or accrued by the Company in accordance with a severance agreement executed by Mr. Lau. |
| (6) | This amount paid to Mr. Neish is in accordance with the letter agreement by and between the Company and Mr. Neish dated March 5, 2008, as part of his appointment to the position of Interim President and CEO and represents a one-time bonus for serving in this capacity. This item is discussed more fully under the section entitled Employment Agreements and Indemnity Agreements on page 40. | |
| (7) | Ms. Redd was appointed CFO and Secretary of the Company effective January 21, 2009, and February 11, 2009, respectively. The bonus amount paid to Ms. Redd in 2009 represents a discretionary bonus for 2009 performance as approved by the Compensation Committee. | |
| (8) | Effective April 15, 2009, the Company entered into a retention agreement with Mr. Conley in which he will receive a retention bonus equal to $200,000 if he continues to be employed by the Company on March 6, 2011. | |
| (9) | On March 5, 2008, the Company entered into the Shareholder Agreement with respect to the election of Directors for the 2008 annual meeting of shareholders (the “2008 Annual Meeting”) and certain other related matters. As a result of the Shareholder Agreement, and the resignation of three additional Board members on May 16, 2008, all named Company headquarters employees had five years added to both age and years of service for purposes of calculating their pension benefits under the Qualified Pension Plan and the non-qualified 2009 Pension BRP Plan under the Change in Control provisions under Program B of the Qualified Pension Plan. Such additional benefits resulted in a much larger aggregate increase in the actuarial present value of accumulated benefits from August 31, 2007 to August 31, 2008 for Messrs. Whitney and Lau. However, Mr. Whitney left the Company on January 9, 2009, and was not eligible for the additional five years of age as he was not eligible for the early retirement subsidy at the time of termination. Therefore, he was not eligible for the actuarial present value of the early retirement subsidy of $55,458 for the Qualified Pension Plan and $42,149 for the Prior Pension BRP for the 2008 calculation. There was no early retirement subsidy added to his 2009 calculation. Mr. Lau left the Company on July 24, 2009, and commenced payment of his benefit under the Qualified Pension Plan on August 1, 2009. Mr. Lau’s 2009 Pension BRP Plan benefit will commence payment February 1, 2010, in accordance with the provisions of the 2009 Pension BRP Plan. |
33
Table of Contents
2009
GRANTS OF PLAN-BASED AWARDS
The following table provides information for each of the Named
Executive Officers regarding fiscal year 2009 annual and
long-term incentive award opportunities, including the range of
possible payments under non-equity incentive plans.
|
Exercise or |
Grant Date |
||||||||||||||||||||||||||||||||||||||||||||
|
Base |
Fair Value |
||||||||||||||||||||||||||||||||||||||||||||
|
Estimated Future Payouts Under |
Estimated Future Payouts Under |
Price of |
of Stock |
||||||||||||||||||||||||||||||||||||||||||
|
Non-Equity Incentive Plan |
Equity Incentive Plan |
Options/SARs |
and |
||||||||||||||||||||||||||||||||||||||||||
|
Grant |
Awards ($)(1) | Awards (#) |
Awards |
Option/SARs |
|||||||||||||||||||||||||||||||||||||||||
| Name | Date | Threshold(2) | Target | Maximum | Threshold(3) | Target | Maximum | ($/Sh) | Awards ($)(4) | ||||||||||||||||||||||||||||||||||||
|
Executive Officers as of 11/30/09
|
|||||||||||||||||||||||||||||||||||||||||||||
|
J. Scott Neish
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Annual Incentive Bonus
|
$ | — | $ | 350,088 | $ | 700,176 | |||||||||||||||||||||||||||||||||||||||
|
Kathleen E. Redd
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Annual Incentive Bonus
|
— | 150,000 | 300,000 | ||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
8-24-09 | — | 30,000 | 37,500 | $ | 170,250 | |||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
8-24-09 | — | 35,000 | 43,750 | $ | 4.54 | 122,535 | ||||||||||||||||||||||||||||||||||||||
|
Chris W. Conley
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Annual Incentive Bonus
|
— | 107,124 | 214,248 | ||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
8-24-09 | — | 7,500 | 9,375 | 42,563 | ||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
8-24-09 | — | 7,500 | 9,375 | 4.54 | 26,258 | |||||||||||||||||||||||||||||||||||||||
|
Robert E. Shenton
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Annual Incentive Bonus
|
— | 122,269 | 244,538 | ||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
8-24-09 | — | 10,000 | 12,500 | 56,750 | ||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
8-24-09 | — | 14,289 | 17,861 | 4.54 | 50,026 | |||||||||||||||||||||||||||||||||||||||
|
Former Executive Officers as of 11/30/09
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Mark A. Whitney
|
|||||||||||||||||||||||||||||||||||||||||||||
|
William M. Lau
|
|||||||||||||||||||||||||||||||||||||||||||||
| (1) | Reflects the possible payout amounts of non-equity incentive plan awards that could have been earned in fiscal year 2009. See the Summary Compensation Table on page 32 for the amounts actually earned and paid out in the first quarter of fiscal year 2010. |
| (2) | If no targets are met the annual incentive bonus will not be earned. | |
| (3) | If no targets are met the equity incentive plan awards will not vest. | |
| (4) | The fair value of stock options was estimated using a Black-Scholes Model with the following weighted average assumptions at the date of grant: Expected life — eight years; Volatility — 54%; Risk-free interest rate — 3.62%; Dividend yield — 0.00%. |
34
Table of Contents
OUTSTANDING
EQUITY AWARDS AT 2009 FISCAL YEAR END
The following table provides information for each of the Named
Executive Officers regarding stock options, SARs, and
outstanding stock awards held by the officers as of
November 30, 2009.
| Option/SARs Awards | Stock Awards | ||||||||||||||||||||||||||||||||||
|
Equity Incentive |
|||||||||||||||||||||||||||||||||||
| Plan Awards | |||||||||||||||||||||||||||||||||||
|
Equity Incentive |
Market or |
||||||||||||||||||||||||||||||||||
|
Plan Awards: |
Number of |
Payout Value |
|||||||||||||||||||||||||||||||||
|
Number of |
Number of |
Number of |
Unearned |
of Unearned |
|||||||||||||||||||||||||||||||
|
Securities |
Securities |
Securities |
Shares, Units |
Shares, Units |
|||||||||||||||||||||||||||||||
|
Underlying |
Underlying |
Underlying |
Option/ |
or Other |
or Other |
||||||||||||||||||||||||||||||
|
Unexercised |
Unexercised |
Unexercised |
SARs |
Option/ |
Rights That |
Rights That |
|||||||||||||||||||||||||||||
|
Options/SARs |
Options/SARs |
Unearned |
Exercise |
SARs |
Have Not |
Have Not |
|||||||||||||||||||||||||||||
|
(#) |
(#) |
Option/SARs |
Price |
Expiration |
Vested |
Vested |
|||||||||||||||||||||||||||||
| Name | Exercisable | Unexercisable | (#) | ($) | Year | (#) | ($)(4) | ||||||||||||||||||||||||||||
|
Executive Officers as of 11/30/09
|
|||||||||||||||||||||||||||||||||||
|
J. Scott Neish
|
|||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
— | $ | — | ||||||||||||||||||||||||||||||||
|
SARs
|
30,000 | — | — | $ | 13.75 | 2017 | |||||||||||||||||||||||||||||
| 21,500 | — | — | 19.34 | 2016 | |||||||||||||||||||||||||||||||
| 5,000 | — | — | 18.55 | 2015 | |||||||||||||||||||||||||||||||
| 3,500 | — | — | 18.71 | 2015 | |||||||||||||||||||||||||||||||
|
Stock Options
|
2,200 | — | — | 9.29 | 2013 | ||||||||||||||||||||||||||||||
|
Kathleen E. Redd
|
|||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
30,000 | 234,300 | |||||||||||||||||||||||||||||||||
|
SARs
|
13,334 | 6,666 | (1) | — | 4.25 | 2018 | |||||||||||||||||||||||||||||
| 1,500 | — | — | 13.75 | 2017 | |||||||||||||||||||||||||||||||
| 2,560 | — | — | 13.19 | 2016 | |||||||||||||||||||||||||||||||
| 2,500 | — | — | 18.71 | 2015 | |||||||||||||||||||||||||||||||
|
Stock Options
|
— | — | 35,000 | (2) | 4.54 | 2019 | |||||||||||||||||||||||||||||
| 2,666 | — | — | 9.29 | 2013 | |||||||||||||||||||||||||||||||
| 1,333 | — | — | 10.85 | 2012 | |||||||||||||||||||||||||||||||
|
Chris W. Conley
|
|||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
7,500 | 58,575 | |||||||||||||||||||||||||||||||||
|
SARs
|
12,000 | — | — | 13.75 | 2017 | ||||||||||||||||||||||||||||||
| 13,800 | — | — | 19.34 | 2016 | |||||||||||||||||||||||||||||||
| 2,000 | — | — | 18.51 | 2015 | |||||||||||||||||||||||||||||||
|
Stock Options
|
— | — | 7,500 | (2) | 4.54 | 2019 | |||||||||||||||||||||||||||||
| 5,000 | — | — | 7.73 | 2013 | |||||||||||||||||||||||||||||||
| 5,000 | — | — | 15.43 | 2012 | |||||||||||||||||||||||||||||||
| 10,000 | — | — | 10.44 | 2011 | |||||||||||||||||||||||||||||||
| 7,000 | — | — | 10.13 | 2010 | |||||||||||||||||||||||||||||||
|
Robert E. Shenton
|
|||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
10,000 | 78,100 | |||||||||||||||||||||||||||||||||
|
SARs
|
1,500 | — | — | 13.75 | 2017 | ||||||||||||||||||||||||||||||
| 4,256 | — | — | 13.19 | 2016 | |||||||||||||||||||||||||||||||
| 3,500 | — | — | 18.71 | 2015 | |||||||||||||||||||||||||||||||
|
Stock Options
|
14,289 | (2) | 4.54 | 2019 | |||||||||||||||||||||||||||||||
|
Former Executive Officers as of 11/30/09
|
|||||||||||||||||||||||||||||||||||
|
Mark A.
Whitney(3)
|
|||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
— | $ | — | ||||||||||||||||||||||||||||||||
|
SARs
|
— | — | — | $ | — | — | |||||||||||||||||||||||||||||
|
Stock Options
|
— | — | — | — | — | ||||||||||||||||||||||||||||||
|
William M.
Lau(3)
|
|||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
— | — | |||||||||||||||||||||||||||||||||
|
SARs
|
5,000 | — | — | 13.77 | 2017 | ||||||||||||||||||||||||||||||
|
Stock Options
|
— | — | — | — | — | ||||||||||||||||||||||||||||||
| (1) | The vesting date for Ms. Redd’s unvested time-based SARs is October 28, 2010. | |
| (2) | The vesting date for these performance-based stock options is over a 29-month period ending January 2012. These awards will only vest if performance targets are met through November 30, 2011. | |
| (3) | Employees 65 years of age or older upon retirement or termination of employment do not forfeit vested stock options or SARs awards. Due to the 2008 Change in Control, certain employees had five years added to both age and years of service. Accordingly, Mr. Lau is above retirement age and therefore did not forfeit his outstanding shares. However, Mr. Whitney |
35
Table of Contents
| forfeited his outstanding shares 90 days after his termination date as the five years added to his age did not put him at 65 years of age or older. | ||
| (4) | The market value was calculated by multiplying the number of unvested shares by the closing market price of the Company’s Common Stock of $7.81 on November 30, 2009. The vesting date for these stock awards is over a 29-month period ending January 2012. These awards will only vest if performance targets are met through November 30, 2011. |
2009
OPTION/SARs EXERCISES AND STOCK VESTED
There were no stock option or SARs exercises and no restricted
stock vested in fiscal year 2009.
2009
PENSION BENEFITS
On November 25, 2008, the Company amended the Qualified
Pension Plan on December 31, 2008, effective
January 1, 2009, the Company entered into the 2009 Pension
BRP Plan to replace the predecessor plan — the Prior
Pension BRP, in each case to freeze future benefit accruals.
Effective February 1, 2009, future benefit accruals for all
current salaried employees were discontinued, including the
Named Executive Officers under the Qualified Pension Plan and
the 2009 Pension BRP Plan. Effective July 31, 2009, future
benefit accruals for all current bargaining unit and hourly
employee were discontinued. Upon vesting, no employee will lose
their previously earned pension benefit, which will be paid to
the employee upon retirement in accordance with the terms of
these pension plans.
Qualified
Pension Plan
The Qualified Pension Plan is a tax-qualified defined benefit
plan covering substantially all salaried and hourly employees.
In general, normal retirement age is 65, with certain plan
provisions allowing for earlier retirement. Pension benefits are
calculated under formulas based on compensation and length of
service for salaried employees and under negotiated non-wage
based formulas for bargaining unit and hourly employees.
Participants receive the highest benefit calculated under any of
the formulas for which they are eligible to participate. The
formulas applicable to the Named Executive Officers are the
“career average formula”, the “five-year average
compensation formula”, the “update formula”, and
the “final average compensation formula.” These
formulas define compensation to include base salary and annual
incentive (cash bonus) compensation, except for the “final
average compensation formula” which does not include
incentive payments in compensation. Compensation and service
earned on or after February 1, 2009, the pension freeze
date applicable to the Named Executive Officers, is not
considered in any of the benefit formulas. The formula
descriptions are as follows:
| • | The “career average formula” provides that for each year of service prior to attainment of 35 years of service the employee will be credited 1.625% of annual compensation up to the ASSWB for such year plus 2.0% of annual compensation in excess of the ASSWB; plus 2.0% of annual compensation after attainment of 35 years of service. | |
| • | The “five-year average compensation formula” is the sum of (A) and (B) where (A) equals the sum of (i) 1.125% of the participant’s highest five-year average compensation up to the ASSWB which is determined as of the earlier of (1) the participant’s termination date or (2) January 31, 2009, and (ii) 1.5% of such five-year average compensation in excess of the ASSWB , which sum is multiplied by the total of such years of service up to 35 years, and (B) equals 1.5% of such five-year average compensation multiplied by the total years of service in excess of 35 years. | |
| • | The “update formula” is the sum of (A) and (B) where (A) equals the sum of (i) 1.125% of the participants highest annual average compensation over 60 consecutive months up to the ASSWB which is determined as of the earlier of (1) the participant’s termination date or (2) January 31, 2009, and (ii) 1.5% of such annual average compensation in excess of the ASSWB, which sum is |
36
Table of Contents
| multiplied by the total of such years of service up to 35 years, and (B) equals 1.5% of such annual compensation multiplied by the total years of service in excess of 35 years. |
| • | The “final average compensation formula” is the sum of (A) and (B), less (C), where (A) equals the sum of (i) 0.95% of the participant’s highest final average compensation up to the participant’s Covered Compensation, as defined in the plan, and (ii) 0.65% of such final average compensation in excess of the participant’s Covered Compensation, which sum is multiplied by the total of such years of service up to 25 years, and (B) equals 0.40% of such final average compensation multiplied by the total years of service in excess of 25 years, and less (C) an offset (if applicable) which is the value of the participant’s Normal Retirement Benefit under the former Atlantic Research Corporation Employee Pension Plan for employees who were previously employed at a former Atlantic Research Corporation location and became an Aerojet employee, as a result of Aerojet’s acquisition of those locations. |
The ASSWB is the 35 year average of the Social Security
Taxable Wage Base. The ASSWB for the “career average
formula”, the “five-year average compensation formula
, and the “update formula” is determined as of the
earlier of (1) the participant’s termination date
including Named Executive Officers or (2) January 31,
2009. The published ASSWB applicable to the Named Executive
Officers for the plan year ended November 30, 2009 is
$54,000. The Covered Compensation for the “final average
compensation formula” is the ASSWB based on the year the
participant attains their SSRA, hence may vary by participant.
2009
Pension BRP Plan
Total pension benefits for the Named Executive Officers and
other certain other highly compensated employees are determined
under a combination of the 2009 Pension BRP Plan, which is a
non-qualified plan, and the Qualified Pension Plan. As set forth
above, the Qualified Pension Plan is a qualified pension plan
that provides pension benefits for employees, the amount of
which is limited under Section 401(a)(17) or 415 of the
Code (or any successor provisions). The 2009 Pension BRP Plan
restores the pension plan benefits which executives and their
beneficiaries would otherwise lose as a result of the
limitations under Section 401(a) (17) or 415 of the
Code (or any successor provisions). Eligibility to participate
in the 2009 Pension BRP Plan is designated by the Compensation
Committee.
Retired executives’ tax-qualified benefits are funded and
are paid out of the assets of the qualified plan, while
non-qualified benefits may be paid out of either the grantor
trust (pre-funded) or the Company’s general assets. In
accordance with the terms and conditions of the Prior Pension
BRP, upon the 2008 Change in Control that resulted from the
Shareholder Agreement, the Company funded into a grantor trust
an amount equal to the present value of the accrued pension
benefits under the Prior Pension BRP for all participants in
such plan as of the date of the 2008 Change in Control.
37
Table of Contents
The following table provides information as of November 30,
2009 for each of the Named Executive Officers regarding the
actuarial present value of their total accumulated benefit under
Qualified Pension Plan and the 2009 Pension BRP Plan.
|
Present Value |
Payments |
|||||||||||||||||
|
Number of Years |
of Accumulated |
During Fiscal |
||||||||||||||||
|
Credited Service |
Benefit |
Year 2009 |
||||||||||||||||
| Name | Plan Name | (#)(1) | ($)(2) | ($) | ||||||||||||||
|
Executive Officers as of 11/30/09
|
||||||||||||||||||
|
J. Scott Neish
|
Qualified Pension Plan
|
6 | $ | 300,012 | $ | — | ||||||||||||
|
2009 Pension BRP Plan
|
6 | 301,033 | — | |||||||||||||||
|
Kathleen E. Redd
|
Qualified Pension Plan
|
7 | 152,837 | — | ||||||||||||||
|
2009 Pension BRP Plan
|
7 | 41,598 | — | |||||||||||||||
|
Chris W. Conley
|
Qualified Pension Plan
|
27 | 578,704 | — | ||||||||||||||
|
2009 Pension BRP Plan
|
27 | 132,599 | — | |||||||||||||||
|
Robert E. Shenton
|
Qualified Pension Plan
|
33 | 173,282 | — | ||||||||||||||
|
2009 Pension BRP Plan
|
33 | 2,792 | — | |||||||||||||||
|
Former Executive Officers as of 11/30/09
|
||||||||||||||||||
|
Mark A.
Whitney(3)
|
Qualified Pension Plan
|
11 | $ | 281,858 | $ | — | ||||||||||||
|
2009 Pension BRP Plan
|
11 | 201,871 | — | |||||||||||||||
|
William M.
Lau(3)
|
Qualified Pension Plan
|
7 | 345,377 | 9,240 | ||||||||||||||
|
2009 Pension BRP Plan
|
7 | 11,572 | — | |||||||||||||||
| (1) | Credited service under the Qualified Pension Plan and the 2009 Pension BRP Plan is determined for all participants in accordance with such plans and is through February 1, 2009, the freeze date for these plans. The credited service for Messrs. Whitney and Lau includes an additional five years granted as a result of the Shareholder Agreement. However, Mr. Whitney left the Company on January 9, 2009, and as a result the additional five years added to his service does not make him eligible for an early retirement subsidy. On February 1, 2009, the Company discontinued future benefit accruals for all salaried employees, including the Named Executive Officers. | |
| (2) | The amounts reported in this column were calculated based on the accrued benefit as of the earlier of (1) the participant’s termination date or (2) January 31, 2009; the date benefit accruals were frozen for salaried employees. Present values were calculated assuming no pre-retirement mortality or termination. The values under the Qualified Pension Plan and the 2009 Pension BRP Plan are the actuarial present values as of November 30, 2009 of the benefits earned as of that date and payable at the earliest age eligible for unreduced benefits for the Qualified Pension Plan (the earlier of age 65, or age 62 with 10 years of service) and the current benefit election date on record for the 2009 Pension BRP Plan. These amounts include the effect on retirement age as a result of the 2008 Change in Control for Messrs. Whitney and Lau. | |
| Effective November 30, 2009, the Company adopted accounting standards which require the measurement of the pension and postretirement plans assets and benefit obligations at the Company’s fiscal year end, November 30. Prior to the adoption, the Company performed this measurement as of August 31 of each fiscal year. Also, effective February 1, 2009, the Company has discontinued future benefit accruals under these pension plans for salaried employees, including the Named Executive Officers. | ||
| The discount rate assumption is 5.65% for the Qualified Pension Plan and 5.60% for the 2009 Pension BRP Plan. The post-retirement mortality assumption of the two pension plans is RP 2000 no-collar, projected to 2005. In order to determine the change in pension values for the Summary Compensation Table on page 32, the values of the Qualified Pension Plan and the Prior Pension BRP were calculated as of August 31, 2008 for the benefits earned as of that date. The discount rate assumption used for the Qualified Pension Plan was 7.10% and 7.05% for the Prior Pension BRP, which was the assumption used for financial reporting purposes for fiscal year 2008. Other assumptions used to determine the value as of August 31, 2008 were primarily the same as those used as of November 30, 2009. The assumptions reflected in this footnote are the same as the ones used for the Qualified Pension Plan and the 2009 Pension BRP Plan for financial reporting purposes with the exception of assumed retirement age and the absence of pre-retirement mortality and termination assumptions. | ||
| (3) | On March 5, 2008, the Company entered into a Shareholder Agreement with respect to the election of Directors for the 2008 Annual Meeting and certain other related matters. As a result of the Shareholder Agreement, and the resignation of three additional Board members on May 16, 2008, Messrs. Whitney and Lau had five years added to both age and years of service |
38
Table of Contents
| for purposes of calculating their pension benefits under the Qualified Pension Plan and the non-qualified 2009 Pension BRP Plan under the Change in Control provisions under Program B of the Qualified Pension Plan. However, Mr. Whitney left the Company on January 9, 2009, and was not eligible for the additional five years of age, as he was not eligible for an early retirement subsidy at the time of termination. Mr. Lau left the Company on July 24, 2009 and commenced payment of his benefit under the Qualified Pension Plan on August 1, 2009. Mr. Lau’s 2009 Pension BRP Plan benefit will commence payment February 1, 2010, in accordance with the provisions of the 2009 Pension BRP Plan. |
2009
NON-QUALIFIED DEFERRED COMPENSATION
Benefits
Restoration Plan — 2009 401(k) BRP Plan
The 2009 401(k) BRP Plan is a non-qualified, unfunded plan
designed to enable participants to defer their compensation on a
pre-tax basis. Under the 2009 401(k) BRP Plan, a select group of
employees approved by the Board, elect to defer compensation
earned in the current year such as salary and certain other
incentive compensation that would otherwise be paid in the
current year. Effective January 1, 2009, obligations with
respect to benefits that were earned or vested under the Prior
Pension BRP after December 31, 2004, and which related to
the restoration of 401(k) benefits which such employees and
their beneficiaries would otherwise have lost as a result of
Code limitations upon accrual
and/or
payment of benefits from the GenCorp Retirement Saving Plan,
along with all associated earnings, were transferred to, and
will be maintained under and paid from the 2009 401(k) BRP Plan.
Accordingly, only benefits that are exempt from
Section 409A of Code will be maintained under and paid from
the Prior Pension BRP, in accordance with the terms of the Prior
Pension BRP.
Prior to January 15, 2009, the Company also made matching
contributions in an amount equal to 100% of the
participant’s contribution up to the first 3% of the
participant’s eligible compensation and 50% up to the next
3% of the participant’s eligible compensation. The maximum
company match was 4.5%. Participants indicate how they wish
their deferred compensation and the company matching
contributions to be notionally invested among the same
investment options available through the GenCorp Retirement
Saving Plan. Non-qualified benefits may be paid out of either
the grantor trust (pre-funded) or the Company’s general
assets.
The following table provides information for each of the Named
Executive Officers regarding aggregate officer and Company
contributions and aggregate earnings for fiscal year 2009 and
fiscal year-end account balances under the 2009 401(k) BRP Plan.
|
Aggregate |
|||||||||||||||||||||||||
|
Executive |
Company |
Aggregate |
Aggregate |
Balance at |
|||||||||||||||||||||
|
Contributions in |
Contributions in |
Earnings in |
Withdrawals/ |
November 30, |
|||||||||||||||||||||
|
fiscal year 2009 |
fiscal year 2009 |
fiscal year 2009 |
Distributions |
2009 |
|||||||||||||||||||||
| Name | ($)(1) | ($)(2) | ($)(3) | ($) | ($) | ||||||||||||||||||||
|
Executive Officers as of 11/30/09
|
|||||||||||||||||||||||||
|
J. Scott Neish
|
$ | 64,167 | $ | 16,962 | $ | 32,467 | $ | — | $ | 261,210 | |||||||||||||||
|
Kathleen E. Redd
|
1,000 | 800 | 730 | — | 37,322 | ||||||||||||||||||||
|
Chris W. Conley
|
960 | 720 | 8,413 | — | 34,584 | ||||||||||||||||||||
|
Robert E. Shenton
|
28,606 | 821 | 10,222 | — | 89,593 | ||||||||||||||||||||
|
Former Executive Officers as of 11/30/09
|
|||||||||||||||||||||||||
|
Mark A. Whitney
|
$ | 1,358 | $ | 1,019 | $ | 948 | $ | (53,316 | ) | $ | — | ||||||||||||||
|
William M. Lau
|
1,051 | 788 | (173 | ) | — | 5,154 | |||||||||||||||||||
| (1) | The amounts reported in this column reflect compensation earned in fiscal year 2009 and deferred under the 2009 401(k) BRP Plan. |
39
Table of Contents
| (2) | The amounts reported in this column reflect company matches under the 2009 401(k) BRP Plan. Effective January 15, 2009, the Company discontinued matching contributions to this plan. These amounts are also included in the total amounts shown in the “All Other Compensation” column in the Summary Compensation Table on page 32. |
| (3) | The amounts reported in this column reflect interest credited on account holdings and the change in value of other investment holdings. |
Employment
Agreements and Indemnity Agreements
On March 5, 2008, prior to the 2008 Annual Meeting, the
Board appointed Mr. Neish as Interim President and CEO of
the Company until such time as the Board appointed a new CEO and
President. As part of that appointment, the Company entered into
an agreement with Mr. Neish pursuant to which the Company
agreed to pay Mr. Neish a one-time bonus in the amount of
$350,000 on the earlier of (i) November 30, 2008, or
(ii) the date of the appointment of a new CEO. The Company
paid the bonus to Mr. Neish in December 2008. This one-time
bonus related to his service as the Interim President and CEO is
not considered in compensation payable to Mr. Neish in the
event of a qualifying termination of employment.
In addition, the Company agreed that if Mr. Neish leaves
the employ of the Company or its subsidiaries on or prior to
March 4, 2010, either voluntarily or involuntarily (except
with cause), the Company would purchase the condominium owned by
Mr. Neish located in Sacramento, California at the then
prevailing fair market value if Mr. Neish is unable to sell
it on his own. Mr. Neish left the Company effective
January 6, 2010.
The Company has entered into indemnification agreements with
each of its Directors and the Named Executive Officers pursuant
to which the Company is required to defend and indemnify such
individuals if or when they are party or threatened to be made a
party to any action, suit, proceeding or claim, whether civil,
criminal, administrative or investigative, by reason of the fact
that such individual is or was a Director
and/or Named
Executive Officer of the Company or any of its subsidiaries.
The Company and Messrs. Neish, Conley, Whitney and Lau also
entered into executive severance agreements as discussed below.
Messrs. Neish, Whitney and Lau left the Company effective
January 6, 2010, January 9, 2009 and July 24,
2009, respectively.
Potential
Payments upon Termination of Employment or Change in
Control
Severance
Agreements
Under the severance agreements into which the Company entered
with Messrs. Neish, Conley, Whitney and Lau, the Company
was required to provide severance payments to such executives
under certain circumstances involving a qualified termination
and a change in control of the Company. The Board at that time
believed that these agreements helped to ensure that the
executives continued to perform in their roles when a potential
change in control was impending and were provided some financial
protection against the loss of their positions following a
change in control of the Company as that term was defined in the
agreements. As discussed below, these change in control
severance agreements provide payouts of severance benefits to
the executives only if such executives are terminated or
otherwise leave the Company for “good reason” within
three years after a change in control of the Company. The
severance agreements provide for a severance payment in an
amount equal to the executive’s base salary plus bonus
multiplied by (A) a factor of three in the case of
Mr. Whitney as Senior Vice President, and by (B) a
factor of two in the case of Messrs. Neish, Conley and Lau
and certain other benefits described below.
The severance agreements provide that the payments become due
if, by March 5, 2011 (May 15, 2011 for Mr. Lau),
the executive’s employment is terminated by: (1) the
Company, for any reason other than death, disability or cause,
or (2) the executive, following the occurrence of one or
more of the following events: (i) failure to elect, reelect
or maintain the executive in office or substantially equivalent
office,
40
Table of Contents
(ii) a significant adverse change in the nature or scope
of authority or duties or reduction in base pay, incentive
opportunity or employee benefits, (iii) a change in
circumstances following a change in control, including, without
limitation, a change in scope of business or activities for
which the executive was responsible prior to the change in
control, (iv) the liquidation, dissolution, merger,
consolidation, reorganization or transfer of substantially all
of the business or assets of the Company, (v) the
relocation of principal work location in excess of
30 miles, or (vi) any material breach of the agreement
by the Company. A change in control as defined in such severance
agreements occurred on March 5, 2008 (May 15, 2008 for
Mr. Lau) as a result of the Shareholder Agreement.
For purposes of computing an executive’s severance payment
under the severance agreements, base salary is the highest
annual salary in effect for any period prior to a termination
following the change in control, and the bonus amount is the
greater of (1) the average of the annual bonus made or to
be made to the executive in regard to services rendered in any
fiscal year during the three immediately preceding fiscal years,
and (2) 75% of the executive’s maximum bonus
opportunity under the Company’s annual incentive
compensation plan for the fiscal year in which the change in
control occurs. No other bonuses are included in the computation
of an executives termination benefits.
Upon a qualified termination of employment of
Messrs. Neish, Conley, Whitney and Lau following a change
in control as noted above, the severance agreements also provide
for (i) the continuation of health benefits and life
insurance coverage for 24 months, (ii) payment of
$15,000 for financial counseling, (iii) payment of the
amount required to cover excise taxes imposed (including any
income or payroll taxes on this amount) under Section 4999
of the Code, if any, and (iv) payment of costs associated
with outplacement services up to 20% of the officer’s base
salary within 12 months of the executive’s termination
date. In addition, whether or not there is a termination of
employment of the Named Executive Officers, the change in
control severance agreements provide for the vesting of equity
and performance awards under the 1999 Incentive Plan, and the
payment of reasonable legal fees and expenses incurred when the
officer is involved in a dispute while seeking to enforce the
benefits and rights provided by the agreement. All of these
items will be treated as income to the employee for
W-2 purposes
except for the reimbursement of legal fees incurred and
outplacement services. Ms. Redd is eligible for all health
benefits and life insurance coverage for three months and
medical and dental coverage for an additional three months after
that due to normal company policy.
As a result of the Shareholder Agreement, the severance
agreements required the Company to fund into a grantor trust on
March 12, 2008, an amount equal to $34.8 million,
which represents liabilities associated with the BRP Pension and
Savings Plans and amounts payable to certain officers of the
Company party to severance agreements in the event of qualifying
terminations of employment (as defined in the severance
agreements) of the Company. In addition, as a result of the
resignation of the Resigning Directors on May 15, 2008, the
Company funded an additional $0.4 million into the grantor
trust on May 22, 2008. In fiscal year 2009,
Mr. Whitney and Mr. Lau left the Company and their
severance payments and other benefits in accordance with the
terms of their executive severance agreements were paid six
months after their departure date. Effective January 6,
2010, Mr. Neish also left the Company and his severance
payment and other benefits will be paid six months after this
date.
Change in
Control Pension Benefits
As a result of the Shareholder Agreement, certain benefits under
the 2009 Pension BRP Plan immediately vested and were funded
into a grantor trust. Such benefits will be paid as an annuity
in accordance with the terms of the Qualified Pension Plan and
the related non-qualified 2009 Pension BRP Plan.
In addition, as a result of the Shareholder Agreement, all
Company headquarters employees (which includes
Messrs. Whitney and Lau as of March 5, 2008 and
May 15, 2008, respectively) had five years added to both
age and years of service for purposes of calculating their
pension benefits under the
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Qualified Pension Plan and the related non-qualified 2009
Pension BRP Plan. However, Mr. Whitney left the Company on
January 9, 2009, and as a result is ineligible to receive
the added five years of age because he was not eligible for an
early retirement subsidy at the time of termination. Such
additional benefits shall be paid to each Named Executive
Officer in accordance with the terms of those plans at the same
time as his or her normal accrued benefits under those plans are
paid.
The Qualified Pension Plan and the related 2009 Pension BRP Plan
has been amended effective January 2009, in which Company
headquartered employees will no longer have five years added to
both age and years of service for purposes of calculating their
pension benefits for any future Change in Control. Also see
discussion below entitled Change to Definition of Change in
Control, in which these plans have been amended concerning
the definition of Change in Control.
Treatment
of Equity Awards
Equity awards made to the Named Executive Officers generally
provide for the immediate accelerated vesting of the award,
including stock options, performance-based stock options, SARs,
time-based restricted stock and performance-based restricted
stock (regardless of whether or not the performance target is
ultimately met) upon a change in control of the Company
regardless of whether a termination occurs. Accordingly, all
unvested equity awards held by the Named Executive Officers on
March 5, 2008, vested on such date. Due to the five
incremental years added to both age and service and the Company
policy in which employees 65 years of age or older upon
retirement or termination do not forfeit vested stock options or
SARs awards, Mr. Lau will not forfeit his vested equity
awards. However, Mr. Whitney forfeited his outstanding
shares 90 days after his termination date as the five years
added to age did not put him at 65 years of age or older.
Change to
Definition of Change in Control
On October 6, 2009, the Board upon the recommendation and
approval of the Compensation Committee approved certain
amendments to the Company Plans. Pursuant to the amendments, the
definition of “Change in Control” in each of the
Company Plans has been amended to mean the occurrence of any of
the following events (i) all or substantially all (meaning
having a total gross fair market value at least equal to 50.1%
of the total gross fair market value of all of the
Company’s assets immediately before such acquisition or
acquisitions) of the assets of the Company are acquired by a
person (during a twelve-month period ending on the date of the
most recent acquisition by such person); or (ii) the
Company is merged, consolidated or reorganized into or with
another corporation or entity during a twelve-month period with
the result that upon the conclusion of the transaction less than
50.1% of the outstanding securities entitled to vote generally
in the election of directors or other capital interests of the
surviving, resulting or acquiring corporation are beneficially
owned (as that term is defined in
Rule 13-d
3 under the Securities Exchange Act of 1934, as amended) by the
shareholders of the Company immediately prior to the completion
of the transaction. The purpose of the amendments was to make
the definition of “Change in Control” consistent in
each of the Company Plans. Copies of each amendment have been
filed as exhibits to the Company’s
Form 10-Q
for the quarterly period ended August 31, 2009 and are
incorporated herein by reference.
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Estimated
Cost of Termination Benefits
The amount of the estimated incremental compensation and
benefits payable to the Named Executive Officers assuming a
qualifying termination of employment as of November 30,
2009, are shown in the following table.
|
Health and |
|||||||||||||||||||||||||
|
Welfare |
|||||||||||||||||||||||||
|
Cash |
Benefit |
Financial |
Outplacement |
||||||||||||||||||||||
| Name | Severance | Continuation | Counseling | Services | Total | ||||||||||||||||||||
|
J. Scott
Neish(1)
|
$ | 1,277,821 | $ | 25,626 | $ | 15,000 | $ | 70,018 | $ | 1,388,465 | |||||||||||||||
|
Kathleen E. Redd
|
69,231 | 8,594 | — | — | 77,825 | ||||||||||||||||||||
|
Chris W. Conley
|
587,623 | 34,445 | 15,000 | 42,850 | 679,918 | ||||||||||||||||||||
|
Robert E. Shenton
|
141,080 | 9,451 | — | — | 150,531 | ||||||||||||||||||||
| (1) | The Company agreed that if Mr. Neish leaves the employ of the Company or its subsidiaries on or prior to March 4, 2010, either voluntarily or involuntarily (except with cause), the Company would purchase the condominium owned by Mr. Neish located in Sacramento, California at the then prevailing fair market value if Mr. Neish is unable to sell it on his own. Mr. Neish left the Company effective January 6, 2010. |
While the severance agreements provide for a gross up to the
executive by the Company for any excise tax imposed by
Section 4999 of the Code, by reason of being considered
“contingent on a change in ownership or control” of
the Company, within the meaning of Section 280G of the
Code, the Company does not believe that the Shareholder
Agreement which resulted in the 2008 Change in Control
constitutes a “change in control” as defined in the
Section 280G of the Code. As stated above, as a result of
the 2008 Change in Control, employees received both five years
of age and service for purposes of calculating their pension
benefits. This increase in benefit is reflected in fiscal year
2008 and the Named Executive Officers are not eligible for any
further increase. There are no other scenarios other than a
change in control in which a Named Executive Officer would get
benefits above and beyond normal employee policy.
Compensation
Committee Actions After Fiscal Year 2009
Compensation
Arrangements for Scott J. Seymour
On January 6, 2010, the Company entered into an employment
agreement with Mr. Seymour to serve as the Company’s
President and CEO. Pursuant to his employment agreement,
Mr. Seymour will be paid an annual base salary of $550,000,
and will be eligible for an annual bonus based on a target
opportunity up to 125% of his annual base salary. On
January 6, 2010, Mr. Seymour received
120,000 shares of the Company’s restricted common
stock and an option to purchase 100,000 shares of the
Company’s common stock (the “Option”). The Option
has a per share exercise price equal to the last sales price
reported for the Company’s common stock on the NYSE on the
date of grant. Mr. Seymour is also eligible to participate
in future grants pursuant to the 2009 Incentive Plan and other
Company performance incentive plans extended to the senior
executives of the Company generally, at levels commensurate with
his position. Mr. Seymour’s employment agreement has a
five-year term, unless earlier terminated in accordance with its
terms. In the event that the Company terminates
Mr. Seymour’s employment for Cause or Mr. Seymour
resigns other than for Good Reason (as such terms are defined in
his employment agreement), the Company’s obligations will
generally be limited to paying Mr. Seymour his annual base
salary through the termination date. If Mr. Seymour’s
employment is terminated at his or the Company’s election
at any time due to his death or disability, or for reasons other
than Cause or Voluntary Resignation (as defined in his
employment agreement), Mr. Seymour will be entitled to
receive the benefits described above and severance payments and
benefits equal to the following, subject to certain limitations:
(i) one year of his annual base salary paid in
installments; (ii) a bonus payment based upon
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the amount of the previous year’s bonus, prorated based on
the number of months of the year that Mr. Seymour worked
for the Company prior to the termination paid in a lump sum;
(iii) immediate vesting of any shares of the Company’s
restricted common stock or options that are scheduled to vest
within one year of the date of termination of employment and
(iv) bonuses earned but unpaid with respect to the fiscal
year ending on or preceding the date of termination pursuant to
the 2009 Incentive Plan.
Security
Ownership of Certain Beneficial Owners
The Company believes that the following table is an accurate
representation of beneficial owners of more than 5% of the
58,782,480 shares of the Common Stock outstanding as of
February 19, 2010. The table is based on reports of
Schedule 13D and Schedule 13G filed with the SEC on or
prior to February 19, 2010.
|
Amount and Nature of |
Percent |
|||||||
| Beneficial Owner | Beneficial Ownership | of Class | ||||||
|
GAMCO Investors, Inc.
|
6,732,426 | (1) | 11.5% | |||||
|
One Corporate Center Rye, NY 10580 |
||||||||
|
Whitebox Advisors, LLC
|
5,050,286 | (2) | 8.6% | |||||
|
3033 Excelsior Boulevard Suite 300 Minneapolis, MN 55416 |
||||||||
|
GenCorp Retirement Savings Plans
|
4,703,989 | (3) | 8.0% | |||||
|
c/o Fidelity
Management Trust Company 82 Devonshire Street Boston, MA 02109 |
||||||||
|
Steel Partners II, L.P.
|
4,055,737 | (4) | 6.9% | |||||
|
590 Madison Avenue 32nd Floor New York, NY 10022 |
||||||||
|
BlackRock, Inc.
|
3,856,990 | (5) | 6.6% | |||||
|
40 East 52nd Street New York, NY 10022 |
||||||||
|
Franklin Mutual Advisers, LLC
|
3,331,352 | (6) | 5.7% | |||||
|
101 John F. Kennedy Parkway Short Hills, CA 07078 |
||||||||
|
Sowood Capital Management LP
|
2,992,400 | (7) | 5.1% | |||||
|
500 Boylston Street, 17th Floor Boston, MA 02116 |
||||||||
| (1) | Includes shares beneficially owned by Mario J. Gabelli and various affiliated entities, including Gabelli Funds, LLC, GAMCO Asset Management Inc., Teton Advisors, Inc., GGCP, Inc., and GAMCO Investors, Inc. Gabelli Funds, LLC reported sole voting power and sole dispositive power with respect to 2,145,000 shares. GAMCO Asset Management Inc. reported sole voting power with respect to 3,817,634 shares and sole dispositive power with respect to 3,906,634 shares. Teton Advisors, Inc. reported sole voting power and sole dispositive power with respect to 499,700 shares. GGCP, Inc. reported sole voting power and sole dispositive power with respect to 20,000 shares. GAMCO Investors, Inc. reported sole voting power and sole dispositive power with respect to 161,092 shares. Includes 161,092 shares with respect to which the reporting persons have the right to acquire beneficial ownership upon conversion of the Company’s 4.0625% and 2.250% convertible subordinated debentures. All of the foregoing information is according to Amendment No. 48 to a Schedule 13D dated December 28, 2009 and filed with the SEC on December 28, 2009. |
| (2) | Includes shares beneficially owned by Whitebox Advisors, LLC and various affiliated entities, including Whitebox Convertible Arbitrage Advisors, LLC, Whitebox Convertible Arbitrage Partners, L.P., Whitebox Concentrated Convertible Arbitrage Fund, L.P., Whitebox Concentrated Convertible Arbitrage Fund, Ltd., Whitebox Combined Advisors, LLC, Whitebox Combined Partners, L.P., Whitebox Multi-Strategy Fund, L.P., Whitebox Multi-Strategy Fund, Ltd., Whitebox Hedged High Yield Advisors, LLC, Whitebox Hedged High Yield Partners, L.P., Whitebox Credit Arbitrage Fund, L.P., |
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Table of Contents
| Whitebox Credit Arbitrage Fund, Ltd., Whitebox Diversified Convertible Arbitrage Advisors, LLC, Whitebox Diversified Convertible Arbitrage Partners, L.P., Whitebox Diversified Convertible Arbitrage Fund, L.P., Whitebox Diversified Convertible Arbitrage Fund, Ltd., Pandora Select Advisors, LLC, Pandora Select Partners LP, Pandora Select Fund, LP, and Pandora Select Fund, Ltd. Whitebox Advisors, LLC reported shared voting power and shared dispositive power with respect to 5,050,286 shares. Whitebox Convertible Arbitrage Advisors, LLC, Whitebox Convertible Arbitrage Partners, L.P., Whitebox Concentrated Convertible Arbitrage Fund, L.P., and Whitebox Concentrated Convertible Arbitrage Fund, Ltd. each reported shared voting power and shared dispositive power with respect to 1,221,592 shares. Whitebox Combined Advisors, LLC, Whitebox Combined Partners, L.P., Whitebox Multi-Strategy Fund, L.P., and Whitebox Multi-Strategy Fund, Ltd each reported shared voting power and shared dispositive power with respect to 2,225,987 shares. Whitebox Hedged High Yield Advisors, LLC, Whitebox Hedged High Yield Partners, L.P., Whitebox Credit Arbitrage Fund, L.P., and Whitebox Credit Arbitrage Fund, Ltd. each reported shared voting power and shared dispositive power with respect to 624,086 shares. Whitebox Diversified Convertible Arbitrage Advisors, LLC, Whitebox Diversified Convertible Arbitrage Partners, L.P., Whitebox Diversified Convertible Arbitrage Fund, L.P., and Whitebox Diversified Convertible Arbitrage Fund, Ltd. each reported shared voting power and shared dispositive power with respect to 97,926 shares. Pandora Select Advisors, LLC, Pandora Select Partners LP, Pandora Select Fund, LP, and Pandora Select Fund, Ltd. each reported shared voting power and shared dispositive power with respect to 356,448 shares. All of the foregoing information is according to Amendment No. 1 to Schedule 13G dated February 8, 2010 and filed with the SEC on February 8, 2010. |
| (3) | Shares held as of December 31, 2009 by Fidelity Management Trust Company, the Trustee for the GenCorp Retirement Savings Plan. |
| (4) | Includes shares beneficially owned by Messrs. Lichtenstein and Henderson and various affiliated entities, including SPII, SPH, and Steel Partners, each of which (other than Mr. Henderson) reported shared voting power and shared dispositive power with respect to such shares. All of the foregoing information is according to Amendment No. 19 to a Schedule 13D dated February 18, 2010 and filed with the SEC on February 19, 2010. As noted in the table entitled Security Ownership of Officers and Directors on page 19 and as noted in the SPII Amendment No. 19 to a Schedule 13D dated February 18, 2010, Mr. Lichtenstein beneficially owns an additional 4,000 restricted shares of stock of the Company and Mr. Henderson beneficially owns an additional 7,500 restricted shares of stock of the Company, both awarded to them in their capacity as Directors of the Company. |
| (5) | On December 1, 2009, BlackRock, Inc. (“BlackRock”) completed its acquisition of Barclays Global Investors, NA and certain of its affiliates (collectively the “BGI Entities”) from Barclays Bank PLC. As a result, substantially all of the BGI Entities are now included as subsidiaries of BlackRock for purposes of Schedule 13G filings. BlackRock reported sole voting power and sole dispositive power with respect to such shares. All of the foregoing information is according to a Schedule 13G dated January 20, 2010 and filed with the SEC on January 29, 2010. |
| (6) | Includes shares beneficially owned by one or more open-end investment companies or other managed accounts which, pursuant to investment management contracts, which are managed by Franklin Mutual Advisers, LLC (“FMA”), an indirect wholly owned subsidiary of Franklin Resources, Inc. FMA reported sole voting power and sole dispositive power with respect to such shares pursuant to such investment management contracts. All of the foregoing information is according to Amendment No. 2 to Schedule 13G dated January 15, 2010 and filed with the SEC on January 22, 2010. |
| (7) | Includes shares beneficially owned by Sowood Capital Management LP and its general partner, Sowood Capital Management LLC, which reported shared voting power and shared dispositive power with respect to such shares. All of the foregoing information is according to a Schedule 13G dated October 10, 2006 and filed with the SEC on October 10, 2006. |
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the
Company’s Directors and certain officers and persons who
own more than 10% of the outstanding Common Stock to file
reports of ownership and changes in ownership on Forms 3, 4
and 5 with the SEC and the NYSE. The SEC also requires such
persons to furnish the Company with copies of the Forms 3,
4 and 5 they file. Based solely on our review of the copies of
such forms that the Company has received, the Company believes
that all of its Directors, executive officers and greater than
10% beneficial owners complied with all filing requirements
applicable to them with respect to transactions during fiscal
year 2009.
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PROPOSAL 2
APPROVAL TO AMEND THE COMPANY’S CHARTER TO RESTRICT CERTAIN TRANSFERS OF COMMON STOCK TO PRESERVE THE VALUE OF CERTAIN TAX ASSETS ASSOCIATED WITH NET LOSS CARRYFORWARDS UNDER SECTION 382 OF THE INTERNAL REVENUE CODE
APPROVAL TO AMEND THE COMPANY’S CHARTER TO RESTRICT CERTAIN TRANSFERS OF COMMON STOCK TO PRESERVE THE VALUE OF CERTAIN TAX ASSETS ASSOCIATED WITH NET LOSS CARRYFORWARDS UNDER SECTION 382 OF THE INTERNAL REVENUE CODE
Our shareholders are being asked to approve a proposed amendment
to our Charter (the “Charter Amendment”) to adopt
certain restrictions on acquisitions and dispositions of our
securities by persons who hold, or intend to acquire, 5% or more
of the value of our stock. The restrictions on acquisitions and
dispositions are intended to reduce the risk of a substantial
loss of potential tax benefits arising from our Net Operating
Losses (“NOLs”), Net Capital Losses (“NCLs”)
and certain other tax attributes.
Our Board has unanimously recommended and declared advisable
that our shareholders approve the proposed Charter Amendment.
A copy of the proposed Charter Amendment is attached to this
Proxy Statement as Exhibit A, and a summary of the Charter
Amendment is set forth below.
Background
and Purpose of the Charter Amendment
We have available NOLs, NCLs and certain other tax attributes to
offset our future taxable income. NOLs and NCLs benefit us by
offsetting future taxable income, if any,
dollar-for-dollar
and thereby eliminating (subject to an alternative minimum tax)
the U.S. federal corporate income tax on such income. The
benefit of the NOLs, NCLs and certain other tax attributes can
be reduced or eliminated if we undergo an ownership change, as
defined in the Code (“Ownership Change”). Generally,
there is an Ownership Change if, at any time, one or more 5%
shareholders (as defined in the Code) have aggregate increases
in their ownership in the corporation of more than 50% looking
back over the relevant testing period, which can occur as a
result of, among other things, acquisitions and certain
dispositions of common stock by 5% shareholders. Our Board
believes that it is in the best interests of our company and our
shareholders to adopt provisions in our Charter, which
provisions we refer to in this proxy statement as the
Section 382 Ownership Limit, that are designed, subject to
certain exceptions, to restrict direct and indirect acquisitions
or dispositions of our equity securities if such transactions
will affect the percentage of stock that is treated as owned by
a 5% shareholder.
Reason
and Purpose of Section 382 Ownership Limit
The Section 382 Ownership Limit is designed, subject to
certain exceptions, to restrict direct and indirect acquisitions
of our common stock that could result in the imposition of
limitations on our use, for U.S. federal income tax
purposes, of the NOLs, NCLs and certain other tax attributes
that are and will be available to us, as discussed more fully
below.
Description
of Charter Amendment
The proposed Charter Amendment will generally prohibit any
direct or indirect sale, transfer, assignment, exchange,
issuance, grant, redemption, repurchase, conveyance, pledge or
other disposition of shares of common stock of our company or
rights or options to purchase common stock of our company or any
other interests that would be treated as stock of our company
under the income tax regulations promulgated under the Code, if
as a result of such sale, transfer, assignment, exchange,
issuance, grant, redemption, repurchase, conveyance, pledge or
other disposition, any person or group becomes a 5% shareholder
(as defined in the Code), which generally includes a person or
group that beneficially owns 5% or more of the market value of
the total outstanding shares of common stock of our company, or
the percentage of common stock of our company owned by a 5%
shareholder (as defined in the Code) would be increased. As a
result of these restrictions, certain stock transactions by
existing 5% shareholders would be prohibited. In addition to
other exceptions, a person will not be treated as violating the
46
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Section 382 Ownership Limit as a result of acquiring shares
of stock, directly or indirectly, as a result of the issuance of
a warrant, the exercise thereof, the transfer or acquisition of
such warrant or stock acquired thereby, where such warrant had
first been issued upon approval of our Board unless and until
the person to whom such warrant was issued thereafter acquires
any stock that is unrelated to the warrant. Any attempted
transfer in violation of the foregoing restrictions will be null
and void ab initio unless the transferor or transferee obtains
the written approval of our Board. No employee or agent of our
company will record any purported transfer to the extent that
such transfer is prohibited by the proposed Charter Amendment,
and the purported transferee will not be entitled to any rights
of shareholders of our company with respect to the securities
that are the subject of the prohibited transfer, including the
right to vote such securities and to receive dividends or
distributions, whether liquidating or otherwise, in respect of
such securities.
If the proposed Charter Amendment is approved and our Board
determines that a transfer would be prohibited, then, upon our
written demand, the purported transferee will transfer the
securities that are the subject of the prohibited transfer, or
cause such securities to be transferred, to an agent designated
by our Board. The agent will sell the securities to a buyer or
buyers, which may include our company, in one or more
arm’s-length transactions that comply with the proposed
Charter Amendment. If the purported transferee has resold the
securities before receiving our demand to surrender them to our
agent, the purported transferee will be deemed to have sold the
securities for the agent and will be required to transfer to the
agent any distributions received with respect to such securities
and any proceeds of the sale of such securities (except for any
proceeds which our company grants the purported transferee
written permission to retain and which do not exceed the amount
that the purported transferee would have received from the agent
if the agent had resold such securities). The proceeds of the
sale of any such securities will be applied first to the agent
to cover its costs and expenses, second to the purported
transferee, up to the lesser of the amount paid by the purported
transferee for the securities or the fair market value of the
securities at the time of the attempted transfer, and third to
one or more charitable organizations selected by our Board. In
no event will the proceeds of the sale of such securities inure
to our benefit.
The proposed Charter Amendment will, subject to certain
exceptions, require any person who acquires or attempts to
acquire shares of our common stock or rights or options to
purchase our common stock or any other interests that would be
treated as our stock under the income tax regulations in
violation of the Section 382 Ownership Limit described
above to immediately give written notice to us of such event and
to provide to us such other information as we may request in
order to determine the effect, if any, of such purported
transfer on the preservation and usage of the benefit of our
NOLs, NCLs and certain other tax attributes.
If the proposed Charter Amendment is approved, all certificates
representing newly issued shares of our stock as well as
certificates issued in connection with the transfer of shares
that are subject to the foregoing restrictions will bear a
legend referencing such restrictions.
Continued
Risk of Ownership Change
Despite the adoption of the Section 382 Ownership Limit,
there still remains a risk that certain changes in relationships
among shareholders or other events will cause an Ownership
Change of our company under Section 382 and
Section 383 of the Code, including as a result of transfers
that do not violate the Section 382 Ownership Limit. We
believe the Section 382 Ownership Limit is enforceable. The
Internal Revenue Service (“IRS”) has issued several
private letter rulings in this area which indicate that, to the
extent Section 382 Ownership Limit is enforceable and is
enforced by a company, its terms will be respected for purposes
of applying Section 382 and Section 383 of the Code.
However, private letter rulings issued by the IRS cannot be
relied upon as legal precedent. There can be no assurance,
therefore, that if acquisitions in violation of the
Section 382 Ownership Limit are attempted, the IRS will
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not assert that such acquisitions have U.S. federal income
tax significance notwithstanding the Section 382 Ownership
Limit.
The Charter Amendment adopting the Section 382 Ownership
Limit is not binding with respect to shares of common stock
issued prior to the adoption of the Section 382 Ownership
Limit unless the holder of such shares has actual knowledge of
the Section 382 Ownership Limit, the Section 382
Ownership Limit is noted conspicuously on the certificate
representing such shares, or, in the case of uncertificated
shares, the registered owners are notified of the
Section 382 Ownership Limit. Therefore, even if the
Section 382 Ownership Limit is approved, we cannot assure
you that the Section 382 Ownership Limit will be
enforceable against all of our shareholders. Consequently, even
with the Charter Amendment, we may experience an Ownership
Change, including as a result of a waiver or modification by our
Board as described below.
Board
Power to Waive or Modify Section 382 Ownership
Limit
The Section 382 Ownership Limit will not apply if the
proposed transferor or transferee obtains an exemption from such
restrictions from our Board. Our Board may grant or deny such
exemption in its sole and absolute discretion and may grant such
exemption prospectively or retroactively. As a condition to
granting an exemption, our Board may, in its discretion, require
(at the expense of the transferor
and/or
transferee) an opinion of counsel selected by the Board that the
transfer will not result in any limitation on the use of the
benefit of our NOLs, NCLs or certain other tax attributes.
Anti-Takeover
Effects
Our Board unanimously recommends that the Section 382
Ownership Limit be adopted for the reasons set forth in this
proxy statement. You should be aware, however, that the
Section 382 Ownership Limit may have anti-takeover effects
in that, subject to the limitations set forth above, it will
restrict the ability of a person or entity or group to
accumulate our common stock such that they become a 5%
shareholder (as defined in the Code). Although the
Section 382 Ownership Limit is designed as a protective
measure to preserve and protect our NOLs, NCLs and certain other
tax attributes, the Section 382 Ownership Limit may, if our
Board does not grant an exemption, have the effect of impeding
or discouraging an acquisition of common stock tender offer or
other transaction, even if such a transaction may be favorable
to the interests of some or all of our shareholders. This might
prevent our common shareholders from realizing an opportunity to
sell all or a portion of their shares of our stock at higher
than market prices. In addition, the Section 382 Ownership
Limit may impede the assumption of control by a holder of a
large block of common stock and the removal of incumbent
directors and management, even if such removal may be beneficial
to all of our shareholders.
The Section 382 Ownership Limit is not in response to any
effort that we are aware of to accumulate our common stock or to
obtain control of our company. Our Board considers the
Section 382 Ownership Limit to be reasonable and in the
best interests of our company and our shareholders because the
Section 382 Ownership Limit reduces certain of the risks
that we will be unable to utilize our available NOLs, NCLs and
certain other tax attributes. In the opinion of our Board, the
fundamental importance to us and our shareholders of maintaining
the availability of the NOLs, NCLs and certain other tax
attributes is a more significant consideration than any indirect
anti-takeover effect the Section 382 Ownership Limit may
have.
The anti-takeover effect should also be considered in light of
other existing circumstances applicable to us, which could also
have the effect of preventing a takeover. For example, pursuant
to our Charter, our Board, with the approval of a majority of
the entire Board and without any action by our shareholders, may
amend our Charter from time to time to increase or decrease the
aggregate number of shares of common stock or the number of
shares of stock of any class or series that we have authority to
issue. Although we have no present intention of doing so, we
could issue a class or series of stock that
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Table of Contents
could delay, defer or prevent a change of control or other
transaction that might involve a premium price for holders of
our common stock or otherwise be in the interests of our
shareholders.
Possible
Effects on Liquidity
The Section 382 Ownership Limit will restrict a
shareholder’s ability to acquire, directly or indirectly,
additional shares of our common stock in excess of the specified
limitations. Furthermore, a shareholder’s ability to
dispose of such shareholder’s stock may be restricted as a
result of the Section 382 Ownership Limit, and a
shareholder’s ownership of common stock may become subject
to the Section 382 Ownership Limit upon the actions taken
by certain related persons. If the Section 382 Ownership
Limit is approved, we would impose a legend reflecting the
Section 382 Ownership Limit on certificates representing
newly issued or transferred shares of common stock or, in the
case of uncertificated shares, notify the registered owners of
the Section 382 Ownership Limit. These restrictions
increase any risks associated with the ownership of our common
stock and may also result in a decreased valuation of such stock
due to the resulting restrictions on acquisition to persons
directly or indirectly owning or seeking to acquire a
significant block of our common stock.
Vote
Required and Board Recommendation
For the proposal to approve the Charter Amendment, you may vote
in favor of the proposal, against the proposal or abstain from
voting. If a quorum is present, approval of this proposal
requires the affirmative vote of at least a majority of the
outstanding shares of Common Stock entitled to vote at the
Annual Meeting.
Our Board unanimously recommends a vote FOR the proposal
to approve the Charter Amendment.
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PROPOSAL 3
APPROVAL OF CERTAIN AMENDMENTS TO THE GENCORP 2009 EQUITY AND
PERFORMANCE INCENTIVE PLAN
APPROVAL OF CERTAIN AMENDMENTS TO THE GENCORP 2009 EQUITY AND
PERFORMANCE INCENTIVE PLAN
On March 25, 2009, the Company’s shareholders approved
the adoption of the GenCorp 2009 Equity and Performance
Incentive Plan (referred to in this section of the Proxy
Statement as the “Plan”), which contained
500,000 shares of GenCorp common stock available for grant
thereunder. The Plan provides equity-based compensation through
the grant of cash-based awards, nonqualified stock options,
incentive stock options, stock appreciation rights
(“SARs”), restricted stock, restricted stock units,
performance shares, performance units and other stock-based
awards. On October 6, 2009, the Board, upon the
recommendation and approval of the Compensation Committee
approved certain amendments, effective October 6, 2009, to
the Plan, including an amendment to the definition of
“Change in Control” (applicable to grants made after
October 6, 2009) such that the definition of
“Change in Control” would be consistent among each of
the Company Plans. The October 2009 amendment did not require
prior shareholder approval.
The Company’s shareholders are now being asked to approve
an amendment to the Plan to increase by 1,500,000 the number of
shares of GenCorp common stock that the Company may issue under
the Plan and increase the maximum individual award limits set
forth therein. Under the Plan, as amended and restated by this
proposal, the total shares available for award grants will equal
2,000,000, although awards for 236,794 of the
500,000 shares currently authorized under the Plan already
have been granted. The individual award limits will also be
amended as follows:
|
Proposed |
||||||||||
| Maximum Number of Shares Available for Awards | Current | Amendment | ||||||||
|
• Full Value Awards
|
250,000 | 1,000,000 | ||||||||
|
• For Nonemployee Directors
|
50,000 | 200,000 | ||||||||
|
• For Nonemployee Directors (per year)
|
10,000 | 150,000 | ||||||||
|
Annual Award Limits (per
Participant)
|
||||||||||
|
• Options
|
50,000 | 200,000 | ||||||||
|
• Incentive Stock Options
|
50,000 | 200,000 | ||||||||
|
• SARs
|
50,000 | 200,000 | ||||||||
|
• Restricted Stock or Restricted Stock
Units
|
50,000 | 200,000 | ||||||||
|
• Performance Units or Performance Shares
|
50,000 | 200,000 | ||||||||
|
• Cash-Based Awards
|
$ | 100,000 | $ | 100,000 | ||||||
|
• Other Stock-Based Awards
|
100,000 | 100,000 | ||||||||
The Company believes that an adequate reserve of shares
available for issuance under the Plan is necessary to enable the
Company to attract, motivate, and retain key employees and
Directors and to provide an additional incentive for such
individuals through stock ownership and other rights that
promote and recognize the financial success and growth of the
Company. The Company also believes the individual award limits
should be increased to accommodate potential changes in Director
compensation that may provide for more stock-based awards than
cash-based awards. For this purpose, subject to the approval of
shareholders, the Board adopted the GenCorp Inc. Amended and
Restated 2009 Equity and Performance Incentive Plan on
January 26, 2010 and February 14, 2010. If
shareholders do not approve the amended and restated Plan, the
Plan will remain in place in accordance with its terms prior to
such amendment and restatement.
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A copy of the amended and restated Plan is attached to this
Proxy Statement as Exhibit B, and a summary of the Plan, as
amended and restated, is set forth below. The summary is
qualified in its entirety by reference to the amended and
restated Plan.
Other than the proposed amendments to the Plan to increase the
number of shares of GenCorp common stock that the Company may
issue under the Plan and increase the maximum individual award
limits set forth therein, there have been no other material
changes to the Plan which would require prior shareholder
approval.
The Company intends to register the 1,500,000 share
increase on a Registration Statement on
Form S-8
under the Securities Act of 1933, as amended, as soon as is
practicable after receiving shareholder approval.
Summary
of the Amended Plan
Purpose of the Plan. The Plan is intended as
an incentive to attract, motivate, and retain employees and
Directors upon whose judgment, initiative, and efforts the
financial success and growth of the business of the Company
largely depend, and to provide an additional incentive for such
individuals through stock ownership and other rights that
promote and recognize the financial success and growth of the
Company and create value for shareholders.
Administration of the Plan. The Plan is to be
administered by the Compensation Committee consisting of two or
more directors who are “non-employee directors” within
the meaning of
Rule 16b-3
and, “outside directors” within the meaning of
Section 162(m) of the Code. In the event that for any
reason the Compensation Committee is unable to act or if the
Compensation Committee at the time of any grant, award or other
acquisition under the Plan does not consist of two or more
“non-employee directors,” or if there is no such
committee, then the Plan will be administered by the Board.
Subject to the other provisions of the Plan, the Compensation
Committee will have the authority, in its discretion:
(i) to grant cash-based awards, nonqualified stock options,
incentive stock options, SARs, restricted stock, restricted
stock units, performance shares, performance units and other
stock-based awards, all of which are referred to collectively as
“Awards”; (ii) to determine the terms and
conditions of each Award granted (which need not be identical);
(iii) to interpret the Plan and all Awards granted
thereunder; and (iv) to make all other determinations
necessary or advisable for the administration of the Plan.
Eligibility. The persons eligible for
participation in the Plan as recipients of Awards include
employees and Directors to the Company or any subsidiary or
affiliate of the Company. Approximately 200 individuals are
currently eligible to participate in the Plan. In selecting
participants, and determining the number of shares of Common
Stock covered by each Award, the Compensation Committee may
consider any factors that it deems relevant.
Shares Subject to the Plan. Subject to
the conditions outlined below, the total number of shares of
Common Stock which may be issued pursuant to Awards granted
under the Plan may not exceed 2,000,000 shares of Common
Stock.
In the event of certain corporate events or transactions
(including, but not limited to, a change in a majority of the
members of the Board, the sale of all, or substantially all, of
the assets of the Company or a change in the shares of the
Company or the capitalization of the Company), the Compensation
Committee, in its sole discretion, in order to prevent dilution
or enlargement of a participant’s rights under the Plan,
shall substitute or adjust, as applicable, the number and kind
of shares of Common Stock that may be issued under the Plan or
under particular forms of Awards, the number and kind of shares
of Common Stock subject to outstanding Awards, the option price
or grant price applicable to outstanding Awards, the annual
Award limits, and other value determinations applicable to
outstanding Awards.
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Options. An option granted under the Plan is
designated at the time of grant as either an incentive stock
option or as a non-qualified stock option. Upon the grant of an
option to purchase shares of Common Stock, the Compensation
Committee will specify the option price, the maximum duration of
the option, the number of shares of Common Stock to which the
option pertains, the conditions upon which an option shall
become vested and exercisable, and such other provisions as the
Compensation Committee shall determine which are not
inconsistent with the terms of the Plan. The purchase price of
each share of Common Stock purchasable under an option will be
determined by the Compensation Committee at the time of grant,
but may not be less than 100% of the fair market value of such
share of Common Stock on the date the option is granted,
provided, however, that an option granted outside the United
States to a person who is a
non-U.S. taxpayer
may be granted with a option price less than the fair market
value of the underlying shares on the date of grant if necessary
to utilize a locally available tax advantage. No option shall be
exercisable later than the seventh anniversary date of its
grant, provided, that for options granted to participants
outside the United States who are
non-U.S. taxpayers,
the Compensation Committee has the authority to grant options
that have a term greater than seven years.
SARs. SARs will be exercisable at such time or
times and subject to such terms and conditions as determined by
the Compensation Committee. The term of SARs granted under the
Plan shall be determined by the Compensation Committee, in its
sole discretion, and except as determined otherwise by the
Compensation Committee, no stock appreciation right shall be
exercisable later than the seventh anniversary date of its
grant, provided, however, that for SARs granted to participants
who are
non-U.S. taxpayers,
the Compensation Committee has the authority to grant SARs that
have a term greater than seven years.
Restricted Stock and Restricted Stock
Units. Shares of restricted stock
and/or
restricted stock units may be granted under the Plan aside from,
or in association with, any other Award and will be subject to
certain conditions and contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the
Compensation Committee deems desirable. Except with respect to a
maximum of 5% of the shares authorized under the Plan or as
otherwise provided in the Plan, any Awards of restricted stock
and/or
restricted stock units which vest on the basis of the
participant’s continued employment with or provision of
service to the Company shall not provide for vesting which is
any more rapid than annual pro rata vesting over a three year
period and any Awards of restricted stock
and/or
restricted stock units which vest upon the attainment of
performance goals shall provide for a performance period of at
least 12 months.
Performance Units/Performance Shares. Subject
to the terms and provisions of the Plan, the Compensation
Committee, at any time and from time to time, may grant
performance units
and/or
performance shares to participants in such amounts and upon such
terms as the Compensation Committee shall determine. Each
performance unit shall have an initial value that is established
by the Compensation Committee at the time of grant. Each
performance share shall have an initial value equal to the fair
market value of a share of Common Stock on the date of grant.
The Compensation Committee shall set performance goals in its
discretion which, depending on the extent to which they are met,
will determine the value
and/or
number of performance units/performance shares that will be paid
out to the participant.
Cash-Based Awards and Other Stock-Based
Awards. Subject to the provisions of the Plan,
the Compensation Committee may grant cash-based awards or other
types of equity-based or equity-related awards not otherwise
described by the terms of the Plan (including the grant or offer
for sale of unrestricted shares of Common Stock) in such amounts
and subject to such terms and conditions, as the Compensation
Committee shall determine. Such Awards may involve the transfer
of actual shares of Common Stock to participants, or payment in
cash or otherwise of amounts based on the value of shares of
Common Stock and may include, without limitation, Awards
designed to comply with or take advantage of the applicable
local laws of jurisdictions other than the United States. Each
cash-based award shall specify a payment amount or payment range
as determined by the Compensation Committee.
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Each other stock-based award shall be expressed in terms of
shares of Common Stock or units based on shares of Common Stock,
as determined by the Compensation Committee.
Restrictions on Transferability. The Awards
granted under the Plan are not transferable and may be exercised
solely by a participant during his lifetime or after his death
by the person or persons entitled thereto under his will or the
laws of descent and distribution or as otherwise required by
law. Any attempt to transfer, assign, pledge or otherwise
dispose of, or to subject to execution, attachment or similar
process, any Award contrary to the provisions set forth in the
Plan will be void and ineffective and will give no right to the
purported transferee.
Change in Control. The Compensation Committee
may provide for the acceleration of the vesting and
exercisability of outstanding options, vesting of restricted
stock and restricted stock units and earlier exercise of
Freestanding SARs, in the event of a Change in Control of the
Company.
Termination of the Plan. Unless sooner
terminated as provided therein, the Plan shall terminate ten
years from the date the Plan is approved by shareholders.
Amendments to the Plan. The Compensation
Committee may at any time alter, amend, modify, suspend, or
terminate the Plan and any evidence of Award in whole or in
part; provided, however, that, without the prior approval of the
Company’s shareholders, options issued under the Plan to
any individual will not be repriced, replaced, or regranted
through cancellation, and no amendment of the Plan shall be made
without shareholder approval if shareholder approval is required
by law, regulation, or stock exchange rule.
Federal
Income Tax Consequences
Incentive Options. Options that are granted
under the Plan and that are intended to qualify as incentive
stock options must comply with the requirements of
Section 422 of the Code. An option holder is not taxed upon
the grant or exercise of an incentive stock option; however, the
difference between the fair market value of the shares of Common
Stock on the exercise date and the exercise price will be an
item of adjustment for purposes of the alternative minimum tax.
If an option holder holds shares of Common Stock acquired upon
the exercise of an incentive stock option for at least two years
following the date of the grant of the option and at least one
year following the exercise of the option, the option
holder’s gain, if any, upon a subsequent disposition of
such shares will be treated as long-term capital gain for
federal income tax purposes. The measure of the gain is the
difference between the proceeds received on disposition and the
option holder’s basis in the shares (which generally would
equal the exercise price). If the option holder disposes of
shares of Common Stock acquired pursuant to exercise of an
incentive stock option before satisfying the
one-and-two
year holding periods described above, the option holder may
recognize both ordinary income and capital gain in the year of
disposition. The amount of the ordinary income will be the
lesser of (i) the amount realized on disposition less the
option holder’s adjusted basis in the shares (generally the
option exercise price); or (ii) the difference between the
fair market value of the shares on the exercise date and the
option price. The balance of the consideration received on such
disposition will be long-term capital gain if the shares had
been held for at least one year following exercise of the
incentive stock option.
The Company is not entitled to an income tax deduction on the
grant or the exercise of an incentive stock option or on the
option holder’s disposition of the shares of Common Stock
after satisfying the holding period requirement described above.
If the holding periods are not satisfied, the Company will
generally be entitled to an income tax deduction in the year the
option holder disposes of the shares, in an amount equal to the
ordinary income recognized by the option holder.
Nonqualified Options. In the case of a
non-qualified stock option, an option holder is not taxed on the
grant of such option. Upon exercise, however, the participant
recognizes ordinary income equal to the difference between the
option price and the fair market value of the shares of Common
Stock on the date
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of the exercise. The Company is generally entitled to an income
tax deduction in the year of exercise in the amount of the
ordinary income recognized by the option holder. Any gain on
subsequent disposition of the shares of Common Stock is
long-term capital gain if the shares are held for at least one
year following the exercise. The Company does not receive an
income tax deduction for this gain.
SARs. No taxable income will be recognized by
an option holder upon receipt of a stock appreciation right and
the Company will not be entitled to a tax deduction upon the
grant of such right.
Upon the exercise of a stock appreciation right, the holder will
include in taxable income, for federal income tax purposes, the
fair market value of the cash and other property received with
respect to the stock appreciation right and the Company will
generally be entitled to a corresponding tax deduction.
Other Awards. A recipient of restricted stock,
restricted stock units, performance shares and performance units
will not have taxable income upon grant, but will have ordinary
income at the time of vesting. The amount of income will equal
the fair market value on the vesting date of the shares
and/or cash
received minus the amount, if any, paid by the recipient. A
recipient of restricted stock may instead, however, elect to be
taxed at the time of grant. The Company will generally be
entitled to an income tax deduction for the taxable year for
which the recipient includes the amount in income.
The Plan is intended to satisfy the performance-based
compensation exception to the limitation on the Company’s
tax deductions imposed by Section 162(m) of the Code with
respect to those grants for which such qualification as
available and for such exception is intended. The Plan is
designed so that all awards are either exempt from
Section 409A of the Code or will satisfy Section 409A
of the Code.
Aggregate
Past Grants Under the Plan
As of February 19, 2010, awards covering
236,794 shares of GenCorp common stock had been granted
under the Plan. This number of shares includes shares subject to
awards that expired or terminated without having been exercised
or paid and became available for new award grants under the
Plan. The following table shows information regarding the
distribution of those awards among the persons
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and groups identified below, option exercises and restricted
stock and restricted stock vesting prior to that date, and any
option, unvested restricted stock and restricted stock holdings
as of that date.
|
Number of Shares |
Number of Shares |
|||||||||
|
Underlying Stock |
Underlying |
|||||||||
| Name and Principal Position | Options | Restricted Stock | ||||||||
|
J. Scott Neish
|
— | — | ||||||||
|
Interim President and CEO and Vice President; and
President, Aerojet-General Corporation |
||||||||||
|
Scott J. Seymour
|
100,000 | 120,000 | ||||||||
|
President and CEO and President of Aerojet-General Corporation
|
||||||||||
|
Kathleen E. Redd
|
8,750 | (1) | 7,500 | (1) | ||||||
|
Vice President, CFO and Secretary
|
||||||||||
|
Chris W. Conley
|
1,875 | (1) | 1,875 | (1) | ||||||
|
Vice President, Environmental, Health & Safety
|
||||||||||
|
Robert E. Shenton
|
3,572 | (1) | 2,500 | (1) | ||||||
|
Vice President and Chief Operating Officer,
Aerojet-General Corporation |
||||||||||
|
Total for all current Executive Officers (including the Named
Executive Officers identified above)
|
115,447 | (2) | 133,125 | (2) | ||||||
|
Non-Executive Director Group
|
— | — | ||||||||
|
All employees, including all current officers who are not
executive officers, as a group
|
43,293 | (3) | 28,169 | (3) | ||||||
| (1) | Potential awards which, if approved by the Compensation Committee, that could not be fully awarded under the 1999 GenCorp Inc. Equity and Performance Incentive Plan because of any numerical limit on awards set forth thereunder. |
| (2) | Includes potential awards which, if approved by the Compensation Committee, that could not be fully awarded under the 1999 GenCorp Inc. Equity and Performance Incentive Plan because of any numerical limit on awards set forth thereunder amounting to 15,447 shares and 13,125 shares for stock options and restricted stock, respectively. |
| (3) | Includes potential awards which, if approved by the Compensation Committee, that could not be fully awarded under the 1999 GenCorp Inc. Equity and Performance Incentive Plan because of any numerical limit on awards set forth thereunder amounting to 31,000 shares and 19,469 shares for stock options and restricted stock, respectively. |
New Plan
Benefits
No awards will be granted under the Plan with respect to this
Proposal 3 prior to approval by the shareholders of the
Company of the amended and restated Plan containing the share
reserve increase. Awards under the Plan will be granted at the
discretion of the Compensation Committee and, accordingly, are
not yet determinable. In addition, benefits under the Plan will
depend on a number of factors, including the fair market value
of the Company’s common stock on future dates, and actual
Company performance against performance goals established with
respect to performance awards, among other
55
Table of Contents
things. Consequently, it is not possible to determine the exact
benefits or number of shares subject to awards that may be
granted in the future to persons eligible for participation in
the Plan
As of February 19, 2010, the fair market value of a share of the
Company’s common stock was $4.53.
Vote
Required and Board Recommendation
The affirmative vote of the holders of at least a majority of
the votes cast at the Annual Meeting is necessary to approve
this proposal. Abstentions and broker non-votes will not be
counted as votes cast and will have no effect on the outcome of
the vote.
Our Board unanimously recommends a vote FOR the amendment to
the GenCorp Inc. 2009 Equity and Performance Incentive Plan.
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PROPOSAL 4
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed PwC to serve as the
Company’s independent registered public accounting firm for
fiscal year 2010. The Audit Committee is submitting
Proposal 4 to shareholders for ratification as a corporate
governance practice. Ultimately, the Audit Committee retains
full discretion and will make all determinations with respect to
the appointment of the independent auditors, whether or not the
Company’s shareholders ratify the appointment.
Representatives of PwC are expected to be present at the Annual
Meeting to answer questions. They also will have the opportunity
to make a statement if they desire to do so.
The affirmative vote of the holders of at least a majority of
the votes cast at the Annual Meeting is necessary to approve
Proposal 4, the ratification of the appointment of the
Company’s independent auditors. Abstentions and broker
non-votes will not be counted as votes cast and will have no
effect on the outcome of the vote on Proposal 4. The
persons named in the accompanying form of proxy intend to vote
such proxies to ratify the appointment of PwC unless a contrary
choice is indicated.
The Board unanimously recommends a vote FOR the ratification
of the appointment of PwC as the Company’s independent
registered public accounting firm for fiscal year 2010.
Audit
Fees
The Auditors’ aggregate fees billed for professional
services rendered by them for the audit of the Company’s
annual financial statements, the review of financial statements
included in the Company’s quarterly reports on
Form 10-Q,
or services that are normally provided in connection with
statutory audits were:
| Fiscal Year Ended | ||||||||
| 2009 | 2008 | |||||||
| In Thousands | ||||||||
|
Audit fees
|
$ | 2,714 | $ | 3,315 | ||||
Audit-Related
Fees
The Auditors’ aggregate fees billed for assurance and
related services that are reasonably related to the performance
of the audit or review of the Company’s financial
statements, and are not reported under “Audit Fees”
above were:
| Fiscal Year Ended | ||||||||
| 2009 | 2008 | |||||||
| In Thousands | ||||||||
|
Audit-related fees
|
$ | 20 | $ | — | ||||
Tax
Fees
The Auditors’ aggregate fees billed for professional
services rendered by them for tax compliance, tax advice and tax
planning were:
| Fiscal Year Ended | ||||||||
| 2009 | 2008 | |||||||
| In Thousands | ||||||||
|
Tax fees
|
$ | 71 | $ | 14 | ||||
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All Other
Fees
The Auditors’ aggregate fees billed for products and
services provided by them, other than those reported under
“Audit Fees,” “Audit-Related Fees” and
“Tax Fees,” were:
| Fiscal Year Ended | ||||||||
| 2009 | 2008 | |||||||
| In Thousands | ||||||||
|
All other fees
|
$ | 9 | $ | 10 | ||||
Policy on
Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Registered Public Accounting
Firm
Consistent with SEC policies regarding auditor independence, the
Audit Committee has responsibility for appointing, setting
compensation and overseeing the work of the independent
auditors. In recognition of this responsibility, the Audit
Committee has established a policy to pre-approve all audit and
permissible non-audit services provided by the independent
auditors.
Prior to engagement of the independent auditors for the next
year’s audit, management will submit an aggregate of
services expected to be rendered during the year for Audit,
Audit-Related, Tax and Other Fees for approval. Prior to
engagement, the Audit Committee pre-approves these services by
category of service. The fees are budgeted and the Audit
Committee requires the independent auditors and management to
report actual fees versus the budget periodically throughout the
year by category of service. During the fiscal year,
circumstances may arise when it may become necessary to engage
the independent auditors for additional services not
contemplated in the original pre-approval. In those instances,
the Audit Committee requires specific pre-approval before
engaging the independent auditors.
The Audit Committee may delegate pre-approval authority to one
or more of its members. The member to whom such authority is
delegated must report, for informational purposes only, any
pre-approval decisions to the Audit Committee at its next
scheduled meeting. None of the services described above was
approved by the Audit Committee under the de minimus
exception provided by
Rule 2-01(c)(7)(i)(C)
under
Regulation S-X.
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Other
Business
As of the time this Proxy Statement was printed, the Company was
unaware of any proposals to be presented for consideration at
the Annual Meeting other than those set forth herein, but, if
other matters do properly come before the Annual Meeting, it is
the intention of the persons named in the accompanying form of
proxy pursuant to discretionary authority conferred thereby, to
vote the proxy in accordance with their best judgment on such
matters.
Submission
of Shareholder Proposals
Shareholders who intend to have their proposals considered for
inclusion in the Company’s proxy materials related to the
2011 annual meeting of shareholders must submit their proposals
to the Company no later than October 29, 2010. Shareholders
who intend to present a proposal at the 2011 annual meeting of
shareholders without inclusion of that proposal in the
Company’s proxy materials are required to provide notice of
their proposal to the Company no later than January 12,
2011. The Company’s proxy for the 2011 annual meeting of
shareholders will grant authority to the persons named in the
proxy card to exercise their voting discretion with respect to
any proposal of which the Company does not receive notice by
January 12, 2011. All proposals for inclusion in the
Company’s proxy materials and notices of proposals should
be sent to Chairman of the Corporate Governance Committee,
c/o Secretary,
GenCorp Inc., P.O. Box 537012, Sacramento, CA
95853-7012
(overnight courier — Highway 50 & Aerojet Road,
Rancho Cordova, CA 95742).
It is important that proxies be voted promptly; therefore,
shareholders who do not expect to attend in person are urged to
vote by either (a) using the toll-free telephone number
shown on your proxy card, (b) casting your vote
electronically at the web site listed on your proxy card, or
(c) completing, signing, dating and promptly returning the
accompanying proxy card in the enclosed envelope, which requires
no postage if mailed in the United States.
By Order of the Board of Directors,
/s/ KATHLEEN
E. REDD
Vice President,
Chief Financial Officer
and Secretary
February 26, 2010
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EXHIBIT A
Eleventh: Restrictions on Transfers
11.1 Definitions. As used in this
Article ELEVENTH, the following capitalized terms have the
following meanings when used herein with initial capital letters
(and any references to any portions of Treasury Regulation
§ 1.382-2T shall include any successor provisions):
“5-percent Transaction” means any Transfer
described in clause (a) or (b) of Section 11.2.
“5-percent Stockholder” means a Person or group
of Persons that is a “5-percent shareholder” of the
Corporation pursuant to Treasury Regulation
§ 1.382-2T(g).
“Agent” has the meaning set forth in
Section 11.5.
“Board of Directors” or “Board” means
the board of directors of the Corporation.
“Code” means the United States Internal Revenue
Code of 1986, as amended from time to time, and the rulings
issued thereunder.
“Common Stock” means any interest in Common
Stock, par value $0.10 per share, of the Corporation that would
be treated as “stock” of the Corporation pursuant to
Treasury Regulation § 1.382-2T(f)(18).
“Corporation Security” or “Corporation
Securities” means (i) shares of Common Stock,
(ii) shares of Preferred Stock (other than preferred stock
described in Section 1504(a)(4) of the Code),
(iii) warrants, rights, or options (including options
within the meaning of Treasury Regulation
§ 1.382-2T(h)(4)(v)) to purchase Securities of the
Corporation, and (iv) any Stock.
“Effective Date” means the date of filing of
this Certificate of Amendment of Articles of Incorporation of
the Corporation with the Secretary of State of the State of Ohio.
“Excess Securities” has the meaning given such
term in Section 11.4.
“Expiration Date” means the earlier of
(i) the repeal of Section 382 of the Code or any
successor statute if the Board of Directors determines that this
Article ELEVENTH is no longer necessary for the
preservation of Tax Benefits, (ii) the beginning of a
taxable year of the Corporation to which the Board of Directors
determines that no Tax Benefits may be carried forward or
(iii) such date as the Board of Directors shall fix in
accordance with Section 11.12 of this Article ELEVENTH.
“Percentage Stock Ownership” means the
percentage Stock Ownership interest of any Person or group (as
the context may require) for purposes of Section 382 of the
Code as determined in accordance with the Treasury Regulation
§ 1.382-2T(g), (h), (j) and (k) or any
successor provision.
“Person” means any individual, firm,
corporation, partnership, limited liability company or other
legal entity, and includes any successor (by merger or
otherwise) of such entity; provided, however, that a Person
shall not mean a Public Group.
“Pre-existing 5-percent Stockholder” means
(i) any Person that has filed a Schedule 13D or 13G
with respect to the Corporation on or before the Effective Date
and (ii) any “5-percent owner” or “higher
tier entity” of any Person described in clause (i)
within the meaning of Treasury Regulation
§ 1.382-2T(f)(10) and 1.382-2T(f)(14).
“Preferred Stock” means any interest in
Cumulative Preference Stock, par value $1.00 per share, of the
Corporation that would be treated as “stock” of the
Corporation pursuant to Treasury Regulation
§ 1.382-2T(f)(18).
“Prohibited Distributions” means any and all
dividends or other distributions paid by the Corporation with
respect to any Excess Securities received by a Purported
Transferee.
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“Prohibited Transfer” means any Transfer or
purported Transfer of Corporation Securities to the extent that
such Transfer is prohibited
and/or void
under this Article ELEVENTH.
“Public Group” has the meaning set forth in
Treasury Regulation § 1.382-2T(f)(13).
“Purported Transferee” has the meaning set
forth in Section 11.4.
“Securities” and “Security” each has
the meaning set forth in Section 11.7.
“Stock” means any interest that would be
treated as “stock” of the Corporation pursuant to
Treasury Regulation § 1.382-2T(f)(18).
“Stock Ownership” means any direct or indirect
ownership of Stock, including any ownership by virtue of
application of constructive ownership rules, with such direct,
indirect, and constructive ownership determined under the
provisions of Section 382 of the Code and the regulations
thereunder.
“Tax Benefits” means the net operating loss
carryforwards, capital loss carryforwards, general business
credit carryforwards, alternative minimum tax credit
carryforwards and foreign tax credit carryforwards, as well as
any loss or deduction attributable to a “net unrealized
built-in loss” of the Corporation or any direct or indirect
subsidiary thereof, within the meaning of Section 382 of
the Code.
“Transfer” means, any direct or indirect sale,
transfer, assignment, conveyance, pledge or other disposition or
other action taken by a person, other than the Corporation, that
alters the Percentage Stock Ownership of any Person or group. A
Transfer also shall include the creation or grant of an option
(including an option within the meaning of Treasury Regulation
§ 1.382-2T(h)(4)(v)). For the avoidance of doubt, a
Transfer shall not include the creation or grant of an option by
the Corporation, nor shall a Transfer include the issuance of
Stock by the Corporation.
“Transferee” means any Person to whom
Corporation Securities are Transferred.
“Treasury Regulations” means the regulations,
including temporary regulations or any successor regulations
promulgated under the Code, as amended from time to time.
11.2 Transfer and Ownership
Restrictions. In order to preserve the Tax
Benefits, from and after the Effective Date of this
Article ELEVENTH any attempted Transfer of Corporation
Securities prior to the Expiration Date and any attempted
Transfer of Corporation Securities pursuant to an agreement
entered into prior to the Expiration Date, shall be prohibited
and void ab initio (a) if the transferor is a 5-percent
Stockholder or (b) to the extent that, as a result of such
Transfer (or any series of Transfers of which such Transfer is a
part), either (1) any Person or group of Persons would
become a 5-percent Stockholder or (2) the Percentage Stock
Ownership in the Corporation of any 5-percent Stockholder would
be increased.
11.3 Exceptions.
(a) Notwithstanding anything to the contrary herein,
if a Transfer by (but not to) a Pre-existing
5-percent
Stockholder otherwise would be prohibited by Section 11.2,
such Transfer shall not be prohibited under Section 11.2 if
both of the following conditions are met: (i) such Transfer
does not increase the Percentage Stock Ownership of any
5-percent Stockholder or create a new 5-percent Stockholder, in
each case other than a Public Group (including a new Public
Group created under Treasury Regulation
§ 1.382-2T(j)(3)(i)), and (ii) the Stock that is
the subject of the Transfer was acquired by such Pre-existing
5-percent Stockholder prior to the Effective Date.
(b) The restrictions set forth in Section 11.2
shall not apply to an attempted Transfer that is a
5-percent
Transaction if the transferor or the Transferee obtains the
written approval of the Board of Directors or a duly authorized
committee thereof. As a condition to granting its approval
pursuant to this Section 11.3, the Board of Directors, may,
in its sole discretion, require (at the expense of the
transferor
and/or the
Transferee) an opinion of counsel selected by the Board of
Directors that the Transfer shall not result in the application
of any Section 382 of the Code limitation on the use of the
Tax Benefits;
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provided that the Board may grant such approval notwithstanding
the effect of such approval on the Tax Benefits if it determines
that the approval is or is reasonably likely to be in the best
interests of the Corporation. The Board of Directors may impose
such conditions, if any, that it deems reasonable and
appropriate in connection with such approval, including, without
limitation, restrictions on the ability of any Transferee to
Transfer Stock acquired through a Transfer. Approvals of the
Board of Directors hereunder may be given prospectively or
retroactively. The Board of Directors, to the fullest extent
permitted by law, may exercise the authority granted by this
Article ELEVENTH through duly authorized officers or agents
of the Corporation. Nothing in this Section 11.3 shall be
construed to limit or restrict the Board of Directors in the
exercise of its fiduciary duties under applicable law.
11.4 Excess Securities.
(a) No employee or agent of the Corporation shall
record any Prohibited Transfer, and the purported transferee of
such a Prohibited Transfer (the “Purported
Transferee”) shall not be recognized as a shareholder of
the Corporation for any purpose whatsoever in respect of the
Corporation Securities which are the subject of the Prohibited
Transfer (the “Excess Securities”). Until the Excess
Securities are acquired by another person in a Transfer that is
not a Prohibited Transfer, the Purported Transferee shall not be
entitled with respect to such Excess Securities to any rights of
shareholders of the Corporation, including, without limitation,
the right to vote such Excess Securities and to receive
dividends or distributions, whether liquidating or otherwise, in
respect thereof, if any, and the Excess Securities shall be
deemed to remain with the transferor unless and until the Excess
Securities are transferred to the Agent pursuant to
Section 11.5 or until an approval is obtained under
Section 11.3(b). After the Excess Securities have been
acquired in a Transfer that is not a Prohibited Transfer, the
Corporation Securities shall cease to be Excess Securities. For
this purpose, any Transfer of Excess Securities not in
accordance with the provisions of this Section 11.4 or
Section 11.5 shall also be a Prohibited Transfer.
(b) The Corporation may require as a condition to the
registration of the Transfer of any Corporation Securities or
the payment of any distribution on any Corporation Securities
that the proposed Transferee or payee furnish to the Corporation
all information reasonably requested by the Corporation with
respect to all of the direct or indirect ownership interests in
such Corporation Securities. The Corporation may make such
arrangements or issue such instructions to its stock transfer
agent as may be determined by the Board of Directors to be
necessary or advisable to implement this Article ELEVENTH,
including, without limitation, authorizing such transfer agent
to require an affidavit from a Purported Transferee regarding
such Person’s actual and constructive ownership of stock
and other evidence that a Transfer will not be prohibited by
this Article ELEVENTH as a condition to registering any
transfer.
11.5 Transfer to Agent. If the
Board of Directors determines that a Transfer of Corporation
Securities constitutes a Prohibited Transfer then, upon written
demand by the Corporation sent within thirty days of the date on
which the Board of Directors determines that the attempted
Transfer would result in Excess Securities, the Purported
Transferee shall transfer or cause to be transferred any
certificate or other evidence of ownership of the Excess
Securities within the Purported Transferee’s possession or
control, together with any Prohibited Distributions, to an agent
designated by the Board of Directors (the “Agent”).
The Agent shall thereupon sell to a buyer or buyers, which may
include the Corporation, the Excess Securities transferred to it
in one or more arm’s-length transactions (on the public
securities market on which such Excess Securities are traded, if
possible, or otherwise privately); provided, however, that any
such sale must not constitute a Prohibited Transfer and
provided, further, that the Agent shall effect such sale or
sales in an orderly fashion and shall not be required to effect
any such sale within any specific time frame if, in the
Agent’s discretion, such sale or sales would disrupt the
market for the Corporation Securities or otherwise would
adversely affect the value of the Corporation Securities. If the
Purported Transferee has resold the Excess Securities before
receiving the Corporation’s demand to surrender Excess
Securities to the Agent, the Purported Transferee shall be
deemed to have sold the Excess Securities for the Agent, and
shall be required to transfer to the Agent any Prohibited
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Distributions and proceeds of such sale, except to the extent
that the Corporation grants written permission to the Purported
Transferee to retain a portion of such sales proceeds not
exceeding the amount that the Purported Transferee would have
received from the Agent pursuant to Section 11.6 if the
Agent rather than the Purported Transferee had resold the Excess
Securities.
11.6 Application of Proceeds and Prohibited
Distributions. The Agent shall apply any proceeds
of a sale by it of Excess Securities and, if the Purported
Transferee has previously resold the Excess Securities, any
amounts received by it from a Purported Transferee, together, in
either case, with any Prohibited Distributions, as follows:
(a) first, such amounts shall be paid to the Agent to the
extent necessary to cover all of its costs and expenses incurred
in connection with its duties hereunder; (b) second, any
remaining amounts shall be paid to the Purported Transferee, up
to the amount paid by the Purported Transferee for the Excess
Securities (or the fair market value at the time of the
Transfer, in the event the purported Transfer of the Excess
Securities was, in whole or in part, a gift, inheritance or
similar Transfer) which amount shall be determined at the sole
discretion of the Board of Directors; and (c) third, any
remaining amounts shall be paid to one or more organizations
qualifying under section 501(c)(3) of the Code (or any
comparable successor provision) selected by the Board of
Directors. The Purported Transferee of Excess Securities shall
have no claim, cause of action or any other recourse whatsoever
against any transferor of Excess Securities. The Purported
Transferee’s sole right with respect to such shares shall
be limited to the amount payable to the Purported Transferee
pursuant to this Section 11.6. In no event shall the
proceeds of any sale of Excess Securities pursuant to this
Section 11.6 inure to the benefit of the Corporation or the
Agent, except to the extent used to cover costs and expenses
incurred by Agent in performing its duties hereunder.
11.7 Modification of Remedies for Certain Indirect
Transfers. In the event of any Transfer which
does not involve a transfer of securities of the Corporation
within the meaning of Ohio law (“Securities,” and
individually, a “Security”) but which would cause a
5-percent Stockholder to violate a restriction on Transfers
provided for in this Article ELEVENTH, the application of
Section 11.5 and Section 11.6 shall be modified as
described in this Section 11.7. In such case, no such
5-percent Stockholder shall be required to dispose of any
interest that is not a Security, but such 5-percent Stockholder
and/or any
Person whose ownership of Securities is attributed to such
5-percent Stockholder shall be deemed to have disposed of and
shall be required to dispose of sufficient Securities (which
Securities shall be disposed of in the inverse order in which
they were acquired) to cause such 5-percent Stockholder,
following such disposition, not to be in violation of this
Article ELEVENTH. Such disposition shall be deemed to occur
simultaneously with the Transfer giving rise to the application
of this provision, and such number of Securities that are deemed
to be disposed of shall be considered Excess Securities and
shall be disposed of through the Agent as provided in
Sections 11.5 and 11.6, except that the maximum aggregate
amount payable either to such 5-percent Stockholder, or to such
other Person that was the direct holder of such Excess
Securities, in connection with such sale shall be the fair
market value of such Excess Securities at the time of the
purported Transfer. All expenses incurred by the Agent in
disposing of such Excess Stock shall be paid out of any amounts
due such 5-percent Stockholder or such other Person. The purpose
of this Section 11.7 is to extend the restrictions in
Sections 11.2 and 11.5 to situations in which there is a
5-percent Transaction without a direct Transfer of Securities,
and this Section 11.7, along with the other provisions of
this Article ELEVENTH, shall be interpreted to produce the
same results, with differences as the context requires, as a
direct Transfer of Corporation Securities.
11.8 Legal Proceedings; Prompt
Enforcement. If the Purported Transferee fails to
surrender the Excess Securities or the proceeds of a sale
thereof to the Agent within thirty days from the date on which
the Corporation makes a written demand pursuant to
Section 11.5 (whether or not made within the time specified
in Section 11.5), then the Corporation shall promptly take
all cost effective actions which it believes are appropriate to
enforce the provisions hereof, including the institution of
legal proceedings to compel the surrender. Nothing in this
Section 11.8 shall (a) be deemed inconsistent with any
Transfer of the Excess Securities provided in this
Article ELEVENTH being void ab initio, (b) preclude
the
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Corporation in its discretion from immediately bringing legal
proceedings without a prior demand or (c) cause any failure
of the Corporation to act within the time periods set forth in
Section 11.5 to constitute a waiver or loss of any right of
the Corporation under this Article ELEVENTH. The Board of
Directors may authorize such additional actions as it deems
advisable to give effect to the provisions of this
Article ELEVENTH.
11.9 Liability. To the fullest
extent permitted by law, any shareholder subject to the
provisions of this Article ELEVENTH who knowingly violates
the provisions of this Article ELEVENTH and any Persons
controlling, controlled by or under common control with such
shareholder shall be jointly and severally liable to the
Corporation for, and shall indemnify and hold the Corporation
harmless against, any and all damages suffered as a result of
such violation, including but not limited to damages resulting
from a reduction in, or elimination of, the Corporation’s
ability to utilize its Tax Benefits, and attorneys’ and
auditors’ fees incurred in connection with such violation.
11.10 Obligation to Provide
Information. As a condition to the registration
of the Transfer of any Stock, any Person who is a beneficial,
legal or record holder of Stock, and any proposed Transferee and
any Person controlling, controlled by or under common control
with the proposed Transferee, shall provide such information as
the Corporation may request from time to time in order to
determine compliance with this Article ELEVENTH or the
status of the Tax Benefits of the Corporation.
11.11 Legends. The Board of
Directors may require that any certificates issued by the
Corporation evidencing ownership of shares of Stock that are
subject to the restrictions on transfer and ownership contained
in this Article ELEVENTH bear the following legend:
“THE ARTICLES OF INCORPORATION, AS AMENDED (THE
“ARTICLES OF INCORPORATION”), OF THE CORPORATION
CONTAINS RESTRICTIONS PROHIBITING THE TRANSFER (AS DEFINED IN
THE ARTICLES OF INCORPORATION) OF COMMON STOCK OF THE
CORPORATION (INCLUDING THE CREATION OR GRANT OF CERTAIN OPTIONS,
RIGHTS AND WARRANTS) WITHOUT THE PRIOR AUTHORIZATION OF THE
BOARD OF DIRECTORS OF THE CORPORATION (THE “BOARD OF
DIRECTORS”) IF SUCH TRANSFER AFFECTS THE PERCENTAGE OF
STOCK OF THE CORPORATION (WITHIN THE MEANING OF SECTION 382
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
“CODE”) AND THE TREASURY REGULATIONS PROMULGATED
THEREUNDER), THAT IS TREATED AS OWNED BY A FIVE PERCENT
SHAREHOLDER UNDER THE CODE AND SUCH REGULATIONS. IF THE TRANSFER
RESTRICTIONS ARE VIOLATED, THEN THE TRANSFER WILL BE VOID AB
INITIO AND THE PURPORTED TRANSFEREE OF THE STOCK WILL BE
REQUIRED TO TRANSFER EXCESS SECURITIES (AS DEFINED IN THE
ARTICLES OF INCORPORATION) TO THE CORPORATION’S AGENT.
IN THE EVENT OF A TRANSFER WHICH DOES NOT INVOLVE SECURITIES OF
THE CORPORATION WITHIN THE MEANING OF THE GENERAL CORPORATION
LAW OF THE STATE OF OHIO (“SECURITIES”) BUT WHICH
WOULD VIOLATE THE TRANSFER RESTRICTIONS, THE PURPORTED
TRANSFEREE (OR THE RECORD OWNER) OF THE SECURITIES WILL BE
REQUIRED TO TRANSFER SUFFICIENT SECURITIES PURSUANT TO THE TERMS
PROVIDED FOR IN THE CORPORATION’S ARTICLES OF
INCORPORATION TO CAUSE THE FIVE PERCENT STOCKHOLDER TO NO LONGER
BE IN VIOLATION OF THE TRANSFER RESTRICTIONS. THE CORPORATION
WILL FURNISH WITHOUT CHARGE TO THE HOLDER OF RECORD OF THIS
CERTIFICATE A COPY OF THE ARTICLES OF INCORPORATION,
CONTAINING THE ABOVE-REFERENCED TRANSFER RESTRICTIONS, WITHIN
FIVE DAYS AFTER RECEIPT OF A WRITTEN REQUEST TO THE CORPORATION
AT ITS PRINCIPAL PLACE OF BUSINESS.”
The Board of Directors may also require that any certificates
issued by the Corporation evidencing ownership of shares of
Stock that are subject to conditions imposed by the Board of
Directors under
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Section 11.3 of this Article ELEVENTH also bear a
conspicuous legend referencing the applicable restrictions.
11.12 Authority of Board of Directors.
(a) The Board of Directors shall have the power to
determine all matters necessary for assessing compliance with
this Article ELEVENTH, including, without limitation,
(i) the identification of 5-percent Stockholders,
(ii) whether a Transfer is a 5-percent Transaction or a
Prohibited Transfer, (iii) the Percentage Stock Ownership
in the Corporation of any 5-percent Stockholder,
(iv) whether an instrument constitutes a Corporation
Security, (v) the amount (or fair market value) due to a
Purported Transferee pursuant to Section 11.6, and
(vi) any other matters which the Board of Directors
determines to be relevant; and the good faith determination of
the Board of Directors on such matters shall be conclusive and
binding for all the purposes of this Article ELEVENTH. In
addition, the Board of Directors may, to the extent permitted by
law, from time to time establish, modify, amend or rescind
by-laws, regulations and procedures of the Corporation not
inconsistent with the provisions of this Article ELEVENTH
for purposes of determining whether any Transfer of Corporation
Securities would jeopardize the Corporation’s ability to
preserve and use the Tax Benefits and for the orderly
application, administration and implementation of this
Article ELEVENTH.
(b) Nothing contained in this Article ELEVENTH shall
limit the authority of the Board of Directors to take such other
action to the extent permitted by law as it deems necessary or
advisable to protect the Corporation and its stockholders in
preserving the Tax Benefits. Without limiting the generality of
the foregoing, in the event of a change in law making one or
more of the following actions necessary or desirable, the Board
of Directors may, by adopting a written resolution,
(i) accelerate or extend the Expiration Date,
(ii) modify the ownership interest percentage in the
Corporation or the Persons or groups covered by this
Article ELEVENTH, (iii) modify the definitions of any
terms set forth in this Article ELEVENTH or
(iv) modify the terms of this Article ELEVENTH as
appropriate, in each case, in order to prevent an ownership
change for purposes of Section 382 of the Code as a result
of any changes in applicable Treasury Regulations or otherwise;
provided, however, that the Board of Directors shall not cause
there to be such acceleration, extension or modification unless
it determines, by adopting a written resolution, that such
action is reasonably necessary or advisable to preserve the Tax
Benefits or that the continuation of these restrictions is no
longer reasonably necessary for the preservation of the Tax
Benefits. Stockholders of the Corporation shall be notified of
such determination through a filing with the Securities and
Exchange Commission or such other method of notice as the
Secretary of the Corporation shall deem appropriate.
(c) In the case of an ambiguity in the application of any
of the provisions of this Article ELEVENTH, including any
definition used herein, the Board of Directors shall have the
power to determine the application of such provisions with
respect to any situation based on its reasonable belief,
understanding or knowledge. In the event this
Article ELEVENTH requires an action by the Board of
Directors but fails to provide specific guidance with respect to
such action, the Board of Directors shall have the power to
determine the action to be taken so long as such action is not
contrary to the provisions of this Article ELEVENTH. All
such actions, calculations, interpretations and determinations
which are done or made by the Board of Directors in good faith
shall be conclusive and binding on the Corporation, the Agent,
and all other parties for all other purposes of this
Article ELEVENTH. The Board of Directors may delegate all
or any portion of its duties and powers under this
Article ELEVENTH to a committee of the Board of Directors
as it deems necessary or advisable and, to the fullest extent
permitted by law, may exercise the authority granted by this
Article ELEVENTH through duly authorized officers or agents
of the Corporation. Nothing in this Article ELEVENTH shall
be construed to limit or restrict the Board of Directors in the
exercise of its fiduciary duties under applicable law.
11.13 Reliance. To the fullest
extent permitted by law, the Corporation and the members of the
Board of Directors shall be fully protected in relying in good
faith upon the information, opinions, reports
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or statements of the chief executive officer, the chief
financial officer, the chief accounting officer or the corporate
controller of the Corporation or of the Corporation’s legal
counsel, independent auditors, transfer agent, investment
bankers or other employees and agents in making the
determinations and findings contemplated by this
Article ELEVENTH, and the members of the Board of Directors
shall not be responsible for any good faith errors made in
connection therewith. For purposes of determining the existence
and identity of, and the amount of any Corporation Securities
owned by any shareholder, the Corporation is entitled to rely on
the existence and absence of filings of Schedule 13D or 13G
under the Securities and Exchange Act of 1934, as amended (or
similar filings), as of any date, subject to its actual
knowledge of the ownership of Corporation Securities.
11.14 Benefits of This
Article Eleventh. Nothing in this
Article ELEVENTH shall be construed to give to any Person
other than the Corporation or the Agent any legal or equitable
right, remedy or claim under this Article ELEVENTH. This
Article ELEVENTH shall be for the sole and exclusive
benefit of the Corporation and the Agent.
11.15 Severability. The purpose of
this Article ELEVENTH is to facilitate the
Corporation’s ability to maintain or preserve its Tax
Benefits. If any provision of this Article ELEVENTH or the
application of any such provision to any Person or under any
circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any
other provision of this Article ELEVENTH.
11.16 Waiver. With regard to any
power, remedy or right provided herein or otherwise available to
the Corporation or the Agent under this Article ELEVENTH,
(1) no waiver will be effective unless expressly contained
in a writing signed by the waiving party; and (2) no
alteration, modification or impairment will be implied by reason
of any previous waiver, extension of time, delay or omission in
exercise, or other indulgence.
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EXHIBIT B
GenCorp
Inc.
Amended and Restated 2009 Equity and Performance Incentive Plan
Amended and Restated 2009 Equity and Performance Incentive Plan
ARTICLE 1.
Establishment,
Purpose, and Duration
1.1 Establishment. GenCorp Inc., an
Ohio corporation (hereinafter referred to as the
“Company”), establishes an incentive compensation plan
to be known as the 2009 Equity and Performance Incentive Plan
(hereinafter referred to as the “Plan”), as set forth
in this document.
The Plan permits the grant of Cash-Based Awards, Nonqualified
Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units and Other Stock-Based Awards.
The Plan shall become effective upon shareholder approval (the
“Effective Date”) and shall remain in effect as
provided in Section 1.3 hereof.
1.2 Purpose of the Plan. The
purpose of the Plan is to promote the interests of the Company
and its shareholders by strengthening the Company’s ability
to attract, motivate, and retain Employees and Directors upon
whose judgment, initiative, and efforts the financial success
and growth of the business of the Company largely depend, and to
provide an additional incentive for such individuals through
stock ownership and other rights that promote and recognize the
financial success and growth of the Company and create value for
shareholders.
1.3 Duration of the Plan. Unless
sooner terminated as provided herein, the Plan shall terminate
ten years from the Effective Date. After the Plan is terminated,
no Awards may be granted but Awards previously granted shall
remain outstanding in accordance with their applicable terms and
conditions and the Plan’s terms and conditions.
ARTICLE 2.
Definitions
Whenever used in the Plan, the following terms shall have the
meanings set forth below, and when the meaning is intended, the
initial letter of the word shall be capitalized.
2.1 “Affiliate” shall have the
meaning ascribed to such term in
Rule 12b-2
promulgated under the General Rules and Regulations of the
Exchange Act.
2.2 “Annual Award Limit” or
“Annual Award Limits” have the meaning set forth in
Section 4.3.
2.3 “Award” means, individually or
collectively, a grant under this Plan of Cash-Based Awards,
Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units or Other Stock-Based
Awards, in each case subject to the terms of this Plan. Awards
shall also include, if approved by the Committee, any
Nonqualified Stock Options, Incentive Stock Options, or
Performance Shares that could not be fully awarded under the
1999 GenCorp Inc. Equity and Performance Incentive Plan because
of any numerical limit on Awards set forth thereunder.
2.4 “Beneficial Owner” or
“Beneficial Ownership” shall have the meaning ascribed
to such term in
Rule 13d-3
promulgated under the General Rules and Regulations under the
Exchange Act.
2.5 “Board” or “Board of
Directors” means the Board of Directors of the Company.
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2.6 “Cash-Based Award” means an
Award granted to a Participant as described in Article 10.
2.7 “Change in Control” means a
Change in Control as defined in Article 15.
2.8 “Code” means the Internal
Revenue Code of 1986, as amended from time to time.
2.9. “Committee” means the
Organization and Compensation Committee of the Board, or any
other committee designated by the Board to administer this Plan.
The members of the Committee shall be appointed from time to
time by and shall serve at the discretion of the Board. The
Committee shall consist of two or more directors who are
Nonemployee Directors and “Outside Directors” (as such
term is defined in Section 162(m) of the Code).
2.10 “Company” means GenCorp Inc.,
an Ohio corporation, and any successor thereto as provided in
Article 18 herein.
2.11 “Consolidated Operating Earnings”
means the consolidated earnings before income taxes of the
Company, computed in accordance with generally accepted
accounting principles, but shall exclude the effects of
Extraordinary Items.
2.12 “Covered Employee” means a
Participant who is a “covered employee,” as defined in
Section 162(m) of the Code and the regulations promulgated
under Section 162(m) of the Code, or any successor statute.
2.13 “Director” means a member of
the Board of Directors of the Company
and/or any
of its Affiliates
and/or
Subsidiaries.
2.14 “Effective Date” has the
meaning set forth in Section 1.1.
2.15 “Employee” means any employee
of the Company, its Affiliates
and/or
Subsidiaries.
2.16 “Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time,
or any successor act thereto.
2.17 “Extraordinary Items” means
(i) extraordinary, unusual
and/or
nonrecurring items of gain or loss; (ii) gains or losses on
the disposition of a business; (iii) changes in tax or
accounting regulations or laws; or (iv) the effect of a
merger or acquisition, all of which must be identified in the
audited financial statements, including footnotes, or Management
Discussion and Analysis section of the Company’s annual
report.
2.18 “Evidence of Award” means an
agreement, certificate, resolution or other type or form of
writing or other evidence approved by the Committee which sets
forth the terms and conditions of an Award. An Evidence of Award
may be in any electronic medium, may be limited to a notation on
the books and records of the Company and, with the approval of
the Committee, need not be signed by a representative of the
Company or a Participant.
2.19 “Fair Market Value” or
“FMV” means the last sales price reported for the
Shares on the applicable date as reported on the principal
national securities exchange in the United States on which it is
then traded or The NASDAQ Stock Market (if the Shares are so
listed), or, if not so listed, the mean between the closing bid
and asked prices of publicly traded Shares in the
over-the-counter
market, or, if such bid and asked prices shall not be available,
as reported by any nationally recognized quotation service
selected by the Company, or as determined by the Committee in a
manner consistent with the provisions of the Code. If, however,
the required accounting standards used to account for equity
Awards granted to Participants are substantially modified
subsequent to the Effective Date of the Plan such that fair
value accounting for such Awards becomes required, the Committee
shall have the ability to determine an Award’s FMV based on
the relevant facts and circumstances.
2.20 “Full Value Award” means an
Award other than in the form of an Option or SAR, and which is
settled by the issuance of Shares.
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2.21 “Freestanding SAR” means an SAR
that is granted independently of any Options, as described in
Article 7.
2.22 “Grant Price” means the price
established at the time of grant of a SAR pursuant to
Article 7, used to determine whether there is any payment
due upon exercise of the SAR.
2.23 “Incentive Stock Option” means
an Option that is intended to qualify as an “incentive
stock option” under Section 422 of the Code or any
successor provision.
2.24 “Insider” shall mean an
individual who is, on the relevant date, an officer, Director,
or more than ten percent (10%) Beneficial Owner of any class of
the Company’s equity securities that is registered pursuant
to Section 12 of the Exchange Act, as determined by the
Board in accordance with Section 16 of the Exchange Act.
2.25 “Net Income” means the
consolidated net income before taxes for the Plan Year, as
reported in the Company’s annual report to shareholders or
as otherwise reported to shareholders.
2.26 “Nonemployee Director” has the
same meaning set forth in
Rule 16b-3
promulgated under the Exchange Act, or any successor definition
adopted by the United States Securities and Exchange Commission.
2.27 “Nonqualified Stock Option”
means an Option that is not intended to meet the
requirements of Section 422 of the Code, or that otherwise
does not meet such requirements.
2.28 “Operating Cash Flow” means
cash flow from operating activities as defined in Statement of
Financial Accounting Standards Number 95, Statement of Cash
Flows.
2.29 “Option” means the right to
purchase Shares granted to a Participant in accordance with
Article 6. Options granted under this Plan may be
Nonqualified Stock Options, Incentive Stock Option or a
combination thereof.
2.30 “Option Price” means the price
at which a Share may be purchased by a Participant pursuant to
an Option.
2.31 “Other Stock-Based Award” means
an equity-based or equity-related Award not otherwise described
by the terms of this Plan, granted pursuant to Article 10.
2.32 “Participant” means any
eligible person as set forth in Article 5 to whom an Award
is granted.
2.33 “Performance-Based Compensation”
means compensation under an Award that satisfies the
requirements of Section 162(m) of the Code for
deductibility of remuneration paid to Covered Employees.
2.34 “Performance Measures” means
measures as described in Article 11 on which the
performance goals are based and which are approved by the
Company’s shareholders pursuant to this Plan in order to
qualify Awards as Performance-Based Compensation.
2.35 “Performance Period” means the
period of time during which the performance goals must be met in
order to determine the degree of payout
and/or
vesting with respect to an Award.
2.36 “Performance Share” means an
Award granted to a Participant, as described in Article 9.
2.37 “Performance Unit” means an
Award granted to a Participant, as described in Article 9.
2.38 “Period of Restriction” means
the period when Restricted Stock or Restricted Stock Units are
subject to a “substantial risk of forfeiture” within
the meaning of Section 83 of the Code (based on the passage
of time, the achievement of performance goals, or upon the
occurrence of other events as determined by the Committee, in
its discretion), as provided in Article 8.
2.39 “Person” shall have the meaning
ascribed to such term in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d) thereof, including
a “group” as defined in Section 13(d) thereof.
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2.40 “Plan” means the GenCorp Inc.
2009 Equity and Performance Incentive Plan.
2.41 “Plan Year” means the
Company’s fiscal year that begins December 1 and ends
November 30.
2.42 “Restricted Stock” means Shares
granted or sold to a Participant pursuant to Article 8 as
to which the Period of Restriction has not lapsed.
2.43 “Restricted Stock Unit” means a
unit granted or sold to a Participant pursuant to Article 8
as to which the Period of Restriction has not lapsed.
2.44 “Section 409A Rules” means
the provisions of Section 409A of the Code and Treasury
Regulations and other Internal Revenue Service guidance
promulgated thereunder.
2.45 “Share” means a share of common
stock of the Company, $.10 par value per share.
2.46 “Stock Appreciation Right” or
“SAR” means an Award, designated as a SAR and granted
pursuant to the terms of Article 7 herein.
2.47 “Subsidiary” means a
corporation, company or other entity (i) more than
50 percent (50%) of whose outstanding shares or securities
(representing the right to vote for the election of directors or
other managing authority) are, or (ii) which does not have
outstanding shares or securities (as may be the case in a
partnership, joint venture or unincorporated association), but
more than 50 percent (50%) of whose ownership interest
representing the right generally to make decisions for such
other entity is, now or hereafter, owned or controlled, directly
or indirectly, by the Company, except that for purposes of
determining whether any person may be a Participant for purposes
of any grant of Incentive Stock Options, “Subsidiary”
means any corporation in which at the time the Company owns or
controls, directly or indirectly, more than 50 percent
(50%) of the total combined voting power represented by all
classes of stock issued by such corporation.
ARTICLE 3.
Administration
3.1 General. The Committee shall be
responsible for administering the Plan, subject to this
Article 3 and the other provisions of the Plan. The act or
determination of a majority of the Committee shall be the act or
determination of the Committee and any decision reduced to
writing and signed by all of the members of the Committee shall
be fully effective as if it had been made by a majority at a
meeting duly held. The Committee may employ attorneys,
consultants, accountants, agents, and other persons, any of whom
may be an Employee, and the Committee, the Company, and its
officers and Directors shall be entitled to rely upon the
advice, opinions, or valuations of any such persons. All actions
taken and all interpretations and determinations made by the
Committee shall be final and binding upon the Participants, the
Company, and all other interested persons.
3.2 Authority of the Committee. The
Committee shall have full and exclusive discretionary power to
interpret the terms and the intent of the Plan and any Evidence
of Award or other agreement or document ancillary to or in
connection with the Plan, to determine eligibility for Awards
and to adopt such rules, regulations, forms, instruments, and
guidelines for administering the Plan as the Committee may deem
necessary or proper. Such authority shall include, but not be
limited to, selecting Award recipients, establishing all Award
terms and conditions, including the terms and conditions set
forth in an Evidence of Award, and, subject to Article 16,
adopting modifications and amendments to the Plan or any
Evidence of Award, including without limitation, any that are
necessary to comply with the laws of the countries and other
jurisdictions in which the Company, its Affiliates,
and/or its
Subsidiaries operate. In the event that for any reason the
Committee is unable to act or if the Committee at the time of
any grant, Award or other acquisition under the Plan does not
consist of two or more Nonemployee Directors, or if there shall
be no such Committee, then the Plan shall be administered by the
Board, and references herein to the Committee (except in the
proviso to this sentence) shall be deemed to be references to
the Board.
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ARTICLE 4.
Shares
Subject to the Plan and Maximum Awards
4.1 Number of Shares Available for Awards.
(a) Subject to adjustment as provided in Section 4.4
herein, the maximum number of Shares available for issuance to
Participants under the Plan (the “Share
Authorization”) shall be two million (2,000,000) Shares,
all of which may be Incentive Stock Options;
(b) Of the Shares reserved for issuance under
Section 4.1(a) of the Plan, no more than one million
(1,000,000) of the reserved Shares may be issued pursuant to
Full Value Awards.
(c) Subject to the limit set forth in Section 4.1(a)
on the number of Shares that may be issued in the aggregate
under the Plan, the maximum number of Shares that may be issued
to Nonemployee Directors shall be two hundred thousand (200,000)
Shares, and no Nonemployee Director may receive more than one
hundred fifty thousand (150,000) Shares in any Plan Year.
4.2 Share Usage. Shares covered by
an Award shall only be counted as used to the extent they are
actually issued. Any Shares related to Awards which terminate by
expiration, forfeiture, cancellation, or otherwise without the
issuance of such Shares, are settled in cash in lieu of Shares,
or are exchanged with the Committee’s permission, prior to
the issuance of Shares, for Awards not involving Shares, shall
be available again for grant under the Plan. Moreover, if the
Option Price of any Option granted under the Plan or the tax
withholding requirements with respect to any Award granted under
the Plan are satisfied by tendering Shares to the Company (by
either actual delivery or by attestation), or if an SAR is
exercised, only the number of Shares issued, net of the Shares
tendered, if any, will be deemed delivered for purposes of
determining the maximum number of Shares available for delivery
under the Plan and any Shares so tendered shall again be
available for issuance under the Plan. The maximum number of
Shares available for issuance under the Plan shall not be
reduced to reflect any dividends or dividend equivalents that
are reinvested into additional Shares or credited as additional
Restricted Stock, Restricted Stock Units, Performance Shares, or
Stock-Based Awards. The Shares available for issuance under the
Plan may be authorized and unissued Shares, treasury Shares or a
combination thereof.
4.3 Annual Award Limits. Subject to
the terms of Section 4.1 hereof and unless and until the
Committee determines that an Award to a Covered Employee shall
not be designed to qualify as Performance-Based Compensation,
the following limits (each an “Annual Award Limit,”
and, collectively, “Annual Award Limits”) shall apply
to grants of such Awards under the Plan:
(a) Options: The maximum aggregate number
of Shares subject to Options granted in any one Plan Year to any
one Participant shall be two hundred thousand (200,000).
(b) Incentive Stock Options: The maximum
aggregate number of Shares subject to Incentive Stock Options
granted under the Plan to any one Participant shall be two
hundred thousand (200,000).
(c) SARs: The maximum number of Shares
subject to Stock Appreciation Rights granted in any one Plan
Year to any one Participant shall be two hundred thousand
(200,000).
(d) Restricted Stock or Restricted Stock
Units: The maximum aggregate grant with respect
to Awards of Restricted Stock or Restricted Stock Units in any
one Plan Year to any one Participant shall be two hundred
thousand (200,000).
(e) Performance Units or Performance
Shares: The maximum aggregate Award of
Performance Units or Performance Shares that any one Participant
may receive in any one Plan Year shall be two hundred thousand
(200,000) Shares, or equal to the value of two hundred thousand
(200,000) Shares determined as of the date of vesting or payout,
as applicable.
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(f) Cash-Based Awards: The maximum
aggregate amount awarded or credited with respect to Cash-Based
Awards to any one Participant in any one Plan Year may not
exceed the value of one hundred thousand dollars ($100,000)
determined as of the date of vesting or payout, as applicable.
(g) Other Stock-Based Awards. The maximum
aggregate grant with respect to other Stock-Based Awards
pursuant to Section 10.2 in any one Plan Year to any one
Participant shall be one hundred thousand (100,000) Shares.
4.4 Adjustments in Authorized
Shares. In the event of any corporate event or
transaction (including, but not limited to, a change in the
shares of the Company or the capitalization of the Company) such
as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split,
split up, spin-off, or other distribution of stock or property
of the Company, combination of Shares, exchange of Shares,
dividend in kind, or other like change in capital structure or
distribution (other than normal cash dividends) to shareholders
of the Company, or any similar corporate event or transaction,
the Committee, in its sole discretion, in order to prevent
dilution or enlargement of Participants’ rights under the
Plan, shall substitute or adjust, as applicable, the number and
kind of Shares that may be issued under the Plan or under
particular forms of Awards, the number and kind of Shares
subject to outstanding Awards, the Option Price or Grant Price
applicable to outstanding Awards, the Annual Award Limits, and
other value determinations applicable to outstanding Awards.
Except as otherwise provided by Section 162(m) of the Code,
the Committee, in its sole discretion, may also make appropriate
adjustments in the terms of any Awards under the Plan to reflect
or related to such changes or distributions and to modify any
other terms of outstanding Awards, including modifications of
performance goals and changes in the length of Performance
Periods. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on
Participants under the Plan.
Subject to the provisions of Article 16, without affecting
the number of Shares reserved or available hereunder, the
Committee may authorize the issuance or assumption of benefits
under this Plan in connection with any merger, consolidation,
acquisition of property or stock, or reorganization upon such
terms and conditions as it may deem appropriate, subject to
compliance with the rules under Section 422 of the Code and
the Section 409A Rules, where applicable.
To the extent that any Award hereunder is one that is made
solely because of a limitation on awards under the 1999 GenCorp
Inc. Equity and Performance Incentive Plan such Award shall
reduce on a Share for Share basis, as applicable, any limit on
Shares set forth in this Section 4.
ARTICLE 5.
Eligibility
and Participation
5.1 Eligibility. Individuals
eligible to participate in this Plan include all Employees and
Nonemployee Directors.
5.2 Actual Participation. Subject
to the provisions of the Plan, the Committee may, from time to
time, select from all eligible individuals, those to whom Awards
shall be granted and shall determine, in its sole discretion,
the nature of, any and all terms permissible by law, and the
amount of each Award. In making this determination, the
Committee may consider any factors it deems relevant, including
without limitation, the office or position held by a Participant
or the Participant’s relationship to the Company, the
Participant’s degree of responsibility for and contribution
to the growth and success of the Company or any Subsidiary or
Affiliate, the Participant’s length of service, promotions
and potential.
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ARTICLE 6.
Options
6.1 Grant of Options. Subject to
the terms and provisions of the Plan, Options may be granted to
Participants in such number, and upon such terms, and at any
time and from time to time as shall be determined by the
Committee, in its sole discretion.
6.2 Evidence of Award. Each Option
grant shall be evidenced by an Evidence of Award that shall
specify the Option Price, the maximum duration of the Option,
the number of Shares to which the Option pertains, the
conditions upon which an Option shall become vested and
exercisable, and such other provisions as the Committee shall
determine which are not inconsistent with the terms of the Plan.
6.3 Option Price. The Option Price
for each grant of an Option under this Plan shall be as
determined by the Committee and shall be specified in the
Evidence of Award. The Option Price may not be less than 100% of
the Fair Market Value of the Shares on the date of grant;
provided, however, that an Option granted outside the United
States to a person who is a
non-U.S. taxpayer
may be granted with a Option Price less than the Fair Market
Value of the underlying Shares on the date of grant if necessary
to utilize a locally available tax advantage.
6.4 Duration of Options. Except as
otherwise provided in Section 422 of the Code, each Option
granted to a Participant shall expire at such time as the
Committee shall determine at the time of grant and specify in
the Evidence of Award; provided, however, that no Option shall
be exercisable later than the seventh (7th) anniversary date of
its grant. Notwithstanding the foregoing, for Options granted to
Participants outside the United States who are
non-U.S. taxpayers,
the Committee has the authority to grant Options that have a
term greater than seven (7) years.
6.5 Exercise of Options. Options
granted under this Article 6 shall be exercisable at such
times and be subject to such restrictions and conditions as the
Committee shall in each instance approve and specify in the
Evidence of Award, which terms and restrictions need not be the
same for each grant or for each Participant. The Committee may
provide in the Evidence of Award for the acceleration of the
vesting and exercisability of outstanding Options, in whole or
in part, as determined by the Committee in its sole discretion,
in the event of a Change in Control.
6.6 Payment. Options granted under
this Article 6 shall be exercised by the delivery of a
notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Committee, or by
complying with any alternative procedures which may be
authorized by the Committee, setting forth the number of Shares
with respect to which the Option is to be exercised, accompanied
by full payment for the Shares.
A condition of the issuance of the Shares as to which an Option
shall be exercised shall be the payment of the Option Price. The
Option Price of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent; (b) by
tendering (either by actual delivery or attestation) previously
acquired Shares having an aggregate Fair Market Value at the
time of exercise equal to the Option Price (provided that except
as otherwise determined by the Committee, the Shares that are
tendered must have been held by the Participant for at least six
(6) months prior to their tender to satisfy the Option
Price or have been purchased on the open market); (c) by a
combination of (a) and (b); or (d) any other method
approved or accepted by the Committee in its sole discretion,
including, without limitation, if the Committee so determines,
(i) a cashless (broker-assisted) exercise, or (ii) a
reduction in the number of Shares that would otherwise be issued
by such number of Shares having in the aggregate a Fair Market
Value at the time of exercise equal to the portion of the Option
Price being so paid.
Subject to any governing rules or regulations, as soon as
practicable after receipt of written notification of exercise
and full payment (including satisfaction of any applicable tax
withholding), the Company shall deliver to the Participant
evidence of book entry Shares, or upon the Participant’s
request,
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Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
Unless otherwise determined by the Committee, all payments under
all of the methods indicated above shall be paid in United
States dollars.
6.7 Restrictions on Share
Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of
an Option granted under this Article 6 as it may deem
advisable and specify in the Evidence of Award, including,
without limitation, minimum holding period requirements,
restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such
Shares are then listed
and/or
traded, or under any blue sky or state securities laws
applicable to such Shares.
6.8 Termination of Employment. Each
Participant’s Evidence of Award shall set forth the extent
to which the Participant shall have the right to exercise the
Option following termination of the Participant’s
employment or provision of services to the Company, its
Affiliates, its Subsidiaries, as the case may be. Such
provisions shall be determined in the sole discretion of the
Committee, shall be included in the Evidence of Award entered
into with each Participant, need not be uniform among all
Options issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination.
6.9 Transferability of
Options. Except as otherwise provided in a
Participant’s Evidence of Award or otherwise at any time by
the Committee, no Option granted under this Article 6 may
be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent
and distribution or as otherwise required by law; provided that
the Board or Committee may permit further transferability, on a
general or a specific basis, and may impose conditions and
limitations on any permitted transferability. Further, except as
otherwise provided in a Participant’s Evidence of Award or
otherwise at any time by the Committee, or unless the Board or
Committee decides to permit further transferability, all Options
granted to a Participant under this Article 6 shall be
exercisable during his or her lifetime only by such Participant.
With respect to those Options, if any, that are permitted to be
transferred to another person, references in the Plan to
exercise or payment of the Option Price by the Participant shall
be deemed to include, as determined by the Committee, the
Participant’s permitted transferee.
ARTICLE 7.
Stock
Appreciation Rights
7.1 Grant of SARs. Subject to the
terms and conditions of the Plan, SARs, including Freestanding
SARs, may be granted to Participants at any time and from time
to time as shall be determined by the Committee.
Subject to the terms and conditions of the Plan, the Committee
shall have complete discretion in determining the number of SARs
granted to each Participant and, consistent with the provisions
of the Plan, in determining the terms and conditions pertaining
to such SARs.
The Grant Price for each grant of a Freestanding SAR shall be
determined by the Committee and shall be specified in the
Evidence of Award. The Grant Price may include (but not be
limited to) a Grant Price based on one hundred percent (100%) of
the FMV of the Shares on the date of grant, a Grant Price that
is set at a premium to the FMV of the Shares on the date of
grant, or is indexed to the FMV of the Shares on the date of
grant, with the index determined by the Committee, in its
discretion to the extent consistent with the Section 409A
Rules.
7.2 SAR Agreement. Each SAR Award
shall be evidenced by an Evidence of Award that shall specify
the Grant Price, the term of the SAR, and such other provisions
as the Committee shall determine.
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7.3 Term of SAR. The term of an SAR
granted under the Plan shall be determined by the Committee, in
its sole discretion, and except as determined otherwise by the
Committee and specified in the SAR Evidence of Award, no SAR
shall be exercisable later than the seventh (7th) anniversary
date of its grant. Notwithstanding the foregoing, for SARs
granted to Participants who are
non-U.S. taxpayers,
the Committee has the authority to grant SARs that have a term
greater than seven (7) years.
7.4 Exercise of Freestanding
SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole
discretion, imposes and specifies in the Evidence of Award. The
Committee may provide in the Evidence of Award for the earlier
exercise of Freestanding SARS in the event of a Change in
Control.
7.5. Payment of SAR Amount. Upon
the exercise of an SAR, a Participant shall be entitled to
receive payment from the Company in an amount determined by
multiplying:
(a) The excess of the Fair Market Value of a Share on the
date of exercise over the Grant Price; by
(b) The number of Shares with respect to which the SAR is
exercised.
At the discretion of the Committee, the payment upon SAR
exercise may be in cash, Shares, or any combination thereof, or
in any other manner approved by the Committee in its sole
discretion. The Committee’s determination regarding the
form of SAR payout shall be set forth in the Evidence of Award
pertaining to the grant of the SAR.
7.6 Termination of Employment. Each
Evidence of Award shall set forth the extent to which the
Participant shall have the right to exercise the SAR following
termination of the Participant’s employment with or
provision of services to the Company, its Affiliates,
and/or its
Subsidiaries, as the case may be. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Evidence of Award entered into with
Participants, need not be uniform among all SARs issued pursuant
to the Plan, and may reflect distinctions based on the reasons
for termination.
7.7 Nontransferability of
SARs. Except as otherwise provided in a
Participant’s Evidence of Award or otherwise at any time by
the Committee, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution or as otherwise required by law. Further, except as
otherwise provided in a Participant’s Evidence of Award or
otherwise at any time by the Committee, all SARs granted to a
Participant under the Plan shall be exercisable during his or
her lifetime only by such Participant. With respect to those
SARs, if any, that are permitted to be transferred to another
person, references in the Plan to exercise of the SAR by the
Participant or payment of any amount to the Participant shall be
deemed to include, as determined by the Committee, the
Participant’s permitted transferee.
7.8 Other Restrictions. The
Committee shall impose such other conditions
and/or
restrictions on any Shares received upon exercise of a SAR
granted pursuant to the Plan as it may deem advisable or
desirable. These restrictions may include, but shall not be
limited to, a requirement that the Participant hold the Shares
received upon exercise of a SAR for a specified period of time.
ARTICLE 8.
Restricted
Stock and Restricted Stock Units
8.1 Grant of Restricted Stock or Restricted Stock
Units. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock
and/or
Restricted Stock Units to Participants in such amounts as the
Committee shall determine. Restricted Stock Units shall
represent the right of a Participant to receive payment upon the
lapse of the Period of Restriction.
8.2 Restricted Stock or Restricted Stock Unit
Agreement. Each Restricted Stock
and/or
Restricted Stock Unit grant shall be evidenced by an Evidence of
Award that shall specify the Period(s) of
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Restriction, the number of Shares of Restricted Stock or the
number of Restricted Stock Units granted, and such other
provisions as the Committee shall determine.
8.3 Transferability. Except as
provided in this Plan or an Evidence of Award, the Shares of
Restricted Stock
and/or
Restricted Stock Units granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the
Evidence of Award (and in the case of Restricted Stock Units
until the date of delivery or other payment), or upon earlier
satisfaction of any other conditions, as specified by the
Committee, in its sole discretion, and set forth in the Evidence
of Award or otherwise at any time by the Committee. All rights
with respect to the Restricted Stock
and/or
Restricted Stock Units granted to a Participant under the Plan
shall be available during his or her lifetime only to such
Participant, except as otherwise provided in an Evidence of
Award or at any time by the Committee.
8.4 Other Restrictions. The
Committee shall impose such other conditions
and/or
restrictions on any Shares of Restricted Stock or Restricted
Stock Units granted pursuant to the Plan as it may deem
advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of
Restricted Stock or each Restricted Stock Unit, restrictions
based upon the achievement of specific performance goals,
time-based restrictions on vesting following the attainment of
the performance goals, time-based restrictions,
and/or
restrictions under applicable laws or under the requirements of
any stock exchange or market upon which such Shares are listed
or traded, or holding requirements or sale restrictions placed
on the Shares by the Company upon vesting of such Restricted
Stock or Restricted Stock Units.
Except with respect to a maximum of five percent (5%) of the
Shares authorized in Section 4.1(a), or as otherwise
provided in Section 8.7 hereto, any Awards of Restricted
Stock or Restricted Stock Units which vest on the basis of the
Participant’s continued employment with or provision of
service to the Company shall not provide for vesting which is
any more rapid than annual pro rata vesting over a three
(3) year period and any Awards of Restricted Stock or
Restricted Stock Units which vest upon the attainment of
performance goals shall provide for a performance period of at
least twelve (12) months. The Committee may provide in the
Evidence of Award for immediate vesting of Restricted Stock or
Restricted Stock Units, in whole or in part, in the event of a
Change in Control.
To the extent deemed appropriate by the Committee, the Company
may retain the certificates representing Shares of Restricted
Stock in the Company’s possession until such time as all
conditions
and/or
restrictions applicable to such Shares have been satisfied or
lapse.
Except as otherwise provided in this Article 8, Shares of
Restricted Stock covered by each Restricted Stock Award shall
become freely transferable by the Participant after all
conditions and restrictions applicable to such Shares have been
satisfied or lapse (including satisfaction of any applicable tax
withholding obligations), and Restricted Stock Units shall be
paid in cash, Shares, or a combination of cash and Shares as the
Committee, in its sole discretion shall determine.
8.5 Certificate Legend. In addition
to any legends placed on certificates pursuant to
Section 8.4, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan may bear a legend
as determined by the Committee in its sole discretion.
8.6 Voting Rights. Unless otherwise
determined by the Committee and set forth in a
Participant’s Evidence of Award, to the extent permitted or
required by law, as determined by the Committee, Participants
holding Shares of Restricted Stock granted hereunder may be
granted the right to exercise full voting rights with respect to
those Shares during the Period of Restriction. A Participant
shall have no voting rights with respect to any Restricted Stock
Units granted hereunder.
8.7 Termination of Employment. To
the extent consistent with the Section 409A Rules, each
Evidence of Award shall set forth the extent to which the
Participant shall have the right to retain Restricted Stock
and/or
Restricted Stock Units following termination of the
Participant’s employment
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with or provision of services to the Company, its Affiliates,
and/or its
Subsidiaries, as the case may be. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Evidence of Award entered into with each
Participant, need not be uniform among all Shares of Restricted
Stock or Restricted Stock Units issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination.
ARTICLE 9.
Performance
Units/Performance Shares
9.1 Grant of Performance Units/Performance
Shares. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may
grant Performance Units
and/or
Performance Shares to Participants in such amounts and upon such
terms as the Committee shall determine.
9.2 Value of Performance Units/Performance
Shares. Each Performance Unit shall have an
initial value that is established by the Committee at the time
of grant. Each Performance Share shall have an initial value
equal to the Fair Market Value of a Share on the date of grant.
The Committee shall set performance goals in its discretion as
described in Section 11.4 which, depending on the extent to
which they are met, will determine the value
and/or
number of Performance Units/Performance Shares that will be paid
out to the Participant.
9.3 Earning of Performance Units/Performance
Shares. Subject to the terms of this Plan, after
the applicable Performance Period has ended, the holder of
Performance Units/Performance Shares shall be entitled to
receive payout on the value and number of Performance
Units/Performance Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent
to which the corresponding performance goals have been achieved.
9.4 Form and Timing of Payment of Performance
Units/Performance Shares. Payment of earned
Performance Units/Performance Shares shall be as determined by
the Committee and as evidenced in the Evidence of Award. Subject
to the terms of the Plan, the Committee, in its sole discretion,
may pay earned Performance Units/Performance Shares in the form
of cash or in Shares (or in a combination thereof) equal to the
value of the earned Performance Units/Performance Shares at the
close of the applicable Performance Period, or as soon as
practicable after the end of the Performance Period. Any Shares
may be granted subject to any restrictions deemed appropriate by
the Committee. The determination of the Committee with respect
to the form of payout of such Awards shall be set forth in the
Evidence of Award pertaining to the grant of the Award.
9.5 Termination of Employment. To
the extent consistent with the Section 409A Rules and
Section 162(m) of the Code, each Evidence of Award shall
set forth the extent to which the Participant shall have the
right to retain Performance Units
and/or
Performance Shares following termination of the
Participant’s employment with or provision of services to
the Company, its Affiliates,
and/or its
Subsidiaries, as the case may be. Such provisions shall be
determined in the sole discretion of the Committee, shall be
included in the Evidence of Award entered into with each
Participant, need not be uniform among all Awards of Performance
Units or Performance Shares issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination.
9.6 Nontransferability. Except as
otherwise provided in a Participant’s Evidence of Award or
otherwise at any time by the Committee, Performance
Units/Performance Shares may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution or as otherwise
required by law. Further, except as otherwise provided in a
Participant’s Evidence of Award or otherwise at any time by
the Committee, a Participant’s rights under the Plan shall
be exercisable during his or her lifetime only by such
Participant.
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ARTICLE 10.
Cash-Based
Awards and Other Stock-Based Awards
10.1 Grant of Cash-Based
Awards. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may
grant Cash-Based Awards to Participants in such amounts and upon
such terms as the Committee may determine.
10.2 Other Stock-Based Awards. The
Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of
this Plan (including the grant or offer for sale of unrestricted
Shares) in such amounts and subject to such terms and
conditions, as the Committee shall determine. Such Awards may
involve the transfer of actual Shares to Participants, or
payment in cash or otherwise of amounts based on the value of
Shares and may include, without limitation, Awards designed to
comply with or take advantage of the applicable local laws of
jurisdictions other than the United States.
10.3 Value of Cash-Based and Other Stock-Based
Awards. Each Cash-Based Award shall specify a
payment amount or payment range as determined by the Committee.
Each Other Stock-Based Award shall be expressed in terms of
Shares or units based on Shares, as determined by the Committee.
The Committee may design Cash-Based Awards and Other Stock-Based
Awards to qualify as Performance-Based Compensation and may
design Cash-Based Awards and Other Stock-Based Awards to not
qualify as Performance-Based Compensation. If the Committee
exercises its discretion to establish Cash-Based Awards and
Other Stock-Based Awards as Performance-Based Compensation, the
number
and/or value
of Cash-Based Awards or Other Stock-Based Awards that will be
paid out to the Participant will depend on the extent to which
the Performance Measures are met.
10.4 Payment of Cash-Based Awards and Other
Stock-Based Awards. Payment, if any, with respect
to a Cash-Based Award or an Other Stock-Based Award shall be
made in accordance with the terms of the Award, in cash, Shares
or a combination thereof, as the Committee determines.
10.5 Termination of Employment. The
Committee shall determine the extent to which the Participant
shall have the right to receive Cash-Based Awards following
termination of the Participant’s employment with or
provision of services to the Company, its Affiliates,
and/or its
Subsidiaries, as the case may be. Such provisions shall be
determined in the sole discretion of the Committee, such
provisions may be included in an agreement entered into with
each Participant, but need not be uniform among all Awards of
Cash-Based Awards issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.
10.6 Nontransferability. Except as
otherwise determined by the Committee, neither Cash-Based Awards
nor Other Stock-Based Awards may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution. Further, except
as otherwise provided by the Committee, a Participant’s
rights under the Plan, if exercisable, shall be exercisable
during his or her lifetime only by such Participant. With
respect to those Cash-Based Awards or Other Stock-Based Awards,
if any, that are permitted to be transferred to another person,
references in the Plan to exercise or payment of such Awards by
or to the Participant shall be deemed to include, as determined
by the Committee, the Participant’s permitted transferee.
ARTICLE 11.
Performance
Measures
11.1 Performance Measures. Unless
and until the Committee proposes for shareholder vote and the
shareholders approve a change in the general Performance
Measures set forth in this Article 11, the performance
goals upon which the payment or vesting of an Award to a Covered
Employee that is
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intended to qualify as Performance-Based Compensation shall be
limited to one or more of the following Performance Measures:
(a) Net earnings or net income (before or after taxes and
interest/investments);
(b) Earnings per share;
(c) Earnings per share growth;
(d) Net sales growth;
(e) Net earnings or net income growth (before or after
taxes and interest/investment);
(f) Net operating profit;
(g) Return measures (including return on assets, capital,
equity, or sales);
(h) Cash flow (including operating cash flow , free cash
flow, and cash flow return on capital);
(i) Earnings before or after taxes, interest, depreciation,
and/or
amortization;
(j) Gross or operating margins or growth thereof;
(k) Productivity ratios;
(l) Share price (including growth measures and total
shareholder return);
(m) Expense targets;
(n) Operating efficiency;
(o) Customer satisfaction;
(p) Revenue or Revenue growth;
(q) Operating profit growth;
(r) Working capital targets;
(s) Economic value added;
(t) Real estate management objectives;
(u) Sale or disposition of assets; and
(v) Acquisition of key assets.
Any Performance Measure(s) may be used to measure the
performance of the Company, Subsidiary,
and/or
Affiliate as a whole or any business unit of the Company,
Subsidiary,
and/or
Affiliate or any combination thereof, as the Committee may deem
appropriate, or any of the above Performance Measures as
compared to the performance of a group of comparable companies,
or published or special index that the Committee, in its sole
discretion, deems appropriate, or the Company may select
Performance Measure (l) above as compared to various stock
market indices. The Committee also has the authority to provide
for accelerated vesting of any Award based on the achievement of
performance goals pursuant to the Performance Measures specified
in this Article 11.
To the extent that any Award hereunder is one that is made
solely because of a limitation on awards under the 1999 GenCorp
Inc. Equity and Performance Incentive Plan, the Performance
Measurement shall be the same as under the 1999 GenCorp Inc.
Equity and Performance Incentive Plan.
11.2 Evaluation of Performance. The
Committee may provide in any such Award that any evaluation of
performance may include or exclude any of the following events
that occurs during a Performance Period: (a) asset
write-downs, (b) litigation or claim judgments or
settlements, (c) the effect
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of changes in tax laws, accounting principles, or other laws or
provisions affecting reported results, (d) any
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 shareholders for the applicable year,
(f) acquisitions or divestitures and (g) foreign
exchange gains and losses. To the extent such inclusions or
exclusions affect Awards to Covered Employees, they shall be
prescribed in a form that meets the requirements of
Section 162(m) of the Code for deductibility.
11.3 Adjustment of Performance-Based
Compensation. The terms of Awards that are
designed to qualify as Performance-Based Compensation, and that
are held by Covered Employees, may not be modified, except to
the extent that after such modification the Award would continue
to constitute Performance-Based Compensation. The Committee
shall retain the discretion to reduce the amount of any payment
under an Award that is designed to qualify as Performance-Based
Compensation that would otherwise be payable to a Covered
Employee, either on a formula or discretionary basis or any
combination, as the Committee determines.
11.4 Committee Discretion. In the
event that applicable tax
and/or
securities laws change to permit Committee discretion to alter
the governing Performance Measures without obtaining shareholder
approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder
approval. In addition, in the event that the Committee
determines that it is advisable to grant Awards that shall not
qualify as Performance-Based Compensation, the Committee may
make such grants without satisfying the requirements of
Section 162(m) of the Code and may base vesting on
Performance Measures other than those set forth in
Section 11.1.
ARTICLE 12.
Beneficiary
Designation
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all
of such benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when
filed by the Participant in writing with the Company during the
Participant’s lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant’s
death shall be paid to the Participant’s estate.
ARTICLE 13.
Deferrals
To the extent permitted by the Section 409A Rules, the
Committee may permit or require a Participant to defer such
Participant’s receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such
Participant by virtue of the exercise of an Option or SAR, the
lapse or waiver of restrictions with respect to Restricted Stock
or Restricted Stock Units, or the satisfaction of any
requirements or performance goals with respect to Performance
Shares, Performance Units, Cash-Based Awards or Other
Stock-Based Awards. If any such deferral election is required or
permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals,
consistent with the Section 409A Rules.
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ARTICLE 14.
Rights of
Participants
14.1 Employment. Nothing in the
Plan or an Evidence of Award shall interfere with or limit in
any way the right of the Company, its Affiliates,
and/or its
Subsidiaries, to terminate any Participant’s employment or
service on the Board at any time or for any reason not
prohibited by law, nor confer upon any Participant any right to
continue his or her employment or service for any specified
period of time.
Neither an Award nor any benefits arising under this Plan shall
constitute an employment contract with the Company, its
Affiliates,
and/or its
Subsidiaries and, accordingly, subject to Articles 3 and
16, this Plan and the benefits hereunder may be terminated at
any time in the sole and exclusive discretion of the Committee
without giving rise to any liability on the part of the Company,
its Affiliates,
and/or its
Subsidiaries.
14.2 Participation. No individual
shall have the right to be selected to receive an Award under
this Plan, or, having been so selected, to be selected to
receive a future Award.
14.3 Rights as a
Shareholder. Except as otherwise provided herein,
a Participant shall have none of the rights of a shareholder
with respect to Shares covered by any Award until the
Participant becomes the record holder of such Shares.
ARTICLE 15.
Change in
Control
15.1 Change in Control. For
purposes of this Plan, a “Change in Control” shall
mean the occurrence during the term of any of the following
events:
(a) All or substantially all (meaning having a total gross
fair market value at least equal to 50.1% of the total gross
fair market value of all of the Company’s assets
immediately before such acquisition or acquisitions) of the
assets of the Company are acquired by a Person (during a twelve
month period ending on the date of the most recent acquisition
by such Person); or
(b) The Company is merged, consolidated, or reorganized
into or with another corporation or entity during a twelve-month
period with the result that upon the conclusion of the
transaction less than 50.1% of the outstanding securities
entitled to vote generally in the election of directors or other
capital interests of the surviving, resulting or acquiring
corporation are beneficially owned (as that term is defined in
Rule 13-d
3 under the Exchange Act) by the shareholders of the Company
immediately prior to the completion of the transaction.
ARTICLE 16.
Amendment,
Modification, Suspension, and Termination
16.1 Amendment, Modification, Suspension, and
Termination. Subject to Section 16.3 and
16.4, the Committee may, at any time and from time to time,
alter, amend, modify, suspend, or terminate the Plan and any
Evidence of Award in whole or in part; provided, however, that,
without the prior approval of the Company’s shareholders,
Options issued under the Plan will not be repriced, replaced, or
regranted through cancellation, and no amendment of the Plan
shall be made without shareholder approval if shareholder
approval is required by law, regulation, or stock exchange rule.
16.2 Adjustment of Awards Upon the Occurrence of
Certain Unusual or Nonrecurring Events. The
Committee may make adjustments, consistent with
Section 162(m) of the Code and the Section 409A Rules,
in the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in
Section 4.4 hereof) affecting
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the Company or the financial statements of the Company or of
changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent unintended
dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan. The determination
of the Committee as to the foregoing adjustments, if any, shall
be conclusive and binding on Participants under the Plan.
16.3 Awards Previously
Granted. Notwithstanding any other provision of
the Plan to the contrary, no termination, amendment, suspension,
or modification of the Plan or an Evidence of Award shall
adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the
Participant holding such Award except as required under the tax
laws.
16.4 Compliance with the Section 409A
Rules. It is the intention of the Board that the
Plan comply strictly with the Section 409A Rules and the
Committee shall exercise its discretion in granting Awards
hereunder (and the terms of such grants), accordingly. The Plan
and any grant of an Award hereunder may be amended from time to
time as may be necessary or appropriate to comply with the
Section 409A Rules.
ARTICLE 17.
Withholding
17.1 Tax Withholding. The Company
shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company, the minimum
statutory amount to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be
withheld with respect to any taxable event arising as a result
of this Plan.
17.2 Share Withholding. With
respect to withholding required upon the exercise of Options or
SARs, upon the lapse of restrictions on Restricted Stock and
Restricted Stock Units, or upon the achievement of performance
goals related to Performance Shares, or any other taxable event
arising as a result of an Award granted hereunder, Participants
may elect, subject to the approval of the Committee, to satisfy
the withholding requirement, in whole or in part, by having the
Company withhold Shares having a Fair Market Value on the date
the tax is to be determined equal to the minimum statutory total
tax that could be imposed on the transaction. All such elections
shall be irrevocable, made in writing, and signed by the
Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems
appropriate.
ARTICLE 18.
Successors
All obligations of the Company under the Plan with respect to
Awards granted hereunder shall be binding on any successor to
the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business
and/or
assets of the Company.
ARTICLE 19.
General
Provisions
19.1 Forfeiture Events.
(a) The Committee may specify in an Evidence of Award that
the Participant’s rights, payments, and benefits with
respect to an Award shall be subject to reduction, cancellation,
forfeiture, or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable
vesting or
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performance conditions of an Award. Such events may include, but
shall not be limited to, termination of employment for cause,
termination of the Participant’s provision of services to
the Company, Affiliate,
and/or
Subsidiary, violation of material Company, Affiliate,
and/or
Subsidiary policies, breach of noncompetition, confidentiality,
or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is
detrimental to the business or reputation of the Company, its
Affiliates,
and/or its
Subsidiaries.
(b) If the Company is required to prepare an accounting
restatement due to the material noncompliance of the Company, as
a result of misconduct, with any financial reporting requirement
under the securities laws, if the Participant knowingly or
grossly negligently engaged in the misconduct, or knowingly or
grossly negligently failed to prevent the misconduct, or if the
Participant is one of the persons subject to automatic
forfeiture under Section 304 of the Sarbanes-Oxley Act of
2002, the Participant shall reimburse the Company the amount of
any payment in settlement of an Award earned or accrued during
the twelve-month period following the first public issuance or
filing with the United States Securities and Exchange Commission
(whichever just occurred) of the financial document embodying
such financial reporting requirement.
19.2 Legend. The certificates for
Shares may include any legend, which the Committee deems
appropriate in its sole discretion to reflect any restrictions
on transfer of such Shares.
19.3 Gender and Number. Except
where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
19.4 Severability. In the event any
provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been
included. To the extent that any provision of this Plan would
prevent any Option that was intended to qualify as an Incentive
Stock Option from qualifying as such, that provision shall be
null and void with respect to such Option. Such provision,
however, shall remain in effect for other Options and there
shall be no further effect on any provision of this Plan.
19.5 Requirements of Law. The
granting of Awards and the issuance of Shares under the Plan
shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national
securities exchanges as may be required.
19.6 Delivery of Title. The Company
shall have no obligation to issue or deliver evidence of title
for Shares issued under the Plan prior to:
(a) Obtaining any approvals from governmental agencies that
the Company determines are necessary or advisable; and
(b) Completion of any registration or other qualification
of the Shares under any applicable national or foreign law or
ruling of any governmental body that the Company determines to
be necessary or advisable.
19.7 Inability to Obtain
Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
19.8 Investment
Representations. The Committee may require any
person receiving Shares pursuant to an Award under this Plan to
represent and warrant in writing that the person is acquiring
the securities for his own account for investment and not with a
view to, or for sale in connection with, the distribution of any
part thereof.
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19.9 Employees Based Outside of the United
States. Notwithstanding any provision of the Plan
to the contrary, in order to comply with the laws in other
countries in which the Company, its Affiliates,
and/or its
Subsidiaries operate or have Employees or Directors, the
Committee, in its sole discretion, shall have the power and
authority to:
(a) Determine which Affiliates and Subsidiaries shall be
covered by the Plan;
(b) Determine which Employees
and/or
Nonemployee Directors outside the United States are eligible to
participate in the Plan;
(c) Modify the terms and conditions of any Award granted to
Employees
and/or
Nonemployee Directors outside the United States to comply with
applicable foreign laws;
(d) Establish subplans and modify exercise procedures and
other terms and procedures, to the extent such actions may be
necessary or advisable. Any subplans and modifications to Plan
terms and procedures established under this Section 19.9 by
the Committee shall be attached to this Plan document as
appendices; and
(e) Take any action, before or after an Award is made, that
it deems advisable to obtain approval or comply with any
necessary local government regulatory exemptions or approvals.
Notwithstanding the above, the Committee may not take any
actions hereunder, and no Awards shall be granted, that would
violate applicable law.
19.10 Uncertificated Shares. To the
extent that the Plan provides for issuance of certificates to
reflect the transfer of Shares, the transfer of such Shares may
be effected on a noncertificated basis, to the extent not
prohibited by applicable law or the rules of any stock exchange.
19.11 Unfunded Plan. Participants
shall have no right, title, or interest whatsoever in or to any
investments that the Company,
and/or its
Subsidiaries,
and/or
Affiliates may make to aid it in meeting its obligations under
the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between
the Company and any Participant, beneficiary, legal
representative, or any other person. To the extent that any
person acquires a right to receive payments from the Company,
and/or its
Subsidiaries,
and/or
Affiliates under the Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company, a
Subsidiary, or an Affiliate, as the case may be. All payments to
be made hereunder shall be paid from the general funds of the
Company, a Subsidiary, or an Affiliate, as the case may be and
no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in the Plan. The Plan is
not subject to ERISA.
19.12 No Fractional Shares. No
fractional Shares shall be issued or delivered pursuant to the
Plan or any Award. The Committee shall determine whether cash,
Awards, or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any
rights thereto shall be forfeited or otherwise eliminated.
19.13 Retirement and Welfare
Plans. Neither Awards made under the Plan nor
Shares or cash paid pursuant to such Awards will be included as
“compensation” for purposes of computing the benefits
payable to any Participant under the Company’s or any
Subsidiary’s or Affiliate’s retirement plans (both
qualified and non-qualified) or welfare benefit plans unless
such other plan expressly provides that such compensation shall
be taken into account in computing a participant’s benefit.
19.14 Nonexclusivity of the
Plan. The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board
or Committee to adopt such other compensation arrangements as it
may deem desirable for any Participant.
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19.15 No Constraint on Corporate
Action. Nothing in this Plan shall be construed
to: (i) limit, impair, or otherwise affect the
Company’s or a Subsidiary’s or an Affiliate’s
right or power to make adjustments, reclassifications,
reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate,
sell, or transfer all or any part of its business or assets; or,
(ii) limit the right or power of the Company or a
Subsidiary or an Affiliate to take any action which such entity
deems to be necessary or appropriate.
19.16 Governing Law. The Plan and
each Evidence of Award shall be governed by the laws of the
State of Ohio, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or
interpretation of the Plan to the substantive law of another
jurisdiction. Unless otherwise provided in the Evidence of
Award, recipients of an Award under the Plan are deemed to
submit to the exclusive jurisdiction and venue of the federal or
state courts of Ohio, to resolve any and all issues that may
arise out of or relate to the Plan or any related Evidence of
Award.
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VOTE BY INTERNET — www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. |
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Electronic Delivery of Future PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. |
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VOTE BY PHONE — 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. |
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VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
NAME
THE COMPANY NAME INC. - COMMON
THE COMPANY NAME INC. - CLASS A
THE COMPANY NAME INC. - CLASS B
THE COMPANY NAME INC. - CLASS C
THE COMPANY NAME INC. - CLASS D
THE COMPANY NAME INC. - CLASS E
THE COMPANY NAME INC. - CLASS F
THE COMPANY NAME INC. - 401 K
THE COMPANY NAME INC. - CLASS A
THE COMPANY NAME INC. - CLASS B
THE COMPANY NAME INC. - CLASS C
THE COMPANY NAME INC. - CLASS D
THE COMPANY NAME INC. - CLASS E
THE COMPANY NAME INC. - CLASS F
THE COMPANY NAME INC. - 401 K
CONTROL #
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® | 000000000000 |
SHARES
|
123,456,789,012.12345 | |||
| 123,456,789,012.12345 | ||||
| 123,456,789,012.12345 | ||||
| 123,456,789,012.12345 | ||||
| 123,456,789,012.12345 | ||||
| 123,456,789,012.12345 | ||||
| 123,456,789,012.12345 | ||||
| 123,456,789,012.12345 |
PAGE 1 OF 2
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
ý |
KEEP THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
DETACH AND RETURN THIS PORTION ONLY | |
0000038387_1 R2.09.05.010
| For | Withhold | For All | To withhold authority to vote for any Individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||||||||||||
| All | All | Except | ||||||||||||||
| The Board of Directors recommends that you | ||||||||||||||||
| vote FOR the following: | ||||||||||||||||
| o | o | o | ||||||||||||||
1.
|
Election of Directors | |||||||||||||||
| Nominees | ||||||||||||||||
01 Thomas A, Corcoran
|
02 James R. Henderson | 03 Warren G. Lichtenstein | 04 David A. Lorber | 05 James H. Perry | ||||
06 Scott J. Seymour
|
07 Martin Turchin | 08 Robert C. Woods |
| The Board of Directors recommends you vote FOR the following proposal(s): | For | Against | Abstain | |||||
2
|
To amend the Company’s Amended Articles of Incorporation to restrict certain transfers of the Company’s common stock to preserve the value of certain tax assets associated with net operating loss carryforwards under Section 382 of the Internal Revenue Code; | o | o | o | ||||
3
|
To approve certain amendments to the GenCorp 2009 Equity and Performance Incentive Plan to increase the number of shares authorized and reserved for issuance thereunder by 1,500,000 shares and increase the maximum individual award limits set forth therein; | o | o | o | ||||
4
|
To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending November 30, 2010; | o | o | o | ||||
5
|
To consider and act on such other business as may properly be brought before the meeting or any adjournments or postponements thereof. | o | o | o | ||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary,
please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or
partnership, please sign in full corporate or partnership name, by authorized officer.
please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or
partnership, please sign in full corporate or partnership name, by authorized officer.
| SHARES | ||||||||||||
| CUSIP # | ||||||||||||
| JOB # | SEQUENCE # | |||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
02 0000000000
Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The
Annual Report, Notice & Proxy Statement is/are available at www.proxyvote.com.
0000038387_2 R2.09.05.010
GENCORP INC.
Annual Meeting of Shareholders
March 24, 2010 9:00 AM
This proxy is solicited by the Board of Directors
Annual Meeting of Shareholders
March 24, 2010 9:00 AM
This proxy is solicited by the Board of Directors
The undersigned hereby appoints Scott J. Seymour and Kathleen E. Redd, and each of them, his
or her proxy, with the power of substitution, to vote all shares of Common Stock of GenCorp which
the undersigned is entitled to vote at the annual meeting of
shareholders to be held at the Omni Berkshire Place, 21 East 52nd
Street, New
York, New York on March 24, 2010 at 9:00 a.m. local time, and at any adjournments or postponements
thereof, and appoints the proxyholders to vote as directed below and in accordance with their sole
judgment on matters incident to the conduct of the meeting and on such other matters as may
properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER. IF NO CONTRARY
DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED, SUCH SHARES WILL BE VOTED FOR ALL OF
THE BOARD’S NOMINEES IN PROPOSAL 1, AND FOR
PROPOSALS 2-4, AND IN ACCORDANCE WITH THE PROXYHOLDERS’ SOLE JUDGMENT ON MATTERS INCIDENT TO THE
CONDUCT OF THE MEETING AND ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE BOARD
OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL PROPOSALS.
Continued and to be signed on reverse side
Table of Contents
FIDELITY INVESTMENTS
P.O. BOX 9112
FARMINGDALE, NY 11735
P.O. BOX 9112
FARMINGDALE, NY 11735
LABEL BELOW FOR MIS USE ONLY!
PO# K-3888
FESCO #482
GENCORP 401(K) - 2010 #202
ORIGINAL 1UP POLY 01-20-10 TM
KEVIN (GENCORP 401K - FESCO K-3888 2010 1-UP KM)
REVISION #1 02-04-10 TM
REVISION #2 02-04-10 JM
REVIEW #1 2/8/10 KD
PO# K-3888
FESCO #482
GENCORP 401(K) - 2010 #202
ORIGINAL 1UP POLY 01-20-10 TM
KEVIN (GENCORP 401K - FESCO K-3888 2010 1-UP KM)
REVISION #1 02-04-10 TM
REVISION #2 02-04-10 JM
REVIEW #1 2/8/10 KD
To Vote by Telephone
| 1) | Read the Proxy Statement and have this card at hand. | |
| 2) | Call toll-free 1-800-597-7657. | |
| 3) | Follow the recorded instructions. |
To Vote by Internet
| 1) | Read the Proxy Statement and have this card at hand | |
| 2) | Go to www.401kproxy.com. | |
| 3) | Follow the on-line instructions. |
To Vote by Mail
| 1) | Read the Proxy Statement. | |
| 2) | Check the appropriate boxes on reverse side. | |
| 3) | Sign, date and return the card in the enclosed envelope provided. |
If you vote by Internet or Telephone,
please do not mail your card.
please do not mail your card.
999 999 999 999 99
←
GENCORP INC.
ANNUAL MEETING OF SHAREHOLDERS–MARCH 24, 2010
THIS INSTRUCTION CARD IS SOLICITED BY FIDELITY MANAGEMENT TRUST COMPANY
ON BEHALF OF THE GENCORP INC. BOARD OF DIRECTORS
As a participant in the GenCorp Retirement Savings Plan, you have the right to instruct
Fidelity Management Trust Company, as trustee for the plan, to vote the shares of GenCorp
attributable to your plan account as you have directed at the Annual Meeting of Shareholders to be
held on March 24, 2010. Your voting instructions will be tabulated confidentially. Only Fidelity
will have access to your individual voting instructions.
Unless otherwise required by law, the shares attributable to your plan account will be voted as
directed; if no direction is made, if the card is not signed, or if the card is not received by
March 19, 2010, the shares attributable to your plan account will be voted in the same proportion
as shares for which the trustee has received voting instructions.
MIS
EDITS: # OF CHANGES___/___PRF 1 ____PRF 2____
OK
TO PRINT AS IS*___*By signing this form you are authorizing
MIS to print this form in its current state.
SIGNATURE OF PERSON AUTHORIZING PRINTING
|
DATE |
ê
ê
Date
, 2010
Signature
|
(Sign in the Box) |
ê
Gencorp 482 205 KM
Table of Contents
| MIS EDITS: # OF CHANGES / PRF 1 PRF 2 | ||
LABEL BELOW FOR MIS USE ONLY! |
||
PO# K-3888
|
OK TO PRINT AS IS* *By signing this form you are authorizing MIS to print this form in its | |
FESCO #482
|
current state. | |
GENCORP 401(K) - 2010 #202 ORIGINAL 1UP POLY 01-20-10 TM |
SIGNATURE OF PERSON AUTHORIZING PRINTING DATE
|
|
KEVIN (GENCORP 401K - FESCO K-3888 2010 1-UP KM) |
||
REVISION #1 01-20-10 TM |
||
REVISION #1 02-08-10 TM |
▼ Please fold and detach card at perforation before mailing ▼
Please fill in box(es) as shown using black or blue ink or number 2 pencil. ý
PLEASE DO NOT USE FINE POINT PENS.
PLEASE DO NOT USE FINE POINT PENS.
| ê | ê | |||||||||||
1.
|
Election of directors. | FOR ALL |
WITHHOLD FOR ALL |
EXCEPTIONS* |
||||||||
| (01) Thomas A. Corcoran | (02) James R. Henderson | (03) Warren G. Lichtenstein | ||||||||||
| (04) David A. Lorber |
(05) James H. Perry |
(06) Scott J. Seymour |
||||||||||
| (07) Martin Turchin | (08) Robert C. Woods | o | o | o | ||||||||
*INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE “EXCEPTIONS” BOX
AND WRITE THAT NOMINEE’S NAME IN THE SPACE PROVIDED ABOVE. |
FOR | AGAINST | ABSTAIN | |||||||||
| 2. | To amend the
Company’s Amended Articles of Incorporation to restrict certain transfers of the Company’s
common stock to preserve the value of certain tax assets associated with net operating loss
carryforwards under Section 382 of the Internal Revenue Code; |
o | o | o | ||||||||
| 3. | To approve certain amendments to the GenCorp 2009 Equity and Performance Incentive Plan to increase the
number of shares authorized and reserved for issuance thereunder by 1,500,000 shares and increase the maximum individual award limits set forth therein; |
o | o | o | ||||||||
| 4. | To ratify the
appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm of the Company for
the fiscal year ending November 30, 2010; and |
o | o | o | ||||||||
| 5. | To consider and act on such other business as may properly be brought before the meeting or any
adjournments or postponements thereof. |
|||||||||||
PLEASE SIGN AND DATE ON THE REVERSE SIDE
| Gencorp 482 205 KM | ||||
ê |
ê |
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERSPROXY STATEMENT FOR THE 2010 ANNUAL MEETING OF SHAREHOLDERSPROPOSAL 1 ELECTION OF DIRECTORSREPORT OF THE AUDIT COMMITTEEORGANIZATION & COMPENSATION COMMITTEE REPORTEXECUTIVE COMPENSATIONCOMPENSATION DISCUSSION AND ANALYSISSUMMARY COMPENSATION TABLE2009 GRANTS OF PLAN-BASED AWARDSOUTSTANDING EQUITY AWARDS AT 2009 FISCAL YEAR END2009 OPTION/SARs EXERCISES AND STOCK VESTEDprint2009 PENSION BENEFITS2009 NON-QUALIFIED DEFERRED COMPENSATIONPROPOSAL 2 APPROVAL TO AMEND THE COMPANYS CHARTER TO RESTRICT CERTAIN TRANSFERS OF COMMON STOCK TO PRESERVE THE VALUE OF CERTAIN TAX ASSETS ASSOCIATED WITH NET LOSS CARRYFORWARDS UNDER SECTION 382 OF THE INTERNAL REVENUE CODEPROPOSAL 3 APPROVAL OF CERTAIN AMENDMENTS TO THE GENCORP 2009 EQUITY AND PERFORMANCE INCENTIVE PLANPROPOSAL 4 RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM