AEROJET ROCKETDYNE HOLDINGS, INC.
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Table of Contents
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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
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 17, 2011
Dear Shareholder:
You are cordially invited to attend the 2011 Annual Meeting of
Shareholders of GenCorp Inc., which will be held on
March 30, 2011 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.
This year we have elected to take advantage of the Securities
and Exchange Commission’s rule that allows us to furnish
our proxy materials to our shareholders over the Internet. We
believe electronic delivery will expedite the receipt of
materials and, by printing and mailing a smaller volume, will
reduce the environmental impact of our annual meeting materials
and help lower our costs. Beginning on February 18, 2011, a
Notice of Internet Availability of Proxy Materials (the
“Notice of Internet Availability”) will be mailed to
our shareholders. This Notice contains instructions on how to
access the Notice of Annual Meeting, Proxy Statement and Annual
Report to Shareholders online. You will not receive a printed
copy of these materials, unless you specifically request one.
The Notice of Internet Availability contains instructions on how
to receive a paper copy of the proxy materials. For those
participants who hold shares of GenCorp’s common stock in
the GenCorp Retirement Savings Plan, you will receive a full set
of annual meeting materials and a proxy card by mail.
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 30, 2011 | |
| 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 2012
annual meeting of shareholders and until their respective
successors have been duly elected and qualified;
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2. To approve an
amendment to the GenCorp Amended and Restated 2009 Equity and
Performance Incentive Plan to eliminate the limitation on the
number of shares available to be issued as Full Value Awards;
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3. To consider and
approve an advisory resolution regarding the compensation of
GenCorp’s named executive officers;
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4. To consider and act
upon an advisory vote on the frequency at which GenCorp should
include an advisory vote regarding the compensation of
GenCorp’s named executive officers;
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5. To ratify the
appointment of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, as independent auditors of
the Company for the fiscal year ending November 30, 2011;
and
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6. 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: | You are entitled to vote at the 2011 Annual Meeting if you were a shareholder of record at the close of business on February 1, 2011. | |
| ANNUAL MEETING ADMISSION: | In addition to a form of valid 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 Internet, by telephone or by completing, signing, dating and returning a proxy card which will be mailed to you if you request delivery of a full set of proxy materials. Participants in the GenCorp Retirement Savings Plan must follow the voting instructions provided by Fidelity Management Trust Company. 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 2011 ANNUAL MEETING OF SHAREHOLDERS
FOR THE 2011 ANNUAL MEETING OF SHAREHOLDERS
To Be
Held On March 30, 2011
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 2011 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 30, 2011 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
February 1, 2011, (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.
We are providing you with a Notice of Internet Availability of
Proxy Materials (“Notice of Internet Availability”)
and access to these proxy materials in connection with the
solicitation by the Board of the Company to be used at the
Annual Meeting and at any adjournment or postponement. The
Notice of Internet Availability will be sent to shareholders of
record and beneficial shareholders starting on or around
February 18, 2011. The Proxy materials, including the
Notice of Annual Meeting, Proxy Statement, and 2010 Annual
Report, will be made available to shareholders on the Internet
on February 18, 2011. For those participants who hold
shares of GenCorp’s Common Stock in the GenCorp Retirement
Savings Plan, you will receive a full set of annual meeting
materials and a proxy card for those shares.
WHY DID I
RECEIVE A NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS
THIS YEAR INSTEAD OF A FULL SET OF PROXY MATERIALS?
Pursuant to new rules adopted by the Securities and Exchange
Commission (the “SEC”), we are providing access to the
Company’s proxy materials over the Internet rather than
printing and mailing them to all shareholders. We believe
electronic delivery will expedite the receipt of these
materials, reduce the environmental impact of our annual meeting
materials and will help lower our costs. Therefore, the Notice
of Internet Availability will be mailed to shareholders (or
e-mailed, in
the case of shareholders that have previously requested to
receive proxy materials electronically) starting on or around
February 18, 2011. The Notice of Internet Availability will
provide instructions as to how shareholders may access and
review the proxy materials on the website referred to in the
Notice of Internet Availability or, alternatively, how to
request that a copy of the proxy materials, including a proxy
card, be sent to them by mail. The Notice of Internet
Availability will also provide voting instructions. In addition,
shareholders may request to receive the proxy materials in
printed form by mail or electronically by
e-mail on an
ongoing basis for future shareholder meetings. Please note that,
while our proxy materials are available at www.proxyvote.com
referenced in the Notice of Internet Availability, no other
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information contained on the website is incorporated by
reference in or considered to be a part of this Proxy Statement.
WHY DID I
RECEIVE MORE THAN ONE NOTICE OF INTERNET AVAILABILITY?
You may receive multiple Notices of Internet Availability if you
hold your shares of GenCorp’s Common Stock in multiple
accounts (such as through a brokerage account). If you hold your
shares of GenCorp’s Common Stock in multiple accounts you
should vote your shares as described in each separate Notice of
Internet Availability you receive.
IF
GENCORP IS UTILIZING NOTICE OF INTERNET AVAILABILITY, WHY DID I
RECEIVE A FULL SET OF ANNUAL MEETING MATERIALS AND A PROXY
CARD?
For those participants who hold shares of GenCorp’s Common
Stock in the GenCorp Retirement Savings Plan, you will receive a
full set of annual meeting materials and proxy card for those
shares. Fidelity Management Trust Company, (the
“Trustee”), is not utilizing Notice of Internet
Availability for the GenCorp Retirement Savings Plan
participants.
WHAT AM I
VOTING ON?
You are voting on the following items of business at the Annual
Meeting:
| • | To elect eight directors to our Board of Directors (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 2012 annual meeting of shareholders and until their respective successors have been duly elected and qualified (“Proposal 1”); | |
| • | To approve an amendment to the GenCorp Amended and Restated 2009 Equity and Performance Incentive Plan (the “2009 Incentive Plan”) to eliminate the limitation on the number of shares available to be issued as Full Value Awards (“Proposal 2”); | |
| • | To consider and approve an advisory resolution regarding the compensation of GenCorp’s named executive officers (“Proposal 3”); | |
| • | To consider and act upon an advisory vote on the frequency at which GenCorp should include an advisory vote regarding the compensation of GenCorp’s named executive officers (“Proposal 4”); | |
| • | To ratify the appointment of PricewaterhouseCoopers LLP (“PwC”), an independent registered public accounting firm, as independent auditors of the Company for the fiscal year ending November 30, 2011 (“Proposal 5”); 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.
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 of an amendment to the
2009 Incentive Plan to eliminate the limitation on the number of
shares available to be issued as Full Value Awards;
“FOR” the advisory resolution regarding the
compensation of GenCorp’s named executive officers; for
“ONE YEAR” as the frequency of the advisory vote on
GenCorp’s executive compensation program; and
“FOR” the
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ratification of PwC, an independent registered public accounting
firm, as independent auditors of the Company.
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 25, 2011 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. GenCorp
Retirement Savings 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 which will be mailed to you if you request delivery
of a full set of proxy materials. A postage-paid envelope will
be provided along with the proxy card.
Telephone and Internet voting for shareholders of record will be
available until 11:59 p.m. Eastern time on March 29,
2011. A mailed proxy card must be received by March 29,
2011 in order to be voted at the Annual Meeting. The
availability of telephone and Internet voting for beneficial
owners of other shares held in “street name” will
depend on your broker, bank or other holder of record and we
recommend that you follow the voting instructions on the Notice
of Internet Availability that you receive from them.
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If you are mailed a set of proxy materials and a proxy card or
voting instruction card and 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. In this
case, your Notice of Internet Availability has been sent to you
directly by Broadridge Financial Solutions, Inc. If your shares
are held in a stock brokerage account or by a bank, trust or
other nominee or custodian, including shares you may own as a
participant in the Company’s Retirement Savings Plan, you
are considered the “beneficial owner” of those shares,
which are held in “street name.” A Notice of Internet
Availability has been forwarded to you by or on behalf of your
broker, bank, trustee or other holder who is considered the
shareholder of record of those shares. 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
their instructions for voting.
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 through 4, 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.
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; |
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| • | 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.
Proposals 2, 3 and 5, the approval of the amendment to the
2009 Incentive Plan, the approval of the advisory resolution
regarding the compensation of GenCorp’s named executive
officers and the ratification of PwC, respectively, 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 Proposals 2, 3 and 5. For
Proposal 4, the option of one year, two years or three
years that receives the highest number of votes cast by
shareholders will be the frequency for the advisory vote on
executive compensation that has been selected by shareholders.
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, 59,255,067 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 and broker “non-votes” 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 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 2010
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.
Copies are 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.
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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, 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 Items of Business.
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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 their successor
has been elected, or until his resignation, removal from office,
or death, whichever is earlier.
The Board recommends a vote FOR the election of these nominees
as Directors.
Director
Qualifications and Experience
The Board, acting through the Corporate Governance &
Nominating Committee, seeks a Board that, as a whole, possesses
the experience, skills, background and qualifications
appropriate to function effectively in light of the
Company’s current and evolving business circumstances. The
Corporate Governance & Nominating Committee reviews
the size of the Board, the tenure of its Directors and their
skills, backgrounds and experiences in determining the slate of
nominees and whether to seek one or more new candidates. The
Committee seeks directors with established records of
significant accomplishments in business and areas relevant to
the Company’s strategies. With respect to the nomination of
continuing Directors for re-election, the individual’s
contributions to the Board are also considered.
All of our Directors bring to our Board a wealth of executive
leadership experience derived from their service as executives
and, in many cases, chief executive officers of large
corporations. They also bring extensive board experience. The
process undertaken by the Corporate Governance &
Nominating Committee in recommending qualified director
candidates is described in the Director Nominations
section on page 15.
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, as well as their particular experience,
qualifications, attributes or skills that led the Board to
conclude that the person should serve as a Director for the
Company. 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 Exchange Act of 1934, as
amended (the “Exchange Act”). The information
concerning the nominees set forth below is given as of
December 31, 2010.
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
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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 Audit Committee),
REMEC, Inc. and LaBarge, Inc. (Audit Committee member).
Mr. Corcoran is also a director with Aer Lingus, Ltd. based
in Dublin, Ireland and was a director of Serco, Ltd. based in
Surry, UK from 2007 to 2010. Mr. Corcoran serves as a
director of American Ireland Fund, is on the board of trustees
of Stevens Institute of Technology and is a trustee emeritus at
Worcester Polytechnic Institute. Mr. Corcoran brings to the
Board considerable industry knowledge gained from extensive
experience as a senior executive in the aerospace industry.
Mr. Corcoran also brings to the Board significant public
company board experience, including service as a director of a
Fortune 500 company. Mr. Corcoran currently serves as
a member of the Organization & Compensation Committee.
Age 66.
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.
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 (currently Chairman of
the Board) of DGT Holdings Corp. (formerly 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 served as a
director of BNS Holding, Inc., a holding company that owned the
majority of Collins Industries, Inc., a manufacturer of school
buses, ambulances and terminal trucks, between June 2004 and May
2010. Mr. Henderson also served as a director of SL
Industries, Inc., a designer, manufacturer, and marketer of
power electronics, motion control, power protection, and
specialized communication equipment (“SL Industries”),
from January 2002 to March 2010. 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
served as the CEO of Gateway Industries, Inc., a former provider
of database development and web site design and development
services, from December 2001 to April 2008. From January 2001 to
August 2001, he was President of MDM Technologies, Inc., a
direct mail and marketing company. He has been the Chairman of
the Board of Point Blank Solutions, Inc. (“Point
Blank”), 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 is
also the CEO and Chairman of the Board of Directors of certain
subsidiaries of Point Blank. On April 14, 2010, Point Blank
and certain of its subsidiaries filed voluntary petitions for
relief under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware. The Chapter 11 petitions are being jointly
administered under the caption “In re Point Blank
Solutions, Inc., et. al.” Case
No. 10-11255,
which case is ongoing. Mr. Henderson serves as a Manager of
the Board of Managers of Easton Development Company, LLC, a
subsidiary of GenCorp. Mr. Henderson’s substantial
experience advising and managing public companies provides the
Board with
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well-developed leadership skills and ability to promote the best
interests of shareholders. Mr. Henderson currently serves
as Chairman of the Board and Chairman of the Corporate
Governance & Nominating Committee. Age 53.
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.,
a private investment partnership which is now a wholly-owned
subsidiary of SPH (“SPII”) in 1993.
Mr. Lichtenstein was the Chairman of the Board, President
and CEO of SP Acquisition from February 2007 to October 2009.
Mr. Lichtenstein has served as a director of SL Industries
since March 2010. He previously served as 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
Handy & Harman Ltd., 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. He served as a
director of Layne Christensen Company, a provider of products
and services for the water, mineral, construction and energy
markets, from January 2004 to October 2006. He served as a
director of BKF Capital Group, Inc., the parent company of
Jon A. Levin & Co., an investment management
firm, from 2005 to 2006. Mr. Lichtenstein is qualified to
serve as director due to his expertise in corporate finance,
record of success in managing private investment funds and his
service as a director of, and advisor to, a diverse group of
public companies. Mr. Lichtenstein currently serves as a
member of the Organization & Compensation Committee.
Age 45.
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
and was a Trustee for IAT Air Cargo Facilities Income Fund from
January 2009 to December 2009. Mr. Lorber brings to the
Board significant financial and investment industry experience
and experience as a public company director. Mr. Lorber
currently serves as Chairman of the Organization &
Compensation Committee and as a member of the Audit Committee.
Age 32.
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, which, 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
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2000 to 2005, and as Vice President from 1997 to 2007.
Mr. Perry, a certified public accountant, 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’s background as
a financial consultant, senior executive and certified public
accountant provides the Board with sophisticated financial
expertise and oversight. Mr. Perry currently serves as
Chairman of the Audit Committee and as a member of the
Organization & Compensation Committee. Age 49.
SCOTT J.
SEYMOUR
Director since 2010
Mr. Seymour joined the Company on January 6, 2010, as
President and CEO 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”), from March 2008 to
January 2010. 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 and a
director of the Astronauts Memorial Foundation. Mr. Seymour
serves as a Manager of the Board of Managers of Easton
Development Company, LLC, a subsidiary of GenCorp.
Mr. Seymour’s extensive experience as a senior
executive provides the Board with significant operational
expertise and an in-depth knowledge of the aerospace and defense
industry. Age 60.
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 serves as a Manager of the Board of Managers of
Easton Development Company, LLC, a subsidiary of GenCorp.
Mr. Turchin’s considerable experience in the real
estate industry and service as a director of public companies
provides the board with valuable expertise in real estate
matters and experience in advising companies. Mr. Turchin
currently serves as a member of the Audit Committee and as a
member of the Corporate Governance & Nominating
Committee. Age 69.
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,
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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
(“CFA”). As a CFA and through extensive experience,
Mr. Woods brings to the Board significant financial and
real estate related knowledge and expertise. Mr. Woods
currently serves as a member of the Audit Committee and as a
member of the Corporate Governance & Nominating
Committee. Age 58.
The 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. In
determining its recommendation to the Board, the Corporate
Governance & Nominating 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 &
Nominating 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 & Nominating 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.
Retirement
Policy
Under the Board’s retirement policy, a Director’s term
of office normally expires at the annual meeting of shareholders
following their 70th birthday. The Board’s retirement
policy also provides that
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the Board may waive immediate compliance with the policy and
request that a Director postpone their retirement until a
subsequent date.
Meetings
of the Board
The Board held eleven meetings during fiscal year 2010. All of
the Directors who served during fiscal year 2010 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 2010. 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 2010 annual meeting of
shareholders were present at such meeting.
Meetings
of Non-Employee Directors
Non-employee Directors (consists of all Directors other than
Mr. Seymour) meet in executive session as part of each
regularly scheduled Board meeting. In 2010, the Chairman of the
Board, presided at all such executive sessions except two. In
the event of the Chairman’s absence, a non-employee
Director is chosen on a rotating basis to preside.
Board
Leadership Structure
The Board does not have a policy regarding the separation of the
roles of CEO and Chairman of the Board as the Board believes it
is in the best interests of the Company to make that
determination based upon the position and direction of the
Company and the membership of the Board. The Board has
determined at this time that the Company’s Chairman should
be an Independent Director rather than the CEO.
Board
Role in Risk Oversight
Management has the primary responsibility for identifying and
managing the risks facing the Company, subject to the oversight
of the Board. The Board strives to effectively oversee the
Company’s enterprise-wide risk management in a way that
balances managing risks while enhancing the long-term value of
the Company for the benefit of the shareholders. The Board of
Directors understands that its focus on effective risk oversight
is critical to setting the Company’s tone and culture
towards effective risk management. To administer its oversight
function, the Board seeks to understand the Company’s risk
philosophy by having discussions with management to establish a
mutual understanding of the Company’s overall appetite for
risk. The Company’s Board of Directors maintains an active
dialogue with management about existing risk management
processes and how management identifies, assesses and manages
the Company’s most significant risk exposures. The
Company’s Board expects frequent updates from management
about the Company’s most significant risks so as to enable
it to evaluate whether management is responding appropriately.
The Board of Directors relies on each of its committees to help
oversee the risk management responsibilities relating to the
functions performed by such committees. The Audit Committee
periodically discusses with management the Company’s major
financial risk exposures and the steps management has taken to
monitor and control such exposures, including the Company’s
risk assessment and risk management policies. The
Organization & Compensation Committee helps the Board
to identify the Company’s exposure to any risks potentially
created by our compensation programs and practices. The
Governance & Nominating Committee oversees risks
relating to the Company’s corporate compliance programs and
assists the Board and management in promoting an organizational
culture that encourages commitment to ethical conduct and a
commitment to compliance with the law. Each of these committees
is required to make regular reports of its actions and
recommendations to the Board, including recommendations to
assist the Board with its overall risk oversight function. The
Board retains oversight responsibility for all subject matters
not specifically assigned to a committee, including risks
presented by the Company’s business strategy, competition,
regulation, general industry trends, and capital structure and
allocation.
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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; | |
| • | 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. |
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Board
Committees
The Board maintains three standing committees: the Audit
Committee; the Corporate Governance & Nominating
Committee; and the Organization & Compensation
Committee. In addition, non-standing committees include the CEO
Search Committee (which was disbanded on January 6, 2010),
the Pricing Committee, the Authorization Committee, and the
Benefits Management Committee. 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 2010:
|
Corporate |
|||||||||||||||
|
Governance & |
Organization & |
||||||||||||||
| Name | Audit | Nominating | Compensation | ||||||||||||
|
Scott J. Seymour
|
|||||||||||||||
|
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 2010
|
7 | 2 | 9 | ||||||||||||
| * | Committee Chairman |
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 audit
or 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.
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The Corporate Governance & Nominating 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 & Nominating 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 &
Nominating 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 & Nominating Committee meets all applicable
independence requirements under the NYSE listing standards.
The Organization & Compensation Committee advises and
recommends to the independent Directors the total compensation
of the President and CEO. In addition, the
Organization & Compensation Committee, with the
counsel of the CEO, considers and establishes base pay and
incentive pay for the other executive officers of the Company.
The Organization & Compensation Committee also
administers the Company’s deferred compensation plan and
the 2009 Incentive Plan. The Organization &
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
Organization & Compensation 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.
Director
Nominations
The Corporate Governance & Nominating Committee
identifies potential director candidates through a variety of
means, including recommendations from members of the Corporate
Governance & Nominating Committee, the Board,
management and shareholders. The Corporate
Governance & Nominating Committee also may retain the
services of a consultant to assist in identifying candidates.
The Corporate Governance & Nominating 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 & Nominating
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.
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Such nominations must be received by the Chairman of the
Corporate Governance & Nominating 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
2010 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 & Nominating 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. Although the Corporate Governance &
Nominating Committee does not have a formal diversity policy
relating to the identification and evaluation of nominees, the
Corporate Governance & Nominating Committee, in
addition to reviewing a candidate’s qualifications and
experience in light of the needs of the Board and the Company at
that time, reviews candidates in the context of the current
composition of the Board and the evolving needs of the
Company’s businesses.
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 & Nominating 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 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 Organization & Compensation Committee is composed
entirely of non-employee independent Directors. As of
November 30, 2010, the members of the
Organization & 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 Organization & Compensation
Committee. In addition, none of the Company’s executive
officers serve as a member of the Organization &
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
Organization & Compensation Committee.
Annual
Retainer Fees
Under our Director compensation program effective for the period
ending on the date of each annual meeting of shareholders, each
non-employee Director will receive an annual retainer fee of
$55,000, with the exception of the Chairman of the Board who
will receive an annual retainer fee of $110,000. Each
non-employee Director will receive $5,000 for service on a
standing or long-term special committee of the Board and $3,250
for service on a limited-purpose special committee of the Board.
Non-employee
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Directors who served as Chairman of the Organization &
Compensation Committee or Corporate Governance &
Nominating Committee will receive an additional annual fee of
$10,000 and the Chairman of the Audit Committee will receive an
additional $15,000. Non-employee Directors who attend Board
meetings in excess of six meetings between any two annual
meetings of shareholders will receive $2,000 per each additional
Board meeting and non-employee Directors who attend meetings of
any single standing or long-term special committee meetings held
in excess of six meetings between any two annual meetings of
shareholders will receive $1,500 per each additional committee
meeting. The annual cash compensation for each non-employee
Director serving as a Manager on the Board of Managers of Easton
Development Company, LLC is $15,000.
Non-Employee Directors are offered a choice annually between
continuing to receive all such Director fees in the form of cash
or receiving all or part, but no less than 50%, of such fees in
the form of fully vested Company Common Stock, calculated based
on the closing price of the Common Stock as reported in the NYSE
Composite Transactions in the Wall Street Journal (or if such
information in such source is unavailable, a source providing
similar information selected by the Company) as of the
applicable Director pay date, pursuant to the 2009 Incentive
Plan. If a non-employee Director elects for any year to receive
all or a portion of such fees in the form of fully-vested Common
Stock, an additional grant of restricted shares of Common Stock
will be given equal in value to 50% of the amount of fees paid
in fully-vested Common Stock vesting on the earlier of the
Director’s retirement from service from the Board or one
year from the date of grant.
Equity
Grants
In March 2010, each non-employee Director received $75,000 worth
of equity compensation, with the exception of the Chairman of
the Board who received $95,000 worth of equity compensation
pursuant to the 2009 Incentive Plan. This grant consisted of
2,000 restricted shares of Common Stock and 27,479 Stock
Appreciation Rights (“SARs”) for non-employee
Directors other than the Chairman of the Board, whom received
3,500 restricted shares of Common Stock and 32,936 SARs. These
awards vest in 50% increments on the six-month and twelve-month
anniversary of the grant date. Also, in April 2010, each
non-employee Director received $100,000 worth of equity
compensation in the form of 17,123 restricted shares of Common
Stock under the 2009 Incentive Plan. These shares will vest upon
the Director’s retirement from the Board of Directors, or
upon a Change in Control as defined in the 2009 Incentive Plan,
or by action of the Organization & Compensation Committee
of the Board taken on or after March 31, 2013. 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 restricted shares of Common Stock may be voted, but
ownership may not transfer 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. The SARs have a seven-year term under the
2009 Incentive Plan.
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 Deferred Compensation Plan for
NonEmployee Directors, if any 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,
17
Table of Contents
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 January 25, 2011.
|
Value of Equity |
|||||||||||||||
| Name | Ownership(*) | Date of Election | Years as a Director | ||||||||||||
|
Thomas A. Corcoran
|
$ | 192,082 | 09/24/08 | 2 | |||||||||||
|
James R. Henderson
|
406,685 | 03/05/08 | 3 | ||||||||||||
|
Warren G. Lichtenstein
|
21,706,337 | 03/05/08 | 3 | ||||||||||||
|
David A. Lorber
|
277,267 | 03/31/06 | 5 | ||||||||||||
|
James H. Perry
|
271,977 | 05/16/08 | 2 | ||||||||||||
|
Martin Turchin
|
331,267 | 03/05/08 | 3 | ||||||||||||
|
Robert C. Woods
|
154,079 | 03/31/06 | 5 | ||||||||||||
| * | Value is based on the stock price on January 25, 2011 of $5.29. |
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 $3,000
per calendar year.
Non-employee Directors may also elect to participate in the same
health benefits programs at the same cost as offered to all of
the Company’s employees. Two Directors participated in this
plan in fiscal 2010. The Company also reimburses Directors for
actual travel and other expenses incurred in attending Board and
Committee meetings.
2010
DIRECTOR COMPENSATION TABLE
The following table sets forth information regarding
compensation earned or paid to each non-employee Director who
served on the Board of Directors in fiscal year 2010. Directors
who are employees are not compensated for their services as
directors.
|
Fees Earned |
Option/SARs |
All Other |
|||||||||||||||||||||||
|
or Paid |
Stock Awards |
Awards |
Compensation |
Total |
|||||||||||||||||||||
| Name | ($)(1) | ($)(2)(3) | ($)(2)(3) | ($)(4) | ($) | ||||||||||||||||||||
|
Thomas A. Corcoran
|
$ | 63,742 | $ | 122,062 | $ | 65,741 | $ | 3,000 | $ | 254,545 | |||||||||||||||
|
James R. Henderson
|
143,494 | 174,945 | 78,796 | — | 397,235 | ||||||||||||||||||||
|
Warren G. Lichtenstein
|
68,743 | 137,380 | 65,741 | — | 271,864 | ||||||||||||||||||||
|
David A. Lorber
|
83,745 | 144,881 | 65,741 | — | 294,367 | ||||||||||||||||||||
|
James H. Perry
|
83,745 | 144,881 | 65,741 | — | 294,367 | ||||||||||||||||||||
|
Martin Turchin
|
78,742 | 142,376 | 65,741 | 3,000 | 289,859 | ||||||||||||||||||||
|
Robert C. Woods
|
63,750 | 109,258 | 65,741 | — | 238,749 | ||||||||||||||||||||
| (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 2010. Non-employee Directors have a choice to receive all or a portion of their director fees in fully vested Common Stock of the Company which is calculated based on the closing price of the Common Stock as of the applicable pay date. If a Director elects to receive fees in Common Stock, an additional grant of restricted shares of Common Stock are given in an amount equal in value to 50% of the amount of fees paid in fully vested Common Stock. This additional grant is reported in the “Stock Awards” |
18
Table of Contents
| column. The following table shows director fees that were paid in fully vested Common Stock in fiscal year 2010. |
|
Grant Date |
|||||||||||||||
|
Stock Awards |
Fair Value |
||||||||||||||
| Name | Pay Date | (#) | ($) | ||||||||||||
|
Thomas A. Corcoran
|
4-15-10 | 2,043 | $ | 11,870 | |||||||||||
| 7-15-10 | 1,302 | 6,875 | |||||||||||||
| 10-15-10 | 1,361 | 6,873 | |||||||||||||
|
James R. Henderson
|
4-15-10 | 10,757 | 62,498 | ||||||||||||
| 7-15-10 | 5,208 | 27,498 | |||||||||||||
| 10-15-10 | 5,445 | 27,497 | |||||||||||||
|
Warren G. Lichtenstein
|
4-15-10 | 4,948 | 28,748 | ||||||||||||
| 7-15-10 | 2,604 | 13,749 | |||||||||||||
| 10-15-10 | 2,722 | 13,746 | |||||||||||||
|
David A. Lorber
|
4-15-10 | 7,530 | 43,749 | ||||||||||||
| 7-15-10 | 2,604 | 13,749 | |||||||||||||
| 10-15-10 | 2,722 | 13,746 | |||||||||||||
|
James H. Perry
|
4-15-10 | 7,530 | 43,749 | ||||||||||||
| 7-15-10 | 2,604 | 13,749 | |||||||||||||
| 10-15-10 | 2,722 | 13,746 | |||||||||||||
|
Martin Turchin
|
4-15-10 | 6,669 | 38,747 | ||||||||||||
| 7-15-10 | 2,604 | 13,749 | |||||||||||||
| 10-15-10 | 2,722 | 13,746 | |||||||||||||
|
Robert C. Woods
|
— | — | |||||||||||||
| (2) | The amounts reported in these columns for each non-employee Director reflect the grant date fair value of stock awards given in fiscal year 2010. A description of these awards can be found under the section entitled Long-Term Incentives (Equity-Based Compensation) on page 29. 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, 2010. |
19
Table of Contents
| The following table shows each grant of restricted stock and SARs granted during fiscal year 2010 to each non-employee Director who served as a Director in fiscal year 2010, and the aggregate grant date fair value for each award. |
|
Grant Date |
||||||||||||||||||||
|
Grant |
Stock Awards |
SARs Awards |
Fair Value |
|||||||||||||||||
| Name | Date | (#) | (#) | ($) | ||||||||||||||||
|
Thomas A. Corcoran
|
3-24-10 | 27,479(A | ) | $ | 65,741 | |||||||||||||||
| 3-24-10 | 2,000(A | ) | 9,260 | |||||||||||||||||
| 4-9-10 | 17,123(B | ) | 99,998 | |||||||||||||||||
| 4-15-10 | 1,021(C | ) | 5,932 | |||||||||||||||||
| 7-15-10 | 651(C | ) | 3,437 | |||||||||||||||||
| 10-15-10 | 680(C | ) | 3,434 | |||||||||||||||||
|
James R. Henderson
|
3-24-10 | 32,936(A | ) | 78,796 | ||||||||||||||||
| 3-24-10 | 3,500(A | ) | 16,205 | |||||||||||||||||
| 4-9-10 | 17,123(B | ) | 99,998 | |||||||||||||||||
| 4-15-10 | 5,378(C | ) | 31,246 | |||||||||||||||||
| 7-15-10 | 2,604(C | ) | 13,749 | |||||||||||||||||
| 10-15-10 | 2,722(C | ) | 13,746 | |||||||||||||||||
|
Warren G. Lichtenstein
|
3-24-10 | 27,479(A | ) | 65,741 | ||||||||||||||||
| 3-24-10 | 2,000(A | ) | 9,260 | |||||||||||||||||
| 4-9-10 | 17,123(B | ) | 99,998 | |||||||||||||||||
| 4-15-10 | 2,474(C | ) | 14,374 | |||||||||||||||||
| 7-15-10 | 1,302(C | ) | 6,875 | |||||||||||||||||
| 10-15-10 | 1,361(C | ) | 6,873 | |||||||||||||||||
|
David A. Lorber
|
3-24-10 | 27,479(A | ) | 65,741 | ||||||||||||||||
| 3-24-10 | 2,000(A | ) | 9,260 | |||||||||||||||||
| 4-9-10 | 17,123(B | ) | 99,998 | |||||||||||||||||
| 4-15-10 | 3,765(C | ) | 21,875 | |||||||||||||||||
| 7-15-10 | 1,302(C | ) | 6,875 | |||||||||||||||||
| 10-15-10 | 1,361(C | ) | 6,873 | |||||||||||||||||
|
James H. Perry
|
3-24-10 | 27,479(A | ) | 65,741 | ||||||||||||||||
| 3-24-10 | 2,000(A | ) | 9,260 | |||||||||||||||||
| 4-9-10 | 17,123(B | ) | 99,998 | |||||||||||||||||
| 4-15-10 | 3,765(C | ) | 21,875 | |||||||||||||||||
| 7-15-10 | 1,302(C | ) | 6,875 | |||||||||||||||||
| 10-15-10 | 1,361(C | ) | 6,873 | |||||||||||||||||
|
Martin Turchin
|
3-24-10 | 27,479(A | ) | 65,741 | ||||||||||||||||
| 3-24-10 | 2,000(A | ) | 9,260 | |||||||||||||||||
| 4-9-10 | 17,123(B | ) | 99,998 | |||||||||||||||||
| 4-15-10 | 3,334(C | ) | 19,371 | |||||||||||||||||
| 7-15-10 | 1,302(C | ) | 6,875 | |||||||||||||||||
| 10-15-10 | 1,361(C | ) | 6,873 | |||||||||||||||||
|
Robert C. Woods
|
3-24-10 | 27,479(A | ) | 65,741 | ||||||||||||||||
| 3-24-10 | 2,000(A | ) | 9,260 | |||||||||||||||||
| 4-9-10 | 17,123(B | ) | 99,998 | |||||||||||||||||
20
Table of Contents
| (A) | These equity awards vest in 50% increments on the six-month and twelve-month anniversary of the grant date. | |
| (B) | These shares will vest upon the Director’s retirement from the Board, or upon a Change in Control as defined in the 2009 Incentive Plan, or by action of the Organization & Compensation Committee of the Board taken on or after March 31, 2013. | |
| (C) | These shares vest on the earlier of the Director’s retirement from the Board or the one year anniversary of the grant date. |
| (3) | The following table shows the amount of outstanding and unexercised SARs awards and unvested stock awards as of November 30, 2010 for each non-employee Director who served as a Director in fiscal year 2010. No Director held stock options as of November 30, 2010. |
|
Outstanding and |
||||||||||
|
Unexercised |
||||||||||
| Name | Unvested Stock Awards | SARs | ||||||||
|
Thomas A. Corcoran
|
23,600 | 48,479 | ||||||||
|
James R. Henderson
|
37,077 | 80,936 | ||||||||
|
Warren G. Lichtenstein
|
27,260 | 63,479 | ||||||||
|
David A. Lorber
|
28,051 | 68,479 | ||||||||
|
James H. Perry
|
28,551 | 63,479 | ||||||||
|
Martin Turchin
|
28,120 | 63,479 | ||||||||
|
Robert C. Woods
|
21,623 | 68,479 | ||||||||
| (4) | All Other Compensation includes matching donations made by the GenCorp Foundation for gifts made in fiscal year 2010. |
21
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 1, 2011 (except for
Mr. Neish, where total amounts owned are as of the date he
terminated employment with the Company).
|
Amount and Nature of |
||||||||
| Beneficial Owner | Beneficial Ownership(1)(2) | Percent of Class | ||||||
|
Directors
|
||||||||
|
Thomas A. Corcoran
|
31,307 | * | ||||||
|
James R.
Henderson(3)
|
68,245 | * | ||||||
|
Warren G.
Lichtenstein(4)
|
4,098,274 | 6.9% | ||||||
|
David A. Lorber
|
47,410 | * | ||||||
|
James H. Perry
|
46,410 | * | ||||||
|
Martin
Turchin(5)
|
57,618 | * | ||||||
|
Robert C. Woods
|
24,123 | * | ||||||
|
Executive Officers
|
||||||||
|
Scott J. Seymour
|
153,334 | * | ||||||
|
Kathleen E.
Redd(6)
|
35,929 | * | ||||||
|
Richard W.
Bregard(7)
|
30,858 | * | ||||||
|
Chris W. Conley
|
48,076 | * | ||||||
|
Former Executive Officer
|
||||||||
|
J. Scott Neish
|
28,473 | * | ||||||
|
All Current Directors and Executive Officers as a group
(except J. Scott Neish) (11 persons)
|
4,641,584 | 7.8% | ||||||
| * | Less than 1.0% | |
| (1) | Includes restricted shares granted under the 1999 Equity and Performance 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 1, 2011, (except for Mr. Neish, where amounts are as of the date he terminated employment with the Company). | |
| (2) | Includes shares issuable upon the exercise of stock options that may be exercised within 60 days of January 29, 2011 as follows: Mr. Seymour — 33,334; Ms. Redd — 3,999; Mr. Conley — 10,000; and Mr. Neish — 2,200; and all current executive officers as a group (except for Mr. Neish) — 47,333 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 4,055,737 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, including 42,537 shares of stock of the Company owned directly by Mr. Lichtenstein. Certain 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. |
22
Table of Contents
| (5) | 7,500 shares are held in the name of Martin Turchin IRA Rollover, 3,000 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. | |
| (7) | 342 shares are held in a Charles Schwab Personal Choice Retirement Account. |
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 exceeds 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 in
which 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.
23
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 auditor’s 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 PwC, the Company’s 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 (AICPA,
Professional Standards Vol. 1, AU Section 380), as adopted
by the Public Accounting Oversight Board in Rule 3200T. 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 PwC’s
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, 2010.
The Audit Committee met seven times during fiscal year 2010.
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, 2010 for filing with
the SEC. The Audit Committee appointed PwC as the Company’s
independent registered public accounting firm for fiscal year
2011.
Submitted by the Audit Committee,
James H. Perry, Chairman
David A. Lorber
Martin Turchin
Robert C. Woods
January 26, 2011
24
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 and the Company’s 2010
Annual Report on
Form 10-K.
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
January 25, 2011
EXECUTIVE
COMPENSATION
Executive
Officers of the Registrant
The following information is given as of December 31, 2010.
| 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. | 60 | |||||
|
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. | 49 | |||||
25
Table of Contents
| Name | Title | Other Business Experience | Age | |||||
|
Richard W. Bregard
|
Deputy to the President (since June 2010) | Vice President, Defense Programs 2007 — 2010; Executive Director, Missile Defense Programs 2004 — 2007 and President, Aerojet Ordnance Tennessee, Inc. 2004 — 2007. | 68 | |||||
|
Chris W. Conley
|
Vice President Environmental, Health and Safety (since October 1999) | Director Environmental, Health and Safety, March 1996 — October 1999; Environmental Manager, 1990 — 1996. | 52 | |||||
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 2010 compensation program covered our
President and CEO, Vice President, CFO and Secretary, and two of
our Named Executive Officers who were officers as of the end of
fiscal year 2010, plus our former Interim President and CEO. The
2010 compensation program also covered other key employees of
the Company.
We have designed our executive compensation program, under the
direction of the Organization & 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 Organization & Compensation
Committee set performance targets for annual cash incentives for
2010 for our officers related to contract profit, free cash
flow, adjusted earnings before interest and taxes, contract
awards, and certain other goals that include individual
performance and accomplishments of a particular executive.
The Organization & Compensation Committee determines
all matters of executive compensation and benefits, although our
President and CEO provides input and initial recommendations to
the Organization & Compensation Committee with respect
to the Named Executive Officers other than the President and
CEO. Our President and CEO, Scott J. Seymour, and our Vice
President, CFO and Secretary, Kathleen E. Redd, provided input
to the Organization & Compensation Committee with
respect to the 2010 compensation program. The
Organization & 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 Organization & Compensation Committee approved share ownership guidelines |
26
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| that apply to our Named Executive Officers, where over a period of time, each Named Executive Officer is expected 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 Organization & 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 Organization &
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 Organization & Compensation
Committee reviewed a study conducted by the Hay Group on the
Company’s behalf that used data from Mercer Human Resource
Consulting and Pearl Meyer & Partners (CHiPS)
Executive and Senior Management Total Compensation Survey.
The compensation program for executive officers has historically
consisted of the following principal elements:
| • | Short-term compensation, including base salaries and annual cash incentive 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, however pension benefits were frozen effective fiscal year 2009. |
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
Organization & Compensation Committee holds a meeting,
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 Organization & Compensation
Committee. In determining the amount of any increases in
salaries, the Organization & 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
Organization & Compensation Committee sets performance
targets such that total cash compensation (base salary plus
annual cash incentive) 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 incentives are paid; if minimum
targets are not met, we will pay less or
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nothing at all. If targets are exceeded, the
Organization & Compensation Committee has discretion
to adjust payments to the executives. The
Organization & Compensation Committee has discretion
to increase, reduce or eliminate payments.
The Organization & Compensation Committee set
performance targets for the annual cash incentive program for
our Named Executive Officers for fiscal year 2010. These targets
consist of contract profit, free cash flow, adjusted earnings
before interest and taxes, contract awards, and certain other
individual goals.
Annually, the Organization & Compensation Committee
approves the annual cash incentive program for the executive
officers of the Company. The target annual incentive pay 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 incentive 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, Vice President, CFO and
Secretary, and Human Resources, the Organization &
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 incentive opportunity for each executive officer; and | |
| • | measures performance and determines awards for the prior fiscal year. |
Annual cash incentives are paid at the beginning of each fiscal
year for the prior fiscal year’s performance. Incentives
paid are based upon the Organization & Compensation
Committee’s (with input from the President and CEO and Vice
President, CFO and Secretary) 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
incentive opportunity. The Organization & Compensation
Committee has discretion to increase, reduce or eliminate
payments.
The Organization & 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
2010, 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% | |
| • | Vice Presidents — 30% to 50% |
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The criteria used in fiscal year 2010 applicable to our Named
Executive Officers were the following:
| Executive Targets |
Target |
|||||||
| (Dollars in millions) | Opportunity | Achievement | ||||||
|
Contract
Profit(1)
|
16.25% | 26.21% | ||||||
|
• Threshold — under
$73.9 — 0%
|
||||||||
|
• Target — $73.9 to
$76.3 — 1% to 100%
|
||||||||
|
• Maximum — $76.4 to
$84.7 — 101% to 200%
|
||||||||
|
Free Cash
Flow(2)
|
20.00% | 40.00% | ||||||
|
• Threshold — under
$95.3 — 0%
|
||||||||
|
• Target — $95.3 to
$108.1 — 1% to 100%
|
||||||||
|
• Maximum — $108.2 to
$121.3 — 101% to 200%
|
||||||||
|
Adjusted Earnings Before Interest and
Taxes(3)
|
16.25% | 12.72% | ||||||
|
• Threshold — under
$81.2 — 0%
|
||||||||
|
• Target — $81.2 to
$83.5 — 1% to 100%
|
||||||||
|
• Maximum — $83.6 to
$93.0 — 101% to 200%
|
||||||||
|
Contract
Awards(4)
|
22.50% | 21.07% | ||||||
|
• Threshold — under
$789.9 — 0%
|
||||||||
|
• Target — $789.9 to
$864.3 — 1% to 100%
|
||||||||
|
• Maximum — $864.4 to
$993.9 — 101% to 200%
|
||||||||
|
Personal
Factors(5)
|
25.00% | 21.00% — 25.00% | ||||||
|
• Threshold — 0 x
multiplier — 0%
|
||||||||
|
• Target — 1 x
multiplier — 1% to 100%
|
||||||||
|
Totals
|
100.00% | 121.00% — 125.00% | ||||||
| (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 Free Cash Flow to be the Aerospace and Defense segment performance before environmental remediation provision adjustments, retirement benefit plan 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 Adjusted Earnings Before Interest and Taxes to be the Company’s income from continuing operations before interest and income taxes, adjusted further for retirement benefit plan expense, unusual items and amortization of deferred financing fees. | |
| (4) | We defined Contract 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 Contract 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 2010 cash incentives 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.
Long-Term
Incentives (Equity-Based Compensation)
The Company, upon the recommendation and approval of the
Organization & Compensation Committee, established the
performance objectives and other terms of the Company’s
2010 Long-Term
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Incentive Program (the “2010 LTIP”) for executive
officers and other eligible employees of the Company. The 2010
LTIP has a two 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 2010 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 Organization & 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 Organization & 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. Time-based stock options are generally exercisable in one-third increments at one year, two years, and three years from the date of grant. Performance-based stock options vest at the end of the performance period provided that underlying goals are met. All stock options have a seven-year contractual life from the date of grant. As with restricted stock grants, executives who voluntarily resign or are terminated immediately forfeit all unvested stock options unless otherwise determined by the Organization & Compensation Committee. |
In order to promote improvement in the Company’s financial
performance, half of the restricted stock grants made in fiscal
year 2010 were performance awards and will vest upon the
achievement of long-term financial performance goals set by the
Organization & Compensation Committee. The performance
targets for restricted stock vesting were (i) sales,
(ii) earnings before interest, taxes, depreciation and
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amortization, and retirement benefit expense, and
(iii) asset utilization with vesting at the end of the two
year performance period, each with a weighting of 33.33%. The
other half of restricted stock grants are service based vesting
over three years. The vesting of the stock option grants made in
fiscal year 2010 are based on meeting the Economic Value Added
performance target with a performance period of two years.
In order to strengthen the alignment between the interests of
shareholders and the interests of executives of the Company, the
Organization & 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 and Vice
Presidents — one times base salary.) In calculating
the amount of equity owned by an executive, the
Organization & Compensation Committee looks at the
value of Company stock owned by the executive (regardless of
whether it is vested or unvested restricted stock), 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 February 1,
2011, 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
Organization & 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, the Company amended the defined
benefit pension and benefits restoration plans (“BRP”)
to freeze future accruals under such plans. Effective
February 1, 2009 and July 31, 2009, future benefit
accruals for all current employees including the Named Executive
Officers and collective bargaining unit employees respectively,
were discontinued. No employees lost their previously earned
pension benefits.
The Named Executive Officers participate in the same
tax-qualified pension plans as other employees with the
exception of Mr. Seymour who does not participate in a
pension plan because his employment commenced after benefit
accruals were discontinued. 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. There were
no employee contributions required in order to participate in
these defined benefit plans. Eligibility to participate in the
2009 Pension BRP Plan was designated by the
Organization & Compensation Committee.
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 2010
Pension Benefits on page 38. The change in the
actuarial pension value from fiscal year 2009 to fiscal year
2010 is presented in the “Change in Pension Value”
column of the Summary Compensation Table on page 34
which represents the change in present value of benefits accrued
up until the freeze date.
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Table of Contents
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. Effective January 15, 2009, the Company
temporarily suspended the employer matching contributions to the
GenCorp Retirement Savings Plan for all non-union eligible
employees. In July 2010, the Company reinstated the employer
matching contributions in which 100% of the first 3% of employee
contributions, and 50% of the next 3% of employee contributions
are matched for all participating employees by the Company.
2009
401(k) Benefits Restoration Plan
The Named Executive Officers participate in the related
non-qualified, unfunded 2009 Benefits Restoration Plan for the
GenCorp Inc. 401(k) Plan (the “2009 401(k) BRP Plan”)
which enables participants to defer their compensation on a
pre-tax basis. Effective January 15, 2009, the Company
suspended employer contributions to the 2009 401(k) BRP Plan. In
July 2010, the company reinstated the employer matching
contribution if the participant has reached the 402(g) limit in
the 401(k) Savings Plan. Details about the 2009 401(k) BRP Plan
are presented in the section entitled 2010 Non-qualified
Deferred Compensation on page 39.
Severance
Agreements, Employment Agreements and Plan Provisions
Scott J.
Seymour Employment Agreement
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 earn an annual base salary of $550,000,
and is eligible for an annual incentive pay 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) an incentive payment based upon the
amount of the previous year’s incentive, 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) incentives earned but unpaid with respect to the
fiscal year ending on or preceding the date of termination
pursuant to the annual cash incentive program.
Also under this employment agreement for a termination in
connection with a change in control in which
Mr. Seymour’s employment is terminated by the Company
without cause or by the executive for good reason within two
years following a change in control, Mr. Seymour will be
entitled to receive a severance payment and benefits as follows:
(i) a lump sum payment equal to two times the sum of his
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Table of Contents
base salary plus the target incentive amount for the year in
which the termination takes place; (ii) immediate full
vesting of outstanding restricted shares and options;
(iii) and payment of any accrued incentive through the date
of termination.
Chris W.
Conley Severance and Retention Agreement
Under the severance agreement into which the Company entered
with Mr. Conley, a severance payment will become due if a
change in control occurs and if the executive’s employment
is terminated within three years of the change in control 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, (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.
The severance payment due to Mr. Conley in the above
scenario would be equal to base salary plus incentive multiplied
by a factor of two, plus the following: (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,
(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, and
(v) 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.
For purposes of computing Mr. Conley’s severance
payment under the severance agreement, base salary is the
highest annual salary in effect for any period prior to the
termination date following the change in control, and the
incentive amount is the greater of (1) the average of the
annual incentive under the Company’s annual incentive
compensation program made or to be made to Mr. Conley in
regard to services rendered in any fiscal year during the three
fiscal years immediately preceding the change in control, or
(2) 75% of Mr. Conley’s maximum incentive
opportunity under the Company’s annual incentive
compensation plan for the fiscal year in which the change in
control occurs. No other incentive pay or bonuses are included
in the computation of Mr. Conley’s termination
benefits.
A change in control as defined in such severance agreement
occurred on March 5, 2008 as a result of the Shareholder
Agreement and as such the agreement will expire three years from
this date which is March 5, 2011.
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.
Other
The GenCorp Foundation matches all 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 $3,000
per calendar year per donor.
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Table of Contents
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 Organization &
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 one other executive officer in
the event of qualified terminations under the executive
severance agreements may exceed the $1 million threshold.
At this time, the Organization & Compensation
Committee believes that accommodating the Internal Revenue
Service regulations will not produce material benefits or
increases in shareholder value. However, the
Organization & Compensation Committee intends to
review this issue regularly and may change its position in
future years.
SUMMARY
COMPENSATION TABLE
The following table sets forth information regarding
compensation for each of the Named Executive Officers for fiscal
years 2010, 2009 and 2008.
|
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 November 30, 2010 | |||||||||||||||||||||||||||||||||||||||||||||
|
Scott J.
Seymour(6)
President and CEO; President of Aerojet-General Corporation |
2010 | $ | 495,529 | $ | — | $ | 856,800 | $ | 771,513 | $ | 845,625 | $ | — | $ | 53,087 | $ | 3,022,554 | ||||||||||||||||||||||||||||
| Kathleen E. Redd | 2010 | 324,969 | — | — | 121,799 | 206,640 | 32,662 | 375 | 686,445 | ||||||||||||||||||||||||||||||||||||
| Vice President, CFO and Secretary(7) | 2009 | 294,308 | 70,000 | 43,133 | 34,286 | 230,000 | 73,100 | 2,600 | 752,427 | ||||||||||||||||||||||||||||||||||||
| 2008 | 228,533 | — | — | 25,490 | 133,000 | 14,531 | 10,332 | 411,886 | |||||||||||||||||||||||||||||||||||||
|
Richard W. Bregard Deputy to the President |
2010 | 225,890 | 4,660 | 82,858 | — | 146,254 | 8,490 | — | 468,152 | ||||||||||||||||||||||||||||||||||||
| Chris W. Conley(8) | 2010 | 222,119 | — | 29,866 | 17,469 | 136,064 | 99,719 | 1,290 | 506,527 | ||||||||||||||||||||||||||||||||||||
| Vice President, Environmental, | 2009 | 212,328 | — | 12,033 | 7,347 | 148,000 | 240,190 | 1,840 | 621,738 | ||||||||||||||||||||||||||||||||||||
| Health & Safety | 2008 | 205,361 | — | — | — | 106,000 | 10,645 | 8,162 | 330,168 | ||||||||||||||||||||||||||||||||||||
| Former Executive Officers as of November 30, 2010 | |||||||||||||||||||||||||||||||||||||||||||||
| J. Scott Neish | 2010 | $ | 36,355 | $ | — | $ | — | $ | — | $ | — | $ | — | (9) | $ | 1,330,632 | $ | 1,366,987 | |||||||||||||||||||||||||||
| Interim President and CEO and Vice | 2009 | 350,088 | — | — | — | 536,000 | 174,386 | 19,704 | 1,080,178 | ||||||||||||||||||||||||||||||||||||
| President; and President, Aerojet-General Corporation | 2008 | 340,137 | 350,000 | (10) | — | — | 357,000 | 112,505 | 29,603 | 1,189,245 | |||||||||||||||||||||||||||||||||||
| (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. | |
| (2) | The amounts reported in these columns for each Named Executive Officer represents the aggregate grant date fair value of awards granted in each of the three years presented. The grant date fair value of stock awards is equal to the closing price of our stock on the date of grant times the number of shares awarded. The grant date fair value of stock options and SARs awards was estimated using the Black-Scholes Model. 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 2010. The values reported for 2008 and 2009 differ from the values previously reported in our 2009 and 2010 Proxy Statements which reported the amount of compensation costs recognized for financial reporting purposes according to GAAP without the impact of estimated forfeitures. A description of these awards can be found under the section entitled Long-Term Incentives (Equity-Based Compensation) on page 29. | |
| (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 27. |
34
Table of Contents
| (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. The following table shows the measurement dates and discount rates used for each year presented in the table: |
|
Discount Rate for Qualified |
Discount Rate for |
||||||||||||
| Year | Measurement Period | Pension Plan | Pension BRP Plan | ||||||||||
| 2010 | December 1, 2009 to November 30, 2010 | 5.21% | 5.34% | ||||||||||
| 2009 | September 1, 2008 to November 30, 2009 | 5.65% | 5.60% | ||||||||||
| 2008 | September 1, 2007 to August 31, 2008 | 7.10% | 7.05% | ||||||||||
| The increase in pension value for current Executive Officers in 2010 is due to changes in actuarial assumptions which is primarily the decrease in the discount rate used to measure the present value of benefits accrued up until the freeze date. There was no change to the pension accrual related to service, as each of the Named Executive Officers’ pension benefits were frozen on February 1, 2009. | ||
| 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 2010. Information regarding these pension plans is set forth in further detail under the section entitled 2010 Pension Benefits on page 38. | ||
| (5) | The amounts reported in this column for each Named Executive Officer include the following for fiscal year 2010: |
|
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 November 30, 2010
|
||||||||||||||||||||||||||||||
| Scott J. Seymour | $ | — | $ | — | $ | 9,519 | $ | 3,000 | $ | 40,568 | (B) | $ | 53,087 | |||||||||||||||||
| Kathleen E. Redd | — | — | — | 375 | — | 375 | ||||||||||||||||||||||||
| Richard W. Bregard | — | — | — | — | — | — | ||||||||||||||||||||||||
| Chris W. Conley | — | — | — | 1,290 | — | 1,290 | ||||||||||||||||||||||||
| Former Executive Officers as of November 30, 2010 | ||||||||||||||||||||||||||||||
| J. Scott Neish | $ | 1,330,632 | $ | — | $ | — | $ | — | $ | — | $ | 1,330,632 | ||||||||||||||||||
| (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 $25,568 for relocation costs and $15,000 for legal fees incurred that were reimbursed to Mr. Seymour. |
| (6) | Mr. Seymour started his employment with the Company on January 6, 2010. | |
| (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 Organization & 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) | The present value of Mr. Neish’s Pension value decreased by $9,849 in fiscal year 2010 due to the assumptions being revised to reflect actual elections since his benefit payout has started versus estimated elections which were used for his 2009 valuation. | |
| (10) | This amount paid to Mr. Neish is in accordance with the letter agreement by and between the Company and Mr. Neish dated March 5, 2008, as part of his appointment to the position of Interim President and CEO and represents a one-time bonus for serving in this capacity. |
35
Table of Contents
2010
GRANTS OF PLAN-BASED AWARDS
The following table provides information for each of the Named
Executive Officers for fiscal year 2010 annual and long-term
incentive award opportunities, including the range of possible
payments under non-equity incentive plans.
|
Other |
All |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Stock |
Other |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Awards: |
Option |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Number of |
Awards: |
Exercise |
Grant Date |
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Estimated Possible Payouts Under |
Estimated Future Payouts |
Shares of |
Number of |
or Base |
Fair Value |
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Non-Equity Incentive Plan |
Under Equity Incentive Plan |
Stock |
Securities |
Price of |
of Stock and |
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Grant |
Awards ($)(1) | Awards(#) |
or |
Underlying |
Options/SARs |
Option/SARs |
|||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Date | Threshold(2) | Target | Maximum | Threshold | Target | Maximum | Units(#) | Options(#) | ($/Sh) | Awards | ||||||||||||||||||||||||||||||||||||||||||||
|
Executive Officers as of November 30, 2010
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Scott J. Seymour
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Annual Incentive Award
|
$ | — | $ | 687,500 | $ | 1,203,125 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
01-06-10 | 120,000 | $ | 856,800 | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
01-06-10 | 100,000 | $ | 7.14 | 415,490 | (3) | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
11-30-10 | 119,732 | 239,464 | 299,330 | 4.91 | 356,023 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Kathleen. E. Redd
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Annual Incentive Award
|
— | 168,000 | 294,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
11-30-10 | 40,962 | 81,923 | 102,404 | 4.91 | 121,799 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Richard W. Bregard
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Annual Incentive Award
|
— | 117,004 | 204,756 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
11-30-10 | 4,728 | 9,455 | 11,819 | 36,434 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
11-30-10 | 9,455 | 46,424 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Chris W. Conley
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Annual Incentive Awards
|
— | 112,450 | 196,788 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
11-30-10 | 1,704 | 3,408 | 4,260 | 13,132 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
11-30-10 | 3,408 | 16,733 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
11-30-10 | 5,875 | 11,750 | 14,688 | 4.91 | 17,469 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Former Executive Officers as of November 30, 2010
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
J. Scott Neish
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | Reflects the possible payout amounts of non-equity incentive plan awards that could have been earned in fiscal year 2010. See the Summary Compensation Table on page 34 for the amounts actually earned and paid out in the first quarter of fiscal year 2011. | |
| (2) | If no targets are met the annual incentive award will not be earned. | |
| (3) | The fair value of these stock options was estimated using a Black-Scholes Model with the following weighted average assumptions at the date of grant: Expected life — seven years; Volatility — 54.5%; Risk-free interest rate — 3.28%; Dividend yield — 0.00%. | |
| (4) | As of November 30, 2010, the Company expects 50% of this performance grant to vest. The grant date fair value at 100% vesting would be $712,046 for Mr. Seymour, $243,598 for Ms. Redd, and $34,939 for Mr. Conley based on a Black-Scholes value of $2.9735. The Black-Scholes Model used the following weighted average assumptions at the date of grant: Expected life — seven years; Volatility — 55.7%; Risk-free interest rate — 2.21%; Dividend yield — 0.00%. | |
| (5) | As of November 30, 2010, the Company expects 78.48% of this performance restricted stock grant to vest. The grant date fair value at 100% vesting would be $46,424 for Mr. Bregard, and $16,733 for Mr. Conley. |
36
Table of Contents
OUTSTANDING
EQUITY AWARDS AT 2010 FISCAL YEAR END
The following table provides information for each of the Named
Executive Officers regarding stock options, SARs, and
outstanding stock awards held by the officers as of
November 30, 2010.
| Option/SARs Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||
|
Service-Based Equity |
Equity Incentive |
||||||||||||||||||||||||||||||||||||||||||||
| Awards | Plan Awards | ||||||||||||||||||||||||||||||||||||||||||||
|
Equity |
|||||||||||||||||||||||||||||||||||||||||||||
|
Incentive |
Number of |
Market or |
|||||||||||||||||||||||||||||||||||||||||||
|
Plan Awards: |
Market Value |
Unearned |
Payout Value |
||||||||||||||||||||||||||||||||||||||||||
|
Number of |
Number of |
Number of |
of Shares |
Shares, Units |
of Unearned |
||||||||||||||||||||||||||||||||||||||||
|
Number of |
Securities |
Securities |
Shares or |
or Units of |
or Other |
Shares, Units |
|||||||||||||||||||||||||||||||||||||||
|
Securities |
Underlying |
Underlying |
Option/ |
Units of |
Stock |
Rights That |
or Other |
||||||||||||||||||||||||||||||||||||||
|
Underlying |
Unexercised |
Unexercised |
SARs |
Option/ |
Stock That |
That |
Have |
Rights That |
|||||||||||||||||||||||||||||||||||||
|
Unexercised |
Options/SARs |
Unearned |
Exercise |
SARs |
Have Not |
Have Not |
Not |
Have Not |
|||||||||||||||||||||||||||||||||||||
|
Options/SARs (#) |
(#) |
Option/SARs |
Price |
Expiration |
Vested |
Vested |
Vested |
Vested |
|||||||||||||||||||||||||||||||||||||
| Name | Exercisable | Unexercisable | (#) | ($) | Year | (#) | ($)(1) | (#) | ($)(1) | ||||||||||||||||||||||||||||||||||||
|
Executive Officers as of November 30, 2010
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Scott J. Seymour
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
120,000(2 | ) | $ | 589,200 | |||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
— | — | 239,464 | (3) | $ | 4.91 | 2017 | ||||||||||||||||||||||||||||||||||||||
| — | 100,000(2 | ) | 7.14 | 2017 | |||||||||||||||||||||||||||||||||||||||||
|
Kathleen E. Redd
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
30,000(4 | ) | $ | 147,300 | |||||||||||||||||||||||||||||||||||||||||
|
SARs
|
20,000 | — | — | 4.25 | 2018 | ||||||||||||||||||||||||||||||||||||||||
| 1,500 | — | — | 13.75 | 2017 | |||||||||||||||||||||||||||||||||||||||||
| 2,560 | — | — | 13.19 | 2016 | |||||||||||||||||||||||||||||||||||||||||
| 2,500 | — | — | 18.71 | 2015 | |||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
— | — | 81,923 | (3) | 4.91 | 2017 | |||||||||||||||||||||||||||||||||||||||
| — | — | 35,000 | (5) | 4.54 | 2019 | ||||||||||||||||||||||||||||||||||||||||
| 2,666 | — | — | 9.29 | 2013 | |||||||||||||||||||||||||||||||||||||||||
| 1,333 | — | — | 10.85 | 2012 | |||||||||||||||||||||||||||||||||||||||||
|
Richard W. Bregard
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
10,000(4 | ) | 49,100 | ||||||||||||||||||||||||||||||||||||||||||
| 9,455(6 | ) | 46,424 | |||||||||||||||||||||||||||||||||||||||||||
| 9,455(7 | ) | 46,424 | |||||||||||||||||||||||||||||||||||||||||||
|
SARs
|
1,500 | — | — | 13.75 | 2017 | ||||||||||||||||||||||||||||||||||||||||
| 4,256 | — | — | 13.19 | 2016 | |||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
— | — | 10,000 | (5) | 4.54 | 2019 | |||||||||||||||||||||||||||||||||||||||
|
Chris W. Conley
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Restricted Stock
|
7,500(4 | ) | 36,825 | ||||||||||||||||||||||||||||||||||||||||||
| 3,408(6 | ) | 16,733 | |||||||||||||||||||||||||||||||||||||||||||
| 3,408(7 | ) | 16,733 | |||||||||||||||||||||||||||||||||||||||||||
|
SARs
|
12,000 | — | — | 13.75 | 2017 | ||||||||||||||||||||||||||||||||||||||||
| 13,800 | 19.34 | 2016 | |||||||||||||||||||||||||||||||||||||||||||
| 2,000 | 18.51 | 2015 | |||||||||||||||||||||||||||||||||||||||||||
|
Stock Options
|
— | — | 11,750 | (3) | 4.91 | 2017 | |||||||||||||||||||||||||||||||||||||||
| — | — | 7,500 | (5) | 4.54 | 2019 | ||||||||||||||||||||||||||||||||||||||||
| 5,000 | — | — | 7.73 | 2013 | |||||||||||||||||||||||||||||||||||||||||
| 5,000 | — | — | 15.43 | 2012 | |||||||||||||||||||||||||||||||||||||||||
| 10,000 | (8) | 10.44 | 2011 | ||||||||||||||||||||||||||||||||||||||||||
|
Former Executive Officers as of November 30, 2010
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Scott J.
Neish(9)
|
|||||||||||||||||||||||||||||||||||||||||||||
|
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 | ||||||||||||||||||||||||||||||||||||||||
| (1) | The market value was calculated by multiplying the number of unvested shares by the closing market price of the Company’s Common Stock of $4.91 on November 30, 2010. | |
| (2) | Mr. Seymour’s unvested time-based stock options and restricted stock vests in one-third increments on January 6th of each year becoming fully vested in 2013. On January 6, 2011, Mr. Seymour vested in 40,000 restricted shares and 33,334 stock options. | |
| (3) | The vesting date for these option awards is January 31, 2013 and will only vest if performance targets are met through November 30, 2012. |
37
Table of Contents
| (4) | 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. | |
| (5) | 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. | |
| (6) | The vesting date for these performance-based stock awards is January 31, 2013 and will only vest if performance targets are met through November 30, 2012. | |
| (7) | The vesting date for these time-based stock awards is November 30, 2013. | |
| (8) | These stock options expired on January 16, 2011. | |
| (9) | Employees 65 years of age or older or 55 years of age or older and with five years of service upon retirement or termination of employment do not forfeit vested stock options or SARs awards. Accordingly, Mr. Neish was over 55 years of age and had over five years of service when he left the Company and therefore did not forfeit his then outstanding shares. |
2010
OPTION/SAR EXERCISES AND STOCK VESTED
There were no stock options or SARs exercised and no restricted
stock vested for the Named Executive Officers in fiscal year
2010.
2010
PENSION BENEFITS
On November 25, 2008, the Company amended the defined
benefit pension and the BRP to freeze future accruals under such
plans. Effective February 1, 2009 and July 31, 2009,
future benefit accruals for all current employees including the
Named Executive Officers and collective bargaining unit
employees respectively, were discontinued. No employees lost
their previously earned pension benefits.
Qualified
Pension Plan
The Qualified Pension Plan is a tax-qualified defined benefit
plan covering substantially all salaried and hourly employees
hired before the freeze date. In general, normal retirement age
is 65, with certain plan provisions allowing for earlier
retirement. Before the freeze date, pension benefits were
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 will receive the highest benefit calculated under
any of the formulas for which they were eligible to participate
through the freeze date.
2009
Pension BRP Plan
Total pension benefits for the Named Executive Officers and
certain other highly compensated employees were 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
restored 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 was designated by the
Organization & Compensation Committee.
The Company funded into a grantor trust an amount equal to the
present value of the accrued pension benefits under the 2009
Pension BRP Plan for all participants in such plan as of
March 5, 2008. These non-qualified benefits may be paid out
of the grantor trust (pre-funded) or the Company’s general
assets.
38
Table of Contents
The following table provides information as of November 30,
2010 for each of the Named Executive Officers regarding the
actuarial present value of their total accumulated benefit under
the Qualified Pension Plan and the 2009 Pension BRP Plan.
|
Present Value |
Payments |
|||||||||||||||||
|
Number of Years |
of Accumulated |
During Fiscal |
||||||||||||||||
|
Credited Service |
Benefit |
Year 2010 |
||||||||||||||||
| Name | Plan Name | (#)(1) | ($)(2) | ($) | ||||||||||||||
|
Executive Officers as of November 30, 2010
|
||||||||||||||||||
|
Scott J. Seymour
|
Qualified Pension Plan
|
— | $ | — | $ | — | ||||||||||||
|
2009 Pension BRP Plan
|
— | — | — | |||||||||||||||
|
Kathleen E. Redd
|
Qualified Pension Plan
|
6.50 | 179,953 | — | ||||||||||||||
|
2009 Pension BRP Plan
|
6.50 | 47,144 | — | |||||||||||||||
|
Richard W. Bregard
|
Qualified Pension Plan
|
4.50 | 187,180 | — | ||||||||||||||
|
2009 Pension BRP Plan
|
4.50 | 25,797 | — | |||||||||||||||
|
Chris W. Conley
|
Qualified Pension Plan
|
26.50 | 665,014 | — | ||||||||||||||
|
2009 Pension BRP Plan
|
26.50 | 146,008 | — | |||||||||||||||
| Former Executive Officers as of November 30, 2010 | ||||||||||||||||||
|
J. Scott Neish
|
Qualified Pension Plan
|
6.25 | $ | 308,575 | $ | 17,627 | ||||||||||||
|
2009 Pension BRP Plan
|
6.25 | 260,881 | 4,114 | |||||||||||||||
| (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 in which the Company discontinued future benefit accruals for all salaried employees, including the Named Executive Officers. This number is being presented unrounded. | |
| (2) | The amounts reported in this column were calculated based on the accrued benefit as of February 1, 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, 2010 of the benefits earned as of the freeze 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. | |
| The discount rate assumption is 5.21% for the Qualified Pension Plan and 5.34% for the 2009 Pension BRP Plan. The post-retirement mortality assumption of the two pension plans is RP 2000 no-collar, projected to 2018. In order to determine the change in pension values for the Summary Compensation Table on page 34, the values of the Qualified Pension Plan, the 2009 Pension BRP Plan (for fiscal year 2009), and the Prior Pension BRP (for fiscal year 2008) were calculated as of November 30, 2009 and August 31, 2008 for the benefits earned as of those dates. The discount rate assumption used for the Qualified Pension Plan was 5.65% for fiscal year 2009 and 7.10% for fiscal year 2008. The discount rate assumption used for the 2009 Pension BRP was 5.60% for fiscal year 2009 and 7.05% for the Prior Pension BRP for fiscal year 2008. These were also the assumptions used for financial reporting purposes for fiscal year 2009 and 2008. Other assumptions used to determine the values as of November 30, 2009 and August 31, 2008 were primarily the same as those used as of November 30, 2010. 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. |
2010
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
39
Table of Contents
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 Savings 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 the Code will be maintained under and paid
from the Prior Pension BRP, in accordance with the terms of the
Prior Pension BRP.
The Company matches 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 if the
participant has reached the 402(g) limit in the 401(k) Savings
Plan. The maximum company match is 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
Savings 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 2010 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 2010 |
fiscal year 2010 |
fiscal year 2010 |
Distributions |
2010 |
|||||||||||||||||||||
| Name | ($)(1) | ($)(2) | ($)(3) | ($) | ($) | ||||||||||||||||||||
| Executive Officers as of November 30, 2010 | |||||||||||||||||||||||||
|
Scott J. Seymour
|
$ | 120,577 | $ | 9,519 | $ | 13,734 | $ | — | $ | 143,830 | |||||||||||||||
|
Kathleen E. Redd
|
— | — | 5,505 | — | 42,827 | ||||||||||||||||||||
|
Richard W. Bregard
|
— | — | — | — | — | ||||||||||||||||||||
|
Chris W. Conley
|
— | — | 4,167 | — | 38,751 | ||||||||||||||||||||
| Former Executive Officers as of November 30, 2010 | |||||||||||||||||||||||||
|
J. Scott Neish
|
$ | 1,347 | $ | — | $ | 6,145 | $ | (268,701 | ) | $ | — | ||||||||||||||
| (1) | The amounts reported in this column reflect compensation earned in fiscal year 2010 and deferred under the 2009 401(k) BRP Plan. These amounts are also included in the “Salary” column in the Summary Compensation Table on page 34. | |
| (2) | The amounts reported in this column reflect company matches under the 2009 401(k) BRP Plan earned in fiscal year 2010. The company match for fiscal year 2010 was not credited to the participant’s accounts until January 2011. These amounts are also included in the “All Other Compensation” column in the Summary Compensation Table on page 34. | |
| (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 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 earn an annual base salary of $550,000,
and is eligible for an annual incentive 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
40
Table of Contents
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) an
incentive payment based upon the amount of the previous
year’s incentive, 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) incentives earned but
unpaid with respect to the fiscal year ending on or preceding
the date of termination pursuant to the Company’s Annual
Incentive Plan.
Also under this employment agreement for a termination in
connection with a change in control in which
Mr. Seymour’s employment is terminated by the Company
without cause or by the executive for good reason within two
years following a change in control, Mr. Seymour will be
entitled to receive a severance payment and benefits as follows:
(i) a lump sum payment equal to two times the sum of his
base salary plus the target incentive amount for the year in
which the termination takes place; (ii) immediate full
vesting of outstanding restricted shares and options;
(iii) and payment of any accrued incentive through the date
of termination.
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 and the condo was purchased by the Company
for approximately $800,000.
The Company has entered into indemnification agreements with
each of its Directors and the Named Executive Officers with the
exception of Mr. Bregard 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 and Conley also entered into
executive severance agreements as discussed below.
Mr. Neish, left the Company effective January 6, 2010
and was paid his severance six months after his termination date.
41
Table of Contents
Potential
Payments upon Termination of Employment or Change in
Control
Termination
Benefits for Scott J. Seymour
According to the employment agreement entered into between the
Company and Mr. Seymour as discussed in the section above,
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 severance payments and benefits equal to the following,
subject to certain limitations: (i) one year of his annual
base salary paid in installments; (ii) an incentive payment
based upon the amount of the previous year’s incentive,
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 and options that
are scheduled to vest within one year of the date of termination
of employment and (iv) incentives earned but unpaid with
respect to the fiscal year ending on or preceding the date of
termination pursuant to the Company’s Annual Incentive Plan.
Also under this employment agreement for a termination in
connection with a change in control in which
Mr. Seymour’s employment is terminated by the Company
without cause or by the executive for good reason within two
years following a change in control, Mr. Seymour will be
entitled to receive a severance payment and benefits as follows:
(i) a lump sum payment equal to two times the sum of his
base salary plus the target incentive amount for the year in
which the termination takes place; (ii) immediate full
vesting of outstanding restricted shares and options;
(iii) and payment of any accrued incentive through the date
of termination.
Mr. Seymour’s employment agreement has a five year
term beginning January 6, 2010.
Termination
Benefits for Other Named Executive Officers
Consistent with the severance plan for all of the Company’s
non-collectively bargained employees, in the event of a
termination for other than cause, Ms. Redd and
Mr. Bregard would receive one week’s pay for each full
or partial year of service with a minimum of two weeks’ pay
and a maximum of 26 weeks’ pay. Ms. Redd and
Mr. Bregard would also be eligible for all health benefits
and life insurance coverage for three months. Four weeks of
additional pay and eligibility to participate in medical and
dental coverage for an additional three months may be granted if
a release is executed.
Termination
Benefits for Chris W. Conley
Under the severance agreement into which the Company entered
with Mr. Conley, a severance payment will become due if a
change in control occurs and if the executive’s employment
is terminated within three years of the change in control 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, (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.
42
Table of Contents
The severance payment due to Mr. Conley in the above
scenario would be equal to base salary plus incentive multiplied
by a factor of two, plus the following: (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,
(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, and
(v) 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.
For purposes of computing Mr. Conley’s severance
payment under the severance agreement, base salary is the
highest annual salary in effect for any period prior to the
termination date following the change in control, and the
incentive amount is the greater of (1) the average of the
annual incentive under the Company’s annual incentive
compensation program made or to be made to Mr. Conley in
regard to services rendered in any fiscal year during the three
fiscal years immediately preceding the change in control, or
(2) 75% of Mr. Conley’s maximum incentive
opportunity under the Company’s annual incentive
compensation plan for the fiscal year in which the change in
control occurs. No other incentive pay or bonuses are included
in the computation of Mr. Conley’s termination
benefits.
A change in control as defined in such severance agreement
occurred on March 5, 2008 as a result of the Shareholder
Agreement and as such the agreement will expire three years from
this date which is March 5, 2011. After this date,
Mr. Conley’s termination benefits will be the same as
described in the above section Termination Benefits for
Other Named Executive Officers. Mr. Neish was party to
a similar severance agreement and on January 6, 2010,
Mr. Neish left the Company and his severance payments and
other benefits in accordance with the terms of his executive
severance agreements were paid six months after this date.
Treatment
of Equity Awards
Equity awards made to employees including 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.
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Table of Contents
Estimated
Cost of Termination Benefits
The amounts of estimated incremental compensation and benefits
payable to the Named Executive Officers assuming a qualifying
termination of employment as of November 30, 2010, are
shown in the following table.
|
Health and |
|||||||||||||||||||||||||
|
Welfare |
|||||||||||||||||||||||||
|
Cash |
Benefit |
Financial |
Outplacement |
||||||||||||||||||||||
| Name | Severance | Continuation | Counseling | Services | Total | ||||||||||||||||||||
|
Scott J. Seymour Termination without Cause
|
$ | 2,083,125 | $ | 1,741 | $ | — | $ | — | $ | 2,084,866 | |||||||||||||||
|
Scott J. Seymour Termination with Change in Control
|
3,162,500 | 1,741 | — | — | 3,164,241 | ||||||||||||||||||||
|
Kathleen E. Redd
|
84,000 | 8,808 | — | — | 92,808 | ||||||||||||||||||||
|
Richard W. Bregard
|
45,001 | 6,039 | — | — | 51,040 | ||||||||||||||||||||
|
Chris W. Conley through March 5, 2011
|
621,407 | 34,445 | 15,000 | 44,980 | 715,832 | ||||||||||||||||||||
|
Chris W. Conley subsequent to March 5, 2011
|
129,750 | 8,395 | — | — | 138,145 | ||||||||||||||||||||
While the severance agreement for Mr. Conley provides 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. There are no other
scenarios other than what is discussed in this section in which
a Named Executive Officer would get benefits above and beyond
normal employee policy.
44
Table of Contents
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
59,255,067 shares of the Common Stock outstanding as of
February 1, 2011. The table is based on reports of
Schedule 13D and Schedule 13G filed with the SEC on or
prior to February 11, 2011.
|
Amount and Nature of |
Percent |
|||||||
| Beneficial Owner | Beneficial Ownership | of Class | ||||||
|
GAMCO Investors, Inc.
|
8,575,486 | (1) | 14.5% | |||||
|
One Corporate Center Rye, NY 10580 |
||||||||
|
GenCorp Retirement Savings Plans
|
4,176,695 | (2) | 7.0% | |||||
|
c/o Fidelity
Management Trust Company 82 Devonshire Street Boston, MA 02109 |
||||||||
|
Steel Partners II, L.P.
|
4,055,737 | (3) | 6.8% | |||||
|
590 Madison Avenue 32nd Floor New York, NY 10022 |
||||||||
|
BlackRock, Inc.
|
4,830,633 | (4) | 8.2% | |||||
|
40 East 52nd Street New York, NY 10022 |
||||||||
|
Franklin Mutual Advisers, LLC
|
3,331,352 | (5) | 5.6% | |||||
|
101 John F. Kennedy Parkway Short Hills, CA 07078 |
||||||||
|
The Vanguard Group, Inc.
|
3,234,672 | (6) | 5.5% | |||||
|
100 Vanguard Boulevard Malvern, PA 19355 |
||||||||
| (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 3,112,073 shares. GAMCO Asset Management Inc. reported sole voting power with respect to 4,575,213 shares and sole dispositive power with respect to 4,668,213 shares. Teton Advisors, Inc. reported sole voting power and sole dispositive power with respect to 775,200 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 0 shares. Includes 622,140 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. 49 to a Schedule 13D dated October 26, 2010 and filed with the SEC on October 26, 2010. | |
| (2) | Shares held as of December 31, 2010 by Fidelity Management Trust Company, the Trustee for the GenCorp Retirement Savings Plan. | |
| (3) | 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 22, Mr. Lichtenstein beneficially owns an additional 42,537 shares of stock of the Company and Mr. Henderson beneficially owns an additional 68,245 shares of stock of the Company, both awarded to them in their capacity as Director of the Company. | |
| (4) | BlackRock, Inc. reported sole voting power and sole dispositive power with respect to the 4,830,633 shares. All of the foregoing information is according to Amendment No. 1 to a Schedule 13G dated January 21, 2011 and filed with the SEC on February 4, 2011. | |
| (5) | 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 |
45
Table of Contents
| 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. | ||
| (6) | Includes shares beneficially owned by The Vanguard Group, Inc., which reported sole voting power with respect to 105,305 shares, sole dispositive power with respect to 3,129,367 shares and shared dispositive power with respect to 105,305 shares. Vanguard Fiduciary Trust Company (“VFTC”), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 105,305 shares as a result of its serving as investment manager of collective trust accounts. VFTC directs the voting of these shares. All of the foregoing information is according to a Schedule 13G dated February 9, 2011 and filed with the SEC on February 10, 2011. |
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 2010 with one exception. Pursuant to the new Director
Compensation Program, if a Director elects to receive common
stock in lieu of at least 50% of his cash compensation, the
Company will grant restricted shares equal in value to 50% of
the amount of cash compensation he elects to receive in common
stock. Due to an administrative oversight,
Mr. Henderson’s Form 4 to report this transaction
was due to be filed by April 19, 2010 with the SEC, but was
not filed until April 20, 2010.
46
Table of Contents
PROPOSAL 2
APPROVAL OF AN AMENDMENT TO THE GENCORP AMENDED AND RESTATED 2009 EQUITY
AND PERFORMANCE INCENTIVE PLAN TO ELIMINATE THE LIMITATION ON THE NUMBER
OF SHARES AVAILABLE TO BE ISSUED AS FULL VALUE AWARDS
APPROVAL OF AN AMENDMENT TO THE GENCORP AMENDED AND RESTATED 2009 EQUITY
AND PERFORMANCE INCENTIVE PLAN TO ELIMINATE THE LIMITATION ON THE NUMBER
OF SHARES AVAILABLE TO BE ISSUED AS FULL VALUE AWARDS
On March 25, 2009, the Company’s shareholders approved
the adoption of the GenCorp 2009 Equity and Performance
Incentive Plan and on March 24, 2010, the Company’s
shareholders approved the adoption of the GenCorp Amended and
Restated 2009 Equity and Performance Incentive Plan (referred to
in this section of the Proxy Statement as the “Plan”).
The Plan allows for the issuance of up to 2,000,000 shares
of GenCorp common stock for award grants. 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 January 26, 2011, the
Board, upon the recommendation and approval of the Organization
& Compensation Committee (referred to in this section of
the Proxy Statement as the “Compensation Committee”)
approved certain amendments, effective January 26, 2011, to
the Plan. The January 2011 amendment did not require prior
shareholder approval.
The Company’s shareholders are now being asked to approve
an amendment to the Plan to eliminate the limitation on the
number of shares of GenCorp common stock that the Company may
issue as the maximum award limits for Full Value Awards under
the Plan. A Full Value Award is any type of Award authorized by
the Plan, other than options and SARs, which is settled by the
issuance of shares (currently set at 1,000,000 shares of
GenCorp common stock).
The Company believes that the limitation on the number of shares
available for Full Value Awards should be eliminated to
accommodate 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 amendment to the Plan on January 26, 2011. If
shareholders do not approve the amendment to the Plan, the Plan
will remain in place in accordance with its terms prior to such
amendment.
A copy of the revised Plan is attached to this Proxy Statement
as Exhibit A, and a summary of the Plan is set forth below.
The summary is qualified in its entirety by reference to the
Plan.
Other than the proposed amendment to the Plan to eliminate the
limitation on the maximum number of shares available for Full
Value Awards, there have been no other material changes to the
Plan which would require prior shareholder approval.
Summary
of the 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,
47
Table of Contents
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. The Plan provides for annual limits on the size of Awards
for any particular participant.
In the event of certain corporate events or transactions
(including, but not limited to, 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.
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 an 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
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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. 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
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Table of Contents
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 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 which 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 1, 2011, awards covering
1,544,972 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 |
Number of Shares |
|||||||||||||
|
Underlying Stock |
Underlying |
Underlying Full |
|||||||||||||
| Name and Principal Position | Options | SARs(1) | Value Awards | ||||||||||||
|
Scott J. Seymour
|
|||||||||||||||
|
President and CEO of the Company and President of Aerojet
|
399,330 | — | 120,000 | ||||||||||||
|
Kathleen E. Redd
|
|||||||||||||||
|
Vice President, CFO and Secretary
|
111,154 | (2) | — | 7,500 | (2) | ||||||||||
|
Richard W. Bregard
|
|||||||||||||||
|
Deputy to the President
|
2,500 | (2) | — | 23,774 | (2) | ||||||||||
|
Chris W. Conley
|
|||||||||||||||
|
Vice President, Environmental, Health & Safety
|
16,563 | (2) | — | 9,543 | (2) | ||||||||||
|
Total for all current Executive Officers (including the Named
Executive Officers identified above)
|
529,547 | (3) | — | 160,817 | (3) | ||||||||||
|
Non-Executive Director Group
|
281,810 | 272,525 | |||||||||||||
|
All employees, including all current officers who are not
executive officers, as a group
|
72,851 | (4) | — | 227,422 | (4) | ||||||||||
| (1) | These SARs awards are settled in cash. | |
| (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. | |
| (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 13,125 shares for stock options and 11,875 for restricted stock. | |
| (4) | 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 32,072 shares for stock options and 19,469 for restricted stock. |
New Plan
Benefits
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 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 1, 2011, the fair market value of a share of
the Company’s common stock was $5.16.
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.
The Board unanimously recommends a vote FOR the amendment to
the GenCorp Inc. 2009 Equity and Performance Incentive Plan.
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PROPOSAL 3
ADVISORY VOTE ON GENCORP’S EXECUTIVE COMPENSATION PROGRAM
ADVISORY VOTE ON GENCORP’S EXECUTIVE COMPENSATION PROGRAM
The recently enacted Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, or the Dodd-Frank Act, enables
shareholders to vote to approve, on an advisory, non-binding
basis, the compensation of the named executive officers as
disclosed in this Proxy Statement in accordance with the
SEC’s rules.
As described in the Compensation Discussion and Analysis, the
Company’s executive compensation program is designed to
support our business goals and promote both short-term and
long-term growth and directly link pay to performance. The
compensation program for executive officers has historically
consisted of the following principal elements: short-term
compensation, including base salaries and annual cash incentive
awards; long-term compensation equity incentive awards,
including restricted stock, stock options and cash-settled SARs;
and in-service and post-retirement/employment benefits.
We are asking shareholders to indicate their support for the
compensation of the executive officers named in the
“Summary Compensation Table” included in this Proxy
Statement (referred to as the “Named Executive
Officers”). This proposal, commonly known as a
“say-on-pay”
proposal, gives shareholders the opportunity to express their
views on the Named Executive Officers’ compensation.
Accordingly, we will ask shareholders to vote “FOR”
the following resolution at the Meeting:
“RESOLVED, that the Company’s shareholders approve, on
an advisory basis, the compensation of the Named Executive
Officers, as disclosed in the Company’s Proxy Statement for
the 2011 Annual Meeting of Shareholders pursuant to the
compensation disclosure rules of the Securities and Exchange
Commission, including the Compensation Discussion and Analysis,
the 2010 Summary Compensation Table and the other related tables
and disclosure.”
The
say-on-pay
vote is advisory, and therefore not binding on the Company, the
Compensation Committee or our Board of Directors. The Board of
Directors and the Compensation Committee value the opinions of
our shareholders and to the extent there is any significant vote
against the Named Executive Officer compensation as disclosed in
this proxy statement, we will consider our shareholders’
concerns and the Compensation Committee will evaluate whether
any actions are necessary to address those concerns.
The approval of this resolution requires the affirmative vote of
a majority of the votes cast at the Meeting. While this vote is
required by law, it will neither be binding on the Company or
the Board, nor will it create or imply any change in the
fiduciary duties of, or impose any additional fiduciary duty on,
the Company or the Board.
The Board unanimously recommends a vote FOR the advisory
approval of GenCorp’s Executive Compensation Program.
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PROPOSAL 4
ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON GENCORP’S
EXECUTIVE COMPENSATION PROGRAM
ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON GENCORP’S
EXECUTIVE COMPENSATION PROGRAM
The Dodd-Frank Act also enables shareholders to indicate how
frequently we should seek an advisory vote on the compensation
of the Named Executive Officers, as disclosed pursuant to the
SEC’s compensation disclosure rules, such as relates to
Proposal 3 included elsewhere in this Proxy Statement. By
voting on this Proposal, shareholders may indicate whether they
would prefer an advisory vote on Named Executive Officer
compensation once every one, two, or three years.
After careful consideration of this Proposal, the Board of
Directors has determined that an advisory vote on executive
compensation that occurs every year, or annually, is the most
appropriate alternative for the Company, and therefore the Board
of Directors recommends that you vote for an annual interval for
the advisory vote on executive compensation. We believe that an
annual vote allows for input from shareholders on the most
frequent basis. As such, an annual vote would likely foster more
robust dialogue between the Board of Directors and our
shareholders.
You may cast your vote on your preferred voting frequency by
choosing the option of one year, two years, three years or
abstain from voting when you vote in response to this Proposal.
The option of one year, two years or three years that receives
the highest number of votes cast by shareholders will be the
frequency for the advisory vote on executive compensation that
has been selected by shareholders. However, because this vote is
advisory and not binding on the Board of Directors or the
Company in any way, the Board may decide that it is in the best
interests of shareholders and the Company to hold an advisory
vote on executive compensation more or less frequently than the
option approved by our shareholders.
The Board unanimously recommends a vote FOR ONE YEAR on the
frequency of the advisory vote on GenCorp’s Executive
Compensation Program.
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PROPOSAL 5
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has appointed PwC, an independent registered
public accounting firm, to serve as the Company’s
independent auditors for fiscal year 2011. The Audit Committee
is submitting Proposal 5 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 and respond to
appropriate questions.
The affirmative vote of the holders of at least a majority of
the votes cast at the Annual Meeting is necessary to approve
Proposal 5, 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 5. 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
auditors for fiscal year 2011.
Audit
Fees
Audit 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 | ||||||||
| 2010 | 2009 | |||||||
| In Thousands | ||||||||
|
Audit fees
|
$ | 2,747 | $ | 2,659 | ||||
Audit-Related
Fees
Audit related 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 | ||||||||
| 2010 | 2009 | |||||||
| In Thousands | ||||||||
|
Audit-related fees
|
$ | 100 | $ | 75 | ||||
Audit-related fees consisted primarily of reviews of the
Company’s Proxy Statement.
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Tax
Fees
Tax fees billed for professional services rendered by them for
tax compliance, tax advice and tax planning were:
| Fiscal Year Ended | ||||||||
| 2010 | 2009 | |||||||
| In Thousands | ||||||||
|
Tax fees
|
$ | 61 | $ | 71 | ||||
All Other
Fees
All other 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 | ||||||||
| 2010 | 2009 | |||||||
| In Thousands | ||||||||
|
All other fees
|
$ | 6 | $ | 9 | ||||
Audit fees relating to audits of the Company’s Pension Plan
are not included in the above amounts as they are paid out of
the assets of the Pension Plan.
Policy on
Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of the Company’s Independent Auditors
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
2012 annual meeting of shareholders must submit their proposals
to the Company no later than October 21, 2011. Shareholders
who intend to present a proposal at the 2012 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 4,
2012. The Company’s Proxy Statement for the 2012 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 4, 2012. All proposals for inclusion in
the Company’s proxy materials and notices of proposals
should be sent to Chairman of the Corporate
Governance & Nominating 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) if you have requested a full set of proxy materials to
be sent to you, 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 17, 2011
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EXHIBIT A
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.
A-1
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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.
A-2
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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.
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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.
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,
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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.
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, all 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 each Nonemployee Director shall be two hundred thousand
(200,000) Shares, and each Nonemployee Director may not receive
more than one hundred fifty thousand (150,000) Shares in any
Plan Year.
(d) For purposes of this Section, to the extent any SAR is
settled, in whole or in part, in cash, the number of shares
available for issuance under this Section shall not be reduced.
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, whether settled in cash or stock,
shall be two hundred thousand (200,000).
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(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.
(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
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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.
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
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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, 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
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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.
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.
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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 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.
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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 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
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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.
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
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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 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
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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 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.
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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.
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.
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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 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.
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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 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.
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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.
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
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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.
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. 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. 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. 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. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY For Withhold For All To withhold authority to vote for any All All Except individual nominee(s), mark “For All Except” and write the number(s) of the The Board of Directors recommends you vote nominee(s) on the line below. FOR the following: 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 proposals 2 and 3. For Against Abstain 2. To approve an amendment to the GenCorp Amended and Restated 2009 Equity and Performance Incentive Plan to eliminate the limitation on the number of shares available to be issued as Full Value Awards. 3. To approve an advisory resolution regarding the compensation of GenCorp’s named executive officers. The Board of Directors recommends you vote 1 YEAR on the following proposal: 1 year 2 years 3 years Abstain 4. To approve an advisory vote on the frequency at which GenCorp should include an advisory vote regarding the compensation of GenCorp’s named executive officers. The Board of Directors recommends you vote FOR the following proposal: For Against Abstain 5. Ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company. 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. SHARES CUSIP # JOB # SEQUENCE # Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
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| 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 . GENCORP INC. PROXY FOR HOLDERS OF COMMON STOCK SOLICITED ON BEHALF OF 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 30, 2011 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; FOR PROPOSALS 2, 3 AND 5; AND FOR [1 YEAR] FOR PROPOSAL 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. Continued and to be signed on reverse side |
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FIDELITY INVESTMENTS
P.O. BOX 9112
FARMINGDALE, NY 11735
P.O. BOX 9112
FARMINGDALE, NY 11735
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 30, 2011
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
30, 2011. 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 25, 2011, the shares attributable to your plan account will be voted in the same proportion
as shares for which the trustee has received voting instructions.
Date
, 2011
Signature
|
(Sign in the Box) |
GEN 11 MM
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▼ 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.
1.
|
Election of directors Nominees |
FOR ALL |
WITHHOLD ALL |
FOR ALL EXCEPT |
||||||||||
| (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 | ||||||||||
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 ABOVE.
|
FOR | AGAINST | ABSTAIN | |||||||||||
| 2. |
To approve an amendment to the GenCorp Amended and Restated 2009 Equity and Performance
Incentive Plan to eliminate the limitation on the number of shares available to be issued as Full Value
Awards.
|
o | o | o | ||||||||||
| 3. |
To approve an advisory resolution regarding the compensation of GenCorp’s named executive officers.
|
o | o | o | ||||||||||
IF NO CHOICE IS SPECIFIED ON PROPOSAL 4, YOUR SHARES WILL BE VOTED FOR THE ONE YEAR
ELECTION ON THAT PROPOSAL.
|
1 YEAR | 2 YEARS | 3 YEARS | ABSTAIN | ||||||||||
| 4. |
To approve an advisory vote on the frequency at which GenCorp should include an advisory vote
regarding the compensation of GenCorp’s named executive officers.
|
o | o | o | o | |||||||||
| FOR | AGAINST | ABSTAIN | ||||||||||||
| 5. | Ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm of the Company.
|
o | o | o | ||||||||||
PLEASE SIGN AND DATE ON THE REVERSE SIDE
| GEN 11 MM | ||||
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERSPROXY STATEMENT FOR THE 2011 ANNUAL MEETING OF SHAREHOLDERSGENERAL INFORMATIONFREQUENTLY ASKED QUESTIONSPROPOSAL 1 ELECTION OF DIRECTORS2010 DIRECTOR COMPENSATION TABLEREPORT OF THE AUDIT COMMITTEEORGANIZATION & COMPENSATION COMMITTEE REPORTEXECUTIVE COMPENSATIONCOMPENSATION DISCUSSION AND ANALYSISSUMMARY COMPENSATION TABLE2010 GRANTS OF PLAN-BASED AWARDS2010 OPTION/SAR EXERCISES AND STOCK VESTED2010 PENSION BENEFITS2010 NON-QUALIFIED DEFERRED COMPENSATIONPROPOSAL 2 APPROVAL OF AN AMENDMENT TO THE GENCORP AMENDED AND RESTATED 2009 EQUITY AND PERFORMANCE INCENTIVE PLAN TO ELIMINATE THE LIMITATION ON THE NUMBER OF SHARES AVAILABLE TO BE ISSUED AS FULL VALUE AWARDSPROPOSAL 3 ADVISORY VOTE ON GENCORPS EXECUTIVE COMPENSATION PROGRAMPROPOSAL 4 ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON GENCORPS EXECUTIVE COMPENSATION PROGRAMPROPOSAL 5 RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS