Item No. 10.9
Exhibit B
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[GENCORP LOGO]
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Senior Vice President, Law Fax: (▇▇▇) ▇▇▇-▇▇▇▇
General Counsel and Secretary ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
November 30, 2001
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Chairman, Chief Executive Officer & President
GenCorp Inc.
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Re: Employment Retention Agreement
Dear ▇▇. ▇▇▇▇▇:
As you are aware, you have discussed the possibility of your early retirement
with the Board of Directors of GenCorp Inc. ("Board"). The Board has expressed a
strong desire that you continue to serve in your present capacity for at least
another two years, through November 30, 2003. As a consequence, I have been
authorized by the Board to offer you this Employment Retention Agreement
("Agreement") upon the terms approved by the Board at its meeting of September
7, 2001, and subject only to the approval of this Agreement by the Chairman of
the Organization and Compensation Committee (the "Committee") (which approval
shall be evidenced by his signature on this Agreement).
From the date hereof until November 30, 2003, you will continue to serve as
Chairman of the Board of Directors ("Chairman"), Chief Executive Officer
("CEO"), and President, as well as a Director, of GenCorp Inc. ("GenCorp"). You
will continue full-time performance of all duties that you heretofore have
performed in these capacities and have the same authority as you previously had.
Your employment shall be subject to termination at will by notice from you or
GenCorp, subject to the severance provisions of this Agreement.
For performance of these services, GenCorp will continue to pay your annual
compensation consisting of a base salary of not less than your current
$540,000.00 per year and year-end Management Incentive Compensation pursuant to
the plan currently in place, or any new plan that may in the future be adopted
in the sole discretion of the Board. For so long as you remain employed by
GenCorp in your present capacity: (i) both your base salary and your year-end
Management Incentive Compensation opportunity and target shall be adjustable
(upwards but not downwards), in the sole discretion of the Board, on an annual
basis; and, (ii) you will continue to be eligible for your present benefits
under GenCorp's employee benefit plans and executive perquisite programs (as
those plans may, in the sole discretion of GenCorp, be modified in the future),
including without limitation, the following: (a) GenCorp Consolidated Pension
Plan, (b) Aerojet-General Corporation Consolidated Pension Plan, (c) GenCorp
Retirement Savings Plan, (d) GenCorp Benefits Restoration Plan, (e) GenCorp
Medical Plan, (f) GenCorp Dental Plan, (g) GenCorp Flexible Benefits Plan, (h)
Employee Assistance Program, (i) Sick-Pay Program, (j) Short-Term Disability
Plan, (k) Long-Term Disability Plan, (l) Accidental Death and Dismemberment
Insurance, (m) Life Insurance, (n) Group Universal Life Insurance, (o) Vacation
Program, (p) Holiday Pay, (q) Deferred Bonus Plan, (r) Country Club Membership,
(s) Executive Physical, and (t) Financial Planning Assistance (AYCO); and, (iii)
you shall continue to be eligible, in the good faith discretion of the Board,
for new grants
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Employment Retention Agreement
November 30, 2001
Page 2
of GenCorp stock options and GenCorp restricted stock in accordance with the
1999 Equity and Performance Incentive Plan, and any subsequently adopted GenCorp
equity participation plan.
This Agreement shall not modify your other employment related agreements
presently in force, to-wit: Severance Agreement, dated October 1, 1999
("Severance Agreement"); Indemnification Agreement, dated October 1, 1999; Stock
Option Agreements, dated September 1, 1997, March 25, 1998, March 30, 1999,
December 16, 1999, and January 16, 2001; and Restricted Stock Agreements dated
February 1, 2000 and January 16, 2001 (in the aggregate, "Prior Contracts").
Should your employment by GenCorp in your present capacity terminate prior to
November 30, 2003 for any reason other than death, disability, a Change of
Control (as defined in Paragraph 1.(d) of your Severance Agreement) or at the
will of GenCorp, all compensation and benefits (including without limitation,
pension and vesting of stock options and restricted stock) to which you are
entitled on or after the date your employment terminates shall be determined by
the Prior Contracts and by the Company's employee benefit plans described above,
in accordance with their terms.
If you continue to serve in your present capacity to November 30, 2003, or if
GenCorp elects to terminate your employment prior to that date for any reason
other than Cause, you shall:
a. Be eligible to receive an annual pension payment (the "Pension Benefit")
equal to the greater of $248,860.26 and the amount calculated as set forth
below commencing upon your termination of employment. This pension payment
shall consist of pension payments made from the appropriate combination of
the Aerojet-General Corporation Consolidated Pension Plan and the GenCorp
Consolidated Pension Plan (collectively "Pension Plan"); the GenCorp
Benefit Restoration Plan (the "Restoration Plan"); and, an Enhanced
Pension Benefit paid to you as an unsecured creditor from the cash assets
of GenCorp. Your Pension Benefit will be calculated based upon: (a) the
formulas in the Pension Plan; (b) your actual age; (c) your actual service
credits plus ten whole years of service credit; and, (d) your actual final
five year average annual plan compensation for you, but not less than
$764,224.80. Pension Benefits will be paid as provided under the
applicable Pension Plan and Restoration Plan (generally as an annuity over
your lifetime) and the Enhanced Pension Benefit will be paid in an
actuarially equivalent five equal annual installments commencing promptly
following the date of your retirement. The amount of the Enhanced Pension
Benefit shall consist of the difference between (i) your pension benefit
calculated as described above, and (ii) your normal pension benefit to be
paid as calculated under the normal terms of the Pension Plan and the
Restoration Plan. The actuarial equivalent value of this difference shall
be calculated using the same discount factors and mortality table as
utilized in connection with the 2001 GenCorp Voluntary Enhanced Retirement
Program under the 2001 Supplemental Retirement Plan for GenCorp
Executives, and the resulting value will be paid to you (and in the event
of your death, to your estate, except to the extent, if any, legally
required to be paid to your spouse) in five equal installments, provided
that you may designate another beneficiary at any time prior to
commencement of payment by written notice to GenCorp (with such consent,
if any, as shall be legally required of your spouse). Additionally, you
may elect payment of the pension offered in this Agreement in the form of
a life annuity or a 100% or 50% joint and survivor annuity, with your wife
as the joint annuitant. Any of these optional annuity forms of payment
shall be the actuarial equivalent of the pension amount calculated in
accordance with the terms and procedures applicable under the Pension
Plan, and this Agreement. Any alternative form must be elected or revoked
at least one (1) year prior to your retirement date.
b. Receive immediate vesting of all unexercised GenCorp stock options granted
to you prior to November 30, 2003, which shall remain exercisable for the
periods specified in the original grants (i.e., the remainder of the term
of the grant);
c. Receive immediate vesting of all GenCorp restricted stock granted to you
prior to November 30, 2003;
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Employment Retention Agreement
November 30, 2001
Page 3
d. Receive in a lump-sum an amount equal to the Base Salary, if any, that
would have been paid to you through November 30, 2003;
e. Receive any accrued amounts including any earned but unpaid Base Salary,
accrued but unused vacation, unreimbursed business expenses and earned
bonus for any completed fiscal year and any amount or benefit due under
any benefit plan (the "Accrued Amounts");
f. Receive a pro rata bonus for the fiscal year of termination based on
actual results and the period of the year during which you were employed
by GenCorp (the "Pro Rata Bonus").
As used herein, "Cause" shall have the same meaning as defined in Paragraph 1(c)
of your Severance Agreement except that subpart (c)(i) shall only be Cause if
such violation is a felony and you are convicted or plead guilty or nolo
contendre to it (and it is not as a result of your vicarious liability), (ii),
(iii) and (iv) shall only be Cause if the violation is injurious to GenCorp. A
material breach of this Agreement by GenCorp, including but not limited to the
first two sentences of the second paragraph of this Agreement, that remains
uncured for ten (10) days after written notice thereof is given by you, or the
relocation of your office by more than fifty (50) miles from its present
location at the Aerojet facility in Sacramento, California shall be deemed a
termination at the will of and by GenCorp without Cause.
If you die prior to November 30, 2003 while employed by GenCorp, or while you
are totally disabled (with the onset of your disability having occurred while
you were employed by GenCorp), GenCorp will: (i) pay the Enhanced Pension
Benefit offered in this Agreement to your estate, unless otherwise required by
law, calculated as if you had retired on November 30, 2003, unless prior to your
death, with the concurrence of GenCorp, you have elected a different one of the
alternative payout options offered in this Agreement to take effect in the case
of your death, in which case the pension shall be paid in accordance with your
election and provided that you may designate another beneficiary at any time
prior to your death by written notice to GenCorp (with such consent, if any, as
shall be legally required of your spouse); (ii) vest all unvested GenCorp stock
options held by you upon your death which shall remain exercisable by your
beneficiary for the periods specified in the original grants (i.e., the
remainder of the term of the grant); (iii) vest all unvested GenCorp restricted
stock held by you upon your death and transfer that stock to your estate; and
(iv) pay to your estate, unless otherwise required by law, any Accrued Amounts,
and Pro Rata Bonus.
If you become totally disabled and unable to perform your duties as Chairman,
CEO and President, and such disability is expected to continue for at least 6
consecutive months, GenCorp shall pay you a monthly disability benefit equal to
one-twelfth of the sum of your base salary rate and target bonus plus your
benefits until the first to occur of the following events: (i) you are able to
resume performance of your duties; or (ii) November 30, 2003, at which time you
shall be eligible to retire and receive the pension and vesting of GenCorp stock
options and GenCorp restricted stock described in this Agreement. However, such
disability benefit shall be reduced by the amount of any disability benefit
payments which you are entitled to receive under the GenCorp Long-Term
Disability Plan or pursuant to federal law until such time as you retire. You
shall also receive Accrued Amounts and a Pro Rata Bonus to the extent these
amounts are not duplicative of amounts previously paid to you.
In the event a Change in Control of GenCorp occurs prior to November 30, 2003,
while you are serving in your present capacity or while you are totally disabled
(with the onset of your disability having occurred while you were employed by
GenCorp), you shall be entitled to the full benefit of your Severance Agreement
and the full benefit of this Agreement. In addition, this Employment Retention
Agreement shall take precedence over those provisions of the Pension Plan which
address Change in Control.
You will hold in confidence and will not disclose to any third person or use for
your personal benefit any confidential information or trade secret GenCorp has
disclosed to you except in compliance with legal process or, while you are an
executive of the Company, as you deem appropriate in your good faith
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Employment Retention Agreement
November 30, 2001
Page 4
judgment. As used herein, "confidential information" and "trade secrets" mean
any and all information of GenCorp and/or any of its subsidiaries, which is not
generally available to third persons and relates to the products, customers,
pricing, terms of sale, manufacturing processes, research and development,
financial performance or any other aspects of the business of GenCorp and/or any
of its subsidiaries.
For a period of three years following the termination of your employment with
GenCorp, you will not perform, directly or indirectly, any consulting or other
services for or on behalf of any company or person in respect of any business
operations which are in material competition with GenCorp's material businesses,
provided that the foregoing shall not prevent you from providing consulting or
other services in respect of noncompetitive business operations of a person or
entity that also has competitive business operations.
This Agreement will be deemed to require you to perform personal services.
Accordingly, you may not assign any right, delegate any duty, or otherwise
transfer any interest hereunder, whether by operation of law or otherwise,
without GenCorp's prior written consent.
As a condition of receiving the benefits hereunder upon termination, you further
agree to provide GenCorp a release, generally in the form attached hereto as
Exhibit A, upon termination of your employment under circumstances that will
result in payment of the benefits offered in this Agreement.
On any termination, except a termination for Cause or a termination initiated by
you prior to November 30, 2003 (which is not deemed a termination without Cause
by GenCorp), you will also receive the items on Exhibit B hereto. This Agreement
constitutes the entire understanding between you and GenCorp regarding the
incentives the Board is offering you to continue your employment in your present
capacity through November 30, 2003. Except as expressly provided in this
Agreement, this Agreement may not be changed, amended or terminated, in whole or
in part, except by a writing executed by you and an authorized representative of
GenCorp. This Agreement shall in all respects be construed in accordance with
the laws of the State of Ohio. This Agreement shall be binding upon and shall
inure to the benefit of successors and assigns of GenCorp, including any
successor resulting from a change in control, provided the Agreement may only be
assigned by GenCorp only to a successor to all or substantially all of its
business and then only upon such successor promptly delivering to you a written
assumption of this Agreement. Any dispute under this Agreement shall be resolved
by arbitration in Sacramento, California before one arbitrator under the
jurisdiction of the American Arbitration Association (the "AAA") pursuant to the
applicable AAA rules. The judgment of the arbitrator shall be final and binding
on the parties and judgment upon it may be entered in any court of competent
jurisdiction. Each party shall bear its own costs and legal fees and shall
equally divide those of the AAA and the arbitrator, provided that the arbitrator
may award the prevailing party (as determined by the arbitrator) his or its
costs and his or its reasonable legal fees and disbursements, provided that no
award shall be made against you unless the arbitrator shall determine that you
took the material portion of your position in bad faith or that your claim was
frivolous.
GENCORP INC.
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Senior Vice President, Law, General Counsel
and Secretary
DATE: November 30, 2001
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Employment Retention Agreement
November 30, 2001
Page 5
ACCEPTED AND AGREED
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Chairman, Chief Executive Officer and President
DATE: November 30, 2001
APPROVED:
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Chairman Organization & Compensation Committee
GenCorp Board of Directors
EXHIBIT A
RELEASE OF CLAIMS
In consideration for the amounts to be paid to me under the Employment
Retention Agreement with GenCorp Inc. dated November 30, 2001, ("Agreement"), I
hereby irrevocably and unconditionally release any and all claims described in
subsection (i) hereafter that I may now have against the following persons or
entities (the "Releasees"): GenCorp Inc., all related, affiliated or subsidiary
companies of GenCorp, and their predecessors, successors and assigns; and, with
respect to each such entity, all of its past and present employees, officers,
directors, stockholders, owners, representatives, assigns, attorneys, agents,
insurers, employee benefit programs (and the trustees, administrators,
fiduciaries and insurers of such programs) and any other persons acting by,
through, under or in concert with any of the persons or entities listed in this
subsection in such capacities.
(i) CLAIMS RELEASED: Except as provided in subsection (iii),
the claims released include all claims, promises, debts, causes of
action or similar rights of any type or nature that I have or had which
in any way relate to: (a) my employment with GenCorp, or the
termination of that employment through voluntary retirement, such as
claims for compensation, bonuses, commissions, or lost wages, (b) the
design or administration of any employee benefit plan or program, other
than my rights as a participant in the employee benefit programs and
the Prior Agreements described in the Agreement, (c) any rights to
severance or similar benefits under any employment agreement, any
termination Agreement, or any related program, policy or procedure of
GenCorp, except my Severance Agreement which shall remain in effect,
(d) any other claims or demands I may have against the Releasees. The
claims released, for example, may have arisen under any of the
following statutes or common law doctrines:
ANTI-DISCRIMINATION STATUTES including, without
limitation, the Age Discrimination in Employment Act and
Executive Order 11141, which prohibit age discrimination in
employment, Title VII of the Civil Rights Act of 1964, Section
1981 of the Civil Rights Act of 1866 and Executive Order
11246, which prohibit discrimination based on race, color,
national origin, religion or sex, the Equal Pay Act, which
prohibits paying men and women unequal pay for equal work; the
Americans With Disabilities Act and Sections 503 and 504 of
the Rehabilitation Act of 1973, which prohibit discrimination
against the disabled; the California Fair Employment and
Housing Act, which prohibits discrimination in employment
based on race, color, national origin, ancestry, physical or
mental disability, medical condition, marital status, sex or
age; and any other federal, state or local laws or regulations
prohibiting employment discrimination.
FEDERAL EMPLOYMENT STATUTES including, without
limitation, the WARN Act, which requires that advance notice
be given of certain work force reductions; the employee
Retirement Income Security Act of 1974, which, among other
things, protects pension or welfare benefits; and the Fair
Labor Standards Act of 1938, which regulates wage and hour
matters.
OTHER LAWS including, without limitation, any
federal, state or local laws providing workers compensation
benefits, restricting an employer's right to terminate
employees or otherwise regulating employment, any federal,
state or local law enforcing express or implied employment
contracts or requiring an employer to deal with employees
fairly or in good faith; California Labor Code ▇▇.▇▇. 200 ET
SEQ., relating to salary, commission, compensation, benefits
and other matters, the California Workers' Compensation Act,
the California Unemployment Insurance Code; any applicable
California Industrial Welfare Commission Order; and any other
federal, state or local laws, whether based on statute,
regulation or common law, providing recourse for alleged
retaliation or wrongful discharge, physical or personal
injury, emotional distress, fraud, negligent
misrepresentation, libel, slander, defamation, whistleblower
and similar or related claims.
(ii) RELEASE EXTENDS TO BOTH KNOWN AND UNKNOWN CLAIMS: This
Release covers both claims that I know about and those that I may not
know about. I hereby expressly waive all rights afforded by any statute
(including Section 1542 of the Civil Code of the State of California)
which limits the effect of a release with respect to unknown claims.
Section 1542 of the Civil Code of the State of California states as
follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
I understand the significance of this Release of unknown claims and my waiver of
statutory protection against a release of unknown claims (such as under Section
1542).
(iii) CLAIMS NOT RELEASED: This Release does not release: (a)
my right to enforce any provision of the Agreement; (b) my rights as a
participant, if any, to unpaid salary, pension, welfare and/or COBRA
benefits under any GenCorp employee benefit plan or program, except to
the extent that any claim was rejected or denied, either as to me or as
to other similarly situated employees, before the Agreement and this
Release of Claims become effective; or (d) any right to indemnity
relating to third-party claims against me arising out of the course or
scope of my employment, and granted under the Articles of
Incorporation, the Corporate Code of Regulations, my Indemnification
Agreement and/or by operation of law or (e) any rights to directors and
officers liability insurance.
(iv) Ownership of Claims: I hereby represent that I have not
assigned or transferred, or purported to assign or transfer, all or any
part of any claim released herein.
Date ______________________ _____________________________________
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EXHIBIT B
1. Office and secretarial support for 3 years.
2. Charitable matching contributions for 3 years.
3. Financial planning and tax preparation for 3 years.
4. Existing home security equipment, home computer, laptop and similar
equipment.
5. Transfer of current country club membership to Executive.
