EMPLOYMENT AGREEMENT
Exhibit 10.1
Execution Copy
This
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of January 6, 2010
(the “Effective Date”), by and between GenCorp Inc. (“GenCorp” or the “Company),
having its principal place of business at Xxxxxxx 00 xxx Xxxxxxx Xxxx, Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000 and Xxxxx Xxxxxxx (“Executive”, and the
Company and the Executive collectively referred to herein as the
“Parties”).
W I T N E S S E T H:
WHEREAS,
the Company desires to hire Executive and to employ him as the Chief Executive
Officer (“CEO”) of the Company, and the Parties desire to enter into this
Agreement embodying the terms of such employment;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
promises of the Parties contained herein, the Parties, intending to be legally
bound, hereby agree as follows:
1. Title and Job
Duties.
(a) Subject
to the terms and conditions set forth in this Agreement, the Company agrees to
employ Executive as CEO. In this capacity, Executive shall have the
duties, authorities and responsibilities commensurate with the duties,
authorities and responsibilities of persons in similar capacities in similarly
sized companies, and such other duties, authorities and responsibilities as the
Board of Directors of the Company (the “Board”) shall designate from time to
time that are not inconsistent with the Executive’s position as CEO. Executive shall report
directly to the Board and the Chairman of the Board. All employees of
the Company shall report directly to Executive or his designee.
(b) Executive
accepts such employment and agrees, during the term of his employment, to devote
his full business and professional time and energy to the
Company. Executive agrees to carry out and abide by all lawful
directions of the Board and the Chairman of the Board that are consistent with
his position as Chief Executive Officer.
(c) Without
limiting the generality of the foregoing, Executive shall not, without the
written approval of the Company, render services of a business or commercial
nature on his own behalf or on behalf of any other person, firm, or corporation,
whether for compensation or otherwise, during his employment hereunder, provided
that the foregoing shall not prevent the Executive from (i) serving on the
boards of directors of non-profit organizations and, with the prior written
approval of the Board, other for profit companies, (ii) participating in
charitable, civic, educational, professional, community or industry affairs, and
(iii) managing Executive’s passive personal investments so long as such
activities in the aggregate do not materially interfere or conflict with
Executive’s duties hereunder or create a potential business or fiduciary
conflict.
(d) Executive
may own passive investments in Competing Businesses, defined below, (including,
but not limited to, indirect investments through mutual funds), provided the
securities of the Competing Business are publicly traded and Executive does not
own or control more than one percent (1%) of the outstanding voting rights or
equity of the Competing Business. “Competing Business” means any
corporation, partnership, limited liability company, university, government
agency or other entity or person (other than the Company) which is engaged in
the development, manufacture, marketing, distribution or sale of, or research
directed to aerospace and defense systems and in the Eastern Sacramento area,
real estate development.
2.
Salary and
Additional Compensation.
(a) Base
Salary. The Company shall pay to Executive an annual base
salary of $550,000, less applicable withholdings and deductions, in accordance
with the Company’s normal payroll procedures. The Board may increase
the Executive’s annual base salary from time to time in its sole and absolute
discretion.
(b) Bonus. Executive
shall be eligible for an annual bonus based on a target opportunity up to
one-hundred and twenty-five percent (125%) of Executive’s annual Base Salary
(“Target Bonus”), pursuant to the Company’s Annual Incentive Plan which shall be
adopted annually by the Board.
(c) Restricted
Shares. On the Effective Date, the Company shall grant to
Executive 120,000 shares of the Company’s restricted common stock (“Restricted
Shares”), pursuant to the GenCorp Inc. 2009 Equity and Performance Incentive
Plan (the “Plan”) pursuant to terms and conditions of the Plan, this Agreement
and the restricted stock award agreement attached hereto as Exhibit A (the
“Restricted Stock Award Agreement”), which Restricted Shares shall vest
according to the following schedule: Thirty-three percent (33%) of the
Restricted Shares shall vest on the first anniversary of the Effective Date,
thirty-three percent (33%) of the Restricted Shares shall vest on the second
anniversary of the Effective Date, and thirty-three percent (33%) of the
Restricted Shares shall vest on the third anniversary of the Effective
Date. The Company may make additional grants to Executive throughout
the Term of this Agreement.
(d) Options. On
the Effective Date, the Company shall grant to Executive an option to purchase
100,000 shares of the Company’s common stock (“Options”) under the Plan,
pursuant to terms and conditions of the Plan, this Agreement and the stock
option award agreement attached hereto as Exhibit B (the “Stock
Option Agreement”), which Options shall be granted at the Fair Market Value (as
such term is defined in the Plan) on the Effective Date and shall vest according
to the following schedule: Thirty-three percent (33%) of the Options shall vest
on the first anniversary of the Effective Date, thirty-three percent (33%) of
the Options shall vest on the second anniversary of the Effective Date, and
thirty-three percent (33%) of the Options shall vest on the third anniversary of
the Effective Date.
(e) Future Equity
Awards. The Executive shall be eligible to participate in
future grants pursuant to the Plan and other Company performance incentive plans
extended to senior executives of the Company generally, at levels commensurate
with Executive’s position.
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3.
Expenses. In
accordance with Company policy, the Company shall reimburse Executive for all
reasonable business expenses properly and reasonably incurred and paid by
Executive in the performance of his duties under this Agreement upon his
presentment of detailed receipts in the form required by the Company’s
policy.
4.
Benefits.
(a) Vacation. Executive
shall be entitled to vacation in accordance with the Company’s standard vacation
policy extended to senior executives of the Company generally, at levels
commensurate with Executive’s position.
(b) Health Insurance and Other
Plans. Executive shall be eligible to participate in the
Company’s medical, dental, long term incentive plan, and other employee benefit
programs, if any, that are provided by the Company for its employees generally,
at levels commensurate with Executive’s position, in accordance with the
provisions of any such plans, as the same may be in effect from time to
time.
5. Term. The
terms set forth in this Agreement will commence on the Effective Date hereof and
shall remain in effect for five (5) years except as otherwise provided
herein.
6.
Termination.
(a) Termination at the Company’s
Election.
(i) For
Cause. At the election of the Company, Executive’s employment
may be terminated for Cause (as defined below) upon written notice to Executive
pursuant to Section 11 of this Agreement. For purposes of this
Agreement, “Cause” for termination shall mean that Executive: (A) pleads
“guilty” or “no contest” to or is indicted for or convicted a felony under
federal or state law or as a crime under federal or state law which involves
Executive’s fraud or dishonesty; (B) in carrying out his duties, engages in
conduct that constitutes gross negligence or willful misconduct; (C) fails to
reasonably perform the responsibilities of his position (such reasonable
performance shall be evaluated based on effort); (D) engages in misconduct that
causes material harm to the reputation of the Company; or (E) materially
breaches any term of this Agreement or written policy of the Company, provided
that if the Company provides written notice of Cause pursuant to (C) through
(E), the Executive shall be given thirty (30) days from the date of such written
notice to cure such conduct.
(ii) Upon Disability, Death or
Without Cause. At the election of the Company, Executive’s
employment may be terminated without Cause: (A) should Executive become
physically or mentally unable to perform his duties for the Company hereunder
and such incapacity has continued for a total of ninety (90) consecutive days or
any one hundred eighty (180) days in a period of three hundred sixty-five (365)
consecutive days (a “Disability”); (B) upon Executive’s death (“Death”); or (C)
upon thirty (30) days’ written notice for any other reason.
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(b) Termination at Executive’s
Election.
(i)
For Good
Reason. At Executive’s election, Executive’s employment may be
terminated for Good Reason (as defined below) by providing notice to the Company
pursuant to Section 11 of this Agreement. For purposes of this
Agreement, “Good Reason” shall be deemed to exist if the following actions occur
without Executive’s consent: (A) a material diminution in Executive’s Base
Salary; (B) a material diminution in Executive’s authority, duties or
responsibilities under this Agreement, provided that removal of Executive as a
director of the Board shall not constitute a material diminution in Executive’s
authority, duties or responsibilities under this Agreement; or (C) any other
action or inaction that constitutes a material breach of the terms of this
Agreement by the Company. In the event any of the occurrences in (A)
through (C) above have occurred, the Company shall be given written notice by
Executive of Executive’s intention to so terminate Executive’s employment, such
notice: (i) to state in detail the particular acts or failures to act that
constitute the grounds on which the proposed termination for Good Reason is
based, (ii) to be given within sixty (60) days after the first
occurrence of such acts or failures to act, and (iii) the Company shall have
thirty (30) days following receipt of such notice to cure such acts or failures
to act in all material respects. If the Company has not cured such
acts or failures to act within the thirty (30) day cure period, then the
Executive’s employment shall be immediately terminated for Good
Reason.
(ii)
Voluntary
Resignation. Notwithstanding anything contained elsewhere in
this Agreement to the contrary, Executive may terminate his employment hereunder
at any time and for any reason whatsoever or for no reason at all in Executive’s
sole discretion by giving thirty (30) days written notice pursuant to Section 11
of this Agreement.
7.
Payments Upon
Termination of Employment.
(a) Termination for Cause or
Resignation Without Good Reason. If, prior to the expiration
of the Term, the Executive’s employment is terminated by the Company for “Cause”
or if the Executive resigns from his employment hereunder other than for “Good
Reason”, the Executive shall be entitled to the following amounts only: (A)
payment of his Base Salary accrued up to and including the date of termination
or resignation within thirty (30) days following termination, (B) payment in
lieu of any accrued but unused vacation time, in accordance with the Company’s
vacation policy, and (C) payment of any unreimbursed expenses in accordance with
the Company’s business reimbursement policy, and (D) payments and benefits under
any Company benefit plan, program or policy that Executive participated in
during employment and paid pursuant to the terms of such plan, program and
policy (collectively, the “Accrued Obligations”).
(b) Termination for Reasons
other than Cause or Voluntary Resignation. If Executive’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 and Section 7(c) is not applicable at the time of Executive’s
termination of employment, Executive shall be entitled to receive the Accrued
Obligations and severance payments and benefits equal to the following: (i)
subject to Section 18, one (1) year of Executive’s Base Salary paid in
installments (the “Severance Payment”); (ii) subject to Section 18, a bonus
payment, which shall be based upon the amount of the previous year’s bonus,
prorated based on the number of months of the year that Executive worked for the
Company prior to the termination paid in a lump sum (the “Bonus payment”); (iii)
immediate vesting of any Restricted Shares that are scheduled to vest, pursuant
to Section 2(c), within one year of the date of termination of employment; (iv)
immediate vesting of any Options that are scheduled to vest, pursuant to Section
2(d), within one year of the date of termination of employment, provided that Executive may
exercise vested Options until the earlier of (y) twelve (12) months following
termination of employment and (z) the scheduled expiration of the Options (“Post
Termination Exercise Period”); and (v) bonuses earned but unpaid with
respect to the fiscal year ending on or preceding the date of termination
pursuant to Company’s Annual Incentive Plan (“Accrued Bonus”), provided, that
Executive shall only receive the payment of Section 7(b)(ii) if Executive’s
termination occurs on or after the first anniversary of the Effective
Date. Payment of the Base Salary component of Executive’s severance
shall be made on regular paydays. Subject to Executive’s execution
and delivery of a general release (that is no longer subject to revocation under
applicable law) of the Company, its parents, subsidiaries and affiliates and
each of its officers, directors, employees, agents, successors and assigns in
the form attached hereto as Exhibit C (the
“General Release”) all payments and/or grants under this Section 7(b) shall
begin within sixty (60) days following termination of employment provided, that
the first payment for severance payments described in Section 7(b)(i) shall
include payment of any amounts otherwise due as of the date of termination,
provided, further that if Executive’s employment terminates due to Death or
Disability, Executive (or his legal representative or estate) shall not be
required to execute and deliver the General Release in order to receive
severance payments and benefits provided in this Section 7(b).
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(c) Termination in Connection of
a Change in Control. Notwithstanding Section 7(b) above, if
Executive’s employment is terminated by the Company without Cause (excluding due
to a Death or Disability) or by Executive for Good Reason within two (2) years
following a Change in Control (as defined in the Plan) then Executive shall be
entitled to the following payments and benefits: (i) the Accrued Obligations;
(ii) subject to Section 18, a severance payment equal to two (2) times the sum
of (y) Executive’s Base Salary and (z) Target Bonus, paid in a lump sum (the the
“Change in Control Severance Payment”); (iii) to the extent unvested at the time
of Executive’s termination of employment, immediate full vesting of the
Restricted Shares; (iv) to the extent unvested at the time of Executive’s
termination of employment immediate full vesting of the unvested Options,
provided, that Executive may exercise vested Options during the Post-Termination
Exercise Period; and (v) the Accrued Bonus, if any. Subject to
Executive’s execution and delivery of the General Release (provide, that such
General Release was not previously executed and delivered), all payments and/or
grants under this Section 7(c) shall begin within (60) days following
termination of employment or, if applicable, upon the consummation of a Change
in Control.
(d) Termination of the
Term. If Executive’s employment terminates on the expiration
of the Term as provided in Section 5, then Executive shall be entitled to the
Accrued Obligations and the Accrued Bonus, if any.
(e) No Mitigation; No
Set-Off. The Company’s obligation to pay Executive the amounts
provided and to make the arrangements provided hereunder shall not be subject to
set-off, counterclaim or recoupment of amounts owed by Executive to the Company
or its affiliates. Executive shall not be required to mitigate the
amount of any payment provided for pursuant to this Agreement by seeking other
employment, and no amounts otherwise earned shall be set–off against the amounts
due hereunder.
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8.
Confidentiality
Agreement and Assignment of Intellectual Property.
(a) Executive
understands that during the Term, he may have access to unpublished and
otherwise confidential information both of a technical and non-technical nature,
relating to the business of the Company and any of its parents, subsidiaries,
divisions, affiliates (collectively, “Affiliated Entities”), or clients,
including without limitation any of their actual or anticipated business,
research or development, any of their technology or the implementation or
exploitation thereof, including without limitation information Executive and
others have collected, obtained or created, information pertaining to clients,
accounts, vendors, prices, costs, materials, processes, codes, material results,
technology, system designs, system specifications, materials of construction,
trade secrets and equipment designs, including information disclosed to the
Company by others under agreements to hold such information confidential
(collectively, the “Confidential Information”). Executive agrees to
observe all Company policies and procedures concerning such Confidential
Information. Executive further agrees not to disclose or use, either
during his employment or at any time thereafter, any Confidential Information
for any purpose, including without limitation any competitive purpose, unless
authorized to do so by the Company in writing, except that he may disclose and
use such information in the good faith performance of his duties for the
Company. Executive’s obligations under this Agreement will continue
with respect to Confidential Information, whether or not his employment is
terminated, until such information becomes generally available from public
sources through no fault of Executive or any representative of
Executive. Notwithstanding the foregoing, however, Executive shall be
permitted to disclose Confidential Information as may be required by a subpoena
or other governmental order, provided that he first notifies the Company of such
subpoena, order or other requirement and such that the Company has the
opportunity to obtain a protective order or other appropriate
remedy.
(b) During
Executive’s employment, upon the Company’s request, or upon the termination of
his employment for any reason, Executive will promptly deliver to the Company
all documents, records, files, notebooks, manuals, letters, notes, reports,
customer and supplier lists, cost and profit data, e-mail, apparatus, computers,
blackberries or other PDAs, hardware, software, drawings, blueprints, and any
other material of the Company or any of its Affiliated Entities or clients,
including all materials pertaining to Confidential Information developed by
Executive or others, and all copies of such materials, whether of a technical,
business or fiscal nature, whether on the hard drive of a laptop or desktop
computer, in hard copy, disk or any other format, which are in his possession,
custody or control. Executive may retain the Executive’s rolodex and
similar address books, provided, that such items only include contact
information.
(c) Executive
will promptly disclose to the Company any idea, invention, discovery or
improvement, whether patentable or not (“Creations”),
conceived or made by him alone or with others at any time during his
employment. Executive agrees that the Company owns any such
Creations, conceived or made by Executive alone or with others at any time
during his employment, and Executive hereby assigns and agrees to assign to the
Company all rights he has or may acquire therein and agrees to execute any and
all applications, assignments and other instruments relating thereto which the
Company deems necessary or desirable. These obligations shall
continue beyond the termination of his employment with respect to Creations and
derivatives of such Creations conceived or made during his employment with the
Company. The Company and Executive understand that the obligation to
assign Creations to the Company shall not apply to any Creation which is
developed entirely on his own time without using any of the Company’s equipment,
supplies, facilities, and/or Confidential Information unless such Creation
(a) relates in any way to the business or to the current or anticipated
research or development of the Company or any of its Affiliated Entities; or
(b) results in any way from his work at the Company.
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(d) Executive
will not assert any rights to any invention, discovery, idea or improvement
relating to the business of the Company or any of its Affiliated Entities or to
his duties hereunder as having been made or acquired by Executive prior to his
work for the Company, except for the matters, if any, described in Exhibit D to this
Agreement.
(e) During
the Term, if Executive incorporates into a product or process of the Company or
any of its Affiliated Entities anything listed or described in Exhibit D, the Company is hereby
granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual,
worldwide license (with the right to grant and authorize sublicenses) to make,
have made, modify, use, sell, offer to sell, import, reproduce, distribute,
publish, prepare derivative works of, display, perform publicly and by means of
digital audio transmission and otherwise exploit as part of or in connection
with any product, process or machine.
(f) Executive
agrees to cooperate fully with the Company, both during and after his employment
with the Company, with respect to the procurement, maintenance and enforcement
of copyrights, patents, trademarks and other intellectual property rights (both
in the United States and foreign countries) relating to such
Creations. Executive shall sign all papers, including, without
limitation, copyright applications, patent applications, declarations, oaths,
formal assignments, assignments of priority rights and powers of attorney, which
the Company may deem necessary or desirable in order to protect its rights and
interests in any Creations. Executive further agrees that if the
Company is unable, after reasonable effort, to secure Executive’s signature on
any such papers, any officer of the Company shall be entitled to execute such
papers as his agent and attorney-in-fact and Executive hereby irrevocably
designates and appoints each officer of the Company as his agent and
attorney-in-fact to execute any such papers on his behalf and to take any and
all actions as the Company may deem necessary or desirable in order to protect
its rights and interests in any Creations, under the conditions described in
this paragraph.
9. Legal
Fees. The Company shall pay directly to Executive’s legal
counsel or reimburse Executive for up to $15,000 for legal fees incurred by
Executive relating to negotiating, drafting and execution of this Agreement and
any related equity award agreements.
10. Representation and
Warranty. Executive represents and warrants to the Company
that he is not subject to any agreement restricting his ability to enter into
this Agreement and fully carry out his duties and responsibilities
hereunder. To the extent that Executive continues to be bound by
confidentiality, non-disparagement obligations with regard to his former
employer, the Company and Executive agree that neither shall require Executive
to disclose any confidential information of any prior employer of Executive or
misappropriate any intellectual property belonging to any other person or entity
during the Term.
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11. Notice. Any
notice or other communication required or permitted to be given to the Parties
shall be deemed to have been given if personally delivered, if sent by
nationally recognized overnight courier or if mailed by certified or registered
mail, return receipt requested, first class postage prepaid, and addressed as
follows:
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(a)
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If
to Executive, to:
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the
address shown on the records of the Company.
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(b)
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If
to the Company, to:
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Xxxxxxx
00 xxx Xxxxxxx Xxxx
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Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
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Attention:
Chairman of the Board
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with
a copy to:
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Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
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00
Xxxx 00xx
Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention:
Xxxxxxx X. Xxxxxxxx, Esq.
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12. Severability. If
any provision of this Agreement is declared void or unenforceable by a court of
competent jurisdiction, all other provisions shall nonetheless remain in full
force and effect.
13. Governing Law and
Arbitration. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of California,
without regard to the conflict of laws provisions thereof. Any
action, suit or other legal proceeding which is commenced to resolve any matter
arising under or relating to any provision of this Agreement shall be submitted
to final and binding arbitration pursuant to the Employment Arbitration Rules of
the American Arbitration Association before a single arbitrator, who is agreed
upon by the Parties, and who is a retired state or federal court
judge. The arbitration shall take place in Sacramento,
California. The arbitrator will have the authority to permit
discovery and to follow the procedures that he or she determines to be
appropriate. The arbitrator will have no power to award consequential
(including lost profits), punitive or exemplary damages. Such
submission to arbitrate shall be the sole and exclusive remedy available to
Executive or the Company. The filing Party shall bear filing fees for
the arbitration and each Party shall bear its own legal fees and costs resulting
from the arbitration. The judgment on the award rendered by the
arbitrator shall be binding upon the Parties and may be entered in any court
having jurisdiction thereof. Neither party may seek judicial review
of the decision imposed by the arbitrator.
14. Indemnification and
Liability Insurance. The Company shall indemnify Executive and
provide Executive with liability insurance pursuant to the terms of the Amended
Code of Regulations of GenCorp Inc., Amended as of March 28, 2007, or, if the
terms of the Amended Code of Regulations of Gencorp Inc. are no longer in
effect, then pursuant to the terms then in effect for directors and officers of
the Company.
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15. Waiver. The
waiver by either Party of a breach of any provision of this Agreement shall not
be or be construed as a waiver of any subsequent breach. The failure
of a Party to insist upon strict adherence to any provision of this Agreement on
one or more occasions shall not be considered a waiver or deprive that Party of
the right thereafter to insist upon strict adherence to that provision or any
other provision of this Agreement. Any waiver must be in
writing.
16. Assignment. This
Agreement is a personal contract and Executive may not sell, transfer, assign,
pledge or hypothecate his rights, interests and obligations
hereunder. Except as otherwise herein expressly provided, this
Agreement shall be binding upon and shall inure to the benefit of Executive and
his personal representatives and shall inure to the benefit of and be binding
upon the Company and its successors and assigns, except that the Company may not
assign this Agreement without the Executive's prior written consent, except to
an acquirer of all or substantially all of the assets of the Company other than
the real estate assets and upon written assumption of the obligations of this
Agreement.
17. Entire
Agreement. This Agreement (together with the Exhibits attached
hereto) embodies all of the representations, warranties, and agreements between
the Parties relating to Executive’s employment with the Company. No
other representations, warranties, covenants, understandings, or agreements
exist between the Parties relating to Executive’s employment. This
Agreement shall supersede all prior agreements, written or oral, relating to
Executive’s employment. This Agreement may not be amended or modified
except by a writing signed by the Parties.
18. Code Section 409A
Compliance.
(a) The
intent of the parties is that payments and benefits under this Agreement comply
with, or be exempt from, Internal Revenue Code (“Code”) Section 409A and the
regulations and guidance promulgated thereunder (collectively “Code Section 409A”)
and, accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. If the Executive notifies
the Company (with specificity as to the reason therefore) that the Executive
believes that as a result of subsequent published guidance issued by the I.R.S.
upon which taxpayers generally rely, any provision of this Agreement (or of any
award of compensation, including equity compensation or benefits) would cause
Executive to incur any additional tax or interest under Code Section 409A and
the Company concurs with such belief or the Company independently makes such
determination, the Company shall, after consulting with the Executive, reform
such provision to try to comply with Code Section 409A through good faith
modifications to the minimum extent reasonably appropriate to conform with Code
Section 409A. To the extent that any provision hereof is modified in
order to comply with Code Section 409A, such modification shall be made in good
faith and shall, to the maximum extent reasonably possible, maintain the
original intent and economic benefit to the Executive and the Company and is tax
neutral to the Company of the applicable provision without violating the
provisions of Code Section 409A.
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(b) A
termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment that are considered
“nonqualified deferred compensation” under Code Section 409A unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.” If the Executive is deemed on the
date of termination to be a “specified employee” within the meaning of that term
under Code Section 409A(a)(2)(B), then with regard to any payment that is
considered non-qualified deferred compensation under Code Section 409A payable
on account of a “separation from service,” such payment or benefit shall be made
or provided at the date which is the earlier of (A) the expiration of the six
(6)-month period measured from the date of such “separation from service” of the
Executive, and (B) thirty (30) days from the date of the Executive’s death (the
“Delay
Period”). Upon the expiration of the Delay Period, all
payments and benefits delayed pursuant to this Section 26 (whether
they would have otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Executive in a lump
sum with interest at the prime rate as published in The Wall Street
Journal on the first business day of the Delay Period, and any remaining
payments and benefits due under this Agreement shall be paid or provided in
accordance with the normal payment dates specified for them herein.
(c) With
regard to any provision herein that provides for reimbursement of costs and
expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the
right to reimbursement or in-kind benefits shall not be subject to liquidation
or exchange for another benefit, (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits, provided during any taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, provided that the foregoing clause (ii)
shall not be violated without regard to expenses reimbursed under any
arrangement covered by Internal Revenue Code Section 105(b) solely because such
expenses are subject to a limit related to the period the arrangement is in
effect and (iii) such payments shall be made on or before the last day of
Executive’s taxable year following the taxable year in which the expense
occurred. Any tax gross-up payment as provided herein shall be made
in any event no later than the end of the calendar year immediately following
the calendar year in which the Executive remits the related taxes, and any
reimbursement of expenses incurred due to a tax audit or litigation shall be
made no later than the end of the calendar year immediately following the
calendar year in which the taxes that are the subject of the audit or litigation
are remitted to the taxing authority, or, if no taxes are to be remitted, the
end of the calendar year following the calendar year in which the audit or
litigation is completed.
(d) For
purposes of Code Section 409A, the Executive’s right to receive any installment
payments pursuant to this Agreement shall be treated as a right to receive a
series of separate and distinct payments. Whenever a payment under
this Agreement specifies a payment period with reference to a number of days
(e.g., “within
sixty (60) days following the date of termination”), the actual date of payment
within the specified period shall be within the sole discretion of the
Company.
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19. Limitation on
Benefits. Notwithstanding anything to the contrary contained
in this Agreement, to the extent that any of the payments and benefits provided
for under this Agreement or any other agreement or arrangement between the
Company and Executive, or any arrangement or agreement with any person whose
actions result in a change of ownership of effective control or a change in
ownership of a substantial portion of the assets of the corporation covered by
Section 280G(b)(2) (collectively, the "Payments") (i) constitute a "parachute
payment" within the meaning of Section 280G of the Code and (ii) but for this
Section 19, would be subject to the excise tax imposed by Section 4999 of the
Code, then the Payments shall be payable either (i) in full or (ii) as to such
lesser amount which would result in no portion of such Payments being subject to
excise tax under Section 4999 of the Code; whichever of the foregoing amounts,
taking into account the applicable federal, state and local income taxes,
payroll taxes and the excise tax imposed by Section 4999, results in Executive's
receipt on an after-tax basis, of the greater amount of payment and benefits.
Any reduction under clause (ii) of the preceding sentence shall be done first by
reducing any cash severance payments with the last payment reduced first; next
any equity or equity derivatives that are included at full value rather than
accelerated value; next any equity or equity derivatives based on acceleration
value shall be reduced with the highest value reduced
first. Notwithstanding the foregoing, to the extent that the Company
and Executive agree that it would not violate Code Section 409A or impact the
ability of the parties to reduce the amounts receivable, the Executive may
prescribe a different order of reduction. Unless Executive and the
Company otherwise agree in writing, any determination required under this
Section shall be made in writing by the Company's independent public accountants
(the "Accountants"), whose determination shall be conclusive and binding upon
Executive and the Company for all purposes. For purposes of making
the calculations required by this Section, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely in
reasonable, good faith interpretations concerning the application of Section
280G and 4999 of the Code. The Company and Executive shall furnish to
the Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section. If the limitation
set forth in this Section 19 is applied to reduce an amount payable to
Executive, and the Internal Revenue Service successfully asserts that, despite
the reduction, Executive has nonetheless received payments which are in excess
of the maximum amount that could have been paid to Executive without being
subjected to any excise tax, then, unless it would be unlawful for the Company
to make such a loan or similar extension of credit to Executive, Executive may
repay such excess amount to the Company as though such amount constitutes a loan
to Executive made at the date of payment of such excess amount, bearing interest
at 120% of the applicable federal rate (as determined under section 1274(d) of
the Code in respect of such loan), provided that if the recalculation of the
higher amount was then redone based on the IRS position and the Executive would
net more if no reduction took place, such reduction shall
be cancelled and the full amount paid to Executive in a lump sum
within thirty (30) days of the IRS assessment becoming final, unless this
proviso would negate the ability to use the reduction if this was not
implemented or caused a violation of Code Section 409A, in which case this
proviso shall be null and void.
[Signature
page follows]
11
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and
delivered on the date above.
|
By:
|
/s/
Xxxxx X. Xxxxxxxxx
|
|||
|
Xxxxx
X. Xxxxxxxxx
|
||||
|
Chairman
of the Board
|
||||
|
Agreed
to and Accepted:
|
||||
|
/s/
Xxxxx Xxxxxxx
|
||||
|
Xxxxx
Xxxxxxx
|
||||
12
EXHIBIT
A
Restricted Stock Award
Agreement
EXHIBIT
B
Stock Option
Agreement
14
Exhibit
C
AGREEMENT AND
RELEASE
Agreement
and Release (“Agreement”) executed this ___ day of ______, 20__, by and between
Xxxxx Xxxxxxx (“Executive”) with an address at ___________________ and GenCorp
Inc., its parents, subsidiaries and affiliates (the “Company”) with an address
at Xxxxxxx 00 xxx Xxxxxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000.
1.
Executive’s employment
shall be terminated effective ________ (“Termination Date”). As of
that date, Executive’s duties, responsibilities, office and title shall
cease. Capitalized terms used without definition in this Agreement
shall have the meanings set forth in the Employment Agreement by and between
Executive and the Company, dated January 6, 2010 (the “Employment
Agreement”).
2.
(a) If
Executive’s employment terminates pursuant to Section 6(a)(ii) (Death,
Disability or without Cause) or 6(b)(i) (for Good Reason) of the Employment
Agreement and Section 7(c) of the Employment Agreement is not applicable as of
the Termination Date, then within ten days of the Release Effective Date,
defined below, the Company shall begin to pay to Executive the payments and
benefits described in Section 7(b) of the Employment Agreement in accordance
with the Company’s standard payroll procedures and on regular
paydays.
(b) Notwithstanding
Paragraph 2(a) above, if Executive’s employment is terminated by the Company
without Cause or by Executive for Good Reason within two (2) years following a
Change in Control, then Executive shall be entitled to the payments and benefits
described in Section 7(c) of the Employment Agreement.
(c) The
Company and Executive agree that in the event that any of the payments in this
Section 2 constitute deferred compensation within the meaning of Section 409(A)
of the Internal Revenue Code of 1986, as amended (the “Code”), and Executive is
at such time a specified employee, such payment or payments that constitute
nonqualified deferred compensation within the meaning of the Code shall not be
made prior to the date which is the earlier of (A) the expiration of the six
(6)-month period measured from the date of such “separation from service” of the
Executive, and (B) thirty (30) days from the date of the Executive’s death
(within the meaning of the Code).
3.
Executive agrees and acknowledges that the payments and/or benefits
provided in Paragraph 2 above exceed any payments and benefits to which
Executive would otherwise be entitled under any policy, plan, and/or procedure
of the Company absent his signing this Agreement. Executive
acknowledges that he has been paid for work performed up to and including the
Termination Date and for accrued but unused vacation.
4.
Executive shall have up to twenty-one (21) days from the date of his
receipt of this Agreement to consider the terms and conditions of this
Agreement. Executive may accept this Agreement at any time within the
twenty-one (21) day period by executing it before a notary and returning it to
the Chairman of the Board of Directors, GenCorp Inc., Xxxxxxx 00 xxx Xxxxxxx
Xxxx, Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000, no later than 5:00 p.m. on the
twenty-first (21st) day after Executive’s receipt of this
Agreement. Thereafter, Executive will have seven (7) days to revoke
this Agreement by stating his desire to do so in writing to the Chairman of the
Board of Directors at the address listed above, and delivering it to the
Chairman of the Board of Directors no later than 5:00 p.m. on the seventh
(7th) day
following the date Executive signs this Agreement. The effective date
of this Agreement shall be the eighth (8th) day
following Executive’s signing of this Agreement (the “Release Effective Date”),
provided the Executive does not revoke the Agreement during the revocation
period. In the event Executive does not accept this Agreement as set
forth above, or in the event Executive revokes this Agreement during the
revocation period, this Agreement, including but not limited to the obligation
of the Company and its subsidiaries and affiliates to provide the payment and/or
benefits referred to in Paragraph 2 above, shall automatically be deemed null
and void.
15
5.
(a) In
consideration of the payment and/or benefits referred to in Paragraph 2 above,
Executive for himself and for his heirs, executors, and assigns (hereinafter
collectively referred to as the “Releasors”), forever releases and discharges
the Company and any and all of its parent corporations, subsidiaries, divisions,
affiliated entities, predecessors, successors and assigns, and any and all of
its or their employee benefit and/or pension plans or funds, and any of its or
their past or present officers, directors, stockholders, agents, trustees,
administrators, employees or assigns (whether acting as agents for such entities
or in their individual capacities), (hereinafter collectively referred to as the
“Releasees”), from any and all claims, demands, causes of action, fees and
liabilities of any kind whatsoever (based upon any legal or equitable theory,
whether contractual, common-law, statutory, decisional, federal, state, local or
otherwise), whether known or unknown, which Releasors ever had, now have or may
have against the Releasees by reason of any actual or alleged act, omission,
transaction, practice, conduct, occurrence, or other matter from the beginning
of the world up to and including the Release Effective Date, except for the
obligations of the Company under this Agreement.
(b) Without
limiting the generality of the foregoing subparagraph (a), this Agreement is
intended to and shall release the Releasees from any and all claims arising out
of Executive’s employment with Releasees and/or the termination of Executive’s
employment, including but not limited to any claim(s) under or arising out of
(i) Title VII of the Civil Rights Act of 1964, as amended; (ii) the Americans
with Disabilities Act, as amended; (iii) the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”) (excluding claims for accrued, vested benefits
under any employee benefit plan of the Company in accordance with the terms of
such plan and applicable law); (iv) the Age Discrimination in
Employment Act, as amended, or the Older Workers Benefit Protection Act; (v) the
California Fair Employment Practices and Housing Act; (vi) Section 806 of the
Sarbanes Oxley Act of 2002; (vii) alleged discrimination or retaliation in
employment (whether based on federal, state or local law, statutory or
decisional); (viii) the terms and conditions of Executive’s employment with the
Company, the termination of such employment, and/or any of the events relating
directly or indirectly to or surrounding that termination; and (ix) any law
(statutory or decisional) providing for attorneys’ fees, costs, disbursements
and/or the like.
(c) As
a further consideration and inducement for this Agreement, to the extent
permitted by law, Executive hereby waives and releases any and all rights under
Section 1542 of the California Civil Code or any analogous state, local, or
federal law, statute, rule, order or regulation that Executive had or may have
with respect to the Releasees. California Civil Code Section 1542
reads as follows:
16
A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
Executive
hereby expressly agrees that this Agreement shall extend and apply to all
unknown, unsuspected and unanticipated injuries and damages, as well as any that
are now disclosed, arising prior to Executive’s execution of this
Agreement. This release does not extend to those rights, which as a
matter of law cannot be waived, including but not limited to unwaivable rights
Executive may have under the California Labor Code. Nothing in this
Agreement shall limit Executive’s right to file a charge or complaint with any
state or federal agency or to participate or cooperate in such a
manner.
(d) Notwithstanding
the foregoing, nothing in this Agreement shall be construed to prevent Executive
from filing a charge with or participating in an investigation conducted by any
governmental agency, including, without limitation, the United States Equal
Employment Opportunity Commission (“EEOC”) or applicable state or city fair
employment practices agency, to the extent required or permitted by
law. Nevertheless, Executive understands and agrees that he is
waiving any relief available (including, for example, monetary damages or
reinstatement), under any of the claims and/or causes of action waived in
Paragraphs 6(a) and (b), including but not limited to financial benefit or
monetary recovery from any lawsuit filed or settlement reached by the EEOC or
anyone else with respect to any claims released and waived in this
Agreement.
(e) Nothing
in this Agreement shall release Executive’s rights (i) as a stockholder of the
Company; (ii) to any claims that arise following the execution of this
Agreement; (ii) to payment of the Accrued Obligations (as defined in the
Employment Agreement); (iii) to payment of the severance payments and benefits
described in Section 2 of this Agreement; (iv) to indemnification pursuant to
the terms set forth in Section 14 of the Employment Agreement and pursuant to
any other agreements currently in effect indemnifying Executive ; (v) to any
claims for accrued vested benefits or rights under any other employee benefit
plan, policy or arrangement (whether tax-qualified or not) maintained by the
Company; (vi) to equity awards that are vested or which may vest under any
equity, equity-based, profits interest, stock option, or similar plans,
agreements, and/or notices to the extent set forth in such awards or as
otherwise provided for in such documents, which awards shall be subject to all
the terms and conditions of such document.
6.
(a) Executive
agrees that he has not and will not engage in any conduct that is injurious to
the Company’s or the Releasees’ reputation or interest, including but not
limited to publicly disparaging (or inducing or encouraging others to publicly
disparage) the Company or the Releasees. The foregoing shall not be
violated by truthful testimony, if provided pursuant tto the terms of Section
7(b).
17
(b) Executive
acknowledges that he has returned to the Company any and all originals and
copies of documents, materials, records, credit cards, keys, building passes,
computers, blackberries and other electronic devices or other items in his
possession or control belonging to the Company or containing proprietary
information relating to the Company pursuant to Section 8(b) of the Employment
Agreement. Executive may retain the Executive’s rolodex and similar
address books, provided, that such items only include contact
information.
(c) Executive
acknowledges that the terms of Section 8, Confidentiality Agreement and
Assignment of Intellectual Property, of the Employment Agreement are
incorporated herein by reference, and Executive agrees and acknowledges that he
is bound by its terms.
7.
(a)
Executive will cooperate with the Company and/or its subsidiaries and
affiliates and its/their counsel in connection with any investigation,
administrative proceeding or litigation relating to any matter in which
Executive was involved or of which Executive has knowledge.
(b) Executive
agrees that, in the event he is subpoenaed by any person or entity (including,
but not limited to, any government agency) to give testimony (in a deposition,
court proceeding or otherwise) that in any way relates to Executive’s employment
with the Company, he will give prompt notice of such request to the Chairman of
the Board of Directors, GenCorp Inc., and will make no disclosure until the
Company has had a reasonable opportunity to contest the right of the requesting
person or entity to such disclosure, provided that nothing herein shall prevent
Executive from complying with the requirements of the law.
8.
Prior to public announcement, the terms and conditions of this Agreement
are and shall be deemed to be confidential, and shall not be disclosed by
Executive to any person or entity without the prior written consent of the
Chairman of the Board of Directors, GenCorp Inc., except if required by law, and
to Executive’s accountants, attorneys, and spouse, provided that they agree to
maintain the confidentiality of this Agreement. Executive further
represents that he has not disclosed the terms and conditions of this Agreement
to anyone other than his attorneys, accountants and spouse.
9.
The making of this Agreement is not intended, and shall not be construed,
as an admission that the Releasees have violated any federal, state or local law
(statutory or decisional), ordinance or regulation, breached any contract, or
committed any wrong whatsoever against Executive.
10. The
parties agree that this Agreement may not be used as evidence in a subsequent
proceeding except in a proceeding to enforce the terms of this
Agreement.
11.
Executive acknowledges that: (a) he has carefully read this Agreement in
its entirety; (b) he has had an opportunity to consider fully the terms of this
Agreement; (c) he has been advised by the Company in writing to consult
with an attorney of his choosing in connection with this Agreement; (d) he fully
understands the significance of all of the terms and conditions of this
Agreement and he has discussed it with his independent legal counsel, or has had
a reasonable opportunity to do so; (e) he has had answered to his satisfaction
any questions he has asked with regard to the meaning and significance of any of
the provisions of this Agreement; and (f) he is signing this Agreement
voluntarily and of his own free will and assents to all the terms and conditions
contained herein.
18
12. This
Agreement is binding upon, and shall inure to the benefit of, the parties and
their respective heirs, executors, administrators, successors and
assigns.
13. If any
provision of this Agreement shall be held by a court of competent jurisdiction
to be illegal, void, or unenforceable, such provision shall be of no force and
effect. However, the illegality or unenforceability of such provision
shall have no effect upon, and shall not impair the enforceability of, any other
provision of this Agreement; provided, however, that, upon any finding by a
court of competent jurisdiction that the release and covenants provided for by
Paragraph 6 above is illegal, void, or unenforceable, Executive agrees to
execute a release, waiver and/or covenant that is legal and
enforceable. Finally, any breach of the terms of Paragraphs 7, 8
and/or 9 above shall constitute a material breach of this Agreement as to which
the Company may seek appropriate relief in a court of competent
jurisdiction.
14. This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of California, without regard to the
conflict of laws provisions thereof. Actions to enforce the terms of
this Agreement, or that relate to Executive’s employment with the Company shall
be submitted to the exclusive jurisdiction of any state or federal court sitting
in the County of Sacramento, State of California.
15. This
Agreement may be executed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument of this Agreement.
16. This
Agreement (including any exhibits attached hereto) constitutes the complete
understanding between the parties with respect to the termination of the
Executive’s employment at the Company and supersedes any and all agreements,
understandings, and discussions, whether written or oral, between the
parties. No amendment of any provision of this Agreement shall be
valid unless the same shall be in writing and signed by each of the parties
hereto.
[Signature
page follows]
19
[Signature
page to Agreement and Release]
|
Dated:
|
|
||
|
Xxxxx
Xxxxxxx
|
|||
|
GENCORP
INC.
|
||||
|
By:
|
|
Date:
|
||
|
Xxxxx
X. Xxxxxxxxx
|
||||
|
Chairman
of the Board of Directors
|
||||
Exhibit
D
Intellectual
Property Prior to Employment
2
