Exhibit 10.4
GENCORP INC.
2009 EQUITY AND PERFORMANCE INCENTIVE PLAN
Director Stock Appreciation Rights Agreement
     WHEREAS,                      (the “Rights Holder”) is a Director of
GenCorp Inc. (the “Company”); and
     WHEREAS, the grant of stock appreciation rights to the Rights Holder has
been duly authorized by a resolution of the Corporate Governance and Nominating
Committee (the “Committee”) of the Board of Directors and by the Board of
Directors (the “Board”) of the Company effective as of                     ,
20___(the “Date of Grant”).
     NOW, THEREFORE, pursuant to the Company’s 2009 Equity and Performance
Incentive Plan (the “Plan”), the Company hereby grants to Rights Holder
                                         (___) Free-Standing Appreciation Rights
(“SAR”) pursuant to this Stock Appreciation Rights Agreement (the “Agreement”)
entitling Rights Holder to obtain, upon the exercise of SARs on the terms and
conditions set forth herein, a cash payment as determined herein.
     1. Exercisability of SARs.
          (a) Unless and until terminated as hereinafter provided, the SARs
subject to this Agreement will become exercisable, (i) to the extent of one-half
of the total number of SARs granted, on the date which is six months after the
Date of Grant, and (ii) with respect to the remaining one-half of such SARs, on
the date which is one year after the Date of Grant, on the condition that the
Rights Holder remains a Director of the Company on such dates. To the extent
that the SARs will have so become exercisable, the SARs may be exercised in
whole or in part from time to time.
          (b) Notwithstanding the provisions of Subsection (a) of this
Section 1, the SARs will become immediately exercisable in full upon the
occurrence of a change in control of the Company. For purposes of this
Agreement, the term “change in control” will have the meaning given such term
under the Plan as in effect on the Date of Grant.
     2. Exercise of SARs.
          (a) SARs may be exercised only by delivery of a signed and dated SAR
Exercise Form to the Company in accordance with instructions provided therewith,
which Exercise Form shall state the number of SARs to be exercised. For all
purposes, including the determination of applicable tax reporting and
withholding, the exercise date will be the date entered next to the Rights
Holder’s signature on the SAR Exercise Form (the “Exercise Date”). The Company
will not fill in the Exercise Date under any circumstances.

 

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          (b) The Exercise Date can be no earlier than the date the SAR Exercise
Form is delivered to the Company regardless of the method of delivery (i.e., by
fax, by hand, by overnight courier, etc.)
     3. Payment of SAR Value.
          (a) Upon the exercise of SARs in accordance with Section 2, the
Company shall make a cash payment for the SAR Value relating to such exercise to
the Rights Holder.
          (b) SAR Value shall be the product of (i) the number of Shares with
respect to which the SAR is exercised, and (ii) the excess of the Fair Market
Value of a Share on the date of exercise over $___(the “Grant Price”).
          (c) Fair Market Value shall mean 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 the
SARs granted to the Rights Holder are substantially modified subsequent to the
Effective Date of the Plan such that fair value accounting for such SARs becomes
required, the Committee shall have the ability to determine the SAR’s Fair
Market Value based on the relevant facts and circumstances.
     4. Term of SARs.
          (a) Exercisable SARs. SARs that have become exercisable will terminate
on the date which is seven years from the Date of Grant.
          (b) SARs Not Yet Exercisable. SARs that have not become exercisable
prior to the termination of the Rights Holder’s service as a Director with the
Company for any reason will terminate on the date of termination of such
service.
     In the event that the Rights Holder’s service as a Director with the
Company is terminated for cause, all SARs will terminate as of the time of such
termination, notwithstanding any other provision of this Agreement.
     5. Transferability.
          (a) SARs may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, except by will or the laws of descent and
distribution or otherwise as required by law and may be exercised during the
lifetime of the Rights Holder only by the Rights Holder or the Rights Holder’s
guardian or legal representative acting on behalf of the Rights Holder in a
fiduciary capacity under state law and court supervision.

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          (b) Notwithstanding the provisions of Section 5(a), SARs shall be
transferable by a Rights Holder without payment of consideration therefore by
the transferee, to any one or more members of the Rights Holder’s Immediate
Family (“Immediate Family” as defined in Rule 16a-1(e) under the Securities
Exchange Act of 1934, as amended, or any successor rule to the same effect, as
in effect from time to time) (or to one or more trusts established solely for
the benefit of such Rights Holder and/or one or more members of the Rights
Holder’s Immediate Family or to one or more partnerships in which the only
partners are such Rights Holder and/or members of the Rights Holder ‘s Immediate
Family); provided, however, that (i) no such transfer shall be effective unless
reasonable prior notice thereof is delivered to the Company and such transfer is
thereafter effected in accordance with any terms and conditions that shall have
been made applicable thereto by the Company or the Board and (ii) any such
transferee shall be subject to the same terms and conditions hereunder as the
Rights Holder. Following transfer, any such SARs shall continue to be subject to
the same terms and conditions as were applicable immediately prior to transfer,
provided that the term “Rights Holder” shall be deemed to refer to the
transferee. In the event of termination of service as a Director, Sections 1 and
4 shall continue to be applied with respect to the original Rights Holder,
following which the SARs shall be exercisable by the transferee only to the
extent, and for the period specified in this Agreement.
     6 Adjustments. 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, this Agreement, in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.4 of the Plan) 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 the Rights Holder under the Plan.
     7. Taxes/Withholding.
          (a) The Company will compute and report all taxes related to an
exercise of SARs based upon the Fair Market Value of the Shares on the Exercise
Date. The amount of taxable income reported in connection with a SAR exercise
will not be affected by previous or subsequent market fluctuations.
          (b) The Company will withhold all applicable federal, state, local,
FICA, Social Security or foreign taxes in connection with the exercise of SARs.
     8. Section 409A. SARs granted hereunder may be amended from time to time as
may be necessary or appropriate to comply with the Section 409A Rules.
     9. Retention Rights. The Plan and this Agreement will not confer upon the
Rights Holder any right with respect to the continuance of service as a Director
with the Company and

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will not interfere in any way with any right that the Company would otherwise
have to terminate the service of the Rights Holder as a Director at any time.
     10. Relation to Other Benefits. Any economic or other benefit to the Rights
Holder under this Agreement will not be taken into account in determining any
benefits to which the Rights Holder may be entitled under any retirement or
other benefit or compensation plan maintained by the Company unless provided
otherwise in any such plan.
     11. Notices. Any notice necessary under this Agreement will be addressed to
the Company or the Committee at the principal executive office of the Company
and to the Rights Holder at the address appearing in the personnel records of
the Company for such Rights Holder, or to either party at such other address as
either party may designate in writing to the other. Any such notice will be
deemed effective upon receipt thereof by the addressee.
     12. Agreement Subject to the Plan. The SARs granted under this Agreement
and all of the terms and conditions hereof are subject to all of the terms and
conditions of the Plan. In the event of any inconsistency between this Agreement
and the Plan, the terms of the Plan will govern.
     13. Amendments. Any amendment to the Plan will be deemed to be an amendment
to this Agreement to the extent that the amendment is applicable hereto;
provided, however, that no amendment will adversely affect the rights of the
Rights Holder under this Agreement without the Rights Holder’s consent.
     15. Severability. In the event that one or more of the provisions of this
Agreement is invalidated for any reason by a court of competent jurisdiction,
any provision so invalidated will be deemed to be separable from the other
provisions hereof, and the remaining provisions hereof will continue to be valid
and fully enforceable.
     16. Governing Law. This Agreement will be construed and governed in
accordance with the laws of the State of Ohio.

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     17. Certain Defined Terms. In addition to the terms defined elsewhere
herein, when used in the Agreement, terms with initial capital letters have the
meaning given such term under the Plan, as in effect from time to time.
     This Agreement is effective as of the ___ day of                     ,
20___.

            GENCORP INC.
      By:           J. Scott Neish        Interim Chief Executive Officer
and Interim President     

     The undersigned Rights Holder hereby acknowledges receipt of an executed
original of this Stock Appreciation Rights Agreement and accepts the SARs
subject to the applicable terms and conditions of the Plan and the terms and
conditions hereinabove set forth.

           
 
 
 
Rights Holder    

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