exv10w5



 





Exhibit 10.5




BENEFITS RESTORATION PLAN FOR SALARIED EMPLOYEES

OF GENCORP INC. AND CERTAIN SUBSIDIARY COMPANIES




PURPOSE




     The purpose of this Plan is to restore the pension and profit sharing plan benefits which
eligible employees and their beneficiaries would otherwise lose as a result of Internal Revenue
Code limitations upon contributions to, and payment of benefits from, tax qualified pension and
profit sharing plans. By restoring such benefits, this Plan permits the total benefits of such
employees to be provided on the same basis as is applicable to all other employees under such
plans. The terms and provisions of this Plan are as follows:



SECTION 1

DEFINITIONS




     Wherever used herein:



     (i) “Beneficiary” means a named beneficiary, joint annuitant or surviving spouse of a deceased
Participant.



     (ii) “Code” means the Internal Revenue Code of 1986, as presently in effect or hereafter
amended.



     (iii) “Company” means GenCorp Inc.



     (iv) “Effective Date” means December 1, 1982, except as otherwise specifically provided.



     (v) “Member Company” means the Company, Aerojet-General Corporation (“Aerojet”) and any of
their subsidiaries which are designated as Member Companies by the Company’s Administrative
Committee.



     (vi) “Participant” means an employee of a Member Company who is a participant under the
Pension or Profit Sharing Plans (as defined below) or is a Beneficiary receiving a benefit under
such plans, provided, however, that no employee shall become a Participant prior to the date such
employee’s employer became a Member Company.



     (vii) “Pension or Profit Sharing Plans” means the pension, savings and profit sharing plans of
a Member Company applicable to salaried employees.



 









 





     (viii) “Plan” means the plan set forth in this instrument known as the “Benefits Restoration
Plan for Salaried Employees of GenCorp Inc. and Certain Subsidiary Companies,” as it may be amended
from time to time.



     (ix) “Administrative Committee” means the GenCorp Administrative Committee as appointed by the
GenCorp Board of Directors.



     (x) “Change in Control” means the occurrence of any of the following events, subject to the
provisions of paragraph (E) hereof:




     (A) All or substantially all of the assets of the Company are sold or transferred to
another corporation or entity, or the Company is merged, consolidated or reorganized into or
with another corporation or entity, with the result that upon conclusion of the transaction
less than 51% of the outstanding securities entitled to vote generally in the election of
directors or other capital interests of the surviving, resulting or acquiring corporation or
entity are beneficially owned (as that term is defined in Rule 13-d3 under the Securities
Exchange Act of 1934 [“Exchange Act"], as amended) (such ownership, “Beneficial Ownership”)
by the shareholders of the Company immediately prior to the completion of the transaction;
or




     (B) Any person (as the term “person” is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act (a “Person”)) has become the Beneficial Owner of securities representing
20% or more of the combined voting power of the then-outstanding voting securities of the
Company; or




     (C) The individuals who, as of the later of (i) January 1, 2006, or (ii) the
Participant’s date of hire by the Company, constituted the Board (the “Incumbent Directors”)
cease for any reason, including without limitation as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute a majority thereof, provided that (1)
any individual becoming a director of the Company subsequent to the later of (i) January 1,
2006, or (ii) the Participant’s date of hire by the Company shall be considered an Incumbent
Director if such person’s election or nomination for election was approved by a vote of at
least two-thirds of the other Incumbent Directors and (2) any individual whose initial
assumption of office is in connection with or as a result of an actual or threatened
election contest relating to the election of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a “person” (as that term is used in
Sections 13(d) and 14(d) of the Exchange Act) other than the Board, including by reason of
agreement intended to avoid or settle any such actual or threatened contest or solicitation
shall not be considered an Incumbent Director; or




     (D) The Board determines that (1) any particular actual or proposed merger,
consolidation, reorganization, sale or transfer of assets, accumulation of shares or tender
offer for shares of the Company or other transaction or event or series of transactions or
events will, or is likely to, if carried out, result in a Change in Control falling within
paragraph (A), (B) or (C) hereof and (2) it is in the best interests of the Company and its
shareholders, and will serve the intended purposes of the Change in Control provisions



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of
this Program and other compensation and benefit programs, plans and agreements of
the Company, if a Change in Control shall be deemed to have occurred.




     (E) Notwithstanding the foregoing provisions of this Section 1(x):




     (1) If any such merger, consolidation, reorganization, sale or transfer of
assets, or tender offer or other transaction or event or series of transactions or
events mentioned in paragraph (D) hereof shall be abandoned, or any such
accumulations of shares shall be dispersed or otherwise resolved, the Board may upon
a majority vote, including a majority vote of all then-continuing Incumbent
Directors (such vote, a “Majority Vote”), by notice to the Executive, nullify the
effect thereof and a Change in Control shall be deemed not to have occurred, but
without prejudice to any action that may have been taken prior to such
nullification.




     (2) Unless otherwise determined in a specific case by the Board, a Change in
Control shall not be deemed to have occurred for purposes of paragraph (B) hereof
solely because (a) the Company, (b) a subsidiary of the Company, or (c) any
Company-sponsored employee stock ownership plan or any other employee benefit plan
of the Company or any subsidiary of the Company either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D, Schedule
14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or item
therein) under the Exchange Act disclosing Beneficial Ownership by it of shares of
the then-outstanding voting securities of the Company, whether in excess of 20% or
otherwise, or because the Company reports that a change in control of the Company
has occurred or will occur in the future by reason of such beneficial ownership.




     (3) For the avoidance of doubt, the fact that a particular event may not
constitute a “Change in Control” under any subparagraph of this Section 1(x) will
not affect whether a Change in Control shall be determined to have occurred under
any other subparagraph.



SECTION 2

ELIGIBILITY




     2.1 Eligibility. A Participant who qualifies for a benefit under either the Pension
or Profit Sharing Plans and who incurs a reduction in such benefit as a result of the Code’s
limitations upon contributions to, and payment of benefits from, such plans (except a reduction
mandated by the Actual Deferral Percentage test contained in Section 401(k) of the Code) shall be
eligible to participate in this Plan.



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SECTION 3

BENEFITS




     3.1 Amount of Benefit. The benefit provided by this Plan shall be an amount equal to
the difference, if any, between (a) the aggregate amount of benefit to which the Participant would
be entitled under each of the Pension or Profit Sharing Plans computed without regard to the Code’s
limitations upon contributions to, and payment of benefit from, such plans (except a reduction
mandated by the Actual Deferral Percentage test contained in Section 401(k) of the Code) and (b)
the aggregate amount of benefit to which the Participant would be entitled under each of the
Pension or Profit Sharing Plans after giving effect to all such limitations and all such
exclusions. In addition, each allocation under this Plan attributable to the restoration of profit
sharing plan benefits shall be credited, beginning September 1, 1985, with a rate of investment
return which the Participant would have earned if he were credited with plan shares in the profit
sharing plan in which the employee is a participant, except, however, that for purposes of this
Plan, all profit sharing plan elections to participate in the GenCorp Stock Fund shall be treated
as elections to participate in the Interest Accumulation Fund.



     In connection with the spin-off of the Company’s Performance Chemicals and Decorative and
Building Products businesses into a separate and independent public company, OMNOVA Solutions Inc.
(“OMNOVA”), the Company’s obligations as of September 30, 1999 to pay benefits under the Plan to
any Participant who, as of September 30, 1999, (i) was an active employee of the Company whose
employment was transferred to OMNOVA on that date and who consented in writing to the transfer
described herein, or (ii) was a former employee of the Company who had terminated employment from
(A) an active business location of OMNOVA or (B) the Company’s former business location in
Newcomerstown, Ohio were transferred to, and assumed by, OMNOVA. To the extent so transferred, the
Company shall have no obligation to pay any benefits under the Plan to a Participant, and the
obligations assumed by OMNOVA will be paid to the Participant in accordance with the terms of the
Benefits Restoration Plan of OMNOVA Solutions Inc.



     In connection with the sale of the Company’s Aerojet Electronics and Information Systems
Group (“AES”) to Northrop Grumman Systems Corporation (“Northrop”), the Company’s obligations
as of the closing of such sale (“Closing Date”) to pay benefits under the Plan to any
Participant who, as of the Closing Date, was an active employee of AES whose employment was
transferred to Northrop and who consented in writing to the transfer described herein, will be
transferred to and assumed by Northrop. To the extent so transferred, the Company shall have no
obligation to pay any benefits under the Plan to a Participant, the Participant shall cease to
accrue benefits under the Plan, and the obligations assumed by Northrop will be paid to the
Participant in accordance with the terms of the Northrop Grumman Deferred Compensation Plan.



     3.2 Allocations. Except as hereinafter specifically provided, the allocation to plan
accounts under this Plan attributable to the restoration of profit sharing plan benefits shall be
made in the same manner and shall be subject to the same conditions as would have been applicable
if such allocations were made to the profit sharing plan, except, however, that (a) with respect to
contributions pursuant to a Section 401(k) election, a Plan Participant must contribute



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to this Plan for the remainder of any calendar year in which applicable Code limitations are
reached at the rate specified in his deferral election under this Plan made prior to such calendar
year, and (b) 401(k) after tax contributions shall be treated as deferred income, provided an
appropriate deferral election is signed by the Plan Participant.



     3.3 Benefit Payments. The benefit payable under this Plan which is attributable to
the restoration of profit sharing plan benefits shall be paid to the Participant (or to the
Participant’s Beneficiary under such plan in case of the Participant’s death) in a single lump sum
as soon as practicable following the Participant’s termination of employment. The benefit payable
under this Plan which is attributable to the restoration of pension plan benefits shall be paid in
the same manner and to the same persons prescribed by the provisions of the pension plan which
would have been applicable if such benefit were paid under the pension plan. Benefits under this
Plan shall be payable from the general assets of the Company, and participation hereunder shall not
cause a Participant to have any title to, or beneficial ownership in, any of the assets of the
Company. Nothing in this Plan shall operate or be construed to modify, amend or affect the terms
and provisions of the Pension or Profit Sharing Plans in any way.



     3.4. Change in Control. Notwithstanding any other provision of this Plan, upon the
occurrence of a Change in Control, benefits will be determined and paid in accordance with this
Section 3.4:




     (a) Vesting. Upon the occurrence of a Change in Control, the (i) benefits of
a Participant with whom the Company has entered into a Severance Agreement which have
accrued but not vested under this Plan, and (ii) benefits of such a Participant which have
accrued but not vested under the applicable Pension or Profit Sharing Plans, shall become
vested and payable in accordance with the terms of this Plan.




     (b) Funding.




     (i) Upon the occurrence of a Change in Control, the performance of the
Company’s obligations under this Plan shall be secured by amounts deposited or to be
deposited in trust pursuant to a trust agreement to which the Company shall be a
party, providing for payment of benefits in accordance with the terms of this Plan.
Any failure by the Company to satisfy its obligations under this Section 3.4(b)
shall not limit the rights of any Participant hereunder.




     (ii) Upon the earlier to occur of (A) a Change of a Control or (B) a
declaration by the Board of Directors of the Company that a Change in Control is
imminent, the Company shall promptly, to the extent it has not previously done so,
and in any event within five business days, transfer to the trustee of such trust,
to be added to the principal of the trust, a sum equal to




     (I) the aggregate account balances, on the date of the Change in
Control (or on such fifth business day if the Board has declared a Change in
Control to be imminent), of Participants who have benefits to be paid
hereunder with respect to the applicable Profit Sharing Plans, plus



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     (II) the present value on the date of the Change in Control (or on such
fifth business day if the Board has declared a Change in Control to be
imminent) of the benefits to be paid to the Participants hereunder with
respect to any applicable Pension Plans, such present value to be computed
(a) assuming that benefit payments to any Participant will commence on such
Participant’s earliest retirement date under the applicable Pension Plan,
and (b) applying a discount factor which is equal to the yield to maturity,
as reported in the Midwest Edition of The Wall Street Journal, of
the 26-week Treasury Bill most recently issued as of the date of the Change
in Control.




Any payments of benefits hereunder by the trustee shall, to the extent thereof,
discharge the Company’s obligation to pay benefits hereunder, it being the intent of
the Company that assets in such trusts be held as security for the Company’s
obligation to pay benefits under this Plan.




     (iii) Subject to the foregoing, a Participant shall have the status of a
general unsecured creditor of the Company and shall have no right to, or security
interest in, any assets of the Company.



     3.5 Lump Sum Payments. This section applies only to pension benefits accrued prior to
January 1, 2005.




     (a) Election. Amounts due to a participant under this Plan may be paid in a
lump sum in accordance with the following:




     (i) Former employees will be able to elect
a lump sum payment of their deferred interest, subject to a 10%
“haircut” and all applicable tax withholding.




     (ii) Active employees may receive lump-sum
payments upon termination of employment based upon:




     (A) an election made at least one
year in advance of termination; or




     (B) an election which is made both
(1) at least six months in advance of termination, and (2) in
the calendar year prior to termination; or




     (C) where an advance election is not
possible (e.g., in the case of a short-notice
involuntary termination), a request for a lump sum payment which
is approved by the Administration Committee in its full
discretion.




     (b) Amount. The amount of any lump sum payment hereunder will be computed
using the then-current interest rate for 30-year Treasury securities.



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SECTION 4

ADMINISTRATION




     4.1 Administrative Committee and Powers. The Administrative Committee shall
administer this Plan and shall have, exercise and perform all of the powers, rights, authority and
duties set forth in each of the Pension or Profit sharing Plans with the same effect as if
similarly set forth herein with respect to this Plan. Any determination or decision of the
Administrative Committee shall be conclusive and binding on all persons having or claiming to have
any interest whatever under this Plan.



SECTION 5

MISCELLANEOUS




     5.1 Amendment and Termination. The Company reserves the right at any time and from
time to time, by resolution of its Board of Directors or its delegate, to amend or terminate this
Plan; provided, however, that no such amendment or termination shall operate retroactively so as to
affect adversely any rights to which a Participant may be entitled under the provisions of this
Plan as in effect prior to such action.



     5.2 No Alienation of Benefits. No Participant may assign, anticipate or otherwise
encumber any payment due under this Plan. Except as may otherwise be required by law, any payment
due under this Plan shall be exempt from the claims of the Participant’s creditors.



     5.3 No Enlargement of Employment Rights. The provisions of the Pension or Profit
Sharing Plans relative to employment rights shall be applicable to this Plan with the same effect
as though set forth in full herein.



     5.4 No Requirement to Fund. The Company shall not be required to reserve or otherwise
set aside funds for the payment of its obligations hereunder.



     5.5 Laws Governing. This Plan shall be construed in accordance with and governed by
the laws of the State of Ohio.




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