Document:

exv10w2

 

Exhibit 10.2

LETTER AGREEMENT

     THIS LETTER AGREEMENT (this “Agreement”), dated as of March 5, 2008 (the
“Effective Date”) is made and entered into by and between GenCorp Inc., an Ohio corporation
(the “Company”), and J. Scott Neish (the “Executive”).

Recitals:

     A. The Company and Steel Partners II, L.P. are parties to that certain Second Amended and
Restated Shareholder Agreement dated March 5, 2008 (the “Shareholder Agreement”).

     B. Pursuant to the Shareholder Agreement, Terry L. Hall resigned as Chief Executive Officer
and President of the Company on the Effective Date.

     C. Executive is currently Vice President of the Company and President of Aerojet-General
Corporation (“Aerojet”), a subsidiary of the Company.

     D. On the Effective Date, the Board of Directors of the Company (the “Board”)
appointed Executive as interim Chief Executive Officer and interim President of the Company in
accordance with Section 2.1(b) of the Shareholder Agreement subject to the terms and conditions set
forth in this Agreement.

     NOW, THEREFORE, the Company and Executive agree as follows:

	1.	 	Executive will serve as interim Chief Executive Officer and interim President of the Company
at the pleasure of the Board until such time as a New CEO (as defined in the Shareholder
Agreement) is appointed by the Board. Additionally, during such time, Executive will continue
to serve as Vice President and President, Aerojet-General Corporation.

	2.	 	In consideration of Executive’s serving as interim Chief Executive Officer and interim
President, the Company agrees as follows:

	 	(a)	 	At the earlier of (i) November 30, 2008, and (ii) the appointment of a New CEO,
the Company shall pay to Executive a one-time bonus in the amount of three hundred
fifty thousand dollars ($350,000);
	 
	 	(b)	 	If Executive serves in the positions of interim Chief Executive Officer and
interim President after November 30, 2008, the Board shall determine a suitable
additional bonus;
	 
	 	(c)	 	If Executive leaves the employ of the Company or its subsidiaries on or prior
to March 4, 2010, either voluntarily or involuntarily (except with Cause (as defined in
that certain severance agreement by and between the Company and Executive dated on or
about August 10, 2006 (the “Severance Agreement”)), the Company shall purchase
the condominium owned by Executive on the Effective Date and located
at ________________, Sacramento, California at the then prevailing

 

 

	 	 	 	fair market value. The terms and conditions of such purchase shall be substantially
similar to the Company’s policy with respect executive relocation. Executive shall
not be entitled to other benefits with respect to any relocation.

	3.	 	As a condition to the appointment to the positions of interim Chief Executive Officer and
interim President, and the receipt of the benefits set forth in paragraph 2 hereof, Executive
hereby acknowledges that (i) the removal of Executive from one or both of the positions of
interim Chief Executive Officer and interim President in and of itself shall not give rise to
the deemed occurrence of Constructive Termination as defined in the Severance Agreement, and
(ii) Executive shall not be deemed a “Corporate Headquarters” employee eligible for the
benefits set forth under Section 4.12 of the GenCorp Consolidated Pension Plan (Program B).

	4.	 	The validity, interpretation, construction and performance of this Agreement will be governed
by and construed in accordance with the substantive laws of the State of California, without
giving effect to the principles of conflict of laws of such State.

	5.	 	This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same agreement.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered
as of the date first above written.

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	/s/ J. Scott Neish
 	 
	 	J. SCOTT NEISH 	 
	 	 	 
	 
	 	GENCORP INC.

 	 
	 	By:  	/s/ Yasmin R. Seyal
 	 
	 	 	Yasmin R. Seyal 	 
	 	 	Senior Vice President and

Chief Financial Officer 	 
	 

2exv10w1

 

EXHIBIT 10.1

FORM OF WARRANT

WARRANT NO. AB-15

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THOSE LAWS OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH DISPOSITION IS
IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

	 	 	 	 	 
	 	Right to Purchase 714,285 Shares of:

Common Stock of Tri-Isthmus Group, Inc.

 	 

TRI-ISTHMUS GROUP, INC.

Common Stock Purchase Warrant

     TRI ISTHMUS GROUP, INC., a Delaware corporation (the “Company”), hereby certifies
that as of October 30, 2007 (the “Issue Date”), for value received, SMP Investments I, LLC,
3366 N. Torrey Pines Court, Suite 210, La Jolla, California 92037 (the “Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company at any time on or
before 5:00 p.m., Pacific Daylight Time, on October 30, 2009 (the “Expiration Date”), SEVEN
HUNDRED FOURTEEN THOUSAND, TWO HUNDRED EIGHTY FIVE (714,285) fully paid and nonassessable shares of
common stock of the Company, par value $0.01 per share (the “Common Stock”), at a purchase
price per share equal to the Purchase Price, as defined herein. The number of such shares of
Common Stock and the Purchase Price are subject to adjustment as provided in this Warrant. The
initial purchase price for shares subject to this Warrant will be $0.45 per share (the “Initial
Purchase Price”), and will be adjusted from time to time as provided herein. The Initial
Purchase Price or, if such price has been adjusted, the price per share of Common Stock as last
adjusted pursuant to the terms hereof is referred to as the “Purchase Price” herein.

     1. Exercise
of Warrant; Vesting.

          (a) Subject to (b) below, this Warrant may be exercised by the Holder hereof in full at any
time until the Expiration Date by surrender of this Warrant and the subscription form annexed
hereto (duly executed by the Holder), to the Company, and by making payment in cash or by certified
or official bank check payable to the order of the Company, in the
amount obtained by multiplying (i) the number of shares of Common Stock subject to the Warrant by
(ii) the Purchase Price then in effect. The shares of Common Stock subject to this Warrant shall
initially be one-third vested, rounded downwards to the nearest share of Common Stock. Holder
shall acquire a vested interest with respect to the remaining two-thirds of the shares of Common
Stock subject to this Warrant upon the passing of the one year anniversary of the Issue Date.

 

 

          (b) In the event Holder ceases to be a member of the Advisory Board of the Company, Holder
shall have sixty (60) days from the date Holder ceases to be a member of the Advisory Board (the
“End Date”) to exercise all shares of Common Stock underlying this Warrant which have vested as of
the End Date. Any such exercise shall be in accordance with the provisions of (a) above, and
failure to exercise within the time period shall result in Holder’s forfeiture of all rights and
interest in this Warrant.

     2. Delivery of Stock Certificates, etc., on Exercise. As soon as practicable after
the exercise of this Warrant, the Company will cause to be issued in the name of and delivered to
the Holder hereof a certificate for the number of fully paid and nonassessable shares of Common
Stock (or Other Securities) to which the Holder shall be entitled on such exercise, plus, in lieu
of any fractional share to which the Holder would otherwise be entitled, cash equal to such
fraction multiplied by the then current fair market value (as reasonably determined by the Company)
of one full share, together with any other stock or other securities or property (including cash,
where applicable) to which the Holder is entitled upon such exercise. “Other Securities”
shall mean any stock (other than Common Stock) and other securities of the Company or any other
person (corporate or otherwise) which the Holder at any time shall be entitled to receive, or shall
have received, on the exercise of this Warrant, in lieu of or in addition to Common Stock, or which
at any time shall be issuable or shall have been issued in exchange for or in replacement of Common
Stock or Other Securities pursuant to Sections 3 or 4.

     3. Adjustment.

          (a) Initial Purchase Price; Subsequent Adjustment of Price and Number of Purchasable
Shares. The Initial Purchase Price will be adjusted from time to time as provided below. Upon
each adjustment of the Purchase Price, the Holder will thereafter be entitled to purchase, at the
Purchase Price resulting from such adjustment, the number of shares of Common Stock obtained by
multiplying the Purchase Price in effect immediately before such adjustment by the number of shares
of Common Stock purchasable pursuant to this Warrant immediately before such adjustment and
dividing the product by the Purchase Price resulting from such adjustment.

          (b) Adjustment for Stock Splits and Combinations. If the Company at any time or from
time to time after the date of this Warrant effects a subdivision of the outstanding shares of
Common Stock, by stock split or otherwise, the Purchase Price then in effect immediately before
that subdivision shall be proportionately decreased; and, conversely, if the Company at any
time or from time to time after the date of this Warrant combines the outstanding shares of Common
Stock, by reverse stock split or otherwise, the Purchase Price then in effect immediately before
that combination shall be proportionately increased. Any adjustment under this Section 3(b) shall
become effective at the close of business on the date the subdivision or combination becomes
effective.

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          (c) Adjustment for Certain Dividends and Distributions. In the event the Company at
any time or from time to time after the date of this Warrant either makes, or fixes a record date
for the determination of holders of Common Stock entitled to receive, a dividend or other
distribution payable in additional shares of Common Stock, then and in each such event the Purchase
Price then in effect shall be decreased as of the time of such issuance or, in the event such a
record date is fixed, as of the close of business on such record date, by multiplying the Purchase
Price then in effect by a fraction (1) the numerator of which is the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such issuance on the close of
business on such record date, and (2) the denominator of which shall be (i) the total number of
shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus (ii) the number of shares of Common Stock issuable in
payment of such dividend or distribution; provided, however, that if such record
date is fixed and such dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the Purchase Price shall be recomputed accordingly as of the close of business
on such record date or date fixed therefor and thereafter the Purchase Price shall be adjusted
pursuant to this Section 3(c) as of the time of actual payment of such dividend or distribution.
For purposes of the foregoing formula, “the total number of shares of Common Stock issued and
outstanding” on a particular date shall include shares of Common Stock issuable upon conversion of
stock or securities convertible into Common Stock and the exercise of warrants, options or rights
for the purchase of Common Stock which are outstanding on such date.

          (d) Adjustments for Other Dividends and Distributions. In the event the Company at
any time or from time to time after the date of this Warrant makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Company other than shares of Common Stock, then and in each such
event, provision shall be made so that the Holder shall receive upon exercise hereof, in addition
to the number of shares of Common Stock receivable thereupon, the amount and kind of securities of
the Company which it would have received had this Warrant been exercised for Common Stock as of the
date of such event and had it thereafter, during the period from the date of such event to and
including the date of exercise, retained such securities receivable by it as aforesaid during such
period, subject to all other adjustments called for during such period under this Section 3 with
respect to the rights of the Holder.

          (e) Adjustment for Recapitalization, Reclassification, or Exchange. If the Common
Stock issuable upon the exercise of this Warrant is changed into the same or a different number of
shares of any class or classes of stock of the Company, whether by recapitalization,
reclassification or other exchange (other than a subdivision or combination of shares, or a stock
dividend or a reorganization, merger, consolidation or sale of assets, provided for elsewhere in
this Section 3), then and in any such event the Holder shall have the right thereafter to exercise
this Warrant to purchase the kind and amount of stock and other securities and property

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receivable upon such recapitalization, reclassification or other exchange by holders of the number of shares
of Common Stock which might have been purchased under this Warrant immediately prior to such
recapitalization, reclassification or other exchange, all subject to further adjustment as provided
herein.

          (f) Reorganizations, Mergers, Consolidations or Sales of Assets. If at any time or
from time to time there is a capital reorganization of the Common Stock (other than a subdivision
or combination of shares or a stock dividend or a recapitalization, reclassification or other
exchange of shares, provided for elsewhere in this Section 3 or a merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially all of the Company’s
assets to any other person), then, as a part of such capital reorganization, provision shall be
made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant the
number of shares of stock or other securities or property of the Company, or of the successor
corporation resulting from such capital reorganization, to which a holder of the number of shares
of Common Stock deliverable upon such exercise would have been entitled on such capital
reorganization. In any such case, appropriate adjustment shall be made in the application of the
provisions of this Section 3 with respect to the rights of the Holder after the capital
reorganization to the end that the provisions of this Section 3 (including the number of shares
deliverable upon exercise of this Warrant) shall continue to be applicable after that event and
shall be as nearly equivalent to the provisions hereof as may be practicable.

          (g) Certificate of Adjustment. Upon the occurrence of each adjustment or readjustment
of the Purchase Price and/or the number of shares of Common Stock subject to this Warrant, the
Company at its expense shall promptly compute such adjustment or readjustment in accordance with
the terms hereof, and shall prepare and furnish to the Holder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based.

     4. Exercise upon Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company intends to (a) effect a reorganization, (b) consolidate with or
merge into any other person, (c) sell or transfer all or substantially all of its properties or
assets to any other person, (d) dissolve, (e) consummate an initial public offering of its
securities; or if the Company is sold through the sale of its capital stock, then, notwithstanding
any other provision of this Warrant, in each such case, as a condition of such reorganization,
consolidation, merger, sale,
dissolution, conveyance, or offering the Company shall give at least ten (10) days’ notice to
the Holder of such pending transaction whereby the Holder shall have the right to exercise this
Warrant prior to any such reorganization, consolidation, merger, sale, dissolution, conveyance or
offering. Any exercise of this Warrant pursuant to notice under this Section shall be conditioned
upon the closing of such reorganization, consolidation, merger, sale, dissolution, conveyance or
offering which is the subject of the notice and the exercise of this Warrant shall not be deemed to
have occurred until immediately prior to the closing of such transaction.

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     5. Further Assurances. The Company will take all action that may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock, free from all taxes, liens and charges with respect to the issue thereof,
on the exercise of all or any portion of this Warrant from time to time outstanding.

     6. Notices of Record Date, etc. In the event of:

          (a) any taking by the Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any dividend on, or any
right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, or

          (b) any capital reorganization of the Company, any reclassification or recapitalization of the
capital stock of the Company or any transfer of all or substantially all of the assets of the
Company to or the sale, consolidation or merger of the Company with, to or into any other person,
or

          (c) any voluntary or involuntary dissolution, liquidation or winding up of the Company;

then and in each such event the Company will mail or cause to be mailed to the Holder, at least ten
(10) days prior to such record date, a notice specifying (i) the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding up is to take place, and the time, if any is to be fixed, as of which the holders of record
of Common Stock (or Other Securities) shall be entitled to exchange their shares of Common Stock
(or Other Securities) for securities or other property deliverable on such reorganization,
reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding up, and (iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant is to be offered or
made.

     7. Reservation of Stock, etc., Issuable on Exercise of Warrants. The Company will at
all times reserve and keep available out of its authorized but unissued shares of capital stock,
solely for issuance and delivery on the exercise of this Warrant, a sufficient number of shares of
Common Stock (or Other Securities) to effect the full exercise of this Warrant and the exercise,
conversion or exchange of any other warrant or security of the Company exercisable for, convertible
into, exchangeable for or otherwise entitling the Holder to acquire shares of Common Stock (or
Other Securities), and if at any time the number of authorized but unissued shares of

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Common Stock
(or Other Securities) shall not be sufficient to effect such exercise, conversion or exchange, the
Company shall take such action as may be necessary to increase its authorized but unissued shares
of Common Stock (or Other Securities) to such number as shall be sufficient for such purposes.

     8. Transfer of Warrant. This Warrant cannot be transferred without the prior written
consent of the Company, which consent shall not be unreasonably withheld; provided,
however, the Holder may transfer this Warrant to any of its affiliates without such consent
so long as such transfer complies with all applicable securities laws.

     9. No Rights as a Stockholder. This Warrant shall not entitle the Holder hereof to
any voting rights or other rights as a stockholder of the Company.

     10. Notices, etc. All notices which are required to be given pursuant to this Warrant
shall be in writing and shall be delivered by certified mail, return receipt requested, first class
postage prepaid, or sent by overnight express or similarly recognized overnight delivery with
receipt acknowledged or by facsimile, with a copy thereof sent by one of the other means. Notices
shall be deemed to have been given at the time delivered and shall be addressed as follows or to
such other address as a party may designate by proper notice hereunder.

	 	 	 
	If to Holder:

	 	To the address set forth on the first page hereof.
	 
	 	 
	If to the Company:

	 	Tri Isthmus Group, Inc.
	 

	 	149 South Barrington Ave., Suite 808
	 

	 	Los Angeles, California 90049
	 

	 	Attn.: David Hirschhorn

     11. Securities Laws. By acceptance of this Warrant, the Holder hereby represents
to the Company that this Warrant is being acquired for investment for the Holder’s own account, not
as a nominee or agent, and not with a view to the resale or distribution thereof, and that the
Holder has no present intention of selling, granting any participation in, or otherwise
distributing this Warrant or the Common Stock issuable upon exercise of this Warrant. By
acceptance of this Warrant, the Holder further represents that the Holder does not presently have
any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to this Warrant or the Common
Stock issuable upon exercise of this Warrant. The Holder is an “accredited investor” as the term
is defined in Rule 501(a) of Regulation D promulgated under the Securities Act and has sufficient
knowledge and experience in finance and business that it is capable of evaluating the risks and
merits of its investment in the shares subject to this Warrant and the Holder is able financially
to bear the risks

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thereof. The Holder understands that the sale and issuance of this Warrant and the Common
Stock issuable upon exercise of this Warrant have not been registered under the Securities Act, by
reason of a specific exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the accuracy of the
Holder’s representations as expressed herein. The Holder further recognizes and acknowledges that
because the sale and issuance of this Warrant and the Common Stock issuable upon exercise of this
Warrant are unregistered, they may not be eligible for resale, and may only be resold in the future
pursuant to an effective registration statement under the Securities Act and any applicable state
securities laws, or pursuant to a valid exemption from such registration requirements and that the
Holder must, therefore, bear the economic risk of such investment indefinitely.

     12. Legend. Unless theretofore registered for resale under the Securities Act, each
certificate for shares of Common Stock issued upon exercise of this Warrant shall bear the
following or a similar legend:

     THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE RESOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY THAT SUCH DISPOSITION IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

     13. Miscellaneous. This Warrant and any terms hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be
construed and enforced in accordance with and governed by the internal laws of the State of
Delaware, without regard to conflict of laws principles. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The
invalidity or unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.

* * *

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed on its behalf by one of
its officers thereunto duly authorized as of October 30, 2007.

	 	 	 	 	 
	 	TRI-ISTHMUS GROUP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	DAVID HIRSCHHORN
 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

Warrant No. AB-15

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FORM OF SUBSCRIPTION

TRI-ISTHMUS GROUP, INC.

(To be signed only on exercise of Warrant)

TO: TRI-ISTHMUS GROUP, INC.

     1. The undersigned Holder of the attached original, executed Warrant of Tri-Isthmus Group,
Inc., a Delaware corporation (the “Company”), hereby elects to exercise its purchase right
under such Warrant with respect to ___(___) shares (the “Exercise
Shares”) of Common Stock (as defined in the Warrant), constituting all the shares of Common
Stock subject to the Warrant.

     2. The undersigned Holder is hereby paying the aggregate purchase price for such the
Exercise Shares (i) by the enclosed certified or official bank check payable in United
States dollars to the order of the Company in the amount of $___, or (ii) by wire transfer
of United States funds to the account of the Company in the amount of $___, which
transfer has been made before or simultaneously with the delivery of this Form of Subscription
pursuant to the instructions of the Company.

     3. Please issue a stock certificate or certificates representing the Exercise Shares in the
name of the undersigned Holder.

Dated:___

	 	 	 	 	 
	 	 	 
	 	 	 
	 	Signature of Holder 	 
	 	 	 
	 

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