Document:

Retention Agreement

 Exhibit 10.1 
 RETENTION AGREEMENT 
 This Retention Agreement (the
“Agreement”) is made and entered by and between Aerojet-General Corporation, its parents, subsidiaries and affiliates (the “Company”) and Richard W. Bregard (the “Executive”) as of February 6, 2012 (the
“Effective Date”). 
 WHEREAS, the Company has employed Executive and wishes to continue to employ him until at least
November 30, 2012; and 
 WHEREAS, the Company wishes to reward Executive for remaining employed for that period and making
particular contributions toward the success of the Company; 
 NOW THEREFORE, in consideration of the covenants set forth in
this Agreement, Company and Executive, each intending to be legally bound, hereby agree as follows: 
 1. Compensation.
(a) Base Salary. The Company shall continue to pay Executive his base salary as of the Effective Date, through and including the Termination Date, less applicable withholdings and deductions, in accordance with the Company’s payroll
procedures. Executive shall be eligible for an adjustment to his base salary in connection with the annual review of base salaries by the Organization and Compensation Committee (the “Committee”) of the Board of Directors of GenCorp, Inc.,
at the discretion of the Committee. In the event that the Termination Date occurs before November 30, 2012, and Executive’s termination qualifies as an Eligible Early Termination, Executive shall be paid a lump sum equal to the salary he
would have earned from the Termination Date up to and including November 30, 2012, but excluding pay for time worked up through and including the Termination Date that has been or will be paid to Executive pursuant to the first sentence of this
paragraph 1(a). 
 (b) Short-term Incentive Program. Executive shall be entitled to participate in the
Short-term Incentive Program (“STIP”) for the fiscal year 2012, with an individual target percentage of fifty percent (50%) of his base compensation. Executive shall participate in the STIP in accordance with the performance measures
and target established by the Committee for fiscal year 2012, and will receive payment of any STIP award based upon the Committee’s determination regarding achievement of the STIP goals. 

(c) Long-term Incentive Program. Executive shall not participate in the Long-term Incentive Program or other
equity-based compensation awards in 2012 or thereafter. 
 (d) Accrued Vacation. Executive shall be paid a
lump sum equal to all accrued but unused vacation after his termination from the Company. 
 2. Benefits. Executive shall
continue to be eligible to participate in the Company’s medical, dental and other similar employee benefit programs that are provided by the Company to executives 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. 
 3. Duties and Title. Executive’s
title and duties shall remain the same as they were as of the Effective Date. 

 4. Retention Bonus. 

(a) In the event Executive remains employed through November 30, 2012, or his termination qualifies as an Eligible
Early Termination, the Company shall pay to Executive a retention bonus (the “Retention Bonus”) as set forth in Section 5(b) below in consideration of Executive’s continued employment until the Termination Date, and provided that
Executive has transitioned his key responsibilities to one or more executives of the Company. 
 (b) The
Retention Bonus shall consist of a lump sum payment equal to Executive’s base salary as then in effect, less applicable withholdings and deductions. 
 5. Continuation of Benefits. In the event Executive’s termination qualifies as an Eligible Early Termination, and Executive timely elects continuation of coverage pursuant to the Consolidated
Omnibus Reconciliation Act of 1986 (“COBRA”), the Company shall fully subsidize reimbursement for the premiums associated with continuation of Executive’s health insurance pursuant to COBRA through November 30, 2012. 

6. Existing Equity Awards. In the event Executive’s termination occurs on or after November 30, 2012, or qualifies as an
Early Eligible Termination, and subject to the approval of the Committee, Executive shall be eligible for continued vesting of any of Executive’s restricted shares of common stock (the “Restricted Shares”) and Stock Appreciation
Rights (“SARs”) granted to Executive pursuant to the GenCorp Inc. 1999 Equity and Performance Incentive Plan and the GenCorp Inc. Amended and Restated 2009 Equity and Performance Incentive Plan (collectively, the “Plans”) that
have not yet vested, in accordance with the terms of the Plans. 
 7. Timing of Post-Termination Payments; Required General
Release. 
 (a) Upon a Termination for any reason, Executive shall be entitled to the following amounts which
shall be paid within thirty (30) days unless otherwise required by law: (i) payment of his Base Compensation up to and including the Termination Date; (ii) payment in lieu of any accrued but unused vacation time, in accordance with
the Company’s vacation policy; (c) payment of unreimbursed expenses in accordance with the Company’s reimbursement policy; and (d) for the period up to and including the Termination Date, payments and benefits under any Company
benefit plan, program or policy in which Executive participated during his employment and paid pursuant to the terms of such plan, program or policy. 
 (b) All post-termination payments under Section 1(b) shall be paid at the same time other executives receive their STIP payments for fiscal year 2012. 

(c) All post-termination payments under Sections 1(a), 4 and 5 shall begin within sixty (60) days following the
Termination Date, provided, however, that if the sixty (60) day period begins in one calendar year and ends in the second calendar year, payment will be made in the second calendar year. All post-termination payments and benefits under
Section 1, 4, 5 and 6 are 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 (the “General Release”), in the form attached hereto as Exhibit A. 

  
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 (d) Notwithstanding the foregoing, Executive agrees that in the event that
all or a portion of any payment described in this Section 7 constitutes nonqualified deferred compensation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), 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 six (6) months after the date Executive separates from service (within the meaning of the Code). 

8. Early Termination. The Company shall not pay Executive the Retention Bonus in the event that prior to November 30, 2012,
(i) Executive resigns or otherwise voluntarily terminates his employment with the Company, (ii) the Company terminates Executive for Cause (as hereinafter defined). 
 9. Definitions. 
 (a) Cause. For purposes of this
Agreement, the term “Cause” 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. 

(b) Disability. For purposes of this Agreement, the term “Disability” shall mean that Executive becomes
physically or mentally unable to perform his duties 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. 
 (c) Termination Date. For purposes of this Agreement, the term “Termination Date” shall
mean the date that Executive’s employment with the Company shall terminate, pursuant to Section 8 or otherwise. 
 (d) Eligible Early Termination. For purposes of this Agreement, the term “Eligible Early Termination” shall mean, in the event that the Termination Date occurs before November 30,
2012, a termination of Executive (i) at the request or upon the initiation of the Company other than for Cause, (ii) due to the death or Disability of Executive, or (iii) upon the resignation or voluntary termination of Executive in
the event that either (A) Executive is no longer a direct report to Scott J. Seymour or (B) an individual other than Scott J. Seymour or the Executive is elected or appointed to act as President of the Company and, in either case,
Executive suffers a significant change or diminution in his duties and responsibilities. 
 10. Non-Solicitation
Agreement. The Executive agrees that for a period of twelve (12) months after the Termination Date regardless of the reason for the Executive’s termination of employment with the Company, he will not directly or indirectly hire,
solicit or attempt to hire or solicit any employee of, or consultant to the Company, or encourage such employee to 

  
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terminate his or her employment with the Company, which employee or consultant had been rendering services to the Company at any time within the last twelve (12) month period of
Executive’s employment with the Company. 
 11. Representations and Warranty. Executive represents and warrants that
Executive’s entering into this Agreement and the performance by Executive hereunder will not conflict with, violate or constitute a breach of, or require any consent or approval under, any agreement, license, arrangement or understanding,
whether written or oral, or any law, judgment, decree, order, rule or regulation to which Executive is a party or, to the best of his knowledge, by which Executive is bound. 
 12. Confidentiality. Except as required by law, 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 Company, except if required by law and to Executive’s accountants, attorneys or spouse, provided that they agree to maintain the confidentiality of this Agreement. 

13. Employment-at-will. Executive understands that he remains an employee-at-will and that this Agreement does not constitute a
contract of employment and does not imply that his employment will continue for any period of time. 
 14. Severability.
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. 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. 
 15. Governing Law. 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 that is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be
submitted to the exclusive jurisdiction of any state or federal court in Sacramento County, in the State of California. 
 16.
Waiver. The waiver by either party of a breach of any provision of this Agreement shall not 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. 

17. Assignment. This Agreement, as it relates to Executive’s employment, 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, including without limitation, any corporation or other entity into which the Company is merged or which acquires all or substantially all of the assets
of the Company. 

  
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 18. Entire Agreement. This Agreement (including all agreements incorporated by
reference herein) constitutes the complete understanding between the parties with respect to Executive’s employment with the Company and supersedes any and all agreements, understandings, and discussions, whether written or oral, between the
parties, all of which remain in full force and effect. 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. 

19. Code Section 409A Compliance. 
 (a) The intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, 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. 

(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 19 (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 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. 

  
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 (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. 

 

															
	 	 	AEORJET-GENERAL CORPORATION	 	 	  	 
					
		 	By:	 	 /s/ Elizabeth A. Zacharias
	 		  	 /s/ Richard W. Bregard

		 		 	Elizabeth A. Zacharias	 		  	Richard W. Bregard
						
		 	Dated:	 	 February 6, 2012
	 		  	Dated:	 	 February 6, 2012

  
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 Exhibit A 
 AGREEMENT AND RELEASE 
 Agreement and Release
(“Agreement”) executed this      day                     , 2012, by and between Richard W. Bregard
(“Executive”) with an address at                     and Aerojet-General Corporation, its parents, subsidiaries and affiliates (the
“Company”) with an address at Highway 50 and Aerojet Road, Rancho Cordova, California 95742. 
 1. Executive’s
employment shall be terminated effective                    (“Termination Date”). As of that date, Employee’s duties,
responsibilities, office and title ceased. 
 2. The Company shall pay to Executive the post-termination payments and benefits
described in Sections 1, 4, 5 and 6 of the Retention Agreement in accordance with the timing and conditions set forth in the Retention Agreement. 
 3. The Company and Executive agree that in the event that any of the payments provided in 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). 
 4. 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. 
 5. 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 Scott Seymour, Chief Executive Officer, GenCorp Inc., 2001 Aerojet Road, Rancho Cordova, California 95742, 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 Scott Seymour at the address listed above, and delivering it to Scott Seymour 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. 

  
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 6. (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
and the Retention 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: 

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 

  
 A-2

 
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. 
 7. (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. 

(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. 

(c) Executive further agrees that he will maintain the confidentiality of all customer and Company confidential
information, unless and until such information is made public through no actions of Executive. 
 8. (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 Chief Executive
Officer 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. 
 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. 

  
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 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. 
 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] 

  
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 [Signature page to Agreement and Release] 

 

									
	 Dated:
	 	  
	 		 	  

		 		 		 	Richard W. Bregard

 AEROJET-GENERAL CORPORATION 
  

									
		 		 	
	By:	 	  
	 		 	Date:	 	  

		 	Name: 	 		 		 	
		 	Title: 	 		 		 	

  
 A-5EX-10.iii.A.1

 Exhibit 10(iii)(A)(1) 
 IMPERIAL OIL LIMITED 
 SHORT TERM INCENTIVE PROGRAM 

(as amended February 2, 2012) 
 I. Purposes

 The Short Term Incentive Program is intended to help reward, retain, and motivate selected employees of the Company and its affiliates by
recognizing efforts and accomplishments which contribute materially to the success of the Company’s business interests. 
 II. Definitions

 In this Program, except where the context otherwise indicates, the following definitions apply: 

 

	 	(1)	“Administrative authority” means the Board, a committee designated by the Board, the Chairman of the Board, or the Chairman’s delegates authorized to administer
outstanding awards under this Program, establish requirements and procedures for the operation of the Program, and to exercise other powers assigned to the administrative authority under this Program. 

 

	 	(2)	“Affiliate” means a legal entity which controls, or which is controlled by, or which is controlled by an entity which controls, the Company. 

 

	 	(3)	“Award” means a bonus, bonus unit, or other award under this Program. 

  
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	 	(4)	“Board” means the Board of Directors of the Company. 

  

	 	(5)	“Bonus” means a cash award specific in amount. 

  

	 	(6)	“Bonus unit” means a potential cash award whose amount is based upon specified measurement criteria. The term bonus unit includes, but is not limited to, earnings bonus
units. 

  

	 	(7)	“Company” means Imperial Oil Limited, its wholly owned subsidiaries, and partnerships, or its successors. 

 

	 	(8)	“Control” means the power to direct or cause the direction of the management and policies of another person or entity whether through the ownership of shares or
partnership interest, a contract, trust arrangement or any other means, either directly or indirectly, that results in control in fact and without restricting the generality of the foregoing includes, with respect to the control of or by a
corporation or a partnership, the ownership of shares or partnership interest carrying not less than 50% of the voting rights regardless of whether such ownership occurs directly or indirectly, as contemplated above. “Controls” and
“Controlled by” and other derivatives shall be construed accordingly. 

  

	 	(9)	“Designated beneficiary” means a person designated by the grantee of an award pursuant to Section XIII to be entitled, on the death of the grantee, to any remaining
rights arising out of such award. 

  

	 	(10)	 “Detrimental activity” of a grantee means activity at any time, during continued employment or up to 24 months after leaving the employment of the
Company or an affiliate, that is determined in individual cases by the administrative authority to be (a) a material violation of applicable standards, 

  
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policies, or procedures of the Company or an affiliate; or (b) a material breach of legal or other duties owed by the grantee to the Company or an affiliate; or (c) a material breach of
any contract between the grantee and the Company or an affiliate; or (d) acceptance by grantee of duties to a third party under circumstances that create a material conflict of interest, or the appearance of a material conflict of interest,
with respect to the grantee’s retention of outstanding awards under this Program. Detrimental activity includes, without limitation, activity that would be a basis for termination of employment for cause under applicable law in Canada. With
respect to material conflict of interest or the appearance of material conflict of interest, such conflict or appearance might occur when, for example and without limitation, a grantee holding an outstanding award becomes employed or otherwise
engaged by an entity that regulates, deals with, or competes with the Company or an affiliate. 

  

	 	(11)	“Employee” means an employee of the Company or an affiliate, including a part-time employee or an employee on military, family, or other approved temporary leave.

  

	 	(12)	“Executive Officer” for any calendar year means the individuals designated as executive officers, including named executive officers, by the Company in its Annual
Report on Form 10-K for such calendar year, or in the event that the Company does not file an Annual Report on Form 10-K for such calendar year, such individuals as are otherwise designated as executive officers by the company.

  

	 	(13)	“Executive Resources Committee” means the committee of the Board so designated. 

 

	 	(14)	“Exchange Act” means the U.S. Securities Exchange Act of 1934, as in effect from time to time. 

  
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	 	(15)	“Grantee” means a recipient of an award under this Program. 

  

	 	(16)	“Granting authority” means the Board or any appropriate committee authorized to grant and amend awards under this Program and to exercise other powers assigned to the
granting authority. 

  

	 	(17)	“Imperial earnings bonus unit” or “IEBU” means an award of the potential right to receive from the Company at the settlement date specified in the award
instrument, or at any later payment dates so specified, an amount of cash, up to the specified maximum settlement value per IEBU, equal to the Company’s cumulative Net Income Per Common Share (Basic), as reflected in its quarterly earnings
statements as initially filed in its quarterly or annual reports with the U.S. Securities and Exchange Commission, commencing with earnings for the first full quarter after the date of grant through the last full quarter preceding the settlement
date. 

  

	 	(18)	“Net Income Per Common Share (Basic)” means the published net earnings per common share or earnings per share, as applicable. 

 

	 	(19)	“Normal retirement time” means for each employee, the first day of the month immediately following the month in which the employee attains age 65, as outlined in
section 2 of the Company’s pension plan. 

  

	 	(20)	“Program” means this Short Term Incentive Program, as amended from time to time. 

 

	 	(21)	 “Resign” means to terminate at the initiative of the employee before the grantee becomes entitled to an annuity under section 2 of the Company’s
retirement plan (or the provision in any plan or plans of the Company substituted thereof). Resignation includes, without limitation, early retirement 

  
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at the initiative of the employee. The time or date of a resignation for purposes of this Program is not necessarily the employee’s last day on the payroll. See Section XI(2).

  

	 	(22)	“Terminate” means cease to be an employee for any reason, whether at the initiative of the employee, the employer, or otherwise. That reason could include, without
limitation, resignation or retirement by the employee; discharge of the employee by the employer, with or without cause; death; transfer of employment to an entity that is a not an affiliate; or a sale, divestiture, or other transaction as a result
of which an employer ceases to be an affiliate. A change of employment from the Company or one affiliate to another affiliate, or to the Company, is not a termination. The time or date of termination is not necessarily the employee’s last day
on the payroll. See Section XI(2). 

  

	 	(23)	“TSX Company Manual” means the Company Manual issued by the TSX to govern companies listed on the TSX. 

 

	 	(24)	“Year” means calendar year. 

 III. Administration

 The Board is the ultimate administrative authority for this Program, with the power to interpret and administer its provisions. The Board may
delegate its authority to a committee which, except in the case of the Executive Resources Committee, need not be a committee of the Board. Subject to the authority of the Board or an authorized committee, the Chairman and his delegates will serve
as the administrative authority for purposes of establishing requirements and procedures for the operation of this Program; making final determinations and interpretations with respect to outstanding awards; and exercising other powers assigned to
the administrative authority under this Program. 

  
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 IV. No Equity-Security Awards 
 It is intended that this Program not be subject to the provisions of the Exchange Act and that awards granted hereunder not be considered equity securities of the Company within the meaning of the Exchange Act and
that the awards not be considered security based compensation arrangements for the purposes of the TSX Company Manual. Accordingly, no award under this Program will be payable in any equity security or result in the issuance of securities of the
Company. In the event an award under this Program should be deemed to be an equity security of the Company within the meaning of the Exchange Act or security based compensation arrangements for the purposes of the TSX Company Manual, such award may,
to the extent permitted by law and deemed advisable by the granting authority, be amended so as not to constitute such an equity security or security based compensation arrangement, or may be annulled. Each award under this Program will be deemed
issued subject to the foregoing qualification. 
 V. Annual Ceiling 
 In respect to each year under this Program, the Executive Resources Committee will, pursuant to authority delegated by the Board, establish a ceiling on the aggregate dollar amount that can be awarded under this
Program. With respect to bonuses and bonus units granted in a particular year under this Program, the sum of (1) the aggregate amount of bonuses, and (2) the aggregate maximum settlement value of bonus units will not exceed such ceiling.
The Executive Resources Committee may revise the ceiling from time to time as it deems appropriate. 
 VI. Right to Grant Awards; Reserved Powers;
Eligibility 
  

	 	(1)	The Board is the ultimate granting authority for this Program, with the power to select eligible persons for participation and to make all decisions concerning the grant or
amendment of awards. The Board may delegate this authority in whole or in part (a) to the Executive Resources Committee; or (b) to a committee of two or more persons who may, but need not, be directors of the Company.

  
 6 

	 	(2)	The granting authority has sole discretion to select persons for awards under this Program, except that grants may be made only to persons who at the time of grant are, or within
the immediately preceding 12 months have been, employees of the Company or of an affiliate. No person is entitled to an award as a matter of right, and the grant of an award under this Program does not entitle a grantee to any future or additional
awards. 

  

	 	(3)	No award may be granted to a member of the Executive Resources Committee. 

 VII. Term 
 This Program will continue until terminated by the Board. 

VIII. Form of Bonus 
 A bonus may be granted either wholly
in cash, wholly in bonus units, or partly in each. 
 IX. Settlement of Bonuses 
 Each grant will specify the time and method of settlement as determined by the granting authority. Each grant, any portion of which is in bonus units, will specify as the regular time of settlement for that portion
a settlement date, which may be accelerated to an earlier time specified in the award instrument. 
 X. Extended Disability Benefits 

  
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 In case the grantee becomes entitled on or before receipt of payment with respect to a bonus or
bonus unit, to payment of extended disability benefits under the Company’s extended disability benefit plan, the grantee shall continue to have to have the right to receive cash payment of bonus or bonus units, or in case of death after
entitlement as aforesaid, by the grantee’s legal representatives. 
 XI. Termination; Detrimental Activity 

 

	 	(1)	If a grantee terminates before normal retirement time, other than by reason of death, all outstanding awards of the grantee under this Program (including bonuses, bonus units,
IEBUs, and other awards not yet paid or settled) will automatically expire and be forfeited as of the date of termination except to the extent the administrative authority determines otherwise. 

 

	 	(2)	For purposes of this Program, the administrative authority may determine that the time or date an employee resigns or otherwise terminates is the time or date the employee gives
notice of resignation, accepts employment with another employer, otherwise indicates an intent to resign, or is discharged. The time or date of termination for this purpose is not necessarily the employee’s last day on the payroll.

  

	 	(3)	If the administrative authority determines that a grantee has engaged in detrimental activity, whether or not the grantee is still an employee, then the administrative authority
may, effective as of the time of such determination, cancel and cause to expire all or part of the grantee’s outstanding awards under this Program (including bonuses, bonus units, IEBUs, and other awards not yet paid or settled).

  
 8 

	 	(4)	If the administrative authority is advised or has reason to believe that a grantee (a) may have engaged in detrimental activity; or (b) may have accepted employment
with another employer or otherwise indicated an intent to resign, the authority may suspend the exercise, delivery, or settlement of all or any specified portion of such grantee’s outstanding awards pending an investigation of the matter.

  

	 	(5)	If the administrative authority determines the conditions lined out in section XI are applicable to the grantee, at its discretion the authority may require the grantee to pay
the Company the equivalent cash payment for each bonus or each bonus unit paid on any settlement date up to 180 days prior to termination of the grantee’s continued employment. 

XII. Material Negative Restatement 
  

	 	(1)	If the Company’s reported financial or operating results become subject to a material negative restatement, the Executive Resources Committee may determine that all or a
portion of the bonus or bonus units granted to a grantee during the three year period prior to such material restatement, where such grantee was an Executive Officer during all or any portion of such three year period, would not have been granted if
the Company’s results as originally published had been equal to the Company’s results as subsequently restated (the “restatement forfeiture bonus or bonus units”). In such event, at the company’s discretion, the restatement
bonus or bonus units are forfeited and the company shall make no payment with respect to such restatement forfeiture bonus or bonus units. 

  

	 	(2)	 Notwithstanding any payment with respect to a cash bonus or bonus units to a grantee, if the Company’s financial results become subject to a material
negative restatement, the Executive Resources Committee may determine that all or a portion of such cash bonus or payment with respect to bonus 

  
 9 

	 	
units received by a grantee during the five year period prior to such material restatement, where such cash bonus or bonus units were granted during a calendar year in which such grantee was an
Executive Officer, or where such cash payment was received during a calendar year in which such grantee was an Executive Officer, would not have been granted or payable if the Company’s Results as originally published had been equal to the
Company’s results as subsequently restated (the “restatement claw back amount”). The Company, at its discretion, may require such grantee to pay to the Company a cash amount equal to the restatement claw back amount.

  

	 	(3)	The obligations of grantees to make payments under this Section XII are independent of any involvement by those grantees in events that led to the restatement. The provisions of
this Section XII are in addition to, not in lieu of, any remedies that the Company may have against any persons whose misconduct caused or contributed to a need to restate the Company’s reported results. 

XIII. Death; Beneficiary Designation 
 Any rights and
obligations of a grantee under this Program in effect at that grantee’s death will apply to that grantee’s designated beneficiary or, if there is no designated beneficiary, to that grantee’s estate representative or lawful heirs, as
demonstrated to the satisfaction of the administrative authority. Beneficiary designations must be made in writing and in accordance with such requirements and procedures as the administrative authority may establish. Unless specified otherwise in
the award instrument, if a grantee dies, the administrative authority may accelerate or otherwise alter the settlement of deferred awards to that grantee. 
 XIV. Amendments to this Program and Outstanding Awards 

  
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	 	(1)	The Board may from time to time amend this Program. An amendment of this Program will, unless the amendment provides otherwise, be immediately and automatically effective for all
outstanding awards. 

  

	 	(2)	Without amending this Program, the granting authority may amend any one or more outstanding awards under this Program to incorporate in those awards any terms that could be
incorporated in a new award under this Program. An award as amended must satisfy any conditions or limitations applicable to the particular type of award under the terms of this Program. 

XV. Withholding Taxes 
 The Company has the right, in its
sole discretion, to deduct or withhold at any time cash otherwise payable or deliverable in order to satisfy any required withholding requirements with respect to awards under this Program. 
 XVI. Non-Resident of Canada Awards 
 Subject to the limitations contained in this Program, the granting
authority may establish different terms and conditions for awards to persons who are residents or nationals of countries other than Canada in order to accommodate the local laws, tax policies, or customs of such countries or the laws of Canada. The
granting authority may adopt one or more supplements or sub-plans under this Program to implement those different terms and conditions. 
 XVII.
General Provisions 
  

	 	(1)	An award under this Program is not transferable except by will or the laws of descent and distribution, and is not subject to attachment, execution, or levy of any kind. The
designation by a grantee of a designated beneficiary is not a transfer for this purpose. 

  
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	 	(2)	A particular form of award may be granted to a grantee either alone or in addition to other awards hereunder. The provisions of particular forms of award need not be the same for
each grantee. 

  

	 	(3)	An award may be granted for no consideration, for the minimum consideration required by applicable law, or for such other consideration as the granting authority may determine.

  

	 	(4)	An award may be evidenced in such manner as the administrative authority determines, including by physical instrument, by electronic communication, or by book entry. In the event
of any dispute or discrepancy regarding the terms of an award, the records of the administrative authority will be determinative. 

  

	 	(5)	The grant of an award under this Program does not constitute or imply a contract of employment and does not in any way limit or restrict the ability of the employer to terminate
the grantee’s employment, with or without cause, even if such termination results in the expiration, cancellation, or forfeiture of outstanding awards. 

 

	 	(6)	A grantee will have only a contractual right to the amounts, if any, payable in settlement of an award under this Program, unsecured by any assets of the Company or any other
entity. 

  

	 	(7)	This Program will be governed by the laws of the Province of Alberta and Canada, without regard to any conflict of law rules. 

  
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