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Exhibit 10.7

2019 PERFORMANCE SHARE UNIT AWARD AGREEMENT

THIS PERFORMANCE SHARE UNIT AWARD AGREEMENT (this “Agreement”) is made as of the ___ day of _____, 2019 (the “Grant Date”), between ADAMS RESOURCES & ENERGY, INC., a Delaware corporation (“Company”), and all of its Affiliates (collectively, the “Company”), and _________________ (the “Employee”).  A copy of the Adams Resources & Energy, Inc. 2018 Long-Term Incentive Plan (the “Plan”) is annexed to this Agreement and shall be deemed a part hereof as if fully set forth herein.  Unless the context otherwise requires, all terms that are not defined in this Agreement but which are defined in the Plan shall have the same meaning given to them in the Plan when used herein.

1.Award.  Pursuant to the Plan, as of the Grant Date, ______ Restricted Stock Units (the “Performance Share Units”) shall be granted to Employee as a matter of separate inducement and not in lieu of any salary or other compensation for Employee’s services, subject to the acceptance by the Employee of the terms and conditions of this Agreement.  The Employee acknowledges receipt of a copy of the Plan, and agrees that the Performance Share Units shall be subject to all of the terms and provisions of the Plan, including future amendments thereto, if any, pursuant to the terms thereof, and to all of the terms and conditions of this Agreement. 

2.Performance Share Units.  The Employee hereby accepts the Performance Share Units when issued and agrees with respect thereto as follows:

a.Payment and Determination of Value.  Except as otherwise provided in Section 10 below, Company shall provide to the Employee one share of the Company’s common stock, $0.10 par value per share for each Performance Share Unit on its scheduled vesting date.  If any dividends are paid with respect to a share of the Company’s common stock during the vesting period, an equivalent amount shall accrue and be held by the Company without interest until the Performance Share Units become vested, at which time such amount shall be paid to the Employee, or are forfeited, at which time such amount shall be forfeited.

b.Vesting.  An Employee’s Performance Share Units shall become vested based on (i) continued service with the Company until the third (3rd) anniversary of the Vesting Commencement Date, and (ii) the attainment of the Performance Criteria specified on Exhibit A to this Agreement.  Any portion of the Performance Share Units that does not become vested in accordance with the preceding provisions of this Section 2(b) and Exhibit A shall be forfeited to the Company for no consideration as of the date of the termination of the Employee’s employment with the Company.  

For purposes of this Agreement, the “Vesting Commencement Date” shall be ____________.  

c.Termination of Employment.  If the Employee terminates his or her employment with the Company prior to the third (3rd) anniversary of the Vesting Commencement Date, then the Performance Share Units shall be forfeited to the Company for no consideration as of the date of the termination of the Employee’s employment with the Company, except that:

(i)     if the Employee is determined to be Disabled or in the event of the death of the Employee, all of the Employee’s Performance Share Units shall become vested upon the later of (A) the completion of the Performance Period (as specified on Exhibit A), or (B) the date the Employee terminates employment with the Company, based upon the actual level of performance.  In such case, Employee (or Employee’s legal representative, or the person, if any, who acquired the Performance Share Units by bequest or inheritance or by reason of the death of Employee), shall be entitled to receive any payment with respect to the Performance Share Units in accordance with this Agreement; and

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(ii)     if the Employee’s employment with the Company terminates by reason of retirement following the date on which such Employee has either (I) reached sixty (60) years of age, and completed at least ten (10) years of service as an employee of the Company, or (II) reached sixty-five (65) years of age, then the Performance Share Units shall become vested upon the later of (A) the completion of the Performance Period, or (B) the date the Employee terminates employment with the Company, based upon the actual level of performance, provided, however, that the Employee shall not receive such shares until their original scheduled vesting date.

Any payment made in connection with Section 2(c)(i) above shall be paid thirty (30) days after the Employee’s termination date. 

3.Transfer Restrictions.  The Performance Share Units may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or otherwise disposed of by the Employee.

4.Shareholder Rights.  The Employee shall not have any of the rights of a shareholder of the Company with respect to the Performance Share Units. 

5.Corporate Acts.  The existence of the Performance Share Units shall not affect in any way the right or power of the Board of Directors of the Company or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding. 

6.Withholding of Tax.  To the extent that the receipt of the Performance Share Units results in compensation income to the Employee for federal or state income tax purposes, the Employee may elect to either (i) deliver to the Company at the time of such receipt, as the case may be, such amount of money as the Company may require to meet its withholding obligation under applicable tax laws or regulations, or (ii) have the Company withhold a portion of the shares of the Company’s common stock distributable to the Employee under this Agreement that does not exceed the amount of taxes to be withheld by reason of such resulting compensation income.  If the Employee does not make a timely election regarding the manner this tax withholding obligation will be satisfied, then the Company shall withhold a portion of the shares of the Company’s common stock distributable to the Employee under this Agreement that does not exceed the amount of taxes to be withheld by reason of such resulting compensation income.

7.Employment Relationship.  For purposes of this Agreement, the Employee shall be considered to be in the employment of the Company as long as the Employee remains an employee of either the Company or an Affiliate (as such term is defined in the Plan).  Nothing in the adoption of the Plan or the award of the Performance Share Units thereunder pursuant to this Agreement shall confer upon the Employee the right to continued employment by the Company or affect in any way the right of the Company to terminate such employment at any time.  Unless otherwise provided in a written employment agreement or by applicable law, the Employee’s employment by the Company shall be on an at-will basis, and the employment relationship may be terminated at any time by either the Employee or the Company for any reason whatsoever, with or without cause.  Any question as to whether and when there has been a termination of such employment, and the cause of such termination, shall be determined by the Committee, and its determination shall be final.

8.Notices.  Any notices or other communications provided for in this Agreement shall be sufficient if in writing.  In the case of the Employee, such notices or communications shall be effectively delivered when hand delivered to the Employee at his or her principal place of employment or when sent by registered or certified mail to the Employee at the last address the Employee has filed with the Company.  In the case of the Company, such notices or communications shall be effectively delivered when sent by registered or certified mail to the Company at its principal executive offices.  

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9.Entire Agreement; Amendment.  This Agreement replaces and merges all previous agreements and discussions relating to the same or similar subject matters between the Employee and the Company and constitutes the entire agreement between the Employee and the Company with respect to the subject matter of this Agreement.  This Agreement may not be modified in any respect by any verbal statement, representation or agreement made by any employee, officer, or representative of the Company or by any written agreement unless signed by an officer of the Company who is expressly authorized by the Company to execute such document.  In addition, if it is subsequently determined by the Committee, in its sole discretion, that the terms and conditions of this Agreement and/or the Plan are not compliant with Code Section 409A, or any Treasury regulations or Internal Revenue Service guidance promulgated thereunder, this Agreement and/or the Plan may be amended by the Company accordingly.

10.Code Section 409A.  If and to the extent any portion of any payment provided to the Employee under this Agreement in connection with the Employee’s separation from service (as defined in Section 409A of Internal Revenue Code of 1986, as amended (“Code Section 409A”) is determined to constitute “nonqualified deferred compensation” within the meaning of Code Section 409A and the Employee is a “specified employee” as defined in Code Section 409A(a)(2)(B)(i), as determined by the Company in accordance with the procedures separately adopted by the Company for this purpose, by which determination the Employee, as a condition to accepting benefits under this Agreement and the Plan, agrees that he or she is bound, such portion of the shares of Company’s common stock to be delivered on a vesting date shall not be delivered before the earlier of (i) the day that is six months plus one day after the date of separation from service (as determined under Code Section 409A) or (ii) the tenth (10th) day after the date of the Employee’s death (as applicable, the “New Payment Date”).  The shares that otherwise would have been delivered to the Employee during the period between the date of separation from service and the New Payment Date shall be delivered to the Employee on such New Payment Date, and any remaining shares will be delivered on their original schedule.  If the Employee becomes Disabled and such disability does not satisfy the requirements of Code Section 409A, then the Employee’s shares shall be delivered on the original scheduled vesting date.  Neither the Company nor the Employee shall have the right to accelerate or defer the delivery of any such shares except to the extent specifically permitted or required by Code Section 409A.  This Agreement is intended to comply with the provisions of Code Section 409A and this Agreement and the Plan shall, to the extent practicable, be construed in accordance therewith.  Terms defined in this Agreement and the Plan shall have the meanings given such terms under Code Section 409A if and to the extent required to comply with Code Section 409A.  In any event, the Company makes no representations or warranty and shall have no liability to the Employee or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.

11.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Employee.

12.Miscellaneous.  In the event of any conflict or inconsistency between the terms of this Agreement and the terms of the Plan, including any amendments or supplements thereto, the terms of this Agreement shall be controlling.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and the Employee has agreed to and accepted the terms of this Agreement, all as of the date first above written.

															
			COMPANY		
					
			ADAMS RESOURCES & ENERGY, INC.		
					
			By:		
					
			Name:		
					
			Title:		
					
			EMPLOYEE		
					
			By:		
					
			Date:		

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Exhibit A

Performance Criteria

        The Employee’s Performance Share Units shall become vested based on the satisfaction of both the (i) the time vesting requirement described in Section 2(b)(i) of the Agreement, and (ii) the Performance Criteria described in this Exhibit A.  The initial number of Performance Share Units specified in Section 1 of the Agreement shall be the “target” number of shares of Stock that may be delivered upon settlement of the Performance Share Units subject to the Agreement.  This initial number of Performance Share Units shall be adjusted based on the attainment of the Performance Criteria described in Section 3 below.

1.Performance Period:  The performance period shall be the period between January 1, 2019 and December 31, 2019.

2.Award Value:  The Performance Share Units subject to this Agreement will be earned based on the Company’s performance for the Performance Period.  Following the end of the Performance Period, the Committee shall determine the number of Performance Share Units earned for the Performance Period.

3.Performance Criteria:  Seventy-five percent (75%) of the Award shall be earned based on the Company’s attainment of the Adjusted Pre-Tax Cash Flow (“APTCF”) factor described in Section 3(a) below.  Twenty-five percent (25%) of the Award shall be earned based on the Company’s attainment of Adjusted Pre-Tax Earnings (“APTE”) factor described in Section 3(b) below. 

(a)     Adjusted Pre-Tax Cash Flow – APTCF is defined as pre-tax cash flow as adjusted to reflect (i) net earnings or losses; (ii) income tax benefits; (iii) depreciation, depletion and amortization; (iv) gains or losses on sales of property; (v) inventory liquidation gains; (vi) inventory valuation losses; (vii) net changes in the fair value of contracts, as each such adjustment is reported in the Company’s publicly filed financial statements for the fiscal year ending December 31, 2019; and (viii) any other adjustments the Company includes in the calculation of adjusted cash flow, as approved by the Company’s Board of Directors and reported in the Company’s earnings release. The Award Level for the APTCF factor for the Performance Period shall be determined based on the following table:     

									
		Adjusted Pre-Tax Cash	% of Target Performance Share
	Performance Level	Flow Amount	Units Earned1

	Maximum	$40,500,000	200% 	 
	Target	$32,400,000	100% 	 
	Threshold	$24,300,000	50% 	 
	<Threshold	<$24,300,000	—% 	 

_____________

1Linear interpolation will be applicable to the percentages between the Performance Levels.

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(b)     Adjusted Pre-Tax Earnings – APTE shall be determined based on the Company’s net earnings during the Performance Period, as adjusted to reflect (i) income tax benefits; (ii) gains or losses on sales of property; (iii) inventory liquidation gains; (iv) inventory valuation losses; (v) net changes in the fair value of contracts, as each such adjustment is reported in the Company’s publicly filed financial statements for the fiscal year ending December 31, 2019; and (vi) any other adjustments included by the Company in the calculation of its net earnings, as approved by the Company’s Board of Directors and reported in its earnings release.  The Award Level for the APTE factor for the Performance Period shall be determined based on the following table:

									
		Adjusted Pre-Tax	% of Target Performance Share
	Performance Level	Earnings Amount	Units Earned1

	Maximum	$21,900,000	200% 	 
	Target	$17,500,000	100% 	 
	Threshold	$13,200,000	50% 	 
	<Threshold	<$13,200,000	—% 	 

_____________

1Linear interpolation will be applicable to the percentages between the Performance Levels.

(c)     Forfeiture.  Any portion of the Performance Share Units which are not earned at the end of the Performance Period shall be forfeited as of the last day of the Performance Period.

6Exhibit 10.1

 

AEROJET ROCKETDYNE HOLDINGS, INC.

AMENDED AND RESTATED EXECUTIVE

CHANGE IN CONTROL SEVERANCE POLICY

As of March 4, 2020

 

Section. 1.             
Introduction.

 

(a)           
The purpose of this Amended and Restated Executive Change in Control Severance Policy (the “Policy”)
is to provide for the payment of severance benefits to Eligible Officers (as defined below) of Aerojet Rocketdyne Holdings, Inc.
(the “Company”) who incur a qualified termination of employment in connection with a Change in Control (as defined
below) and to provide certain additional benefits if such termination occurs. An “Eligible Officer” means an
executive officer of the Company or any of its subsidiaries, other than the Company’s Executive Chairman and Chief Executive
Officer, who has been designated in writing by the Board of Directors of the Company (the “Board”) (or its Organization
& Compensation Committee, including any replacement or successor committee (the “Compensation Committee”))
as eligible to participate in the Policy. Once an employee is designated as an Eligible Officer, such employee shall be an Eligible
Officer for the duration of the Policy.

 

Section. 2.             
Amendment or Termination of the Policy. The Board or the Compensation Committee may amend or terminate the Policy
at any time, except:

 

(a)           
During the 24-month period following a Change in Control, the Policy may not be terminated or amended in a way that would
adversely affect an Eligible Officer without such Eligible Officer’s written consent.

 

(b)           
With respect to any individual who is an Eligible Officer as of the date of any termination or amendment of the Policy,
and subject to Section 2(a), unless such termination or amendment is determined by the Board (or the Compensation Committee) in
its sole discretion to be necessary or appropriate to minimize or eliminate adverse tax treatment to Eligible Officers or to the
Company (whether under Section 409A (as defined below) or otherwise), then without such Eligible Officer’s written consent,
the termination or amendment of the Policy shall not be effective as it applies to such Eligible Officer until (x) the first anniversary
of the date the termination or amendment of the Policy is approved or adopted by the Board (or the Compensation Committee) or (y)
if such approval or adoption date occurs within the 12-month period prior to a Change in Control, the 24-month anniversary of the
Change in Control.

 

(c)           
No such amendment or termination of the Policy shall give the Company (or any successor) the right to recover any amount
paid to an Eligible Officer prior to the date of such amendment or termination, or to cause the cessation of severance payments
and benefits to an Eligible Officer who has executed a Release (as defined below).

 

Nothing in this Section 2 shall be construed to limit the ability
of the Company to amend the Equity Plan, adopt or amend any successor or replacement equity compensation plan, or enter into any
agreement with an Eligible Officer, regardless of the effect on the Policy.

 

     

    

    

Section. 3.             
Eligibility for Change in Control Severance Benefits Under the Policy.

 

(a)           
In order to be eligible to receive any benefits under Section 4 of this Policy, the Eligible Officer must execute an acknowledgment
form in the form attached to this Policy as Exhibit A.

 

(b)           
In order to be eligible to receive any benefits under Section 4 of this Policy, the Eligible Officer must, within 60 days
following the Termination Date (as defined below) (such 60-day period referred to as the “Release Period”),
execute a general waiver and release of all claims in favor of the Company, in a form prescribed by the Company (the “Release”),
and such Release must become effective, binding and irrevocable by the end of the Release Period in accordance with its terms.
In addition to the general waiver and release of claims, such Release shall also provide that the Eligible Officer:

 

(i)                
will not engage in any conduct that is injurious to the Company’s reputation or interest, including but not limited
to publicly disparaging (or inducing or encouraging others to publicly disparage) the Company;

 

(ii)             
shall return to the Company any and all originals and copies of documents, materials, records, credit cards, keys, building
passes, computers, smartphones, tablets, PDAs and other electronic devices or other items in his or her possession or control belonging
to the Company or containing proprietary information relating to the Company;

 

(iii)           
will cooperate with the Company and its/their counsel in connection with any investigation, administrative proceeding or
litigation relating to any matter in which the Eligible Officer was involved or of which Eligible Officer has knowledge; and

 

(iv)            
that, in the event the Eligible Officer 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 the Eligible Officer’s
employment with the Company, the Eligible Officer will give prompt notice of such request to the Company, and subject to applicable
law, 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.

 

(c)           
An Eligible Officer will not receive benefits under the Policy if an Eligible Officer’s employment with the Company
terminates for any reason not specified in Section 4 hereof.

 

(d)           
All benefits that an Eligible Officer may be or become entitled to under this Policy will terminate immediately if the Eligible
Officer, at any time, violates any proprietary information, intellectual property or confidentiality obligation to the Company
or the terms of the Release.

 

Section. 4.             
Change in Control Severance Benefits. In the event that an Eligible Officer incurs a termination of employment by
reason of a Change in Control Termination at any time, and subject to the provisions of Section 6, the Eligible Officer shall be
entitled to, in lieu of any other severance compensation and benefits whatsoever, the following payments and benefits (subject
to the terms and conditions of this Policy), in addition to payment of any Accrued Obligations:

 

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(i)                
a one-time lump sum cash payment equal to two times such Eligible Officer’s annual base salary in effect on the Termination
Date (or, if greater, the Eligible Officer’s annual base salary in effect immediately prior to the Change in Control), payable
within 15 days following the last date on which the Release can be revoked;

 

(ii)             
 a prorated (to the Termination Date) portion of the incentive compensation payment such Eligible Officer would have received
under the Company’s Short-Term Incentive Plan (the “STIP”) for the fiscal year in which the Termination
Date occurs (based on the greater of target level or actual performance), and the full incentive compensation payment such Eligible
Officer would have received under the STIP for the fiscal year prior to the year in which the Termination Date occurs to the extent
not yet paid (based on actual performance as determined by the Board or the Compensation Committee in its discretion for other
STIP participants following year-end), and payable at the same time as such other STIP participants receive payments under the
STIP;

 

(iii)           
a one-time lump sum cash payment equal to two times the “target” incentive compensation such Eligible Officer
could have received under the STIP for the fiscal year in which the Termination Date occurs, payable within 15 days following the
last date on which the Release can be revoked;

 

(iv)            
continued participation in the Aerojet Rocketdyne’s Executive Physical Program for a period of twenty-four months,
and for so long as the Eligible Officer timely elects (and remains eligible for) health benefits continuation pursuant to COBRA
payment by the Company of the Eligible Officer’s applicable premiums (including spouse or family coverage if the Eligible
Officer had such coverage on the Termination Date) for such continuation coverage under COBRA (payable as and when such payments
become due) during the period commencing on the Termination Date and ending on the earliest to occur of (a) the 24-month anniversary
of the Termination Date, and (b) the date on which the Eligible Officer and his or her covered dependents, if any, become eligible
for health insurance coverage through another employer; and

 

(v)              
to the extent unvested, effective on the effective date of the Release, immediate full vesting of all of the Eligible Officer’s
equity awards (at the maximum level of performance, if applicable); and

 

(vi)            
outplacement services provided by the Company-designated outplacement firm for a period of 12 months starting no later than
ninety (90) days from the Eligible Officer’s date of termination with a maximum value of $15,000.

 

Severance compensation and benefits received under the Policy will
not be included in compensation or earnings for purposes of determining benefits under any employee welfare or pension benefit
plan (including 401(k) plan) of the Company except to the extent provided specifically under the terms of such plan.

 

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The Company’s obligation to pay the Eligible Officer the amounts
provided and to make the arrangements provided shall not be subject to set-off, counterclaim or recoupment of amounts owed by the
Eligible Officer to the Company or its affiliates. The Eligible Officer shall not be required to mitigate the amount of any payment
provided for pursuant to this Policy by seeking other employment, and no amounts otherwise earned shall be set-off against the
amounts due.

 

Section. 5.             
Definitions. For purposes of this Policy:

 

(i)                
“Accrued Obligations” means, each as determined and payable in accordance with the applicable Company
policy or benefit plan, (x) accrued and unpaid wages, (y) accrued and unused vacation, and (z) to the extent vested, any other
payments or benefits pursuant to any Company benefit plans.

 

(ii)             
“Cause” means that the Eligible Officer: (A) pleads “guilty” or “no contest”
to or is convicted of a felony under federal or state law or as a crime under federal or state law which involves Eligible Officer’s
fraud or dishonesty; (B) in carrying out the Eligible Officer’s duties, engages in conduct that constitutes gross negligence
or willful misconduct that results in material harm to the Company; (C) fails to reasonably and materially perform the responsibilities
of Eligible Officer’s position (other than any such failure resulting from incapacity due to physical or mental illness);
(D) engages in misconduct that causes material harm to the reputation of the Company; or (E) materially breaches any term of this
Policy or other material written policy of the Company, provided that if the Company provides written notice of Cause pursuant
to (B) through (E), the Eligible Officer shall be given thirty (30) days from the date of such written notice to cure such conduct.

 

(iii)           
“Change in Control” shall mean the occurrence of any of the following events:

 

(a)       all or substantially
all (meaning having a total gross fair market value equal to 50% or more of the total gross fair market value of all of the Company’s
assets immediately before such acquisition or acquisitions) of the assets of the Company are acquired by a Person (during a twelve
month period ending on the date of the most recent acquisition by such Person); or

 

(b) the Company is merged, consolidated, or reorganized
into or with another corporation or entity in one or a series of transactions during a twelve-month period with the result that
upon the conclusion of the transaction less than 60% of the outstanding securities entitled to vote generally in the election of
directors or other capital interests of the surviving, resulting or acquiring corporation are beneficially owned (as that term
is defined in Rule 13-d 3 under the Exchange Act) by the stockholders of the Company immediately prior to the completion of the
transaction in approximately the same proportions as such holdings by such stockholders immediately prior to the completion of
the transaction; or

 

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(c) the individuals who, immediately as of the date hereof,
are members of the Board (the “Company Incumbent Board”) cease for any reason to constitute at least a majority
of the members of the Board; provided, however, that if the election, or nomination for election of any new director was approved
by a vote of at least a majority of the Company Incumbent Board, such new director shall, for purposes of the Plan, be considered
as a member of the Company Incumbent Board; provided further, however, that no individual shall be considered a member of the Company
Incumbent Board if such individual initially assumed office as a result of either an actual or threatened “Election Contest”
(as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board (a “Company Proxy Contest”) including by reason of any agreement
intended to avoid or settle any Election Contest or Company Proxy Contest.

 

(iv)            
“Change in Control Termination” means, within 24 months following a Change in Control, and subject to
the following sentence, any termination of the Eligible Officer’s employment with the Company (or its successor) (A) by the
Company (or its successor) for any reason other than Cause or (B) by the Eligible Officer for Good Reason. For avoidance of doubt,
a “Change in Control Termination” shall include termination of the Eligible Officer’s employment with the Company
(or its successor) due to the Eligible Officer’s Disability (as such term is defined under Section 409A) or death after a
Change in Control. A Change in Control Termination also includes any termination of the Eligible Officer’s employment with
the Company that occurs pursuant to clauses (A) or (B) of the first sentence of this paragraph if such termination occurs within
six months prior to the occurrence of a Change in Control (or, if earlier, following the signing of a definitive agreement that
if consummated would result in a Change in Control) and the Change in Control occurs. In the event the prior sentence applies to
an Eligible Officer, the Eligible Officer’s date of termination shall be deemed to be the date of the Change in Control.

 

(v)              
“Good Reason” means the occurrence of one of the following events without the Eligible Officer’s
consent: (A) a material diminution in Eligible Officer’s base salary or target annual bonus opportunity percentage, (ii)
a requirement that the Eligible Officer be based anywhere other than within 25 miles of such Eligible Officer’s principal
place of employment as of the date hereof, or (iii) a material diminution in the Eligible Officer’s title, duties, responsibilities,
authority or reporting obligations from those in effect as of the date hereof (other than temporarily while the Eligible Officer
is physically or mentally incapacitated or as required by applicable law); provided, however, that no event shall constitute Good
Reason unless the Eligible Officer has notified the Company in writing of the Eligible Officer’s intention to so terminate
the Eligible Officer’s employment, such notice: (i) to state in detail the particular acts or failures to act that constitute
the grounds on which the proposed termination for Good Reason is based, (ii) to be given within sixty (60) days after the first
occurrence of such acts or failures to act, and (iii) the Company shall have thirty (30) days following receipt of such notice
to cure such acts or failures to act in all material respects. If the Company has not cured such acts or failures to act within
the thirty (30) day cure period, then the Eligible Officer’s employment shall be immediately terminated for Good Reason.

 

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Section. 6.             
Tax Provisions.

 

(a)           
Withholding Taxes. The Company may withhold from any amounts payable under this Policy such federal, state, local
and other taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

(b)           
Section 409A.

 

(i)                
This Policy and the payments and benefits hereunder are intended to qualify for the short-term deferral exception to Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), and all regulations, rulings and other guidance
issued thereunder, all as amended and in effect from time to time (“Section 409A”), described in Treasury Regulation
Section 1.409A-1(b)(4) to the maximum extent possible, and to the extent they do not so qualify, they are intended to qualify for
the involuntary separation pay plan exception to Section 409A described in Treasury Regulation Section 1.409A-1(b)(9)(iii) to the
maximum extent possible.

 

(ii)             
To the extent Section 409A is applicable to this Policy, this Policy is intended to comply with Section 409A. Without limiting
the generality of the foregoing, if on the date of termination of employment the Eligible Officer is a “specified employee”
within the meaning of Section 409A as determined in accordance with the Company’s procedures for making such determination,
to the extent required in order to comply with Section 409A, amounts that would otherwise be payable under this Policy during the
six-month period immediately following the Termination Date shall instead be paid within 10 days of the first business day after
the date that is six months following the Termination Date (or, if earlier, the date of death of the Eligible Officer).

 

(iii)           
To the extent the Release Period crosses two calendar years, and to the extent required in order to comply with Section
409A, amounts that would otherwise be payable under this Policy during the Release Period in the initial calendar year shall be
paid within 10 days of the January 1st of the second calendar year.

 

(iv)            
All references herein to “Termination Date” or “termination of employment” shall mean separation
from service as an employee within the meaning of Section 409A(a)(2)(A)(i) of the Code and Treasury Regulation Section 1.409A-1(h).

 

(v)              
The Company makes no representation or warranty and shall have no liability to any Eligible Officer or any other person
if any provisions of this Policy are determined to constitute deferred compensation subject to Section 409A but do not satisfy
an exemption from, or the requirements of, Section 409A. The Company shall not have any liability to any Eligible Officer or any
other person in the event Section 409A applies to payments and benefits under the Policy in a manner that results in adverse tax
consequences for the Eligible Officer or such person.

 

(vi)            
Except as otherwise expressly provided herein, to the extent any expense reimbursement or the provision of any in-kind benefit
under this Policy is determined to be subject to Section 409A, the amount of any such expenses eligible for reimbursement, or the
provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable
year (except for any lifetime or other aggregate limitation applicable to medical expenses), in no event shall any expenses be
reimbursed after the last day of the calendar year following the calendar year in which such Eligible Officer incurred such expenses,
and in no event shall any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange
for another benefit.

 

    6

    

    

(c)           
Section 280G Contingent Cutback. In the event that the payments and benefits provided for in this Policy or otherwise
payable to an Eligible Officer (i) constitute “parachute payments” within the meaning of Section 280G of the Code and
(ii) but for this provision, would be subject to the excise tax imposed by Section 4999 of the Code, then such severance and other
payments and benefits shall be payable either (i) in full or (ii) as to such lesser amount that would result in no portion of such
payments and benefits being subject to the excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking
into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt
by such Eligible Officer on an after-tax basis, of the greatest amount of payments and benefits under this Policy or otherwise,
notwithstanding that all or some portion of such payments and benefits may be taxable under Section 4999 of the Code. To the extent
any of such benefits and payments provided for in this Policy are “deferred compensation” within the meaning of Section
409A, any reduction shall be made in the following manner: first a pro rata reduction of (i) cash payments subject to Section 409A
as deferred compensation and (ii) cash payments not subject to Section 409A, and second a pro rata cancellation of (x) equity-based
compensation subject to Section 409A as deferred compensation and (y) equity-based compensation not subject to Section 409A; provided
that reduction in either cash payments or equity compensation benefits shall be made pro rata between and among benefits that are
subject to Section 409A and benefits that are exempt from Section 409A. Unless the Company and such Eligible Officer otherwise
agree in writing, any determination required under this provision shall be made in writing by the Company’s independent public
accountants (the “Accountants”), whose determination shall be conclusive and binding upon such Eligible Officer
and the Company for all purposes. For purposes of making the calculations required by this provision, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning
the application of Sections 280G and 4999 of the Code. The Company and such Eligible Officer shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to make a determination under this provision. The
Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this provision.

 

Section. 7.             
Miscellaneous.

 

(a)           
Entire Agreement; No Duplication of Benefits. Any amounts payable hereunder shall be reduced by any notice under,
or payments in lieu of notice under, the WARN Act (or similar state law). Any amounts payable under this Policy shall not be duplicative
or cumulative of any other severance benefits, and to the extent an Eligible Officer has executed an individually negotiated written
agreement with the Company relating to severance benefits after a “change in control” (or such similar term) that is
in effect on his or her Termination Date, no amounts will be due hereunder.

 

    7

    

    

(b)           
No Implied Employment Contract. This Policy is not an employment contract. Nothing in this Policy or any other instrument
executed pursuant to this Policy shall confer upon an Eligible Officer any right to continue in the Company’s employ or service
nor limit in any way the Company’s right to terminate an Eligible Officer’s employment at any time for any reason.
The Company and the Eligible Officer acknowledge that the Eligible Officer’s employment is and shall continue to be “at-will”,
as defined under applicable law, except to the extent otherwise expressly provided in a written agreement between the Eligible
Officer and the Company.

 

(c)           
Exclusive Discretion. The Board, the Compensation Committee or another authorized committee thereof will have the
exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Policy and to construe
and interpret the Policy and to decide any and all questions of fact, interpretation, definition, computation or administration
arising in connection with the operation of the Policy, including, but not limited to, the eligibility to participate in the Policy
and amount of benefits paid under the Policy, and its rules, interpretations, computations and other actions will be binding and
conclusive on all persons.

 

(d)           
Notice. Notices and all other communications contemplated by this Policy shall be in writing and shall be deemed
to have been duly given when personally delivered, sent by facsimile or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Eligible Officer, mailed notices shall be addressed to him or her at
the home address or facsimile number shown on the Company’s corporate records, unless a different address or facsimile number
is subsequently communicated to the Company in writing. In the case of the Company, mailed notices or notices sent by facsimile
shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of the Company’s General
Counsel (or, in the event the Eligible Officer is the General Counsel of the Company, then to the Company’s Chief Executive
Officer).

 

(e)           
No Waiver. The failure of a party to insist upon strict adherence to any term of this Policy on any occasion shall
not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence
to that term or any other term of this Policy.

 

(f)            
Severability. In the event that any one or more of the provisions of this Policy shall be or become invalid, illegal
or unenforceable in any respect or to any degree, the validity, legality and enforceability of the remaining provisions of this
Policy shall not be affected thereby. The parties intend to give the terms of this Policy the fullest force and effect so that
if any provision shall be found to be invalid or unenforceable, the court reaching such conclusion may modify or interpret such
provision in a manner that shall carry out the parties’ intent and shall be valid and enforceable.

 

(g)           
Successors. The Company shall have the right to assign its rights and obligations under this Policy to an entity
that (whether direct or indirect, by purchase, merger, consolidation or otherwise) acquires all or substantially all of the assets
of the Company. The rights and obligations of the Company under this Policy shall inure to the benefit and shall be binding upon
the successors and assigns of the Company. In the case of any transaction in which a successor would not by the foregoing provision
or by operation of law be bound by the Policy, the Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to the Company to expressly and unconditionally assume the Policy in writing and honor the
obligations of the Company hereunder, in the same manner and to the same extent that the Company would be required to perform if
no succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any
such succession shall entitle Eligible Officers to such severance compensation and benefits from the Company in the same amount
and on the same terms as the Eligible Officer would be entitled hereunder if the Eligible Officer had terminated his or her employment
with Good Reason following a Change in Control, except that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination.

 

    8

    

    

An Eligible Officer shall not have any right to assign his or her obligations
under this Policy and shall only be entitled to assign his or her rights under this Policy upon his or her death, solely to the
extent permitted by this Policy, or as otherwise agreed to by the Company.

 

(h)           
Creditor Status of Eligible Officers. In the event that any Eligible Officer acquires a right to receive payments
from the Company under the Policy such right shall be no greater than the right of any unsecured general creditor of the Company.

 

(i)             
Governing Law. This Policy is intended to be governed by and will be construed in accordance with the laws of the
State of Delaware.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    9

    

    

EXHIBIT A 

 

PARTICIPANT ACKNOWLEDGMENT AND ACCEPTANCE OF THE

AEROJET ROCKETDYNE HOLDINGS, INC.

AMENDED AND RESTATED

EXECUTIVE CHANGE IN CONTROL SEVERANCE POLICY

 

I acknowledge that I have received this official plan document attached as Annex A hereto
for the Aerojet Rocketdyne Holdings, Inc. Amended and Restated Executive Change in Control Severance Policy (the “Policy”),
and confirm that I have read and understand the terms of the Policy. Furthermore, I agree that any compensation and benefits I
may be due under the Policy will be paid under the rules, restrictions, terms and conditions as stated therein (and as may be subsequently
modified). The Company agrees not to remove the undersigned as an Eligible Officer (as defined in the Policy) without the undersigned’s
written consent.

 

	 	 
	 	 
	 	

	 	
        [NAME]

        Date:

 

Agreed and Acknowledged:

 

Aerojet Rocketdyne Holdings, Inc.

 

 

By:__________________________________

Name:

Title:

Date:

 

 

 

 

 

 

 

 

 

 

 

 

 

10

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