THE 2009
BENEFIT RESTORATION PLAN
FOR THE GENCORP INC. PENSION PLAN
Effective January 1, 2009
The
2009 Benefit Restoration Plan for the GenCorp Inc. Pension Plan
(the “Plan”) was established to provide restored
benefits solely related to the statutory limits under the Pension
Plan. This Plan is effective January 1, 2009, unless
specifically stated otherwise in the Plan with respect to a
specific provision.
The
Plan is a successor plan to The Benefit Restoration Plan for
Salaried Employees of GenCorp Inc. and Certain Subsidiary
Companies, as amended (the “Prior Plan”) which was
originally established effective as of December 1, 1982.
Between January 1, 2005 and December 31, 2008, the Plan
operated in good faith compliance with the guidance issued under
Code Section 409A (the “409A Transition
Period”).
For
purposes of this Plan, all references to the Prior Plan shall only
be to those amounts in the Prior Plan that were to restore benefits
unavailable because of statutory limits applied to certain
employees participating in the Pension Plan. Effective
December 31, 2004, the Prior Plan was frozen and no new
benefits shall be earned or vest under it; provided, however, that
any benefits earned and vested under the Prior Plan before
January 1, 2005, shall continue to be governed by the terms
and conditions of the Prior Plan as in effect on December 31,
2004, or on the date of any later amendment, provided that any
amendment after October 3, 2004, is not a material
modification of the Prior Plan under Section 409A of the Code
and the regulations promulgated thereunder. Any benefits earned and
vested under the Prior Plan after December 31, 2004, are
deemed to have been earned and vested under this Plan.
During
the 409A Transition Period, the timing and form of benefits
payments were controlled by participants’ elections under the
Pension Plan, in accordance with the terms of the Prior
Plan.
The
Pension Plan was frozen on February 1, 2009. As of that date,
no additional benefits will accrue under this Plan. However,
benefits will continue to vest under the Plan for a Participant in
the same manner as benefits continue to vest under the Pension Plan
for that particular Participant (including the ability to vest into
early retirement status based upon age and service). If vesting
ceases to occur under the Pension Plan, vesting shall also cease to
occur in the Plan.
The
Plan is intended to be a plan which is unfunded and maintained
primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees within
the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of
ERISA.
This
Plan is further intended to comply with the requirements of Code
Section 409A, and the Treasury Regulations issued thereunder,
and shall be administered and interpreted in a manner consistent
therewith.
The
terms and provisions of this Plan are as follows:
Any
capitalized word or phrase used in the Plan that is not defined in
this Plan but is used in the Pension Plan shall have the meaning it
has in the applicable Pension Plan in which a Participant hereunder
has accrued a pension benefit. Wherever used herein:
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1.1
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“Actuarial Equivalence”
or “Actuarially Equivalent” shall mean benefits of
equivalent value when calculated at the date benefits commence,
using these interest and mortality assumptions: (a) interest
equal to 6.0% and (b) mortality as assumed in the RP-2000
Mortality Table projected to 2010.
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1.2
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“Administrative
Committee” means the Administrative Committee as appointed by
the Board.
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1.3
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“Beneficiary” means a
named beneficiary, joint annuitant or surviving Spouse of a
deceased Participant. Notwithstanding the foregoing, no Beneficiary
designation under the Plan shall be effective unless it is
submitted in writing on the form required by the Company (or its
designee) and delivered to the Company (or its designee) prior to
the Participant’s death.
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1.4
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“Board” shall mean the
Board of Directors of the Company.
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1.5
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“Company” means GenCorp
Inc., an Ohio corporation.
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1.6
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“Compensation Committee”
means the Organization and Compensation Committee as appointed by
the Board.
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1.7
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“ERISA” means the
Employee Retirement Income Security Act of 1974, as
amended.
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1.8
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“Employer” means the
Company and each entity that is treated with the Company as a
single “service recipient” under Treasury Regulations
Section 1.409A-1(h)(3), except that “greater than
50 percent” shall be used instead of “at least
80 percent” in each place it appears in Code
Sections 1563(a)(1), (2), and (3).
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1.9
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“Member Company” means
the Company, Aerojet-General Corporation and any of their divisions
or subsidiaries, which are designated by the Board, in its sole
discretion, as a Member Company.
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1.10
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“Participant” means an
employee who meets the requirements of Section 2.1 or is a
Beneficiary receiving a benefit under the Plan; provided, however,
that no employee shall become a Participant prior to the date such
employee’s employer becomes a Member Company.
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1.11
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“Pension Plan” means a
pension plan of a Member Company applicable to salaried
employees.
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1.12
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“Plan” means The 2009
Benefit Restoration Plan for the GenCorp Inc. Pension Plan,
effective January 1, 2009, as it may be amended from time to
time.
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1.13
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“Spouse” has the same
meaning as set forth in the Pension Plan.
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1.14
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“Termination of
Employment” means a separation from service within the
meaning of Treasury Regulation Section 1.409A-1(h).
Whether a Termination of Employment has occurred is based on
whether the facts and circumstances indicate that the Participant
and the Employer reasonably anticipate that no further services
would be performed after a certain date. A Participant shall not be
deemed to have separated from service if the Participant continues
to provide services to the Employer (whether as an employee,
contractor or otherwise) at an annual rate that is fifty percent
(50%) or more of the services rendered, on average, during the
immediately preceding thirty-six (36) months of employment
with the Employer (or if less than thirty-six (36) months,
such lesser period); provided, however, that a separation from
service will be deemed to have occurred if a Participant’s
service with the Employer (whether as an employee, contractor or
otherwise) is reduced to an annual rate that is less than twenty
percent (20%) of the services rendered, on average, during the
immediately preceding thirty-six (36) months of employment
with the Employer (or if less than thirty-six (36) months, such
lesser period). A Participant shall be deemed to separate from
service if the Participant is on a bona fide leave of absence that
exceeds six (6) months in duration and the Participant’s
right to reemployment with the Employer is not provided either by
statute or by contract on the day immediately following such six
(6) month period. A bona fide leave of absence shall include a
military leave, sick leave or other bona fide leave of absence if
such leave does not exceed six (6) months, or longer, so long
as the Participant’s right to reemployment with the Employer
is provided either by statute or contract.
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2.1
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Eligibility
. In order to be
eligible, the employee: (a) must be an employee of a Member
Company who qualifies for a benefit under the Pension Plan and who
incurs a reduction in such benefit as a result of the limitations
under Section 401(a)(17) or 415 of the Code (or any successor
provisions), (b) is an officer or key employee of the Member
Company, and (c) is designated by the Compensation Committee
as eligible for the Plan.
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2.2
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Committee Selection
. The Compensation
Committee, in its sole discretion, shall have the right to
designate which eligible employees: (A) are members of a
select group of management or highly compensated employees,
(B) are key employees and (C) shall become, or will
continue to be, Participants of the Plan.
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2.3
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Termination of
Participation . A Participant’s eligibility
for continued accrual of benefits under the Plan shall end upon the
earlier of his: (i) Termination of Employment, (ii)
termination of the Plan, (iii) ceasing to be a member of a
select group of management or highly compensated employees, or
(iv) the date the Compensation Committee determines the
employee is no longer a Participant in the Plan.
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3.1
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Amount of Benefit
. Subject to
Section 3.2, the monthly pension benefit provided by this Plan
shall be an amount equal to subsection (a) minus the sum of
subsection (b) plus subsection (c), where:
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(a)
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is
any monthly amount of pension that would be payable to the
Participant under the Pension Plan if such pension amount were
(1) calculated without regard to the limits of Code
Sections 401(a)(17) or 415, and (2) paid in a single life
annuity commencing on the Participant’s Normal Retirement
Date;
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(b)
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is
the monthly amount of pension that would be payable to the
Participant under the Pension Plan if such pension amount were paid
in a single life annuity commencing on the Participant’s
Normal Retirement Date;
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(c)
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is
any monthly amount of pension that would be payable to the
Participant under the Prior Plan, in accordance with the schedule
set forth on Schedule A, if such pension amount were paid in a
single life annuity commencing on the Participant’s Normal
Retirement Date.
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The amounts determined in
Section 3.1(c) are fixed amounts that are calculated in
accordance with the formula set forth in Appendix A. These
amounts under the Prior Plan are not subject to change and, for
purposes of this Section 3.1, cannot be calculated in any
manner other than the manner set forth in Appendix A and
allowed by Code Section 409A.
The
Pension Plan was frozen on February 1, 2009. As of that date,
the Pension Plan was first frozen, no additional benefits will
accrue under the Plan. However, benefits will continue to vest
under the Plan for a Participant in the same manner as benefits
continue to vest under the Pension Plan for that particular
Participant (including the ability to vest into early retirement
status based upon age and service). If vesting ceases to occur
under the Pension Plan, vesting shall also cease to occur in the
Plan.
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3.2
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Special Rules for Determining Amount
of Benefit . This section sets forth additional,
special rules for determining the amount of the benefit set forth
in Section 3.1 above.
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(a)
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Effective December 1, 2008, the
GenCorp Consolidated Pension Plan Program B was amended to
eliminate the Change in Control Enhancement under Program B for any
Change in Control (as such term is defined in Program B wherever
referenced in this subsection (a) only) occurring on or after
December 1, 2008. With respect to any Change in Control on or
after December 1, 2008, all highly compensated Participants in
Program B who would have qualified for a Change in Control
Enhancement under Program B if such benefit had not been
eliminated, shall be provided under this Plan a Change in Control
Enhancement (according to the terms of such enhancement benefit as
it existed in Program B prior to the amendment eliminating the
benefit) which will be used to calculate monthly pension amounts
under subsection (a) above relating solely to benefit accruals
under this Plan on or after December 1, 2008.
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The
Change in Control Enhancement applied to a select group of highly
compensated employees. In addition, it does not apply to any
transaction that occurs after 2008.
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(b)
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For
purposes of calculating Credited Service and Compensation for
Participants working at locations acquired as the result of the
purchase of Atlantic Research Corporation (“ARC”) by
Aerojet-General Corporation, on October 17, 2003
(“Aerojet East”), and who have not transferred or been
transferred to a location covered by another pension program of the
Company or a Member Company, when determining the monthly pension
amount under Section 3.1, service and Compensation shall be
recognized from the later of the date of hire with Aerojet East or
the date of transfer to Aerojet East from Atlantic Research
Corporation, but in no event will service or Compensation before
October 18, 2003, be included.
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(c)
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With respect to the GenCorp
Consolidated Pension Plan (Program B), for Plan Years ending on or
before November 30, 1993, the term “Annual Plan
Compensation” shall include amounts which would have been
paid to a Participant (while such Participant is an Employee) by a
Member Company during a Plan Year, but for his election to defer
such amount to the GenCorp Inc. and Participating Subsidiaries
Deferred Bonus Plan.
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3.3
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Pre-Retirement Death
Benefit .
If a vested Participant dies while employed by the Employer, such
Participant shall be entitled to a benefit under this Plan equal to
the benefit he or she had earned under this Plan as of his date of
death (the “Pre-Retirement Death Benefit”) payable to
his Spouse as if the Participant had a Termination of Employment,
elected to commence benefits on the dates outlined below in the
form of a joint and 50% survivor annuity (as described in
Section 3.5(b)(ii)), then died the next day. The
Pre-Retirement Death benefit will commence payment on the later of
(1) the first day of the first month following the
Participant’s death or (2) the first day of the first
month following the date the Participant would have obtained
55 years of age.
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3.4
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Vesting . A Participant shall become vested
in his retirement benefits earned under this Plan on the same date
and under the same conditions he would become vested under the
earliest applicable vesting provisions of the Pension
Plan.
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3.5
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Form of Payment
. The form of payment
shall be in the form selected by the Participant on his
distribution election form, as prescribed by and pursuant to the
procedures established by the Administrative Committee from time to
time in its sole discretion, as follows:
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(a)
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Normal Form of Benefit
Payment . An
annual pension payable monthly for the Participant’s life
with a 50% survivor annuity paid for the life of the
Participant’s Spouse if the Participant is married, or a
single life annuity if the Participant is single; or
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(b)
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Alternative Forms of
Payment .
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(i)
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A
reduced annuity payable for the life of the Participant with a
period certain of either 5, 10, 15, or 20 years of payments to
the Participant’s Spouse or Beneficiary; or
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(ii)
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An
annual pension payable monthly for the Participant’s life
with a 50%, 75%, or 100% survivor annuity paid for the life of the
Participant’s Spouse or Beneficiary.
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(c)
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Small Accounts and Default Form of
Payment .
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(i)
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Notwithstanding anything to the
contrary in Sections 3.5(a) and 3.5(b), if the lump-sum
equivalent of any form of benefit payment, at the time initially
payable to the Participant, is less than $15,000, then the
Participant shall receive a single lump-sum payout of his benefit
in full satisfaction or his pension benefit under the Plan. The
lump-sum payment will be made the first day of the seventh month
following the Participant’s Termination of
Employment.
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(ii)
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In
the event a Participant fails to make an election with respect to
the form of benefit payment, the default form of benefit payment
shall be the applicable form under Section 3.5(a).
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(i)
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All
Participants must elect a form of payment for benefits under the
Plan prior to the later of (A) December 31, 2008, or
(B) the date that is thirty (30) days following the date
the Participant becomes initially eligible to participate in the
Plan. For the purposes of this rule, a Participant is treated as
initially eligible to participate in the Plan as of the first day
of the Participant’s taxable year immediately following the
first year the Participant accrues a benefit under the Plan, in
accordance with Treasury
Regulation Section 1.409A-2(a)(7)(iii).
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Any
election under this section shall be subject to any special
administrative rules imposed by the Administrative Committee
including rules intended to comply with Section 409A of the
Code.
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(ii)
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This election will become
irrevocable on the later of (A) December 31, 2008, or
(B) the date that is thirty (30) days following the date
the Participant initially becomes eligible to participate in the
Plan.
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(iii)
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Notwithstanding the foregoing, no
election under this Section 3.4(d)(i)(A) made on December 31,
2008, shall (A) change the payment date of any distribution
otherwise scheduled to be paid in 2008 or cause a payment to be
paid in 2008, or (B) be permitted after December 31,
2008.
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3.6
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Change in Election
. A change from one type
of annuity to another is not considered to be a change in time and
form of payment, provided that the annuities are Actuarially
Equivalent, the change is made before any annuity payment is made,
and the new annuity has the same scheduled date for the first
payment.
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(a)
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Except as otherwise provided in the
Plan, all pension payments will commence as of the later of
(i) the first day of the month following the month in which
the Participant attains the six-month anniversary of his
Termination of Employment or (ii) the first day of the month
following the attainment of the age elected by the Participant
pursuant to his distribution election form, within the time periods
set forth in Section 3.5(d). Under subsection 3.7(a)(ii), the
Participant may only elect an age that is between age 55 and age
65. For this provision only with regards to the timing of the
benefit payment under the Plan, if the Participant received a
Change in Control Enhancement Benefit under the Pension Plan or
this Plan, any age elected by the Participant on his distribution
election form will be increased by five (5) years to take into
account that Change in Control Enhancement Benefit.
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(b)
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In
the event a Participant fails to elect, within the time periods set
forth in Section 3.5(d), an age for the commencement date of
benefit payments, the default age shall be 65. Accordingly, the
benefit will commence as of the later of (i) the first day of
the month following the month in which the Participant attains the
six-month anniversary of his Termination of Employment or
(ii) the first day of the month following the attainment of
the age 65.
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(c)
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If
Termination of Employment is the payment event for the
Participant’s benefit, interest will not accrue on pension
payments under this Plan between the date of Termination of
Employment and actual payment of the benefit. In addition, interest
will not accrue on a pension payment under this Plan from the date
the pension payment could first be paid under the Plan and the date
the pension payments are paid under the Plan, taking into account
the grace periods set forth in Section 409A.
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(d)
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Any
payment date provided for in the Plan shall be deemed to
incorporate the longest applicable grace period permissible under
Code Section 409A and no interest shall be earned or accrued
with respect to any payment made in the
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