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EXHIBIT 10.1
[Logo - GenCorp Aerojet] P O BOX 13222
SACRAMENTO CA 95813-6000
ROBERT A. WOLFE TEL: 916-351-8616
PRESIDENT FAX: 916-351-8668
May 3, 1999
Mr. Terry Hall
1644 35th Street NW
Washington, D.C. 20007
Dear Terry:
I am pleased to extend to you this offer of employment with GenCorp Inc. As you
are aware, GenCorp Inc. is in the process of spinning off its Decorative &
Building Products and Performance Chemical divisions into a separately held,
publicly traded company. Prior to the spin-off, you will report to me on special
assignment until the successful spin-off occurs. After the spin-off, you will
report to me as the Senior Vice President, Chief Financial Officer for GenCorp
Inc. located in Sacramento, California. Your employment will commence on May 1,
1999. This offer is contingent upon your written acceptance of the position
under the following terms of employment:
1. Your semi-monthly base salary will be $12,916.67, an annualized salary of
$310,000.
2. You will be eligible to participate in the company's annual incentive plan,
beginning with GenCorp's 1999 fiscal year. Your maximum incentive
opportunity will be 100% of your annual base salary. Your actual incentive
payment will be based on GenCorp's achievement of specified objectives and
GenCorp's evaluation of your personal performance. Annual incentive payments
are payable in January or February following the end of GenCorp's fiscal
year and in accordance with GenCorp's regular pay practices and discretion
of the CEO. All annual incentive payments require that you be employed by
GenCorp on the date of payment.
3. You will be guaranteed an annual incentive of $232,500 for fiscal year 1999,
an amount equal to 75% of your starting base salary of $310,000.
4. You will receive a one-time sign-on bonus of $50,000 to be paid in the first
regular pay cycle following the date your employment commences ("employment
date").
5. On your employment date you will be granted an option to purchase 35,000
shares of GenCorp common stock pursuant to GenCorp's 1997 Stock Option Plan.
The option price will be the closing price on the New York Stock Exchange of
GenCorp common stock on
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May 3, 1999
your employment date. Also on your employment date, you will be granted
15,000 restricted shares of GenCorp Common Stock. The restriction will lift
and the shares will transfer in equal segments of 5,000 shares over a
three-year period. The first 5,000 shares will transfer one year from your
employment date. The second and third segments (each equal to 5,000 shares)
will transfer two years and three years respectively from your employment
date. Subject to your signature on GenCorp's standard form of Restricted
Stock Agreement, you will have full voting rights and receive dividends on
any restricted shares. If your employment terminates for any reason other
than death, disability, or change in control of GenCorp, you will forfeit
100% of any shares that are restricted on your termination date. If the
proposed spin-off is cancelled for any reason, the total amount of
restricted stock (15,000 shares) will be forfeited.
6. You will be eligible to participate in the company's long-term incentive
plan commencing with the beginning of the plan in fiscal year 2000.
7. You will be eligible to participate in the company's stock option plan. In
the event the Company grants options to any person in fiscal year 2000, you
will be entitled to receive an option grant for not less than 30,000 shares
in fiscal year 2000.
8. You will automatically participate in the company's retirement plan.
Participation in this plan does not require employee contributions and your
accrued benefit fully vests after five years of service.
9. You will be eligible to participate in the company's retirement savings
plan. The plan provides a 100% matching contribution up to the first three
percent of your contributions to the plan and a 50% match on your next three
percent of contributions. All company-matching contributions vest
immediately.
10. You will be eligible to participate in the company benefit restoration plan.
The purpose of this plan is to restore retirement savings plan and pension
plan benefits that you would otherwise lose because of certain Internal
Revenue Code limitations on participation in such plans.
11. GenCorp will provide relocation assistance after the successful spin-off
according to its Relocation Assistance Program for transferring employees.
You will be guaranteed "no loss of equity" on the sale of your existing
home, and you shall in addition, be grossed up for any taxes incurred on
relocation reimbursements that are not otherwise tax deductible on your tax
returns. To commence the relocation process, please complete the top portion
of the enclosed Authorization for Movement Form and return it to Sam Harmon
as soon as possible. After you return the completed form, a representative
from our third party relocation service provider, Cendant Mobility, will
contact you to begin your move and to review the details of the program.
12. You will be eligible for individual financial counseling. GenCorp has
entered into an agreement with AYCO to provide this service. If you elect to
participate, your cost will be
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May 3, 1999
10% of the annual fees charged by AYCO. You will incur an income tax
liability on imputed income resulting from GenCorp's payment of its share of
AYCO's fees.
13. GenCorp offers a flexible benefits program. It provides a number of benefit
levels and options from which to choose. These options include:
- Comprehensive health insurance
- Dental insurance
- Life insurance
- Supplemental group universal life insurance
- Accidental death and dismemberment insurance
- Short-term disability insurance
- Long-term disability insurance
Participation in some of these plans is voluntary and requires employee
contributions. Nothing herein will be deemed to preclude GenCorp from changing
or terminating any employee benefit plan or practice applicable to you and other
employees or require GenCorp to employ you for any specific period of time.
14. The term of your employment will be indefinite in duration and therefore,
subject to termination at will by notice from you or GenCorp. GenCorp will
not terminate your employment solely for the purpose of avoiding payment of
the amount required by paragraph 17 below.
15. GenCorp offers a drug-free work environment. It is the policy of GenCorp
that all offers of employment are contingent upon successfully passing a
pre-employment alcohol and drug screen test. Please contact Sam Harmon to
schedule an appointment at your earliest convenience. Additionally, you must
satisfy all job-related physical requirements.
16. Lastly, this letter incorporates all of the elements of our employment
offer, subject to the more definitive terms of the GenCorp Human Resources
policies and employee benefit plans. There are no other terms or conditions
of employment, and your acceptance of this offer acknowledges that no one
provided additional promises or incentives for you to accept this offer.
Summary descriptions of the GenCorp employee benefit plans are available
from your human resources representative.
17. If the spin-off described above does not occur your annual salary of
$310,000 will be continued for one year from the date of termination. Your
medical health insurance shall also be continued for the one-year period. In
consideration for any and all lost incentive opportunity at the time of your
termination, you will also be eligible for 50% of your annual salary at the
date of termination.
18. GenCorp will provide to you it's standard "Change in Control" Agreement
after the successful spin off occurs. This agreement will be subject to
approval by the GenCorp Board of Directors.
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Terry, I am very excited by the prospect of you joining our team and believe
that you can make a significant contribution to the success of our business. To
indicate your agreement with the above terms of your employment offer, please
sign below and return one copy of this letter to Sam Harmon in the enclosed
return envelope.
Sincerely,
/s/ Robert A. Wolfe
Accepted this 6th day of May , 1999.
/s/ Terry Hall
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Terry Hall