December 2, 2009
333-
Ohio | ||
(State or other jurisdiction of incorporation or organization) | 3060 (Primary Standard Industrial Classification Code Number) | 34-0244000 (I.R.S. Employer Identification No.) |
Highway 50 and Aerojet Road Rancho Cordova, CA 95742 (916) 355-4000 | ||||
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices) |
P.O. Box 537012 | ||
Sacramento, CA 95853-7012 | ||
(Mailing Address) Kathleen E. Redd Vice President, Chief Financial Officer and Secretary Highway 50 and Aerojet Road Rancho Cordova, CA 95742 (916) 355-4000 | ||
(Name, Address, |
Steve Wolosky, Esq. Jeffrey S. Spindler, Esq. Olshan Grundman Frome Rosenzweig & Wolosky LLP 65 East 55th Street New York, NY 10022-1106 (212) 451-2300 |
With a copy to:
statement becomes effective.
Large accelerated filer | ¨ | Accelerated filer | ý |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
(Do not check if a smaller reporting company) |
Proposed Maximum | Proposed Maximum | |||||||||||||||
Title of Securities | Amount to | Offering Price | Aggregate | Amount of | ||||||||||||
to be Registered | be Registered | Per Debenture(1)(2) | Offering Price(1) | Registration Fee | ||||||||||||
2 1/4% Convertible Subordinated Debentures | $ | 146,400,000 | 100 | % | $ | 146,400,000 | $ | 17,232 | ||||||||
Common Stock, par value $.10 per share and associated rights | 7,320,000 shares(3) | $ | — | — | $ | — | (4) | |||||||||
(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 of the Securities Act.
(2) Exclusive of accrued interest and distributions, if any.
(3) Represents the number of shares of common stock that are initially issuable upon conversion of the debentures and shall be deemed to register an additional indeterminate number of shares of common stock issuable upon conversion in the future pursuant to Rule 416 of the Securities Act.
(4) No additional consideration will be received for the common stock and therefore no registration fee is required pursuant to Rule 457(i) of the Securities Act.
Debt securities Common stock, par value $0.10 per share TOTAL $200,000,000 $11,160 (1) (2) (3) Estimated solely for the purpose of calculating the registration fee for a primary offering pursuant to Rule 457(o) under the Securities Act of 1933. Pursuant to such Rule 457(o) and General Instruction II.D of Form S-3, which permits the registration fee to be calculated on the basis of the maximum offering price of all the securities listed for the primary offering, the table does not specify by each class information as to the amount to be registered or the proposed maximum offering price per unit. (4) Calculated pursuant to Rule 457(o) under the Securities Act. registrantRegistrant hereby amends this registration statementRegistration Statement on such date or dates as may be necessary to delay its effective date until the registrant filesRegistrant shall file a further amendment which specifically states that this registration statement is toRegistration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.becomes effective onfiled with the dateSecurities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the SEC, acting under Section 8(a), determines.
offer or sale is not permitted.
PRELIMINARY DECEMBER 2, 2009
200,000,000
The debentures bear interest at the rateour securities or securities of 2 1/4% per annum. Interest on the debentures accrues from November 23, 2004 and is payable semi-annually in arrears in cash on May 15 and November 15 of each year beginning May 15, 2005. The debentures will mature on November 15, 2024.
The debentures are our unsecured, subordinated obligations and are subordinated to our existing and future senior debt, including our obligations under our senior credit facility and 9 1/2% senior subordinated notes due 2013. The debentures effectively rank junior to our subsidiaries’ liabilities, including trade debt.
Holders of the debentures may convert the debentures into cash and, if applicable, sharesone or more other entities. Shares of our common stock at a conversion rate of 50.00 shares per $1,000 principal amount of debentures (representing a conversion price of $20.00 per share), as follows: (i) during any fiscal quarter commencing after November 30, 2004, if the closing sale price of our common stock exceeds 130% of the conversion price for at least 20 trading days in the 30 consecutive trading-day period ending on the last trading day of the preceding fiscal quarter; (ii) subject to certain exceptions, during the five business days after any five consecutive trading-day period in which the trading price per $1,000 principal amount of the debentures for each day of such period was less than 95% of the product of the closing sale price of our common stock and the conversion rate then in effect; (iii) if the debentures have been called for redemption; (iv) upon the occurrence of specified corporate transactions; or (v) in connection with a transaction or event constituting a designated event. The conversion rate is subject to adjustment in certain circumstances. We may be required to pay a make-whole premium in shares of our common stock and accrued but unpaid interest if you convert your debentures in connection with certain specified designated events occurring on or prior to November 20, 2011.
From November 20, 2011 to but not including November 15, 2014, we may redeem all or any part of the debentures if the closing sale price of our common stock exceeds 140% of the conversion price for at least 20 trading days in any 30 consecutive trading-day period, including the last day of the period. If we so redeem the debentures, we will make an additional payment in cash, shares or a combination thereof, at our option, equal to the present value of all remaining scheduled payments of interest on the debentures to be redeemed through November 15, 2014. On or after November 15, 2014, we may redeem all or any part of the debentures for cash at 100% of the principal amount of the debentures, plus accrued and unpaid interest and liquidated damages, if any, to but not including the redemption date.
Holders of the debentures may require us to repurchase all or any part of the debentures for cash on November 20, 2011, November 15, 2014 and November 15, 2019, or at any time prior to maturity upon the occurrence of a designated event, at a repurchase price equal to 100% of the principal amount of the debentures, plus accrued and unpaid interest and liquidated damages, if any, plus, in certain circumstances described herein, the make-whole premium, if any, payable in our common stock.
The debentures issued in the initial private placements are eligible for trading in the PORTAL System. The debentures sold using this prospectus, however, will no longer be eligible for trading in the PORTAL System. We do not intend to list the debentures on any national securities exchange or automated quotation system.
Our common stock is listedtraded on the New York Stock Exchange and the Chicago Stock Exchange under the symbol “GY.”“GY”. On January 10, 2005,December 1, 2009, the last reported saleclosing price of our common stock on the New York Stock Exchange was $17.34.
Investing$8.19.
The securities offered hereby have not been approved or recommended by3 of this prospectus and in the sections entitled “Risk Factors” in each Annual Report on Form 10-K and in any quarterly report on Form 10-Q filed subsequently, as well as in any prospectus supplements relating to specific offerings.
TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates by reference herein other than historical information may be deemed forward-looking statements. These statements present without limitation,(without limitation) the expectations, beliefs, plans and objectives of management and future financial performance and assumptions underlying, or judgments concerning, the matters discussed in the statements. The words “believe,” “estimate,” “anticipate,” “project”“project,” “may,” “should,” “will,” “could” and “expect,” and similar expressions, are intended to identify forward-looking statements. Forward-looking statements involve certain risks, estimates, assumptions and uncertainties, including with respect to future sales and activity levels, cash flows, contract performance, the outcome of litigation and contingencies, environmental remediation and anticipated costs of capital.
A variety of factors could cause our actual results or outcomes to differ materially from those expected and expressed in our forward-looking statements. Some important riskThese factors, risks and uncertainties that could cause our actual results or outcomes to differ from those expressed in ourthe forward-looking statements include but are not limited to those described underin the heading “Risk Factors” insection of this prospectus, beginning on page 11, in ourany prospectus supplement, each Annual Report on Form 10-K for the fiscal year ended November 30, 2003 and in our Quarterly Reportany quarterly report on Form 10-Q forfiled subsequently, including any amendments, and the fiscal quarter ended August 31, 2004, as amended.following:
· | the cost of servicing our debt and our ability to comply with the financial and other covenants contained in our debt agreements; |
· | economic conditions that could affect our ability to refinance our existing debt; |
· | our ability to obtain the consent of our lenders under our senior credit facility on terms favorable to us, if necessary, to refinance our debt and to effect a rescission offer; |
· | the earnings and cash flow of our subsidiaries and the distribution of those earnings to us; |
· | our plans to effect a rescission offer relating to our 401(k) employee benefit plan; |
· | the funding status of our defined benefit pension plan and our obligation to make cash contributions to such pension plan; |
· | effects of changes in discount rates, actual returns on plan assets, and government regulations of defined benefit pension plans; |
· | significant changes to our senior management and Board of Directors; |
· | the possibility that environmental and other government regulations that impact us become more stringent or subject us to material liability in excess of our established reserves; |
· | changes in the amounts recoverable from environmental claims; |
· | environmental claims related to our current and former businesses and operations; |
· | the results of significant litigation; |
· | cancellation or material modification of one or more significant contracts; |
· | future reductions or changes in U.S. government spending; |
· | cost-overruns on our fixed-price contracts; |
· | failure to secure contracts; |
· | failure to comply with regulations applicable to contracts with the U.S. government; |
· | our inability to adapt to rapid technological changes and remain competitive; |
· | product failures, schedule delays or other problems with existing or new products and systems; |
· | the release or explosion of dangerous materials used in our businesses; |
· | loss of key qualified suppliers of technologies, components and materials; |
· | risks inherent to the real estate market; |
· | changes in economic and other conditions in the Sacramento, California metropolitan area real estate market or changes in interest rates affecting real estate values in that market; |
· | our ability to execute our real estate business plan including our ability to obtain, or caused to be obtained, the necessary final governmental zoning, land use and environmental approvals and building permits; |
· | costs and time commitment related to potential acquisition activities; |
· | additional costs related to our divestitures; |
· | a strike or other work stoppage or our inability to renew collective bargaining agreements on favorable terms; |
· | the loss of key employees and shortage of available skilled employees to achieve anticipated growth and to replace any losses; |
· | fluctuations in sales levels causing our quarterly operating results to fluctuate; |
· | occurrence of liabilities that are inadequately covered by indemnity or insurance; |
· | changes in our contract-related accounting estimates; |
· | new accounting standards that could result in changes to our methods of quantifying and recording accounting transactions; |
· | failure to maintain effective internal controls in accordance with the Sarbanes-Oxley Act of 2002; and |
· | any other risks detailed from time to time in our reports filed with the SEC. |
WHERE YOU CAN FIND MORE INFORMATION
The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants like us that file electronically with the SEC. The address of such site is:
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http://www.sec.gov. Reports, proxy statements and other information concerning our business may also be inspected at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We incorporate by reference the documents listed below that we have filed with the SEC (File No. 1-1520) and any filings that we make with the SEC on or after the date of this prospectus under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until the termination of this offering:
Any statement contained in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified will not be deemed to constitute a part of this prospectus, except as so modified, and any statement so superseded will not be deemed to constitute a part of this prospectus.
The information related to us contained in this prospectus should be read together with the information contained in the documents incorporated by reference.
We will provide without charge to each person to whom a copy of this prospectus is delivered, upon the written or oral request of any such person, a copy of any or all of the documents incorporated into this prospectus by reference, other than exhibits to those documents unless the exhibits are specifically incorporated by reference into those documents, or referred to in this prospectus. Requests should be directed to:
GenCorp Inc.P.O. Box 537012Sacramento, California 95853-7012Attention: Deputy General Counsel(916) 355-4000
Market And Industry Data
Market and industry data and other statistical information and forecasts used in or incorporated by reference into this prospectus, including information relating to our relative position in the aerospace and defense andsystems, with a separate real estate industries, is based on independent industry and government publications, reports by market research
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firms or other published independent sources. Some of the data, statistical information and forecasts are also based on our good faith estimates, which are derived from management’s review of internal surveys, as well as other independent sources and publicly available information. However, such data are subject to change and cannot always be verified due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Forecasts are particularly likely to be inaccurate, especially over long periods of time.
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PROSPECTUS SUMMARY
This summary highlights selected information regarding our company. This summary is not complete and does not contain all of the information that you should consider before deciding whether or not to invest in the debentures. For a more complete understanding of our company and this offering, we encourage you to read this entire document, including “Risk Factors,” the financial information included in or incorporated by reference into this prospectus and the documents to which we have referred.
Our fiscal year ends on November 30 of each year. When we refer to a fiscal year, such as fiscal 2003, we are referring to the fiscal year ended on November 30 of that year.
Our Company
Overview
We are a technology-based manufacturer operating primarily in North America.segment. Our continuing operations are organized into two segments:
For more information about our two business segments, see our Annual Report on Form 10-K for the fiscal year ended November 30, 2003, our Current Report on Form 8-K dated November 4, 2004 We own approximately 12,200 acres of land adjacent to U.S. Highway 50 between Rancho Cordova and our Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2004, as amended.
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Recent Developments
Financing Developments
Convertible Debenture Offering.On November 23, 2004, we closed a private offering at parFolsom, California, east of $80 million of the debentures. The debentures are convertible, at the option of the holder upon the satisfaction of certain conditions, into cash and, if applicable, our common stock at an initial conversion price of $20.00 per share, subject to certain adjustments. The initial conversion price is equivalent to a conversion rate of 50 shares per $1,000 principal amount of the debentures. Cash proceeds, net of underwriting discounts and transaction costs, were approximately $77 million.
We used the net proceeds of the offering to repurchase approximately $70 million of our outstanding 5 3/4% convertible notes, plus accrued interest, premium and transaction fees. We granted one of the initial purchasers an option to purchase up to an additional $80 million aggregate principal amount of the debentures. On December 6, December 9 and December 16, 2004, that initial purchaser exercised its option to purchase additional debentures totaling approximately $66 million aggregate principal amount of the debentures. Cash proceeds, net of underwriting discounts and transaction costs, were approximately $64 million and were used to repurchase approximately $60 million of our 5 3/4% convertible notes, plus accrued interest, premium and transaction fees.
New Credit Facility.On December 6, 2004, we closed a new $180 million credit facility with a syndicate of lenders.
The new credit facility provides for an $80 million revolving credit facility maturing on December 6, 2009, and a $100 million credit-linked facility maturing on December 6, 2010. The credit-linked facility consists of a $25 million term loan subfacility and a $75 million letter of credit subfacility. The interest rate on the revolving credit facility is LIBOR plus 275 basis points, subject to adjustment based on our leverage ratio, and the interest rate on the term loan is LIBOR plus 300 basis points.
The facility is secured by substantially all our assets, including the stock and assets of our material domestic subsidiaries, which are guarantors of the facility. Under this facility, we are subject to certain limitations including the ability to: incur additional debt or sell assets, with restrictions on the use of proceeds; make certain investments and acquisitions; grant liens; and make restricted payments. We also are subject to financial covenants which include an interest coverage ratio, a leverage ratio, a senior leverage ratio, and a fixed charge coverage ratio.
The new credit facility replaces the previous credit facility, which was terminated by us effective December 6, 2004. The outstanding term loans totaling $141 million plus accrued interest under the previous facility were repaid in full using restricted cash from the proceeds of the GDX Automotive sale in August 2004 and the common stock offering described below.
Common Stock Offering.On November 23, 2004, we closed our public offering of 8,625,000 shares of our common stock, priced at $16.00 per share, which includes the underwriters’ over-allotment option to purchase up to 1,125,000 additional shares. Net proceeds to us were approximately $130 million. We will use approximately $58 million of the net proceeds to repurchase approximately $53 million aggregate principal amount of our outstanding 9 1/2% Senior Subordinated Notes due 2013,Sacramento, which we refer to as our 9 1/2% notes, and we used the remaining net proceeds to repay borrowings under the previous senior credit facility.
Consent Solicitation.On November 1, 2004, we had received the consents required to modify provisions in the indenture governing our 9 1/2% notes to permit the refinancing of our 5 3/4% notes. Approximately 67% of the $150 million aggregate principal amount outstanding of the 9 1/2% notes consented to the modifications. We paid total consideration of $1.25 per $1,000 aggregate principal amount of the 9 1/2% notes for which consents were received. We and the trustee have executed a supplemental indenture to the indenture governing the 9 1/2% notes containing those amendments to the indenture.
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Business Developments
Olin Judgment.On November 22, 2004, the United States Court of Appeals for the Sixth Circuit rendered a decision in the case of GenCorp Inc. v. Olin Corporation. In its decision, the court upheld the decision of the U.S. District Court for the Northern District of Ohio to the effect that we were contributorily liable under the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, arising from environmental liability at the Big D Campground landfill site (see additional discussion in Note 11(b) of Notes to Consolidated Financial Statements of our Current Report on Form 8-K dated November 4, 2004). Still pending, before the district court and not addressed in the appellate court decision, are our claims that under the terms of a 1962 manufacturing agreement with Olin, Olin had a contractual obligation to insure against environmental and other risks and that its failure to protect such insurance payments under these policies precluded Olin from recovery against us for these remediation costs. Further, we claim that any failure on Olin’s part to comply with the terms of such insurance policies would result in our entitlement to breach of contract remedies resulting in a reduction in any CERCLA liability amounts determined to be owed to Olin that would have otherwise been recovered from Olin’s insurance carriers.
As we have disclosed in filings with the Securities and Exchange Commission, our total potential liability under the lower court’s judgment is approximately $19 million, plus pre-judgment and judgment interest in the amount of approximately $11 million. If we choose not to appeal the court’s decision and are required to satisfy the judgment, we believe that we will be able to do so out of funds or financing sources available to us.
We had previously concluded that it was not appropriate to accrue amounts relating to this matter because we believed we would prevail on appeal in the Sixth Circuit case and because of claims that Olin has pending against its insurers in federal court in New York. If Olin prevails on its claims against its insurers, we will ultimately benefit from available insurance proceeds up to potentially the entire amount of any monies we are obligated to pay Olin under CERCLA. If Olin does not prevail on its claims against its insurers, Olin may nevertheless be liable to us for breach of its contractual obligations to provide insurance in an amount up to the entire amount of monies we are obligated to pay Olin under CERCLA.
Sacramento Land. We are currently evaluatingin the appellate court’s decision,process of seeking zoning changes, removal of environmental restrictions and weother governmental approvals on a portion of the Sacramento Land to optimize its value. We have filed a petitionapplications with and submitted information to governmental and regulatory authorities for rehearing. In addition, weapprovals necessary to re-zone approximately 6,000 acres of the Sacramento Land. We also own approximately 580 acres in Chino Hills, California. We are currently evaluatingseeking removal of environmental restrictions on the potential impact that this decision may haveChino Hills property to our results of operationoptimize its value.
Intent to Dispose of Fine Chemicals Business.On October 15, 2004, we announced our strategic decision to sell our Fine Chemicals business, which, through Aerojet Fine Chemicals, is a custom manufacturer of active pharmaceutical ingredients and registered intermediates for pharmaceutical and biotechnology companies. This plan was a result of management’s decision to focus our capital and resources on our Aerospace and Defense and Real Estate businesses. We will continue to operate our Fine Chemicals business in the ordinary course of business pending any sale. We have classified our Fine Chemicals business segment as a discontinued operation as of the third quarter of fiscal 2004.
Sale of GDX Automotive Business.During the second quarter of fiscal 2004, we announced plans to sell our GDX Automotive, or GDX, business, which developed and manufactured vehicle sealing systems for automotive original equipment manufacturers. This decision was a result of declining volumes and continued challenges in this market environment including adverse customer pricing pressures, increased material costs, high development and start-up costs and increased working capital requirements. In accordance with our plan to sell the GDX business, we classified our GDX business segment as a discontinued operation during the second quarter of fiscal 2004. During the third quarter of fiscal 2004, we completed the sale of GDX to Cerberus Capital Management, L.P. for $147 million, subject to adjustment, of which $140 million has been received as of August 31, 2004.
Our principal executive offices are located at Highway 50 and Aerojet Road, Rancho Cordova, California 95670.CA 95742. Our mailing address is P.O. Box 537012, Sacramento, CaliforniaCA 95853-7012 and our telephone number is (916) 355-4000. We maintain
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incorporated by reference into this prospectus when making
· | make it more difficult to satisfy our outstanding debt obligations; |
· | require us to dedicate a substantial portion of our cash for payments on debt, reducing the amount of cash flow available for working capital, capital expenditures, entitlement of our real estate assets, and other general corporate purposes; |
· | limit our flexibility in planning for, or reacting to, changes in the industries in which we compete; |
· | place us at a competitive disadvantage with respect to our competitors, some of which have lower debt service obligations and greater financial resources than we do; |
· | limit our ability to borrow additional funds; and |
· | increase our vulnerability to general adverse economic and industry conditions. |
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The Debentures
The summary below describes the principal terms of the debentures. CertainSenior Credit Facility be amended in a manner that is unfavorable to us, including a possible increase in interest, fees, reduction in the amount of the funds available and covenant changes. Furthermore, the current financial turmoil affecting the banking system and financial markets and the possibility that financial institutions may consolidate or go out of business have resulted in a tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in fixed income, credit, currency and equity markets. Our inability to amend our Senior Credit Facility or obtain financing on terms acceptable to us could have a material adverse effect on our operating results, financial condition and/or cash flows.
· | access the full amount of our revolving credit facility and/or incur additional debt; |
· | enter into certain leases; |
· | make certain distributions, investments, and other restricted payments; |
· | cause our restricted subsidiaries to make payments to us; |
· | enter into transactions with affiliates; |
· | create certain liens; |
· | purchase assets or businesses; |
· | sell assets and, if sold, retain excess cash flow from operations and asset sale proceeds; and |
· | consolidate, merge or sell all or substantially all of our assets. |
· | relating to the maintenance of the property securing the debt; and |
· | restricting our ability to pledge assets or create other liens. |
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Risk Factors
You should carefully consider the information set forth in the section of this prospectus entitled “Risk Factors,” beginning on page 11,formerly owned businesses. We are subject to toxic tort and asbestos lawsuits as well as other third-party lawsuits, due to either our past or present use of hazardous substances or the other information includedalleged on-site or off-site contamination of the environment through past or present operations. We may incur material costs in defending these claims and lawsuits. Any adverse judgment or incorporatedcash outlay could have a significant adverse effect on our operating results, financial condition and/or cash flows.
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RatioUnder an agreement with the U.S. government, our environmental expenses related to our Aerojet Sacramento and former Azusa sites are allowable for reimbursement through our government contracts up to 88% of Earningsenvironmental expenses, or the Global Settlement. Environmental expenses at other Aerojet sites are eligible for reimbursement and treated under the normal rules of cost allowability. Aerojet’s mix of contracts can affect the actual reimbursement made by the U.S. government. Because these costs are recovered through forward pricing arrangements, our ability to Fixed Charges
The following table shows our historical ratiocontinue recovering these costs from the U.S. government depends on Aerojet’s sustained business volume under U.S. government contracts and programs and the relative size of earnings to fixed charges forAerojet’s commercial business. Additionally, in conjunction with the nine months ended August 31, 2004 and for eachsale of the five most recent fiscal yearsElectronics and Information Systems business in 2001, Aerojet entered into an agreement with Northrop Grumman Corporation, or Northrop, whereby Aerojet is reimbursed by Northrop for a portion of environmental expenditures eligible for recovery under the Global Settlement subject to annual and cumulative limitations. If we are unable to recover environmental expenses from the U.S. government that exceed the cumulative limitations from Northrop, a significant increase in Aerojet estimated environmental expenses could have a significant adverse effect on our operating results, financial condition and/or cash flows.
Historical | Pro Forma | |||||||||||||||||||||||
Year Ended November 30, | ||||||||||||||||||||||||
Year Ended | ||||||||||||||||||||||||
Nine Months Ended | November 30, | |||||||||||||||||||||||
1999 | 2000 | 2001 | 2002 | 2003 | August 31, 2004 | 2003 | ||||||||||||||||||
22.0x | 5.8x | 9.6x | 2.5x | 1.4x | —* | 1.7x |
* For the nine months ended August 31, 2004, our earnings were insufficient to cover fixed charges by approximately $39 million.
For purposes of calculating the ratio of earnings to fixed charges, “earnings” represents income from continuing operations before income taxes, plus fixed charges. “Fixed charges” consists of interest expense, including amortization of debt issuance costs. Effective December 1, 2001, we ceased recording goodwill amortization expense as required by SFAS No. 142. The ratios shown for the years ended November 30, 1999 through 2001 include goodwill amortization expense.
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RISK FACTORS
An investment in the debentures represents a high degree of risk. There are a number of factors associated with our business, including those specified below, which could affect your decision whether to invest in the debentures operating results, financial condition and/or the common stock issued upon conversion of the debentures. The following discussion describes the material risks currently known to us. You should carefully consider the risks described below together with the other information contained in, or incorporated by reference into, this prospectus before making a decision to invest in the debentures.
Risks Related to Our Business
cash flows.
financial results.
The Under Secretary of the Air Force has indicated that in 2005 the DoD intends to revise the Evolved Expendable Launch Vehicle, or EELV, program under which we provide propulsion systems for the Atlas V rocket to reflect cost pressures resulting from continued low commercial launch activity. Details of the form and terms of the anticipated changes are unknown at this time; however, any significant change to the program will likely require Congressional approval and we cannot assure you that any such change will lead to a satisfactory resolution for launch vehicle manufacturers. The cancellation or material modification of the EELV program could adversely affect our revenues from that program and our ability to recover the costs we have incurred to date under the program.
financial results.
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Our aerospace and defense contracts generally can be categorized as either “fixed-price” or “cost-reimbursable”financial results.
production processes.
operating results, financial condition and/or cash flows.
financial results.
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adversely impact our competitive position if we are unable to react to these developments in a timely or efficient manner; | ||||
require us to write-down obsolete facilities, equipment, and technology; | ||||
require us to discontinue production of obsolete products before we can recover any or all of our related research, development and commercialization expenses; or | ||||
require significant capital expenditures for research, development, and launch of new products or processes. |
systems.
Some
Our operations and properties are currently the subject
Under an agreement with the U.S. government, the U.S. government recognizes as allowable for government contract cost purposes up to 88% of environmental expenses at our Sacramento and former Azusa sites. Aerojet’s mix of contracts can affect the actual reimbursement made by the U.S. government. Because these costs are recovered through forward pricing arrangements, our ability to continue recovering these costs from the U.S. government depends on Aerojet’s sustained business volume under U.S. government contracts and programs and the relative size of Aerojet’s commercial business. We also may seek recovery of our environmental costs from insurers.
As of August 31, 2004, we had established reserves of $317 million, which we believe to be sufficient to cover our estimated share of the environmental remediation costs at that time. However, given the many uncertainties involved in assessing liability for environmental claims, our reserves may prove to be insufficient. We continually evaluate the adequacy of those reserves, and they could change. In addition, the reserves are based only on known sites and the known contamination at those sites. It is possible that additional remediation sites will be identified in the future or that unknown contamination at previously identified sites will be discovered. This could lead us to have additional expenditures for environmental remediation in the future and given the many uncertainties involved in assessing liability for environmental claims, our reserves may prove to be insufficient.
For additional discussion of environmental matters, please see our Annual Report on Form 10-K for the fiscal year ended November 30, 2003, our Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2004, as amended and our other documents that are incorporated by reference into this prospectus.
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The release or explosion of dangerous materials used in our business could disrupt our operations and cause us to incur additional costs and liability.
Thecould adversely affect our financial results.
Disruptions in the supplymarketplace circumstances beyond our control. The loss of key qualified suppliers of technologies, components and materials can cause significant disruption to our program performance and cost.
delivery or reliance on such suppliers. We closely monitor sources of supply to assure that adequate raw materials and other supplies needed in our manufacturing processes are available. As a U.S. government contractor, we are frequently limited to procuring materials and components from supply sources of supply that can meet rigorous customer and/or government specifications.specifications or socio-economic criteria. In addition, as business conditions, the DoD budget,budgets, and Congressional allocations change, suppliers of specialty chemicals and materials sometimes consider dropping low volumelow-volume items from their product lines, whichlines. This may require as it has in the past, qualification ofus to qualify new suppliers for raw materials on key programs. The supply of ammonium perchlorate, a principal raw material used inWe continue to monitor this situation carefully. In our operations, is limited to a single source that supplies the entire domestic solid propellant industry. This single source, however, maintains two separate manufacturing lines a reasonable distance apart, which mitigates the likelihood of a fire, explosion, or other problem impacting all production. We also presently rely on one primary supplier for graphite fiber, which is used in the production of composite materials. This supplier has multiple manufacturing lines for graphite fiber. Although other sources of graphite fiber exist, the addition of a new supplier would require us to qualify the new source for use.
Current suppliers of some insulation materials used in rocket motors have announced plans to close manufacturing plants and discontinue product lines. These materials include polymers used in ethylene propylene diene monomer rubber insulation and aerospace grade rayon used in nozzles. We are in the process of qualifying new replacement materials for some programs. For other programs,engineering processes where we have produced sufficient inventorythe opportunity to cover current program requirements anddo so, we are in the process of qualifying new replacementdefining materials that are known to be qualified in timemore sustainable and less prone to meet future production needs.
obsolescence or disruption.
regulatory issues.
Substantially all of our
As a result ofvarious risks, including the geographic concentration of our properties, our long-term performance and the value of our properties will depend upon conditions in the Sacramento region, including:
following:
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There can be no assurance that the Sacramento market will continue to grow or that conditions will remain favorable. If unfavorable economic or other conditions occur in the region, our development plans and business strategy could be adversely affected.
We have limited experience in real estate development activities.
While we have owned our real estate for over 50 years, we have no significant real estate development experience. Therefore, we do not have any real estate development history from which you can draw conclusions about our ability to execute our real estate business plan.
Real estate development is inherently risky.
Our real estate development activities may subject us to the following risks:
we may be unable to obtain, or suffer delays in obtaining, necessary re-zoning, land use, building, occupancy, and other required governmental permits and authorizations, which could result in increased costs or our abandonment of these projects; | ||||
we may be unable to complete environmental remediation or to | ||||
we may be unable to obtain sufficient water sources to service our | ||||
our real estate activities require significant capital expenditures and we may not be able to obtain financing on favorable terms, which may render us unable to proceed with our |
Additionally, the time frame required for development of these properties means that we may have to wait years for a significant cash return.
The value
· | economic and political uncertainties could have an adverse effect on consumer buying habits, construction costs, availability of labor and materials and other factors affecting us and the real estate industry in general; |
· | our property is subject to federal, state, and local regulations and restrictions that may impose significant limitations on our plans; |
· | much of our property is raw land that includes the natural habitats of various endangered or protected wildlife species requiring mitigation; |
· | if our land use plans are approved by the appropriate governmental authorities, we may face lawsuits from those who oppose such plans. Such lawsuits and the costs associated with such opposition could be material and have an adverse effect on our ability to sell property or realize income from our projects; and |
· | the time frame required for approval of our plans means that we may have to wait years for a significant cash return. |
ForSacramento County, California making us vulnerable to changes in economic and other conditions in that particular market.
· | the sustainability and growth of industries located in the Sacramento region; |
· | the financial strength and spending of the State of California; |
· | local real estate market conditions; |
· | changes in neighborhood characteristics; |
· | changes in interest rates; and |
· | real estate tax rates. |
Weactivities.
We have a substantial amount of debt for which we are required to make interest and principal payments. As of August 31, 2004, we had total consolidated debt of approximately $568 million. For fiscal 2003, our ratio of earnings to fixed charges was 1.4 to 1.0. For the nine months ended August 31, 2004, our earnings were insufficient to cover fixed charges by approximately $39 million. Subject to the limits contained in some of the agreements governing our outstanding debt, we may incur additional debt in the future.
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Our level of debt places significant demands on our cash resources, which could:
We experienced negative net cash flow from continuing operations in the last three fiscal years, due in part to an increase in interest costs and increased working capital requirements, including with respect to our Atlas V program.
We are obligated to comply with financial and other covenants in our debt that could restrict our operating activities, and the failure to comply could result in defaults that accelerate the payment under our debt.
Our outstanding debt generally contains various restrictive covenants. These covenants include, among others, provisions restricting our ability to:
Our secured debt also contains other customary covenants, including, among others, provisions:
In addition, certain covenants in our bank facilities require us and our subsidiaries to maintain certain financial ratios. Any of the covenants described in this risk factor may restrict our operations and our ability to pursue potentially advantageous business opportunities. Our failure to comply with these covenants could also result in an event of default that, if not cured or waived, could result in the acceleration of all or a substantial portion of our debt.
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If our operating subsidiaries do not generate sufficient cash flow or if they are not able to pay dividends or otherwise distribute their cash to us, we may not be able to service our debt.
All of the operations of our Aerospace and Defense and Real Estate businesses are conducted through subsidiaries. Consequently, our cash flow and ability to service our debt obligations will be largely dependent upon the earnings of our operating subsidiaries and the distribution of those earnings to us, or upon loans, advances or other payments made by these subsidiaries to us. The ability of our subsidiaries to pay dividends or make other payments or advances to us will depend upon their operating results and will be subject to applicable laws and any contractual restrictions contained in the agreements governing their debt, if any.
We expect to continue to expand our operations through acquisitions, which may divert management’s attention and expose us to unanticipated liabilities and costs. We may experience difficulties integrating theany acquired operations, and we may incur costs relating to acquisitions that are never consummated.
We have recently focused our operations through divestitures.
We have announced that we intend to divest our Fine Chemicals business. However, our ability to do so on favorable terms may be limited by the availability of interested purchasers and internal demand on our resources. We may not be able to identify a purchaser and negotiate an acceptable agreement on a timely basis or at all. In that event, we may be unable to complete our strategy of focusing our operations in our Aerospace and Defense and Real Estate businesses.
financial results.
operating results, financial condition and/or cash flows.
financial results.
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covered by collective bargaining agreements, thatwhich are due to expire within one year.in 2011 and 2012. If we are unable to negotiate acceptable new agreements with the unions representing our employeesunion, upon expiration of the existing contracts,contract, we could experience strikesa strike or work stoppages.stoppage. Even if we are successful in negotiating new agreements, the new agreements could call for higher wages or benefits paid to union members, which would increase our operating costs and could adversely affect our profitability. If our unionized workers were to engage in a strike or other work stoppage, or other non-unionized operations were to become unionized, we could experience a significant disruption of operations at our facilities or higher ongoing labor costs. A strike or other work stoppage in the facilities of any of our major customers or suppliers could also have similar effects on us.
A loss
Our executive officers are critical to the management and direction of our businesses. Our future success depends,experience higher labor, recruiting, or training costs in large part, on our ability to retain these officers and other capable management personnel. In general, we do not enter into employment agreements with our executive officers. We have entered into severance agreements with several of our officers that allow those officers to terminate their employment under particular circumstances, such as a change of control affecting our company. Although we believe that we will be ableorder to attract and retain talented personnel and replace key personnel should the need arise,such employees, or could experience difficulties in performing under our inability to do so could disrupt the operations of the segment affected orcontracts if our overall operations. In addition, because of the complex nature of many of our products and programs, we are generally dependent on an educated and highly skilled engineering staff and workforce. Our operations could be disrupted by a shortage of available skilled employees.
needs for such employees were unmet.
Due to the nature of our business, our sales may fluctuate causing our quarterly operating results to fluctuate.
We may be subjectmade from time to time, which may result in variability in our operating results.
We have announced that we plan to sell our Fine Chemicals business. We will continue to operate our Fine Chemicals business in the ordinary course of business pending any sale. This business is subject to the following operational risks:
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Any of these factors could have a material adverse effect on our operating results, financial condition and/or cash flows.
We are exposed to potential risks from recent legislation requiring companies to evaluate controls under Section 404significance of the Sarbanes-Oxley Actjudgments and estimation processes described above, it is likely that materially different amounts could be recorded if we used different assumptions or if the underlying circumstances were to change. Changes in underlying assumptions, circumstances, or estimates may adversely affect our future period operating results, financial condition and/or cash flows.
Risks Related to the Debentures
Your right to receive payments on the debentures is subject to the prior claims of holders of our senior indebtedness, including our senior credit facility and 9 1/2% notes.
The debentures are our general unsecured subordinated obligations. Accordingly, the payment of principal, premium, if any, and interest on the debentures by us are junior in right of payment to all of our existing and future senior indebtedness, including indebtedness under our senior credit facility and our outstanding 9 1/2% notes. As a result, in the event of our insolvency, liquidation or other reorganization, all senior indebtedness must be paid in full before any amounts owed under the debentures may be paid.
Moreover, we may not pay any amount owed under the debentures, or repurchase, redeem or otherwise retire the debentures, if any payment default on our senior indebtedness occurs, unless the default has been cured or waived, the senior indebtedness is repaid in full or the holders of the senior indebtedness consent to the payment. In addition, if any other default exists with respect to senior indebtedness and specified other conditions are satisfied, at the option of the holders of that senior indebtedness, we may be prohibited from making payments on the debentures for a designated period of time. For additional information on the subordination terms applicable to the debentures, and the amounts of senior indebtedness to which the debentures were contractually subordinated as of August 31, 2004, see “Description of the Debentures — Subordination of the Debentures.”
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Your right to receive payments on the debentures in the event of a bankruptcy, insolvency or similar proceeding involving us will be effectively subordinated to all of our secured indebtedness.
The debentures are effectively subordinated to all of our secured indebtedness to the extent of the value of the assets securing that indebtedness. For example, our obligations under our senior credit facility are secured by all of the capital stock of our material domestic subsidiaries and 65% of the stock of certain of our foreign subsidiaries to the extent owned by us and our subsidiaries and by substantially all of our and our material domestic subsidiaries’ tangible and intangible personal property. In the event that we are not able to repay amounts due under the senior credit facility, the lenders could proceed against the assets securing that indebtedness. In that event, any proceeds received upon a realization of the collateral would be applied first to amounts due under the senior credit facility before any proceeds would be available to make payments on our other indebtedness, including the debentures. The value of this collateral may not be sufficient to repay the lenders under the senior credit facility and the holders of all our other indebtedness. In that event, holders of the debentures would receive less than our secured creditors, or they could receive no payment at all.
The debentures will not be guaranteed by any of our subsidiaries, and creditors of these subsidiaries will therefore be paid from the assets of those subsidiaries before holders of the debentures will have any claim to those assets.
The debentures are not guaranteed by any of our subsidiaries or by entities in which we hold a minority interest or share control. As a result, the debentures are effectively subordinated to all indebtedness and other liabilities of our subsidiaries and other entities, including trade payables of and guarantees by these subsidiaries and other entities. Our senior credit facility and $150 million aggregate principal amount of our outstanding 9 1/2% notes are guaranteed by our material domestic subsidiaries.
We may incur more indebtedness, which could exacerbate the risks described above that we now face as a result of our leverage.
Even though we are highly leveraged, the terms of the debentures do not prohibit us or our subsidiaries from incurring substantial additional indebtedness in the future. Although some of the agreements governing our outstanding indebtedness restrict us and our restricted subsidiaries from incurring additional indebtedness, these restrictions are subject to important exceptions and qualifications. If we or our subsidiaries incur additional indebtedness, the risks that we and they now face as a result of our high leverage could increase.
We may not be able to pay the cash principal return upon conversion of the debentures.
Our senior credit facility and the indenture governing our 9 1/2% notes (which we refer to collectively as our “senior debt agreements”) contain covenants that limit our ability to pay cash to the holders of the debentures upon conversion of the debentures. Upon conversion of the debentures, we are obligated to pay the holders of the debentures an amount in cash equal to the lesser of the principal amount of the debentures being converted and the value of the shares into which the debentures are convertible, based on a ten-day average of our closing stock price. Such a payment would constitute a “restricted payment” under the terms of our senior debt agreements. Each of our senior debt agreements limits our restricted payments to calculated amounts, which are referred to as “baskets,” and these baskets may be reduced by other restricted payments we make in the future, including payments associated with investments. As a result, the amount that may be available under these baskets at the time, we are required to convert any of the debentures may be substantially less than the amount required to satisfy our obligations under the debentures.
Under the terms of our 9 1/2% notes, if we are unable to make required payments on conversion as a result of any limitations imposed on our restricted payments, we would have to satisfy our obligations under the indenture by refinancing the applicable debentures within the limitation imposed by the indenture governing our 9 1/2% notes. Generally, in order to refinance the debentures we would have to raise funds through the issuance of equity securities or other subordinated debt. Our senior credit facility contains similar provisions. Our ability to raise such financing will depend on prevailing market conditions and other factors, some of which are beyond our control. Further, we may not be able to raise such financing within the period required to satisfy our obligation to make timely payment upon any conversion.
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If we were unable to make a required payment due to restrictions imposed by our senior debt agreements, that non-payment would constitute a default under the indenture governing the debentures. In that event, we would need to obtain a waiver or amend, or otherwise terminate or repay, our senior credit facility and/or our 9 1/2% notes to allow us to make the required cash payments to holders of the debentures. There can be no assuranceensure that we will be ablecan conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with the Sarbanes-Oxley Act of 2002. Failure to obtain a waiver or amendment, or that any other credit facilities we may enter into or debt instruments we may issue in the future will not have similar or more restrictive limitations than those contained in our existing indebtedness. In addition, a default under our senior debt agreements or the indenture governing the debenturesachieve and maintain an effective internal control environment could lead to a default under other existing and future agreements governing our indebtedness.
We may not be able to repurchase the debentures at the option of the holder or upon a designated event, which may increase your credit risk.
On November 20, 2011, November 15, 2014 and November 15, 2019, holders of the debentures have the right to require us to repurchase all or any portion of their debentures at 100% of their principal amount plus accrued and unpaid interest, including liquidated damages, if any, up to but not including the date of repurchase, payable in cash. Upon the occurrence of a designated event, we will be required to make an offer to purchase all outstanding debentures at 100% of their principal amount plus accrued and unpaid interest, including liquidated damages, if any, up to, but not including, the date of repurchase, payable in cash (and, in the case of a repurchase upon the occurrence of certain designated events, we will also pay a make-whole premium in shares of our common stock as part of the repurchase price). We may not have enough available cash or be able to obtain third-party financing to satisfy these obligations at the time we are required to make repurchases of tendered debentures. Additionally, the repurchase of any debentures would constitute a “restricted payment” under our senior credit facility and the indenture governing our 9 1/2% notes and any such repurchase could be restricted under those agreements. Our failure to repurchase tendered debentures at a time when the repurchase is required by the indenture would constitute an event of default.
In addition, a default under the indenture governing the debentures or the designated event itself could lead to a default under other existing and future agreements governing our indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the debentures.
The terms of our convertible debt obligations may reduce the cash available to repurchase or redeem the debentures.
Our 5 3/4% notes mature in April 2007 and holders of those notes may require us to repurchase their notes in cash in certain circumstances upon the occurrence of a change of control. Our 4% notes mature in January 2024 and holders of those notes may require us to repurchase their notes in cash on January 16, 2010, 2014 and 2019 and in certain circumstances upon the occurrence of a change of control. To the extent we repurchase or redeem any of these securities, our inability to obtain additional cash either through the issuance of new debt securities or through other financings could adversely affect our cash balances and our business, and could impact our ability to repurchase or redeem the debentures offered hereby.
The definition of designated events for purposes of the indenture does not necessarily afford protection for the holders of the debentures in the event of some types of highly leveraged transactions.
We may enter into some types of highly leveraged transactions, including acquisitions, mergers, refinancings, restructurings or other recapitalizations, that would not fall within the definition of a designated event for purposes of the indenture governing the debentures, although these types of transactions could increase our indebtedness or otherwise affect our capital structure or credit ratings and the holders of the debentures. The definition of designated events for purposes of the indenture governing the debentures also includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of “all or substantially all” of our properties or assets taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition under applicable law. Accordingly, our obligation to make an offer to purchase the debentures, and the ability of a holder of debentures to require us to repurchase its debentures pursuant to the offer as a result of a highly leveraged transaction or a sale, lease, transfer, conveyance or other disposition of less than all of our assets, taken as a whole, may be uncertain.
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The make-whole premium on the debentures converted in connection with, or tendered for repurchase upon, certain designated events may not adequately compensate the holder for the lost option time value of the debentures.
If certain designated events occur on or prior to November 20, 2011, holders of debentures will be entitled to a make-whole premium in respect of debentures converted in connection with, or tendered for repurchase upon, such designated event. The amount of the make-whole premium will be determined based on the date on which such designated event becomes effective and the price paid per share of our common stock in the transaction constituting the designated event, as described under “Description of the Debentures — Determination of the Make-Whole Premium.” While the make-whole premium is designed to compensate the holder of debentures for the lost option time value of the debentures as a result of such designated event, the amount of the make-whole premium is only an approximation of the lost value and may not adequately compensate the holder for such loss. In addition, if the price paid per share of our common stock in the transaction constituting the designated event is less than $16.00 or more than $100.00, subject to adjustment, no make-whole premium entitlement will arise.
There is no established trading market for the debentures.
The debentures are a new issue of securities for which there is no established trading market. Although the debentures issued in the initial private placements are eligible for trading in the PORTAL market, notes sold using this prospectus will no longer be eligible for trading in the PORTAL market. We do not intend to apply for listing of the debentures on any securities exchange or to arrange for quotation on any automated dealer quotation system. As a result, a final, active trading market for the debentures may not develop. If a final, active trading market does not develop or is not maintained, the market price and liquidity of the debentures may be adversely affected.
We cannot assure you that you will be able to sell your debentures at a particular time or that you will be able to sell your debentures or the common stock at a favorable price. Future trading prices of the debentures and the common stock will depend on many factors, including:
Historically, the markets for non-investment grade debt securities, such as the debentures, have been subject to disruptions that have caused volatility in prices. It is possible that the markets for the debentures and our common stock will be subject to disruptions. Any such disruptions may have a negative effect on you as a holder of the debentures or the common stock issuable upon conversion of the debentures, regardless of our prospects and financial performance.
The initial purchasers have advised us that they intend to make a market in the debentures, but they are not obligated to do so. Any initial purchaser may also discontinue market making activities at any time, in its sole discretion, which could further negatively impact your ability to sell the debentures or the prevailing market price at the time you choose to sell.
Risks Related to Our Common Stock
Volatility in the market price of our common stock could resultstock.
1. | Our Annual Report on Form 10-K for the fiscal year ended November 30, 2008; |
2. | Our Quarterly Reports on Form 10-Q for the periods ended February 28, 2009, May 31, 2009 and August 31, 2009; |
3. | Our Current Reports on Form 8-K filed on December 17, 2008, January 7, 2009, January 9, 2009, January 26, 2009, February 18, 2009, March 19, 2009, March 31, 2009, April 17, 2009, May 6, 2009, May 20, 2009, May 26, 2009, July 27, 2009, August 26, 2009, October 8, 2009 and November 30, 2009; and |
4. | The description of our capital stock contained in our Registration Statement on Form 10 dated May 20, 1935, as amended by Amendment No. 1 on Form 8, dated March 29, 1989 (File No. 1-1520). |
Year ended November 30, | Nine Months ended | |||||
2004 | 2005 | 2006 | 2007 | 2008 | August 31, 2009 | |
Ratio of earnings to fixed charges | * | ** | *** | 1.7x | 1.1x | 2.1x |
* | For fiscal 2004, our earnings were insufficient to cover fixed charges by $57.3 million. |
** | For fiscal 2005, our earnings were insufficient to cover fixed charges by $235.7 million. |
*** | For fiscal 2006, our earnings were insufficient to cover fixed charges by $43.7 million. |
The market price of our common stock has historically fluctuated over a wide range. In addition,prospectus supplement, we expect to use the stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to
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net proceeds from the operating performance of companies. The market price of our common stock may continue to fluctuate in the future and may be affected adversely by factors such as actual or anticipated fluctuations in our operating results, acquisition activity, the impact of international markets, changes in financial estimates by securities analysts, general market conditions, rumors and other factors. Negative fluctuations in the market price of our common stock could adversely impact the trading pricesale of the debentures.
Future salessecurities offered by this prospectus and any prospectus supplement for general corporate purposes, which may include the repayment of our commonindebtedness, working capital and capital expenditures.
We may, in the future, sell additional150,000,000 shares of our common stock to raise capital or to finance future acquisitions. We also have a substantial number of shares of our common stock reserved for issuance pursuant to stock options and upon conversion of the debentures and our outstanding 5 3/4% notes and 4% notes. We cannot predict the size of future issuances or the effect, if any, that they may have on the market price for our common stock. The issuance of substantial amounts of common stock, or the perception that such issuances may occur, could adversely affect the market price for ourpar value $0.10 per share, and 15,000,000 shares of cumulative preference stock, par value $1.00 per share, 1,500,000 shares of which are designated as Series A cumulative preference stock as of December 1, 2009. As of November 30, 2009, 58,662,480 shares of common stock and/orwere issued and outstanding, and no shares of cumulative preference stock were outstanding.
Various agreements and laws could delay or prevent a change in control that you may favor.
The terms of some of the anti-takeover provisions in our amended articles of incorporation and amended code of regulations, our shareholder rights plan and provisions of Ohio corporate law could delay or prevent a change in control that you may favor or may impede the ability ofrestrictions described below, the holders of our common stock are entitled to change our management.
In particular, the provisions of our amended articles of incorporationreceive dividends from funds legally available when, as and amended code of regulations, among other things:
Our shareholder rights plan also makes an acquisition of a controlling interest in us in a transaction not approvedif declared by our Board of Directors, more difficult.
Additionally, Ohio corporate law provides that certain notice and informational filings and special shareholder meeting and voting procedures must be followed priorare entitled upon our liquidation, dissolution or winding up to consummation of a proposed “control share acquisition,” as defined in the Ohio General Corporation Law. Assuming compliance with the prescribed notice and information filings, a proposed control share acquisition may be made only if, at a special meeting of shareholders, the acquisition is approved by both a majority of the voting power of GenCorp Inc. represented at the meeting and a majority of the voting power remainingreceive pro rata our net assets after excluding the combined voting power of the “interested shares,” as defined in the Ohio General Corporation Law.
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USE OF PROCEEDS
All sales of the debentures or common stock issuable upon conversion of the notes will be by or for the account of the selling securityholders listed in this prospectus or any prospectus supplement. We will not receive any proceeds from the sale by any selling securityholder of the debentures or the common stock issuable upon conversion of the debentures.
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DESCRIPTION OF THE DEBENTURES
The debentures were issued under an indenture between us and The Bank of New York Trust Company, N.A., as trustee. The following description is only a summary of the material provisions of the indenture and the debentures. We urge you to read the indenture, the debentures and the registration rights agreement for all of the provisions that may be important to you. You may request copies of these documents by writing to us at the address shown under the caption “Incorporation of Certain Documents by Reference.” For purposes of this section, references to “we,” “us,” “ours” and “GenCorp” include only GenCorp Inc. and not its subsidiaries.
General
We issued the debentures having a principal amount of $146,400,000 in private transactions on November 23, 2004, December 6, 2004, December 9, 2004 and December 16, 2004. The debentures will mature on November 15, 2024 unless earlier converted, redeemed or repurchased. The debentures are issued only in denominations of $1,000 and multiples of $1,000. The debentures are convertible into cash and common stock as described under “— Conversion of Debentures.” We use the term “debenture” in this prospectus to refer to each $1,000 principal amount of debentures.
The debentures are our unsecured, subordinated obligations. The payment of the principal of, premium, if any, and interest on the debentures are subordinated in right of payment to the prior paymentsatisfaction in full of our existing and future senior indebtedness, including our obligations under the Credit Agreement (as defined below) and our 9 1/2% Senior Subordinated Notes due 2013 (the “Senior Subordinated Notes”), as described under “— Subordination of the Debentures” below. The debentures will rank equal in right of payment with our existing and future subordinated indebtedness, including our outstanding 5 3/4% Convertible Subordinated Notes due 2007 and 4% Contingent Convertible Subordinated Notes due 2024. The debentures are effectively subordinated to our secured indebtedness (including obligations under the Credit Agreement) to the extent of the underlying collateral. Our obligations under the Credit Agreement and our Senior Subordinated Notes are guaranteed by allprior rights of our material domestic subsidiaries.
Wecreditors and holders of any cumulative preference stock.
Claims of creditors of our subsidiaries, including trade creditors, secured creditors and creditors holding debt and guarantees issued by those subsidiaries, and claims of preferred stockholders (if any) of those subsidiaries generally will have priority with respect to the assets and earnings of those subsidiaries over the claims of our creditors, including holders of the debentures.
Neither we nor any of our subsidiaries are subject to any financial covenants under the indenture. In addition, neither we nor any of our subsidiaries are restricted under the indenture from paying dividends, incurring debt or issuing or repurchasing our securities.
We may redeem the debentures at our option during the periods and subject to the conditions described below under “— Optional Redemption by GenCorp.” You may require us to repurchase your debentures on the dates specified under “— Repurchase at Option of the Holder.” You are not afforded protection under the indenture in the event of a highly leveraged transaction or a change in control of GenCorp except to the extent described below under “— Designated Event” and “— Repurchase at Option of the Holder Upon a Designated Event.”
The debentures bear interest at a rate of 2 1/4% per annum. Interest is calculated on the basis of a 360-day year consisting of twelve 30-day months and will accrue from November 23, 2004, or from the most recent date to which interest has been paid or duly provided for. We will pay interest semi-annually in arrears on May 15 and
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November 15, beginning on May 15, 2005, to holders of record at the close of business on the preceding May 1 and November 1, respectively.
If any date for the payment of interest or liquidated damages, if any, is not a business day, then the applicable payment will be made on the next succeeding day that is a business day and without any interest or other payment in respect of the delay. If any redemption date, repurchase date or maturity date is not a business day, then the payment of principal and accrued interest and liquidated damages, if any, will be made on the next succeeding day that is a business day and without any interest or other payment in respect of the delay.
An office is maintained in the Borough of Manhattan, New York City, where we will pay the principal and premium, if any, on the debentures and you may present the debentures for conversion, registration of transfer or exchange for other denominations, which shall initially be an office or agency of the trustee. We may pay interest by check mailed to your address as it appears in the debenture register. However, payments to DTC will be made by wire transfer of immediately available funds to the account of DTC or its nominee.
The debentures are not subject to a sinking fund provision and will not be subject to defeasance or covenant defeasance under the indenture.
Conversion of Debentures
Subject to the conditions and during the periods described below, holders may convert any of their debentures, in whole or in part, into cash and, if applicable, shares of our common stock prior to the close of business on the business day immediately preceding the final maturity date of the debentures, initially at a conversion rate of 50.00 shares of common stock per $1,000 principal amount of debentures, subject to adjustment as described below, which is based upon an initial conversion price of approximately $20.00 per share. The conversion rate and the corresponding conversion price in effect at any given time are referred to as the “applicable conversion rate” and the “applicable conversion price,” respectively, and will be subject to adjustment as described below. If a holder converts debentures on any date when we are required to pay liquidated damages, the applicable conversion rate shall be multiplied by 103%. A holder may convert debentures in part so long as such part is $1,000 principal amount or a multiple of $1,000.
Subject to the exceptions described in the preceding paragraph and under “— Conversion in Connection with a Designated Event,” once the debentures are tendered for conversion, the value (the “conversion value”) of the cash and shares of our common stock, if any, to be received by a holder converting $1,000 principal amount of the debentures will be determined by multiplying the applicable conversion rate by the ten-day average closing sale price of our common stock. The “ten-day average closing sale price” will be the average of the closing sale prices of our common stock on the New York Stock Exchange on the ten consecutive trading days beginning on the second trading day following the day the debentures are submitted for conversion.
Subject to the exceptions described under “— Conversion in Connection with a Designated Event,” we will deliver the conversion value to holders as follows:
(1) an amount in cash (the “principal return”) equal to the lesser of (a) the aggregate conversion value of the debentures to be converted and (b) the aggregate principal amount of the debentures to be converted;
(2) if the aggregate conversion value of the debentures to be converted is greater than the principal return, an amount in whole shares (the “net shares”), determined as set forth below, equal to such aggregate conversion value less the principal return (the “net share amount”); and
(3) an amount in cash in lieu of any fractional shares of common stock.
The number of net shares to be paid will be determined by dividing the net share amount by the ten-day average closing sale price. The conversion value, principal return, net share amount and the number of net shares will be determined by us at the end of the ten consecutive trading-day period beginning on the second trading day following the day the debentures are tendered for conversion (the “determination date”). We will pay the principal
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return and cash in lieu of fractional shares and deliver the net shares, if any, as promptly as practicable after the determination date, but in no event later than four business days thereafter.
Notwithstanding the foregoing paragraphs, if an event of bankruptcy involving us has occurred and is continuing, in lieu of delivering the principal return in cash and any net share amount in shares of common stock, we may elect to deliver the conversion value to holders in cash, shares of common stock or a combination of cash and shares of common stock. In such event, we will inform the holders of our election through the trustee no later than two business days following the day the debentures are tendered for conversion. If we elect to satisfy part or all of our conversion obligation in cash, such cash amount will be calculated based on the ten-day average closing sale price of our common stock.
Conversion Procedures
To convert debentures into common stock, a holder must do the following:
The date a holder complies with these requirements is the conversion date under the indenture. The debentures will be deemed to have been converted immediately prior to the close of business on the conversion date. If a holder’s interest is a beneficial interest in a global debenture, in order to convert, such holder must comply with the last three requirements listed above and comply with the depositary’s procedures for converting a beneficial interest in a global debenture. We will deliver, or cause to be delivered, to you the cash representing the principal return and any shares of our common stock (including any cash in lieu of fractional shares) into which the debentures are converted as soon as practicable on or after the conversion date.
If we call debentures for redemption, a holder may convert its debentures until the close of business on the business day prior to the redemption date, unless we fail to pay the redemption price. If a holder has delivered a notice informing us of its exercise of its repurchase rights, as described below under “— Repurchase at Option of the Holder” or “— Repurchase at Option of the Holder Upon a Designated Event” with respect to a debenture, the holder may not surrender that debenture for conversion until the holder has withdrawn the notice in accordance with the indenture.
We will not issue fractional common shares upon conversion of debentures. Instead, we will pay cash in lieu of fractional shares based on the ten-day average closing sale price of our common stock. Our delivery to the holder of cash representing the principal return and any full number of shares of our common stock (including any cash in lieu of fractional shares) into which a debenture is convertible will be deemed to satisfy our obligation to pay the principal amount of the debenture and accrued but unpaid interest and liquidated damages, if any, attributable to the period from the most recent interest payment date to the conversion date, except as described below. As a result, accrued but unpaid interest and liquidated damages, if any, to the conversion date is deemed to be paid in full rather than cancelled, extinguished or forfeited, except as described under “— Conversion in Connection with a Designated Event.” For a discussion of your tax treatment upon receipt of our common stock upon conversion, see “Certain United States Federal Income Tax Considerations.”
Notwithstanding the preceding paragraph, if debentures are converted after a record date but prior to the next interest payment date, holders of such debentures at the close of business on the record date will receive the interest payable on such debentures on the corresponding interest payment date notwithstanding the conversion.
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Such debentures, upon surrender for conversion, must be accompanied by funds equal to the amount of interest payable on the debentures so converted;providedthat no such interest payment need be made (1) if we have specified a redemption date that is after a record date but prior to the next interest payment date, (2) if we have specified a repurchase date following a designated event that is after a record date but prior to the next interest payment date, or (3) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such debenture.
We may not be able to pay the principal return in cash upon conversion of the debentures. As described under “Risk Factors — Risks Related to the Debentures — We may not be able to pay the cash principal return upon conversion of the debentures,” our existing Credit Agreement and Senior Subordinated Notes contain, and any future credit agreements or other agreements relating to our indebtedness may contain, provisions limiting our ability to pay cash to holders upon conversion of the debentures. If you convert the debentures at a time when we are prohibited from paying cash to satisfy our conversion obligation, we may, consistent with the terms of our other indebtedness, seek to finance such payment through a sale for cash of our common stock, other qualified capital stock or subordinated debt that qualifies as refinancing debt. If we are unable to raise such financing, we could seek the consent of our lenders or noteholders to satisfy our conversion obligation; however, if we do not obtain consent, we would not be permitted to satisfy our conversion obligation. Our failure to satisfy our conversion obligation would constitute an event of default under the indenture, which might constitute a default under the terms of our other indebtedness.
If we are unable to pay the principal return in cash upon conversion by a holder of its debentures, we shall so inform such holder and concurrently notify the holders of all outstanding debentures through the trustee. In such event, such holder may elect to revoke its conversion notice by delivering a written notice of revocation to us.
Upon determination that holders of debentures are or will be entitled to convert their debentures in accordance with the following provisions, we will promptly notify the holders of debentures and post this information on our website or otherwise publicly disclose this information. Holders may surrender their debentures for conversion into cash and shares of our common stock only under the following circumstances:
Conversion Upon Satisfaction of Market Price Condition
A holder may surrender any of its debentures for conversion during any fiscal quarter (but only during such fiscal quarter) commencing after November 30, 2004 if the closing sale price of our common stock exceeds 130% of the applicable conversion price for at least 20 trading days in the 30 consecutive trading-day period ending on the last trading day of the preceding fiscal quarter.
The “closing sale price” of our common stock on any date means the closing per share sale price (or if no closing sale price is reported, the average of the closing bid and closing ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported in composite transactions reported on the New York Stock Exchange or, if the common stock is not subject to redemption. All of our issued and outstanding common stock is fully paid and non-assessable.
The “conversion price” as of any day will equal $1,000 divided by the conversion rate.
Conversion Upon Satisfaction of Trading Price Condition
A holder may surrender any of its debentures for conversion prior to maturity during the five business days immediately following any five consecutive trading-day period (the “measurement period”) in which the trading price per $1,000 principal amount of debentures (as determined following a request by a holder of the debentures in accordance with the procedures described below) for each day of such measurement period was less than 95% of the product of the closing sale priceevent of our common stock and the conversion rate then in effect;provided, however, you
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may not convert your debentures in reliance on this provision if on any trading day during such measurement period the closing sale price
The trustee shall have no obligation to determine the trading price of the debentures unless we have requested such determination, and we shall have no obligation to make such request unless you provide us with reasonable evidence that the trading price per $1,000 principal amount of the debentures would be less than 95% of the product of the closing sale price of our common stock and the conversion rate. If you provide us with such evidence, we shall instruct the trustee to determine the trading price of the debentures beginning on the next trading day and on each successive trading day until the trading price is greater than or equal to 95% of the product of the closing sale price of our common stock and the conversion rate.
Conversion Upon Notice of Redemption
If we call debentures for redemption, holders may convert the debentures until the close of business on the business day immediately preceding the redemption date, after which time the right to convert will expire unless we default invote, as a single class with the paymentcommon stock, for the election of the redemption price.
Conversion Upon Specified Corporate Transactions
If we elect to:
we must notify the holders of debentures at least 20 days prior to the ex-dividend date for such distribution. Once we have given such notice, holders may surrender their debentures for conversion at any time until the earlier of the close of business on the business day prior to the ex-dividend date or any announcement by us that such distribution will not take place, even if the debentures are not otherwise convertible at such time. No holder may exercise this right to convert if the holder otherwise will participate in the distribution without conversion. The ex-dividend date is the first date upon which a sale of the common stock, does not automatically transfer the right to receive the relevant distribution from the seller of the common stock to its buyer.
Conversion in Connection with a Designated Event
We must give notice to all record holders and to the trustee at least 10 trading days prior to the anticipated effective date of a “designated event,” as defined below under “Designated Event.” We must also give notice to all record holders and to the trustee that a designated event has become effective within the five trading-day period after the date the designated event becomes effective. You may surrender your debentures for conversion at any time
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during the period from the opening of business on the date we give notice of the anticipated effective date of a designated event to the close of business on the 10th trading day from and including the date of our notice (the “effective date notice”) that a designated event has become effective.
If you convert your debentures in connection with a designated event, you will receive:
In addition, if we are a party to a consolidation, merger, binding sharelease, sale, exchange, transfer or saleother disposition of all or substantially all of our property, assets or business or our consolidation or merger with or into another corporation, (i) the affirmative vote of the holders of a majority of the cumulative preference stock, voting separately as a class, and in each case pursuantcertain cases by series, is required to which our commoneffect or validate certain actions, including, among other things, (a) the authorization or creation of any stock, would be convertedor any security convertible into cash, securities or other property, a holder may surrender debentures for conversion at any time from and after the date that is 15 days priorstock, ranking senior to the anticipated effective datecumulative preference stock, (b) an increase in the number of authorized shares of cumulative preference stock or of any other stock of any class ranking senior to or on a parity with the transaction until and includingcumulative preference stock or of any security convertible into stock of any class ranking senior to or on parity with the date that is 15 days aftercumulative preference stock, or (c) the actual date of such transaction (or, if such merger, consolidationsale, lease or share exchange also constitutes a designated event, until the corresponding designated event repurchase date). If we are a party to a consolidation, merger, binding share exchange or sale or transferconveyance of all or substantially all of our assets, in each case pursuant to which our common stock is converted into cash, securities,property or business, or a consolidation or merger with any other property, then atcompany (with certain exceptions), and (ii) the effective timeaffirmative vote of the transaction, your right to receiveholders of a super majority of the cumulative preference stock, voting separately as a class, and in certain cases by series, is required for the alteration, amendment or repeal of any net share amount in sharesprovision of our common stock upon conversionAmended Articles of a debenture will be changed into a right to receive any net share amount in the kind and amount of cash, securities and other property that you would have received if you had converted your debentures immediately prior to the transaction. If the transaction also constitutes a designated event, you can require us to repurchase allIncorporation or a portion of your debentures as described under “— Repurchase at Option of the Holder Upon a Designated Event.”
Conversion Rate Adjustments
The conversion rate will be subject to adjustment, without duplication, upon the occurrence of any of the following events:
(1) the payment or issuance of common stock as a dividend or distribution on our common stock;
(2) the issuance to all holders of common stock of rights, warrants or options to purchase our common stock for a period expiring within 60 days of the record date for such distribution at a price less than the average of the closing sale prices for the 10 trading days preceding the declaration date for such distribution;
(3) subdivisions, splits or combinationscertain provisions of our common stock;
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(4) distributions by us to all holdersAmended Code of our common stock of shares of our capital stock, evidences of indebtedness, propertyRegulations which would adversely affect the rights or assets, including rights, warrants, options and other securities but excluding dividends or distributions covered by clause (1) or (2) above or any dividend or distribution paid exclusively in cash;
In the event that we distribute capital stock of, or similar equity interests in, a subsidiary or other business unit of ours, then the conversion rate will be adjusted based on the market value of the securities so distributed relative to the market value of our common stock, in each case based on the average closing sales prices of those securities (where such closing prices are available) for the 10 trading days commencing on and including the fifth trading day after the date on which “ex-dividend trading” commences for such distribution on the New York Stock Exchange or such other principal national or regional exchange or market on which the securities are then listed or quoted or in the absencepreferences of such a quotation, a closing sale price determined by us on a basis we consider appropriate;
(5)stock (or series).
(6) we or any of our subsidiaries makes a payment in respect of a tender offer or exchange offer for our common stock to the extent that the cash and value of any other consideration included in the payment per share of our common stock exceeds the closing sale price per share of our common stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer.
If the rights provided for in our shareholder rights agreement have separated from our common stock in accordance with the provisions of the rights agreement so thatdefault, the holders of the debentures would not be entitled to receive any rights in respect of shares of our commoncumulative preference stock, issuable upon conversion of the debentures, the conversion price will be adjustedvoting separately as provided in clause (4) above, subject to readjustment in the event of expiration, termination or redemption of the rights. In lieu of any such adjustment, we may amend our rights agreement to provide that upon conversion of the debentures, the holder will receive,a class, in addition to cash and shares of our common stock issuable upon such conversion, theall other voting rights, that would have attached to such total number of shares of our common stock (assuming for this purpose that the debentures were converted entirely into shares of our common stock at the then- applicable conversion rate) if the rights had not become separated from our common stock under our rights agreement. To the extent that we adopt any future rights plan, upon conversion of debentures into our common stock, you will receive, in addition to our common stock, the rights under the future rights plan whether or not the rights have separated from our common stock at the time of conversion, and no adjustment to the conversion price will be made.
No adjustment in the applicable conversion rate will be required unless the adjustment would require an increase or decrease of at least 1% of the applicable conversion rate. If the adjustment is not made because the adjustment does not change the applicable conversion rate by more than 1%, then the adjustment that is not made will be carried forward and taken into account in any future adjustment.
In the event of:
in which holders of our common stock would beare entitled to receive stock, other securities, other property, assets or cash for their common stock, upon conversioncall a special meeting of your debentures you will be entitledshareholders to receive the same type of consideration that you would have been entitled to receive if you had converted the debentures immediately prior to any of these events.
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You may in some circumstances be deemed to have received a distribution or dividend subject to U.S. federal income tax as a result of an adjustment or the non-occurrence of an adjustment to the conversion rate. See “Certain United States Federal Income Tax Considerations.”
We may, from time to time, increase the conversion rate if our board of directors has made a determination that this increase would be in our best interests. Any such determination by our board will be conclusive. In addition, we may increase the conversion rate if our board of directors deems it advisable to avoid or diminish any income tax to holders of common stock resulting from any stock or rights distribution. See “Certain United States Federal Income Tax Considerations.”
Except as described above in this section, we will not adjust the conversion rate for any issuance of our common stock or convertible or exchangeable securities or rights to purchase our common stock or convertible or exchangeable securities.
Designated Event
A “designated event” will be deemed to have occurred upon a “fundamental change” or a “termination of trading,” as such terms are defined below.
A “fundamental change” is defined to include any of:
(1) a transaction or event (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger, combination, reclassification, recapitalization or otherwise) in connection with which more than 50% of our common stock is exchanged for, converted into, acquired for or constitutes solely the right to receive, consideration that is not all or substantially all common stock that:
(2) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of GenCorp and its subsidiaries, taken as a whole, to any person or group of related persons (a “Group”), as defined in Section 13(d) of the Exchange Act;
(3) the approval by the holders of capital stock of GenCorp of any plan or proposal for the liquidation or dissolution of GenCorp (whether or not otherwise in compliance with the provisions of the indenture);
(4) any person or Group shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 45% of the aggregate Voting Stock of GenCorp or any successor to all or substantially all of GenCorp’s assets; or
(5) the first day on which a majority of theelect two additional members of GenCorp’s Board of Directors are not Continuing Directors.
The definition of “fundamental change” includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the assets of GenCorp and its subsidiaries, taken as a whole. Although there is a developing body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of debentures to require GenCorp to repurchase such debentures as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of GenCorp and its subsidiaries, taken as a whole, to another person or group may be uncertain.
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“Continuing Director” means, as of any date of determination, any member of the Board of Directors of GenCorp who (i) was a memberDirectors. When all dividends on the cumulative preference stock in default have been paid, the holders are divested of such Boardvoting power at subsequent elections of Directors on the datedirectors. The holders of the original issuancecumulative preference stock do not have cumulative voting rights or any preferential, subscriptive or preemptive rights to subscribe to or purchase any new or additional issue of the debentures or (ii) was nominated for election or elected to such Boardshares of Directors with the approvalany class of a majority of the Continuing Directors who were members of such board at the time of such nomination or election.
“Voting Stock” means stock or securities of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a person (irrespective of whether or not at the timeconvertible into our stock.
A “termination of trading” willseries may be deemed to have occurred if our common stock (or other security into which the debentures are then convertible) ceases to be listed for trading on a U.S. national securities exchange or approved for trading on the Nasdaq National Market.
Determination of the Make-Whole Premium
If a designated event occurs on or prior to November 20, 2011 and is (i) an event described in clause (1) or (2) of the definition of fundamental change or (ii) a termination of trading, we will pay a make-whole premium upon the conversion of the debentures as described above under “— Conversion in Connection with a Designated Event” and upon the repurchase of the debentures as described below under “— Repurchase at Option of the Holder Upon a Designated Event.” No make-whole premium will be paid if the stock price (as defined below) is less than $16.00 or greater than $100.00 (in each case subject to adjustment). The make-whole premium will be equal to a percentage (the “additional premium”) of the principal amount of the debentures. The additional premium will be determined by reference to the table below and is based on the date on which the designated event becomes effective (the “effective date”) and the price (the “stock price”) paid per share of our common stock in the transaction constituting the designated event. If holders of our common stock receive only cash in the transaction constituting the designated event, the stock price shall be the cash amount paid per share. Otherwise the stock price shall be the average of the closing sale price of our common stock (determined as described under “— Conversion of Debentures” above) on the 10 trading days up to but not including the effective date.
We will pay the make-whole premium solely in shares of our common stock (other than cash paid in lieu of fractional shares) or in the same form of consideration into which all or substantially all of the shares of our common stock have been converted in connection with the designated event. If holders of our common stock have the right to elect the form of consideration received in a designated event, then for purposes of the foregoing the consideration into which a share of our common stock has been converted shall be deemed to equal the aggregate consideration distributed in respect of all shares of our common stock divided by the total number of shares of common stock participating in the distribution.
The value of our shares for purposes of determining the number of shares to be issued in respect of the make-whole premium will be calculated as follows:
(a) securities that are traded on a United States national securities exchange or approved for quotation on the Nasdaq National Market or any similar system of automated dissemination of quotations of securities prices will be valued based on 98% of the average closing sale price or last sale price, as applicable, on the 10 trading days prior to but excluding the repurchase date,
(b) other securities, assets or property (other than cash) that holders will have the right to receive will be valued based on 98% of the average of the fair market value of such securities, assets or property (other than cash) as determined by two independent nationally-recognized investment banks selected by the trustee, and
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(c) 100% of any cash.
Notwithstanding the foregoing, in no event shall the value of our common stock calculated pursuant to this provision be less than 50% of the stock price used to determine the amount of the make-whole premium.
The stock prices set forth in the first row of the table (i.e., the column headers), will be adjusted as of any date on which the conversion rate of the debentures is adjusted. The adjusted stock prices will equal the stock prices applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the conversion rate immediately prior to the adjustment giving rise to the stock price adjustment and the denominator of which is the conversion rate as so adjusted.
The following table sets forth the additional premiums (table in percentages).
Stock Price | ||||||||||||||||||||||||||||||||||||||||||||
Effective Date | $16.00 | $18.00 | $20.00 | $30.00 | $40.00 | $50.00 | $60.00 | $70.00 | $80.00 | $90.00 | $100.00 | |||||||||||||||||||||||||||||||||
November 17, 2004 | 0.00 | % | 8.22 | % | 16.95 | % | 13.37 | % | 11.64 | % | 10.46 | % | 9.47 | % | 8.56 | % | 7.69 | % | 6.85 | % | 6.04 | % | ||||||||||||||||||||||
November 15, 2005 | 0.00 | % | 8.07 | % | 16.79 | % | 12.86 | % | 11.16 | % | 10.07 | % | 9.20 | % | 8.41 | % | 7.64 | % | 6.81 | % | 6.03 | % | ||||||||||||||||||||||
November 15, 2006 | 0.00 | % | 7.92 | % | 16.62 | % | 12.24 | % | 10.56 | % | 9.59 | % | 8.84 | % | 8.17 | % | 7.53 | % | 6.77 | % | 5.99 | % | ||||||||||||||||||||||
November 15, 2007 | 0.00 | % | 7.61 | % | 16.30 | % | 11.44 | % | 9.80 | % | 8.96 | % | 8.35 | % | 7.81 | % | 7.30 | % | 6.54 | % | 5.90 | % | ||||||||||||||||||||||
November 15, 2008 | 0.00 | % | 7.17 | % | 15.82 | % | 10.46 | % | 8.91 | % | 8.23 | % | 7.77 | % | 7.36 | % | 6.98 | % | 6.25 | % | 5.67 | % | ||||||||||||||||||||||
November 15, 2009 | 0.00 | % | 6.48 | % | 15.07 | % | 9.21 | % | 7.84 | % | 7.35 | % | 7.05 | % | 6.78 | % | 6.53 | % | 5.78 | % | 5.31 | % | ||||||||||||||||||||||
November 15, 2010 | 0.00 | % | 5.35 | % | 13.84 | % | 7.69 | % | 6.60 | % | 6.34 | % | 6.20 | % | 6.08 | % | 5.95 | % | 5.18 | % | 4.99 | % | ||||||||||||||||||||||
November 20, 2011 | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
The stock prices and additional premium amounts set forth above are based on a common stock price of $16.00 and an initial conversion price of $20.00.
The exact stock price and repurchase dates may not be set forth on the table, in which case:
Notwithstanding the above provisions regarding payment of the make-whole premium, in no event will the total number of shares of common stock issuable upon conversion (including the shares of common stock constituting the make-whole premium) exceed 61.2745 per $1,000 principal amount of debentures, subject to adjustments in the same manner as the conversion rate as set forth under “— Conversion Rate Adjustments.”
Optional Redemption by GenCorp
Prior to November 20, 2011, the debentures are not redeemable. From November 20, 2011 to but not including November 15, 2014, we may redeem the debentures at any time or from time to timeredeemed in whole or in part, at aour option, by vote of the Board of Directors, or by operation of the sinking fund, if any, provided for the cumulative preference stock of such series, from time to time, at the redemption price equal to 100%or the respective redemption prices theretofore fixed by the Board of Directors as provided in the Amended Articles of Incorporation upon notice given as provided in the Amended Articles of Incorporation.
If we redeem debentures as described above on or after November 20, 2011 and prior to November 15, 2014, we will make a “coupon make-whole” payment in cash, sharesholders of not less than 80% of our common stock or a combination thereof,
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at our option, equalvoting power entitled to elect directors in place of those being removed, (ii) provides that the present valueBoard of all remaining scheduled payments of interest on the debentures to be redeemed through November 15, 2014. The present value of the remaining interest payments will be computed using a discount rate equal to the Treasury Yield plus 25 basis points. “Treasury Yield” means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source for similar market data)) most nearly equal to the then remaining term to November 15, 2014;provided, however, that if the then remaining term to November 15, 2014 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Yield shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the then remaining term to November 15, 2014 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. We must make these coupon make-whole payments on all debentures called for redemption prior to November 15, 2014, including debentures converted after the date we mail the notice of redemption. If we elect to deliver shares,Directors may fix the number of sharesdirectors within a range of common stock a holder will receive will equalseven (to the amountextent consistent with applicable law) to seventeen directors, (iii) provides that the size of the coupon make-whole payment toBoard of Directors may be paid dividedincreased or decreased within such range by the average closing sale priceaffirmative vote of a majority of the Board of Directors or by the holders of not less than 80% of our common stock, to be determined as follows: (i) if a holder converts the debentures after we deliver the notice of redemptionvoting power and prior(iv) contains certain provisions relating to the redemption date,size of, and filling vacancies on, the average closing sale priceBoard of Directors and the removal of directors which may be amended only by the affirmative vote of not less than 80% of our common stock willvoting power. Subject to clause (iv) above, the provisions of our Amended Code of Regulations may be the averageamended at a meeting of the closing sale prices of our common stock onshareholders by the New York Stock Exchange on the ten consecutive trading days beginning on the second trading day following the day the debentures are submitted for conversion, and (ii) if we redeem the debentures on the redemption date, the average closing sale price of our common stock will be the averageaffirmative vote of the closing sale pricesholders of record of shares entitling them to exercise a majority of the voting power on such proposal, or by the written consent of the holders of record of shares entitling them to exercise two-thirds (2/3) of the voting power on such proposal, subject to certain exceptions.
On or after November 15, 2014,incumbent Board of Directors.
Webe complete and are requiredsubject to, give notice of redemptionand are qualified in their entirety by mailreference to, holders not more than 60 but not less than 30 days prior to the redemption date. If less than all of the outstanding debenturesprovisions of the debt securities and the indentures (including any amendments or supplements we may enter into from time to time which are to be redeemed,permitted under the trustee will selectdebt securities or any indenture).
We may not redeem the debentures if we have failedCompany. Any debt securities designated as senior will rank equally with any of our other senior and unsubordinated debt. Any debt securities designated as subordinated will be subordinate and junior in right of payment to pay any interest on the debentures and such failure to pay is continuing. No debenturessenior indebtedness. There may be redeemed by us ifsubordinated debt securities that are senior or junior to other series of subordinated debt securities.
Repurchase at Option of the Holder
You have the right to require us to repurchase your debentures for cash on November 20, 2011, November 15, 2014 and November 15, 2019. We will be required to repurchasedebt securities or any outstanding debenture for which you deliver a written repurchase notice to the paying agent. The paying agent will initially be the trustee. This notice must be delivered during the period beginning at any time from the opening of business on the date that is 20 business days prior to the repurchase date until the close of business on the repurchase date. A holder may withdraw its repurchase notice at any time prior to close of business on the repurchase date. If a repurchase notice is given and withdrawn during that period, we will not be obligated to repurchase the debentures listed in the notice. Our repurchase obligation will be subject to certain additional conditions.
The repurchase price payable for a debenture will be equal to the principal amount to be repurchased plus accrued and unpaid interest and liquidated damages,series thereof, including, if any, to, but excluding, the repurchase date.
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We must give notice of an upcoming repurchase date to all debenture holders not less than 20 business days prior to the repurchase date at their addresses shown in the register of the registrar. We will also give notice to beneficial owners as required by applicable law. This notice will state, among other things, the repurchase price and the procedures that holders must follow to require us to repurchase their debentures.
The repurchase notice from the holder must state:
any limit upon the aggregate principal amount of the debt securities; |
· | whether the debt securities will be issued as registered securities, bearer securities or both, and any restrictions on the exchange of one form of debt securities for another and on the offer, sale and delivery of the debt securities in either form; |
· | the date or dates on which the principal amount of the debt securities will mature; |
· | if the debt securities bear interest, the rate or rates at which the debt securities bear interest and the date or dates from which interest will accrue; |
· | if the debt securities bear interest, the dates on which interest will be payable and the regular record dates for interest payments; |
· | the place or places where the payment of principal, any premium and interest will be made, where the debt securities may be surrendered for transfer or exchange and where notices or demands to or upon us may be served; |
· | the price at which we originally issue the debt security, expressed as a percentage of the principal amount, and the original issue date; |
· | any optional redemption provisions, which would allow us to redeem the debt securities in whole or in part; |
· | any sinking fund or other provisions that would obligate us to redeem, repay or purchase the debt securities; |
· | if the currency in which the debt securities will be issuable is U.S. dollars, the denominations in which any registered securities will be issuable, if other than denominations of $1,000 and any integral multiple thereof, and the denominations in which any bearer securities will be issuable, if other than the denomination of $5,000; |
· | if other than the entire principal amount, the portion of the principal amount of | |||
· | the name and location of the corporate trust office of the applicable trustee under the indenture for such series of notes; |
· | if other than U.S. dollars, the currency in which the debt securities will be paid or denominated; |
· | if the debt securities are to be |
· | the designation of the original currency determination agent, if any; |
· | if the debt securities do not bear interest, the dates on which we will furnish to the applicable |
You may withdraw any written repurchase notice by delivering a written notice of withdrawal to the paying agent prior to the close of business on the repurchase date. The withdrawal notice must state:
if the | ||||
if | ||||
the |
· | whether and under what circumstances we will pay additional amounts to non-U.S. holders in respect of any tax assessment or government charge; |
· | whether the debt securities will be issued in whole or in part in the form of a global security or securities and, in that case, any depositary and global exchange agent for the global security or securities, whether the global form shall be permanent or temporary and, if applicable, the exchange date; |
· | if debt securities are to be issuable initially in the form of a temporary global security, the circumstances under which the temporary global security can be exchanged for definitive debt securities and whether the definitive debt securities will be registered securities, bearer securities or will be in global form and provisions relating to the payment of interest in respect of any portion of a global security payable in respect of an interest payment date prior to the exchange date; |
· | the extent and manner to which payment on or in respect of debt securities will be subordinated to the prior payment of our other liabilities and obligations; |
· | the assets, if any, that |
Payment of the repurchase price for a debenture for which a repurchase notice has been delivered and not withdrawn is conditioned upon book-entry transfer or delivery of the debenture, together with necessary endorsements, to the paying agent at its corporate trust office in the Borough of Manhattan, New York City, or any other office of the paying agent, at any time after delivery of the repurchase notice. Payment of the repurchase price for the debenture will be made promptly following the later of the repurchase date and the time of book-entry transfer or delivery of the debenture. If the paying agent holds money sufficient to pay the repurchase price of the debenture on the business day following the repurchase date, then, on and after such date:
whether payment of any amount due under the | ||||
· | any other |
We may be unable to repurchase the debentures if you elect to require us to repurchase the debentures pursuant to this provision. If you elect to require us to repurchase the debentures on November 20, 2011, November 15, 2014 or November 15, 2019,debt securities that we may not have enough funds to pay the repurchase price for all tendered debentures. Our Credit Agreementissue and our Senior Subordinated Notes contain, and any future credit agreements or other agreements relating to our indebtedness may contain, provisions prohibiting repurchase of the debentures under certain circumstances. If you elect to require us to repurchase the debentures at a time when we are prohibited from repurchasing them, we could seek the consent of our lenders or noteholders to repurchase the debentures or attempt to refinance this debt. If we do not obtain consent, we would not be permitted to repurchase the debentures.
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Our failure to repurchase tendered debentures would constitute an event of default under the indenture, which might constitute a default under the terms of our other indebtedness.
The Exchange Act requires the dissemination of certain information to security holders andprovides that an issuer follow certain procedures if an issuer tender offer occurs, which may apply if the repurchase rights summarized above become available to holders of the debentures. In connection with any offer to require us to repurchase debentures as summarized above, we will, to the extent applicable:
We may, to the extent permitted by applicable law and the agreements governing our other debt, at any time purchase the debentures in the open market or by tender at any price or by private agreement. Any debenture so purchased by us may, to the extent permitted by applicable law, be resold or may be surrendered to the trustee for cancellation. Any debentures surrendered to the trustee may not be reissued or resold and will be canceled promptly.
Repurchase at Option of the Holder Upon a Designated Event
If a designated event occurs at any time prior to the maturity of the debentures, you may require us to repurchase your debentures, in whole or in part, on a repurchase date specified by us that is not less than 20 nor more than 35 business days after the date of our notice of the designated event described in the second succeeding paragraph. The debentures will be repurchased only in multiples of $1,000 principal amount.
We will repurchase the debentures at a price equal to 100% of the principal amount to be repurchased, plus accrued and unpaid interest and liquidated damages, if any, to but excluding the repurchase date, payable in cash, plus in the event the designated event occurs on or prior to November 20, 2011 and is (i) an event described in clause (1) or (2) of the definition of fundamental change or (ii) a termination of trading, we will also pay a make-whole premium in shares of our common stock determined as described above under “Determination of the Make-Whole Premium.” If the repurchase date falls after a record date and on or prior to the corresponding interest payment date, we will pay the full amount of accrued and unpaid interest payment and liquidated damages, if any, on such interest payment date to the holder of record at the close of business on the corresponding record date.
We will mail to all record holders a notice of a designated event within 20 days after it has occurred. We are also required to deliver to the trustee a copy of the designated event notice. If you elect to require us to repurchase your debentures, you must deliver to us or our designated agent, on or before the repurchase date specified in our designated event notice, your repurchase notice and any debentures to be repurchased, duly endorsed for transfer.
The repurchase notice from the holder must state:
You may withdraw any written repurchase notice by delivering a written notice of withdrawal to the paying agent prior to the close of business on the business day prior to the repurchase date. The withdrawal notice must state:
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Payment of the repurchase price for a debenture for which a repurchase notice has been delivered and not withdrawn is conditioned upon book-entry transfer or delivery of the debenture, together with necessary endorsements, to the paying agent at its corporate trust office in the Borough of Manhattan, The City of New York, or any other office of the paying agent, at any time after delivery of the repurchase notice. Payment of the repurchase price for the debenture will be made promptly following the later of the repurchase date and the time of book-entry transfer or delivery of the debenture. If the paying agent holds money sufficient to pay the repurchase price of the debenture on the business day following the repurchase date, then, on and after such date:
This will be the case whether or not book-entry transfer of the debenture has been made or the debenture has been delivered to the paying agent.
The terms “designated event” and “fundamental change” are limited to specified transactions and may not include other events that might adversely affect our financial condition or business operations. Our obligation to offer to repurchase the debentures upon the occurrence of a designated event would not necessarily afford you protection in the event of a highly leveraged transaction, reorganization, merger or similar transaction.
The Exchange Act requires the dissemination of certain information to security holders and that an issuer follow certain procedures if an issuer tender offer occurs, which may apply in the event of a designated event. In connection with any designated event we will, to the extent applicable:
This designated event repurchase right could discourage a potential acquirer of GenCorp. However, this designated event repurchase feature is not the result of management’s knowledge of any specific effort to obtain control of us by means of a merger, tender offer or solicitation, or part of a plan by management to adopt a series of anti-takeover provisions. No debentures may be repurchased by us at the option of holders upon a designated event if the principal amount of the debentures has been accelerated, and such acceleration has not been rescinded, on or prior to the repurchase date.
We may be unable to repurchase the debentures upon a designated event. If a designated event were to occur, we may not have enough funds to pay the repurchase price for all tendered debentures. Our current Credit Agreement and Senior Subordinated Notes contain, and any future credit agreements or other agreements relating to our indebtedness may contain, provisions prohibiting repurchase of the debentures under certain circumstances, or expressly prohibit our repurchase of the debentures upon a designated event or may provide that a designated event is prohibited or constitutes an event of default under that agreement. If a designated event occurs at a time when we are prohibited from repurchasing debentures, we could seek the consent of our lenders to repurchase the debentures or attempt to refinance this debt. If we do not obtain consent, we would not be permitted to repurchase the
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debentures. Our failure to repurchase tendered debentures would constitute an event of default under the indenture, which might constitute a default under the terms of our other indebtedness.
Subordination of the Debentures
The payment of the principal of, premium, if any, and interest (including liquidated damages, if any) on the debentures, including our ability to pay cash with respect to the principal return or in lieu of fractional shares upon conversion of the debentures, will, to the extent described in the indenture, be subordinated in right of payment to the prior payment in full of all our Senior Indebtedness (as defined below). The holders of all Senior Indebtedness will first be entitled to receive payment in full in cash of all amounts due or to become due on the Senior Indebtedness, or provision for payment in cash or cash equivalents, before the holders of the debentures will be entitled to receive any payment in respect of the debentures, when there is a payment or distribution of assets to creditors upon our:
We expectissue debt securities from time to time to incur additional indebtedness and obligations that will constitute Senior Indebtedness. The indenture does not limitin one or prohibit us from incurring additional Senior Indebtednessmore series under one or other indebtedness.
In addition, our subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts due on the debentures or to provide us with the funds to satisfy our payment obligations. As a result, the debentures are effectively subordinated to all existing and future indebtedness and other liabilities of (including guarantees by) our subsidiaries. Our senior credit facility and our 9 1/2% Senior Subordinated Notes due 2013 are guaranteed by all of our material domestic subsidiaries.
No payment on account of the debentures or on account of the purchase, redemption, acquisition, retirement or conversion of debentures may be made, to the extent describedmore indentures, in the indenture, if a default in any payment with respect to Senior Indebtedness has occurred and is continuing. If (1) there is a default on any Designated Senior Indebtedness other than a payment default that occurs that permits the holders of that Designated Senior Indebtedness to accelerate its maturity and (2) the trustee and GenCorp receive the notice required by the indenture, no payments may be made on the debentures for up to 179 days in any 365-day period unless the default is cured or waived. By reason of this subordination, in the event of our insolvency, holders of the debentures may recover less ratably than holders of our Senior Indebtedness. We may be required to obtain the consent of holders of Senior Indebtedness prior to redeeming the debentures or satisfying or discharging our obligations under the indenture prior to the maturity of the debentures.
“Senior Indebtedness” means the principal of, premium, if any, and interest on, and fees, costs, enforcement expenses, collateral protection expenses and other reimbursement or indemnity obligations in respect
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of, and any other payments due pursuant to, any of the following, whether outstanding as of the date of the indenture or incurred or created thereafter, unless, in theeach case of any particular indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such indebtedness shall not be senior in right of payment to the debentures:
provided, however, that in no event shall Senior Indebtedness include (a) indebtedness or other obligations owed to any of our subsidiaries or affiliates, (b) trade account payables incurred in the ordinary course of business, (c) any liabilities for taxes owed or owing by us or any of our subsidiaries, or (d) our obligations under the Existing Convertible Notes or the debentures.
“Credit Agreement” means the Credit Agreement dated as of December 6, 2004, among the Company and the lenders named therein, and any deferrals, renewals, extensions, replacements, refinancings or refundings thereof, or amendments, modifications or supplements thereto or replacements thereof of all or any portion of the indebtedness under such agreement or any successor or replacement agreement and any agreement providing therefor (including, without limitation, any agreement increasing the amount borrowed thereunder or adding additional balances or guarantors thereunder), whether by or with the same or any other lender, creditors,various maturities, at par or group of creditors, and including related notes, guarantee agreements, security agreements and other instruments and agreements executedat a discount. Unless indicated in connection therewith and whether by the same or any other agent, lender or group of lenders.
“Designated Senior Indebtedness” means (i) indebtedness under or in respect of the Credit Agreement, or any credit facility or credit line of any foreign subsidiary of GenCorp and (ii) any other indebtedness constituting Senior Indebtedness which, at the time of determination, has an aggregate principal amount of at least $25 million. The instrument, agreement or other document evidencing any Designated Senior Indebtedness may place limitations and conditions on the right of such Senior Indebtedness to exercise the rights of Designated Senior Indebtedness.
“Existing Convertible Notes” means GenCorp’s 5 3/4% Convertible Subordinated Notes due 2007 and 4% Contingent Convertible Subordinated Notes due 2024.
“Existing Senior Subordinated Notes” means GenCorp’s 9 1/2% Senior Subordinated Notes due 2013.
Merger and Sale of Assets by GenCorp
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The indenture provides thata prospectus supplement, we may not consolidate with or merge with or into any other person and that we may not sell, convey, transfer or lease all or substantially all of our properties and assets to another person, unless among other items:
When such a person assumes our obligations in such circumstances, subject to certain exceptions, we shall be discharged from all obligations under the debentures and the indenture. Although such transactions are permitted under the indenture, the occurrence of any such transactions could constitute a designated event, permitting each holder to require us to repurchase the debentures of such holder as described above. An assumption of our obligations under the debentures and the indenture by any such person might be deemed for United States federal income tax purposes to be an exchange of the debentures for new debentures by the holders thereof, resulting in recognition of gain or loss for such purposes and possibly other adverse tax consequences to the holders. Holders should consult their own tax advisors regarding the tax consequences of such an assumption.
Events of Default; Notice and Waiver
The following are events of default under the indenture:
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The trustee may withhold notice to the holders of the debentures of any default, except defaults in payment of principal, premium, interest and liquidated damages, if any, on the debentures. However, the trustee must consider it to be in the interest of the holders of the debentures to withhold this notice.
The term “significant subsidiary” means any of our subsidiaries which has: (i) consolidated assets or in which we and our other subsidiaries have investments equal to or greater than 10% of our total consolidated assets; or (ii) consolidated gross revenue equal to or greater than 10% of our consolidated gross revenue.
If an event of default occurs and continues, the trustee or the holders of at least 25% in principal amount of the outstanding debentures may declare the principal, accrued and unpaid interest to the date of such declaration, and liquidated damages, if any, on the outstanding debentures to be immediately due and payable. In case of certain events of bankruptcy or insolvency involving us or any of our significant subsidiaries, the principal, accrued and unpaid interest and liquidated damages, if any, on the debentures will automatically become due and payable. However, if we cure all defaults, except the nonpayment of principal, interest to the date of such declaration, and liquidated damages, if any, that became due as a result of the acceleration, and meet certain other conditions, with certain exceptions, this declaration may be cancelled, the acceleration may be rescinded and annulled and the holdersissue additional debt securities of a majority of the principal amount of outstanding debentures may waive these past defaults.
Payments of principal, premium, if any, interest and liquidated damages, if any, on the debentures that are not made when due will accrue interest from the required payment date at the then-applicable interest rate for the debentures.
No holder of the debentures may pursue any remedy under the indenture, except in the case of a default in the payment of principal of, premium, if any, or interest and liquidated damages, if any, on the debentures, unless:
The holders of a majority in aggregate principal amount of the debentures at the time outstanding may waive any existing default and its consequences except:
(1) any default in any payment of the debentures;
(2) any default with respect to the conversion rights of the debentures;
(3) any default in the payment of the redemption price;
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(4) a default in the payment of the repurchase price (upon a repurchase at the option of a holder or a repurchase upon a designated event); or
(5) any default in respect of certain covenants or provisions in the indenture which may not be modified without the consent of the holder of each debenture as described in “— Modification” below.
When a default is waived, it is deemed cured and will cease to exist, but no such waiver shall extend to any subsequent or other default or impair any consequent right.
Modification
The consent of the holders of a majority in principal amount of the outstanding debentures is required to modify or amend the indenture. However, a modification or amendment requires the consent of the holder of each outstanding debenture if it would:
We are permitted to modify the following provisions of the indentureparticular series without the consent of the holders of the debentures:
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Form, Denomination and Registration
The debentures were issued:
Global Debenture, Book-Entry Form
The debentures are evidenced by global debentures. We deposited the global debentures with DTC and registered the global debentures in the name of Cede & Co. as DTC’s nominee. Except as set forth below, a global debenture may be transferred, in whole or in part, only to another nominee of DTC or to a successor of DTC or its nominee.
Beneficial interests in a global debenture may be held through organizations that are participants in DTC (called “participants”). Transfers between participants will be effected in the ordinary way in accordance with DTC rules and will be settled in clearing house funds. The laws of some states require that certain persons take physical delivery ofdebt securities in definitive form. As a result, the ability to transfer beneficial interests in the global debenture to such persons may be limited.
Beneficial interests in a global debenture held by DTC may be held only through participants, or certain banks, brokers, dealers, trust companies and other parties that clear through or maintain a custodial relationship with a participant, either directly or indirectly (called “indirect participants”). So long as Cede & Co., as the nominee of DTC, is the registered owner of a global debenture, Cede & Co. for all purposes will be considered the sole holder of such global debenture. Except as provided below, owners of beneficial interests in a global debenture will:
We will pay interest and liquidated damages, if any, on and the redemption price and the repurchase price of, a global debenture to Cede & Co., as the registered owner of the global debenture, by wire transfer of immediately available funds on each interest payment date or the redemption or repurchase date, as the case may be. Neither we, the trustee nor any paying agent will be responsible or liable:
Neither we, the trustee, registrar, paying agent nor conversion agent will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and
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procedures governing their operations. DTC has advised us that it will take any action permitted to be taken by a holder of debentures, including the presentation of debentures for conversion, only at the direction of one or more participants to whose account with DTC interests in the global debenture are credited, and only in respect of the principal amount of the debentures represented by the global debenture as to which the participant or participants has or have given such direction.
DTC has advised us that it is:
DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes to the accounts of its participants. Participants include securities brokers, dealers, banks, trust companies and clearing corporations and other organizations. Some of the participants or their representatives, together with other entities, own DTC. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.
DTC has agreed to the foregoing procedures to facilitate transfers of interests in a global debenture among participants. However, DTC is under no obligation to perform or continue to perform these procedures, and may discontinue these procedures at any time.
We will issue the debentures in definitive certificated form if:
Governing Law
The debentures and the indenture are governed by, and construed in accordance with, the laws of the State of New York.
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SELLING SECURITYHOLDERS
The debentures were originally issued by us and sold to Wachovia Capital Markets LLC, J.P. Morgan Securities Inc. and Scotia Capital (USA) Inc., to whom we refer to elsewhere in this prospectus as the “initial purchasers,” in transactions exempt from the registration requirements of the federal securities laws. The initial purchasers resold the debentures to persons reasonably believed by them to be “qualified institutional buyers,” as defined by Rule 144A under the Securities Act of 1933, as amended. The selling securityholders, which term includes their transferees, pledges, donees or successors, may from time to time offer and sell pursuant to this prospectus any and all of the debentures and the shares of common stock issuable upon conversion and/or redemption of the debentures. Set forth below are the names of each selling securityholder, the principal amount of the debentures that may be offered by such selling securityholder pursuant to this prospectus and the number of shares of common stock into which the debentures are convertible, each to the extent known to us as of the date of this prospectus. None of the selling securityholders which is a broker-dealer acquired debentures as compensation for underwriting activities. Each selling securityholder that is an affiliate of a broker-dealer has represented to us that it purchased the debentures to be resold in the ordinary course of business and had no agreements or understandings, directly or indirectly, with any person to distribute the debenturesseries outstanding at the time of their purchase. Unless set forth below, nonethe issuance. Any such additional debt securities, together with all other outstanding debt securities of that series, will constitute a single series of debt securities under the applicable indenture.
Any or all of the debentures or common stock listed below may be offered for sale pursuant to this prospectus by the selling securityholdersfollowing ways from time to time. Accordingly, no estimate can be given astime:
· | directly to investors, including through a specific bidding, auction or other process; |
· | to investors through agents; |
· | directly to agents; |
· | to or through brokers or dealers; |
· | to the public through underwriting syndicates led by one or more managing underwriters; |
· | to one or more underwriters acting alone for resale to investors or to the public; or |
· | through a combination of any such methods of sale. |
Aggregate | ||||||||||||||||
Principal Amount | Common | |||||||||||||||
of Debentures at | Percentage | Common Stock | Stock | |||||||||||||
Maturity that | of Debentures | Owned Prior to | Registered | |||||||||||||
Name | may be Sold | Outstanding | Conversion | Hereby(1) | ||||||||||||
AHFP Context(2) | 250,000 | * | 12,500 | |||||||||||||
BNP Paribas Equity Strategies, SNC(**)(3) | 3,698,000 | 2.53 | % | 184,900 | ||||||||||||
Context Convertible Arbitrage Fund, LP(4) | 1,150,000 | * | 57,500 | |||||||||||||
Context Convertible Arbitrage Offshore, LTD(5) | 3,375,000 | 2.31 | % | 168,750 | ||||||||||||
CooperNeff Convertible Strategies (Cayman) Master Fund, LP(6) | 1,943,000 | 1.33 | % | 97,150 | ||||||||||||
DKR Saturn Event Driven Holding Fund Ltd.(7) | 3,750,000 | 2.56 | % | 277,260 | 187,500 | |||||||||||
DKR Saturn Multi-Strategy Holding Fund Ltd.(8) | 3,750,000 | 2.56 | % | 187,500 | ||||||||||||
Grace Convertible Arbitrage Fund, LTD.(9) | 5,000,000 | 3.42 | % | 250,000 | ||||||||||||
Highbridge International LLC(**)(10) | 17,000,000 | 11.61 | % | 850,000 | ||||||||||||
JMG Capital Partners LP(11) | 6,978,000 | 4.77 | % | (12 | ) | 348,900 | ||||||||||
JMG Triton Offshore Ltd(13) | 6,977,000 | 4.77 | % | (14 | ) | 348,850 | ||||||||||
LDG Limited(15) | 354,000 | * | 17,700 | |||||||||||||
Lyxor/Convertible Arbitrage Fund Limited(16) | 510,000 | * | 25,500 | |||||||||||||
Lyxor/Context Fund LTD(**)(17) | 675,000 | * | 33,750 | |||||||||||||
McMahan Securities Co. L.P. | 750,000 | * | 37,500 | |||||||||||||
MSS — Convertible Arbitrage 1(18) | 28,000 | * | 1,400 | |||||||||||||
National Bank of Canada(**)(19) | 450,000 | * | 22,500 | |||||||||||||
Singlehedge US Convertible Arbitrage Fund(20) | 712,000 | * | 35,600 | |||||||||||||
Sphinx Fund(21) | 537,000 | * | 26,850 | |||||||||||||
Sturgeon Limited(22) | 637,000 | * | 31,850 | |||||||||||||
Sturgeon Limited(23) | 469,000 | * | 23,450 | |||||||||||||
TQA Master Fund, Ltd.(24) | 3,837,000 | 2.62 | % | 191,850 | ||||||||||||
TQA Master Plus Fund, Ltd.(25) | 6,288,000 | 4.30 | % | 314,400 | ||||||||||||
UBS AG London F/B/O HFS | 15,500,000 | 10.59 | % | 775,000 | ||||||||||||
UBS O’Connor LLC F/B/0 O’Connor Global Convertible Arbitrage Master Ltd. | 1,000,000 | * | 50,000 | |||||||||||||
Univest Convertible Arbitrage Fund II LTD (Norshield)(26) | 100,000 | * | 5,000 | |||||||||||||
Xavex — Convertible Arbitrage 7 Fund(27) | 593,000 | * | 29,650 | |||||||||||||
Zurich Institutional Benchmarks Master Fund Ltd.(28) | 748,000 | * | 37,400 | |||||||||||||
All other holders of Debentures or future transferees, pledges, donees or successors of any such holders (29)(30) | 59,341,000 | 40.53 | % | 2,967,050 | ||||||||||||
Total (31) | 146,400,000 | 100 | % | 7,320,000 |
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PLAN OF DISTRIBUTION
The debenturesA prospectus supplement accompanying this prospectus will set forth the terms of the offering and the common stock are being registered to permit public secondary tradingmethod of these securities by the holders thereof from time to time after the date of this prospectus. We have agreed, among other things, to bear all expenses, other than underwriting discountsdistribution and selling commissions,will identify any firms acting as underwriters, dealers or agents in connection with the registration and saleoffering, including:
· | the name or names of any underwriters, dealers or agents; |
· | the purchase price of the securities and the proceeds to us from the sale; |
· | any over-allotment options under which the underwriters may purchase additional securities from us; |
· | any underwriting discounts and other items constituting compensation to underwriters, dealers or agents; |
· | any public offering price; |
· | any discounts or concessions allowed or reallowed or paid to dealers; or |
· | any securities exchange or market on which the securities offered in the prospectus supplement may be listed. |
We will not receive any of the proceeds from the offering of the debentures or the common stock by the selling securityholders. We have been advised by the selling securityholders that the selling securityholders may sell all or a portion of the debentures and common stock beneficially owned by them and offered hereby from time to time on any exchange on which the securities are listed on terms to be determined at the times of such sales. The selling securityholders may also make private sales directly or through a broker or brokers. Alternatively, any of the selling securityholders may from time to time offer the debentures or the common stock beneficially owned by them through underwriters, dealers or agents, who may receive compensation in the form of underwriting discounts, commissions or concessions from the selling securityholders and the purchasers of the debentures and the common stock for whom they may act as agent. The aggregate proceeds to the selling securityholders from the sale of the debentures or common stock offering will be the purchase price of such debentures or common stock less discounts and commissions, if any.
The debentures and the common stock may be soldeffected from time to time in one or more transactions at a fixed offeringprice or prices, which may be changed, or at varying prices determined at the time of sale, or at negotiated prices. These prices willdetermined as the applicable prospectus supplement specifies. The common stock may be determined by the holders of such securitiessold through a rights offering, forward contracts or by agreement between these holders and underwriters or dealers who may receive fees or commissions in connection therewith.
These transactions may include block transactions or crosses. Crosses are transactions in which the same broker acts as an agent on both sides of the trade.
similar arrangements.
To our knowledge, there are currently no plans, arrangements or understandings between any selling securityholders and any underwriter, broker-dealer or agent regarding the sale of the debenturessecurities, underwriters, dealers or agents may be deemed to have received compensation from us in the form of underwriting discounts or commissions and also may receive commissions from purchasers for whom they may act as agent. Underwriters may sell the securities to or through dealers, and the underlyingdealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act as agent.
Our outstanding common stock isare listed for trading on the New York Stock Exchange and the Chicago Stock Exchange.
The selling securityholders Any common stock sold pursuant to a prospectus supplement will be listed on the New York Stock Exchange and the Chicago Stock Exchange, subject to official notice of issuance. We may elect to list any broker and any broker-dealers, agentsseries of debt securities on an exchange, but we are not obligated to do so. It is possible that one or more underwriters that participate with the selling securityholdersmay make a market in the distributionsecurities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of, the debentures or the common stock may be deemed to be “underwriters” within the meaning of the Securities Act, in which eventtrading market for, any commission received by such broker-dealers, agents or underwriters and any profit on the resale of the debentures of the common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
offered securities.
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The debentures were issued and sold on November 23, 2004, December 6, 2004, December 9, 2004 and December 16, 2004 in transactions exempt from registration requirements of the federal securities laws to the initial purchasers. We have agreed to indemnify each initial purchaser, the directors, officers, partners, employees, representatives and agents of each initial purchaser and each selling securityholder including each person, if any, who controls any of them within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each selling securityholder has agreed severally and not jointly, to indemnify us, our directors and officers and each person, if any, who controls us within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act against certain liabilities arising under the Securities Act.
The selling securityholders and any other persons participating in the distribution will be subjectopen market. These transactions may include short sales, stabilizing transactions and purchases to certain provisions undercover positions created by short sales. Short sales involve the federal securities laws, including Regulation M, which may limit the timing of purchases and sales of the debentures and the underlying common stocksale by the selling securityholders and any other such person. In addition, Regulation M may restrictunderwriters of a greater number of securities than they are required to purchase in an offering. Stabilizing transactions consist of bids or purchases made for the abilitypurpose of any person engagedpreventing or retarding a decline in the distribution of the debentures and the underlying common stock to engage in market-making activities with respect to the particular debentures and the underlying common stock being distributed for a period of up to five business days prior to the commencement of such distribution. This may affect the marketability of the debentures and the underlying common stock and the ability of any person or entity to engage in market-making activities with respect to the debentures and the underlying common stock.
We have agreed to use our reasonable best efforts to keep the registration statement of which this prospectus is a part effective until the earlier of (1) the sale pursuant to the registration statement of all the securities registered thereunder, (2) the expiration of the holding period applicable to such securities held by persons that are not our affiliates under Rule 144(k) under the Securities Act or any successor provision, or (3) the date on which allmarket price of the securities registered under the registration statement cease to be outstanding, subject to certain permitted exceptionswhile an offering is in which case weprogress. The underwriters also may prohibit offers and sales of debentures and common stock pursuantimpose a penalty bid. This occurs when a particular underwriter repays to the registration statement to which this prospectus relates.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material United States federal income tax consequences of the ownership and disposition of the debentures and shares of common stock into which the debentures are convertible (the “securities”). Unless otherwise specified, this summary deals only with U.S. holders who purchase and hold the debentures and any shares of common stock into which the debentures are convertible as capital assets for United States federal income tax purposes (generally, property held for investment). The discussion regarding United States federal income tax laws assumes that transfers of the debentures and payments thereon will be made in accordance with the applicable indenture.
As used herein, “U.S. holders” are beneficial owners of the securities, that are, for United States federal income tax purposes, (1) citizens or residents of the United States, (2) corporations created or organized in, or under the laws of, the United States, any state thereof or the District of Columbia, (3) estates, the income of which is subject to United States federal income taxation regardless of its source, or (4) trusts if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and (B) one or more United States persons have the authority to control all substantial decisions of the trust. In addition, certain trusts in existence on August 20, 1996 and treated as U.S. holders prior to such date may also be treated as U.S. holders. As used herein, “non-U.S. holders” are beneficial owners of the securities that are neither U.S. holders nor partnerships for United States federal income tax purposes. If a partnership (or any other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of the securities, the treatment of a partner in the partnership will generally depend upon the status of the partner and upon the activities of the partnership. Partnerships and partners in such partnerships should consult their tax advisors about the United States federal income tax consequences of owning and disposing of the securities.
This summary does not describe all of the tax consequences that may be relevant to a holder in light of its particular circumstances. For example, it does not deal with special classes of holders, such as banks, thrifts, real estate investment trusts, regulated investment companies, insurance companies, partnerships or other pass-through entities for United States federal income tax purposes, dealers and traders in securities or currencies, or tax-exempt investors. It also does not discuss securities held as part of a hedge, straddle, “synthetic security” or other integrated transaction. This summary also does not address the tax consequences to (i) U.S. holders that have a functional currency other than the U.S. dollar, or (ii) certain former citizens or residents of the United States. Further, it does not include any description of any alternative minimum tax consequences or the tax laws of any state or local government or of any foreign government that may be applicable to the securities. This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof, and all of which are subject to change and/or differing interpretations, possibly on a retroactive basis.
Holders should consult with their own tax advisors regarding the federal, state, local and foreign income, franchise, personal property and any other tax consequences of the ownership and disposition of the securities.
Taxation of U.S. Holders
Interest Income
Payments of interest on the debentures generally will be taxable to a U.S. holder as ordinary interest income at the time such payments are accrued or received (in accordance with the holder’s regular method of tax accounting).
Because we are required to pay a make-whole premium upon a conversion or repurchase of the debentures due to the occurrence of certain “designated events,” and also to pay liquidated damages on the debentures if we fail to comply with certain obligations under the registration rights agreement, the debentures could be subject to the rules applicable to contingent payment debt instruments. Under these rules, however, a payment is not a contingent payment merely because of a contingency that, as of the issue date, is either “remote” or “incidental.” We believe (and the remainder of this discussion assumes) that the payment of either make-whole premiums, liquidated damages, or both, are remote or incidental contingencies as of the issue date. As a result, we intend to take the
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position that the provision for such make-whole premiums or liquidated damages will not cause the debentures to be subject to the contingent payment debt instrument rules. Our position will be binding on a holder unless the holder explicitly discloses that the holder’s determination is different, which disclosure is made on a statement attached to the holder’s timely filed federal income tax return for the taxable year that includes the acquisition date of the debenture. Based on the foregoing, we believe that the payment of liquidated damages on the debentures generally should be taxable to a U.S. holder as ordinary income at the time such payment is accrued or received (in accordance with the holder’s regular method of tax accounting). The treatment of the make-whole premium, if any, is described below under “— Conversion of Debentures” and “— Sale, Exchange, Repurchase, Redemption or Other Taxable Disposition of Debentures.” If our treatment of liquidated damages or make-whole premiums were found to be incorrect, and the debentures were deemed to be contingent payment debt instruments, the amount, timing and character of income, gain or loss in respect of an investment in the debenture would differ from those described herein. Holders should consult their tax advisors regarding the tax consequences relating to debentures providing for payments of liquidated damages or make-whole premiums.
Market Discount
If a U.S. holder acquires a debenture other than in connection with its original issue at a price that is less than its issue price, the amount of such difference is treated as “market discount” for U.S. federal income tax purposes, unless such difference is less than 1/4 of one percent of the principal amount at maturity multiplied by the number of complete years to maturity from the date of acquisition. Under the market discount rules, a U.S. holder is required to treat any gain on the sale, exchange, retirement or other disposition of a debenture as ordinary income to the extent of the accrued market discount that has not previously been included in income. If a U.S. holder disposes of a debenture which has accrued market discount in a nonrecognition transaction in which the U.S. holder receives property the basis of which is determined in whole or in part by reference to the basis of the debenture, the accrued market discount is generally not includible in income at the time of such transaction. Instead, the accrued market discount attaches to the property received in the nonrecognition transaction and is recognized as ordinary income upon the disposition of such property. Such nonrecognition transaction should include the conversion of a debenture for our shares of common stock. In general, the amount of market discount that has accrued is determined on a ratable basis, by allocating an equal amount of market discount to each day of every accrual period. A U.S. holder may, however, elect to determine the amount of accrued market discount allocable to any accrual period under the constant yield method. Any such election applies to all debt instruments acquired by the U.S. holder on or after the first day of the first taxable year to which the election applies, and is irrevocable without the consent of the IRS. If such an election is made, the U.S. holder’s tax basis in the debentures will be increased by the amount of market discount included in income. Unless a U.S. holder elects to include market discount in income as it accrues, such U.S. holder may not be allowed to deduct on a current basisunderwriters a portion of the interest expense on any indebtedness incurredunderwriting discount received by it because the underwriters have repurchased the securities sold by or continued to purchasefor the account of that underwriter in stabilizing or carry debentures withshort-covering transactions. These activities by the underwriters may stabilize, maintain or otherwise affect the market discount.
Amortizable Bond Premium
If a U.S. holder purchases a debenture at a price that exceeds the principal amount of the debenture, the amount of the difference is referred to as “bond premium” for U.S federal income tax purposes. The U.S holder may elect to amortize the bond premium against interest payable on the debenture, except to the extent that the bond premium is attributable to the conversion feature of the debenture. In addition, any bond premium in excess of the interest payable on the debenture may be deductible over the term of the debenture. If a U.S. holder elects to amortize bond premium, the amount of bond premium allocable to each period will be based on a constant yield to maturity over the period the debenture is held. The amortized bond premium would reduce the U.S. holder’s tax basis in the debenture. Any such election applies to all fully taxable bonds held by the U.S. holder at the beginning of the first taxable year to which the election applies, and all fully taxable bonds acquired thereafter, and is irrevocable without the consent of the IRS. If the election is not made, a U.S. holder must include the full amount of each interest payment in income as it accrues or is paid, and premium will not be taken into account until principal payments are received on the debenture or the debenture is sold or otherwise disposed of. Any loss resulting from taking into account such unamortized premium would generally be treated as a capital loss.
Conversion of Debentures
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If a U.S. holder converts a debenture and we deliver a combination of shares of common stock and cash, the tax treatment to the holder is uncertain. A holder may be required to recognize any gain (but not loss) realized, but only to the extent such gain does not exceed the amount of cash received (other than cash received in lieu of a fractional share or attributable to accrued but unpaid interest). In such case, a holder’s tax basis in the common stock received upon a conversion (including any tax basis allocable to a fractional share but excluding shares of common stock attributable to accrued but unpaid interest) would be equal to such holder’s adjusted tax basis in the debenture at the time of conversion, reduced by any cash received upon a conversion (other than cash received in lieu of a fractional share or attributable to accrued but unpaid interest) and increased by the amount of any gain recognized on the conversion (other than gain with respect to a fractional share). Alternatively, the cash payment may be treated as proceeds from a sale of a portion of the debenture, as described below under “— Sale, Exchange, Repurchase, Redemption or Other Taxable Disposition of Debentures.” In such case, a holder’s tax basis in the debenture would be allocated pro rata between the common stock (including any fractional share treated as received but excluding any amounts attributable to accrued but unpaid interest) received and the portion of the debenture that is treated as sold for cash, and a holder would recognize gain or loss on the portion of the debenture treated as sold for cash but would not recognize gain or loss on the portion treated as converted into common stock.
If cash is received in lieu of a fractional share, the holder will be treated as having received the fractional share and as having immediately sold it for an amount equal to such cash. Accordingly, the receipt of cash in lieu of a fractional share will generally result in capital gain or loss, if any, measured by the difference between the cash received for the fractional share and the U.S. holder’s adjusted tax basis in the debenture that is allocable to the fractional share. The holding period for any common stock received upon a conversion (including any fractional share treated as received but excluding any common stock received that is attributable to accrued but unpaid interest) will include the holding period for the debenture. Holders should consult their tax advisors regarding the proper treatment to them of the receipt of a combination of cash and common stock upon a conversion of the debentures.
If a U.S. holder converts a debenture and we deliver solely cash in satisfaction of our obligation, such cash payment will generally be treated as received from a sale of the debenture by the U.S. holder as described below under “— Sale, Exchange, Repurchase, Redemption or Other Taxable Disposition of Debentures.”
The amount of cash and the fair market value of any common stock received by the holder that is attributable to accrued but unpaid interest not previously included in income generally will be taxable to the holder as ordinary income. A holder’s tax basis in any such shares of common stock will equal the fair market value of such shares and the holding period will begin on the day following the date of conversion.
Notwithstanding the foregoing, upon a payment of the make-whole premium in common stock as a result of certain designated events, the tax consequences to the holders of the receipt of such common stock are unclear. In such an instance, a holder could be required to recognize income or gain on the receipt of the make-whole premium. Holders are urged to consult their tax advisors concerning the tax treatment of the make-whole premium.
Adjustment of Conversion Rate
The conversion rate of the debentures is subject to adjustment under certain circumstances (see “Description of the Debentures — Conversion of Debentures”). Certain adjustments (or the failure to make such adjustments) to the conversion rate of the debentures that increase a U.S. holder’s proportionate interest in our assets or earnings and profits may result in a constructive distribution to the holder, whether or not the holder ever converts the debentures. This could occur, for example, if the conversion rate is adjusted to compensate holders of debentures for distributions of cash or property to our stockholders. Such constructive distribution will be treated as a dividend for tax purposes, resulting in ordinary income to the extent of our current or accumulated earnings and profits, as determined under United States federal income tax principles.
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pursuant to a bona fide reasonable adjustment formula which have the effect of preventing dilution in the interest of the holders of the debentures, however, will generally not be considered to result in a constructive dividend distribution.
Sale, Exchange, Repurchase, Redemption or Other Taxable Disposition of Debentures
Except as set forth under “— Conversion of Debentures,” above, a U.S. holder will generally recognize capital gain or loss equal to the difference between the amount realized on the sale, exchange, repurchase, redemption or other taxable disposition of a debenture (except to the extent the amount realized is attributable to accrued but unpaid interest not previously included in gross income, which will be taxable as ordinary interest income) and the holder’s adjusted tax basis in such debenture. A holder’s adjusted tax basis in the debenture generally will be the initial purchase price for such debenture (increaseddiscontinued by the amount of market discount, ifunderwriters at any previously includedtime. Underwriters may engage in income, and decreased by the amount ofover-allotment. If any amortized bond premium, if any). In the case ofunderwriters create a holder other than a corporation, preferential tax rates may apply to gain recognized on the sale, exchange, repurchase, redemption, or other taxable disposition of a debenture if such holder’s holding period for such debenture exceeds one year. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes.
Notwithstanding the foregoing, upon a payment of the make-whole premium in common stock as a result of certain designated events, the tax consequences to the holder of the receipt of such common stock are unclear. In such an instance, a holder could be required to recognize income or gain on the receipt of the make-whole premium. Holders are urged to consult their tax advisors concerning the tax treatment of the make-whole premium.
Distributions on Common Stock
The amount of any distribution we make in respect of the common stock will be equal to the amount of cash and the fair market value, on the date of distribution, of any property distributed. Generally, distributions will be treated as a dividend to the extent of our current or accumulated earnings and profits, as determined under United States federal income tax principles, then as a tax-free return of capital to the extent of a holder’s tax basis in the common stock and thereafter as gain from the sale or other taxable disposition of such common stock as described below. In general, a dividend distribution to a corporate U.S. holder will qualify for the dividends-received deduction. The dividends-received deduction is subject to certain holding period, taxable income, and other limitations.
Dividends received by a non-corporate U.S. holder during taxable years beginning before 2009 will be taxed at a maximum rate of 15%, provided the taxpayer held the stock for more than 60 days during a specified period of time and certain other requirements are met. Under current law, dividends received by a non-corporate taxpayer for taxable years beginning after 2008 will be subject to tax at ordinary income rates.
Sale or Other Taxable Disposition of Common Stock
Upon the sale or other taxable disposition of common stock, a U.S. holder generally will recognize capital gain or loss equal to the difference between the amount realized on the sale or other taxable disposition and the holder’s adjusted tax basis in the common stock. In the case of a holder other than a corporation, preferential tax rates may apply to such gain if the holder’s holding period for the common stock exceeds one year. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes.
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to payments of principal and interest on the debentures, payments of dividends on the common stock and payments of the proceeds of the sale or other disposition of the debentures or common stock. A backup withholding tax may apply to such payments if the holder fails to comply with certain identification requirements. Backup withholding is currently imposed at a rate of 28%. Any amounts withheld under the backup withholding rules from a payment to a holder will be allowed as a credit
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against such holder’s United States federal income tax and may entitle the holder to a refund, provided that the required information is timely furnished to the Internal Revenue Service.
Taxation of Non-U.S. Holders
The rules governing United States federal income taxation of a non-U.S. holder are complex and no attempt will be made herein to provide more than a summary of such rules. Non-U.S. holders should consult with their own tax advisors to determine the effect of United States federal, state and local and foreign tax laws, as well as applicable income tax treaties, with regard to an investmentshort position in the securities including any reporting requirements.
Interest Income
Generally, interest income of a non-U.S. holder that is not effectively connected with a United States trade or business is subject to a withholding tax at a 30% rate, or, if applicable, a lower tax rate specified byin an income tax treaty. However, interest income earnedoffering in which they sell more securities than are set forth on a debenture by a non-U.S. holder generally will qualify for the “portfolio interest” exemption and therefore generally will not be subject to United States federal income tax or withholding tax, provided that such interest income is not effectively connected with a United States trade or businesscover page of the non-U.S. holder and providedapplicable prospectus supplement, the underwriters may reduce that (1)short position by purchasing the non-U.S. holder does not actuallysecurities in the open market.
Except to the extent that an applicable income tax treaty otherwise provides, a non-U.S. holder generally will be taxed with respect to interest in the same manner as a U.S. holder if the interest is effectively connected with a United States trade or business of the non-U.S. holder. Effectively connected interest incomehave received or accrued by a corporate non-U.S. holder may also, under certain circumstances, be subject to an additional “branch profits” tax at a 30% rate (or, if applicable, at a lower tax rate specified by a treaty). Even though such effectively connected income is subject to income tax,receive customary fees and may be subject to the branch profits tax, it is not subject to withholding tax if the non-U.S. holder delivers a properly executed Internal Revenue Service Form W-8ECI (or successor form) to the payor or the payor’s agent.
Adjustmentreimbursement of Conversion Rate
Certain adjustments in the conversion rate of the debentures may be treated as payment of a taxable dividend to a non-U.S. holder. See “Taxation of U.S. Holders — Adjustment of Conversion Rate” above and “— Dividends” below.
Dividends
Distributions we make with respect to the common stock that are treated as dividends paid, as described above under “Taxation of U.S. Holders — Distributions on Common Stock,” to a non-U.S. holder (excluding dividends that are effectively connected with the conduct of a United States trade or business by such holder and are taxable as described below) will be subject to United States federal withholding tax at a 30% rate, or a lower rate provided under an applicable income tax treaty. Except to the extent that an applicable income tax treaty otherwise provides, a non-U.S. holder generally will be taxed in the same manner as a U.S. holder on dividends paid (or
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deemed paid) that are effectively connected with the conduct of a United States trade or business by the non-U.S. holder. If such non-U.S. holder is a foreign corporation, it may also be subject to a United States branch profits tax on such effectively connected income at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty). Even though such effectively connected dividends are subject to income tax and may be subject to the branch profits tax, they will not be subject to United States federal withholding tax if the holder delivers a properly executed Internal Revenue Service Form W-8ECI (or successor form) to the payor or the payor’s agent. A non-U.S. holder who wishes to claim the benefit of an applicable income tax treaty is required to satisfy certain certification and other requirements. If you are eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty, you may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the Internal Revenue Service.
Sale, Exchange, Repurchase, Redemption or Other Disposition of Debentures; Sale or Other Disposition of Common Stock
Except as set forth under “— Conversion of Debentures” above, a non-U.S. holder generally will not be subject to United States federal income tax on any gain realized on the sale, exchange, repurchase, redemption or other disposition, including conversion or repurchase, of a debenture or the sale or other disposition of common stock unless (1) the gain is effectively connected with a United States trade or business of the non-U.S. holder and, if an income tax treaty applies, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States, (2) in the case of a non-U.S. holder who is an individual, such holder is present in the United States for a period or periods aggregating 183 days or more during the taxable year of the disposition, and either (A) such holder has a “tax home” in the United States or (B) the disposition is attributable to an office or other fixed place of business maintained by such holder in the United States, or (3) we are or have been a U.S. real property holding corporation for United States federal income tax purposes (“USRPHC”) at any time during the shorter of the five-year period ending on the date of disposition or the period during which the non-U.S. holder held the debentures or common stock.
Generally, a corporation is a USRPHC if the fair market value of its “U.S. real property interests” equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. We believe that we are not, and have never been, a USRPHC. However, due to our environmental remediation and re-zoning and other development activities on the Sacramento land, we expect the value of that land to appreciate in the future. As a result of these activities, our land holdings may in the future have sufficient value to make us a USRPHC unless the other operating businesses comprise more than half of the total value of the Company. In the event that we become a USRPHC, gain recognized by non-U.S. holders on a disposition of debentures or the common stock received upon conversion of the debentures may be subject to U.S. federal income tax, including any applicable withholding tax. In that case, any tax withheld pursuant to the rules applicable to dispositions of a U.S. real property interest would be creditable against such non-U.S. holder’s U.S. federal income tax liability and might entitle such non-U.S. holder to a refund upon furnishing required information to the Internal Revenue Service. However, U.S. federal income and withholding tax would not apply to a non-U.S. holder who holds, actually or constructively, 5% or less of the debentures or common stock (determined by fair market value), provided that the common stock is regularly traded on an established securities market.
If an individual non-U.S. holder falls under clause (1) above, such individual generally will be taxed on the net gain derived from a sale or other disposition in the same manner as a U.S. holder. If an individual non-U.S. holder falls under clause (2) above, such individual generally will be subject to a 30% tax on the gain derived from a sale or other disposition, which may be offset by certain United States source capital losses (notwithstanding the fact that such individual is not considered a resident of the United States). Individual non-U.S. holders who have spent (or expect to spend) 183 days or more in the United States in the taxable year in which they contemplate a disposition of debentures or common stock are urged to consult their tax advisors as to the tax consequences of such sale or other disposition. If a non-U.S. holder that is a foreign corporation falls under clause (1), it generally will be taxed on the net gain derived from a sale in the same manner as a U.S. holder and, in addition, may be subject to the branch profits tax on such effectively connected income at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty).
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Information Reporting and Backup Withholding Tax
We are generally required to backup withhold at a gross rate of 28% on any payments of interest on the debentures or payments of dividends made on the common stock. However, this backup withholding tax will not apply to payments on the debentures or payments of dividends on the common stock to a non-U.S. holder if the statement described in clause (3) of “— Interest Income” above is duly provided by such holder, provided that the payor does not have actual knowledge or reason to know that the holder is a United States person. Information reporting requirements may apply with respect to interest payments on the debentures and dividend payments on the common stock, in which event the amount of interest or dividends paid and tax withheld (if any) with respect to each non-U.S. holder will be reported annually to the Internal Revenue Service.
Information reporting requirements and backup withholding tax will not apply to any payment of the proceeds of the sale or other disposition of debentures or common stock effected outside the United States by a foreign office of a “broker” as defined in applicable Treasury regulations, unless such broker (1) is a United States person as defined in the Internal Revenue Code, (2) is a foreign person that derives 50% or more of its gross income for certain periods from the conduct of a trade or business in the United States, (3) is a controlled foreign corporation for United States federal income tax purposes or (4) is a foreign partnership with certain U.S. connections. Payment of the proceeds of any such sale or other disposition effected outside the United States by a foreign office of any broker that is described in the preceding sentence may be subject to information reporting (but generally not backup withholding), unless such broker has documentary evidence in its records that the beneficial owner is a non-U.S. holder and certain other conditions are met, or the beneficial owner otherwise establishes an exemption. Payment of the proceeds of any such sale or other disposition to or through the United States office of a broker is subject to information reporting and backup withholding requirements unless the beneficial owner of the debentures or common stock provides the statement described in clause (3) of “— Interest Income” and certain other conditions are met, or the beneficial owner otherwise establishes an exemption.
The United States federal income tax discussion set forth above is included for general information only and may not be applicable depending upon a holder’s particular situation. Holders should consult their tax advisors with respect to the tax consequences to them of the ownership and disposition of the securities, including the tax consequences under state, local, foreign and other tax laws and the possible effects of changes in United States federal or other tax laws.CERTAIN LEGAL MATTERS
VALIDITY OF THE DEBENTURES
EXPERTS
Ernst & Young LLP,an independent registered public accounting firm, have audited our consolidated financial statements as of November 30, 2003 and 2002 and for the three years in the period ended November 30, 2003 included in our Current Report on Form 8-K dated November 4, 2004, as set forth in their report, which is incorporated by reference in this registration statement. Our financial statements are incorporated by reference in reliance on Ernst & Young LLP’s report, given on theirthe authority of said firm as experts in accountingauditing and auditing.
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Registration Fee — Securities and Exchange Commission | $ | 17,232 | ||
Printing and Engraving Expenses | 5,000 | |||
Accounting Fees and Expenses | 40,000 | |||
Legal Fees and Expenses | 25,000 | |||
Miscellaneous (including listing fees) | 5,000 | |||
Total | $ | 92,232 | ||
SEC registration fee | $ | 11,160 | ||
Legal fees and expenses | 250,000 | |||
Printing and mailing fees | 100,000 | |||
Accounting fees and expenses | 100,000 | |||
Miscellaneous | 38,840 | |||
Total | $ | 500,000 |
Officers.
The Corporationthat the Registrant shall indemnify, to the full extent then permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a member of the Board of Directors or an officer, employee, member, manager or agent of the Corporation,Registrant, or is or was serving at the request of the CorporationRegistrant as a director, trustee, officer, employee or agent of another corporation, limited liability company, or a partnership, joint venture, trust or other enterprise. The CorporationRegistrant shall pay, to the full extent then required by law, expenses, including attorney’s fees, incurred by a member of the Board of Directors in defending any such action, suit or proceeding as they are incurred, in advance of the final disposition thereof, and may pay, in the same manner and to the full extent then permitted by law, such expenses incurred by any other person. The indemnification and payment of expenses provided hereby shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification under any law, the Amended Articles of Incorporation, any agreement, vote of shareholders or disinterested members of the Board of Directors, or otherwise, both as to action in official capacities and as to action in another capacity while he or she is a member of the Board of Directors, or an officer, employee or agent of the Corporation,Registrant, and shall continue as to a person who has ceased to be a
II-1
member of the Board of Directors, trustee, officer, employee or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
GenCorp Inc.
GenCorp Inc.
Exhibit No. | Description |
1. | 1* | Underwriting Agreement, if any. |
2. | 1** | Purchase Agreement, dated May 2, 2003, between Atlantic Research Corporation and Aerojet-General Corporation was filed as Exhibit 10.1 to GenCorp Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2003 (File No. 1-1520) and is incorporated herein by reference. |
2. | 2** | First Amendment to Purchase Agreement, dated August 29, 2003, between Aerojet-General Corporation and Atlantic Research Corporation was filed as Exhibit 2.2 to GenCorp’s Form S-4 Registration Statement dated October 6, 2003 (File No. 333-109518) and is incorporated herein by reference. |
2. | 3** | Second Amendment to Purchase Agreement, dated September 30, 2003, between Aerojet-General Corporation and Atlantic Research Corporation was filed as Exhibit 2.2 to GenCorp Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2003 (File No. 1-1520) and is incorporated herein by reference. |
2. | 4** | Third Amendment to Purchase Agreement, dated October 16, 2003, between Aerojet-General Corporation and Atlantic Research Corporation was filed as Exhibit 2.4 to GenCorp’s Amendment No. 1 to Form S-4 Registration Statement dated December 15, 2003 (file no. 333-109518) and is incorporated herein by reference. |
2. | 5** | Stock and Asset Purchase Agreement by and between GDX Holdings LLC and GenCorp Inc. dated July 16, 2004 was filed as Exhibit 2.1 to GenCorp Inc.’s Current Report on Form 8-K dated September 7, 2004 (File No. 1-1520) and incorporated herein by reference. |
2. | 6** | First Amendment to Stock and Asset Purchase Agreement by and between GenCorp Inc. and GDX Holdings LLC dated as of August 31, 2004 was filed as Exhibit 2.2 to GenCorp Inc.’s Current Report on Form 8-K dated September 7, 2004 (File No. 1-1520) and incorporated herein by reference. |
2. | 7** | Second Amendment to Stock and Asset Purchase Agreement by and between GenCorp Inc. and GDX Holdings LLC dated as of October 14, 2004 was filed as Exhibit 2.3 to GenCorp Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2004 (File No. 1-1520), as amended, and incorporated herein by reference. |
2. | 8** | Asset Purchase Agreement, dated as of July 12, 2005, by and among Aerojet Fine Chemicals LLC, Aerojet-General Corporation and American Pacific Corporation was filed as Exhibit 2.1 to GenCorp Inc.’s Current Report on Form 8-K filed on July 18, 2005 (File No. 1-1520), and is incorporated herein by reference. |
2. | 9** | First Amendment to Asset Purchase Agreement by and among American Pacific Corporation, Aerojet Fine Chemicals LLC and Aerojet-General Corporation dated as of November 30, 2005 was filed as Exhibit 2.1 to GenCorp Inc.’s Current Report on Form 8-K filed on December 1, 2005 (File No. 1-1520) and incorporated herein by reference. |
4. | 1 | GenCorp Retirement Savings Plan was filed as Exhibit 4.1 to GenCorp Inc.’s Registration Statement on Form S-8 filed on June 30, 2008 (File No. 333-152032) and incorporated herein by reference. |
4. | 2 | Indenture, dated as of August 11, 2003, between GenCorp Inc., the Guarantors named therein and The Bank of New York as trustee relating to GenCorp’s 9 1/2% Senior Subordinated Notes was filed as Exhibit 4.1 to GenCorp’s Form S-4 Registration Statement dated October 6, 2003 (File No. 333-109518) and is incorporated herein by reference. |
4. | 3 | Form of 9 1/2% Senior Subordinated Notes was filed as Exhibit 4.4 to GenCorp’s Form S-4 Registration Statement dated October 6, 2003 (File No. 333-109518) and is incorporated herein by reference. |
4. | 4 | First Supplemental Indenture dated as of October 29, 2004 to the Indenture between GenCorp Inc. and The Bank of New York, as trustee relating to GenCorp’s 9 1/2% Senior Subordinated Notes due 2013 was filed as Exhibit 10.1 to GenCorp Inc.’s Current Report on Form 8-K dated November 1, 2004 (File No. 1-1520) and incorporated herein by reference. |
4. | 5 | Second Supplemental Indenture dated as of June 27, 2006 to Indenture dated as of August 11, 2003, as amended, between GenCorp Inc. as Issuer, the Guarantors party thereto as Guarantors, and The Bank of New York Trust Company, N.A., as trustee, relating to GenCorp’s 9 1/2% Senior Subordinated Notes due 2013, was filed as Exhibit 10.1 to GenCorp Inc.’s Current Report on Form 8-K filed on June 28, 2006 (File No. 1-1520), and is incorporated herein by reference. |
4. | 6 | Indenture dated January 16, 2004 between GenCorp and The Bank of New York, as trustee, relating to GenCorp’s 4% Contingent Convertible Subordinated Notes due 2024 was filed as Exhibit 4.11 to GenCorp Inc.’s Annual Report on Form 10-K for the fiscal year ended November 30, 2003 (File No. 1-1520) and is incorporated herein by reference. |
4. | 7 | Registration Rights Agreement dated January 16, 2004 by and among GenCorp, Deutsche Bank Securities Inc., Wachovia Capital Markets, LLC, Scotia Capital (USA) Inc., BNY Capital Markets, Inc., NatCity Investments, Inc. and Wells Fargo Securities, LLC was filed as Exhibit 4.12 to GenCorp Inc.’s Annual Report on Form 10-K for the fiscal year ended November 30, 2003 (File No. 1-1520) and is incorporated herein by reference. |
4. | 8 | Form of 4% Contingent Convertible Subordinated Notes was filed as Exhibit 4.13 to GenCorp Inc.’s Annual Report on Form 10-K for the fiscal year ended November 30, 2003 (File No. 1-1520) and is incorporated herein by reference. |
4. | 9 | Indenture, dated as of November 23, 2004, between GenCorp Inc. and The Bank of New York Trust Company, N.A., as trustee relating to GenCorp Inc.’s 2 1/4% Convertible Subordinated Debentures due 2024 was filed as Exhibit 4.01 to GenCorp Inc.’s Current Report on Form 8-K dated November 23, 2004 (File No. 1-1520), as amended, and incorporated herein by reference. |
4. | 10 | Registration Rights Agreement, dated as of November 23, 2004, by and between GenCorp Inc. and Wachovia Capital Markets, LLC, as representative for the several initial purchasers of the 2 1/4% Convertible Subordinated Debentures due 2024 was filed as Exhibit 4.14 to GenCorp Inc.’s Form S-3 Registration Statement dated January 11, 2005 (File No. 333-121948) and incorporated herein by reference. |
4. | 11 | Form of 2 1/4% Convertible Subordinated Debenture was filed as Exhibit 4.02 to GenCorp Inc.’s Current Report on Form 8-K dated November 23, 2004 (File No. 1-1520), as amended, and incorporated herein by reference. |
4. | 12* | Form of Indenture. |
4. | 13* | Form of Debt Security, if any. |
5. | 1*** | Opinion of Ulmer & Berne LLP. |
12. | 1*** | Statement Regarding Computation of Ratio of Earnings to Fixed Charges. |
23. | 1*** | Consent of PricewaterhouseCoopers LLP. |
23. | 3*** | Consent of Ulmer & Berne LLP (contained in Exhibit 5.1). |
24. | 1*** | Power of Attorney. |
1* | Statement of Eligibility of Trustee for Indenture under Trust Indenture Act of 1939. |
To be filed by | ||
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** | Schedules and |
*** | Filed herewith. |
(a)
undertakes:
(i) Toto include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) Toto reflect in the prospectus any actsfacts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b), if, in the aggregate, the changes in volume and price represent no more than a 20%20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) Toto include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
statement, provided, however, that paragraphs (a)(1)clauses (i), (ii) and (a)(1)(ii) herein(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the undersigned registrant(s)Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in thethis registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement.
(c)
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connection with the securities being registered, such registrantthe Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
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GENCORP INC., | ||||
An Ohio corporation | ||||
(Registrant) | ||||
By: | /s/ | J. Scott Neish | ||
J. Scott Neish | ||||
Interim President and Chief Executive Officer | ||||
Signature | Title | Date | ||
/s/ J. Scott Neish | ||||
J. Scott Neish | Interim President and Chief Executive Officer (principal executive officer) | December 2, 2009 | ||
/s/ | ||||
Kathleen E. Redd | Vice President, Chief Financial Officer and Secretary (principal financial officer) | December 2, 2009 | ||
/s/ * | ||||
James R. Henderson | Chairman of the Board | |||
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/s/ * | ||||
Director | ||||
/s/ | ||||||
David A. Lorber | Director | December 2, 2009 | ||||
/s/ * | ||||||
James H. Perry | Director | December 2, 2009 | ||||
/s/ * | ||||||
Martin Turchin | Director | December 2, 2009 | ||||
Robert C. Woods | Director | |||||
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EXHIBIT INDEX
/s/ * | ||||
Thomas A. Corcoran | Director | December 2, 2009 | ||
* /s/ Kathleen E. Redd | ||||
Attorney-in-Fact pursuant to Power of Attorney filed herewith. | December 2, 2009 |
Exhibit No. | Description |
1. | 1* | Underwriting Agreement, if any. |
2. | 1** | Purchase Agreement, dated May 2, 2003, between Atlantic Research Corporation and Aerojet-General Corporation was filed as Exhibit 10.1 to GenCorp Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2003 (File No. 1-1520) and is incorporated herein by reference. |
2. | 2** | First Amendment to Purchase Agreement, dated August 29, 2003, between Aerojet-General Corporation and Atlantic Research Corporation was filed as Exhibit 2.2 to GenCorp’s Form S-4 Registration Statement dated October 6, 2003 (File No. 333-109518) and is incorporated herein by reference. |
2. | 3** | Second Amendment to Purchase Agreement, dated September 30, 2003, between Aerojet-General Corporation and Atlantic Research Corporation was filed as Exhibit 2.2 to GenCorp Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2003 (File No. 1-1520) and is incorporated herein by reference. |
2. | 4** | Third Amendment to Purchase Agreement, dated October 16, 2003, between Aerojet-General Corporation and Atlantic Research Corporation was filed as Exhibit 2.4 to GenCorp’s Amendment No. 1 to Form S-4 Registration Statement dated December 15, 2003 (file no. 333-109518) and is incorporated herein by reference. |
2. | 5** | Stock and Asset Purchase Agreement by and between GDX Holdings LLC and GenCorp Inc. dated July 16, 2004 was filed as Exhibit 2.1 to GenCorp Inc.’s Current Report on Form 8-K dated September 7, 2004 (File No. 1-1520) and incorporated herein by reference. |
2. | 6** | First Amendment to Stock and Asset Purchase Agreement by and between GenCorp Inc. and GDX Holdings LLC dated as of August 31, 2004 was filed as Exhibit 2.2 to GenCorp Inc.’s Current Report on Form 8-K dated September 7, 2004 (File No. 1-1520) and incorporated herein by reference. |
2. | 7** | Second Amendment to Stock and Asset Purchase Agreement by and between GenCorp Inc. and GDX Holdings LLC dated as of October 14, 2004 was filed as Exhibit 2.3 to GenCorp Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2004 (File No. 1-1520), as amended, and incorporated herein by reference. |
2. | 8** | Asset Purchase Agreement, dated as of July 12, 2005, by and among Aerojet Fine Chemicals LLC, Aerojet-General Corporation and American Pacific Corporation was filed as Exhibit 2.1 to GenCorp Inc.’s Current Report on Form 8-K filed on July 18, 2005 (File No. 1-1520), and is incorporated herein by reference. |
2. | 9** | First Amendment to Asset Purchase Agreement by and among American Pacific Corporation, Aerojet Fine Chemicals LLC and Aerojet-General Corporation dated as of November 30, 2005 was filed as Exhibit 2.1 to GenCorp Inc.’s Current Report on Form 8-K filed on December 1, 2005 (File No. 1-1520) and incorporated herein by reference. |
4. | 1 | GenCorp Retirement Savings Plan was filed as Exhibit 4.1 to GenCorp Inc.’s Registration Statement on Form S-8 filed on June 30, 2008 (File No. 333-152032) and incorporated herein by reference. |
4. | 2 | Indenture, dated as of August 11, 2003, between GenCorp Inc., the Guarantors named therein and The Bank of New York as trustee relating to GenCorp’s 9 1/2% Senior Subordinated Notes was filed as Exhibit 4.1 to GenCorp’s Form S-4 Registration Statement dated October 6, 2003 (File No. 333-109518) and is incorporated herein by reference. |
4. | 3 | Form of 9 1/2% Senior Subordinated Notes was filed as Exhibit 4.4 to GenCorp’s Form S-4 Registration Statement dated October 6, 2003 (File No. 333-109518) and is incorporated herein by reference. |
4. | 4 | First Supplemental Indenture dated as of October 29, 2004 to the Indenture between GenCorp Inc. and The Bank of New York, as trustee relating to GenCorp’s 9 1/2% Senior Subordinated Notes due 2013 was filed as Exhibit 10.1 to GenCorp Inc.’s Current Report on Form 8-K dated November 1, 2004 (File No. 1-1520) and incorporated herein by reference. |
4. | 5 | Second Supplemental Indenture dated as of June 27, 2006 to Indenture dated as of August 11, 2003, as amended, between GenCorp Inc. as Issuer, the Guarantors party thereto as Guarantors, and The Bank of New York Trust Company, N.A., as trustee, relating to GenCorp’s 9 1/2% Senior Subordinated Notes due 2013, was filed as Exhibit 10.1 to GenCorp Inc.’s Current Report on Form 8-K filed on June 28, 2006 (File No. 1-1520), and is incorporated herein by reference. |
4. | 6 | Indenture dated January 16, 2004 between GenCorp and The Bank of New York, as trustee, relating to GenCorp’s 4% Contingent Convertible Subordinated Notes due 2024 was filed as Exhibit 4.11 to GenCorp Inc.’s Annual Report on Form 10-K for the fiscal year ended November 30, 2003 (File No. 1-1520) and is incorporated herein by reference. |
4. | 7 | Registration Rights Agreement dated January 16, 2004 by and among GenCorp, Deutsche Bank Securities Inc., Wachovia Capital Markets, LLC, Scotia Capital (USA) Inc., BNY Capital Markets, Inc., NatCity Investments, Inc. and Wells Fargo Securities, LLC was filed as Exhibit 4.12 to GenCorp Inc.’s Annual Report on Form 10-K for the fiscal year ended November 30, 2003 (File No. 1-1520) and is incorporated herein by reference. |
4. | 8 | Form of 4% Contingent Convertible Subordinated Notes was filed as Exhibit 4.13 to GenCorp Inc.’s Annual Report on Form 10-K for the fiscal year ended November 30, 2003 (File No. 1-1520) and is incorporated herein by reference. |
4. | 9 | Indenture, dated as of November 23, 2004, between GenCorp Inc. and The Bank of New York Trust Company, N.A., as trustee relating to GenCorp Inc.’s 2 1/4% Convertible Subordinated Debentures due 2024 was filed as Exhibit 4.01 to GenCorp Inc.’s Current Report on Form 8-K dated November 23, 2004 (File No. 1-1520), as amended, and incorporated herein by reference. |
4. | 10 | Registration Rights Agreement, dated as of November 23, 2004, by and between GenCorp Inc. and Wachovia Capital Markets, LLC, as representative for the several initial purchasers of the 2 1/4% Convertible Subordinated Debentures due 2024 was filed as Exhibit 4.14 to GenCorp Inc.’s Form S-3 Registration Statement dated January 11, 2005 (File No. 333-121948) and incorporated herein by reference. |
4. | 11 | Form of 2 1/4% Convertible Subordinated Debenture was filed as Exhibit 4.02 to GenCorp Inc.’s Current Report on Form 8-K dated November 23, 2004 (File No. 1-1520), as amended, and incorporated herein by reference. |
4. | 12* | Form of Indenture. |
4. | 13* | Form of Debt Security, if any. |
5. | 1*** | Opinion of Ulmer & Berne LLP. |
12. | 1*** | Statement Regarding Computation of Ratio of Earnings to Fixed Charges. |
23. | 1*** | Consent of PricewaterhouseCoopers LLP. |
23. | 3*** | Consent of Ulmer & Berne LLP (contained in Exhibit 5.1). |
24. | 1*** | Power of Attorney. |
25. | 1* | Statement of Eligibility of Trustee for Indenture under Trust Indenture Act of 1939. |
* | To be filed by an amendment to | |
** | Schedules and |
*** | Filed herewith. |