Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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222 N. Pacific Coast Highway, Suite 500

El Segundo, California 90245

February 5, 2021

Dear Stockholder:

On December 20, 2020, Aerojet Rocketdyne Holdings, Inc., a Delaware corporation (“Aerojet Rocketdyne”), announced that it had entered into a definitive agreement to be acquired by Lockheed Martin Corporation, a Maryland corporation (“Lockheed Martin”), in an all-cash transaction. Stockholder approval of the Merger Agreement and the transactions contemplated thereby is required to consummate the transactions contemplated by the Merger Agreement.

You are cordially invited to attend a special meeting of stockholders of Aerojet Rocketdyne that will be held at 9:00 a.m. Pacific Time, on March 9, 2021, to consider and vote on a proposal to adopt the Merger Agreement and the related merger (the “Special Meeting”). The Special Meeting will be a completely virtual meeting of stockholders conducted via live webcast. You will be able to attend the Special Meeting on the Internet and submit your questions during the Special Meeting by visiting www.virtualshareholdermeeting.com/AJRD2021SM. Details regarding how to attend the Special Meeting online and the business to be presented at the Special Meeting can be found in the accompanying Notice of Special Meeting.

At the Special Meeting, you will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated December 20, 2020 (the “Merger Agreement”), pursuant to which Mizar Sub, Inc., a Delaware corporation and wholly owned subsidiary of Lockheed Martin (“Merger Sub”), will merge with and into Aerojet Rocketdyne, with Aerojet Rocketdyne surviving as a wholly owned subsidiary of Lockheed Martin (the “Merger”). You will also be asked to consider and vote on a non-binding, advisory proposal to approve certain compensation that will or may become payable to Aerojet Rocketdyne’s named executive officers in connection with our proposed Merger with Lockheed Martin.

If the Merger is completed, unless you have properly exercised your appraisal rights, you will be entitled to receive $56.00 in cash per share of Aerojet Rocketdyne common stock that you own, without interest and less, to the extent paid or payable as discussed further in this proxy statement, the $5.00 per share amount of the special cash dividend declared by the Aerojet Rocketdyne board of directors on December 19, 2020 and payable on March 24, 2021 to stockholders of record as of the close of business on March 10, 2021. This represents a premium of approximately 33% to Aerojet Rocketdyne’s closing stock price on December 18, 2020 (the last trading day before the announcement of the Merger), and a premium of approximately 42% to Aerojet Rocketdyne’s volume weighted average stock price in the 90 trading days prior to the announcement of the Merger Agreement.

Our proxy statement provides detailed information about the Special Meeting, the Merger Agreement and the Merger. A copy of the Merger Agreement is attached as Annex A to the proxy statement. The proxy statement also describes the actions and determinations of Aerojet Rocketdyne’s board of directors in connection with its evaluation of the Merger Agreement and the Merger. We encourage you to read the proxy statement and its annexes, including the Merger Agreement, carefully and in their entirety, as they contain important information.

The board of directors of Aerojet Rocketdyne unanimously supports the Merger. After considering the factors more fully described in the enclosed proxy statement, our board of directors: (1) has determined that the terms of the Merger Agreement, the Merger and the other transactions contemplated thereby are advisable and fair to and in the best interests of Aerojet Rocketdyne and Aerojet Rocketdyne’s stockholders; (2) has approved and declared advisable the Merger Agreement, the Merger and the transactions contemplated thereby in accordance with the requirements of the Delaware General Corporation Law (“DGCL”); (3) has directed that the Merger Agreement be submitted to the stockholders of Aerojet Rocketdyne for adoption; and (4) recommends that Aerojet Rocketdyne stockholders vote in favor of the adoption of the Merger Agreement and the transactions contemplated thereby at the Special Meeting.

The board of directors recommends that you vote:

YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN. WE CANNOT COMPLETE THE MERGER UNLESS THE PROPOSAL TO ADOPT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY IS APPROVED BY THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF AEROJET ROCKETDYNE COMMON STOCK AS OF THE RECORD DATE.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals for stockholder consideration contained in this proxy statement without your instructions.

If you have any questions or need assistance voting your shares, please contact our proxy solicitor:

Okapi Partners

1212 Avenue of the Americas, 24^th Floor

New York, NY 10036

toll-free at 1-888-785-6707

info@okapipartners.com

On behalf of the board of directors and the management of Aerojet Rocketdyne Holdings, Inc., I extend our appreciation for your continued support.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the Merger, passed upon the merits or fairness of the Merger Agreement or the transactions contemplated thereby, including the proposed Merger, or passed upon the adequacy or accuracy of the information contained in this proxy statement. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated February 5, 2021, and is first being sent to stockholders on or about February 5, 2021.

 

It is important that your shares be represented and voted at the Special Meeting. You may vote your shares by voting electronically at the Special Meeting by visiting www.virtualshareholdermeeting.com/AJRD2021SM and following the instructions, or by submitting a proxy by Internet, telephone or mail. Participants in the Aerojet Rocketdyne Retirement Savings Plan should use the enclosed proxy card to provide voting instructions to Fidelity Management Trust Company for shares attributable to your account. See details under the heading “How do I vote?” on page 17.

Except as otherwise specifically noted in this proxy statement, “Aerojet Rocketdyne,” the “Company,” “we,” “our,” “us” and similar words refer to Aerojet Rocketdyne Holdings, Inc., a Delaware corporation, including our subsidiaries in certain cases. Throughout this proxy statement, we refer to Lockheed Martin Corporation, a Maryland corporation, as “Lockheed Martin.”

Mentions of the “Merger Agreement” in this proxy statement refer to the Agreement and Plan of Merger dated December 20, 2020, as it may be amended from time to time, by and among Aerojet Rocketdyne, Lockheed Martin and Mizar Sub, Inc., a Delaware corporation and wholly owned subsidiary of Lockheed Martin that we refer to as the “Merger Sub.” To implement the acquisition (subject to the terms of the Merger Agreement, including stockholder approval), Merger Sub will merge with and into Aerojet Rocketdyne, with Aerojet Rocketdyne surviving as a wholly owned subsidiary of Lockheed Martin. We refer to this as the “Merger.”

Aerojet Rocketdyne has supplied all information relating to Aerojet Rocketdyne, and Lockheed Martin has supplied, and Aerojet Rocketdyne has not independently verified, all of the information relating to Lockheed Martin or Merger Sub contained in this proxy statement.

The Merger Agreement is the legal document that governs the Merger and related transactions and is attached as Annex A to this proxy statement. We encourage you to read it carefully and in its entirety before casting your vote.

Aerojet Rocketdyne is primarily a technology-based engineering and manufacturing company that develops and produces specialized power and propulsion systems, as well as armament systems. It develops and manufactures liquid and solid rocket propulsion, air-breathing hypersonic engines, and electric power and propulsion for space, defense, civil and commercial applications.

Aerojet Rocketdyne operates as a merchant supplier in the aerospace and defense industry. The Company has nearly 5,000 employees and 13 operating locations throughout the U.S.

Aerojet Rocketdyne acts as either a prime contractor, selling directly to the end user, or as a subcontractor, selling products to prime contractors. The principal end user customers of our products and technologies are primarily agencies of the U.S. government. Lockheed Martin is one of the Company’s largest customers. As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, sales to Lockheed Martin made up approximately 33% of the Company’s 2019 net sales.

Aerojet Rocketdyne’s common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “AJRD.” The Company is headquartered at 222 N. Pacific Coast Highway, Suite 500, El Segundo, California 90245 and its telephone number is (310) 252-8100.

Lockheed Martin is a global security and aerospace company principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. Lockheed Martin also provides a broad range of management, engineering, technical, scientific, logistics, systems integration and cybersecurity services. Lockheed Martin serves both U.S. and international customers with

products and services that have defense, civil and commercial applications, with Lockheed Martin’s principal customers being agencies of the U.S. Government. Lockheed Martin’s main areas of focus are in defense, space, intelligence, homeland security and information technology, including cybersecurity.

Lockheed Martin is one of Aerojet Rocketdyne’s largest customers.

Lockheed Martin employs approximately 114,000 employees worldwide.

Lockheed Martin’s common stock is listed on the NYSE under the symbol “LMT.” Lockheed Martin is headquartered at 6801 Rockledge Drive, Bethesda, Maryland 20817 and its telephone number is (301) 897-6000.

Mizar Sub, Inc., or “Merger Sub,” is a wholly owned direct subsidiary of Lockheed Martin formed on December 17, 2020, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement. Merger Sub has not otherwise engaged in any business activities.

Merger Sub is headquartered at 6801 Rockledge Drive, Bethesda, Maryland 20817 and its telephone number is (301) 897-6000.

Upon the terms and subject to the conditions of the Merger Agreement, if the Merger is completed, Merger Sub will merge with and into Aerojet Rocketdyne, and Aerojet Rocketdyne will continue as the surviving corporation and as a wholly owned subsidiary of Lockheed Martin (the “Surviving Corporation”). As a result of the Merger, Aerojet Rocketdyne will cease to be a publicly traded company and all outstanding shares of Aerojet Rocketdyne common stock will be canceled and converted into the right to receive $56.00 per share in cash, without interest and less, to the extent paid or payable as discussed further in this proxy statement, the $5.00 per share amount of the Pre-Closing Dividend (defined below), which we refer to as the “Price Per Share” or “Merger Consideration,” except for (i) any shares held by Aerojet Rocketdyne or any wholly owned subsidiary of Aerojet Rocketdyne (or held in Aerojet Rocketdyne’s treasury), including shares of common stock reserved for issuance under any of our equity and performance incentive plans or Aerojet Rocketdyne’s Amended and Restated 2013 Employee Stock Purchase Plan (the “ESPP”), but not including any shares of common stock held by any of our employee and performance incentive plans or trusts related thereto, (ii) any shares held, directly or indirectly, by Lockheed Martin or Merger Sub, and (iii) any shares owned by stockholders who are entitled to and who properly exercise appraisal rights under the DGCL. You will not own any shares of the capital stock of the Surviving Corporation upon the consummation of the Merger.

After the Merger is completed, you will have the right to receive the Merger Consideration, but you will no longer have any rights as a stockholder of Aerojet Rocketdyne (except that stockholders who properly exercise their appraisal rights will have the right to receive a payment for the “fair value” of their shares as determined pursuant to an appraisal proceeding as contemplated by Delaware law, as described below in the section of this proxy statement captioned “The Merger — Appraisal Rights”).

The Merger Agreement provides that, promptly after the effective time of the Merger, a designated paying agent will send each holder of record of a certificate representing shares of Aerojet Rocketdyne common stock or of uncertificated shares of Aerojet Rocketdyne common stock immediately prior to the effective time of the Merger a customary letter of transmittal and instructions advising such holder as to how to surrender or transfer such shares of common stock in exchange for the Merger Consideration. The paying agent will promptly pay such holders the Merger Consideration upon (i) the surrender of a certificate representing shares of common stock to the paying agent (or compliance with the reasonable procedures established by the paying agent for transfer of uncertificated shares) and (ii) delivery of a properly completed letter of transmittal and any other documents reasonably required by the paying agent or Lockheed Martin. Interest will not be paid or accrue in respect of cash payments. The amount of any cash payments paid to you will be reduced by any applicable withholding taxes.

You should not surrender your shares of Aerojet Rocketdyne common stock without a letter of transmittal.

See the section of this proxy statement captioned “The Merger Agreement — Payment for the Shares.”

On December 19, 2020, the Company’s board of directors declared a one-time cash dividend of $5.00 per share of our common stock (the “Pre-Closing Dividend”). The Pre-Closing Dividend is payable on March 24, 2021 (the “Dividend Payment Date”) to each stockholder of record of our common stock as of the close of business on March 10, 2021 (the “Pre-Closing Dividend Record Date”). The Merger Agreement provides that if the Merger closing date occurs after the Pre-Closing Dividend Record Date but before the Dividend Payment Date, which we do not expect to be the case, the Surviving Corporation shall pay, and Lockheed Martin will cause the Surviving Corporation to pay, the Pre-Closing Dividend to each stockholder of record of our common stock as of the Pre-Closing Dividend Record Date.

At the effective time of the Merger, each outstanding unvested share of Aerojet Rocketdyne restricted common stock will (i) automatically become fully vested (and for shares subject to performance vesting criteria, based on deemed achievement of maximum performance) and (ii) be automatically converted into the right to receive cash in an amount equal to the Price Per Share, plus, to the extent paid or payable to holders of our common stock and payable but unpaid on such share of restricted common stock, the amount per share of the Pre-Closing Dividend, less applicable taxes or other withholdings.

At the effective time of the Merger, each outstanding option and stock appreciation right (“SAR”) with respect to shares of our common stock that have an exercise price or grant price that is less than the Price Per Share will be automatically canceled and converted into the right to receive, upon delivery of a notice and acknowledgment, cash in an amount equal to the total number of shares subject to the award multiplied by the excess of the Price Per Share over the per share exercise or grant price (as applicable), less applicable taxes and other withholdings. Each outstanding option and SAR with exercise or grant prices equal to or greater than the Price Per Share will be canceled for no consideration at the effective time of the Merger.

At the effective time of the Merger, each outstanding unvested restricted stock unit (“RSU”) with respect to shares of Aerojet Rocketdyne common stock, to the extent granted prior to the execution of the Merger Agreement, will be automatically canceled and converted into the right to receive cash in an amount equal to the total number of shares subject to the award (for units subject to performance vesting criteria, based on deemed achievement of maximum performance) multiplied by the sum of the Price Per Share, plus, to the extent paid or payable to holders of our common stock and payable but unpaid on such restricted stock units, the amount per share of the Pre-Closing Dividend, less applicable taxes or other withholdings.

At the effective time of the Merger, each outstanding unvested restricted stock unit with respect to shares of Aerojet Rocketdyne common stock that was granted on or after the date of the execution of the Merger Agreement will be automatically canceled. With respect to each cancelled restricted stock unit, (i) for individuals who remain employed by Lockheed Martin or its affiliates as of the grant date of the Lockheed Martin restricted stock units contemplated hereby (which grant date shall be within 30 days of the effective date of the Merger), Lockheed Martin will grant a replacement award of Lockheed Martin restricted stock units with respect to a number of shares of Lockheed Martin stock equal to the total number of shares subject to the award (for units subject to performance vesting criteria, based on deemed achievement of maximum performance) multiplied by the Equity Award Exchange Ratio (as defined in the Merger Agreement) or (ii) for individuals who do not remain employed by Lockheed Martin or its affiliates as of such date, Lockheed Martin will pay an amount in cash equal to the total number of shares subject to the canceled award (for units subject to performance vesting criteria, based on deemed achievement of maximum performance) multiplied by the sum of the Price Per Share, plus, to the extent paid to holders of our common stock and payable but unpaid on such restricted stock units, the amount per share of the Pre-Closing Dividend, less applicable withholding taxes.

In connection with the payment of the Pre-Closing Dividend, Aerojet Rocketdyne will (i) accrue dividends payable with respect to restricted shares of common stock; (ii) reduce the exercise price with respect to options to purchase common stock; (iii) reduce the grant price with respect to SARs; and (iv) accrue dividend equivalents payable with respect to RSUs, in each case that are issued and outstanding as of the Pre-Closing Dividend Record Date, and in an amount equal to the per-share amount of the Pre-Closing Dividend.

Each party’s obligation to consummate the Merger is subject to the satisfaction or waiver of the following conditions at or prior to the effective time of the Merger:

In addition, the obligations of Lockheed Martin and Merger Sub to effect the Merger are subject to the satisfaction or waiver of the following conditions:

In addition, Aerojet Rocketdyne’s obligations to effect the Merger are subject to the satisfaction or waiver of the following conditions:

After considering various factors described in the section of this proxy statement captioned “The Merger — Recommendation of the Board of Directors and Reasons for the Merger,” Aerojet Rocketdyne’s board of directors unanimously: (1) determined that the Merger is advisable and fair to and in the best interests of the Company and its stockholders; (2) approved the Merger Agreement and approved the Merger, in accordance with the requirements of the DGCL; (3) directed that the Merger Agreement be submitted to the stockholders of Aerojet Rocketdyne for adoption; and (4) recommends that Aerojet Rocketdyne stockholders vote in favor of the adoption of the Merger Agreement. The Company’s board of directors unanimously recommends that you vote: (1) “FOR” the adoption of the Merger Agreement and the transactions contemplated thereby (the “Board Recommendation”); (2) “FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement and the transactions contemplated thereby at the time of the Special Meeting; and (3) “FOR” the proposal to approve, by non-binding, advisory vote, certain compensation that will or may become payable to Aerojet Rocketdyne’s named executive officers in connection with the Merger.

Aerojet Rocketdyne retained Citigroup Global Markets Inc. (“Citi”) to provide financial advisory services in connection with a possible transaction involving Aerojet Rocketdyne. In connection with Citi’s engagement, Aerojet Rocketdyne’s board of directors requested that Citi evaluate the fairness, from a financial point of view, to the holders of shares of Aerojet Rocketdyne common stock of the merger consideration to be received in the proposed Merger by such holders pursuant to the terms and subject to the conditions set forth in the Merger Agreement. On December 19, 2020, at a meeting of the Aerojet Rocketdyne board of directors held to evaluate the proposed Merger, Citi rendered to the Aerojet Rocketdyne board of directors an oral opinion, subsequently confirmed by delivery of a written opinion, dated December 19, 2020, to the effect that, as of the date of Citi’s written opinion and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi as set forth in its written opinion, the merger consideration of $56.00 per share minus, to the extent paid, the amount per share of the Pre-Closing Dividend (as defined in the section of this proxy statement captioned “The Merger — Pre-Closing Cash Dividend”), was fair, from a financial point of view, to the holders of shares of Aerojet Rocketdyne common stock.

The full text of Citi’s written opinion, dated December 19, 2020, to the Aerojet Rocketdyne board of directors, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi in rendering its opinion, is attached to this proxy statement as Annex B and is incorporated herein by reference in its entirety. The summary of Citi’s opinion in the section of this proxy statement captioned “The Merger — Opinion of Citigroup Global Markets Inc.”

beginning on page 57 is qualified in its entirety by reference to the full text of Citi’s opinion. Citi’s opinion was rendered to the Aerojet Rocketdyne board of directors (in its capacity as such) in connection with its evaluation of the proposed Merger and was limited to the fairness, from a financial point of view, as of the date of the opinion, to the holders of shares of Aerojet Rocketdyne common stock of the merger consideration of $56.00 per share minus, to the extent paid, the amount per share of the Pre-Closing Dividend. Citi’s opinion did not address any other terms, aspects or implications of the proposed Merger or the Merger Agreement. Citi’s opinion did not address the underlying business decision of Aerojet Rocketdyne to effect the proposed Merger, the relative merits of the proposed Merger as compared to any alternative business strategies that might have existed for Aerojet Rocketdyne or the effect of any other transaction in which Aerojet Rocketdyne might have engaged. Citi’s opinion is not intended to be and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act on any matters relating to the proposed Merger or otherwise.

For more information, see the section of this proxy statement captioned “The Merger — Opinion of Citigroup Global Markets Inc.”

Aerojet Rocketdyne retained Evercore Group L.L.C. (“Evercore”) to provide financial advisory services in connection with a possible transaction involving Aerojet Rocketdyne. As part of this engagement, Aerojet Rocketdyne requested that Evercore evaluate the fairness, from a financial point of view, of the merger consideration to be received by the holders of Aerojet Rocketdyne common stock. On December 19, 2020, at a meeting of the Aerojet Rocketdyne board of directors held to evaluate the proposed Merger, Evercore rendered to the Aerojet Rocketdyne board of directors its oral opinion, which was subsequently confirmed in writing, to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $56.00 per share minus, to the extent paid, the amount per share of the Pre-Closing Dividend (as defined in the section of this proxy statement captioned “The Merger — Pre-Closing Cash Dividend”) to be received by holders of shares of Aerojet Rocketdyne common stock in the Merger was fair, from a financial point of view, to such holders.

The full text of the written opinion of Evercore, dated December 19, 2020, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex C to this proxy statement and is incorporated herein by reference. Aerojet Rocketdyne encourages you to read this opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Aerojet Rocketdyne board of directors (in its capacity as such) in connection with its evaluation of the proposed Merger. The opinion does not constitute a recommendation to the Aerojet Rocketdyne board of directors or to any other persons in respect of the Merger, including as to how any holder of shares of Aerojet Rocketdyne common stock should vote or act in respect of the Merger. Evercore’s opinion does not address the relative merits of the Merger as compared to other business or financial strategies that might be available to Aerojet Rocketdyne, nor does it address the underlying business decision of Aerojet Rocketdyne to engage in the Merger.

For more information, see the section in this proxy statement captioned “The Merger — Opinion of Evercore Group L.L.C.”

When considering the recommendation of Aerojet Rocketdyne’s board of directors that you vote to approve the proposal to adopt the Merger Agreement and the transactions contemplated thereby, you should be aware that our directors and executive officers may have interests in the Merger that are different from, or in addition to, your interests as a stockholder. In (i) evaluating and negotiating the Merger Agreement; (ii) approving the Merger Agreement and the Merger; and (iii) recommending that the Merger Agreement and the transactions contemplated thereby be adopted by Aerojet Rocketdyne’s stockholders, the board of directors was aware of and considered these interests, among other matters. These interests include the following:

For more information, see “The Merger — Interests of Aerojet Rocketdyne’s Directors and Executive Officers in the Merger.”

Section 262 of the DGCL (“Section 262”) entitles certain stockholders to exercise appraisal rights in connection with the Merger. Holders of shares of our common stock who qualify for, and have properly exercised, their appraisal rights are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the Delaware Court of Chancery. The appraisal process is complex. See “The Merger — Appraisal Rights” for additional information.

Under the Merger Agreement, Aerojet Rocketdyne agreed not to (and agreed not to publicly propose to), agreed to ensure that its subsidiaries do not (and do not publicly propose to), and agreed to use reasonable best efforts to cause Aerojet Rocketdyne’s and its subsidiaries’ respective representatives not to, directly or indirectly (subject to certain exceptions):

Notwithstanding the foregoing, prior to the adoption of the Merger Agreement by Aerojet Rocketdyne stockholders, Aerojet Rocketdyne may furnish or otherwise provide access to any information (including non-public information) regarding Aerojet Rocketdyne and its subsidiaries to, and may enter into discussions or negotiations and cooperate with, any person in response to an unsolicited, bona fide written Acquisition Proposal that is submitted to Aerojet Rocketdyne after the date of the Merger Agreement by such person (and not withdrawn) under certain circumstances, including if: (i) such Acquisition Proposal was not obtained or made as a result of a material breach of any of the provisions set forth in the non-solicitation and related provisions of the Merger Agreement; (ii) Aerojet Rocketdyne’s board of directors determines in good faith, after consultation with an independent financial advisor of nationally recognized reputation and Aerojet Rocketdyne’s outside legal counsel, that such Acquisition Proposal constitutes or would reasonably be expected to lead to a Superior Offer; (iii) Aerojet Rocketdyne’s board of directors determines in good faith, after considering the advice of Aerojet Rocketdyne’s outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary obligations to Aerojet Rocketdyne’s stockholders under Delaware law; and (iv) prior to first furnishing any non-public information to, or entering into discussions or negotiations with, such person, Aerojet Rocketdyne receives from such person an executed confidentiality agreement containing specified provisions and gives Lockheed Martin certain notices and other information.

See “The Merger Agreement — No Solicitation; Acquisition Proposals” for more information, including definitions of the terms “Acquisition Inquiry,” “Acquisition Proposal,” “Acquisition Transaction” and “Superior Offer.”

The Merger Agreement provides that, subject to the exceptions noted below, Aerojet Rocketdyne’s board of directors (including any committee thereof) may not:

Any action referred to in the first or second bullet above is a “Company Change in Recommendation.”

Notwithstanding the foregoing limitations, the Merger Agreement provides that, prior to the approval of the Aerojet Rocketdyne stockholders of the Merger Agreement, Aerojet Rocketdyne’s board of directors may effect a Company Change in Recommendation (and may also cause Aerojet Rocketdyne to terminate the Merger Agreement and cause Aerojet Rocketdyne to enter into a definitive agreement in respect of a Superior Offer) if among other requirements (i) Aerojet Rocketdyne’s board of directors determines in good faith, after consultation with an independent financial advisor of nationally recognized reputation and the advice of Aerojet Rocketdyne’s outside legal counsel, that an Acquisition Proposal made to Aerojet Rocketdyne after the date of the Merger Agreement constitutes a Superior Offer, (ii) Aerojet Rocketdyne’s board of directors determines in good faith, after consultation with Aerojet Rocketdyne’s outside counsel, that, in light of such Superior Offer, the failure to effect a Company Change in Recommendation, or the failure to terminate the Merger Agreement in order to accept such Superior Offer, would be inconsistent with its fiduciary obligations to Aerojet Rocketdyne’s stockholders under applicable Delaware law; and (iii) Aerojet Rocketdyne provides at least three business days’ prior written notice to Lockheed Martin and during such period engages (to the extent requested by Lockheed Martin) in good faith negotiations with Lockheed Martin to amend the Merger Agreement in such a manner that the failure to effect a Company Change in Recommendation, or the failure to terminate the Merger Agreement in order to accept such Superior Offer, would not be inconsistent with the fiduciary obligations of Aerojet Rocketdyne’s board of directors to Aerojet Rocketdyne’s stockholders under applicable Delaware law.

See “The Merger Agreement — Stockholders’ Meeting; No Change in Board Recommendation” for additional information.

The Merger Agreement contains certain termination rights for both Aerojet Rocketdyne and Lockheed Martin and further provides that, upon termination of the Merger Agreement by Aerojet Rocketdyne or Lockheed Martin under certain circumstances, including due to a failure to secure approval of Aerojet Rocketdyne’s stockholders or Aerojet Rocketdyne accepting a Superior Offer (as defined in the Merger Agreement), the Company will be required to pay Lockheed Martin a termination fee of $150,000,000.

See “The Merger Agreement — Termination of the Merger Agreement” for additional information.

A U.S. Holder (as defined in the section of this proxy statement captioned “The Merger — Material U.S. Federal Income Tax Consequences of the Merger and Pre-Closing Dividend”) generally will recognize gain or loss for U.S. federal income tax purposes tax with respect to the exchange of common stock for cash in the Merger in an

amount equal to the difference, if any, between the amount of cash received by such U.S. Holder in the Merger and such U.S. Holder’s adjusted tax basis in the shares of common stock surrendered in the Merger. Although the tax treatment of the Pre-Closing Dividend is not entirely clear, Aerojet Rocketdyne and Lockheed Martin intend to report the Pre-Closing Dividend as a distribution with respect to Aerojet Rocketdyne’s common stock for U.S. federal income tax purposes. Assuming that this characterization applies, the amount of this distribution would be treated first as a taxable dividend to the extent of the U.S. Holder’s pro rata share of Aerojet Rocketdyne’s current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), then as a non-taxable return of capital to the extent of the U.S. Holder’s basis in its Aerojet Rocketdyne common stock, and finally as capital gain from the sale or exchange of Aerojet Rocketdyne common stock.

A Non-U.S. Holder (as defined in the section of this proxy statement captioned “The Merger — Material U.S. Federal Income Tax Consequences of the Merger and Pre-Closing Dividend”) generally will not be subject to U.S. federal income tax with respect to the exchange of common stock for cash in the Merger unless such Non-U.S. Holder has certain connections to the United States. Assuming the Pre-Closing Dividend will be treated as a distribution with respect to Aerojet Rocketdyne common stock for U.S. federal income tax purposes, a Non-U.S. Holder generally will be subject to U.S. federal income tax withholding at a rate of 30% (or a lower rate under an applicable income tax treaty) with respect to the portion of the Pre-Closing Dividend treated as a taxable dividend unless certain exceptions apply. Since the determination of the portion of the Pre-Closing Dividend that is treated as a taxable dividend will not be completed until after the closing of the Merger, it is possible that a broker, dealer, bank or other custodian that holds Aerojet Rocketdyne common stock beneficially owned by a Non-U.S. Holder may withhold at a rate of 30% (or a lower rate under an applicable income tax treaty) on the entire amount of the Pre-Closing Dividend.

Stockholders should consult their own tax advisors regarding the U.S. federal income tax consequences of the Merger and to the Pre-Closing Dividend in light of their particular circumstances and any consequences arising under U.S. federal non-income tax laws or the laws of any state, local or foreign taxing jurisdiction and any applicable income tax treaty.

Except for a termination fee payable by Aerojet Rocketdyne in specified circumstances or with respect to a failure of Aerojet Rocketdyne to pay a termination fee when due, Aerojet Rocketdyne, on the one hand, and Lockheed Martin and Merger Sub, on the other hand, are each responsible for all of their own respective costs and expenses incurred in connection with the Merger and the other transactions contemplated by the Merger Agreement, whether or not the Merger is consummated.

Aerojet Rocketdyne must pay to Lockheed Martin a termination fee of $150,000,000 if the Merger Agreement is terminated in order to accept a Superior Offer and under certain other specified circumstances.

For more information on these termination fee payments, see the sections of this proxy statement captioned “The Merger Agreement — Termination of the Merger Agreement” and “The Merger Agreement — Termination Fees and Expenses.”

At the virtual Special Meeting, we will ask stockholders to vote on proposals to: (1) adopt the Merger Agreement and the transactions contemplated thereby (the “Merger Proposal”); (2) adjourn the Special Meeting to a later date or dates to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement and the transactions contemplated thereby at the time of the Special Meeting (the “Adjournment Proposal”); and (3) approve, by a non-binding, advisory vote, certain compensation that will or may become payable to Aerojet Rocketdyne named executive officers in connection with the Merger (the “Merger-Related Named Executive Officer Compensation Proposal”).

As of the Record Date, there were 77,503,616 shares of common stock outstanding and entitled to vote at the Special Meeting. The stockholders of Aerojet Rocketdyne representing a majority of the voting power of the issued and outstanding common stock of Aerojet Rocketdyne, present in person or represented by proxy, shall constitute a quorum at the Special Meeting.

As of the Record Date, our directors and executive officers beneficially owned and were entitled to vote, in the aggregate, 1,921,729 shares of common stock, representing approximately 2.48% of the shares of common stock outstanding on the Record Date.

If you are a participant in the Aerojet Rocketdyne Retirement Savings Plan, the enclosed proxy card will also serve to provide voting instructions to Fidelity Management Trust Company, the trustee of the Aerojet Rocketdyne Retirement Savings Plan (the “Trustee”), with respect to any shares of the Stock Fund attributable to your account under the Aerojet Rocketdyne Retirement Savings Plan. You may provide such instructions to the Trustee by following the instructions on the proxy card. If you provide voting instructions by mail, telephone, or the Internet, the Trustee will vote your shares as you have directed (or not vote your shares, if that is your direction). If you do not provide voting instructions, the Trustee will vote your shares in the same proportion as shares for which the Trustee has received voting instructions. You must submit voting instructions to the Trustee by no later than March 4, 2021, at 11:59 p.m. Eastern time in order for your shares to be voted as you have directed by the Trustee at the Special Meeting. Aerojet Rocketdyne Retirement Savings Plan participants may not vote their Plan shares in person at the Special Meeting.

You may vote in several different ways:

Telephone and Internet voting before the meeting date for stockholders of record will be available until 11:59 p.m. Eastern Time on March 8, 2021. A mailed proxy card must be received by March 8, 2021, in order to be voted at the Special Meeting. The availability of telephone and Internet voting for beneficial owners of other shares held in “street name” will depend on your broker, bank or other holder of record and we recommend that you follow the voting instructions that you receive from them.

If you choose to vote by telephone or by Internet, you do not have to return your proxy card or voting instruction card. However, even if you plan to attend the Special Meeting via the Internet, we recommend that you vote your shares in advance so that your vote will be counted if you later decide not to attend the meeting via the Internet.

If the Merger Agreement and the transactions contemplated thereby are not adopted by stockholders, Aerojet Rocketdyne stockholders will not receive any payment for their shares of common stock. Instead, Aerojet Rocketdyne will remain an independent public company, our common stock will continue to be listed and traded on the NYSE and registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we will continue to file periodic and current reports with the Securities and Exchange Commission (the “SEC”). However, payment of the Pre-Closing Dividend is not conditioned on approval of the Merger. Under specified circumstances, Aerojet Rocketdyne will be required to pay Lockheed Martin a termination fee upon the termination of the Merger Agreement. For more details, see the section of this proxy statement captioned “The Merger — Effect on Aerojet Rocketdyne if the Merger Is Not Completed.”

On January 29, 2021, a lawsuit entitled Richard Myers v. Aerojet Rocketdyne Holdings, Inc. et al., Case No. 2:21-cv-00844, styled as a putative class action, was filed in the United States District Court for the Central District of California against Aerojet Rocketdyne and the members of the Aerojet Rocketdyne board of directors (the “Myers Action”). Also on January 29, 2021, a lawsuit entitled Alexa Hiramitsu v. Aerojet Rocketdyne Holdings, Inc. et al., Case No. 1:21-cv-00123, was filed in the United States District Court for the District of Delaware against Aerojet Rocketdyne and the members of the Aerojet Rocketdyne board of directors (the “Hiramitsu Action”). On February 1, 2021, a lawsuit entitled Richard Feinhals v. Aerojet Rocketdyne Holdings, Inc. et al., Case No. 1:21-cv-00892, was filed in the United States District Court for the Southern District of New York against Aerojet Rocketdyne and the members of the Aerojet Rocketdyne board of directors (the “Feinhals Action”). On February 2, 2021, a lawsuit entitled Shiva Stein v. Aerojet Rocketdyne Holdings, Inc. et al., Case No. 2:21-cv-00962, was filed in the United States District Court for the Central District of California (the “Stein Action”). On February 4, 2021, a lawsuit entitled Mateo Clark v. Aerojet Rocketdyne Holdings, Inc. et al., Case No. 1:21-cv-00994, was filed in the United States District Court for the Southern District of

New York against Aerojet Rocketdyne and the members of the Aerojet Rocketdyne board of directors (the “Clark Action''). Also on February 4, 2021, a lawsuit entitled Guy Coffman v. Aerojet Rocketdyne Holdings,Inc. et al., Case No. 2:21-cv-01917, was filed in the United States District Court for the District of New Jersey against Aerojet Rocketdyne and the members of the Aerojet Rocketdyne board of directors (the“Coffman Action”). The Myers Action, the Hiramitsu Action, the Feinhals Action, the Stein Action, the Clark Action and the Coffman Action are collectively referred to as the “Actions.” The Actions allege that the defendants violated Sections 14(a) (and Rule 14a-9 promulgated thereunder) and 20(a) of the Exchange Act by, among other things, omitting certain allegedly material information with respect to the Merger in the preliminary proxy statement filed by Aerojet Rocketdyne on January 25, 2021. The Myers Action and the Feinhals Action also allege that the members of the Aerojet Rocketdyne board of directors breached their fiduciary duties in connection with the Merger, and the Myers Action further alleges that Aerojet Rocketdyne aided and abetted the directors’ alleged breaches of fiduciary duties. The plaintiffs in the Actions seek, among other things, injunctive relief, money damages and the costs of the Actions, including reasonable attorneys’ and experts’ fees.

Aerojet Rocketdyne and the members of its board of directors disagree with and intend to vigorously defend against the Actions. If the Actions are not resolved on a timely basis, the Actions could delay consummation of the Merger and result in additional costs to Aerojet Rocketdyne, including costs associated with the indemnification of directors. Additional plaintiffs may file lawsuits against Aerojet Rocketdyne and/or our directors and officers in connection with the Merger.

Certain information contained in this proxy statement should be considered “forward-looking statements” as defined by Section 21E of the Exchange Act. All statements included or incorporated by reference in this proxy statement, other than statements of historical fact, may be forward-looking statements.

Stockholders can identify forward-looking statements by the use of words such as “estimate,” “may,” “will,” “could,” “anticipate,” “expect,” “intend,” “believe,” “continue” or the negative of such terms, or other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

Actual results may be materially different from any future results expressed or implied by such forward-looking statements. Among other risks and uncertainties, there can be no guarantee that the Merger will be completed, or if it is completed, that it will close within the anticipated time frame. Additional risks and uncertainties relating to the acquisition include: (1) the Company may be unable to obtain stockholder approval as required for the transaction; (2) other conditions to the closing of the transaction may not be satisfied or waived; (3) the transaction may involve unexpected costs, liabilities or delays; (4) the Company’s business may suffer as a result of uncertainty surrounding the transaction, including due to disruption of current plans and operations and the potential difficulties in employee retention as a result of the transaction; (5) the outcome of any legal proceedings related to the transaction; (6) required regulatory approvals may not be obtained on a timely basis or at all; and (7) an event, change or other circumstances may occur that could give rise to the termination of the Merger Agreement. Important risk factors that could cause actual results or outcomes to differ from those expressed in the forward-looking statements are described in the “Risk Factors” section in Item 1A of our Annual Report to the SEC on Form 10-K for the year ended December 31, 2019, and Part II, Item 1A of the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30, 2020. Forward-looking statements speak only as of the date hereof, and no obligation is assumed to update any forward-looking statements, even if expectations change, except as required by law.

Aerojet Rocketdyne’s board of directors is soliciting your proxy to vote at the Special Meeting because you were a stockholder of Aerojet Rocketdyne’s common stock, par value $0.10 per share, at the close of business (5:00 p.m. Eastern time) on February 4, 2021 (the “Record Date”), and therefore you are entitled to vote at the Special Meeting. This proxy statement contains information about the matters to be voted on at the Special Meeting and the voting process, as well as information about our proposed acquisition by Lockheed Martin pursuant to the terms of the Merger Agreement.

You are voting on the following items of business at the Special Meeting:

Stockholders of record as of the Record Date, February 4, 2021, are entitled to vote at the Special Meeting. Each share of common stock is entitled to one vote.

The board of directors recommends that you vote:

The Special Meeting will be held entirely online to allow greater participation and protect the health and safety of our stockholders. Stockholders may participate in the Special Meeting by visiting www.virtualshareholdermeeting.com/AJRD2021SM on the Internet.

To participate in the Special Meeting, you will need the control number included on your proxy card, or on the instructions that accompanied your proxy materials. Even if you plan to participate in the Special Meeting online, we urge you to vote as soon as possible by one of the following methods to make sure your shares are represented if you later decide not to participate in the virtual Special Meeting.

If you are a participant in the Aerojet Rocketdyne Retirement Savings Plan, the enclosed proxy card will also serve to provide voting instructions to Fidelity Management Trust Company, the Trustee, with respect to any shares of the Stock Fund attributable to your account under the Aerojet Rocketdyne Retirement Savings Plan. You may provide such instructions to the Trustee by following the instructions on the proxy card. If you provide voting instructions by mail, telephone, or the Internet, the Trustee will vote your shares as you have directed (or not vote your shares, if that is your direction). If you do not provide voting instructions, the Trustee will vote your shares in the same proportion as shares for which the Trustee has received voting instructions. You must submit voting instructions to the Trustee by no later than 11:59 p.m. Eastern time on March 4, 2021, in order for your shares to be voted as you have directed by the Trustee at the Special Meeting. Aerojet Rocketdyne Retirement Savings Plan participants may not vote their Plan shares in person at the Special Meeting.

You may vote in several different ways:

Telephone and Internet voting before the meeting date for stockholders of record will be available until 11:59 p.m. Eastern Time on March 8, 2021. A mailed proxy card must be received by March 8, 2021, in order to be voted at the Special Meeting. The availability of telephone and Internet voting for beneficial owners of other shares held in “street name” will depend on your broker, bank or other holder of record and we recommend that you follow the voting instructions that you receive from them.

If you choose to vote by telephone or by Internet, you do not have to return your proxy card or voting instruction card. However, even if you plan to attend the Special Meeting via the Internet, we recommend that you vote your shares in advance so that your vote will be counted if you later decide not to attend the meeting via the Internet.

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed, either within the Company or to third parties, except: (1) as necessary to meet and address applicable legal requirements; (2) to allow for the tabulation of votes and certification of the vote; and (3) to facilitate a successful proxy solicitation. Occasionally, stockholders provide written comments on their proxy card, which are then forwarded to management.

All stockholders and properly appointed proxy holders may attend the Special Meeting over the Internet at www.virtualshareholdermeeting.com/AJRD2021SM. Stockholders who plan to attend must have access to the control number we have provided to you to join the virtual Special Meeting. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at

www.proxyvote.com. Stockholders of record will be verified against an official list available electronically at the Special Meeting. The Company reserves the right to deny admittance to anyone who cannot adequately show proof of share ownership as of the Record Date (or demonstrate that the person holds a valid proxy from a stockholder as of the Record Date).

Stockholders may submit questions in advance of the Special Meeting by visiting www.proxyvote.com and accessing the online pre-meeting forum using the 16-digit control number found on such stockholder's proxy card or voting instruction form. Stockholders may also submit questions during the Special Meeting. As part of the Special Meeting, Aerojet Rocketdyne will hold a live question and answer session during which we intend to answer questions submitted in advance of and during the meeting that are pertinent to Aerojet Rocketdyne and the meeting matters, as time permits. Questions may be submitted during the special meeting through www.virtualshareholdermeeting.com/AJRD2021SM. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once.”

If your shares are registered directly in your name with Aerojet Rocketdyne’s transfer agent, Computershare, Inc., you are considered a “stockholder of record” or a “registered stockholder” of those shares. In this case, your proxy materials have been sent to you directly by Broadridge Financial Solutions, Inc. If your shares are held in a stock brokerage account or by a bank, trust or other nominee or custodian, including shares you may own as a participant in the Aerojet Rocketdyne Retirement Savings Plan, you are considered the “beneficial owner” of those shares, which are held in “street name.” The proxy materials have been forwarded to you by or on behalf of your broker, bank, trustee or other holder who is considered the stockholder of record of those shares. As the beneficial owner, you have the right to direct your broker, bank, trustee or other holder of record as to how to vote your shares by following their instructions for voting.

Broker non-votes occur when nominees, such as brokers and banks holding shares on behalf of the beneficial owners, are prohibited from exercising discretionary voting authority for beneficial owners who have not provided voting instructions at least ten days before the Special Meeting. If no instructions are given within that time frame, the nominees may not vote those shares on matters deemed “non-routine” by the NYSE. The proposals for stockholder consideration herein are non-routine matters and nominees cannot vote without instructions from the beneficial owner. These so-called “broker non-votes,” if any, will have the same effect as a vote against Proposal 1 and no effect on the outcome of Proposal 2 and Proposal 3. Broker non-votes are not counted for the purposes of determining the number of shares present in person or represented by proxy on a voting matter. For these reasons, please promptly vote by telephone, or Internet, or mail.

If you are a stockholder of record, you may revoke your proxy at any time before it is voted at the Special Meeting by:

If you are a beneficial owner of shares, you may submit new voting instructions by contacting your broker, bank or other nominee. You may also vote at the Special Meeting via the Internet at www.virtualshareholdermeeting.com/AJRD2021SM if you obtain a legal proxy as described above.

Under applicable law, we cannot complete the Merger without the affirmative vote of a majority of the outstanding shares of Aerojet Rocketdyne common stock voting in favor of the proposal to adopt the Merger Agreement and the transactions contemplated thereby. If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, or other nominee, it will have the same effect as a vote against the proposal to adopt the Merger Agreement and the transactions contemplated thereby.

The affirmative vote of a majority of the shares of Aerojet Rocketdyne common stock, present or represented by proxy at the Special Meeting, is required to approve the Adjournment Proposal, whether or not a quorum is present. The Special Meeting may also be adjourned by the chairman of the meeting for a proper purpose or by the stockholders for any other purpose per Aerojet Rocketdyne’s bylaws.

Assuming a quorum is present, the affirmative vote of a majority of the shares of Aerojet Rocketdyne common stock, present or represented by proxy at the Special Meeting and entitled to vote on the subject matter, is required to approve the Merger-Related Named Executive Officer Compensation Proposal (Proposal 3). The stockholders’ vote regarding Proposal 3 is a non-binding, advisory vote. Since compensation and benefits that may be paid or provided in connection with the Merger are based on contractual arrangements with the named executive officers, the outcome of this advisory vote will not affect the obligation to make these payments and these payments may still be made even if the stockholders do not approve the Merger-Related Named Executive Officer Compensation Proposal.

As of the Record Date, 77,503,616 shares of common stock were outstanding. A majority of the outstanding shares entitled to vote at the Special Meeting, represented individually or by proxy, will constitute a quorum. Shares represented by a proxy that directs that the shares abstain from voting or that a vote be withheld on a matter will be included at the Special Meeting for quorum purposes. Shares represented by proxy as to which no voting instructions are given as to matters to be voted upon will be included at the Special Meeting for quorum purposes.

The Company’s Internet address is www.AerojetRocketdyne.com. You can access this proxy statement at this Internet address, as well as all other Company filings with the SEC.

The Company will provide free of charge a print copy of the proxy materials to any beneficial owner of the Company’s common stock as of the Record Date who sends a written request to:

Aerojet Rocketdyne Holdings, Inc.

Attn: Corporate Secretary

222 N. Pacific Coast Highway, Suite 500

El Segundo, California 90245

As of the date of this proxy statement, our management knows of no other matter that will be presented for consideration at the Special Meeting other than those matters discussed in this proxy statement. If any other matters properly come before the Special Meeting and call for a vote of the stockholders, validly executed proxies will be voted in accordance with the recommendation of Aerojet Rocketdyne’s board of directors.

The proxies being solicited hereby are being solicited by our board of directors. The cost of soliciting proxies in the enclosed form will be borne by the Company. Officers and regular employees of the Company may, but without receiving additional compensation other than their regular compensation, solicit proxies by further

mailings, personal conversations, by telephone, facsimile, or electronic means. The Company will, upon request, reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation material to the beneficial owners of the stock. The Company has retained Okapi Partners, an independent proxy solicitation firm, to assist in soliciting proxies on its behalf. The Company has agreed to pay Okapi Partners a fee of approximately $45,000, plus costs and expenses, for these services. If stockholders need assistance with casting or changing their vote, they should contact our proxy solicitor, Okapi Partners, toll-free at 1-888-785-6707.

On December 20, 2020, we entered into a definitive agreement to be acquired by Lockheed Martin in an all-cash transaction, which we refer to as the “Merger Agreement” throughout this proxy statement. The acquisition will be implemented by the merger of a wholly owned subsidiary of Lockheed Martin with and into Aerojet Rocketdyne, with Aerojet Rocketdyne surviving that merger as a wholly owned subsidiary of Lockheed Martin.

If the Merger is completed, holders of our common stock will be entitled to receive $56.00 per share in cash, without interest and less, to the extent paid or payable as discussed further in this proxy statement, the $5.00 per share amount of the Pre-Closing Dividend, unless the holder properly exercises their appraisal rights. This $56.00 per share amount represents a premium of approximately 33% to Aerojet Rocketdyne’s closing stock price on December 18, 2020 (the last trading day before the announcement of the Merger Agreement), and a premium of approximately 42% to Aerojet Rocketdyne’s volume weighted average stock price in the 90 trading days prior to announcement of the Merger Agreement.

At the effective time of the Merger, and subject to the terms of the Merger Agreement:

We are working toward completing the Merger as quickly as possible and currently expect to complete the Merger in the second half of 2021. However, the exact timing of completion of the Merger cannot be predicted because the Merger is subject to the closing conditions described in the section of this proxy statement captioned “The Merger Agreement — Conditions to the Merger,” many of which are outside of our control.

The Merger Agreement provides that, promptly after the effective time of the Merger, a designated paying agent will send each holder of record of a certificate representing shares of common stock or of uncertificated shares of common stock immediately prior to the effective time of the Merger a customary letter of transmittal and instructions advising such holder as to how to surrender or transfer such shares of common stock in exchange for the Merger Consideration. The paying agent will promptly pay such holders the Merger Consideration upon (i) the surrender of a certificate representing shares of common stock to the paying agent (or compliance with the reasonable procedures established by the paying agent for transfer of uncertificated shares) and (ii) delivery of a properly completed letter of transmittal and any other documents reasonably required by the paying agent or Lockheed Martin. Interest will not be paid or accrue in respect of cash payments. The amount of any cash payments paid to you will be reduced by any applicable withholding taxes.

You should not surrender your shares of common stock without a letter of transmittal.

See the section of this proxy statement captioned “The Merger Agreement — Payment for the Shares.”

If the Merger is completed, stockholders who do not vote in favor of Proposal 1 (adoption of the Merger Agreement and the transactions contemplated thereby) and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the Merger under Section 262 of the Delaware General Corporation Law (the “DGCL”). This means that holders of shares of common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of the shares of common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the court. Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process. The DGCL requirements for exercising appraisal rights are described in additional detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced in Annex D to this proxy statement.

If you are a U.S. Holder (as defined in the section of this proxy statement captioned “The Merger — Material U.S. Federal Income Tax Consequences of the Merger and Pre-Closing Dividend”), the exchange of common stock for cash pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes, which generally will require a U.S. Holder to recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received by such U.S. Holder in the Merger and such U.S. Holder’s adjusted tax basis in the shares of common stock surrendered in the Merger.

A Non-U.S. Holder (as defined in the section of this proxy statement captioned “The Merger — Material U.S. federal Income Tax Consequences of the Merger and Pre-Closing Dividend”) generally will not be subject to U.S. federal income tax with respect to the exchange of common stock for cash in the Merger unless such Non-U.S. Holder has certain connections to the United States.

Please see the section of this proxy statement captioned “The Merger — Material U.S. Federal Income Tax Consequences of the Merger and Pre-Closing Dividend.” We recommend that you consult your own tax advisor regarding the U.S. federal income tax consequences of the Merger to you in light of your own particular circumstances and any consequences arising under U.S. federal non-income tax laws or the laws of any state, local or foreign taxing jurisdiction and any applicable income tax treaty.

In considering the recommendation of Aerojet Rocketdyne’s board of directors with respect to the proposal to adopt Proposal 1 (adoption of the Merger Agreement and the transactions contemplated thereby), you should be aware that our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of stockholders generally, including golden parachute payment mitigation actions, payments upon termination following a change-in-control, cashing out of equity-based awards held by our directors and executive officers and continued indemnification and insurance coverage for our directors and executive officers. In (i) evaluating and negotiating the Merger Agreement; (ii) approving the Merger Agreement and the Merger; and (iii) recommending that the Merger Agreement be adopted by stockholders, Aerojet Rocketdyne’s board of directors was aware of and considered these interests, among other matters. For more information, see the section of this proxy statement captioned “The Merger — Interests of Aerojet Rocketdyne’s Directors and Executive Officers in the Merger.”

If you have any questions concerning the Merger, the Special Meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of our common stock, please contact our proxy solicitor:

Okapi Partners

1212 Avenue of the Americas, 24^th Floor

New York, NY 10036

toll-free at 1-888-785-6707

info@okapipartners.com

No. On December 19, 2020, Aerojet Rocketdyne’s board of directors declared a one-time cash dividend of $5.00 per share payable on March 24, 2021 to stockholders of record of common stock as of the close of business on March 10, 2021. Payment of this Pre-Closing Dividend is not conditioned on approval of the Merger.

Yes. Under the terms of the Merger Agreement, at the closing of the Merger, the $56.00 per share price will be reduced by the $5.00 per share Pre-Closing Dividend to the extent it is paid prior to closing or payable after closing. As a result:

Although the tax treatment of the Pre-Closing Dividend is not entirely clear, Aerojet Rocketdyne and Lockheed Martin intend to report the Pre-Closing Dividend as a distribution with respect to Aerojet Rocketdyne common stock for U.S. federal income tax purposes. Assuming that this characterization applies, the amount of this distribution would be treated first as a taxable dividend to the extent of a U.S. Holder’s (as defined in the section of this proxy statement captioned “The Merger — Material U.S. Federal Income Tax Consequences of the Merger and Pre-Closing Dividend”) pro rata share of Aerojet Rocketdyne’s current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), then as a non-taxable return of capital to the extent of the U.S. Holder’s basis in its Aerojet Rocketdyne common stock, and finally as capital gain from the sale or exchange of Aerojet Rocketdyne common stock.

Assuming the Pre-Closing Dividend is treated as a distribution with respect to Aerojet Rocketdyne common shares for United States federal income tax purposes, a Non-U.S. Holder (as defined in the section of this proxy statement captioned “The Merger — Material U.S. Federal Income Tax Consequences of the Merger and Pre-Closing Dividend”) generally will be subject to U.S. federal income tax withholding at a rate of 30% (or a lower rate under an applicable income tax treaty) with respect to the portion of the Pre-Closing Dividend treated as a taxable dividend unless certain exceptions apply. Since the determination of the portion of the Pre-Closing Dividend that is treated as a taxable dividend will not be completed until after the closing of the Merger, it is possible that a broker, dealer, bank or other custodian that holds Aerojet Rocketdyne common stock beneficially owned by a Non-U.S. Holder may withhold at a rate of 30% (or a lower rate under an applicable income tax treaty) on the entire amount of the Pre-Closing Dividend.

Please see the section of this proxy statement captioned “The Merger — Material U.S. Federal Income Tax Consequences of the Merger and Pre-Closing Dividend.” We recommend that you consult your own tax advisor regarding the U.S. federal income tax consequences of the Pre-Closing Dividend to you in light of your own particular circumstances and any consequences arising under U.S. federal non-income tax laws or the laws of any state, local or foreign taxing jurisdiction and any applicable income tax treaty.

March 9, 2021 at 9:00 a.m. Pacific Time

The Special Meeting will be held entirely online at:

 

www.virtualshareholdermeeting.com/AJRD2021SM

 

Record Date: February 4, 2021

You are entitled to vote if you were a stockholder of record at the close of business on February 4, 2021.

At the virtual Special Meeting, we will ask stockholders to vote on proposals to: (1) adopt the Merger Agreement and the transactions contemplated thereby (the “Merger Proposal”); (2) adjourn the Special Meeting to a later date or dates to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement and the transactions contemplated thereby at the time of the Special Meeting (the “Adjournment Proposal”); and (3) approve, by non-binding, advisory vote, certain compensation that will or may become payable to Aerojet Rocketdyne named executive officers in connection with the Merger (the “Merger-Related Named Executive Officer Compensation Proposal”).

Only stockholders of record as of the Record Date are entitled to notice of the Special Meeting and to vote at the Special Meeting. A list of stockholders entitled to vote at the Special Meeting will be available online at www.proxyvote.com for a period of no less than ten days before the Special Meeting and online at www.virtualshareholdermeeting.com/AJRD2021SM during the meeting.

As of the Record Date, there were 77,503,616 shares of common stock outstanding and entitled to vote at the Special Meeting.

Stockholders representing a majority of the voting power of the issued and outstanding Aerojet Rocketdyne common stock, present individually or represented by proxy, constitute a quorum at the Special Meeting. In the event that a quorum is not present at the Special Meeting, it is expected that the meeting will be adjourned to solicit additional proxies.

Broker non-votes occur when nominees, such as brokers and banks holding shares on behalf of the beneficial owners, are prohibited from exercising discretionary voting authority for beneficial owners who have not provided voting instructions at least ten days before the Special Meeting. If no instructions are given within that time frame, the nominees may not vote those shares on matters deemed “non-routine” by the NYSE. The proposals for stockholder consideration herein are non-routine matters and nominees cannot vote without instructions from the beneficial owner. So-called broker non-votes are not counted for the purposes of determining the number of shares present in person or represented by proxy on a voting matter. For these reasons, please promptly vote by telephone, or Internet, or mail.

As of the Record Date, our directors and executive officers beneficially owned and were entitled to vote, in the aggregate, 1,921,729 shares of common stock, representing approximately 2.48% of the shares of common stock outstanding on the Record Date. Our directors and executive officers have informed us that they intend to vote all of their shares of common stock: (1) “FOR” the Merger Proposal; (2) “FOR” the Adjournment Proposal; and (3) “FOR” the Merger-Related Named Executive Officer Compensation Proposal.

If you are a participant in the Aerojet Rocketdyne Retirement Savings Plan, the enclosed proxy card will also serve to provide voting instructions to Fidelity Management Trust Company, the Trustee, with respect to any shares of the Stock Fund attributable to your account under the Aerojet Rocketdyne Retirement Savings Plan. You may provide such instructions to the Trustee by following the instructions on the proxy card. If you provide voting instructions by mail, telephone, or the Internet, the Trustee will vote your shares as you have directed (or not vote your shares, if that is your direction). If you do not provide voting instructions, the Trustee will vote your shares in the same proportion as shares for which the Trustee has received voting instructions. You must submit voting instructions to the Trustee by no later than 11:59 p.m. Eastern time on March 4, 2021, in order for your shares to be voted as you have directed by the Trustee at the Special Meeting. Aerojet Rocketdyne Retirement Savings Plan participants may not vote their Plan shares in person at the Special Meeting.

You may vote in several different ways:

Telephone and Internet voting before the meeting date for stockholders of record will be available until 11:59 p.m. Eastern Time on March 8, 2021. A mailed proxy card must be received by March 8, 2021, in order to be voted at the Special Meeting. The availability of telephone and Internet voting for beneficial owners of other shares held in “street name” will depend on your broker, bank or other holder of record and we recommend that you follow the voting instructions that you receive from them.

If you choose to vote by telephone or by Internet, you do not have to return your proxy card or voting instruction card. However, even if you plan to attend the Special Meeting via the Internet, we recommend that you vote your shares in advance so that your vote will be counted if you later decide not to attend the meeting via the Internet.

If you are a stockholder of record, you may revoke your proxy at any time before it is voted at the Special Meeting by:

If you are a beneficial owner of shares, you may submit new voting instructions by contacting your broker, bank or other nominee. You may also vote at the Special Meeting via the Internet at www.virtualshareholdermeeting.com/AJRD2021SM if you obtain a legal proxy as described above.

After considering various factors described in the section of this proxy statement captioned “The Merger — Recommendation of the Board of Directors and Reasons for the Merger,” Aerojet Rocketdyne’s board of directors unanimously recommends that you vote:

“FOR” the adoption of the Merger Agreement and the transactions contemplated thereby (Proposal 1);

“FOR” the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement and the transactions contemplated thereby at the time of the Special Meeting (Proposal 2); and

“FOR” the non-binding, advisory proposal to approve certain compensation payable to Aerojet Rocketdyne’s named executive officers in connection with the Merger (Proposal 3).

The proxies being solicited hereby are being solicited by our board of directors. The cost of soliciting proxies in the enclosed form will be borne by Aerojet Rocketdyne. Officers and regular employees of the Company may, but without receiving additional compensation other than their regular compensation, solicit proxies by further mailings, personal conversations, by telephone, facsimile, or electronic means. The Company will, upon request, reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation material to the

beneficial owners of the stock. The Company has retained Okapi Partners, an independent proxy solicitation firm, to assist in soliciting proxies on its behalf. The Company has agreed to pay Okapi Partners a fee of approximately $45,000, plus costs and expenses, for these services. If stockholders need assistance with casting or changing their vote, they should contact our proxy solicitor, Okapi Partners, toll-free at 1-888-785-6707.

We are working toward completing the Merger as quickly as possible and currently expect to complete the Merger in the second half of 2021. However, the exact timing of completion of the Merger cannot be predicted because the Merger is subject to the closing conditions described in the section of this proxy statement captioned “The Merger Agreement — Conditions to the Merger,” many of which are outside of our control.

Section 262 of the DGCL (“Section 262”) entitles certain stockholders to exercise appraisal rights in connection with the Merger. Holders of shares of our common stock who qualify for, and have properly exercised, their appraisal rights are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of our common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the Delaware Court of Chancery.

The procedures established by Section 262 must be complied with exactly. Due to the complexity of the appraisal process, stockholders who wish to seek appraisal of their shares of common stock are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights. Stockholders considering seeking appraisal should be aware that the fair value of their shares as determined pursuant to Section 262 could be more than, the same as or less than the value of the Merger Consideration.

To exercise your appraisal rights, you must follow exactly the procedures specified under the DGCL, including: (i) delivering a written demand for appraisal to Aerojet Rocketdyne before the vote is taken on the proposal to adopt the Merger Agreement and the transactions contemplated thereby; (ii) not submitting a proxy or otherwise voting in favor of the proposal to adopt the Merger Agreement and the transactions contemplated thereby; and (iii) continuing to hold your shares of our common stock of record through the effective time of the Merger. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights. If you hold your shares of common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such bank, brokerage firm or nominee. The DGCL requirements for exercising appraisal rights are described in further detail in this proxy statement, and Section 262 regarding appraisal rights is reproduced and attached as Annex D to this proxy statement.

See “The Merger — Appraisal Rights” for additional information.

As of the date of this proxy statement, the Company knows of no matters that will be presented for consideration at the Special Meeting other than as described in this proxy statement.

A copy of this proxy statement is available, without charge, by written request to Aerojet Rocketdyne (Attn: Corporate Secretary) or the proxy solicitor at the address listed below, or from the SEC website at www.sec.gov.

If you have any questions concerning the Merger, the Special Meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of Aerojet Rocketdyne common stock, please contact our proxy solicitor:

Okapi Partners

1212 Avenue of the Americas, 24^th Floor

New York, NY 10036

toll-free at 1-888-785-6707

info@okapipartners.com

We are asking you to adopt the Merger Agreement and the transactions contemplated thereby, including the Merger.

For a summary of and detailed information regarding this proposal, see the information about the Merger Agreement and the Merger throughout this proxy statement, including the information set forth in the sections captioned “The Merger” and “The Merger Agreement.” A copy of the Merger Agreement is attached to this proxy statement as Annex A. You are urged to read the Merger Agreement carefully in its entirety.

Under applicable law, we cannot complete the Merger without the affirmative vote of a majority of the outstanding shares of our common stock voting in favor of the proposal to adopt the Merger Agreement and the transactions contemplated thereby. If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, or other nominee, it will have the same effect as a vote against the proposal to adopt the Merger Agreement and the transactions contemplated thereby.

We are asking you to approve a proposal to adjourn the Special Meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement and the transactions contemplated thereby at the time of the Special Meeting. If stockholders approve the Adjournment Proposal, we could adjourn the Special Meeting and any adjourned session of the Special Meeting and use the additional time to solicit additional proxies, including proxies from stockholders that have previously returned properly executed proxies voting against adoption of the Merger Agreement and the transactions contemplated thereby.

Among other things, approval of the Adjournment Proposal could mean that, even if we had received proxies representing a sufficient number of votes against adoption of the Merger Agreement and the transactions contemplated thereby such that the proposal to adopt the Merger Agreement would be defeated, we could adjourn the Special Meeting without a vote on the adoption of the Merger Agreement and the transactions contemplated thereby and seek to convince the holders of those shares to change their votes to votes in favor of adoption of the Merger Agreement and the transactions contemplated thereby. Additionally, we may seek to adjourn the Special Meeting if a quorum is not present or otherwise at the discretion of the chairman of the Special Meeting.

Section 14A of the Exchange Act requires that we provide stockholders with the opportunity to vote to approve, on an advisory, non-binding basis, the payment of certain compensation that will or may become payable to Aerojet Rocketdyne’s named executive officers in connection with the Merger, as disclosed in the section of this proxy statement captioned “The Merger — Interests of Aerojet Rocketdyne’s Directors and Executive Officers in the Merger — Payments Upon Termination Following Change-in-Control” and “The Merger — Interests of Aerojet Rocketdyne’s Directors and Executive Officers in the Merger — Golden Parachute Payment Mitigation.”

We are asking stockholders to indicate their approval of the various compensation that will or may become payable to Aerojet Rocketdyne’s named executive officers in connection with the Merger. These payments are set forth in the section of this proxy statement captioned “The Merger — Interests of Aerojet Rocketdyne’s Directors and Executive Officers in the Merger — Golden Parachute Compensation” and the accompanying footnotes. In general, the various plans and arrangements pursuant to which these compensation payments may be made have previously formed part of Aerojet Rocketdyne’s overall compensation program for our named executive officers and previously have been disclosed to stockholders as part of the Compensation Discussion and Analysis and related sections of our annual proxy statements. These historical arrangements were adopted and approved by the Compensation Committee of Aerojet Rocketdyne’s board of directors, which is composed solely of non-management directors, and are believed to be reasonable and in line with marketplace norms.

Accordingly, we are seeking approval of the following resolution at the Special Meeting:

“RESOLVED, that the stockholders of Aerojet Rocketdyne Holdings, Inc. approve, on a non-binding, advisory basis, the compensation that will or may become payable to Aerojet Rocketdyne’s named executive officers that is based on or otherwise relates to the Merger as disclosed pursuant to Item 402(t) of Regulation S-K in the section of this proxy statement captioned “The Merger — Interests of Aerojet Rocketdyne’s Directors and Executive Officers in the Merger — Payments Upon Termination Following Change-in-Control” and “The Merger — Interests of Aerojet Rocketdyne’s Directors and Executive Officers in the Merger — Golden Parachute Payment Mitigation” in Aerojet Rocketdyne’s proxy statement for the Special Meeting.”

Stockholders should note that this proposal is not a condition to completion of the Merger, and as an advisory vote, the result will not be binding on Aerojet Rocketdyne, Aerojet Rocketdyne’s board of directors or Lockheed Martin. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to stockholder approval. Accordingly, regardless of the outcome of the advisory vote, if the Merger is consummated, our named executive officers will be eligible to receive the compensation that is based on or otherwise relates to the Merger in accordance with the terms and conditions applicable to those payments.

This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger.

Aerojet Rocketdyne is primarily a technology-based engineering and manufacturing company that develops and produces specialized power and propulsion systems, as well as armament systems. It develops and manufactures liquid and solid rocket propulsion, air-breathing hypersonic engines, and electric power and propulsion for space, defense, civil and commercial applications.

Aerojet Rocketdyne operates as a merchant supplier in the aerospace and defense industry. The Company acts as either a prime contractor, selling directly to the end user, or as a subcontractor, selling products to prime contractors. The principal end user customers of our products and technologies are primarily agencies of the U.S. government.

The Company is a supplier of propulsion systems on multiple of Lockheed Martin’s missile defense, strategic deterrence, strike, hypersonics and orbital access programs including significantly, Patriot Advanced Capability-3 (PAC-3), Terminal High Altitude Area Defense (THAAD), Army Tactical Missile System (ATACMS) and Orion and is providing propulsion for Lockheed Martin’s Next Generation Interceptor offering. As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, sales to Lockheed Martin made up approximately 33% of the Company’s 2019 net sales.

Aerojet Rocketdyne’s common stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol “AJRD.”

The Company is headquartered at 222 N. Pacific Coast Highway, Suite 500, El Segundo, California 90245 and its telephone number is (310) 252-8100.

Lockheed Martin is a global security and aerospace company principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. Lockheed Martin also provides a broad range of management, engineering, technical, scientific, logistics, systems integration and cybersecurity services. Lockheed Martin serves both U.S. and international customers with products and services that have defense, civil and commercial applications, with Lockheed Martin’s principal customers being agencies of the U.S. Government. Lockheed Martin’s main areas of focus are in defense, space, intelligence, homeland security and information technology, including cybersecurity.

Lockheed Martin is one of Aerojet Rocketdyne’s largest customers.

Lockheed Martin employs approximately 114,000 employees worldwide.

Lockheed Martin’s common stock is listed on the NYSE under the symbol “LMT.” Lockheed Martin is headquartered at 6801 Rockledge Drive, Bethesda, Maryland 20817 and its telephone number is (301) 897-6000.

Mizar Sub, Inc., or the “Merger Sub,” is a wholly owned direct subsidiary of Lockheed Martin and was formed on December 17, 2020, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement and has not engaged in any business activities, other than in connection with the transactions contemplated by the Merger Agreement.

Merger Sub is headquartered at 6801 Rockledge Drive, Bethesda, Maryland 20817 and its telephone number is (301) 897-6000.

Upon the terms and subject to the conditions of the Merger Agreement, if the Merger is completed, Merger Sub will merge with and into Aerojet Rocketdyne, and Aerojet Rocketdyne will continue as the Surviving Corporation and as a wholly owned subsidiary of Lockheed Martin. As a result of the Merger, Aerojet Rocketdyne will

become a wholly owned subsidiary of Lockheed Martin, and our common stock will no longer be publicly traded and will be delisted from the NYSE. In addition, our common stock will be deregistered under the Exchange Act, and we will no longer file periodic or current reports with the SEC. If the Merger is completed, you will not own any shares of the capital stock of the Surviving Corporation.

The effective time of the Merger will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware, or at such other time as is agreed upon in writing by Lockheed Martin and Aerojet Rocketdyne and specified in the certificate of merger in accordance with the DGCL.

If the Merger Agreement and the transactions contemplated thereby is not adopted by the stockholders, Aerojet Rocketdyne stockholders will not receive any payment for their shares of common stock. Instead, Aerojet Rocketdyne will remain an independent public company, our common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and we will continue to file periodic and current reports with the SEC. In addition, if the Merger is not completed, we expect that management will operate the business in a manner similar to that in which it is being operated today and that stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including risks related to the highly competitive industry in which Aerojet Rocketdyne operates and risks related to adverse economic conditions.

Furthermore, if the Merger is not completed, and depending on the circumstances that caused the Merger not to be completed, the price of our common stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of our common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of common stock. If the Merger is not completed, Aerojet Rocketdyne’s board of directors will continue to evaluate and review Aerojet Rocketdyne’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate. If the Merger Agreement and the transactions contemplated thereby are not adopted by stockholders or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to Aerojet Rocketdyne’s board of directors will be offered or that Aerojet Rocketdyne’s business, prospects or results of operation will not be adversely impacted.

In addition, Aerojet Rocketdyne will be required to pay to Lockheed Martin a termination fee of $150,000,000 if the Merger Agreement is terminated under specified circumstances. For more information, please see the section of this proxy statement captioned “The Merger Agreement — Termination of the Merger Agreement; Termination Fees and Expenses.”

At the effective time of the Merger, each issued and outstanding share of common stock, $0.10 par value per share, of Aerojet Rocketdyne (our “common stock”) will automatically be canceled and will cease to exist and will be converted into the right to receive an amount in cash equal to (a) $56.00 minus (b) to the extent paid (or, in the event that the closing date occurs after the Pre-Closing Dividend Record Date but before the Dividend Payment Date, to the extent payable after the closing date), the $5.00 per share amount of the Pre-Closing Dividend, unless the holder of such shares properly exercises its appraisal rights, without interest, other than the following: (i) any shares of common stock held by (A) Aerojet Rocketdyne or any wholly owned subsidiary of Aerojet Rocketdyne (or held in Aerojet Rocketdyne’s treasury), including shares of common stock reserved for issuance under any of our equity and performance incentive plans or the ESPP, but not including any shares of common stock held by any of our employee plans or trusts related thereto, or (B) Lockheed Martin, Merger Sub or any other wholly owned subsidiary of Lockheed Martin, immediately prior to the effective time of the Merger (collectively, the “Cancelled Shares”), which will be automatically canceled without payment of any consideration therefor and will cease to exist; and (ii) shares of common stock, other than the Cancelled Shares, that are held by a stockholder of record who did not vote in favor of the Merger Proposal with respect to such shares and is entitled to demand and validly demands appraisal of such shares of common stock pursuant to, and complies in all respects with, Section 262 of the DGCL, as more fully described in the section of this proxy statement captioned “The Merger — Appraisal Rights.”

On December 19, 2020, the Company’s board of directors declared a one-time cash dividend of $5.00 per share of common stock. The Pre-Closing Dividend is payable on March 24, 2021 to each stockholder of record of common stock as of the close of business on March 10, 2021. Aerojet Rocketdyne’s board of directors has the authority to modify, suspend, cancel or revoke the Pre-Closing Dividend prior to the Payment Date, but has no expectation of doing so. The Merger Agreement provides that if the Merger closing date occurs after the Pre-Closing Dividend Record Date but before the Dividend Payment Date, which we do not expect to be the case, the Surviving Corporation in the Merger shall pay, and Lockheed Martin will cause the Surviving Corporation to pay, the Pre-Closing Dividend to each stockholder of record of common stock as of the Pre-Closing Dividend Record Date. If the Pre-Closing Dividend is paid or payable before the closing of the Merger, as we expect will be the case, stockholders will receive $51.00 per share of common stock in connection with the consummation of the Merger, reflecting the $56.00 per share Merger consideration price less the amount of the $5.00 per share Pre-Closing Dividend. If the Pre-Closing Dividend is not paid or payable before the closing of the Merger, stockholders will receive the $56.00 per share Merger consideration price. Payment of the Pre-Closing Dividend is not contingent upon approval or closing of the Merger.

The Aerojet Rocketdyne board of directors, with the assistance of Aerojet Rocketdyne’s management, regularly evaluates Aerojet Rocketdyne’s prospects and strategy in light of its performance, the business and economic environment, as well as developments in the aerospace and defense industries, and opportunities and challenges facing Aerojet Rocketdyne and other participants in such industries, all with a view toward maximizing stockholder value. These reviews have included, among other things, consideration of potential strategic alternatives, including the possibility of strategic acquisitions, divestitures and business combination transactions, as well as other uses of company resources, including potential recapitalization transactions and other capital deployment transactions.

Aerojet Rocketdyne has for many years served as a supplier to United Launch Alliance (“ULA”), a joint venture between Lockheed Martin and The Boeing Company (“Boeing”). ULA currently provides launch services using the Atlas and Delta launch vehicles, which both use Aerojet Rocketdyne-made rocket engines. In light of the nature of the businesses of Aerojet Rocketdyne and each of Lockheed Martin, Boeing and ULA and the commercial relationship between Aerojet Rocketdyne and each of those companies, members of Aerojet Rocketdyne management are generally familiar with those other companies’ businesses, and representatives of Aerojet Rocketdyne have periodically discussed Aerojet Rocketdyne’s commercial relationships with ULA with representatives of Lockheed Martin and Boeing.

On January 28, 2020, Gregory A. Jones, Senior Vice President, Strategy and Business Development of Aerojet Rocketdyne, contacted representatives of Boeing regarding Aerojet Rocketdyne’s potential interest in a strategic business combination involving Boeing’s Space and Launch division and/or Aerojet Rocketdyne’s acquisition of Boeing’s interest in ULA. During February and March 2020, Mr. Jones had additional discussions with representatives of Boeing concerning Aerojet Rocketdyne’s potential interest in any such potential transaction.

On March 18, 2020, Mr. Jones contacted Mr. Robert E. Mullins, Senior Vice President, Corporate Strategy and Business Development of Lockheed Martin, and Mr. Jones indicated that Aerojet Rocketdyne might have potential interest in acquiring ULA. During this call, the discussion expanded into a broader discussion about the strategic relationship between Aerojet Rocketdyne and Lockheed Martin and the possibility of a potential business combination involving the two companies. Later that day, Mr. Jones informed Warren G. Lichtenstein, Executive Chairman of Aerojet Rocketdyne, and Eileen P. Drake, Chief Executive Officer and President of Aerojet Rocketdyne, about this discussion with Lockheed Martin.

During April 2020, Mr. Jones had several discussions with Mr. Mullins and Mr. Gregory L. Psihas, Vice President, Corporate Development of Lockheed Martin, regarding the possibility of a potential business combination involving Aerojet Rocketdyne and Lockheed Martin.

In April 2020, members of Aerojet Rocketdyne management began to have discussions with representatives of Citi regarding Aerojet Rocketdyne’s potential retention of Citi as a financial advisor to Aerojet Rocketdyne and the Aerojet Rocketdyne board of directors to assist in analyzing an array of potential business and financial

matters, including a possible strategic transaction involving Aerojet Rocketdyne and other strategic alternatives. Thereafter members of Aerojet Rocketdyne management and representatives of Citi engaged in a number of discussions regarding various business and financial matters.

On April 14, 2020, Boeing informed Aerojet Rocketdyne that no decision had been made or was expected to be made in the foreseeable future to either divest their 50% equity ownership interest in ULA or pursue a possible strategic combination involving Aerojet Rocketdyne, given Boeing senior leadership’s increasing attention being devoted towards the impact of COVID-19.

On May 4, 2020, Mr. Jones and Mr. Psihas had a telephone call during which Mr. Psihas confirmed Lockheed Martin’s interest in continuing preliminary discussions with Aerojet Rocketdyne concerning a potential business combination transaction and the timing for potential next steps in the process, including the execution of an appropriate confidentiality agreement between Aerojet Rocketdyne and Lockheed Martin and a potential management presentation by Aerojet Rocketdyne with respect to its business and operations. Later that day, Mr. Jones provided Mr. Psihas with a draft confidentiality agreement prepared by Arjun L. Kampani, Senior Vice President, General Counsel and Secretary of Aerojet Rocketdyne.

On May 6, 2020, as part of a regularly-scheduled meeting of the Aerojet Rocketdyne board of directors, Mr. Jones provided a summary to the Aerojet Rocketdyne board of directors of his various discussions with Lockheed Martin and Boeing, and noted that Aerojet Rocketdyne and Lockheed Martin agreed that a confidentiality agreement would be appropriate in order to facilitate further discussions with Lockheed Martin.

On May 19, 2020, Aerojet Rocketdyne and Lockheed Martin entered into a confidentiality agreement (the “Confidentiality Agreement”) that included, among other things, customary confidentiality provisions and a 15-month standstill provision prohibiting Lockheed Martin from engaging in certain types of actions, including making any acquisition proposal with respect to Aerojet Rocketdyne (subject to certain exceptions), except that the Confidentiality Agreement did not restrict Lockheed Martin from initiating and engaging in private discussions with, and submitting certain confidential proposals to, the Aerojet Rocketdyne board of directors. The Confidentiality Agreement also provided that the standstill provisions would terminate and be of no further effect upon the occurrence of certain fundamental change events.

On May 20, 2020, certain members of management of Aerojet Rocketdyne (including Ms. Drake, Mr. Jones, Paul R. Lundstrom, Aerojet Rocketdyne’s then-current Chief Financial Officer, Mr. Kampani, and Mark Tucker, Aerojet Rocketdyne’s then-current Senior Executive and former Chief Operating Officer) and representatives of Citi participated in a conference call with certain members of Lockheed Martin’s management team (including Mr. Psihas), various representatives from Lockheed Martin’s financial advisors, Goldman Sachs & Co. LLC (“Goldman Sachs”) and Ardea Partners LP (“Ardea”), and representatives of Hogan Lovells US LLP (“Hogan Lovells”), legal advisor to Lockheed Martin. During this meeting, Aerojet Rocketdyne’s management provided a presentation on Aerojet Rocketdyne, which included an introduction to Aerojet Rocketdyne’s executive management team, a review of Aerojet Rocketdyne’s business, strategy and operations and a review of Aerojet Rocketdyne’s Management Presentation Forecast (as defined in the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” beginning on page 73), which was Aerojet Rocketdyne’s then-current 10-year financial forecast and which was subsequently updated and superseded by a new forecast in the latter half of September 2020. See the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” for a summary of this Management Presentation Forecast as well as other later forecasts.

Over the course of the next few weeks, continuing into June 2020, Aerojet Rocketdyne management and Citi provided additional information, through written responses to questions and during conference calls, to Lockheed Martin and its representatives, including Goldman Sachs, Ardea and Hogan Lovells. In connection with that process, representatives of Citi had multiple discussions with representatives of Goldman Sachs and Ardea.

In June 2020, Mr. Lichtenstein had a discussion with representatives of Evercore regarding Aerojet Rocketdyne’s potential retention of Evercore as an additional financial advisor to Aerojet Rocketdyne and the Aerojet Rocketdyne board of directors to assist in analyzing an array of potential business and financial matters, including potential recapitalization transactions and other strategic alternatives. Thereafter and continuing into July 2020, Mr. Lichtenstein and representatives of Evercore had various discussions regarding various business and financial matters. Other members of Aerojet Rocketdyne management also began to have preliminary discussions with representatives of Evercore in late July 2020 regarding business and financial matters.

During the week of July 6, 2020, Ms. Drake had a telephone call with Frank A. St. John, Chief Operating Officer of Lockheed Martin, to follow up on prior discussions and to inquire whether Lockheed Martin intended to submit a transaction proposal to Aerojet Rocketdyne regarding a business combination transaction.

On July 14, 2020, Mr. St. John and Mr. Psihas provided Ms. Drake, Mr. Jones and Mr. Lundstrom a presentation regarding Lockheed Martin’s views regarding the strategic rationale, strategic fit and valuation of a potential business combination transaction between Aerojet Rocketdyne and Lockheed Martin, and a preview of Lockheed Martin’s preliminary merger proposal. The presentation described Lockheed Martin’s view that Aerojet Rocketdyne’s revenues would grow at a substantially lower rate than was included in Aerojet Rocketdyne’s 10-year revenue projections included in the Management Presentation Forecast. The presentation also indicated that while the loss of Aerojet Rocketdyne profits on certain sales to Lockheed Martin as a result of government procurement laws would have a negative impact on the value of the combined entity, Lockheed Martin had been able to identify significant cost and revenue synergy opportunities, which could potentially offset the profit loss. During this presentation, the Lockheed Martin management team indicated that Lockheed Martin would be submitting to Aerojet Rocketdyne an indication of interest letter for an all-cash merger transaction at $47.50 per share.

Following the presentation, Mr. Jones called Mr. Psihas and indicated that Aerojet Rocketdyne was extremely disappointed in Lockheed Martin’s $47.50 price per share offer and was not prepared to present it to the Aerojet Rocketdyne board of directors, as Aerojet Rocketdyne management believed that the offer was opportunistic based on the recent stock market downturn and significantly undervalued Aerojet Rocketdyne in light of Aerojet Rocketdyne’s business, prospects and position in the aerospace and defense industry. During this discussion, Mr. Psihas indicated to Mr. Jones that the indication of interest letter had already been sent.

The indication of interest letter from James D. Taiclet, President and Chief Executive Officer of Lockheed Martin, that was delivered to Ms. Drake set forth a preliminary, non-binding proposal for the acquisition of Aerojet Rocketdyne in an all-cash merger transaction at a price of $47.50 per share. The letter identified key elements of context for Lockheed Martin’s diligence review and valuation framework with respect to a potential acquisition of Aerojet Rocketdyne. Among other things, Lockheed Martin reiterated the negative financial implications of the loss of Aerojet Rocketdyne profits on sales to Lockheed Martin as a result of government procurement laws and its expectation that there would be both cost and growth synergies available to Lockheed Martin to offset this economic reality. Lockheed Martin also noted that there was long-term uncertainty in the Space Launch System (“SLS”) program of the National Aeronautics and Space Administration (“NASA”) as well as uncertainty regarding the number of hypersonics programs that ultimately would be funded through production. Aerojet Rocketdyne did not formally respond in writing to the letter. Aerojet Rocketdyne management consulted with representatives of Citi in connection with these matters.

In mid-July 2020, Aerojet Rocketdyne and its management team began to analyze and focus on one or more potential capital deployment transactions as alternatives to a strategic business combination transaction with Lockheed Martin or any other company.

Between July 14 and August 4, 2020, Aerojet Rocketdyne management and Citi engaged in discussions with Lockheed Martin management and Lockheed Martin’s financial advisors regarding Lockheed Martin’s proposal and the significant gap between the respective valuations of Aerojet Rocketdyne by Aerojet Rocketdyne and Lockheed Martin. During these discussions, Aerojet Rocketdyne management and Citi provided additional information concerning Aerojet Rocketdyne’s business and prospects.

On August 4, 2020, Mr. St. John and Mr. Psihas provided an updated presentation to Ms. Drake and Mr. Jones, and indicated that Lockheed Martin would be delivering a revised merger proposal for an all-cash merger transaction at $52.00 per share. While Mr. St. John and Mr. Psihas noted that the increased price reflected Lockheed Martin’s better understanding of Aerojet Rocketdyne’s business and financial forecast, they also noted that the price continued to reflect uncertainty regarding the SLS program and the number of hypersonics programs that would be funded over the next 10 years. During this discussion, the Aerojet Rocketdyne management team noted to Mr. St. John and Mr. Psihas that they were again disappointed in Lockheed Martin’s $52.00 per share offer, and that they believed it was still opportunistic, inadequate and not sufficient to merit making a counterproposal or engaging in a negotiation, but they indicated a willingness to provide certain additional financial information on Aerojet Rocketdyne’s strategic plan and the Management Presentation Forecast.

After the presentation, a letter from Mr. Taiclet was delivered to Ms. Drake setting forth a revised preliminary, non-binding proposal for the acquisition of Aerojet Rocketdyne in an all-cash merger transaction at a price of $52.00 per share. Except for the proposed price per share, this August 4, 2020 letter was otherwise substantially similar to Mr. Taiclet’s July 14, 2020 letter. Aerojet Rocketdyne management consulted with representatives of Citi concerning the terms of this revised proposal.

On August 5, 2020, at a regularly-scheduled meeting of the Aerojet Rocketdyne board of directors, Mr. Jones presented to the Aerojet Rocketdyne board of directors information regarding the indication of interest letter that Aerojet Rocketdyne had received from Lockheed Martin on July 14, 2020 proposing an all-cash merger transaction at $47.50 per share, the subsequent discussions that Aerojet Rocketdyne management and Citi had with Lockheed Martin and its advisors during the past several weeks regarding the significant gap in Aerojet Rocketdyne’s and Lockheed Martin’s respective valuations of Aerojet Rocketdyne, the revised indication of interest letter Aerojet Rocketdyne received from Lockheed Martin on August 4, 2020 proposing an all-cash merger transaction at $52.00 per share and Aerojet Rocketdyne management’s views that Lockheed Martin’s latest offer was still inadequate. Mr. Jones also presented to the Aerojet Rocketdyne board of directors information about various Aerojet Rocketdyne strategic alternatives, including Aerojet Rocketdyne’s organic growth plan, potential inorganic growth opportunities through acquisitions, and the likelihood that various potential merger and acquisition targets might be available to Aerojet Rocketdyne. Aerojet Rocketdyne management also reviewed with the Aerojet Rocketdyne board of directors management’s assessment of Lockheed Martin in comparison to other companies potentially interested in a business combination with Aerojet Rocketdyne and management’s view that Lockheed Martin represented the best fit for Aerojet Rocketdyne from a business, synergy and timing perspective. Management reviewed with the Aerojet Rocketdyne board of directors management’s views that (1) Company A, while potentially a good fit, had timing restrictions, (2) Company B, while potentially a good fit, had timing issues due to various business challenges and had other priorities, (3) Company C, while a moderate fit, was focused on other business areas and had low synergy potential, (4) Company D had some product overlap and unclear interest in the defense business, and (5) Company E had timing issues due to various business challenges and had low synergy potential. After discussion, the Aerojet Rocketdyne board of directors confirmed that the $52.00 per share price offer from Lockheed Martin was inadequate and not sufficient to merit making a counterproposal or engaging in a negotiation with Lockheed Martin, and the Aerojet Rocketdyne board of directors instructed management to proceed with Aerojet Rocketdyne’s organic growth plan while continuing to seek out and assess opportunities under its inorganic acquisition growth plan and consider the timing of potentially approaching any other parties that might have potential interest in a strategic transaction involving Aerojet Rocketdyne. Management noted that it would reassess any revised indication of interest that Lockheed Martin might submit in the future, at a higher price per share, and report on its analysis of any such revised indication of interest.

On August 7, 2020, Mr. Jones again communicated to Mr. Psihas that Lockheed Martin’s $52.00 per share offer was inadequate and not sufficient to merit making a counterproposal or engaging in a negotiation. Aerojet Rocketdyne did not otherwise respond to this letter, but Mr. Jones indicated to Mr. Psihas in the conversation that Aerojet Rocketdyne believed that a price of at least $60.00 per share was justified. Aerojet Rocketdyne management then continued to focus on Aerojet Rocketdyne’s organic growth plan, potential capital deployment transactions and other alternatives to a strategic business combination transaction.

Over the next couple of weeks, members of the Aerojet Rocketdyne senior management team, representatives of Citi and representatives of Lockheed Martin and its financial advisors engaged in discussions regarding Lockheed Martin’s revised proposal from August 4, 2020 and the remaining significant gap between the respective valuations of Aerojet Rocketdyne by Aerojet Rocketdyne and Lockheed Martin. Mr. Jones also provided further information about Aerojet Rocketdyne’s business and prospects to Mr. Psihas.

On August 14, 2020, Ms. Drake and Mr. Jones had a telephone call with Mr. St. John and Mr. Psihas, and Mr. St. John and Mr. Psihas presented Lockheed Martin’s views on various matters relating to a potential business combination transaction involving Aerojet Rocketdyne and Lockheed Martin.

Between August 14, 2020 and August 17, 2020, members of Aerojet Rocketdyne management met with representatives of Citi and two other financial advisors to conduct an assessment of the market, and Aerojet Rocketdyne management received feedback from representatives of Citi and the other two financial advisors

regarding the likelihood that certain potential strategic buyers of Aerojet Rocketdyne would be interested in a strategic transaction with Aerojet Rocketdyne. During this time, Mr. Lichtenstein also had conversations with senior executives at Company A, Company C and Company D regarding Aerojet Rocketdyne’s business and prospects.

On August 18, 2020, the Aerojet Rocketdyne board of directors increased its size from seven to eight members and appointed Audrey A. McNiff as a director.

On August 27, 2020, Ms. Drake, Mr. Jones, Mr. Kampani, Tyler Evans, Senior Vice President, Defense Business Unit, James Maser, Senior Vice President, Space Business Unit, and other members of Aerojet Rocketdyne senior management had a discussion with and provided additional information to Mr. St. John, Mr. Psihas and other members of Lockheed Martin’s management team concerning Aerojet Rocketdyne’s business, including its hypersonics and space exploration-related businesses. Aerojet Rocketdyne management also described additional emerging business opportunities that could potentially add, over a 10-year period, $500 million more revenue, and associated profit and cash flow, to the Management Presentation Forecast that was previously provided in May 2020. These additional opportunities were subsequently incorporated into the Aerojet Rocketdyne management’s Base Case Forecast (as defined in the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” beginning on page 73) for Aerojet Rocketdyne’s business for the years 2020 through 2029, which was provided to Lockheed Martin on September 18, 2020.

On August 31, 2020, Mr. Lichtenstein, Ms. Drake and other members of Aerojet Rocketdyne senior management had a telephone call with Kenneth R. Possenriede, Chief Financial Officer of Lockheed Martin, Mr. St. John and Mr. Psihas, during which Mr. Lichtenstein indicated that Lockheed Martin’s latest $52.00 per share price proposal was not sufficient and expressed a view that Aerojet Rocketdyne could be reasonably valued at a price of at least $60.00 per share based on Aerojet Rocketdyne management’s then-current view of the Management Presentation Forecast as discussed during the August 27 discussion. During this conversation, Mr. Lichtenstein and members of Aerojet Rocketdyne’s senior management provided further insights into Aerojet Rocketdyne’s business and prospects and their views about the inadequacy of the price offered pursuant to Lockheed Martin’s two prior indication of interest letters. During the call, Mr. Psihas indicated that Lockheed Martin continued to have a differing view of Aerojet Rocketdyne’s 10-year revenue projections in the Management Presentation Forecast.

During September and the first half of October 2020, Aerojet Rocketdyne management continued to evaluate, consider and, in one case, implement various alternatives to a strategic business combination transaction. Aerojet Rocketdyne management was focused on the effective utilization of the substantial amount of cash on its balance sheet, and therefore gave careful consideration to potential deployment of cash for alternative strategies, including the deployment of capital for a special dividend, redemptions and repurchases of Aerojet Rocketdyne’s outstanding convertible notes, a tender offer for shares of Aerojet Rocketdyne common stock and repurchases of shares of Aerojet Rocketdyne common stock pursuant to a share repurchase program that had been approved by the Aerojet Rocketdyne board of directors in March 2020, as well as the possibility of potential acquisitions by Aerojet Rocketdyne of other businesses. From time to time during this period, Aerojet Rocketdyne sought advice from outside advisors regarding these strategic actions, including financial advice from two financial advisory firms and legal advice from its outside securities counsel, Gibson, Dunn & Crutcher LLP (“Gibson Dunn”) and Morrison & Foerster LLP (“Morrison & Foerster”), and its outside mergers and acquisitions and governance counsel, Jenner & Block LLP (“Jenner & Block”).

Between September 2 and September 14, 2020, Ms. Drake had several telephone calls with Mr. St. John, during which they discussed the parties’ respective positions on valuation and other issues relating to the terms and conditions of any potential transaction. On one of these calls on September 14, 2020, Mr. St. John informed Ms. Drake that the upper range of Lockheed Martin’s assessment would not reach $60.00 per share. Ms. Drake reiterated the difference of views the two companies had on valuation. She indicated that she had no authority to negotiate below $60.00 per share. She further indicated that, if there were a compelling offer, she would take it to the Aerojet Rocketdyne board of directors for consideration. Mr. St. John indicated that he would discuss the matter further with the Lockheed Martin board of directors later that month.

In addition, on September 4, 2020, Mr. Jones had a conversation with a senior executive from Company A regarding a potential business combination transaction, as a follow-up to the conversation that Mr. Lichtenstein had with Company A in mid-August 2020. Mr. Jones was informed by that senior executive that Company A was not in a position to pursue a potential business combination involving Aerojet Rocketdyne at this time.

On September 9, 2020, Citi and Lockheed Martin’s financial advisors from Goldman Sachs and Ardea had a call to discuss their respective approaches to the calculation of transaction multiples for a potential business combination transaction involving Aerojet Rocketdyne and Lockheed Martin and other comparable transactions.

On September 18, 2020, Mr. Jones delivered an updated set of Aerojet Rocketdyne financial projections to Mr. Psihas. These updated financial projections consisted of Aerojet Rocketdyne management’s Base Case Forecast (as defined in the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” beginning on page 73) for Aerojet Rocketdyne’s business for the years 2020 through 2029, which was based upon and reflected, among other things, an assumption that the NASA SLS manifest would ramp up from one launch per year to two launches per year beginning in 2028. See the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” beginning on page 73 for more information about these projections. The Base Case Forecast was an update of Aerojet Rocketdyne’s 10-year Management Presentation Forecast, with the addition of $500 million more revenue, and associated profit and cash flow, over the 10-year period from the emerging opportunities that were discussed between Aerojet Rocketdyne and Lockheed Martin on August 27, 2020. Shortly thereafter, Mr. Jones had a telephone discussion with Mr. Psihas during which Mr. Jones reviewed the Base Case Forecast in further detail. At the direction of Aerojet Rocketdyne management, Citi also delivered a copy of the Base Case Forecast to Goldman Sachs and Ardea.

On September 30, 2020, Ms. Drake and Mr. Jones had a telephone call with Mr. St. John and Mr. Psihas, during which Mr. St. John communicated a revised indication of interest from Lockheed Martin proposing an acquisition of Aerojet Rocketdyne in an all-cash merger transaction at a price of $56.00 per share, with the same non-price terms and conditions as had been communicated in Lockheed Martin’s August 4 letter. Mr. St. John also noted that there would be no financing contingency and that the proposal had the full support of the Lockheed Martin board of directors.

From October 2020 through December 2020, various members of the Aerojet Rocketdyne board of directors had various meetings and calls from time to time with Aerojet Rocketdyne’s senior management and, at times, representatives of Citi, representatives of Evercore, representatives of Jenner & Block and/or representatives of Gibson Dunn. A range of strategic and other matters were discussed from time to time with various members of the Aerojet Rocketdyne board of directors including valuation matters, assessments of strategic alternatives to a business combination transaction involving Lockheed Martin, Aerojet Rocketdyne’s standalone business plan and strategy, the terms and conditions of a potential transaction involving Lockheed Martin, regulatory matters, and fiduciary considerations.

On October 2, 2020, Ms. Drake and Mr. St. John had another telephone call to discuss the parties’ respective positions on valuation and other issues relating to the terms and conditions of any potential transaction involving the two companies.

On October 8, 2020, the Aerojet Rocketdyne board of directors met. All Aerojet Rocketdyne directors and certain members of Aerojet Rocketdyne’s senior management attended the meeting. Ms. Drake and Mr. Jones updated the Aerojet Rocketdyne board of directors regarding the further indication of interest communicated by Lockheed Martin to Ms. Drake on September 30 for an all-cash merger transaction at a price of $56.00 per share. In describing the further indication of interest, Ms. Drake and Mr. Jones noted that while the $56.00 per share price offered had been authorized by the Lockheed Martin board of directors, they believed that it may not represent Lockheed Martin’s best and final offer, thus potentially leaving room for further negotiation of price. Ms. Drake and Mr. Jones then provided a detailed review of Lockheed Martin’s proposed terms and recapped for the Aerojet Rocketdyne board of directors the timeline of Aerojet Rocketdyne’s discussions with Lockheed Martin to date. In connection with this meeting, the Aerojet Rocketdyne board of directors was provided with (1) the Base Case Forecast and (2) a more conservative set of financial projections consisting of Aerojet Rocketdyne management’s Adjusted Base Case Forecast (as defined in the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” beginning on page 73) for Aerojet Rocketdyne’s business for the years 2020 through 2029 (which was based upon and reflected an assumption that the NASA

SLS manifest would remain at about one launch per year). See the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” beginning on page 73 for more information about the Base Case Forecast and the Adjusted Base Case Forecast.

At this meeting, Ms. Drake and Mr. Jones then presented to the Aerojet Rocketdyne board of directors an overview of the anticipated strategic opportunities and benefits from a potential combination with Lockheed Martin, along with, among other things, an analysis of (1) Aerojet Rocketdyne’s 10-year Base Case Forecast and Adjusted Base Case Forecast, (2) valuation matters and (3) potential Lockheed Martin and Aerojet Rocketdyne synergy opportunities. Aerojet Rocketdyne management also noted to the Aerojet Rocketdyne board of directors management’s view about increasing uncertainty related to NASA’s SLS launch manifest and human space exploration program. Aerojet Rocketdyne management also presented a preliminary downside risk-based sensitivity analysis relating to the Adjusted Base Case Forecast, which downside analysis assumed that NASA’s schedule for landing a human presence on the moon could potentially be delayed and that space exploration-related new business might not be funded or won at the same rate assumed in the Adjusted Base Case Forecast.

Aerojet Rocketdyne management then presented to the Aerojet Rocketdyne board of directors information about various potential strategic combination alternatives, including Aerojet Rocketdyne management’s assessment of Lockheed Martin in comparison to other companies that might potentially be interested in a business combination with Aerojet Rocketdyne and management’s view that Lockheed Martin continued to represent the best fit for Aerojet Rocketdyne from a business, synergy and timing perspective. Management reviewed with the Aerojet Rocketdyne board of directors management’s views that (1) Company A, while potentially a good fit, had timing restrictions and had communicated that it was not in a position to pursue a transaction, (2) Company B, while potentially a good fit, had timing issues due to various business challenges and had other priorities, (3) Company C, while a moderate fit, was focused on other business areas and had low synergy potential, (4) Company D had some product overlap and no interest in the defense business, and (5) Company E had timing issues due to various business challenges and had low synergy potential.

At this same meeting, Daniel L. Boehle, who had been appointed Chief Financial Officer of Aerojet Rocketdyne in August following Mr. Lundstrom’s departure, then presented to the Aerojet Rocketdyne board of directors multiple potential recapitalization and capital deployment alternatives Aerojet Rocketdyne could consider in lieu of a strategic business combination transaction with Lockheed Martin or another company, including the redemption of Aerojet Rocketdyne’s currently outstanding convertible notes and share repurchases. In connection with this discussion, Mr. Boehle presented information on the status of Aerojet Rocketdyne’s share repurchase program, an overview of the terms of Aerojet Rocketdyne’s outstanding convertible notes and a number of potential refinancing alternatives for the notes, including a full or partial redemption of the notes using Aerojet Rocketdyne’s cash on hand, a redemption of the notes using the proceeds of a new convertible note offering, term loan, high yield bond or other debt issuance, or a privately-negotiated repurchase of a portion of the notes from various holders, and presented an overview of the pros and cons of these various potential alternatives. Management then presented various valuation models for various potential recapitalization scenarios, including a potential future sale of Aerojet Rocketdyne following a recapitalization. Mr. Kampani provided to the Aerojet Rocketdyne board of directors a summary of their fiduciary duties in connection with its consideration of these matters. Throughout these presentations the Aerojet Rocketdyne board of directors asked questions and discussed the issues. After further discussion, the Aerojet Rocketdyne board of directors directed that Aerojet Rocketdyne management provide further information about the assumptions and uncertainty underlying the Base Case Forecast and the Adjusted Base Case Forecast, a review of various strategic transactions Aerojet Rocketdyne could potentially consider and a review of potential recapitalization and other capital deployment alternatives that Aerojet Rocketdyne could consider in lieu of a strategic transaction.

On October 13, 2020, the Aerojet Rocketdyne board of directors met again to, among other things, receive an update from Aerojet Rocketdyne management about the matters requested at its October 8, 2020 meeting. All Aerojet Rocketdyne directors and certain members of Aerojet Rocketdyne’s senior management attended the meeting. Mr. Jones discussed with the Aerojet Rocketdyne board of directors further information about the modeling assumptions underlying Aerojet Rocketdyne’s 10-year Adjusted Base Case Forecast and an Aerojet Rocketdyne management valuation model based on the Adjusted Base Case Forecast, each as previously presented to the Aerojet Rocketdyne board of directors at its October 8, 2020 meeting. Aerojet Rocketdyne management then presented in further detail its views regarding various growing risk factors and other

uncertainties present even in Aerojet Rocketdyne’s 10-year Adjusted Base Case Forecast, particularly the current human space exploration budgetary environment, management’s view of the increasing uncertainty related to NASA’s SLS launch manifest, potential future competition and uncertainties associated with a potential new Presidential administration. Management then provided additional information about the outlook for Aerojet Rocketdyne’s Defense Business Unit. Mr. Jones then discussed with the Aerojet Rocketdyne board of directors an assessment of a possible sale of Aerojet Rocketdyne’s Space Business Unit and Defense Business Unit operations in separate transactions. Ms. Drake and Mr. Jones then discussed Aerojet Rocketdyne’s proposed formal engagement of Citi and Evercore as financial advisors, the advisors’ relevant experience and Aerojet Rocketdyne’s proposed approach for the structuring of their respective fees and other terms and conditions of their engagements.

At this meeting, management then reviewed (1) the views of representatives of Citi and Evercore regarding the likelihood that certain other companies would have interest in a strategic transaction involving Aerojet Rocketdyne, (2) Mr. Lichtenstein’s preliminary conversations earlier in the year with senior executives at Company A (who subsequently communicated that it was not in a position to pursue a transaction), Company C and Company D regarding Aerojet Rocketdyne’s business and prospects and (3) the potential of performing a more explicit market test (and related risks of leaks and any potential impact on the ongoing discussions with Lockheed Martin). Management also reviewed a summary of the material potential transaction terms and conditions proposed by Lockheed Martin and Aerojet Rocketdyne’s contemplated positions with respect to those terms and conditions, based on further assessment of the risks and uncertainties associated with Aerojet Rocketdyne’s forecasts in view of changing circumstances. Mr. Kampani then reviewed a preliminary regulatory assessment of a potential transaction with Lockheed Martin, and management discussed with the Aerojet Rocketdyne board of directors potential negotiation strategies for engaging with Lockheed Martin, with a view towards achieving an offer of a higher price per share.

At this meeting, Aerojet Rocketdyne management then further reviewed various business, financial and legal considerations relating to potential recapitalization transactions and other capital deployment alternatives that Aerojet Rocketdyne could consider pursuing in lieu of a strategic business combination. Management’s review addressed, among other things, various mechanisms and legal requirements relating to a redemption of Aerojet Rocketdyne’s outstanding convertible notes, various legal requirements and other considerations relating to privately-negotiated repurchases of the notes, mechanisms and legal requirements relating to a tender offer for Aerojet Rocketdyne shares, and considerations relating to the Aerojet Rocketdyne share repurchase program and other share repurchases. Management also discussed valuation, timing and other risks, uncertainties and considerations relating to any decision to defer a potential business combination transaction (including a potential transaction with Lockheed Martin) until after the completion of a recapitalization transaction, and various other disclosure and other legal considerations relating to a potential recapitalization transaction. Mr. Kampani reminded the Aerojet Rocketdyne board of directors of its fiduciary obligations in connection with consideration of the matters discussed at this meeting and reviewed various fiduciary considerations.

It was at this meeting that the Aerojet Rocketdyne board of directors confirmed, based on its assessment of the relative risks and uncertainties associated with its business (particularly management’s view of increasing uncertainty related to NASA’s SLS launch manifest and potential shifting priorities in space exploration under a potential new Presidential administration) and available alternative capital deployment and other strategies, that Aerojet Rocketdyne should shift its focus to pursue in earnest a transaction involving Lockheed Martin, but at a higher price than currently offered at that time by Lockheed Martin. The Aerojet Rocketdyne board of directors also determined that it would be useful to have the benefit of multiple advisory perspectives, including in respect of valuation matters, the market generally and other companies potentially interested in a business combination transaction involving Aerojet Rocketdyne. Throughout these presentations the Aerojet Rocketdyne board of directors asked questions and discussed the issues. After discussion, the Aerojet Rocketdyne board of directors then directed that management (1) review further with the assistance of outside advisors any financial and legal considerations regarding a potential near-term recapitalization or other capital deployment transaction, (2) pursue in earnest the possibility of a transaction with Lockheed Martin and begin negotiations to seek a higher price than Lockheed Martin’s September 30 indication of interest, based on Aerojet Rocketdyne’s then-current belief that $56.00 per share may not represent the best and final offer from Lockheed Martin, and (3) finalize the terms

of Aerojet Rocketdyne’s formal engagement of each of Citi and Evercore as financial advisors and have those advisors review with the Aerojet Rocketdyne board of directors their respective preliminary financial analyses of Aerojet Rocketdyne and potential strategic alternatives to a potential business combination with Lockheed Martin.

On October 14, 2020, Mr. Kampani conferred with Aerojet Rocketdyne’s outside securities counsel at Gibson Dunn and Morrison & Foerster regarding legal considerations pertaining to recapitalization and other transactions, as well as other matters. Management of Aerojet Rocketdyne also consulted with Aerojet Rocketdyne’s financial advisors regarding financial considerations relating to recapitalization and other transactions that Aerojet Rocketdyne might consider.

On October 15, 2020, Mr. St. John contacted Ms. Drake to inform her that the Lockheed Martin board of directors would be meeting on October 23, 2020, and that the Lockheed Martin board of directors would want Lockheed Martin to either begin confirmatory due diligence on Aerojet Rocketdyne or move on to other strategic initiatives.

On October 17, 2020 and October 19, 2020, Aerojet Rocketdyne entered into engagement letter agreements with Citi and Evercore, respectively.

On October 18, 2020, Mr. St. John contacted Ms. Drake to reiterate that Lockheed Martin’s latest offer of $56.00 per share was at the top end of its valuation.

On October 19, 2020, the Aerojet Rocketdyne board of directors met again. All Aerojet Rocketdyne directors and certain members of Aerojet Rocketdyne’s senior management attended the meeting, and representatives of Citi and Evercore attended portions of the meeting. Mr. Lichtenstein commented on Aerojet Rocketdyne’s transaction review process and provided an update regarding the engagement of Citi and Evercore as financial advisors. Representatives of Citi and Evercore then reviewed their respective preliminary financial analyses of Aerojet Rocketdyne, as well as their views on other potential buyers of Aerojet Rocketdyne. A discussion then ensued among the Aerojet Rocketdyne board of directors, Aerojet Rocketdyne’s senior management and the financial advisors regarding the analyses presented, and strategic considerations in terms of next steps in the transaction process and further discussions with Lockheed Martin regarding a potential transaction. Management of Aerojet Rocketdyne also reviewed with the Aerojet Rocketdyne board of directors management’s plan to commence negotiations with Lockheed Martin on price and submit a non-binding counterproposal for a $60.00 per share transaction that would involve (1) Lockheed Martin’s issuance of $55.00 per share of Lockheed Martin stock at closing (subject to a 10% collar) in exchange for each share of Aerojet Rocketdyne common stock and (2) Aerojet Rocketdyne’s payment of a $5.00 per share cash dividend shortly after public announcement of the transaction, subject to further discussion amongst both parties’ advisors concerning the allocation of regulatory approval risk and other key transaction terms. The dividend was intended to accelerate the delivery of cash to Aerojet Rocketdyne stockholders prior to a transaction closing. The Aerojet Rocketdyne board of directors authorized management to submit the proposed non-binding counterproposal to Lockheed Martin. At the meeting, the Aerojet Rocketdyne board of directors also approved and ratified the engagement of Citi and Evercore. Prior to approving and ratifying those engagements, the Aerojet Rocketdyne board of directors considered the written disclosures from Citi and Evercore, respectively, regarding their respective material relationships with Lockheed Martin.

On October 20, 2020, Ms. Drake spoke with Mr. St. John via telephone and communicated Aerojet Rocketdyne’s non-binding counterproposal that had been approved by the Aerojet Rocketdyne board of directors the previous day as detailed in the prior paragraph. Ms. Drake followed up with a letter that same day to Mr. St. John that further described the terms and conditions of Aerojet Rocketdyne’s non-binding counterproposal. The letter also noted that at this price, Aerojet Rocketdyne would consider a break-up fee at the higher end of the customary range. The letter further indicated that Aerojet Rocketdyne sought Lockheed Martin stock as consideration because it believed in the prospects for success of the combined businesses and because equity, rather than cash, consideration would provide a tax advantage for Aerojet Rocketdyne’s stockholders. Finally, the letter noted that an appropriate efforts provision and appropriate remedial commitments from Lockheed Martin related to regulatory review would need to be included in the merger agreement and that a customary “fiduciary out” provision would also need to be included in the merger agreement.

On October 21, 2020, Mr. St. John contacted Ms. Drake to inform her that Lockheed Martin had reviewed her letter and that the counterproposal was not acceptable, including the contemplation of stock as a form of consideration. Mr. St. John also reiterated that Lockheed Martin would not agree to a $60.00 per share price and that the only path to continue discussions would be if the Aerojet Rocketdyne board of directors could support a transaction at a price below $60.00 per share.

Later that day on October 21, 2020, Ms. Drake spoke by telephone with Mr. St. John, who again relayed Lockheed Martin’s disappointment that Aerojet Rocketdyne had not reduced its required price below $60.00 per share. Ms. Drake asked Mr. St. John to take the Aerojet Rocketdyne counterproposal to the Lockheed Martin board of directors, and Mr. St. John indicated that if Aerojet Rocketdyne was not willing to make any price movement he would communicate to the Lockheed Martin board of directors that discussions may come to an end.

On October 22, 2020, the Aerojet Rocketdyne board of directors met and was provided an update on the current state of Aerojet Rocketdyne’s discussions with Lockheed Martin. All Aerojet Rocketdyne directors and certain members of Aerojet Rocketdyne’s senior management attended the meeting, and representatives of Citi and Evercore attended a portion of the meeting. Ms. Drake provided details on her latest discussions with Lockheed Martin, including Lockheed Martin’s rejection of Aerojet Rocketdyne’s October 20 counterproposal, and the Aerojet Rocketdyne board of directors discussed whether to continue to pursue negotiations with Lockheed Martin or consider other initiatives. Representatives of Citi and Evercore then discussed their views on potential next steps in the transaction process and further discussions with Lockheed Martin and other transaction-related considerations.

On October 24, 2020, the Aerojet Rocketdyne board of directors met again. All Aerojet Rocketdyne directors and certain members of Aerojet Rocketdyne’s senior management attended the meeting, and representatives of Citi, Evercore and Jenner & Block attended portions of the meeting. Management discussed with the Aerojet Rocketdyne board of directors various transaction structuring and related considerations, including appropriate remedial commitments from Lockheed Martin pertaining to regulatory matters that could be included in a merger agreement. Mr. Kampani provided to the Aerojet Rocketdyne board of directors a summary of their fiduciary duties, and representatives of Jenner & Block further commented on the directors’ fiduciary obligations in the context of their consideration of any potential transactions. Representatives of Jenner & Block also commented on transaction structuring matters and deal terms considerations. After further discussion, the Aerojet Rocketdyne board of directors unanimously authorized management to submit to Lockheed Martin a non-binding counterproposal for a $58.00 per share (50% cash and 50% stock) transaction containing the following terms: (1) allowance for Aerojet Rocketdyne to issue up to a $5.00 cash dividend (which would reduce the purchase price on a dollar-for-dollar basis by the amount of the dividend); (2) a ticking fee of $0.25 per share per month if regulatory approval would exceed six months from signing; and (3) the stock consideration portion of the purchase price would be subject to a +/- 10% collar (with a floating exchange ratio within the collar and fixed exchange ratio outside the collar).

On October 26, 2020, Ms. Drake delivered a letter to Mr. St. John communicating Aerojet Rocketdyne’s revised non-binding counterproposal that had been approved by the Aerojet Rocketdyne board of directors on October 24, including the financial terms as outlined in the prior paragraph. The letter also communicated information relating to the capitalization of Aerojet Rocketdyne.

On October 26, 2020, Ms. Drake and Mr. St. John discussed Ms. Drake’s October 26 letter to Mr. St. John. Mr. St. John stated that he was unable to commit to accepting a price of $58.00 per share, but he would take the proposal to the Lockheed Martin board of directors. Mr. St. John indicated that any dividend payment would need to reduce the purchase price on a dollar-for-dollar basis and that he was opposed to Lockheed Martin issuing stock as part of the merger consideration.

On October 30, 2020, Mr. Jones had a telephone call with Mr. Psihas, during which Mr. Psihas indicated that Lockheed Martin would be sending a letter to Aerojet Rocketdyne reflecting their best and final offer of $56.00 per share. Later that day on October 30, 2020, Mr. Taiclet delivered to Ms. Drake a letter setting forth an updated non-binding acquisition proposal from Lockheed Martin. The letter indicated that Lockheed Martin was not prepared to proceed based on Aerojet Rocketdyne’s most recent counterproposal, and that Lockheed Martin wished to make a final attempt to communicate the basis on which Lockheed Martin was prepared to proceed with a transaction. The letter stated that it replaced in its entirety the earlier proposals included in Lockheed

Martin’s letters dated July 14, 2020 and August 4, 2020, and superseded the views expressed by Mr. St. John in his discussions with Ms. Drake on September 30, 2020. The letter stated that Lockheed Martin’s final proposal would be an all-cash merger at a price of $56.00 per share, and that Lockheed Martin was not prepared to offer stock consideration or to include a ticking fee. It did, however, state that Lockheed Martin was prepared to include provisions giving Aerojet Rocketdyne the option of declaring a special cash dividend of up to $5.00 per share at the time a transaction would be announced, and that if such a dividend was declared, the cash consideration at the closing of the merger would be reduced on a dollar-for-dollar basis by the amount of the dividend. Similar to Lockheed Martin’s July 14 and August 4 letters, the letter also identified key elements underlying Lockheed Martin’s valuation framework with respect to a potential acquisition of Aerojet Rocketdyne, including an explanation that Lockheed Martin projected a lower growth rate for Aerojet Rocketdyne than was included in Aerojet Rocketdyne’s Base Case Forecast. The October 30, 2020 letter also outlined the remedies and restrictions to which Lockheed Martin would be willing to agree in the context of regulatory approval of such a transaction.

On November 2, 2020, Ms. Drake and Mr. Jones had a telephone call with Mr. St. John and Mr. Psihas regarding the terms of Lockheed Martin’s revised proposal and related matters.

On November 2, 2020, the Aerojet Rocketdyne board of directors met again. All Aerojet Rocketdyne directors and certain members of Aerojet Rocketdyne’s senior management attended the meeting, and representatives of Citi, Evercore and Jenner & Block attended portions of the meeting. Ms. Drake provided the Aerojet Rocketdyne board of directors an update on Mr. Lichtenstein’s and Ms. Drake’s recent discussions about desirable parameters of a potential counterproposal of $57.00 per share that Aerojet Rocketdyne could make to Lockheed Martin in response to its indication of interest for an all-cash merger transaction at $56.00 per share. Ms. Drake also provided an update on her and Mr. Jones’ recent call with Mr. St. John and Mr. Psihas. Mr. Lichtenstein then provided a further overview of discussions over the weekend among Aerojet Rocketdyne’s management, representatives of Citi and Evercore and other members of the Aerojet Rocketdyne board of directors. Management then presented an overview and analysis of Lockheed Martin’s current indication of interest at a $56.00 per share price, including a comparison of key metrics of a potential Aerojet Rocketdyne / Lockheed Martin transaction at $56.00 per share to those metrics as reflected in the 2018 Northrop Grumman / Orbital ATK transaction. Management also reviewed with the Aerojet Rocketdyne board of directors management’s views on increasing risks to and uncertainties associated with the Adjusted Base Case Forecast, with a particular focus on growing uncertainties to Aerojet Rocketdyne regarding NASA’s Space Exploration (Artemis) Program, including potential shifting priorities in space exploration under a potential new Presidential administration. Aerojet Rocketdyne management reviewed with the Aerojet Rocketdyne board of directors, among other things, (1) the fact that NASA’s Artemis-related business accounted for approximately 25% of Aerojet Rocketdyne’s annual revenues, and (2) Aerojet Rocketdyne management’s view about increasing uncertainty related to NASA’s SLS launch manifest and space exploration program and that the schedule for landing a human presence on the moon could potentially be delayed, which schedule delay could result in greater competitive pressure on Aerojet Rocketdyne from new competitive entrants into Aerojet Rocketdyne’s industry.

In connection with this meeting, the Aerojet Rocketdyne board of directors was provided with (1) another copy of Aerojet Rocketdyne’s 10-year Adjusted Base Case Forecast and (2) Aerojet Rocketdyne management’s Risk Adjusted Case Analysis (as defined in the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” beginning on page 73), which represented a downside risk-based sensitivity analysis prepared by Aerojet Rocketdyne management in respect of the Adjusted Base Case Forecast taking into account Aerojet Rocketdyne management’s evolving and expanding view that there was growing uncertainty in Aerojet Rocketdyne’s space exploration business prospects. See the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” beginning on page 73. Aerojet Rocketdyne management also reviewed with the Aerojet Rocketdyne board of directors Aerojet Rocketdyne’s 10-year Adjusted Base Case Forecast and Risk Adjusted Case Analysis and Aerojet Rocketdyne management’s view that a $56.00 per share price was at the top end of management’s valuation range based on the Risk Adjusted Case Analysis and within management’s valuation range based on the Adjusted Base Case Forecast.

Representatives of Citi and Evercore then reviewed their respective preliminary financial analyses of Aerojet Rocketdyne, and a discussion ensued regarding the analyses presented, and strategy in terms of next steps with Lockheed Martin. Mr. Kampani provided the Aerojet Rocketdyne board of directors a summary of their fiduciary duties, and representatives of Jenner & Block further commented on the directors’ fiduciary obligations in the

context of a potential transaction, including by referencing prior discussions of these matters with the Aerojet Rocketdyne board of directors. A discussion of the proposed deal terms and conditions and required regulatory approvals ensued, with representatives of Jenner & Block, Citi and Evercore commenting on such matters, contemplated transaction execution timelines and other related items.

After further discussion, the Aerojet Rocketdyne board of directors unanimously approved management’s recommendation to authorize Ms. Drake to submit to Lockheed Martin a non-binding counterproposal for an all-cash transaction at a $57.00 price per share or, if such a higher price could not be achieved, a $56.00 price per share, with any discussions and negotiations for a $56.00 per share transaction to include an Aerojet Rocketdyne request for a lower break-up fee. In connection therewith, the Aerojet Rocketdyne board of directors noted its belief that, in light of its assessment of the value of Aerojet Rocketdyne, the substantial premium of each such price to Aerojet Rocketdyne’s then-current trading price and its consideration of certain risks and uncertainties associated with Aerojet Rocketdyne’s projected performance (particularly in the space exploration sector), either price would represent a significant value enhancement for Aerojet Rocketdyne stockholders and be in their best interests.

On November 3, 2020, Ms. Drake delivered a letter (dated November 2, 2020) to Mr. Taiclet communicating Aerojet Rocketdyne’s latest non-binding counterproposal for a $57.00 per share all-cash merger transaction. The letter noted that the merger agreement would need to include provisions giving Aerojet Rocketdyne the option of declaring a special cash dividend of up to $5.00 per share at the time a transaction is announced, provided that if such a dividend is declared and paid the cash consideration delivered to Aerojet Rocketdyne stockholders at closing would be reduced on a dollar-for-dollar basis by the amount of such dividend. The letter also noted that Aerojet Rocketdyne would want to include in the merger agreement appropriate efforts provisions and appropriate regulatory remedial commitments from Lockheed Martin. The letter further indicated that Lockheed Martin would have no financing contingency and that a customary “fiduciary out” provision would be included in the merger agreement.

On November 10, 2020, Ms. Drake contacted Mr. St. John by telephone to discuss the status of Lockheed Martin’s consideration of Aerojet Rocketdyne’s latest proposal. Mr. St. John indicated that the Lockheed Martin management team had engaged in numerous conversations, including with the Lockheed Martin board of directors, and that Lockheed Martin management team believed that their previous $56.00 per share offer price remained at the high end of the valuation range and that they were unable to change their valuation position. Ms. Drake reiterated the counter-offer of $57.00 per share, but Mr. St. John stated that he was directed to send Aerojet Rocketdyne a letter affirming their $56.00 per share offer.

On November 12, 2020, Ms. Drake received a letter (dated November 10, 2020) from Mr. Taiclet responding to Aerojet Rocketdyne’s November 2, 2020 counterproposal. The letter noted that Lockheed Martin was prepared to proceed with confirmatory due diligence and to negotiate a definitive merger agreement at an all-cash price of $56.00 on the terms set forth in that letter. The letter also stated that Lockheed Martin’s price was firm and that it believed its proposal reflected appropriately the risk to and uncertainty associated with Aerojet Rocketdyne’s Base Case Forecast. On that same date, Ms. Drake communicated to Mr. St. John that the Aerojet Rocketdyne board of directors would be meeting the next day.

On November 13, 2020, the Aerojet Rocketdyne board of directors held a meeting. All Aerojet Rocketdyne directors and certain members of Aerojet Rocketdyne’s senior management attended the meeting. Ms. Drake reviewed her recent discussions with Mr. St. John and the recent letter she had received from Lockheed Martin, which indicated that Lockheed Martin would only pursue a transaction at a price of $56.00 per share and that Lockheed Martin’s price was firm. Management then reviewed with the Aerojet Rocketdyne board of directors certain deal protection provisions, including termination fee amounts, contained in various merger agreements for recent transactions involving companies in the aerospace and defense industry. At this meeting, the Aerojet Rocketdyne board of directors confirmed that, consistent with its prior deliberations, the Aerojet Rocketdyne board of directors was prepared to move forward with an all-cash merger transaction with Lockheed Martin (with appropriate terms and conditions) at a price of $56.00 per share. In connection therewith, the Aerojet Rocketdyne board of directors noted its belief that, in light of its assessment of the value of Aerojet Rocketdyne, the substantial premium of such price to Aerojet Rocketdyne’s then-current trading price and its consideration of certain risks and uncertainties associated with Aerojet Rocketdyne’s projected performance (particularly uncertainties in the space exploration sector), this price would represent a significant value enhancement for Aerojet Rocketdyne stockholders and be in their best interests.

Aerojet Rocketdyne and Lockheed Martin then continued discussions based on an all-cash merger transaction at a price of $56.00 per share with the Aerojet Rocketdyne board of directors having the ability to declare a special cash dividend of up to $5.00 per share (which dividend would reduce the per share purchase price on a dollar-for-dollar basis), subject to the parties reaching agreement on other terms and conditions of a potential transaction.

On November 14, 2020, Mr. Jones had a telephone call with Mr. Psihas to discuss various key terms and provisions to be contained in the merger agreement, including Lockheed Martin’s required remedial measures related to regulatory clearance, the “no-shop” and “fiduciary out” provisions, and related break-up fee provisions.

On November 16, 2020, members of Aerojet Rocketdyne management and members of Lockheed Martin management had a further discussion concerning various key terms and conditions to be included in the merger agreement. Among other things, Aerojet Rocketdyne indicated to Lockheed Martin that Aerojet Rocketdyne expected that the merger agreement would contain a customary “fiduciary out” to any “no-shop” provision included in the merger agreement. Aerojet Rocketdyne also proposed that the break-up fee that would be payable by Aerojet Rocketdyne upon any termination of the merger agreement for certain customary events would be on the low end of the customary range of break-up fees, measured as a percentage of equity value represented in the transaction. Lockheed Martin responded that such a low break-up fee was not acceptable to it in light of the substantial premium it believed was represented by its $56.00 per share offer price in relation to the recent trading prices of Aerojet Rocketdyne stock.

On November 17, 2020, representatives of Aerojet Rocketdyne, Lockheed Martin, Jenner & Block, Hogan Lovells and McDermott, Will & Emery LLP (“McDermott Will”), antitrust counsel to Lockheed Martin, had a further discussion about various key deal points, including the level of the break-up fee that was appropriate under the circumstances. In the context of these discussions, a representative of Lockheed Martin indicated that if Aerojet Rocketdyne were to contact other potential buyers at this time, Lockheed Martin would immediately terminate its merger discussions with Aerojet Rocketdyne. The parties also discussed Lockheed Martin’s required efforts and remedial measures related to regulatory clearance.

Later that same day on November 17, 2020, certain members of Aerojet Rocketdyne management and the independent members of the Aerojet Rocketdyne board of directors had a discussion with representatives of Citi, Evercore and Jenner & Block to review the open material transaction terms and conditions and the status of the merger discussions with Lockheed Martin, including Lockheed Martin’s refusal to accept Aerojet Rocketdyne’s request for a lower break-up fee. The independent directors were further advised by Aerojet Rocketdyne management of Lockheed Martin’s assertion that it would retract its offer and cease discussions if Aerojet Rocketdyne were to conduct any further market check at this time. Aerojet Rocketdyne’s financial advisors also discussed their views regarding whether certain companies in Aerojet Rocketdyne’s industry (including Company B) would likely be interested in pursuing a potential business combination transaction with Aerojet Rocketdyne. Based on this discussion and other information previously reviewed with the Aerojet Rocketdyne board of directors, the independent directors believed that it was unlikely that there were other viable counterparties for a potential business combination involving Aerojet Rocketdyne. The independent directors and representatives of Citi and Evercore also discussed the risk that new competitive entrants could disrupt Aerojet Rocketdyne’s industry, which could result in a negative impact on Aerojet Rocketdyne’s business and standalone value. As part of this discussion, the independent directors also considered the level of break-up fees in a number of recent merger transactions, including merger transactions in the aerospace and defense industry. At this time, the independent directors of the Aerojet Rocketdyne board of directors considered the level of a break-up fee in the context of any transaction involving Lockheed Martin and determined, based on its consideration and evaluation of input from Aerojet Rocketdyne’s financial and legal advisors, that a break-up fee at the level proposed by Lockheed Martin fell within the generally acceptable range of customary break-up fees and would not likely preclude a potentially superior proposal for the acquisition of Aerojet Rocketdyne.

On November 19, 2020, Mr. Psihas sent an email to Mr. Jones purporting to reiterate Lockheed Martin’s understanding of various conversations over the past week on a number of items, including a price of $56 per share (subject to dollar-for-dollar reduction for any dividend). Mr. Psihas’ email also noted that in order to facilitate regulatory clearance for the proposed transaction, Lockheed Martin was prepared to take certain remedial measures if necessary to obtain clearance, but that Lockheed Martin would not agree to a reverse break-up fee in the context of a failure to obtain regulatory approval, which Aerojet Rocketdyne had proposed.

The email also noted that Lockheed Martin expected a break-up fee at a level based on at least 3% of the equity value of the transaction (including any special cash dividend that Aerojet Rocketdyne may declare), and that it anticipated that the members of the Aerojet Rocketdyne board of directors would execute voting and support agreements and that a similar voting and support agreement would be sought from one of Aerojet Rocketdyne’s stockholders, Steel Partners Holdings L.P. (“Steel Partners”).

On November 20, 2020, Mr. Jones responded to Mr. Psihas that Aerojet Rocketdyne agreed that his email addressed the parties’ prior discussions around the price and dividend and the general contours of antitrust-related covenants, but rejected the requirement of voting and support agreements from Steel Partners and the Aerojet Rocketdyne directors. Mr. Jones then outlined the process and timing of allowing Lockheed Martin to proceed with its confirmatory due diligence and also noted that Aerojet Rocketdyne believed that the transaction process would best be advanced by Lockheed Martin sending Aerojet Rocketdyne its proposed draft merger agreement, which Lockheed Martin had previously indicated was in process, and that all remaining issues would need to be resolved in the totality of the deal terms and conditions as embodied in the merger agreement.

Shortly thereafter, on November 20, 2020, representatives of Aerojet Rocketdyne provided various Lockheed Martin representatives access to a virtual data room so that Lockheed Martin could begin its confirmatory due diligence. During the course of Lockheed Martin’s confirmatory due diligence, representatives of Aerojet Rocketdyne had various discussions with representatives of Lockheed Martin regarding Aerojet Rocketdyne’s business, operations, financial performance and financial outlook, including Aerojet Rocketdyne’s then-current forecasts and related uncertainties associated with NASA’s human space exploration program.

On November 30, 2020, Hogan Lovells delivered to Jenner & Block a draft Merger Agreement along with a draft of a form of voting and support agreement, which Lockheed Martin indicated they expected would be executed by each of the Aerojet Rocketdyne directors and Steel Partners.

On December 3, 2020, representatives of Aerojet Rocketdyne, Lockheed Martin, Jenner & Block and Hogan Lovells held a teleconference to discuss various key issues that Aerojet Rocketdyne and its representatives had identified based on their review of the draft Merger Agreement and the draft form of voting and support agreement. The key issues discussed included Lockheed Martin’s request that the Aerojet Rocketdyne directors and Steel Partners sign voting and support agreements, the proposed terms of the “no-shop” covenant and related “fiduciary out” and other provisions that would give the Aerojet Rocketdyne board of directors flexibility to comply with its fiduciary duties in the event a third party were to submit a proposal for a potentially superior transaction, the proposed requirement that Aerojet Rocketdyne redeem its outstanding convertible notes promptly after redemption becomes permissible under the related indenture, the scope of Lockheed Martin’s remedial commitments related to regulatory review, the scope of various Lockheed Martin termination rights, Lockheed Martin’s proposed $150 million termination fee and the circumstances under which Aerojet Rocketdyne would become obligated to pay the termination fee, and the scope of Aerojet Rocketdyne’s representations and warranties and interim operating covenants.

On December 5, 2020, Jenner & Block delivered to Hogan Lovells a revised draft of the Merger Agreement, reflecting Aerojet Rocketdyne’s position on the key open issues.

On December 8, 2020, Hogan Lovells delivered to Jenner & Block a revised draft of the Merger Agreement, reflecting Lockheed Martin’s response to Aerojet Rocketdyne’s positions on the issues.

On December 9, 2020, representatives of Aerojet Rocketdyne, Lockheed Martin, Jenner & Block and Hogan Lovells held a teleconference to discuss various key issues that Aerojet Rocketdyne and its representatives had identified based on their review of the latest draft of the Merger Agreement. The key issues that were discussed included Lockheed Martin’s continuing request that each of the Aerojet Rocketdyne directors (but no other stockholder) sign voting and support agreements, the scope of Aerojet Rocketdyne’s representations and warranties, the proposed scope and substance of the interim operating covenants, the proposed terms of the “no-shop” covenant and related “fiduciary out” and other provisions that would give the Aerojet Rocketdyne board of directors appropriate flexibility to comply with its fiduciary duties in the event a third party were to submit a proposal for a potentially superior transaction, the proposed scope of remedial commitments related to regulatory review, the conditions to Lockheed Martin’s obligation to close the Merger, the scope of various Lockheed Martin termination rights and Lockheed Martin’s proposed $150 million termination fee and the circumstances under which Aerojet Rocketdyne would become obligated to pay such a fee.

On December 10, 2020, the Aerojet Rocketdyne board of directors met to consider the status of the potential transaction. All Aerojet Rocketdyne directors attended the meeting, and certain members of Aerojet Rocketdyne’s senior management and representatives of Citi, Evercore and Jenner & Block attended portions of the meeting. Mr. Jones provided an update on the transaction process and the status of Lockheed Martin’s confirmatory due diligence review. Mr. Boehle and Mr. Kampani then provided an overview of the process and timing for the declaration and payment of the $5.00 per share special cash dividend being contemplated in connection with the signing of the Merger Agreement. Mr. Kampani then reviewed the status of the negotiations with Lockheed Martin on the proposed Merger Agreement and the key terms and provisions reflected in the latest draft of the Merger Agreement, including the “no-shop” and “fiduciary out” provisions, the interim operations covenants, Lockheed Martin’s closing conditions and various termination and break-up fee payment provisions. Mr. Kampani also noted that Lockheed Martin had not yet dropped its request that all members of the Aerojet Rocketdyne board of directors execute voting and support agreements with Lockheed Martin in connection with the signing of the Merger Agreement and that further Aerojet Rocketdyne board of directors discussion of the terms of such agreements may be needed if Lockheed Martin continued to insist on those agreements as part of the Merger transaction. Mr. Kampani then reviewed various regulatory considerations and the related provisions being negotiated in the Merger Agreement. Andreas Wagner, Chief Human Resources Officer of Aerojet Rocketdyne, provided an overview of the employee retention arrangements anticipated to be adopted in connection with the Merger Agreement and intended to help ensure appropriate management continuity pending the closing of the Merger transaction. Throughout these presentations the Aerojet Rocketdyne board of directors asked questions and discussed the issues. In an executive session of this Board meeting, representatives of Jenner & Block also reviewed certain legal considerations in connection with the Aerojet Rocketdyne board of directors’ consideration of the Merger. This session included a review and discussion of the Aerojet Rocketdyne board of directors’ fiduciary obligations in connection with its consideration of these matters, including deal protection terms that might be included in the Merger Agreement. Following the executive session, the Aerojet Rocketdyne board of directors directed Aerojet Rocketdyne management to continue negotiating the Merger Agreement as discussed during the meeting.

On December 12, 2020, Jenner & Block delivered to Hogan Lovells a revised draft of the Merger Agreement, reflecting Aerojet Rocketdyne’s position on the open issues.

On December 13, 2020, Aerojet Rocketdyne and Lockheed Martin executed a Supplemental Confidentiality Agreement Governing the Establishment of a “Clean Team,” effective as of December 6, 2020, by and between Aerojet Rocketdyne and Lockheed Martin to set forth certain procedures and restrictions in respect of the sharing of certain competitively sensitive information.

Also on December 13, 2020, representatives of Aerojet Rocketdyne, Lockheed Martin, Jenner & Block and Hogan Lovells had a lengthy negotiation session on the Merger Agreement. Key issues remaining unresolved after that session included Aerojet Rocketdyne’s flexibility to issue equity and other compensatory awards to various employees and officers in 2021, the scope and terms of a transaction bonus pool that Aerojet Rocketdyne would issue in order to incentivize and reward employees through the closing of the Merger, the proposed terms of the “no-shop” covenant and related “fiduciary out” and other provisions that would give the Aerojet Rocketdyne board of directors flexibility to comply with its fiduciary duties in the event a third party were to submit a proposal for a potentially superior transaction, the scope of Lockheed Martin’s remedial commitments related to regulatory review, certain conditions to Lockheed Martin’s obligation to close the Merger, the scope of various Lockheed Martin termination rights and the circumstances under which Aerojet Rocketdyne would become obligated to pay a termination fee.

Between December 13 and December 18, 2020, representatives of Jenner & Block, Freshfields Bruckhaus Deringer LLP (“Freshfields”) (additional antitrust counsel to Aerojet Rocketdyne) and McDermott Will had further discussions regarding regulatory-related provisions in the Merger Agreement.

On December 14, 2020, the Organization & Compensation Committee of the Aerojet Rocketdyne board of directors (the “Compensation Committee”) held a meeting with certain members of Aerojet Rocketdyne’s senior management and invited advisors, including a representative of Jenner & Block and a representative of the Compensation Committee’s outside compensation consultant, to review and consider information about change in control tax issues related to executive compensation as well as proposed actions to mitigate adverse effects on executives and Aerojet Rocketdyne.

On December 16, 2020, representatives of Aerojet Rocketdyne, Lockheed Martin, Jenner & Block, Hogan Lovells and McDermott Will had a number of telephone conferences to negotiate open issues relating to the Merger Agreement. Several issues were resolved during these discussions, including the terms of the “no-shop” and “fiduciary out” and other provisions designed to provide the Aerojet Rocketdyne board of directors appropriate flexibility to comply with its fiduciary duties if a potentially superior proposal were to arise after the signing of the Merger Agreement and prior to the receipt of the requisite stockholder vote, and Lockheed Martin withdrew its request that Aerojet Rocketdyne directors execute voting and support agreements.

On December 17, 2020, the Aerojet Rocketdyne board of directors met again to consider the status of the potential Merger transaction. All Aerojet Rocketdyne directors, certain members of Aerojet Rocketdyne’s senior management and representatives of Citi, Evercore and Jenner & Block attended the meeting. Mr. Jones provided an update on the transaction process to date and the status of Lockheed Martin’s confirmatory due diligence review. Mr. Boehle and Mr. Kampani then reviewed the proposed terms and conditions of the $5.00 per share special cash dividend being contemplated in connection with the signing of the Merger Agreement. Mr. Kampani further commented on the statutory and other legal requirements relevant to the declaration and payment of a dividend, and the Aerojet Rocketdyne board of directors was presented with a review of the preliminary results of management’s solvency and related analyses. Mr. Kampani also provided an update for the Aerojet Rocketdyne board of directors regarding the key terms and conditions of the latest draft of the Merger Agreement. Representatives of Jenner & Block commented on the key terms and conditions of the Merger Agreement as well as certain fiduciary considerations relating to the Aerojet Rocketdyne board of directors’ consideration of these matters. Throughout these presentations the Aerojet Rocketdyne board of directors asked questions and discussed the issues.

On December 17, 2020, Hogan Lovells delivered to Jenner & Block a revised draft of the Merger Agreement.

On December 18, 2020, the Compensation Committee held a meeting with certain members of Aerojet Rocketdyne’s senior management and invited advisors, including a representative of Jenner & Block and a representative of the Compensation Committee’s outside compensation consultant, to review and consider information about change in control tax issues related to executive compensation as well as proposed actions to mitigate potential adverse effects on executives and Aerojet Rocketdyne. The Compensation Committee also reviewed the proposed adjustments to the Aerojet Rocketdyne stock options and stock appreciation rights required in respect of the proposed special cash dividend.

On December 18, 2020, the parties and their representatives had a number of discussions to resolve various open issues on the Merger Agreement, including (1) Aerojet Rocketdyne’s flexibility to issue equity and other compensatory awards to employees and officers in 2021 and (2) certain triggers that would require Aerojet Rocketdyne to pay a break-up fee.

On December 19, 2020, Jenner & Block delivered a revised draft of the Merger Agreement to Hogan Lovells.

Also on December 19, 2020, the Compensation Committee held a meeting to approve certain compensatory arrangements, all of which had been reviewed at previous Compensation Committee meetings. All members of the Compensation Committee, the other Aerojet Rocketdyne directors and certain members of Aerojet Rocketdyne’s senior management and a representative of Jenner & Block attended the meeting. At this meeting, the Compensation Committee approved the arrangements set forth in the section of this proxy statement captioned “The Merger — Interests of Aerojet Rocketdyne’s Directors and Executive Officers in the Merger — Golden Parachute Payment Mitigation.” The Compensation Committee also approved, effective as of the payment of any special cash dividend in connection with the Merger, adjustments of outstanding stock options and stock appreciation right awards to account for the special cash dividend.

Immediately after the Compensation Committee meeting on December 19, 2020, the Aerojet Rocketdyne board of directors held a meeting to consider approving the Merger Agreement and related matters. All Aerojet Rocketdyne directors, certain members of Aerojet Rocketdyne’s senior management and representatives of Citi, Evercore and Jenner & Block attended the meeting. Mr. Jones provided an update of the transaction process to date and the anticipated transaction schedule. Mr. Kampani and Mr. Boehle presented the terms of the proposed Pre-Closing Dividend, and Mr. Boehle confirmed that the proposed Pre-Closing Dividend passed the required solvency and capital surplus tests, referencing the analysis previously shared with the Aerojet Rocketdyne board of directors and updated as of the date of this meeting.

Mr. Kampani then reviewed the proposed terms and conditions of the Merger Agreement, focusing on the progress made during the most recent rounds of negotiations, and the status of Aerojet Rocketdyne’s discussions with Lockheed Martin, including the status of Lockheed Martin’s confirmatory due diligence process. A discussion ensued, with questions asked and answered.

Representatives of Evercore then reviewed with the Aerojet Rocketdyne board of directors Evercore’s financial analysis of the merger consideration, and Evercore then rendered to the Aerojet Rocketdyne board of directors Evercore’s oral opinion, which was subsequently confirmed in writing, to the effect that, as of December 19, 2020 and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $56.00 per share minus, to the extent paid, the amount per share of the Pre-Closing Dividend, to be received by holders of shares of Aerojet Rocketdyne common stock in the Merger was fair, from a financial point of view, to such holders. See the section of this proxy statement captioned “The Merger — Opinion of Evercore Group L.L.C.” beginning on page 64. A discussion ensued, with questions asked and answered. Representatives of Citi then reviewed with the Aerojet Rocketdyne board of directors Citi’s financial analysis relating to the fairness to the holders of shares of Aerojet Rocketdyne common stock of the merger consideration to be received in the proposed Merger by such holders, and Citi then rendered to the Aerojet Rocketdyne board of directors Citi’s oral opinion, subsequently confirmed by delivery of a written opinion, dated December 19, 2020, to the effect that, as of that date and based on and subject to the various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi as described in Citi’s written opinion, the merger consideration of $56.00 per share minus, to the extent paid, the amount per share of the Pre-Closing Dividend, was fair, from a financial point of view, to the holders of Aerojet Rocketdyne common stock. See the section of this proxy statement captioned “The Merger — Opinion of Citigroup Global Markets Inc.” beginning on page 57. A further discussion ensued, with questions asked and answered.

Representatives of Jenner & Block reviewed the Aerojet Rocketdyne board of directors’ fiduciary duties in connection with their review and consideration of the Merger, and further commented on the process undertaken by the Aerojet Rocketdyne board of directors in connection with its consideration of the proposed Merger transaction over the course of this and prior meetings, as well as the proposed terms and conditions of the Merger Agreement, including the deal protection provisions.

A further discussion of the proposed Merger transaction ensued, with questions asked and answered. During the course of the meeting, the Aerojet Rocketdyne board of directors considered carefully, in addition to the matters described above, the terms and conditions of the Merger Agreement and the proposed Merger, including the merger consideration and the fact that the merger consideration constituted a substantial premium to the then-current trading price and recent trading prices of Aerojet Rocketdyne common stock, among other items. During the course of its deliberations at this and prior meetings considered the other matters described in the section of this proxy statement captioned “The Merger — Recommendation of the Board of Directors and Reasons for the Merger — Reasons for the Merger” beginning on page 52.

Following this discussion, the Aerojet Rocketdyne board of directors unanimously, among other things, (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable and fair to, and in the best interests of, Aerojet Rocketdyne and its stockholders, and that it is in the best interests of Aerojet Rocketdyne and its stockholders that Aerojet Rocketdyne enter into the Merger Agreement and consummate the Merger and the other transactions contemplated by the Merger Agreement, (2) approved and adopted the Merger Agreement, the Merger, the other transactions contemplated by the Merger Agreement and the performance by Aerojet Rocketdyne of its obligations under the Merger Agreement, (3) directed that the adoption of the Merger Agreement be submitted to a vote at a meeting of Aerojet Rocketdyne’s stockholders, (4) recommended that the stockholders of Aerojet Rocketdyne vote in favor of adopting and approving the Merger Agreement and the Merger, (5) approved the declaration and payment of the Pre-Closing Dividend, subject to the Aerojet Rocketdyne board of directors’ ability to modify or revoke the special cash dividend in its discretion, and (6) approved the payment of such special cash dividend to the holders of record of Aerojet Rocketdyne’s outstanding convertible notes as of the dividend record date as if they held a number of shares of Aerojet Rocketdyne common stock equal to the conversion rate set forth in the indenture governing the convertible notes multiplied by the principal amount of convertible notes held by such holder, at

the same time and upon the same terms as holders of Aerojet Rocketdyne common stock without having to convert their convertible notes. The Aerojet Rocketdyne board of directors further authorized certain officers of Aerojet Rocketdyne to take such further actions as may be necessary to finalize and execute the Merger Agreement and the transactions contemplated thereby.

Also on December 19, 2020, the Lockheed Martin board of directors held a meeting to consider and approve the Merger Agreement and the transactions contemplated thereby.

Following the Aerojet Rocketdyne board of directors meeting and the Lockheed Martin board of directors meeting, the parties and their representatives worked to finalize the Merger Agreement and the related disclosure schedules and to close out Lockheed Martin’s remaining confirmatory due diligence items. On the afternoon of December 20, 2020, Aerojet Rocketdyne and Lockheed Martin executed the Merger Agreement, and thereafter each of Aerojet Rocketdyne and Lockheed Martin issued their respective separate press releases publicly announcing the execution of the Merger Agreement.

At its meeting on December 19, 2020, the Aerojet Rocketdyne board of directors met to consider the Merger Agreement and after due consideration, at this and prior meetings of the Aerojet Rocketdyne board of directors as described above in the section of this proxy statement captioned “The Merger — Background of the Merger,” unanimously (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable and fair to, and in the best interests of, Aerojet Rocketdyne and its stockholders, and that it is in the best interests of Aerojet Rocketdyne and its stockholders that Aerojet Rocketdyne enter into the Merger Agreement and consummate the Merger and the other transactions contemplated by the Merger Agreement, (2) approved and adopted the Merger Agreement, the Merger, the other transactions contemplated by the Merger Agreement and the performance by Aerojet Rocketdyne of its obligations under the Merger Agreement, (3) directed that the adoption of the Merger Agreement be submitted to a vote at a meeting of Aerojet Rocketdyne’s stockholders and (4) resolved to recommend that the stockholders of Aerojet Rocketdyne vote in favor of adopting and approving the Merger Agreement and the Merger.

The Aerojet Rocketdyne board of directors unanimously recommends that stockholders vote “FOR” (1) the Merger Proposal, (2) the Adjournment Proposal and (3) the Merger-Related Named Executive Officer Compensation Proposal.

As described above in the section of this proxy statement captioned “The Merger — Background of the Merger,” in evaluating the Merger and the Merger Agreement, the Aerojet Rocketdyne board of directors consulted and discussed with Aerojet Rocketdyne senior management on topics and issues related to the Merger, the Merger Agreement and the other transactions contemplated thereby, and consulted with and received the advice of Aerojet Rocketdyne’s legal counsel and financial advisors.

After careful consideration, the Aerojet Rocketdyne board of directors, at a special meeting held on December 19, 2020, unanimously:

In unanimously determining to approve and adopt the Merger Agreement and the Merger and recommend that Aerojet Rocketdyne’s stockholders vote their shares of common stock in favor of the proposal to adopt the Merger Agreement, the Aerojet Rocketdyne board of directors also considered, during the course of its deliberations at its December 19, 2020 and prior meetings, the material factors that are discussed below. The discussion in this section is not intended to be an exhaustive list of the information and factors considered by the Aerojet Rocketdyne board of directors, but rather includes the material factors considered by the Aerojet Rocketdyne board of directors. In view of the wide variety of factors considered by the Aerojet Rocketdyne board of directors in connection with its evaluation of the Merger and the complexity of these matters, the Aerojet Rocketdyne board of directors did not consider it practicable, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision. In addition, individual members of the Aerojet Rocketdyne board of directors may have given different weight to different factors. The Aerojet Rocketdyne board of directors made its recommendation based on the totality of the information available to the Aerojet Rocketdyne board of directors, including discussions with, and questioning of, Aerojet Rocketdyne’s management and legal counsel and financial advisors.

The Aerojet Rocketdyne board of directors considered, among other things, the following factors as supporting its decision to recommend that Aerojet Rocketdyne’s stockholders vote in favor of the adoption of the Merger Agreement:

In the course of its deliberations, the Aerojet Rocketdyne board of directors also considered a variety of risks, uncertainties and other countervailing factors related to the Merger Agreement and the Merger, including, among other things, the following factors:

In addition to considering the factors described above, the Aerojet Rocketdyne board of directors also considered (1) the prior relationships between Citi and Lockheed Martin that Citi disclosed to the Aerojet Rocketdyne board of directors, as described below in the section of this proxy statement captioned “The Merger — Opinion of Citigroup Global Markets Inc.,” (2) the fact that Aerojet Rocketdyne’s directors and executive officers have financial interests in the Merger that may be different from, or in addition to, those of Aerojet Rocketdyne stockholders generally, including those interests that are a result of employment and compensation arrangements with Aerojet Rocketdyne, as described below in the section of this proxy statement captioned “The Merger — Interests of Aerojet Rocketdyne’s Directors and Executive Officers in the Merger” and (3) the process undertaken by the Aerojet Rocketdyne board of directors in considering and evaluating the Merger Agreement and the Merger and potential alternatives thereto, including the number of, and quality of deliberation occurring at, meetings held by the Aerojet Rocketdyne board of directors and the fact that many of those meetings included executive sessions with only the directors in attendance and/or special executive sessions with only the independent directors in attendance.

This explanation of the Aerojet Rocketdyne board of directors’ reasons for recommending the adoption of the Merger Agreement and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors described in the section of this proxy statement captioned “Forward-Looking Statements” beginning on page 16.

The Aerojet Rocketdyne board of directors unanimously recommends that stockholders vote “FOR” (1) the Merger Proposal, (2) the Adjournment Proposal and (3) the Merger-Related Named Executive Officer Compensation Proposal.

Aerojet Rocketdyne retained Citi to provide financial advisory services in connection with a possible transaction involving Aerojet Rocketdyne. In connection with Citi’s engagement, Aerojet Rocketdyne’s board of directors requested that Citi evaluate the fairness, from a financial point of view, to the holders of shares of Aerojet Rocketdyne common stock of the merger consideration to be received in the proposed Merger by such holders pursuant to the terms and subject to the conditions set forth in the Merger Agreement. On December 19, 2020, at a meeting of the Aerojet Rocketdyne board of directors held to evaluate the proposed Merger, Citi rendered to the Aerojet Rocketdyne board of directors an oral opinion, subsequently confirmed by delivery of a written opinion, dated December 19, 2020, to the effect that, as of the date of Citi’s written opinion and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi as set forth in its written opinion, the merger consideration of $56.00 per share minus, to the extent paid, the amount per share of the Pre-Closing Dividend, was fair, from a financial point of view, to the holders of shares of Aerojet Rocketdyne common stock.

The full text of Citi’s written opinion, dated December 19, 2020, to the Aerojet Rocketdyne board of directors, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi in rendering its opinion, is attached to this proxy statement as Annex B and is incorporated herein by reference in its entirety. The summary of Citi’s opinion set forth below is qualified in its entirety by reference to the full text of Citi’s opinion. Citi’s opinion was rendered to the Aerojet Rocketdyne board of directors (in its capacity as such) in connection with its evaluation of the proposed Merger and was limited to the fairness, from a financial point of view, as of the date of the opinion, to the holders of shares of Aerojet Rocketdyne common stock of the merger consideration. Citi’s opinion did not address any other terms, aspects or implications of the proposed Merger or the Merger Agreement. Citi’s opinion did not address the underlying business decision of Aerojet Rocketdyne to effect the proposed Merger, the relative merits of the proposed Merger as compared to any alternative business strategies that might have existed for Aerojet Rocketdyne or the effect of any other transaction in which Aerojet Rocketdyne might have engaged. Citi’s opinion is not intended to be and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act on any matters relating to the proposed Merger or otherwise.

In arriving at its opinion, Citi:

The issuance of Citi’s opinion was authorized by Citi’s fairness opinion committee.

In rendering its opinion, Citi assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with Citi, and upon the assurances of the management of Aerojet Rocketdyne that they were not aware of any relevant information that was omitted or that remained undisclosed to Citi. With respect to each of the Aerojet Rocketdyne Forecasts and other information and data relating to Aerojet Rocketdyne provided to or otherwise reviewed by or discussed with Citi, Citi was advised by the management of Aerojet Rocketdyne that such forecasts and other information and data were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Aerojet Rocketdyne as to the future financial performance of Aerojet Rocketdyne under the scenario reflected therein.

Citi assumed, with the consent of the Aerojet Rocketdyne board of directors, that the proposed Merger would be consummated in accordance with the terms, conditions and agreements set forth in the Merger Agreement, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary regulatory or third-party approvals, consents and releases for the proposed Merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on the Merger meaningful to its opinion and analysis. Representatives of Aerojet Rocketdyne advised Citi, and Citi further

assumed, with the consent of the Aerojet Rocketdyne board of directors, that the final terms of the Merger Agreement would not vary materially from those set forth in the draft reviewed by Citi. Citi did not make and was not provided with an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of Aerojet Rocketdyne nor did Citi make any physical inspection of the properties or assets of Aerojet Rocketdyne. Citi was not requested to, and it did not, solicit third party indications of interest in the possible acquisition of all or a part of Aerojet Rocketdyne, nor was it requested to consider, and Citi’s opinion did not address, the underlying business decision of Aerojet Rocketdyne to effect the proposed Merger, the relative merits of the proposed Merger as compared to any alternative business strategies that might have existed for Aerojet Rocketdyne or the effect of any other transaction in which Aerojet Rocketdyne might have engaged. Citi also expressed no view as to, and Citi’s opinion did not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation to any officers, directors or employees of any parties to the proposed Merger, or any class of such persons, relative to the merger consideration or otherwise. Citi’s opinion was necessarily based upon information available to Citi, and financial, stock market and other conditions and circumstances existing, as of the date of its opinion. The credit, financial and stock markets, the industries in which Aerojet Rocketdyne operates, and the securities of Aerojet Rocketdyne have experienced and may continue to experience volatility and Citi expressed no view or opinion as to any potential effects of such volatility on Aerojet Rocketdyne or the Merger.

In preparing its opinion, Citi performed a variety of financial and comparative analyses, including those described below. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. Citi arrived at its opinion based on the results of all analyses undertaken by it and factors assessed as a whole, and it did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion.

In its analyses, Citi considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond the control of Aerojet Rocketdyne. No company, business or transaction reviewed is identical or directly comparable to Aerojet Rocketdyne or the Merger, and an evaluation of these analyses is not entirely mathematical; rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies, businesses or transactions reviewed or the results of any particular analysis.

The estimates used by Citi for purposes of its analyses and the valuation ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by such analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold or acquired. Accordingly, the estimates used in, and the results derived from, Citi’s analyses are inherently subject to substantial uncertainty.

Citi was not requested to, and it did not, recommend or determine the specific consideration payable in the Merger. The type and amount of consideration payable in the proposed Merger was determined through negotiations between Aerojet Rocketdyne, on the one hand, and Lockheed Martin and its affiliates, on the other hand, and Aerojet Rocketdyne’s decision to enter into the Merger Agreement was solely that of the Aerojet Rocketdyne board of directors. Citi’s opinion was only one of many factors considered by the Aerojet Rocketdyne board of directors in its evaluation of the Merger and should not be viewed as determinative of the views of the Aerojet Rocketdyne board of directors or the management of Aerojet Rocketdyne with respect to the proposed Merger, merger consideration or any other aspect of the transactions contemplated by the Merger Agreement.

The following is a summary of the material financial analyses prepared for and reviewed with the Aerojet Rocketdyne board of directors in connection with Citi’s opinion, dated December 19, 2020, to the Aerojet Rocketdyne board of directors. The summary set forth below does not purport to be a complete description of the financial analyses performed by, and underlying the opinion of, Citi, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses

by Citi. Certain financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the financial analyses, could create a misleading or incomplete view of such financial analyses. Future results may be different from those described, and such differences may be material. Approximate implied equity value per share reference ranges derived from the financial analyses described below and other per share ranges presented for reference purposes only were rounded to the nearest $0.25, except for data relating to intraday trading share prices. Except as otherwise noted, financial data utilized for Aerojet Rocketdyne in the financial analyses described below were based on the Base Case Forecast and the Adjusted Base Case Forecast as indicated and other information and data relating to Aerojet Rocketdyne provided to or discussed with Citi and approved for Citi’s use by Aerojet Rocketdyne and as further summarized in the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information” beginning on page 73. For purposes of the financial analyses described below, the term “EBITDA,” when used with respect to any company, other than Aerojet Rocketdyne, generally refers to that company’s earnings before interest, taxes, depreciation and amortization expenses; the term “adjusted EBITDA,” when used with respect to Aerojet Rocketdyne, generally refers to EBITDA excluding EBITDA attributable to its real estate segment and income/(expense) related to re-measurement of net environmental remediation asset/liability.

Citi conducted a discounted cash flow analysis of Aerojet Rocketdyne using the Base Case Forecast and the Adjusted Base Case Forecast. For each set of Aerojet Rocketdyne Forecasts, Citi calculated a range of present values (as of September 30, 2020) of the estimated unlevered after-tax free cash flows that Aerojet Rocketdyne was forecasted to generate under that set of Aerojet Rocketdyne Forecasts during the fourth quarter of the fiscal year ending December 31, 2020 through the full fiscal year ending December 31, 2029 (such cash flows referred to as the “projected cash flows”). For purposes of this analysis, the projected cash flows provided by Aerojet Rocketdyne’s management were adjusted with management’s approval to exclude the impact of cash pension contributions and reimbursements, net environmental remediation cash flows and real estate cash flows (collectively, the “additional cash flow items”). The additional cash flow items were excluded from the projected cash flows on the basis that they are significant items that Aerojet Rocketdyne’s management believes are non-perpetual. The impact of cash pension contributions and reimbursements was reflected as a liability on Aerojet Rocketdyne’s balance sheet, and each of the net environmental cash flows and real estate cash flows were reflected as assets. For purposes of this analysis, stock based compensation was treated as a cash expense. Citi also calculated a range of estimated terminal values for Aerojet Rocketdyne under each set of Aerojet Rocketdyne Forecasts, by applying an illustrative range of perpetuity growth rates of 2.0% to 3.0% to Aerojet Rocketdyne’s estimated terminal year unlevered after-tax free cash flows (excluding the additional cash flow items) under that set of Aerojet Rocketdyne Forecasts. The illustrative range of perpetuity growth rates applied was selected by Citi based on its professional judgment and experience. The range of estimated terminal values for Aerojet Rocketdyne under each set of Aerojet Rocketdyne Forecasts was then discounted to present values (as of September 30, 2020) and added to the estimated present values of the projected cash flows under that set of Aerojet Rocketdyne Forecasts in order to derive ranges of implied adjusted firm values for Aerojet Rocketdyne under that set of Aerojet Rocketdyne Forecasts.

In calculating the ranges of implied adjusted firm values for Aerojet Rocketdyne, Citi discounted the projected cash flows and estimated terminal values using discount rates ranging from 7.8% to 9.0%. Citi derived this range of discount rates based on a calculation of the weighted average cost of capital of Aerojet Rocketdyne it performed utilizing the capital asset pricing model with inputs that Citi determined were relevant based on publicly available data and Citi’s professional judgment.

From the range of implied adjusted firm values it derived under each set of Aerojet Rocketdyne Forecasts, Citi subtracted Aerojet Rocketdyne’s reported net debt and other as of September 30, 2020 (calculated as debt, excluding in-the-money convertible debt, plus the tax-effected net present value of net Cost Accounting Standards (“CAS”) reimbursements and cash pension contributions/other post-employment benefits (“OPEB”) payments, less cash, cash equivalents, a range of tax-effected net present values of real estate cash flows and reported net environmental asset/(liability)), and divided the results by the number of shares of Aerojet

Rocketdyne common stock outstanding on a fully diluted basis, calculated using the treasury share method and treating in-the-money convertible debt as converted to shares of Aerojet Rocketdyne common stock, based on information provided by Aerojet Rocketdyne management. The net present value of net CAS reimbursements and cash pension contributions/OPEB payments was calculated by discounting CAS reimbursements and cash pension contributions/OPEB payments reflected in the Aerojet Rocketdyne Forecasts using, at the direction of Aerojet Rocketdyne management, a 2.7% after tax cost of debt and 0% perpetuity growth rate. The range of tax-effected net present values of real estate cash flows was calculated by discounting projected cash flows from real estate provided by Aerojet Rocketdyne management using a range of discount rates of 7.8% to 9.0%, which Citi derived from a calculation of the weighted average cost of capital of Aerojet Rocketdyne. This analysis indicated the following approximate implied per share equity value reference ranges for Aerojet Rocketdyne (rounded to the nearest $0.25) under the Base Case Forecast and the Adjusted Base Case Forecast, as compared to $56.00 per share:

Citi performed an analysis to derive a range of illustrative present values per share of Aerojet Rocketdyne common stock as of December 18, 2020 based on theoretical future prices calculated by Citi for the shares of Aerojet Rocketdyne common stock under each of the Base Case Forecast and the Adjusted Base Case Forecast. Citi derived a range of theoretical future values per share for the shares of Aerojet Rocketdyne common stock as of December 31 of each of 2021, 2022 and 2023 using each of the Base Case Forecast and the Adjusted Base Case Forecast. For each set of Aerojet Rocketdyne Forecasts, Citi derived this range of theoretical future values per share by (i) applying illustrative one year forward adjusted firm value to Adjusted EBITDA (as defined, and as calculated as described, in the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information”) multiples of 9.5x to 10.9x to estimates of the Adjusted EBITDA of Aerojet Rocketdyne for each of calendar years 2022, 2023 and 2024, as reflected in that set of Aerojet Rocketdyne Forecasts, (ii) adjusting the resulting range of firm values to a range of equity values by subtracting Aerojet Rocketdyne’s estimated net debt and other for each period ending as of December 31 (calculated as estimated debt, excluding in-the-money convertible debt, plus estimated tax effected unfunded pension/OPEB liability, less estimated cash, cash equivalents, mid-point estimate of tax effected net present value of real estate cash flows and estimated net environmental asset/(liability)), and (iii) dividing the resulting range of equity values by the number of shares of Aerojet Rocketdyne common stock outstanding on a fully diluted basis, calculated using the treasury share method and treating in-the-money convertible debt as converted to shares of Aerojet Rocketdyne common stock, based on information provided by Aerojet Rocketdyne management. The firm value to Adjusted EBITDA multiples used by Citi were derived based on Citi’s professional judgment and experience and taking into account historical firm value to Adjusted EBITDA multiples of Aerojet Rocketdyne during the period from December 18, 2018 through December 18, 2020. By applying a discount rate of 8.7%, reflecting a mid-point estimate of Aerojet Rocketdyne’s cost of equity, Citi discounted to present value as of December 18, 2020 the theoretical future values per share it derived for Aerojet Rocketdyne under each set of Aerojet Rocketdyne Forecasts, to yield under each set of Aerojet Rocketdyne Forecasts a range of illustrative present values per share of Aerojet Rocketdyne common stock. This analysis indicated the following approximate implied per share equity value reference range for Aerojet Rocketdyne (rounded to the nearest $0.25) under each of the Base Case Forecast and the Adjusted Base Case Forecast, as compared to $56.00 per share:

Citi reviewed certain financial and stock market information relating to Aerojet Rocketdyne and the nine publicly traded companies listed below whose operations, for the purposes of Citi’s analysis and based on its experience and professional judgment, Citi considered generally relevant in evaluating those of Aerojet Rocketdyne, based on business sector participation, operational characteristics and financial metrics (such companies collectively, the “selected companies”).

For the selected companies, Citi calculated and reviewed, among other information, firm values (calculated as fully diluted market equity value, plus net debt, preferred equity and non-controlling interests, and less unconsolidated investments and non-operating assets, as applicable) as multiples of estimated calendar year 2021 EBITDA. All calculations in this review were based on closing share prices on December 18, 2020 and, with respect to the selected companies, financial data (pro forma as applicable) were based on publicly available Wall Street research analysts’ estimates, public filings and other publicly available information. Citi also calculated and reviewed the adjusted firm value of Aerojet Rocketdyne as a multiple of its estimated Adjusted EBITDA of Aerojet Rocketdyne for calendar year 2021, based on publicly available Wall Street research analysts’ estimates, as well as based on the Base Case Forecast and the Adjusted Base Case Forecast. The estimated calendar year 2021 EBITDA multiples observed for the selected companies and for Aerojet Rocketdyne were as follows:

Based on the multiples calculated and observed for the selected companies as described above and its professional judgment and experience, Citi identified and applied a selected illustrative range of firm value to calendar year 2021 EBITDA multiples of 11.2x to 13.2x to Aerojet Rocketdyne’s estimated calendar year 2021 Adjusted EBITDA, reflected in each of the Base Case Forecasts and the Adjusted Base Case Forecasts, to derive a range of implied adjusted firm values for Aerojet Rocketdyne under each set of Aerojet Rocketdyne Forecasts. Citi subtracted from the range of implied adjusted firm values it derived under each set of Aerojet Rocketdyne Forecasts Aerojet Rocketdyne’s reported net debt and other as of September 30, 2020 (calculated as debt, excluding in-the-money convertible debt, plus tax effected reported unfunded pension/OPEB liability, less cash, cash equivalents, mid-point estimate of tax effected net present value of real estate cash flows and reported net environmental asset/(liability)) and divided the results by the number of shares of Aerojet Rocketdyne common stock outstanding on a fully diluted basis, calculated using the treasury share method and treating in-the-money convertible debt as converted to shares of Aerojet Rocketdyne common stock, based on information provided by Aerojet Rocketdyne management. This analysis indicated the following approximate implied per share equity value reference range for Aerojet Rocketdyne (rounded to the nearest $0.25) under each of the Base Case Forecast and the Adjusted Base Case Forecast, as compared to $56.00 per share:

Using publicly available information, Citi reviewed certain financial data relating to the six transactions listed below involving target companies whose operations, for the purposes of Citi’s analysis and based on its experience and professional judgment, Citi considered generally relevant in evaluating those of Aerojet Rocketdyne, based on business sector participation, operational characteristics and financial metrics (such transactions collectively, the “selected transactions”).

Citi calculated and reviewed, among other information, the implied firm value for the target company involved in each transaction at the time of announcement (calculated based on (i) the aggregate consideration paid or to be paid in such transaction, or, if and as applicable, (ii) the fully diluted equity value implied by the per share purchase price in such transaction, plus net debt, preferred equity and non-controlling interests, and less unconsolidated investments and non-operating assets, as applicable) as a multiple of the applicable target company’s publicly available EBITDA (or metric functionally equivalent thereto) for the last twelve-month period (“LTM”) prior to the announcement of the applicable transaction (such multiples, “Firm Value / LTM EBITDA”). The Firm Value / LTM EBITDA multiples observed for the selected transactions were as follows:

Based on the multiples calculated and observed for the selected transactions and its professional judgment and experience, Citi identified and applied a selected illustrative range of Firm Value / LTM EBITDA multiples of 12.6x to 15.9x to Aerojet Rocketdyne’s LTM Adjusted EBITDA for the twelve-month period ended September 30, 2020, to derive a range of implied adjusted firm values for Aerojet Rocketdyne. Citi subtracted from the range of implied adjusted firm values it derived Aerojet Rocketdyne’s reported net debt and other as of September 30, 2020 (calculated as described above under the section entitled “The Merger — Opinion of Citigroup Global Markets Inc. — Selected Public Companies Analysis”), and divided the results by the number of shares of Aerojet Rocketdyne common stock outstanding on a fully diluted basis, calculated using the treasury share method and treating in-the-money convertible debt as converted to shares of Aerojet Rocketdyne common stock, based on information provided by Aerojet Rocketdyne management. This analysis indicated the following approximate implied per share equity value reference range for Aerojet Rocketdyne (rounded to the nearest $0.25), as compared to $56.00 per share:

Citi observed certain other information with respect to Aerojet Rocketdyne that was not considered part of its financial analyses with respect to its opinion, but was noted for reference purposes only, including the following:

Aerojet Rocketdyne has agreed to pay Citi for its services in connection with the Merger an aggregate fee of $15 million, $2 million of which became payable upon delivery of Citi’s opinion to the Aerojet Rocketdyne board of directors, and the remainder of which is payable contingent upon the consummation of the proposed Merger. In addition, Aerojet Rocketdyne agreed to reimburse Citi for certain expenses incurred by Citi in performing its services, and to indemnify Citi and related parties against certain liabilities, including liabilities under federal securities laws, arising out of Citi’s engagement. Although Citi and its affiliates have not provided investment banking, commercial banking or other similar financial services to Aerojet Rocketdyne during the two-year period prior to the date of Citi’s opinion for which Citi and its affiliates received compensation, Citi and its affiliates in the future may provide such services to Aerojet Rocketdyne and/or its affiliates, for which services Citi and its affiliates would expect to receive compensation.

As Aerojet Rocketdyne’s board of directors was aware, Citi and its affiliates in the past have provided, currently are providing and in the future may provide certain investment banking, commercial banking and other similar financial services to Lockheed Martin unrelated to the proposed Merger, for which services Citi and such affiliates have received and expect to receive compensation, including, without limitation, during the two-year period prior to the date of Citi’s opinion, having acted as joint bookrunner for an offering of senior notes by Lockheed Martin in May 2020. For the services described above for Lockheed Martin and its affiliates, Citi and its affiliates received, during the two-year period prior to the date of Citi’s opinion, aggregate fees of approximately $1.8 million.

In the ordinary course of Citi’s business, Citi and its affiliates may actively trade or hold the securities of Aerojet Rocketdyne or Lockheed Martin for Citi’s own account or for the account of Citi’s customers and, accordingly, may at any time hold a long or short position in such securities. In addition, Citi and its affiliates (including Citigroup Inc. and its affiliates) may maintain relationships with Aerojet Rocketdyne, Lockheed Martin and their respective affiliates.

Aerojet Rocketdyne’s board of directors selected Citi as a financial advisor in connection with the Merger based on Citi’s reputation, experience and familiarity with Aerojet Rocketdyne and its business. Citi is an internationally recognized investment banking firm that regularly engages in the valuation of businesses and their securities in connection with mergers and acquisitions and other purposes.

Aerojet Rocketdyne retained Evercore to provide financial advisory services in connection with the Merger. As part of this engagement, Aerojet Rocketdyne requested that Evercore evaluate the fairness, from a financial point of view, of the merger consideration to be received by the holders of shares of Aerojet Rocketdyne common stock. On December 19, 2020, at a meeting of the Aerojet Rocketdyne board of directors held to evaluate the proposed Merger, Evercore rendered to the Aerojet Rocketdyne board of directors its oral opinion, which was

subsequently confirmed in writing, to the effect that, as of December 19, 2020 and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $56.00 per share minus, to the extent paid, the amount per share of the Pre-Closing Dividend, to be received by holders of shares of Aerojet Rocketdyne common stock in the Merger was fair, from a financial point of view, to such holders. Evercore’s written opinion noted that shares of Aerojet Rocketdyne common stock owned by Lockheed Martin or Merger Sub or any of their respective subsidiaries, shares held by Aerojet Rocketdyne or any of its subsidiaries, and dissenting shares (as defined in the Merger Agreement) would not be converted into the right to receive the merger consideration.

The full text of the written opinion of Evercore, dated December 19, 2020, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex C to this proxy statement and is incorporated herein by reference. Aerojet Rocketdyne encourages you to read this opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Aerojet Rocketdyne board of directors (in its capacity as such) in connection with its evaluation of the proposed Merger. The opinion does not constitute a recommendation to the Aerojet Rocketdyne board of directors or to any other persons in respect of the Merger, including as to how any holder of shares of Aerojet Rocketdyne common stock should vote or act in respect of the Merger. Evercore’s opinion does not address the relative merits of the Merger as compared to other business or financial strategies that might be available to Aerojet Rocketdyne, nor does it address the underlying business decision of Aerojet Rocketdyne to engage in the Merger.

In connection with rendering its opinion, Evercore, among other things:

Set forth below is a summary of the material financial analyses reviewed by Evercore with Aerojet Rocketdyne’s board of directors on December 19, 2020 in connection with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses performed by Evercore. The order of the analyses described and the results of these analyses do not represent relative importance or weight given to these analyses by Evercore. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data that existed on or before December 18, 2020 (the last full trading date prior to the rendering of Evercore’s opinion), and is not necessarily indicative of current market conditions.

For purposes of its analyses and reviews, Evercore considered general business, economic, market and financial conditions, industry sector performance, and other matters, as they existed and could be evaluated as of the date of its opinion, many of which are beyond the control of Aerojet Rocketdyne. The estimates contained in Evercore’s analyses and reviews, and the ranges of valuations resulting from any particular analysis or review, are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by Evercore’s analyses and reviews. In addition, analyses and reviews relating to the value of companies, businesses or securities do not purport to be appraisals or to reflect the prices at which companies, businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, Evercore’s analyses and reviews are inherently subject to substantial uncertainty.

For purposes of its analysis and opinion, Evercore assumed and relied upon the accuracy and completeness of the financial and other information publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by Evercore, without any independent verification of such information (and Evercore has not assumed responsibility or liability for any independent verification of such information), and Evercore further relied upon the assurances of the management of Aerojet Rocketdyne that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the Base Case Forecast and the Adjusted Base Case Forecast, respectively, Evercore assumed with Aerojet Rocketdyne’s consent that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of Aerojet Rocketdyne as to the future financial performance of Aerojet Rocketdyne in the alternative business scenarios underlying the Base Case Forecast and the Adjusted Base Case Forecast, respectively. Evercore expressed no view as to the Base Case Forecast and the Adjusted Base Case Forecast or the alternative business scenarios or other assumptions on which they were based.

For purposes of its analysis and opinion, Evercore assumed, in all respects material to its analysis, that the final executed agreement would not differ from the draft of the Merger Agreement reviewed by Evercore, that the representations and warranties of each party contained in the Merger Agreement are true and correct, that each party will perform all of the covenants and agreements required to be performed by it under the Merger Agreement and that all conditions to the consummation of the Merger will be satisfied without waiver or modification thereof. Evercore further assumed, in all respects material to its analysis, that all governmental, regulatory or other consents, approvals or releases necessary for the consummation of the Merger will be obtained without any delay, limitation, restriction or condition that would have an adverse effect on Aerojet Rocketdyne or the consummation of the Merger or reduce the contemplated benefits to the holders of Aerojet Rocketdyne common stock of the Merger. The credit, financial and stock markets had been experiencing unusual volatility and Evercore expressed no opinion or view as to any potential effects of such volatility on the parties or the Merger. In addition, Evercore relied, without independent verification, on the assessments of the management of Aerojet Rocketdyne as to (i) the validity of, and risks associated with, Aerojet Rocketdyne’s intellectual property, technology, products and services, and (ii) the marketability, commercial viability and market adoption of Aerojet Rocketdyne’s current and future products and services.

Evercore did not conduct a physical inspection of the properties or facilities of Aerojet Rocketdyne and did not make or assume any responsibility for making any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or other off-balance sheet assets and liabilities) of Aerojet Rocketdyne, nor was Evercore furnished with any such valuations or appraisals, nor has Evercore evaluated the solvency or fair value of Aerojet Rocketdyne under any state or federal laws relating to bankruptcy, insolvency or similar matters. Evercore’s opinion is necessarily based upon information made available to Evercore as of the date of its opinion and financial, economic, market and other conditions as they existed and as could be evaluated on the date of its opinion. It is understood that subsequent developments may affect Evercore’s opinion and that Evercore does not have any obligation to update, revise or reaffirm this opinion.

Evercore was not asked to pass upon, and Evercore expressed no opinion with respect to, any matter other than the fairness, from a financial point of view, of the merger consideration to the holders of Aerojet Rocketdyne common stock. Evercore did not express any view on, and its opinion did not address, the fairness of the proposed transaction to, or any consideration to be received in connection therewith by, the holders of any other class of securities, creditors or other constituencies of Aerojet Rocketdyne, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Aerojet Rocketdyne, or any class of such persons, whether relative to the merger consideration or otherwise. Evercore was not asked to, nor did Evercore express any view on, and its opinion did not address, any other term or

aspect of the Merger Agreement or the Merger, including, without limitation, the structure or form of the Merger, or any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into or amended in connection with the Merger Agreement. Evercore’s opinion does not address the relative merits of the Merger as compared to other business or financial strategies that might be available to Aerojet Rocketdyne, nor does it address the underlying business decision of Aerojet Rocketdyne to engage in the Merger. In arriving at its opinion, Evercore was not authorized to solicit, and did not solicit, interest from any third party with respect to the acquisition of any or all of Aerojet Rocketdyne common stock or any business combination or other extraordinary transaction involving Aerojet Rocketdyne. Evercore’s opinion did not constitute a recommendation to the Aerojet Rocketdyne board of directors or to any other persons in respect of the Merger, including as to how any holder of shares of Aerojet Rocketdyne common stock should vote or act in respect of the Merger. Evercore was not expressing any opinion as to the prices at which shares of Aerojet Rocketdyne common stock will trade at any time, as to the potential effects of volatility in the credit, financial and stock markets on Aerojet Rocketdyne or the Merger or as to the impact of the Merger on the solvency or viability of Aerojet Rocketdyne or the ability of Aerojet Rocketdyne to pay its obligations when they come due. Evercore is not a legal, regulatory, accounting or tax expert and has assumed the accuracy and completeness of assessments by Aerojet Rocketdyne and its advisors with respect to legal, regulatory, accounting and tax matters.

The following summary of Evercore’s financial analyses includes information presented in tabular format. In order to fully understand the analyses, the tables should be read together with the full text of each summary. The tables are not intended to stand alone and alone do not constitute a complete description of Evercore’s financial analyses. Considering the tables below without considering the full narrative description of Evercore’s financial analyses, including the methodologies and assumptions underlying such analyses, could create a misleading or incomplete view of such analyses.

Evercore performed discounted cash flow analyses of Aerojet Rocketdyne to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that Aerojet Rocketdyne was forecasted to generate during Aerojet Rocketdyne’s fiscal years 2021 through 2029 based on each of the Base Case Forecast and the Adjusted Base Case Forecast. For purposes of this analysis, the projected cash flows provided by Aerojet Rocketdyne’s management were adjusted with management’s approval to exclude the impact of cash pension contributions and reimbursements, net environmental remediation cash flows and real estate cash flows (collectively, the “additional cash flow items”). The additional cash flow items were excluded from the projected cash flows on the basis that they are significant items that Aerojet Rocketdyne’s management believes are non-perpetual. The impact of cash pension contributions and reimbursements was reflected as a liability on Aerojet Rocketdyne’s balance sheet, and each of the net environmental cash flows and real estate cash flows were reflected as assets. Evercore calculated terminal values for Aerojet Rocketdyne by applying perpetuity growth rates of 2.0% to 3.0%, which range was selected based on Evercore’s professional judgment and experience, to a terminal year estimate of the unlevered, after-tax free cash flows that Aerojet Rocketdyne was forecasted to generate based on the Aerojet Rocketdyne Forecasts. The cash flows and terminal values in each case were then discounted to present value as of December 31, 2020 using discount rates ranging from 7.50% to 8.75%, which were based on an estimate of Aerojet Rocketdyne’s weighted average cost of capital and the mid-year cash flow discounting convention. Based on this range of implied enterprise values, Aerojet Rocketdyne’s total debt (excluding convertible notes), cash and marketable securities (excluding restricted cash and cash used to repurchase shares since September 30, 2020 per Aerojet Rocketdyne’s management) and net environmental asset position resulting from government and other reimbursements that Aerojet Rocketdyne management projects will more than fully offset Aerojet Rocketdyne’s payments related to its environmental remediation liabilities as of September 30, 2020, Aerojet Rocketdyne’s present value of forecast cash contributions to fund pension liabilities, net of federal government reimbursement for certain pension expenses, for fiscal years 2021 through 2029, Aerojet Rocketdyne’s average estimated present value of real estate and the number of fully diluted shares of Aerojet Rocketdyne common stock, in each case as provided by Aerojet Rocketdyne’s management, this analysis indicated a range of implied equity values per share of Aerojet Rocketdyne common stock rounded to the nearest $0.25 of $52.00 to $71.00 in the case of the Base Case Forecast and a range of implied equity values per share of Aerojet Rocketdyne common stock rounded to the nearest $0.25 of $48.75 to $66.25 in the case of the Adjusted Base Case Forecast, each as compared to the merger consideration of $56.00 per share of Aerojet Rocketdyne common stock minus, to the extent paid, the amount per share of the Pre-Closing Dividend.

Evercore reviewed and compared certain financial information of Aerojet Rocketdyne to corresponding financial multiples and ratios for the following selected publicly traded companies in the defense industry (the “selected companies”) which Evercore deemed most relevant to consider in relation to Aerojet Rocketdyne, based on its professional judgment and experience, because they are public companies with operations that, for purposes of its analysis, Evercore considered similar to the operations of Aerojet Rocketdyne.

For each of the selected companies, Evercore calculated, based on closing share prices as of December 18, 2020 (i) enterprise value (defined as equity market capitalization plus total debt, plus after-tax unfunded pension and other post-employment benefits (“OPEB”) obligations as of December 31, 2019, plus minority interest, less cash and cash equivalents and investments in unconsolidated affiliates, all as of latest available publicly filed balance sheets unless otherwise noted) as a multiple of estimated 2021 and 2022 Adjusted EBITDA (as defined in the section of this proxy statement captioned “The Merger — Certain Unaudited Prospective Financial Information,” provided that when used with respect to companies other than Aerojet Rocketdyne, no adjustments attributable to the Aerojet Rocketdyne real estate segment and income/(expense) related to re-measurement of net environmental remediation liability are included in such definition), which we refer to as “2021E Adjusted EBITDA” and “2022E Adjusted EBITDA,” respectively, and (ii) closing share prices as a multiple of estimated 2021 and 2022 earnings per share (“EPS”), which we refer to as “2021E EPS” and “2022E EPS,” respectively. Estimated financial data of the selected companies (pro forma as applicable) were based on publicly available research analysts’ estimates.

This analysis indicated the following:

Based on the multiples it derived for the selected companies and based on its professional judgment and experience, Evercore selected a reference range of: enterprise value/Adjusted EBITDA multiples of 10.0x – 12.0x and applied this range of multiples to Aerojet Rocketdyne’s estimated fiscal year 2021 Adjusted EBITDA based on the Base Case Forecast, enterprise value/Adjusted EBITDA multiples of 9.0x – 11.0x and applied this range of multiples to Aerojet Rocketdyne’s estimated fiscal year 2022 Adjusted EBITDA based on the Base Case Forecast; price/EPS multiples of 14.0x – 17.0x and applied this range of multiples to Aerojet Rocketdyne’s estimated fiscal year 2021 EPS (excluding cash) based on the Base Case Forecast, and price/EPS multiples of 13.0x – 16.0x and applied this range of multiples to Aerojet Rocketdyne’s estimated fiscal year 2022 EPS (excluding cash) based on the Base Case Forecast. “EPS (excluding cash)” reflects Aerojet Rocketdyne’s forecast net income and average fully diluted share count, excluding estimated post-tax income per average fully diluted share attributable to interest earned on Aerojet Rocketdyne’s balance of cash and marketable securities. Evercore made this adjustment to EPS in order to be able to more accurately infer a range of valuation multiples for Aerojet Rocketdyne based on the trading valuations of its peers, for which cash makes up a materially lower portion of total market capitalization. Based on these ranges of implied enterprise values, Aerojet Rocketdyne’s total debt (excluding convertible notes), cash and marketable securities (excluding restricted cash) and net environmental asset position as of September 30, 2020, Aerojet Rocketdyne’s after-tax unfunded pension and OPEB liabilities as of December 31, 2019, Aerojet Rocketdyne’s average estimated present value of real estate and the number of fully diluted shares of Aerojet Rocketdyne common stock, in each case as provided by Aerojet Rocketdyne’s management, this analysis indicated a range of implied equity values per share of Aerojet Rocketdyne common stock rounded to the nearest $0.25 of $45.25 to $53.25, $41.75 to $50.00, $40.50 to

$47.00, and $43.75 to $51.25, respectively, compared to the merger consideration of $56.00 per share of Aerojet Rocketdyne common stock minus, to the extent paid, the amount per share of the Pre-Closing Dividend.

Based on the multiples it derived for the selected companies and based on its professional judgment and experience, Evercore selected a reference range of: enterprise value/Adjusted EBITDA multiples of 10.0x – 12.0x and applied this range of multiples to Aerojet Rocketdyne’s estimated fiscal year 2021 Adjusted EBITDA based on the Adjusted Base Case Forecast, enterprise value/Adjusted EBITDA multiples of 9.0x – 11.0x and applied this range of multiples to Aerojet Rocketdyne’s estimated fiscal year 2022 Adjusted EBITDA based on the Adjusted Base Case Forecast; price/EPS multiples of 14.0x – 17.0x and applied this range of multiples to Aerojet Rocketdyne’s estimated fiscal year 2021 EPS (excluding cash) based on the Adjusted Base Case Forecast, and price/EPS multiples of 13.0x – 16.0x and applied this range of multiples to Aerojet Rocketdyne’s estimated fiscal year 2022 EPS (excluding cash) based on the Adjusted Base Case Forecast. Based on these ranges of implied enterprise values, Aerojet Rocketdyne’s total debt (excluding convertible notes), cash and marketable securities (excluding restricted cash) and net environmental asset position as of September 30, 2020, Aerojet Rocketdyne’s after-tax unfunded pension and OPEB liabilities as of December 31, 2019, Aerojet Rocketdyne’s average estimated present value of real estate and the number of fully diluted shares of Aerojet Rocketdyne common stock, in each case as provided by Aerojet Rocketdyne’s management, this analysis indicated a range of implied equity values per share of Aerojet Rocketdyne common stock rounded to the nearest $0.25 of $44.00 to $51.75, $40.25 to $48.00, $39.50 to $45.75, and $42.25 to $49.50, respectively, compared to the merger consideration of $56.00 per share of Aerojet Rocketdyne common stock minus, to the extent paid, the amount per share of the Pre-Closing Dividend.

Although none of the selected companies are directly comparable to Aerojet Rocketdyne, Evercore selected these companies because they are publicly traded defense companies that Evercore, in its professional judgment and experience, considered generally relevant to Aerojet Rocketdyne for purposes of its financial analyses. In evaluating the selected companies, Evercore made judgments and assumptions with regard to general business, economic and market conditions affecting the selected companies and other matters, as well as differences in the selected companies’ financial, business and operating characteristics. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the selected companies and the multiples derived from the selected companies. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the data of the selected companies.

Evercore reviewed, to the extent publicly available, financial information related to the following selected transactions involving target companies in the defense and aerospace industries announced since 2015 (the “selected transactions”). For each selected transaction, Evercore calculated the implied enterprise value (defined as the target company’s implied equity value based on the consideration paid in the applicable transaction plus total debt, plus minority interest and after-tax unfunded pension and OPEB liabilities (post-Financial Accounting Standards Board Accounting Standards Update 2017-07 effective date, if relevant), less cash and cash equivalents and net of acquired tax benefits, if relevant) as a multiple of last twelve-month (LTM) Adjusted EBITDA for the target company at the time of the announcement of the applicable transaction, which we refer to as “LTM Adjusted EBITDA.” Estimated financial data of the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. Any transactions reported in non-USD values reflect the applicable foreign exchange rate as of the date of announcement of the relevant transaction.

The selected transactions reviewed by Evercore, the date each was announced, and the results of this analysis were as follows:

Based on the multiples it derived from the selected transactions and based on its professional judgment and experience, Evercore selected a reference range of enterprise value to LTM Adjusted EBITDA multiples of 12.0x to 14.0x and applied this range of multiples to Aerojet Rocketdyne’s LTM Adjusted EBITDA as of September 30, 2020 based on the financial results for Aerojet Rocketdyne provided by Aerojet Rocketdyne’s management and to Aerojet Rocketdyne’s estimated 2020 Adjusted EBITDA based on the Base Case Forecast. Based on this range of implied enterprise values, Aerojet Rocketdyne’s total debt (excluding convertible notes), cash and marketable securities (excluding restricted cash) and net environmental asset position as of September 30, 2020, Aerojet Rocketdyne’s after-tax unfunded pension and OPEB liabilities as of December 31, 2019, Aerojet Rocketdyne’s average estimated present value of real estate and the number of fully diluted shares of Aerojet Rocketdyne common stock, in each case as provided by Aerojet Rocketdyne’s management, this analysis indicated a range of implied equity values per share of Aerojet Rocketdyne common stock rounded to the nearest $0.25 of $46.25 to $53.00 and $48.00 to $55.25, respectively, compared to the merger consideration of $56.00 per share of Aerojet Rocketdyne common stock minus, to the extent paid, the amount per share of the Pre-Closing Dividend.

Although none of the target companies or businesses reviewed in the selected transactions analysis is directly comparable to Aerojet Rocketdyne and none of the selected transactions is directly comparable to the Merger, Evercore selected these transactions because they involve companies or businesses that Evercore, in its professional judgment and experience, considered generally relevant to Aerojet Rocketdyne for purposes of its financial analyses. In evaluating the selected transactions, Evercore made judgments and assumptions with regard to general business, economic and market conditions and other factors existing at the time of the selected transactions, and other matters, as well as differences in financial, business and operating characteristics and other factors relevant to the target companies or businesses in the selected transactions. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the target companies or businesses in the selected transactions and the multiples derived from the selected transactions. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the data of the selected transactions.

Evercore also noted certain other factors, which were not considered material to its financial analyses with respect to its opinion, but were referenced for informational purposes only, including, among other things, the following:

Evercore reviewed historical trading prices of shares of Aerojet Rocketdyne common stock during the twelve-month period ended December 18, 2020, noting that the low and high closing prices during such period ranged from $32.42 to $55.96 per share of Aerojet Rocketdyne common stock, respectively.

Evercore reviewed selected public market trading price targets for the shares of Aerojet Rocketdyne common stock prepared and published by equity research analysts that were publicly available as of December 18, 2020, the last full trading day prior to the delivery by Evercore of its opinion to the Aerojet Rocketdyne board of directors. These price targets reflect analysts’ estimates of the future public market trading price of the shares of Aerojet Rocketdyne common stock at the time the price target was published. As of December 18, 2020, the range of selected equity research analyst price targets per share of Aerojet Rocketdyne common stock was $43.00 to $55.00. Public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for the shares of Aerojet Rocketdyne common stock and these target prices and the analysts’ earnings estimates on which they were based are subject to risk and uncertainties, including factors affecting the financial performance of Aerojet Rocketdyne and future general industry and market conditions.

Evercore performed an illustrative analysis of the implied present value of the future price per share of Aerojet Rocketdyne common stock, which is designed to provide an indication of the present value of a theoretical future value of a company’s equity as a function of that company’s EPS.

In calculating the implied present value of the future price per share of Aerojet Rocketdyne common stock, Evercore first calculated a range of implied future prices per share of Aerojet Rocketdyne common stock on December 31, 2023 by multiplying Aerojet Rocketdyne’s estimated calendar year 2024 EPS based on each of the Base Case Forecast and the Adjusted Base Case Forecast by a range of illustrative price-to-earnings ratios of 20.6x to 22.6x. Evercore then discounted the implied share prices back to December 31, 2020 using discount rates ranging from 8.25% to 9.25%, which were based on an estimate of Aerojet Rocketdyne’s cost of equity. This analysis indicated a range of implied equity values per share of Aerojet Rocketdyne common stock rounded to the nearest $0.25 of $48.75 to $54.75 and $46.50 to $52.50 based on the Base Case Forecast and the Adjusted Base Case Forecast, respectively, compared to the merger consideration of $56.00 per share of Aerojet Rocketdyne common stock minus, to the extent paid, the amount per share of the Pre-Closing Dividend.

Using publicly available information, Evercore reviewed 39 all-cash and 50 total transactions and announced bids for control of U.S. public targets by strategic acquirors with an aggregate transaction value between $2 billion and $6 billion announced since January 1, 2015 (excluding financial, REIT, master limited partnership and pharmaceutical targets, mergers of equals, acquisitions by financial sponsors and transactions between related parties). Using publicly available information, Evercore calculated the premiums paid as the percentage by which the per share consideration paid or proposed to be paid in each such transaction exceeded the closing market prices per share of the target companies one day and four weeks prior to announcement of each transaction.

This analysis indicated the following:

Based on the results of this analysis and its professional judgment and experience, Evercore applied (i) a premium range of 20% to 45% to $31.26, representing the closing market price per share of Aerojet Rocketdyne common stock on December 18, 2020 minus the $10.78 amount of cash and marketable securities (excluding restricted cash) per share of Aerojet Rocketdyne common stock on Aerojet Rocketdyne’s balance sheet as of September 30, 2020, and (ii) a premium range of 25% to 45% to $31.26, representing the closing market price per share of Aerojet Rocketdyne common stock on December 18, 2020 minus the $10.78 amount of cash and marketable securities (excluding restricted cash) per share on Aerojet Rocketdyne’s balance sheet as of September 30, 2020. The resulting products were added to $10.78 of cash and marketable securities (excluding restricted cash) per share of Aerojet Rocketdyne common stock. This analysis indicated a range of implied equity values per share of Aerojet Rocketdyne common stock rounded to the nearest $0.25 of $48.25 to $56.00 and $49.75 to $56.00 based on the one-day prior and four-weeks prior premia, respectively, compared to the merger consideration of $56.00 per share of Aerojet Rocketdyne common stock minus, to the extent paid, the amount per share of the Pre-Closing Dividend.

The foregoing summary of Evercore’s financial analyses does not purport to be a complete description of the analyses or data presented by Evercore to the Aerojet Rocketdyne board of directors. In connection with the review of the Merger by Aerojet Rocketdyne’s board of directors, Evercore performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Evercore’s opinion. In arriving at its fairness determination, Evercore considered the results of all the analyses and did not draw, in isolation, conclusions from or with regard to any one analysis or factor considered by it for purposes of its opinion. Rather, Evercore made its determination as to fairness on the basis of its professional judgment and experience after considering the results of all the analyses. In addition, Evercore may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above should not be taken to be the view of Evercore with respect to the actual value of the shares of Aerojet Rocketdyne common stock. Rounding may result in total sums set forth in this section not equaling the total of the figures shown.

Evercore prepared these analyses for the purpose of providing an opinion to the Aerojet Rocketdyne board of directors as to the fairness, from a financial point of view, of the merger consideration to the holders of shares of Aerojet Rocketdyne common stock. These analyses do not purport to be appraisals or to necessarily reflect the prices at which the business or securities actually may be sold. Any estimates contained in these analyses are not necessarily indicative of actual future results, which may be significantly more or less favorable than those suggested by such estimates. Accordingly, estimates used in, and the results derived from, Evercore’s analyses are inherently subject to substantial uncertainty, and Evercore assumes no responsibility if future results are materially different from those forecasted in such estimates.

Evercore’s financial advisory services and its opinion were provided for the information and benefit of the Aerojet Rocketdyne board of directors (in its capacity as such) in connection with its evaluation of the proposed Merger. The issuance of Evercore’s opinion was approved by an Opinion Committee of Evercore.

Evercore did not recommend any specific amount of consideration to the Aerojet Rocketdyne board of directors or Aerojet Rocketdyne’s management or that any specific amount of consideration constituted the only appropriate consideration in the Merger for the holders of Aerojet Rocketdyne common stock.

Pursuant to the terms of Evercore’s engagement letter with Aerojet Rocketdyne, Aerojet Rocketdyne has agreed to pay Evercore a fee for its services in the amount of approximately $15 million, of which $1 million was paid upon delivery of Evercore’s opinion, and the balance of which will be payable contingent upon the consummation of the Merger. Aerojet Rocketdyne has also agreed to reimburse Evercore for certain expenses and to indemnify Evercore against certain liabilities arising out of its engagement.

During the two-year period prior to the date of its opinion, Evercore and its affiliates have not been engaged to provide financial advisory or other services to Aerojet Rocketdyne and Evercore has not received any compensation from Aerojet Rocketdyne during such period. In addition, during the two-year period prior to the

date of its opinion, Evercore and its affiliates have not been engaged to provide financial advisory or other services to Lockheed Martin and Evercore has not received any compensation from Lockheed Martin during such period. Evercore may provide financial advisory or other services to Aerojet Rocketdyne and Lockheed Martin in the future, and in connection with any such services Evercore may receive compensation.

Evercore and its affiliates engage in a wide range of activities for its and their own accounts and the accounts of customers, including corporate finance, mergers and acquisitions, equity sales, trading and research, private equity, placement agent, asset management and related activities. In connection with these businesses or otherwise, Evercore and its affiliates and/or its or their respective employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly, hold long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or equity securities, senior loans and/or derivative products or other financial instruments of or relating to Aerojet Rocketdyne or its affiliates, Lockheed Martin or its affiliates or persons that are competitors, customers or suppliers of Aerojet Rocketdyne.

Aerojet Rocketdyne engaged Evercore to act as a financial advisor based on Evercore’s qualifications, experience and reputation. Evercore is an internationally recognized investment banking firm and regularly provides fairness opinions to its clients in connection with mergers and acquisitions, leveraged buyouts and valuations for corporate and other purposes.

Although Aerojet Rocketdyne may periodically issue limited guidance to investors concerning its expected financial performance, Aerojet Rocketdyne does not as a matter of course publicly disclose long-term financial projections due to, among other things, the inherent uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates, particularly in the aerospace and defense industry. However, in connection with the proposed Merger, Aerojet Rocketdyne management prepared certain non-public, unaudited financial projections regarding Aerojet Rocketdyne’s future results of operations for fiscal years ending 2020 through 2029.

One set of financial projections (referred to herein as the “Base Case Forecast”) was based upon and reflected, among other things, an assumption that the NASA Space Launch System (“SLS”) manifest would ramp up from about one launch per year to two launches per year beginning in 2028. The Base Case Forecast was provided to and its assumptions were discussed with Lockheed Martin, and was also provided to, and reviewed with, the Aerojet Rocketdyne board of directors as well as Aerojet Rocketdyne’s financial advisors, Citi and Evercore, for use, with the approval of Aerojet Rocketdyne, in connection with Citi’s and Evercore’s respective financial analyses and opinions described above under the sections in this proxy statement captioned “The Merger — Opinion of Citigroup Global Markets Inc.” and “The Merger — Opinion of Evercore Group L.L.C.,” respectively. Aerojet Rocketdyne and Lockheed Martin also discussed, among other things, the possibility that the NASA SLS manifest would remain at about one launch per year (rather than ramping up to two launches per year beginning in 2028, as contemplated by the Base Case Forecast).

Another set of more conservative financial projections (referred to herein as the “Adjusted Base Case Forecast”) was based upon and reflected, among other things, the assumption that the NASA SLS manifest would remain at about one launch per year. The Adjusted Base Case Forecast was provided to, and reviewed with, the Aerojet Rocketdyne board of directors as well as Aerojet Rocketdyne’s financial advisors, Citi and Evercore, for use, with the approval of Aerojet Rocketdyne, in connection with Citi’s and Evercore’s respective financial analyses and opinions described above under the sections in this proxy statement captioned “The Merger — Opinion of Citigroup Global Market Inc.” and “The Merger — Opinion of Evercore Group L.L.C.,” respectively.

The Base Case Forecast and the Adjusted Base Case Forecast are referred to herein collectively as the “Aerojet Rocketdyne Forecasts.”

Base Case Forecast. Aerojet Rocketdyne management prepared the Base Case Forecast as summarized below:

Adjusted Base Case Forecast. Aerojet Rocketdyne management prepared the Adjusted Base Case Forecast using similar assumptions as the Base Case Forecast, except that (1) the Adjusted Base Case Forecast was based upon and reflected an assumption that the NASA SLS manifest would remain at about one launch per year (rather than ramping up to two launches per year beginning in 2028) and (2) Aerojet Rocketdyne management decremented revenue and associated profit and cash flow in amounts that, in its judgment, were appropriate to reflect such assumed reduced NASA SLS launch manifest.

Risk Adjusted Case Analysis. In addition, in November 2020, Aerojet Rocketdyne management provided to the Aerojet Rocketdyne board of directors, Citi and Evercore a downside risk-based sensitivity analysis in respect of the Adjusted Base Case Forecast (the “Risk Adjusted Case Analysis”) taking into account Aerojet Rocketdyne management’s evolving and expanding view that there was growing uncertainty in Aerojet Rocketdyne’s space exploration business prospects. The Risk Adjusted Case Analysis was based on similar assumptions as the Adjusted Base Case Forecast, except that (1) the Risk Adjusted Case Analysis further assumed that NASA’s schedule for landing a human presence on the moon could potentially be delayed and that space exploration-related new business might not be funded or won at the same rate assumed in the Adjusted Base Case Forecast and (2) Aerojet Rocketdyne management further decremented revenue and associated profit and cash flow in amounts that, in its judgment, were appropriate to reflect such assumed slippage in the moon landing schedule and reduced space exploration-related new business.

Management Presentation Forecast. In May 2020 Aerojet Rocketdyne management had also provided to Lockheed Martin and Citi (and in October 2020 Aerojet Rocketdyne management provided to Evercore) certain non-public, unaudited financial projections regarding Aerojet Rocketdyne for the fiscal years ending December 31, 2020 through 2029 (the “Management Presentation Forecast”), which projections were subsequently superseded by the Base Case Forecast in September 2020. The Management Presentation Forecast had been based on substantially similar assumptions as the Base Case Forecast, except that the Base Case Forecast in September 2020 incorporated emerging opportunities that added approximately $500 million more revenue, and associated profit and cash flow, over the 10-year period than the Management Presentation Forecast had assumed.

The Risk Adjusted Case Analysis and the Management Presentation Forecast were neither approved by Aerojet Rocketdyne for use, nor used, by Citi or Evercore in connection with Citi’s and Evercore’s respective financial analyses and opinions described above under the sections in this proxy statement captioned “The Merger — Opinion of Citigroup Global Markets Inc.” and “The Merger — Opinion of Evercore Group L.L.C.,” respectively.

We sometimes refer to the Base Case Forecast, the Adjusted Base Case Forecast, the Risk Adjusted Case Analysis and the Management Presentation Forecast collectively as the “Management Projections.”

The below summary of the Management Projections is included in this proxy statement for the purpose of providing stockholders certain nonpublic information that was furnished to certain persons and parties (in each case, as and to the extent described in this section of the proxy statement captioned

“The Merger — Certain Unaudited Prospective Financial Information”) in connection with evaluating the Merger and the other transactions contemplated by the Merger Agreement, and such information may not be appropriate for other purposes, and it is not included to influence the voting decision of any stockholder on the Merger Proposal or any of the other proposals to be voted on at the special meeting or to influence any stockholder to make any investment decision with respect to the Merger. The Management Projections were not prepared with a view toward public disclosure, the published guidelines of the SEC regarding projections, the use of non-GAAP financial measures or forward-looking statements, or the guidelines established by the American Institute of Certified Public Accountants for the preparation and presentation of prospective financial information. None of Aerojet Rocketdyne, Lockheed Martin, Citi, Evercore or their respective officers, directors, affiliates, advisors or other representatives considered, or now consider, the inclusion of the Management Projections to be regarded as an indication that the Management Projections are predictive of actual future events, actual future results or performance of Aerojet Rocketdyne, or actual future results or performance of Lockheed Martin following its acquisition of Aerojet Rocketdyne, and such information should not be relied upon as such. Readers of this proxy statement are cautioned not to place undue, if any, reliance on the Management Projections.

While presented here with numeric specificity, the Management Projections were based on many variables and assumptions (including assumptions related to industry performance and general business, economic, market and financial conditions and additional matters specific to Aerojet Rocketdyne’s business) that are inherently subjective and uncertain, continually evolving and beyond the control of Aerojet Rocketdyne’s management. Important factors that may affect actual results and cause this unaudited prospective financial information not to be achieved include, but are not limited to, risks and uncertainties relating to Aerojet Rocketdyne’s business (including its ability to achieve strategic goals, objectives and targets over applicable periods), industry performance, general business and economic conditions, changes in laws and regulations (including, but not limited to, tax laws and regulations), changes in government priorities and other factors described in the section of this proxy statement captioned “Forward-Looking Statements” beginning on page 16. The Management Projections also reflect numerous variables, expectations and assumptions available at the time they were prepared as to certain business decisions that are subject to change. As a result, actual results may differ materially from those contained in the Management Projections. Accordingly, there can be no assurance that the projected results summarized below will be realized. Stockholders are urged to review the most recent SEC filings of Aerojet Rocketdyne for a description of the reported results of operations and financial condition of Aerojet Rocketdyne, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Aerojet Rocketdyne’s Annual Report on Form 10-K for the year ended December 31, 2019, and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020. None of Aerojet Rocketdyne, Lockheed Martin, Citi, Evercore or their respective officers, directors, affiliates, advisors or other representatives can provide you any assurance that actual results will not differ materially from this unaudited prospective financial information.

NEITHER AEROJET ROCKETDYNE, LOCKHEED MARTIN, NOR ANY OTHER PARTY UNDERTAKES ANY OBLIGATION TO UPDATE OR OTHERWISE REVISE OR RECONCILE THE MANAGEMENT PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE THE MANAGEMENT PROJECTIONS WERE GENERATED OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING SUCH INFORMATION ARE SHOWN TO BE IN ERROR. SINCE THE MANAGEMENT PROJECTIONS COVER MULTIPLE YEARS, SUCH INFORMATION BY ITS NATURE BECOMES MORE LIKELY TO DIFFER MATERIALLY FROM ACTUAL RESULTS WITH EACH SUCCESSIVE YEAR.

Aerojet Rocketdyne has not made and makes no representation to Lockheed Martin or any Aerojet Rocketdyne stockholder or other stakeholder or any other party, in the Merger Agreement or otherwise, concerning the Management Projections or regarding Aerojet Rocketdyne’s actual performance compared to the Management Projections or that the projected results will be achieved. The inclusion of this unaudited prospective financial information in this proxy statement does not constitute an admission or representation by Aerojet Rocketdyne that the information is material. In light of the foregoing factors and the uncertainties inherent in this unaudited prospective financial information, Aerojet Rocketdyne urges all of its stockholders not to place undue reliance, if any, on such information and to review Aerojet Rocketdyne’s most recent SEC filings for a description of Aerojet Rocketdyne’s reported financial results and condition.

Neither Aerojet Rocketdyne’s independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and they assume no responsibility for, and disclaim any association with, the prospective financial information. Financial measures not presented in accordance with GAAP should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and financial measures not presented in accordance with GAAP as used by Aerojet Rocketdyne may not be comparable to similarly titled measures used by other companies. The Management Projections are not subject to SEC rules requiring reconciliation of a non-GAAP financial measure to a GAAP financial measure.

The following table presents a summary of the Base Case Forecast for the fiscal years ending December 31, 2020 through 2029 for Aerojet Rocketdyne on a standalone basis (amounts may reflect rounding):

Citi Adjustments in Respect of the Base Case Forecast. The following table sets forth the estimated amounts of the Adjusted EBITDA and Adjusted Unlevered Free Cash Flow of Aerojet Rocketdyne, as calculated by Citi in respect of the Base Case Forecast based on certain information provided by Aerojet Rocketdyne management for purposes of (and as approved by Aerojet Rocketdyne management for use by Citi in connection with) Citi’s financial analyses and opinion described in the section of this proxy statement captioned “The Merger — Opinion of Citigroup Global Markets Inc.” (amounts may reflect rounding):

Evercore Adjustments in Respect of the Base Case Forecast. The following table sets forth the estimated amounts of the Adjusted EBITDA and Adjusted Unlevered Free Cash Flow of Aerojet Rocketdyne, as calculated by Evercore in respect of the Base Case Forecast based on certain information provided by Aerojet Rocketdyne management for purposes of (and as approved by Aerojet Rocketdyne management for use by Evercore in connection with) Evercore’s financial analyses and opinion described in the section of this proxy statement captioned “The Merger — Opinion of Evercore Group L.L.C.” (amounts may reflect rounding):

The following table presents a summary of the Adjusted Base Case Forecast for the fiscal years ending December 31, 2020 through 2029 for Aerojet Rocketdyne on a standalone basis (amounts may reflect rounding):

Citi Adjustments in Respect of the Adjusted Base Case Forecast. The following table sets forth the estimated amounts of the Adjusted EBITDA and Adjusted Unlevered Free Cash Flow of Aerojet Rocketdyne, as calculated by Citi in respect of the Adjusted Base Case Forecast based on certain information provided by Aerojet Rocketdyne management for purposes of (and as approved by Aerojet Rocketdyne management for use by Citi in connection with) Citi’s financial analyses and opinion described in the section of this proxy statement captioned “The Merger — Opinion of Citigroup Global Markets Inc.” (amounts may reflect rounding):

Evercore Adjustments in Respect of the Adjusted Base Case Forecast. The following table sets forth the estimated amounts of the Adjusted EBITDA and Adjusted Unlevered Free Cash Flow of Aerojet Rocketdyne, as calculated by Evercore in respect of the Adjusted Base Case Forecast based on certain information provided by Aerojet Rocketdyne management for purposes of (and as approved by Aerojet Rocketdyne management for use by Evercore in connection with) Evercore’s financial analyses and opinion described in the section of this proxy statement captioned “The Merger — Opinion of Evercore Group L.L.C.” (amounts may reflect rounding):

The following table presents a summary of the Risk Adjusted Case Analysis for the fiscal years ending December 31, 2020 through 2029 for Aerojet Rocketdyne on a standalone basis (amounts may reflect rounding):

The following table presents a summary of the Management Presentation Forecast for the fiscal years ending December 31, 2020 through 2029 for Aerojet Rocketdyne on a standalone basis (amounts may reflect rounding):

When considering the recommendation of Aerojet Rocketdyne’s board of directors that you vote to approve the proposal to adopt the Merger Agreement, you should be aware that our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of stockholders generally, as more fully described below. In (i) evaluating and negotiating the Merger Agreement; (ii) approving the Merger Agreement and the Merger; and (iii) recommending that the Merger Agreement and the transactions contemplated thereby be adopted by stockholders, Aerojet Rocketdyne’s board of directors was aware of and considered these interests, among other matters.

The Merger Agreement provides that all rights to indemnification, advancement of expenses and exculpation from liabilities by Aerojet Rocketdyne and any of its subsidiaries now existing in favor of current or former directors or officers of Aerojet Rocketdyne or any of its subsidiaries (or directors or officers of Aerojet Rocketdyne or any of its subsidiaries to the extent serving as fiduciaries with respect to any employee benefit plan maintained by Aerojet Rocketdyne or any of its subsidiaries) (such directors, officers or fiduciaries, collectively, the “Indemnified Persons”) for their acts or omissions as such directors and officers and fiduciaries

occurring, or alleged to have occurred, at or prior to the effective time of the Merger, including in connection with the Merger Agreement, the Merger and the transactions contemplated thereby, as provided in Aerojet Rocketdyne’s or its applicable subsidiary’s respective certificate of incorporation, bylaws or other organizational documents (as in effect as of the date of the Merger Agreement) and/or as provided in any indemnification agreement between Aerojet Rocketdyne or any of its subsidiaries and such Indemnified Person (as in effect as of the date of the Merger Agreement), shall survive the Merger and shall continue in full force and effect (to the extent such rights to indemnification are available under and consistent with applicable Delaware Law) in accordance with their terms and shall not be amended, repealed or otherwise modified during such period in any manner that would adversely affect any right thereunder of any such Indemnified Person.

As of or prior to the effective time of the Merger, Aerojet Rocketdyne agreed to purchase a six-year “tail” (i) directors’ and officers’ liability insurance policy or policies and (ii) fiduciary liability insurance policy or policies, in each case, subject to a cap on aggregate premiums equal to 300% of the last annual premiums paid prior to the date of the Merger Agreement for such policies, covering each person covered by Aerojet Rocketdyne’s directors’ and officers’ liability insurance policy or policies and fiduciary liability insurance policy or policies existing as of the date of the Merger Agreement with respect to acts, omissions or events occurring prior to the Merger.

The Merger Agreement provides for the treatment set forth below with respect to the awards held by our directors and executive officers at the effective time of the Merger.

Pursuant to the Merger Agreement, as of immediately prior to the effective time of the Merger, each share of restricted common stock held by our directors and executive officers on which restrictions have not yet lapsed and that is outstanding immediately prior to the effective time of the Merger (i) shall automatically become fully vested (and for shares of restricted common stock subject to performance vesting criteria, based on deemed achievement of maximum performance) and all restrictions applicable thereto shall lapse and (ii) shall terminate and be converted into the right to receive an amount in cash equal to (A) the sum of (1) the Price Per Share, plus (2) to the extent paid or payable to holders of common stock and payable but unpaid on such share of restricted common stock, the amount per share of the Pre-Closing Dividend (including, without duplication, any accrued and unpaid dividends payable with respect to the restricted shares), less (B) any applicable withholding or other taxes or other amounts required by applicable law to be withheld.

In connection with the payment of the Pre-Closing Dividend, Aerojet Rocketdyne will accrue dividends payable with respect to shares of restricted common stock issued and outstanding as of the Pre-Closing Dividend Record Date, in an amount equal to the per-share amount of the Pre-Closing Dividend.

As of January 20, 2021, the Company’s executive officers held an aggregate of 656,013 shares of common stock subject to unvested restricted stock and restricted stock unit awards (all of which restricted stock units are Pre-Signing RSUs (as defined below)), and the Company’s non-employee directors held an aggregate of 14,016 shares of common stock subject to unvested restricted stock and restricted stock unit awards (all of which restricted stock units are Pre-Signing RSUs).

Pursuant to the Merger Agreement, at the effective time of the Merger, each option to purchase common stock held by our executive officers that is unexpired, unexercised and outstanding immediately prior to the effective time of the Merger, whether vested or unvested, will be canceled and extinguished, and the holder thereof will be entitled to receive (subject to any applicable withholding or other taxes, or other amounts required by applicable law to be withheld), upon delivery of an option notice and acknowledgment in the form attached as an exhibit to the Merger Agreement, an amount in cash equal to the product of (i) the total number of shares of common stock subject to such option, multiplied by (ii) the excess (if any) of (A) the Price Per Share over (B) the per share exercise price (determined after downward adjustments to such exercise price contemplated in connection with the Pre-Closing Dividend) for the common stock subject to such option. If the exercise price applicable to shares of Aerojet Rocketdyne common stock subject to an option is equal to or greater than the Price Per Share, the option shall terminate and be canceled for no consideration.

In connection with the payment of the Pre-Closing Dividend, Aerojet Rocketdyne will reduce the exercise price with respect to options to purchase common stock issued and outstanding as of the Pre-Closing Dividend Record Date, in an amount equal to the per-share amount of the Pre-Closing Dividend.

Pursuant to the Merger Agreement, at the effective time of the Merger, each stock appreciation right, or “SAR,” held by our directors and executive officers that is unexpired, unexercised and outstanding immediately prior to the effective time of the Merger, whether vested or unvested, will be canceled and extinguished, and the holder thereof will be entitled to receive (subject to any applicable withholding or other taxes, or other amounts required by applicable law to be withheld), upon delivery of a stock appreciation rights notice and acknowledgment in the form attached as an exhibit to the Merger Agreement, an amount in cash equal to the product of (i) the total number of shares of common stock subject to such SAR multiplied by (ii) the excess (if any) of (A) the Price Per Share over (B) the per share grant price (determined after downward adjustments to such grant price contemplated in connection with the Pre-Closing Dividend) for the common stock subject to such SAR. If the grant price applicable to shares of Aerojet Rocketdyne common stock subject to a SAR is equal to or greater than the Price Per Share, the SAR shall terminate and be canceled for no consideration.

In connection with the payment of the Pre-Closing Dividend, Aerojet Rocketdyne will reduce the grant price with respect to SARs issued and outstanding as of the Pre-Closing Dividend Record Date, in an amount equal to the per-share amount of the Pre-Closing Dividend.

As of January 20, 2021, the Company’s executive officers held an aggregate of 87,485 stock appreciation rights, and the Company’s non-employee directors did not hold any stock appreciation rights.

The “Equity Award Exchange Ratio” means, with respect to each Post-Signing RSU, the quotient determined by dividing (a) the sum of (i) the Price Per Share, plus (ii) to the extent paid to holders of common stock and payable but unpaid on such Post-Signing RSU, the amount per share of the Pre-Closing Dividend (including, without duplication, the amount of any dividend equivalent accrued on such Post-Signing RSU) by (b) the volume weighted average of the closing sale prices per share of Lockheed Martin common stock on the NYSE, as reported in the New York City edition of The Wall Street Journal (or, if not reported thereby, as reported in another authoritative source), on each of the five full consecutive trading days ending on and including the third (3rd) business day prior to the closing date of the Merger.

In connection with the payment of the Pre-Closing Dividend, Aerojet Rocketdyne will accrue dividend equivalents payable with respect to RSUs issued and outstanding as of the Pre-Closing Dividend Record Date, in an amount equal to the per-share amount of the Pre-Closing Dividend.

For an estimate of the amounts that would be payable to each of our named executive officers in respect of their unvested equity awards, see the section entitled “The Merger — Interests of Aerojet Rocketdyne's Directors and Executive Officers in the Merger — Golden Parachute Compensation” below. The estimated aggregate amount that would be payable to our directors and 6 executive officers who are not named executive officers in respect of their 197,811 currently outstanding and unvested restricted stock and restricted stock unit awards upon the effective time of the Merger is $11,077,416; the estimated aggregate amount that would be payable to our directors and executive officers who are not named executive officers in respect of their currently outstanding stock options upon the effective time of the Merger is $0; the estimated aggregate amount that would be payable to our directors and executive officers who are not named executive officers in respect of their currently outstanding SARs upon the effective time of the Merger is $903,588 (each taking into account dividend / dividend equivalent payments and adjustments and, in the case of Post-Signing RSUs, assuming that the executive officer will not remain employed by Lockheed Martin following the effective time of the Merger).

In connection with the execution of the Merger Agreement, on December 19, 2020, the Organization & Compensation Committee of the Aerojet Rocketdyne board of directors approved the following actions, effective December 22, 2020, to, in part, mitigate the impact of adverse tax consequences to the Company and to certain of our executive officers pursuant to the golden parachute provisions of Sections 280G and 4999 of the Code: (1) accelerated payment of annual cash incentive awards under our 2020 Short-Term Incentive Program at the 150% payout level for each of our executive officers (other than Mr. Lichtenstein), with any remaining amount earned to be certified by the committee and paid in 2021; (2) accelerated vesting of performance-based restricted stock grants awarded under our 2018 Long-Term Incentive Program at the 150% payout level for each of our executive officers (other than Mr. Lichtenstein), with any remaining amount earned under such awards to be

certified by the committee and vested in 2021; (3) accelerated vesting of time-based equity awards held by each of our executive officers (other than Mr. Lichtenstein) that were otherwise scheduled to vest based on continued employment in 2021; (4) accelerated vesting of time-based equity awards that were otherwise scheduled to vest based on continued employment in 2022 held by each of Ms. Drake, Mr. Boehle and, by separate action on December 22, 2020, two other executive officers who are not named executive officers; (5) accelerated vesting of time-based stock options and stock appreciation rights held by Mr. Lichtenstein that were otherwise scheduled to vest based on continued employment in 2022; (6) the grant to Ms. Drake, Mr. Boehle and one other executive officer who is not a named executive officer of the restricted stock awards that would otherwise have been granted to those executive officers in 2021 with vesting criteria consistent with prior performance-based equity awards; and (7) the payment to Mr. Lichtenstein of a cash award in the amount of $3,900,000 in lieu of any long-term incentive award in 2021, a portion of which cash award is subject to recoupment by us in the event Mr. Lichtenstein’s employment terminates prior to December 22, 2023 due to his resignation or our termination of his employment for cause prior to the closing of the Merger.

The estimated aggregate amount realized by our executive officers who are not named executive officers pursuant to the accelerated vesting described in clauses (3), (4) and (5) of the preceding paragraph (based upon our closing stock price on December 22, 2020, the date of vesting acceleration) was $3,067,279.

We are party to an employment agreement with Ms. Drake, which was amended and restated on March 4, 2020 (the “Drake Employment Agreement”). Under the Drake Employment Agreement, if Ms. Drake’s employment is terminated by us without “cause” (including due to a death or disability) or by Ms. Drake for “good reason” within the period commencing six months prior to (or, if earlier, following the signing of a definitive agreement that, if consummated, would result in a change in control) and ending 24 months following a “change in control,” then Ms. Drake shall be entitled to the following payments and benefits: (i) accrued obligations; (ii) annual target bonus for the pro-rated portion of the fiscal year prior to the change in control, paid in a lump sum; (iii) a severance payment equal to three times the sum of (y) Ms. Drake’s base salary and (z) annual target bonus, paid in a lump sum; (iv) to the extent unvested at the time of Ms. Drake’s termination of employment, immediate full vesting of all of Ms. Drake’s equity awards (at the maximum level of performance, if applicable); (v) the opportunity to continue to participate in our life insurance policy in which she is enrolled before the date of termination at an amount of one times base salary for a period of 12 months following the date of termination; (vi) provided Ms. Drake timely elects and is eligible for COBRA coverage, payment by us of the premiums associated with 24 months of Ms. Drake’s continued participation, without any required contributions from Ms. Drake (but subject to all other plan terms, including co-payments and deductibles) in the health benefit plans in which Ms. Drake is enrolled prior to the date of termination; (vii) the opportunity to continue to participate in the Aerojet Rocketdyne Executive Physical Program for a period of 24 months following termination and (viii) outplacement services provided by the company-designated outplacement firm for a period of 18 months starting no later than ninety (90) days from Ms. Drake’s date of termination, with a maximum value of $25,000 (in each case, as such terms are defined in the Drake Employment Agreement). Receipt of such compensation and benefits is contingent on Ms. Drake’s timely execution of a release in the form attached to the Drake Employment Agreement.

We also maintain an executive change in control severance policy, which was amended on March 5, 2020 (the “CIC Policy”). The CIC Policy provides all of our executive officers, other than Ms. Drake and Mr. Lichtenstein, with compensation and benefits upon a termination of their employment by us without “cause” or by the executive for “good reason” (including due to an executive’s death or “disability”) within the six-month period prior to a “change in control” (or, if earlier, following the signing of a definitive agreement that, if consummated, would result in a change in control) through the 24-month period following a “change in control” (in each case, as such terms are defined in the CIC policy). In the event of an applicable termination of employment, the executive officer shall be entitled to the following:

Receipt of compensation and benefits under the CIC Policy is contingent on the executive officer’s timely execution of a release in a form we prescribe.

The Merger will constitute a “change in control” for purposes of each of these arrangements. These arrangements do not include a “gross-up” of any golden parachute excise tax imposed on the executive officer pursuant to Section 4999 of the Internal Revenue Code. Rather, payments would be reduced to an amount equal to the greatest dollar amount that would not subject the executive officer to the imposition of the excise tax, unless the executive officer would be placed in a better after-tax position receiving all payments and paying the excise tax.

The estimated aggregate amount that would be payable to our executive officers who are not named executive officers under the CIC Policy upon the effective time of the Merger is $11,209,986.

Certain of our non-employee directors and Mr. Lichtenstein participate in the Company’s Deferred Compensation Plan for Directors. In connection with the Merger, accrued account balances under such plan will become immediately payable in a cash lump sum.

In accordance with Item 402(t) of Regulation S-K, the table below sets forth the compensation that is based on or otherwise relates to the Merger that will or may become payable to each of our named executive officers in connection with the Merger. Please see the previous portions of this section for further information regarding this compensation.

The amounts indicated in the table below are estimates of the amounts that would be payable assuming, solely for purposes of this table, that the Merger is consummated on January 15, 2021, and that the employment of each of the named executive officers were subject to an involuntary termination without cause on January 15, 2021. The amounts indicated in the table below also assume that the amount payable in respect of outstanding and unvested equity awards will be $56.00 per share. Our executive officers will not receive pension, non-qualified deferred compensation, tax reimbursement or other benefits in connection with the Merger.

Some of the amounts set forth in the table would be payable solely by virtue of the consummation of the Merger. In addition to the assumptions regarding the consummation date of the Merger and the termination of employment, these estimates are based on certain other assumptions that are described in the footnotes accompanying the table below. Accordingly, the ultimate values to be received by a named executive officer in connection with the Merger may differ from the amounts set forth below.

Mr. Lichtenstein, the Executive Chairman of Aerojet Rocketdyne, is also the Executive Chairman of Steel Partners Holdings L.P. (“Steel Holdings”) and the Chief Executive Officer of Steel Partners Ltd. (“SPL”). In addition to Aerojet Rocketdyne receiving certain services from Steel Holdings and SPL, Mr. Lichtenstein may be deemed to beneficially own the shares of common stock owned directly by SPL. See the section of this proxy statement captioned “Security Ownership of Certain Beneficial Owners and Management.”

The Merger Agreement provides that the closing of the Merger will take place no later than the third business day following the satisfaction or waiver in accordance with the Merger Agreement of all of the conditions to closing of the Merger (as described in the section of this proxy captioned “The Merger Agreement — Conditions to the Merger”), other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions.

The effective time of the Merger will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware, or at such other time as is agreed upon in writing by Lockheed Martin and Aerojet Rocketdyne and specified in the certificate of merger in accordance with the DGCL.

If the Merger is completed, stockholders who have complied exactly with the procedures set forth in Section 262 of the DGCL, including stockholders who: (i) do not vote in favor of the adoption of the Merger Agreement and the transactions contemplated thereby; (ii) continuously hold their shares of our common stock through the effective time of the Merger; and (iii) properly demand appraisal of their shares of common stock in compliance with the requirements of Section 262 are entitled to exercise appraisal rights in connection with the Merger under Section 262.

The following discussion is not a complete statement of the law pertaining to appraisal rights under Section 262 and is qualified in its entirety by the full text of Section 262, which is attached to this proxy statement as Annex D and incorporated herein by reference. The following summary does not constitute legal or other advice and does not constitute a recommendation that stockholders exercise their appraisal rights under Section 262. Only a holder of record of shares of common stock is entitled to demand appraisal rights for the shares registered in such holder’s name. A person having a beneficial interest in shares of common stock held of record in the name of another person, such as a bank, broker or other nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights. If you hold your shares of common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or the other nominee.

Under Section 262, holders of shares of common stock who: (i) do not vote in favor of the adoption of the Merger Agreement and the transactions contemplated thereby; (ii) continuously hold their shares of common stock through the effective time of the Merger; and (iii) otherwise follow exactly the procedures set forth in Section 262, will be entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of the shares of common stock, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the Delaware Court of Chancery. Unless the Delaware Court of Chancery, in its discretion, determines otherwise for good cause shown, interest on an appraisal award will accrue and compound quarterly from the effective time of the Merger through the date the judgment is paid at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during such period.

Under Section 262, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to exercise appraisal rights that appraisal rights are available and include in the notice a copy of Section 262. This proxy statement constitutes Aerojet Rocketdyne’s notice to stockholders that appraisal rights are available in connection with the Merger, and the full text of Section 262 is attached to this proxy statement as Annex D. In connection with the Merger, any holder of shares of common stock who wishes to exercise appraisal rights or who wishes to preserve such holder’s right to do so should review Annex D carefully.

Failure to comply exactly with the requirements of Section 262 in a timely and proper manner will result in the loss of appraisal rights under the DGCL.

A stockholder who loses his, her or its appraisal rights will be entitled to receive the Merger Consideration described in the Merger Agreement. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of common stock, Aerojet Rocketdyne believes that if a stockholder considers exercising such rights, such stockholder should seek the advice of legal counsel.

Stockholders wishing to exercise the right to seek an appraisal of their shares of common stock must, among other requirements, do ALL of the following:

The stockholder or the Surviving Corporation must also file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares of common stock within 120 days after the effective time of the Merger. The Surviving Corporation is under no obligation to file any petition and has no intention of doing so.

Because a proxy that does not contain voting instructions will, unless revoked, be voted in favor of the Merger Agreement, a stockholder who votes by proxy and who wishes to exercise appraisal rights must vote against the adoption of the Merger Agreement and the transactions contemplated thereby, abstain or not vote its shares.

Any holder of shares of common stock wishing to exercise appraisal rights must deliver to Aerojet Rocketdyne, before the vote on the adoption of the Merger Agreement and the transactions contemplated thereby, at the Special Meeting at which the proposal to adopt the Merger Agreement and the transactions contemplated thereby will be submitted to the stockholders, a written demand for the appraisal of the stockholder’s shares, and that stockholder must not vote or submit a proxy in favor of the adoption of the Merger Agreement and the transactions contemplated thereby. A holder of shares of common stock exercising appraisal rights must hold of record the shares on the date the written demand for appraisal is made, and must continue to hold the shares of record through the effective time of the Merger. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the adoption of the Merger Agreement and the transactions contemplated thereby and it will constitute a waiver of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the adoption of the Merger Agreement and the transactions contemplated thereby or abstain from voting on the adoption of the Merger Agreement and the transactions contemplated thereby. Neither voting against the adoption of the Merger Agreement and the transactions contemplated thereby nor abstaining from voting or failing to vote on the proposal to adopt the Merger Agreement and the transactions contemplated thereby will, in and of itself, constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the adoption of the Merger Agreement and the transactions contemplated thereby. A stockholder’s failure to make the written demand prior to the taking of the vote on the adoption of the Merger Agreement and the transactions contemplated thereby at the Special Meeting will result in a loss of appraisal rights under the DGCL.

Only a holder of record of shares of common stock is entitled to demand appraisal rights for the shares registered in such holder’s name. A demand for appraisal in respect of shares of our common stock should be executed by or on behalf of the holder of record and must reasonably inform Aerojet Rocketdyne of the identity of the holder and state that the person intends thereby to demand appraisal of the holder’s shares of common stock in connection with the Merger. If the shares of common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, such demand must be executed by or on behalf of the record owner, and if the shares are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners.

STOCKHOLDERS WHO HOLD THEIR SHARES OF COMMON STOCK IN BROKERAGE OR BANK ACCOUNTS OR OTHER NOMINEE FORMS AND WHO WISH TO EXERCISE APPRAISAL RIGHTS SHOULD CONSULT WITH THEIR BANK, BROKER OR OTHER NOMINEES, AS APPLICABLE, TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE BANK, BROKER OR OTHER NOMINEE TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES OF COMMON STOCK. A PERSON HAVING A BENEFICIAL INTEREST IN SHARES OF COMMON STOCK HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BANK, BROKER OR OTHER NOMINEE, MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT APPRAISAL RIGHTS.

All written demands for appraisal pursuant to Section 262 should be delivered to:

Aerojet Rocketdyne Holdings, Inc.

Attn: Corporate Secretary

222 N. Pacific Coast Highway, Suite 500

El Segundo, California 90245

Any holder of shares of common stock may withdraw his, her or its demand for appraisal and accept the consideration offered pursuant to the Merger Agreement by delivering to Aerojet Rocketdyne a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the effective time of the Merger will require written approval of the Surviving Corporation.

No appraisal proceeding in the Delaware Court of Chancery will be dismissed without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just; provided, however, that such dismissal will not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the Merger within 60 days after the effective time of the Merger.

If the Merger is completed, within ten days after the effective time of the Merger, the Surviving Corporation will notify each holder of shares of common stock who has made a written demand for appraisal pursuant to Section 262 and who has not voted in favor of the adoption of the Merger Agreement and the transactions contemplated thereby that the Merger has become effective and the effective date thereof, and include with such notice a copy of Section 262.

Within 120 days after the effective time of the Merger, the Surviving Corporation or any holder of shares of common stock who has complied with Section 262 and is entitled to exercise appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the Surviving Corporation in the case of a petition filed by a stockholder, demanding a determination of the fair value of the shares held by all stockholders entitled to appraisal. The Surviving Corporation is under no obligation, and has no present intention, to file a petition, and holders should not assume that the Surviving Corporation will file a petition or initiate any negotiations with respect to the fair value of the shares of common stock. Accordingly, any holders of shares of common stock who desire to have their shares appraised should initiate all necessary action to perfect their appraisal rights in respect of their shares of common stock within the time and in the manner prescribed by Section 262. The failure of a holder of shares of common stock to file such a petition within the period specified in Section 262 will nullify the stockholder’s previous written demand for appraisal.

Within 120 days after the effective time of the Merger, any holder of shares of common stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the Surviving Corporation a statement setting forth the aggregate number of shares not voted in favor of the adoption of the Merger Agreement and the transactions contemplated thereby with respect to which Aerojet Rocketdyne has received demands for appraisal, and the aggregate number of holders of such shares. The Surviving Corporation must mail this statement to the requesting stockholder within ten days after receipt of the written request for such a statement or within ten days after the expiration of the period for delivery of demands for appraisal, whichever is later. A beneficial owner of shares held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition seeking appraisal or request from the Surviving Corporation the foregoing statements. As noted above, however, the demand for appraisal can only be made by a stockholder of record.

If a petition for an appraisal is duly filed by a holder of shares of common stock and a copy thereof is served upon the Surviving Corporation, the Surviving Corporation will then be obligated within 20 days after such service to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the court, the Delaware Court of

Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to exercise appraisal rights thereunder. The Delaware Court of Chancery may require stockholders demanding appraisal of their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to such stockholder. The Delaware Court of Chancery shall dismiss the appraisal proceeding unless (i) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of common stock eligible for appraisal or (ii) the value of the consideration provided in the merger for such total number of shares of common stock exceeds $1 million.

After determining the holders of common stock entitled to appraisal, the Delaware Court of Chancery will appraise the “fair value” of the shares of common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. Unless the court in its discretion determines otherwise for good cause shown, interest from the effective time of the Merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective time of the Merger and the date of payment of the judgment. When the fair value is determined, the Delaware Court of Chancery will direct the payment of such value, with interest thereon accrued during the pendency of the proceeding, if the Delaware Court of Chancery so determines, to the former Aerojet Rocketdyne stockholders entitled to receive the same (in the case of shares represented by certificates, payment will not be made until such certificates are surrendered to the surviving corporation). At any time before the entry of judgment in the proceedings, the surviving corporation may pay to each former stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter only upon the sum of (i) the difference, if any, between the amount paid and the fair value of the shares as determined by the Delaware Court of Chancery, and (ii) interest theretofore accrued, unless paid at that time.

In determining fair value, and, if applicable, interest, the Delaware Court of Chancery will take into account all relevant factors. In Weinberger v. UOP, Inc., the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the Merger and not the product of speculation, may be considered.”

Stockholders considering seeking appraisal should be aware that the fair value of their shares as so determined by the Delaware Court of Chancery could be more than, the same as or less than the consideration they would receive pursuant to the Merger if they did not seek appraisal of their shares and that an opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a merger is not an opinion as to, and does not in any manner address, fair value under Section 262. Although Aerojet Rocketdyne believes that the Merger Consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery, and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the Merger Consideration. Neither Aerojet Rocketdyne nor Lockheed Martin anticipates offering more than the Merger Consideration to any stockholder exercising appraisal rights, and each of Aerojet Rocketdyne and Lockheed Martin reserves the right to assert, in any appraisal proceeding, that for purposes of Section 262, the “fair value” of a share of common stock is less than the Merger Consideration. If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of the appraisal proceedings (which do not

include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and imposed upon the parties as the Delaware Court of Chancery deems equitable under the circumstances. Upon application of a stockholder, the Delaware Court of Chancery may also order that all or a portion of the expenses incurred by a stockholder in connection with an appraisal, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all the shares entitled to be appraised.

If any stockholder who demands appraisal of his, her or its shares of common stock under Section 262 fails to perfect, or loses or successfully withdraws, such holder’s right to appraisal, such stockholder’s shares of common stock will be deemed to have been converted at the effective time of the Merger into the right to receive the Merger Consideration. A stockholder will fail to perfect, or effectively lose or withdraw, the holder’s right to appraisal if no petition for appraisal is filed within 120 days after the effective time of the Merger or if the stockholder delivers to the Surviving Corporation a written withdrawal of the holder’s demand for appraisal and an acceptance of the Merger Consideration in accordance with Section 262.

From and after the effective time of the Merger, no stockholder who has demanded appraisal rights will be entitled to vote such shares of common stock for any purpose or to receive payment of dividends or other distributions on the stock, except dividends or other distributions on the holder’s shares of common stock, if any, payable to stockholders as of a time prior to the effective time of the Merger. If no petition for an appraisal is filed, or if the stockholder delivers to the Surviving Corporation a written withdrawal of the demand for an appraisal and an acceptance of the Merger, either within 60 days after the effective time of the Merger or thereafter with the written approval of the Surviving Corporation, then the right of such stockholder to an appraisal will cease. Once a petition for appraisal is filed with the Delaware Court of Chancery, however, the appraisal proceeding may not be dismissed as to any stockholder who commenced the proceeding or joined that proceeding as a named party without the approval of the court.

Failure to comply exactly with all of the procedures set forth in Section 262 will result in the loss of a stockholder’s statutory appraisal rights. Consequently, any stockholder wishing to exercise appraisal rights is encouraged to consult legal counsel before attempting to exercise those rights.

The Merger will be accounted for as a “purchase transaction” for financial accounting purposes.

The following discussion is a summary of material U.S. federal income tax consequences of the Merger and Pre-Closing Dividend that may be relevant to U.S. Holders and Non-U.S. Holders (each as defined below) of shares of our common stock. This discussion is based upon the Internal Revenue Code of 1986, as amended, (the “Code”), Treasury Regulations promulgated under the Code, court decisions, published positions of the Internal Revenue Service, (“IRS”) and other applicable authorities, all as in effect on the date of this proxy statement and all of which are subject to change or differing interpretations, possibly with retroactive effect. This discussion is limited to holders who hold their shares of common stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment purposes).

This discussion is for general information only and does not address all of the tax consequences that may be relevant to holders in light of their particular circumstances. For example, this discussion does not address:

If a partnership (including an entity or arrangement, domestic or foreign, treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of shares of common stock, then the tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partner and the partnership. Partnerships holding shares of common stock and partners therein should consult their tax advisors regarding the consequences of the Merger and Pre-Closing Dividend.

No ruling from the IRS and no opinion of counsel has been or will be obtained regarding the U.S. federal income tax consequences of the Merger or Pre-Closing Dividend described below, and no assurance can be given that a holder would ultimately prevail if the IRS were to challenge one or more of the tax consequences described in this summary.

THIS DISCUSSION IS PROVIDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE TAX CONSEQUENCES OF THE MERGER AND PRE-CLOSING DIVIDEND IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, INCLUDING ANY CONSEQUENCES ARISING UNDER U.S. FEDERAL NON-INCOME TAX LAWS OR THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION AND ANY APPLICABLE INCOME TAX TREATY.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of shares of our common stock that is for U.S. federal income tax purposes:

The receipt of cash by a U.S. Holder in exchange for shares of our common stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, such U.S. Holder’s gain or loss will be equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares surrendered pursuant to the Merger. Subject to the discussion below concerning any Pre-Closing Dividend, a U.S. Holder’s adjusted tax basis in our shares generally will equal the amount that such U.S. Holder paid for the shares. Such gain or loss generally will be capital gain or loss and generally will be long-term capital gain or loss if such U.S. Holder’s holding period in such shares is more than one year at the time of the completion of the Merger. A reduced tax rate on capital gain generally will apply to long-term capital gain of an individual or other non-corporate U.S. Holder. The deductibility of capital losses is subject to limitation. Gain or loss realized generally must be calculated separately for each block of shares (i.e., shares acquired at the same cost in a single transaction) surrendered pursuant to the Merger.

Under the terms of the Merger Agreement, the per-share amount of cash payable as Merger consideration is subject to reduction by the per-share amount of the Pre-Closing Dividend. The Pre-Closing Dividend is payable on the Dividend Payment Date to stockholders of record on the Pre-Closing Dividend Record Date, and payment of the Pre-Closing Dividend is not contingent upon approval or closing of the Merger. See the section of this proxy statement captioned “The Merger — Pre-Closing Cash Dividend.” Although the tax treatment of the Pre-Closing Dividend is not entirely clear, Aerojet Rocketdyne and Lockheed Martin intend to report the Pre-Closing Dividend as a distribution with respect to Aerojet Rocketdyne’s common stock for U.S. federal income tax purposes. Assuming that this characterization applies, the amount of this distribution would be treated first as a taxable dividend to the extent of the U.S. Holder’s pro rata share of Aerojet Rocketdyne’s current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), then as a non-taxable return of capital to the extent of the U.S. Holder’s basis in its Aerojet Rocketdyne common stock (which will correspondingly reduce such basis), and finally as capital gain from the sale or exchange of Aerojet Rocketdyne common stock. Aerojet Rocketdyne cannot predict whether it will have current or accumulated earnings and profits for its current taxable year (which will end in connection with the Merger). The determination of Aerojet Rocketdyne’s earnings and profits entails complex factual and legal analysis which cannot be completed until after the closing of the Merger. Once the determination is made, Lockheed Martin will post this determination regarding Aerojet Rocketdyne’s earnings and profits for U.S. federal income tax purposes on its website or otherwise inform former Aerojet Rocketdyne’s stockholders of such determination.

Assuming the Pre-Closing Dividend will be treated as a distribution with respect to Aerojet Rocketdyne common stock for U.S. federal income tax purposes, individual Aerojet Rocketdyne stockholders generally should be taxed on the Pre-Closing Dividend at rates applicable to long-term capital gains so long as certain holding period and other requirements are met. Corporate Aerojet Rocketdyne stockholders may be entitled to a dividends-received deduction with respect to distributions treated as dividends if the Aerojet Rocketdyne stockholder is an otherwise qualifying corporate holder that meets the holding period and certain other requirements. A dividend may be considered an “extraordinary dividend” under U.S. federal income tax rules depending on the facts and circumstances of the Aerojet Rocketdyne stockholder. Treatment of a dividend as an extraordinary dividend may affect a corporate Aerojet Rocketdyne stockholder’s basis in its shares of common stock, or, with respect to individual stockholders, may affect the tax characterization of a sale of his or her shares of Aerojet Rocketdyne common stock. Aerojet Rocketdyne stockholders should consult their tax advisors regarding the potential applicability of the “extraordinary dividend” provisions of the Code in light of their particular circumstances.

It is possible that the IRS could disagree with the characterization of the Pre-Closing Dividend as a distribution with respect to Aerojet Rocketdyne common stock for U.S. federal income tax purposes and, instead, seek to characterize the Pre-Closing Dividend as additional cash received in connection with the Merger. If this characterization were to be sustained, the Pre-Closing Dividend would instead be treated as additional Merger consideration, with a corresponding adjustment to the gain or loss recognized by a U.S. Holder in the Merger.

U.S. Holders should consult their own tax advisors regarding the consequences of the Merger and Pre-Closing Dividend in light of their particular circumstances.

For purposes of this discussion, the term “Non-U.S. Holder” means a beneficial owner of shares of our common stock that is neither a U.S. Holder nor a partnership (or other entity treated as a partnership) for U.S. federal income tax purposes.

Any gain realized by a Non-U.S. Holder pursuant to the Merger generally will not be subject to U.S. federal income tax unless:

As discussed above under “— U.S. Holders,” although the tax treatment of the Pre-Closing Dividend is not entirely clear, Aerojet Rocketdyne and Lockheed Martin intend to report the Pre-Closing Dividend as a distribution with respect to Aerojet Rocketdyne common stock for U.S. federal income tax purposes. Assuming that this characterization applies, the amount of this distribution would be treated first as a taxable dividend to the extent of the Non-U.S. Holder’s pro rata share of Aerojet Rocketdyne’s current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) and subject to withholding (as discussed below), then as a return of capital to the extent of the Non-U.S. Holder’s basis in its Aerojet Rocketdyne common stock (which will correspondingly reduce such basis), and finally as capital gain from the sale or exchange of Aerojet Rocketdyne common stock.

Assuming the Pre-Closing Dividend will be treated as a distribution with respect to Aerojet Rocketdyne common stock for U.S. federal income tax purposes, a Non-U.S. Holder generally will be subject to U.S. federal income tax withholding at a rate of 30% with respect to the portion of the Pre-Closing Dividend treated as a taxable dividend if such dividend income is not effectively connected with a U.S. trade or business of the Non-U.S. Holder in the United States. The 30% rate may be reduced under the provisions of an applicable income tax treaty between the United States and the country in which the Non-U.S. Holder resides or is organized.

Income of Non-U.S. Holders that is effectively connected with a U.S. trade or business (and attributable to a U.S. permanent establishment or fixed base in the case of Non-U.S. Holders subject to an applicable income tax treaty) will be exempt from the U.S. federal income tax withholding described above and instead will be subject to U.S. federal income tax on a net basis at the regular graduated rates and in the manner applicable to a U.S. Holder (unless an applicable income tax treaty provides otherwise). In addition, a Non-U.S. Holder that is a corporation may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits for the taxable year, as adjusted for certain items, unless a lower rate applies under an applicable income tax treaty. As discussed above under “— U.S. Holders,” Aerojet Rocketdyne cannot predict whether it will have current or accumulated earnings and profits for its current taxable year (which will end in connection with the Merger). Once the determination is made, Lockheed Martin will post this determination regarding Aerojet Rocketdyne’s earnings and profits for U.S. federal income tax purposes on its website or otherwise inform former Aerojet Rocketdyne’s stockholders of such determination.

Since the determination of the portion of the Pre-Closing Dividend that is treated as a taxable dividend will not be completed until after the closing of the Merger, it is possible that a broker, dealer, bank or other custodian that holds Aerojet Rocketdyne common stock beneficially owned by a Non-U.S. Holder may withhold at a rate of 30% (or a lower rate under an applicable income tax treaty) on the entire amount of the Pre-Closing Dividend. Non-U.S. Holders generally may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

As discussed above under “— U.S. Holders,” it is possible that the IRS could disagree with the characterization of the Pre-Closing Dividend as a distribution with respect to Aerojet Rocketdyne common stock for U.S. federal income tax purposes and, instead, seek to characterize the Pre-Closing Dividend as additional cash received in connection with the Merger. If this characterization were to be sustained, the Pre-Closing Dividend would instead be treated as additional Merger consideration received by a Non-U.S. Holder.

Non-U.S. Holders should consult their own tax advisors regarding the consequences of the Merger and Pre-Closing Dividend in light of their particular circumstances.

Provisions of the Code commonly referred to as “FATCA” require withholding of 30% on payments of dividends on Aerojet Rocketdyne common stock (including potentially the Pre-Closing Dividend) to “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment vehicles) and certain other Non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied, or an exemption applies. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. If FATCA withholding is imposed, a beneficial owner that is not a foreign financial institution generally may obtain a refund of any amounts withheld by filing a U.S. federal income tax return (which may entail significant administrative burden). You should consult your tax advisor regarding the effects of FATCA on your receipt of the Pre-Closing Dividend.

Information reporting and backup withholding (at the statutory rate) may apply to the proceeds received by a holder pursuant to the Merger and Pre-Closing Dividend. Backup withholding generally will not apply to (i) a U.S. Holder that furnishes a correct taxpayer identification number and certifies that such holder is not subject to backup withholding on a properly completed IRS Form W-9 (or a substitute or successor form) or (ii) a Non-U.S. Holder that (A) provides a certification of such holder’s foreign status on a properly completed appropriate series of IRS Form W-8 (or a substitute or successor form) or (B) otherwise establishes an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.