-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SecsYZrGE9HWImg9U2It1mhHfwZtA7bvqFKo9UTyC/8ZMMdK81PBD/St0PsPvXJ5 qQptjNl5u9D8HtfZulAmmg== 0000930413-09-001416.txt : 20090313 0000930413-09-001416.hdr.sgml : 20090313 20090313163716 ACCESSION NUMBER: 0000930413-09-001416 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20081231 FILED AS OF DATE: 20090313 DATE AS OF CHANGE: 20090313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENTEK INC CENTRAL INDEX KEY: 0001077552 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 020505547 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14789 FILM NUMBER: 09680585 BUSINESS ADDRESS: STREET 1: C/O GENTEK INC STREET 2: 90 EAST HALSEY ROAD CITY: PARSIPPANY STATE: NJ ZIP: 07054 BUSINESS PHONE: 9738846952 MAIL ADDRESS: STREET 1: C/O GENTEK INC STREET 2: 90 EAST HALSEY ROAD CITY: PARSIPPANY STATE: NJ ZIP: 07054 10-K 1 c56928_10k.htm


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

(Mark One)
x	ANNUAL REPORT UNDER SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2008
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ________ to ________
	Commission File Number 001-14789
	GENTEK INC.
	(Exact name of Registrant as specified in its charter)


Delaware		02-0505547
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
90 East Halsey Road
Parsippany, New Jersey		07054
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (973) 515-3221
Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Common stock, no par value
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Act).
Large Accelerated Filer o Accelerated Filerx Non-accelerated Filero Smaller reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o Nox

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2008 was $250,355,984.

The number of outstanding shares of the Registrant’s Common Stock as of February 27, 2009 was 10,137,189.

Documents Incorporated by Reference:

Portions of the Registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on May 14, 2009, to be filed within 120 days after the close of the Registrant’s fiscal year, are incorporated by reference into Part III of this Annual Report on Form 10-K.

PART I


Item 1.	*Business.*

Overview

GenTek Inc. (the “Company” or “GenTek”) is a holding company whose subsidiaries manufacture industrial components and performance chemicals. GenTek has no independent operations and, therefore, is dependent upon cash flow from its subsidiaries to meet its obligations. GenTek’s subsidiaries operate through two primary business segments: valve actuation systems and performance chemicals. The valve actuation systems segment provides precision engineered valve actuation systems and components for gasoline and diesel engines. The performance chemicals segment provides value-added chemical products to four principal markets: water treatment, chemical processing, pharmaceutical and food additives, and technology. The Company’s products are frequently highly engineered and are important components of, or provide critical attributes to, its customers’ end products or operations. The Company operates over 50 manufacturing and production facilities located primarily in the U.S. and Canada.

Acquisitions

On December 31, 2007, the Company acquired Bay Chemical and Supply Company. The acquisition included the manufacturing facility in Odem, Texas. Bay Chemical and Supply Company produces and distributes aluminum sulfate and other water treatment chemicals for the south Texas municipal water treatment market. The purchase price was $7 million.

On February 6, 2007, the Company acquired the assets of Chalum, Inc. The acquisition included the manufacturing facility in Sacaton, Arizona. Chalum produces aluminum sulfate for the greater Phoenix, Arizona municipal water treatment market. The purchase price was $3 million.

On September 21, 2006, the Company acquired the assets of GAC MidAmerica, Inc. The acquisition included manufacturing facilities in Toledo, Ohio, Indianapolis, Indiana, and Saukville, Wisconsin. GAC produces aluminum sulfate and bleach, as well as distributing specialty water treatment chemicals, sulfuric acid and caustic soda. The purchase price of the transaction was $8 million.

On July 27, 2006, the Company acquired the assets of Repauno Products, LLC. The acquisition included the manufacturing facility in Gibbstown, New Jersey. Repauno Products manufactures sodium nitrite which is used in a wide range of industries including metal finishing, heat transfer salts, rubber processing, meat curing, odor control and inks and dyes. The purchase price of the transaction was $6 million.

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Divestitures

On February 29, 2008, the Company completed the sale of its Reheis antiperspirant actives product line to Summit Research Labs, Inc. As part of this transaction, the Company continued to operate the antiperspirant actives manufacturing unit through September 30, 2008 under a transition services contract. This business continues to be classified as continuing operations.

On November 14, 2008, the Company completed the sale of its wire and cable manufacturing business in Mineral Wells, TX. On July 17, 2007, the Company completed the sale of its wholly-owned subsidiary, Defiance Testing and Engineering Services, Inc. On February 16, 2007, the Company completed the sale of its Noma wire and cable harness assembly business. During April 2006, the Company completed the sale of its cable and wire manufacturing business in Stouffville, Canada. Accordingly, all financial information included herein has been reclassified to reflect these businesses as discontinued operations.

Products and Services by Segment

The following table sets forth the Company’s sales by segment:


	Years Ended December 31,

	2008		2007		2006

	(In millions)
Valve actuation systems	$	115.4	$	152.1	$	146.1
Performance chemicals		482.2		396.7		373.3
Corporate and other		10.5		11.5		12.1

Consolidated	$	608.0	$	560.3	$	531.6

Valve Actuation Systems Segment

The valve actuations systems segment provides precision engineered valve actuation systems and components for gasoline and diesel engines used in automotive and light trucks as well as a range of heavy duty and commercial applications. The Company’s product offering includes complete valve actuation sub-assemblies as well as components such as stamped and machined rocker and roller-rocker arms, cam follower rollers, cam follower roller axles, antifriction needle roller bearings, hydraulic lash adjusters, hydraulic flat and roller lifters, mechanical roller tappets and other hardened/machined components.

The Company’s precision-engineered stamped and machined engine components for valve actuation systems improve engine efficiency by reducing engine friction and component mass. These components are used both in traditional overhead valve and in single and double overhead cam engines which power cars, light trucks and sport utility vehicles. Over the last several years, the Company has benefited from the design transition of overhead valve engines to overhead cam engines providing a strong position with which to participate in the industry’s latest efforts to improve fuel efficiency and power. Increased design use of additional valves per cylinder to improve fuel/air throughput have resulted in volume growth on specific engine applications. The majority of the Company’s valve actuation system production is sold to U.S. automobile engine manufacturers and their Tier 1 suppliers.

Automotive and heavy duty/commercial engine manufacturers generally award business to their suppliers by individual engine line for the life of the engine. The loss of any single engine line contract would not be material to the Company. However, the continuing economic downturn in the automotive and the heavy duty/commercial industry as a whole, or other events (e.g., labor disruptions) resulting in

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significantly reduced operations of Chrysler or Ford could have a material adverse impact on the results of the Company’s valve actuation systems segment. Neither of these customers accounted for 10 percent or more of the Company’s revenues in 2008.

Performance Chemicals Segment

The Company’s performance chemicals segment provides value-added products to four principal markets: (i) water treatment; (ii) chemical processing; (iii) pharmaceutical and food additives; and (iv) technology. The Company’s products and services for these markets are described below.

Water Treatment. With a network of 38 water treatment chemical plants located throughout the United States and Canada, the Company is the largest North American producer of aluminum sulfate, or “alum”, which is used as a coagulant in potable water and waste water treatment applications, and a leading supplier of ferric sulfate and other specialty flocculants (polymer-based materials used for settling and/or separating solids from liquids), and sodium nitrite. The Company’s water treatment products are designed to address important environmental issues confronting its customers. These value-added products provide cleaner drinking water, restore algae-infested lakes, reduce damaging phosphorus runoff from agricultural operations, and significantly reduce pollution from industrial waste water.

Chemical Processing. The Company operates three sulfuric acid production facilities which produce various grades of sulfuric acid used in the manufacture of fertilizers, synthetic fibers, petroleum and paper, as well as many other products. In addition, the Company provides sulfuric acid regeneration services to the refining industry, and pollution abatement and sulfur recovery services to selected refinery customers. Refineries use sulfuric acid as a catalyst in the production of alkylate, a gasoline blending component with favorable performance and environmental properties. The alkylation process contaminates and dilutes the sulfuric acid, thereby creating the need to dispose of or regenerate the contaminated acid. The Company transports the contaminated acid back to the Company’s facilities for recycling and redelivers the fresh, recycled acid back to customers. This “closed loop” process offers customers significant savings versus alternative disposal methods and also benefits the environment by significantly reducing refineries’ waste streams.

Pharmaceutical and Food Additives. The Company supplies ingredients used in prescription pharmaceuticals, nutritional supplements, veterinary health products and food additive applications.

Technology. The Company provides ultrahigh-purity electronic chemicals for the semiconductor and disk drive industries. The Company’s electronic chemicals include ultrahigh-purity acids, caustics, solvents, etchants and formulated photo ancillaries for use in the manufacture of semiconductor processing chips and computer disk drives.

Corporate and Other

The corporate and other segment provides fluid handling equipment sold primarily for automotive service applications.

Competition

Competition in the valve actuation systems segment’s markets is based upon a number of factors including design and engineering capabilities, quality, price and the ability to meet customer delivery

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requirements. The Company competes with, among others, Delphi, Eaton, INA, Timken, Mahle, and captive OEMs.

Although the Company’s performance chemicals segment generally has significant market share positions in the product areas in which it competes, most of its end markets are highly competitive. In water treatment, the Company competes with Geo Specialty Chemicals, Kemira Water Solutions, U.S. Aluminates and other regional players. The Company’s competitors in the chemical processing market include the refineries that perform their own sulfuric acid regeneration, as well as DuPont, Marsulex, Chemtrade Logistics, PVS and Rhodia, which also have sulfuric acid regeneration facilities that are generally located near their major customers. In the pharmaceutical and food additives market, the Company’s major competitors include K+S Kali GmbH, and Brenntag Biosector. Competitors in the technology market include KMG Chemicals, Honeywell Electronic Materials and Mallinckrodt-Baker.

Suppliers; Availability of Raw Materials

The Company purchases a variety of raw materials for its businesses. The primary raw material used by the valve actuation systems segment is steel. The Company’s performance chemicals segment’s competitive cost position is, in part, attributable to its sourcing relationships for certain raw materials that serve as the feedstock for many of its products. Major raw material purchases include sulfuric acid where it is uneconomical for the Company to supply itself due to distribution costs, bauxite and aluminum tri-hydrate (for the manufacture of alum), sulfur (for the manufacture of sulfuric acid), muriate of potash (for the manufacture of potassium chloride), ammonia (for the manufacture of sodium nitrite), iron ore (for the manufacture of ferric sulfate) and soda ash (for the manufacture of sodium nitrite).

The Company purchases raw materials from a number of suppliers and, in most cases, believes that alternative sources are available to fulfill its needs. A number of the raw materials the Company purchases are subject to cyclical price movements. In the performance chemicals segment, the Company is able to pass through all or a portion of raw material price increases, but often on a lagged basis. In the valve actuation systems segment, the Company has been successful in passing steel cost increases, in a similar fashion, to its automotive market customers. The Company continues its efforts to ensure it has sufficient access to required raw materials at competitive prices and to pass along raw material price increases where possible.

Sales and Distribution

The Company’s valve actuation systems segment has approximately 35 sales, marketing, engineering and customer service personnel. Generally, the Company markets its products directly to its customers, but in certain markets a distribution network is used. The valve actuation systems segment’s technical and engineering staff is an integral part of the segment’s sales and distribution effort. Since many of the Company’s products are precision-engineered and custom-designed to customer specifications, the Company’s sales force and engineers work closely with its customers in designing, producing, testing and improving its products.

In the Company’s performance chemicals segment, the Company employs approximately 66 sales, marketing, distribution and customer service personnel. The sales force is divided into several specialized groups which focus on specific products, end-users and geographic regions. This targeted approach provides the Company with insight into emerging industry trends and creates opportunities for product development.

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Seasonality; Backlog

The business of the valve actuation systems segment is generally not seasonal. Within the performance chemicals segment, the water treatment and sulfur products businesses have higher volumes in the second and third quarters of the year, owing to (i) higher spring and summer demand for sulfuric acid regeneration services from gasoline refinery customers to meet peak summer driving season demand and (ii) higher spring and summer demand from water treatment chemical customers to manage seasonally high and low water conditions. The other markets that the performance chemicals segment serves are generally not seasonal. Due to the nature of the Company’s businesses, there are no significant backlogs.

Environmental Matters

The Company’s various manufacturing operations, which have been conducted at a number of facilities for many years, are subject to numerous laws and regulations relating to the protection of human health and the environment in the U.S., Canada and other countries. The Company believes that it is in substantial compliance with such laws and regulations. However, as a result of its operations, the Company is involved from time to time in administrative and judicial proceedings and inquiries relating to environmental matters. Based on information available at this time with respect to potential liability involving these facilities, the Company believes that any such liability will not have a material adverse effect on its financial condition, cash flows or results of operations. However, modifications of existing laws and regulations or the adoption of new laws and regulations in the future, particularly with respect to environmental and safety standards, or the discovery of additional or unknown environmental contamination of any of the Company’s current or former facilities, could require the Company to make expenditures which may be material or otherwise adversely impact the Company’s operations.

The Company maintains a program to manage its facilities’ compliance with environmental laws and regulations. Expenditures for 2008 approximated $8 million (of which approximately $2 million represented capital expenditures and approximately $6 million related to ongoing operations and the management of potential environmental contamination from prior operations). Expenditures for 2007 approximated $13 million (of which approximately $4 million represented capital expenditures and approximately $9 million related to ongoing operations and the management of potential environmental contamination from prior operations). The Company expects expenditures similar to 2008 levels in 2009. In addition, if environmental laws and regulations affecting the Company’s operations become more stringent, costs for environmental compliance may increase above historical levels.

The Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”) and similar statutes, have been construed as imposing joint and several liability, under certain circumstances, on present and former owners and operators of contaminated sites, and transporters and generators of hazardous substances, regardless of fault. The Company’s facilities have been operated for many years by the Company or its prior owners and operators, and adverse environmental conditions of which the Company is not aware may exist. Modifications of existing laws and regulations and discovery of additional or unknown environmental contamination at any of the Company’s current or former facilities could have a material adverse effect on the Company’s financial condition, cash flows and/or results of operations. In addition, the Company has received written notice from the Environmental Protection Agency that it has been identified as a “potentially responsible party” under CERCLA at a third-party site. The Company does not believe that its liability, if any, for this site will be material to its results of operations, cash flows or financial condition.

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At any time, the Company may be involved in proceedings with various regulatory authorities which could require the Company to pay various fines and penalties due to violations of environmental laws and regulations at its sites, remediate contamination at some of these sites, comply with applicable standards or other requirements, or incur capital expenditures to modify certain pollution control equipment or processes at its sites. Again, although the amount of any liability that could arise with respect to these matters cannot be accurately predicted, the Company believes that the ultimate resolution of these matters will have no material adverse effect on its results of operations, cash flows or financial condition.

Delaware Valley Facility. On September 7, 2000, the EPA issued to the Company an Initial Administrative Order (an “IAO”) pursuant to Section 3008(h) of the Resource Conservation and Recovery Act (“RCRA”), which requires that the Company conduct an environmental investigation of the Company’s Delaware Valley facility (the “Facility”) and, if necessary, propose and implement corrective measures to address any historical environmental contamination at the Facility. Over the past eight years, the Company has been working cooperatively with the EPA and Honeywell, a prior owner of the Facility and current owner of a plant adjacent to the Facility, to implement the actions required under the IAO. The Company conducted the first investigatory steps required by the IAO, the evaluation of potential soil and groundwater contamination, in both the North Plant (the area of the facility north of US Route 18) and the South Plant (the area south of US Route 18) that borders the Delaware River. As a result of the Company’s bankruptcy filing in 2002, the Company entered into an agreement with Honeywell dated April 30, 2004 in which Honeywell agreed to take back all environmental liability at the North Plant, past, present and future, as well as ownership of the North Plant. In addition, Honeywell took responsibility for the cost to address groundwater contamination at the South Plant. The Company remains responsible only for soil contamination at the South Plant. Although the EPA refused to formally drop the Company from the IAO, the EPA signed a letter acknowledging Honeywell’s agreement to be responsible for all liability at the North Plant and for groundwater contamination at the South Plant and to seek recourse against Honeywell for those liabilities and only look to the Company in the event of a default by Honeywell. The remaining requirements of the IAO will be performed over the course of the next several years. The Company closed the South Plant operations of its Delaware Valley facility on November 10, 2003. This closure resulted in an expansion of the investigation to be performed under the IAO. Depending on the results of that additional investigation, additional remedial activity may be required for soils in the South Plant. The Company has provided for the estimated costs of $2 million for compliance with the IAO in its accrual for environmental liabilities. As such, the Company believes that compliance with the IAO will not have a material effect on its results of operations or financial condition.

Employees/Labor Relations

At December 31, 2008, the Company had approximately 1,110 employees, of whom approximately 460 were full-time salaried employees, approximately 370 were full-time hourly employees (represented by 6 different unions) and approximately 280 were hourly employees working in nonunion facilities.

The Company’s union contracts have durations which vary from three to four years. The Company’s relationships with its unions are generally good.

Executive Officers and Key Employees

Set forth below is information with respect to each of the Company’s executive officers and/or key employees.

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William E. Redmond, Jr., 49, President and Chief Executive Officer of the Company since May, 2005 and a Director of the Company since November 2003. Mr. Redmond is also a Director of Eddie Bauer Inc. From 1996 until 2003, Mr. Redmond held the position of Chairman, President and Chief Executive Officer of Garden Way Incorporated.

Douglas J. Grierson, 44, Vice President and Controller since April 2005. Mr. Grierson served as Director of Accounting and Assistant Controller from June 1999 to April 2005.

James Imbriaco, 56, Vice President, General Counsel and Secretary since July 2005. From May 2004 to June 2005, Mr. Imbriaco held the position of Consulting Corporate Counsel with Bowne & Co., Inc. From October 2000 to August 2003, Mr. Imbriaco held the position of Vice President, General Counsel and Secretary with Agency.com, Ltd.

Robert D. Novo, 51, Vice President of Human Resources and Environmental Health and Safety since August 2004. Mr. Novo served as the Vice President of Human Resources from July 2003 to August 2004. Prior to July 2003, Mr. Novo held various senior level human resource positions with Honeywell International since 1995.

Vincent J. Opalewski, 46, Vice President and General Manager – Performance Chemicals Group since September 2006. Mr. Opalewski served as Vice President - Sales and Marketing, for the Performance Chemicals Group from July 2005 to September 2006. He previously served as General Manager of the Sulfur Products business group from January 2000 to July 2005.

Thomas B. Testa, 47, Vice President and Chief Financial Officer since September 2006. Mr. Testa served as Vice President and General Manager – Performance Chemicals Group from August 2004 to September 2006. From April 2002 to August 2004, Mr. Testa served as Vice President – Operations for the Performance Chemicals Group. He previously served as General Manager of the Electronic Chemicals business group from October 1997 to April 2002.

Corporate Governance and Internet Address

The Company emphasizes the importance of professional business conduct and ethics through its corporate governance initiatives. The Company’s board of directors has adopted a code of business conduct and ethics that applies to all employees, directors and officers, including the Company’s principal executive officer, principal financial officer and principal accounting officer. The Company’s board of directors consists of a majority of independent directors.

The Company’s internet address is www.gentek-global.com. The Company makes available, free of charge through a link on its site, the annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports, if any, as filed with the SEC as soon as reasonably practicable after such filing. We will also furnish a paper copy of such filings free of charge upon request. The site also contains the Company’s code of business conduct and ethics and the charters of the audit committee, corporate governance and nominating committee and compensation committee of its board of directors. The Company’s principal executive offices are located at 90 East Halsey Road, Parsippany, New Jersey 07054, and its telephone number is (973) 515-3221.

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Item 1A.	*Risk Factors.*

The following is a discussion of certain factors that currently impact or may impact the Company’s business, operating results and/or financial condition. An investment in the Company’s common stock involves a high degree of risk. You should carefully consider the risks described below before deciding to invest in its common stock. In assessing these risks, you should also refer to the other information in this Annual Report on Form 10-K, including the Company’s financial statements and the related notes. Various statements in this Annual Report on Form 10-K, including some of the following risk factors, constitute forward-looking statements.

Risks Related to the Company’s Capital Structure

The Company’s ability to make payments on its debt will be contingent on GenTek’s future operating performance, which will depend on a number of factors that are outside of its control.

The Company’s debt service obligations are estimated to be approximately $16 million to $18 million in 2009, including approximately $3 million of principal repayments. This debt service may have an adverse impact on the Company’s earnings and cash flow, which could in turn negatively impact GenTek’s stock price.

The Company’s ability to make principal and interest payments on its debt is contingent on its future operating performance, which will depend on a number of factors, many of which are outside of its control. The degree to which GenTek is leveraged could have other important negative consequences, including the following:


	•	the Company must dedicate a substantial portion of its cash flows from operations to the payment of its indebtedness, reducing the funds available for future working capital requirements, capital expenditures, acquisitions or other general corporate requirements;

	•	a significant portion of its borrowings are, and will continue to be, at variable rates of interest, which may result in higher interest expense in the event of increases in interest rates;

	•	the Company may be more vulnerable to a downturn in the industries in which it operates or a downturn in the economy in general;

	•	the Company may be limited in its flexibility to plan for, or react to, changes in its businesses and the industries in which it operates;

	•	the Company may be placed at a competitive disadvantage compared to its competitors that have less debt;

	•	the Company may be limited in its ability to react to unforeseen increases in certain costs and obligations arising in its businesses, including environmental, pension and tax liabilities;

	•	the Company may determine it to be necessary to dispose of certain assets or one or more of its businesses to reduce its debt; and

	•	the Company’s ability to borrow additional funds in excess of its current financing may be limited.

Disruptions in the financial markets are adversely impacting the availability and cost of credit which could negatively affect the Company.

Lending institutions have suffered and may continue to suffer losses due to their lending and other financial relationships, especially because of the general weakening of the global economy. As a result, changes in the financial markets may impact the Company’s ability to obtain financing on commercially reasonable terms and in adequate amounts, if at all. The Company can provide no assurance

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that its businesses will generate sufficient cash flow from operations or that future borrowings will be available in amounts sufficient to enable the Company to pay its indebtedness or to fund its other liquidity needs.

The Company is subject to restrictive debt covenants pursuant to its indebtedness. These covenants may restrict its ability to finance its business and, if the Company does not comply with the covenants or otherwise default under them, the Company may not have the funds necessary to pay all amounts that could become due and the lenders could foreclose on substantially all of its assets.

The Company’s indebtedness contains covenants that, among other things, significantly restricts and, in some cases, effectively eliminates the Company’s ability and the ability of most of its subsidiaries to:


	•	incur additional debt;

	•	create or incur liens;

	•	pay dividends or make other equity distributions to the Company’s shareholders;

	•	make investments;

	•	sell assets;

	•	issue or sell share capital of certain subsidiaries;

	•	engage in transactions with affiliates;

	•	issue or become liable on a guarantee;

	•	create or acquire new subsidiaries; and

	•	effect a merger or consolidation of, or sell all or substantially all of its assets.

In addition, the Company and its subsidiaries must comply with certain financial covenants. In the event the Company were to fail to meet any of such covenants and were unable to cure such breach or otherwise renegotiate such covenants, the Company’s lenders would have significant rights to deny future access to liquidity and/or seize control of substantially all of its assets. The material financial covenants with which the Company must comply include a maximum leverage ratio of 3.5, a minimum interest coverage ratio of 3.00, and a maximum amount of capital expenditures of $48 million in 2009.

The covenants governing the Company’s indebtedness and any credit agreement governing future debt may significantly restrict its future operations. Furthermore, upon the occurrence of any event of default, the Company’s lenders could elect to declare all amounts outstanding under such agreements, together with accrued interest, to be immediately due and payable. If those lenders were to accelerate the payment of those amounts, the Company cannot assure you that its assets and the assets of its subsidiaries would be sufficient to repay those amounts in full.

The Company is also subject to interest rate risk due to its indebtedness at variable interest rates, based on a base rate or LIBOR plus an applicable margin. The Company cannot assure you that shifts in interest rates will not have a material adverse effect on it.

The Company may be required to prepay its indebtedness prior to its stated maturity, which may limit its ability to pursue business opportunities.

Pursuant to the terms of certain of the Company’s indebtedness, in certain instances it is required to prepay outstanding indebtedness prior to its stated maturity date. Specifically, certain non-recurring cash inflows such as proceeds from asset sales, insurance recoveries, and equity offerings may have to be

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used to pay down indebtedness and may not be reborrowed. These prepayment provisions may limit the Company’s ability to utilize this cash flow to pursue business opportunities.

The Company’s business is capital intensive. The Company cannot assure you that it will have sufficient liquidity to fund its working capital and capital expenditures and to meet its obligations under existing debt instruments.

The Company’s business is capital intensive and it cannot be certain that it will achieve sufficient cash flow in the future. Failure to maintain profitability and generate sufficient cash flow could diminish its ability to sustain operations, meet financial covenants, obtain additional required funds and make required payments on any indebtedness it may have incurred or may incur in the future. If the Company does not comply with the covenants in its credit agreements or otherwise default under them, it may not have access to borrowings under its $60 million revolving credit facility or the funds necessary to pay amounts that become due.

Although the Company believes that its current levels of cash and cash equivalents, along with available borrowings on its revolving credit facility, will be sufficient for its cash requirements during the next twelve months, it is possible that these sources of cash will be insufficient, resulting in the Company having to raise additional funds for liquidity. There can be no assurance the Company will have access to additional funding should the need arise.

The Company is a holding company that is dependent upon cash flow from its subsidiaries to meet its financial obligations; its ability to access that cash flow may be limited in some circumstances.

The Company is a holding company with no independent operations or significant operating assets other than its investments in, and advances to, its subsidiaries. The Company depends upon the receipt of sufficient funds from its subsidiaries through its centralized cash management system from its domestic subsidiaries and through dividends, loans or other distributions from its foreign subsidiaries to meet its financial obligations. In addition, the terms of the Company and its subsidiaries’ existing indebtedness, and the laws of the jurisdictions under which it and its subsidiaries are organized, limit the payment of dividends, loan repayments and other distributions by its subsidiaries to the Company under some circumstances. Any indebtedness that it, or its subsidiaries, may incur in the future may contain similar restrictions.

Risks Related to the Company’s Operations

The industries in which the Company operates are highly competitive. This competition may prevent it from raising prices at the same pace as its costs increase, making it difficult for the Company to maintain existing business and win new business.

The Company faces significant competition in its businesses. Certain of its competitors have large market shares and substantially greater financial and technical resources than it does. The Company may be required to reduce prices if its competitors reduce prices, or as a result of any other downward pressure on prices for its products and services, which could have an adverse effect on the Company.

In each of its business segments, the Company operates in competitive markets. Its valve actuation systems segment competes with numerous international and North American companies, including various captive operations of automotive original equipment manufacturers (OEMs) and Tier 1 suppliers to automotive manufacturers. Competition in the valve actuation systems segment’s markets is based on a number of factors, including design and engineering capabilities, price, quality and the ability

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to meet customer delivery requirements. Due to the level of competition, its customers have regularly requested price decreases and maintaining or raising prices has been difficult over the past several years and will likely continue to be so in the near future. The markets in which its performance chemicals segment does business are highly competitive, with competitors typically segregated by end market. Competition in the performance chemicals segment’s markets is based on a number of factors, including price, freight economics, product quality and technical support. If the Company is unable to compete successfully, its financial condition and results of operations could be adversely affected.

The industries the Company competes in are subject to economic downturns.

An economic downturn in the areas in which the Company sells its products has and could continue to reduce demand for these products and result in a decrease in sales volume that could have a negative impact on the Company’s results of operations. Volatility and disruption of financial markets could limit customers’ ability to obtain adequate financing to maintain operations and result in a decrease in sales volume that could have a negative impact on the Company’s results of operations. In addition, these conditions may negatively impact the Company’s suppliers. This may make it difficult for the Company to obtain necessary raw materials from its suppliers or in order to obtain them, the Company may incur greater cost and this may negatively impact its results of operations.

The Company may experience increased costs and production delays if suppliers fail to deliver materials to the Company or if prices increase for raw materials and other goods and services that it purchases from third parties.

The Company purchases raw materials from a number of domestic and foreign suppliers. Although it believes that the raw materials it requires will be available in sufficient supply on a competitive basis for the foreseeable future, continued increases in the cost of raw materials, including energy and other inputs used to make the Company’s products, could affect future sales volumes, prices and margins for its products. If a supplier should cease to deliver goods or services to the Company, it would probably find other sources, however, such a disruption could result in added cost and manufacturing delays. In addition, political instability, war, terrorism and other disruptions to international transit routes control could adversely impact its ability to obtain key raw materials in a timely fashion, or at all.

The Company’s revenues are dependent on the continued operation of its manufacturing facilities, and breakdowns or other problems in its operations could adversely affect its results of operations.

The Company’s revenues are dependent on the continued operation of its various manufacturing facilities. In particular, the operation of chemical manufacturing plants involves many risks, including the breakdown, failure or substandard performance of equipment, natural disasters, acts of terrorism, power outages, the need to comply with directives of government agencies, and dependence on the ability of railroads and other shippers to transport raw materials and finished products in a timely manner. The occurrence of material operational problems, including but not limited to the foregoing events, at one or more of the Company’s facilities could have a material adverse effect on its results of operations or financial condition. Certain facilities within each of its business segments account for a significant share of its profits. Disruption to operations at one of these facilities could have a material adverse impact on segment financial performance and its overall financial condition. In addition, in certain circumstances, the Company could also be materially affected by a disruption or closure of a customer’s plant or facility to which it supplies its products.

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A significant portion of the Company’s revenue and operating results from its valve actuation systems segment has been, and is expected to continue to be, dependent on the automotive industry and concentrated in a small number of customers.

The Company derives and is expected to continue to derive significant portions of its revenues and operating results in its valve actuation systems segment from sales of products to the automotive industry and specifically to Ford and Chrysler. Both of these customers have experienced declining market shares and are burdened with significant structural costs that have affected their profitability and may ultimately result in severe financial difficulty, including possible bankruptcy. As a result, the loss of, or reduced demand from these customers could cause us to incur significant write-offs of accounts receivable, require additional restructuring actions beyond those already taken and adversely effect the Company’s revenues and operating income.

Material changes in pension and other postretirement benefit costs may occur in the future. In addition, investment returns on pension assets may be lower than assumed, which could result in larger cash funding requirements for the Company’s pension plans, which could have an adverse impact on the Company.

The Company maintains several defined benefit pension plans covering certain employees in Canada and the United States. It records pension and postretirement benefit costs in amounts developed from actuarial valuations. Inherent in these valuations are key assumptions including the discount rate and expected long-term rate of return on plan assets. Material changes in pension and other postretirement benefit costs may occur in the future due to changes in these assumptions, differences between actual experience and the assumptions used, and changes in the benefit plans. Amounts required to be funded are also dependent upon interest rates. Some of the plans are underfunded. The Company is required to rectify this underfunding in accordance with federal guidelines. The Company expects to be required to make substantial cash contributions beginning in 2010 and continuing beyond such time. Moreover, if investment returns on pension assets are lower than assumed, it may have substantially larger cash funding requirements for its pension plans, which may have a material adverse impact on its liquidity.

The Company’s principal businesses are subject to government regulation, including environmental regulation, and changes in current regulations may adversely affect it.

The Company’s principal business activities are regulated and supervised by various governmental bodies. Changes in laws, regulations or governmental policy or the interpretations of those laws or regulations affecting its activities and those of its competitors could have a material adverse effect on it.

For example, the Company’s various manufacturing operations, which have been conducted at a number of facilities for many years, are subject to numerous laws and regulations relating to the protection of human health and the environment in the U.S., Canada and other countries. The Company believes that it is in substantial compliance with such laws and regulations. However, as a result of its operations, from time to time it is involved in administrative and judicial proceedings and inquiries relating to environmental matters. Based on information available to it at this time with respect to potential liability involving these facilities, the Company believes that any such liability will not have a material adverse effect on its financial condition, cash flows or results of operations. However, modifications to existing laws and regulations or the adoption of new laws and regulations in the future, particularly with respect to environmental and safety standards, could require it to make expenditures which may be material or may otherwise adversely impact its operations.

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The production of chemicals is associated with a variety of hazards, which could create significant liabilities or cause the Company’s facilities to suspend its operations.

The Company’s operations are subject to various hazards incident to the production of chemicals, including the use, handling, processing, storage and transportation of certain hazardous materials. These hazards, which include the risk of explosions, fires and chemical spills or releases, can cause personal injury and loss of life, severe damage to and destruction of property and equipment, environmental damage, suspension of operations and potentially subject the Company to lawsuits relating to personal injury and property damages. Any such event or circumstance could have a material adverse effect on its results of operations or financial condition.

The Company’s facilities have been operated for many years by it or prior owners and operators, and adverse environmental conditions of which it is not aware may exist. The discovery of additional or unknown environmental contamination at any of its current or former facilities could have a material adverse effect on its financial condition, cash flows and/or results of operations.

The seasonal nature of the water treatment and chemical processing businesses could increase the Company’s costs or have other negative effects.

Within the Company’s performance chemicals segment, the water treatment and chemical processing businesses have higher volumes in the second and third quarters of the year, owing to higher spring and summer demand for sulfuric acid regeneration services from gasoline refinery customers to meet peak summer driving season demand and higher spring and summer demand from water treatment chemical customers to manage seasonally high and low water conditions. The degree of seasonal peaks and declines in the volumes of its business could increase its costs, negatively impact its manufacturing efficiency, or have other negative effects on its operations or financial performance.

The Company may not be able to obtain insurance at its historical rates and its insurance coverage may not cover all claims and losses.

The Company maintains insurance coverage on its properties, machines, supplies and other elements integral to its business and against certain third party litigation, environmental matters and similar events. Due to recent changes in market conditions in the insurance industry and other factors, the Company may not be able to secure insurance at a similar cost to what it may have previously paid, if at all. In addition, there are certain types of losses, such as earthquakes, floods, hurricanes, terrorism, acts of war or product warranty that may be uninsurable or not economically insurable. Inflation, changes in building codes and ordinances, environmental considerations, and other factors, including terrorism or acts of war, also may make insurance proceeds insufficient to repair or replace a property if it is damaged or destroyed.

The Company is dependent upon many critical systems and processes, many of which are dependent upon hardware that is concentrated in a limited number of locations. If a catastrophe were to occur at one or more of those locations, it could have a material adverse effect on its business.

The business is dependent on certain critical systems, which support various aspects of its operations, from its computer network to its billing and customer service systems. The hardware supporting a large number of such systems is housed in a small number of locations. If one or more of these locations were to be subject to fire, natural disaster, terrorism, power loss, or other catastrophe, it could have a material adverse effect on its business. While the Company believes that it maintains

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reasonable disaster recovery programs, there can be no assurance that, despite these efforts, any disaster recovery, security and service continuity protection measures it may have or may take in the future will be sufficient.

In addition, computer viruses, electronic break-ins or other similar disruptive technological problems could also adversely affect its operations. The Company’s insurance policies may not adequately compensate it for any losses that may occur due to any failures or interruptions in its computer systems.

The Company cannot predict the impact of any asset or business disposition.

From time to time, the Company considers dispositions of assets or businesses. The Company cannot predict the types of dispositions that may be undertaken in the future or the financial impact of such actions. For example, after-tax cash proceeds received in connection with any disposition would be dependent on levels of interest from potential purchasers and the tax and other structuring elements of such transaction. As a result, there can be no assurance as to the terms of any such disposition, the level of any disruption to the operations of the Company caused by such transaction, or the long-term effect of such transaction on the Company’s financial condition.

The Company has completed several acquisitions and may continue to pursue new acquisitions or joint ventures, and any such transaction could adversely affect operating results or result in increased costs or other operating or management problems. The Company remains subject to the ongoing risks of successfully integrating and managing the acquisitions that have been completed.

The Company has completed several acquisitions. These transactions expose the Company to the risk of successfully integrating those acquisitions. Such integration could impact various areas of the Company’s business, including, but not limited to, its workforce, management, production facilities, information systems, accounting and financial reporting, and customer service. Disruption to any of these areas could materially harm the Company’s financial condition or results of operations.

The Company may continue to pursue new acquisitions or joint ventures in the future, a pursuit which could consume substantial time and resources. The successful implementation of the Company’s operating strategy in current and future acquisitions and joint ventures may require substantial attention from its management team, which could divert management attention from existing businesses. The businesses acquired, or the joint ventures entered into, may not generate the cash flow and earnings, or yield the other benefits anticipated at the time of their acquisition or formation. The risks inherent in any such strategy could have an adverse impact on the Company’s results of operation or financial condition.

The Company may be unable to identify liabilities associated with the properties that may be acquired or obtain protection from sellers against them.

The acquisition of properties requires assessment of a number of factors, including physical condition and potential environmental and other liabilities. Such assessments are inexact and inherently uncertain. The assessments made result from a due diligence review of the subject properties, but such a review will not reveal all existing or potential problems. The Company may not be able to obtain contractual indemnities from the seller for liabilities that it created or that were created by any predecessor of the seller. The Company may be required to assume the risk of the physical or environmental condition of the properties in addition to the risk that the properties may not perform in accordance with expectations.

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Risks Related to The Company’s Common Stock

The market price of the Company’s common stock is subject to volatility.

The market price of the Company’s common stock could be subject to wide fluctuations in response to numerous factors, many of which are beyond its control. These factors include, among other things, actual or anticipated variations in its operating results and cash flow, the nature and content of its earnings releases and its competitors’ earnings releases, and announcements of technological innovations that impact its products, customers, competitors or markets. Other factors include, changes in financial estimates by securities analysts, business conditions in its markets and the general state of the securities markets and the market for similar stocks, changes in capital markets that affect the perceived availability of capital to companies in its industries, governmental legislation or regulation, as well as general economic and market conditions, such as recessions.

Sales of large amounts of the Company’s common stock, or the perception that large sales could occur, may cause volatility in its stock price. As of December 31, 2008, the Company had approximately 10 million shares of common stock outstanding. This relatively small float of shares available for purchase/sale may result in share price volatility in cases where an investor seeks, or is perceived to be seeking, to acquire or divest a large block of shares in the public market.

The exercise of the Company’s Tranche C warrants could create substantial dilution, or there may be other events which could have a dilutive effect on its common stock.

The Company currently has options and warrants outstanding covering the purchase of approximately 1 million shares of common stock. If options or warrants to purchase the Company’s common stock are exercised, or other equity interests are granted under its management and directors incentive plan or under other plans adopted in the future, such equity interests will have a dilutive effect on its common stock. The Company cannot predict the effect any such dilution may have on the price of its common stock.


Item 1B.	*Unresolved Staff Comments.*

NONE


Item 2.	*Properties.*

The Company operates over 50 manufacturing and production facilities located primarily in the United States and Canada. The Company’s headquarters are located in Parsippany, New Jersey.

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Set forth below are the locations and uses of the Company’s major properties:


	Location		Use

	Valve Actuation Systems Segment
	Tallahassee, Florida		Production Facility
	Westland, Michigan⁽¹⁾		R&D Center and Offices
	Toledo, Ohio		Production Facility
	Defiance, Ohio⁽²⁾		Production Facility
	Curitiba, Brazil⁽¹⁾		Production Facility

	Performance Chemicals Segment
	Hollister, California⁽²⁾		Production Facility and Offices
	Pittsburg, California⁽²⁾		Production Facility
	Richmond, California⁽²⁾		Production Facility
	Augusta, Georgia		Production Facility
	East St. Louis, Illinois		Production Facility
	Berkeley Heights, New Jersey⁽²⁾		Production Facility
	Solvay, New York		Production Facility
	Celina, Texas		Production Facility
	Midlothian, Texas		Production Facility
	Odem, Texas		Production Facility
	Anacortes, Washington		Production Facility
	Thorold, Ontario		Production Facility
	Valleyfield, Quebec		Production Facility

	Corporate and Other
	Weaverville, North Carolina⁽²⁾		Production Facility and Offices
	Parsippany, New Jersey⁽¹⁾		Headquarters


(1)	Leased.

(2)	Mortgaged as security under the Company’s debt facilities.


Item 3.	*Legal Proceedings.*

The Company is involved in claims, litigation, administrative proceedings and investigations of various types and certain environmental proceedings previously discussed. See “Item 1. Business - Environmental Matters” above. Although the amount of any liability that could arise with respect to these actions cannot be accurately predicted, the opinion of management based upon currently-available information is that any such liability not covered by insurance will have no material adverse effect on the Company’s results of operations, cash flows or financial condition.


Item 4.	*Submission of Matters to a Vote of Security Holders.*

No items were submitted to a vote of security holders of the Company, through the solicitation of proxies or otherwise, during the fourth quarter of fiscal 2008.

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PART II


Item 5.	*Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.*

Market Information

The common stock is quoted on the NASDAQ National Market under the symbol “GETI.” The following table sets forth, for the period indicated, the high and low sale prices in dollars as quoted on the NASDAQ National Market for its common stock.


	High		Low

2008
First Quarter	$	30.08	$	25.62
Second Quarter	$	33.15	$	26.89
Third Quarter	$	29.56	$	25.71
Fourth Quarter	$	25.56	$	14.35

2007
First Quarter	$	38.00	$	31.25
Second Quarter	$	36.39	$	32.76
Third Quarter	$	36.53	$	28.14
Fourth Quarter	$	36.09	$	27.96

As of March 4, 2009, there were 2,850 stockholders of record of the Company’s common stock.

Dividends

The Company currently intends to retain its earnings for use in the operation and expansion of its business and for debt service and, therefore, it does not anticipate paying regular cash dividends in the foreseeable future. Additionally, the Company’s credit facilities directly limit the ability of the Company to pay cash dividends.

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Equity Compensation Plan Information

The following table gives information about its existing Common Stock that may be issued upon the exercise of options, warrants and rights under its Amended and Restated 2003 Management and Directors Incentive Plan as of December 31, 2008.


	Equity Compensation Plan Information

Plan Category		Number of Securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options, warrants and rights (b)		Number of Securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)

Equity compensation plans approved by security holders			413,430	$	21.50		580,164
Equity compensation plans not approved by security holders			0		N/A		0

Total			413,430	$	21.50		580,164

Performance Graph

In accordance with the rules of the SEC, this section entitled “Performance Graph” shall not be incorporated by reference into any of our future filings under the Securities Act of 1933, as amended, or Securities Act, or the Securities Exchange Act of 1934, as amended, or Exchange Act, and shall not be deemed to be soliciting material or to be filed under the Securities Act or the Exchange Act.

The following graph illustrates the cumulative total stockholder return that would have been realized (assuming reinvestment of dividends) by an investor who invested $100 on December 31, 2003 in each of: (i) GenTek Inc. Common Stock, (ii) the Russell 2000 Index, (iii) the Standard & Poor’s MidCap Auto Components Index, and (iv) the Standard & Poor’s SmallCap Chemicals Index.

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(LINE GRAPH)


Indexed Performance

	12/31/2003	12/31/2004	12/31/2005	12/31/2006	12/31/2007	12/31/2008

GenTek (GETI)	100.00	147.44	160.39	310.29	262.56	135.00
Russell 2000 Index	100.00	118.33	123.72	146.44	144.15	95.44
S&P MidCap Auto Components Index	100.00	102.99	86.64	82.95	98.02	36.55
S&P SmallCap Chemicals Index	100.00	126.00	101.66	126.80	119.71	69.00

Issuer Purchases of Equity Securities


	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Program		(d) Approximate Dollar Value Of Shares That May Yet Be Purchased Under the Program

October 1-31, 2008		132,800	$	23.20		132,800	$	13,226,467
November 1-30, 2008		17,150		18.25		17,150		12,913,480
December 1-31, 2008		142,560		14.45		142,560		10,853,488

Total		292,510	$	18.64		292,510

On August 7, 2007, the Company announced a stock repurchase program pursuant to which the Company may purchase in the aggregate up to $30 million of its common stock. The program expires on August 7, 2010.

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Item 6.	*Selected Financial Data.*

The following selected consolidated financial data of the Company have been derived from and should be read in conjunction with the Company’s Consolidated Financial Statements.


	Years Ended December 31,


	2008			2007			2006			2005			2004

	(In thousands, except per share data)

Statement of Operations Data:
Net revenues	$	608,039		$	560,267		$	531,599		$	488,588		$	470,111
Restructuring and impairment charges		158,941			4,964			2,974			6,989			8,934
Operating profit (loss)		(104,947	)		60,382			48,610			35,445			29,182
Interest expense		12,803			22,685			29,137			24,733			7,930
Income (loss) from continuing operations		(110,065	)		37,037			12,339			6,920			14,745
Income (loss) from discontinued operations		1,035			(7,270	)		(14,442	)		(7,742	)		180,573
Net income (loss)	$	(109,030	)	$	29,767		$	(2,103	)	$	(822	)	$	195,318

Per Share:
Income (loss) from continuing operations—basic	$	(10.93	)	$	3.59		$	1.21		$	0.69		$	1.47
Income (loss) from continuing operations—diluted		(10.93	)		3.20			1.12			0.68			1.47
Income (loss) from discontinued operations—basic		0.10			(0.70	)		(1.42	)		(0.77	)		18.06
Income (loss) from discontinued operations—diluted		0.10			(0.63	)		(1.32	)		(0.77	)		18.01
Net income (loss)—basic		(10.83	)		2.89			(0.21	)		(0.08	)		19.53
Net income (loss)—diluted		(10.83	)		2.57			(0.19	)		(0.08	)		19.48
Dividends⁽¹⁾		—			—			—			31.00			7.00

Balance Sheet Data (at end of period):
Total assets	$	425,312		$	613,979		$	730,206		$	761,075		$	755,519
Long-term debt (including current portion)		213,388			239,869			345,013			359,958			11,458
Total equity (deficit)		(21,639	)		145,609			98,479			85,375			400,427




	(1)	During 2005 and 2004, the Company paid special dividends of $31.00 and $7.00 per share, respectively.

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Item 7.	*Management’s Discussion and Analysis of Financial Condition and Results of Operations.*

The following section should be read in conjunction with the consolidated financial statements and the notes indicated elsewhere in this Annual Report. This Annual Report on Form 10-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements, other than statements of historical facts, included in this Annual Report may constitute forward-looking statements. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue” or other similar words or expressions. The Company has based these forward-looking statements on its current expectations and projections about future events. Although the Company believes that its assumptions made in connection with the forward-looking statements are reasonable, there can be no assurances that these assumptions and expectations will prove to have been correct. Important factors that could cause actual results to differ from these expectations are disclosed in this Annual Report and include various risks, uncertainties and assumptions. Such factors include, but are not limited to, those set forth in the section of this Annual Report captioned “Item 1A. – Risk Factors”.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Annual Report might not occur.

Acquisitions

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Divestitures

On November 14, 2008, the Company completed the sale of its wire and cable manufacturing business in Mineral Wells, TX. On July 17, 2007, the Company completed the sale of its wholly-owned subsidiary Defiance Testing and Engineering Services, Inc. On February 16, 2007, the Company completed the sale of its Noma wire and cable harness assembly business. During April 2006, the Company completed the sale of its cable and wire manufacturing business in Stouffville, Canada. Accordingly, all financial information included herein has been reclassified to reflect these businesses as discontinued operations.

Overview

The Company is a holding company whose subsidiaries manufacture industrial components and performance chemicals. GenTek has no independent operations and, therefore, is dependent upon cash flow from its subsidiaries to meet its obligations. It operates through two primary business segments: valve actuation systems and performance chemicals. Its products are frequently highly engineered and are important components of, or provide critical attributes to, its customers’ end products or operations. The Company operates over 50 manufacturing and production facilities located primarily in the U.S. and Canada.

Valve Actuation Systems

The valve actuation systems segment provides precision engineered valve actuation systems and components for gasoline and diesel engines. Over the last several years the Company’s automotive sales and operating profits have been adversely impacted by industry conditions affecting its major customers’ operations. Volume reductions and pricing pressure by auto manufacturers and Tier 1 suppliers has resulted in lower volumes and selling prices. The Company expects that revenues for 2009 will continue to decline due to reduced demand in both the automotive and heavy duty/commercial markets. In response to competitive pressures within the automotive market, the valve actuation systems segment has taken aggressive action to improve its cost position. The Company has closed certain facilities, reduced headcount and other operating expenses, and expanded production in its lower cost, non-union facility in Tallahassee, FL.

Due to the Company’s dependence on the North American automotive market, production levels of the automotive OEMs influence sales and profitability of the valve actuation systems segment. The North American automobile and light truck “build rate” is one commonly used indicator of such production levels. More specifically, though, the production levels of the individual engine programs that it supplies impact its sales and profitability in the automotive market. The Company’s revenues in this market are also influenced, to a lesser degree, by the North American “class 8” heavy duty diesel truck build rate.

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Profitability in the Company’s valve actuation systems segment can be influenced by a number of factors, including: production levels at its individual manufacturing facilities, as well as the volume and consistency of production levels at its customers’ manufacturing facilities; demands from its customers to reduce the prices of its products; the prices it pays for key raw materials and transportation costs.

Performance Chemicals

The performance chemicals segment provides a broad range of value-added chemical products to four principal markets: water treatment, chemical processing, pharmaceutical and food additives, and technology. In the water treatment market its revenues are primarily derived from the sale of water treatment chemicals to large municipal treatment facilities and pulp and paper operations. Sales to the water treatment market, which accounts for approximately 56 percent of the performance chemicals segment’s revenues, have increased approximately 34 percent over the last year. This increase is principally due to price increases as well as the impact of the acquisitions made over the course of the last two years. The Company anticipates that sales to the water treatment market will continue to grow in 2009 primarily due to the full year impact of price increases implemented in 2008. In the chemical processing market, its revenues are derived principally from the sale of sulfuric acid regeneration services to large oil refineries on the West Coast of the United States and from the sale of sulfuric acid which is used in the manufacture of synthetic fibers, paper, fertilizers as well as many other products. Sales to the chemical processing market, which account for approximately 22 percent of the performance chemicals segment’s revenues, have increased by approximately 50 percent over the last year. This increase is primarily due to increased prices driven by the pass-through of higher raw material costs. The Company anticipates that sales to the chemical processing market will decline in 2009 driven by reduced selling prices. In the pharmaceutical and food additives market, GenTek’s revenues are driven by sales of high purity potassium chloride to manufacturers of pharmaceutical and food additives. Sales to the pharmaceutical and food additives market, which account for approximately 10 percent of the performance chemicals segment’s revenue, decreased by approximately 35 percent over the last year. The reduction was due to the sale of the Reheis antiperspirant actives product line. The Company anticipates that sales into the pharmaceutical and food additives market will continue to decline in 2009 driven by the full year impact of the sale of the Reheis antiperspirant actives product line. In the technology market, GenTek’s revenues are derived primarily from the sale of high purity chemicals to producers of semiconductor devices. Sales to the technology market, which account for approximately 12 percent of the performance chemicals segment’s revenues, have increased 14 percent over the last year. This increase was primarily due to increased prices driven by the pass-through of higher raw material costs. The Company anticipates that sales into this market will decrease as a result of reduced customer demand driven by current economic conditions. Operating efficiency and price improvements offsetting raw material and other cost increases are expected to maintain the performance chemicals segment’s profitability in 2009.

Profitability in its performance chemicals segment can be influenced by a number of factors, including: competitive market conditions; the volume and consistency of production levels at its customers’ consuming locations, production levels at its individual manufacturing facilities; the prices it pays for its key raw materials, including sulfur, sulfuric acid, bauxite, aluminum tri-hydrate and muriate of potash; and transportation costs.

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Corporate and Other

The corporate and other segment provides fluid handling equipment sold primarily for automotive service applications. Sales to the fluid handling market decreased by approximately 9 percent over the last year. The Company expects fluid handling equipment sales in 2009 to continue to decline driven by general North American economic conditions and the associated impact on customer demand.

Profitability in the corporate and other segment can be influenced by a number of factors: production levels at its manufacturing facility, as well as the volume and consistency of investment in new equipment installations at its customers’ facilities; demands from its customers to reduce the prices of its products; the prices it pays for key raw materials and transportation costs.

Results of Operations

The following table sets forth certain line items from the Company’s Consolidated Statements of Operations for the three years ended December 31, 2008 and the corresponding percentage of net revenues for the relevant periods presented as a percentage of revenue for the periods indicated.


	Years Ended December 31,

	2008					2007					2006

	(In millions)
Net revenues	$	608.0		100	%	$	560.3		100	%	$	531.6		100	%
Cost of sales		501.5		82			457.1		82			430.7		81
Selling, general and administrative expense		50.8		8			51.1		9			49.5		9
Net (gain) loss on disposition of long-term assets		1.8		—			(10.0	)	(2	)		0.5		—
Restructuring and impairment charges		158.9		26			5.0		1			3.0		1
Pension curtailment and settlement (gains) losses		—		—			(3.3	)	(1	)		(0.6	)	—

Operating profit (loss)		(104.9	)	(17	)		60.4		11			48.6		9
Interest expense		12.8		2			22.7		4			29.1		5
Interest income		0.2		—			0.6		—			0.6		—
Other (income) expense, net		1.0		—			(0.9	)	—			0.3		—
Income tax provision (benefit)		(8.4	)	(1	)		2.2		—			7.4		1

Income (loss) from continuing operations	$	(110.1	)	(18	)%	$	37.0		7	%	$	12.3		2	%

2008 Compared with 2007

Net revenues were $608 million for the year 2008 compared with $560 million for the prior year. The increase was due to higher sales of $85 million in the performance chemicals segment partly offset by reduced sales of $37 million in the valve actuation systems segment and $1 million in the corporate and other segment. The increase in the performance chemicals segment is due primarily to broad based strength across all markets resulting from the impact of the acquisitions made in the water treatment market in 2007 coupled with higher average selling prices necessary to offset increased raw material costs, partly offset by the sale of the Reheis antiperspirant actives product line. The reduced sales in the valve actuation systems segment was the result of lower volumes resulting from reduced demand across the entire customer base. Lower sales in the corporate and other segment were the result of reduced volumes in the fluid handling equipment market.

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Gross profit (net revenues less cost of sales) was $107 million for the year 2008 compared with $103 million for the prior year. The increase in gross profit was the result of higher gross profit of $14 million in the performance chemicals segment partly offset by lower gross profit of $10 million in the valve actuation systems segment. The improvement in the performance chemicals segment was the result of price increases which more than offset higher raw material costs combined with the full year impact of the acquisitions made in the water treatment market in 2007, partly offset by a reduction resulting from the sale of the Reheis antiperspirant actives product line. The shortfall in the valve actuation systems segment was due primarily to reduced sales volumes and higher material costs.

Net loss on disposition of long-term assets for the year 2008 was $2 million as compared to a net gain on disposition of long-term assets of $10 million in the prior year. The loss on disposition of long-term assets in 2008 was the result of the sale of the Company’s Reheis antiperspirant actives product line on February 29, 2008. The gain in 2007 was the result of the sale of surplus real estate.

Selling, general and administrative expense was $51 million for the year 2008 which was flat with the prior year.

Restructuring and impairment charges were $159 million for the year 2008 as compared with charges of $5 million for the prior year. During 2008, the Company recorded impairment charges of $157 million related to the goodwill and intangible assets within the valve actuation systems segment. Upon conducting its annual test of goodwill impairment, the Company determined that the carrying value, including goodwill, of the valve actuation systems segment exceeded its fair value. In addition, driven by the continued downturn in the business the Company performed a recoverability test for the long-lived assets of the valve actuation systems segment. As a result of this testing the Company has recorded an impairment charge of $123 million to reduce the goodwill balance to $0 and an impairment charge of $22 million against certain intangible assets. Finally, the Company has made a decision to cease using certain trademarks in the valve actuation systems business and has recorded a corresponding charge of $12 million to write-down the value of these trademarks to $0.

Operating loss was $105 million for the year 2008 as compared with an operating profit of $60 million for the prior year. The unfavorable operating performance was the result of the restructuring and impairment charge recorded in 2008 combined with the gains from disposition of long-term assets and pension curtailments in 2007 partly offset by the improved gross profit as compared to 2007.

Interest expense was $13 million for the year 2008 as compared to $23 million for the prior year. The reduction in interest expense was the result of lower average principal balances and lower interest rates during 2008 as compared to the prior year. In addition, 2008 interest expense benefitted from a $4 million net gain on debt repurchases.

Income tax benefit for the year 2008 was $8 million as compared to income tax expense of $2 million for the year 2007. Income tax benefit for the year 2008 was reduced by $49 million due to the non-deductible goodwill write-down included in the operating loss.

Income from discontinued operations was $1 million for the year 2008 as compared to a loss from discontinued operations of $7 million in 2007.

2007 Compared with 2006

Net revenues were $560 million for the year 2007 compared with $532 million for the prior year. This increase was due to higher sales of $23 million in the performance chemicals segment and $6 million

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in the valve actuation systems segment partly offset by reduced sales of $1 million in the corporate and other segment. The increase in the performance chemicals segment was due to increased sales into the water treatment market driven in part by the impact of the acquisitions of GAC, Repauno and Chalum. The increase in the valve actuation systems segment was primarily the result of the full year impact of the acquisition of Precision Engine Products. Lower sales in the corporate and other segment were due to reduced sales into the fluid handling market.

Gross profit was $103 million for the year 2007 compared with $101 million for the prior year. Gross profit performance was the result of increased gross profit of $15 million in the performance chemicals segment partly offset by reduced gross profit in the valve actuation systems segment of $12 million. The increase in the performance chemicals segment gross profit was driven by the strong revenue performance primarily in the water treatment market resulting from the impact of the acquisitions combined with increased prices and higher volumes which more than offset the impact of increased raw material costs. The decrease in gross profit in the valve actuation systems segment was principally due to unfavorable product mix and increased cost related to operational issues.

Net gains on disposition of long-term assets of $10 million for the year 2007 were the result of the sale of surplus real estate in the performance chemicals segment located in Denver, CO, El Segundo, CA, and Atlanta, GA.

Selling, general and administrative expense was $51 million for the year 2007 as compared with $49 million in the prior year. This increase is primarily attributable to increased compensation costs of $2 million and increased IT systems costs in the performance chemicals segment of $1 million partly offset by a one-time $1 million insurance settlement realized in the first quarter of 2007.

Restructuring and impairment charges were $5 million for the year 2007 as compared with charges of $3 million for the prior year. During 2007, impairment charges of $1 million were recorded to reflect estimated fair values of two closed facilities that were held for sale. Restructuring charges recorded in 2007 included $2 million associated with the closure of a production facility and $2 million for continuing costs from activities initiated during prior years. These restructuring actions have been completed.

During 2007, the Company adopted plan amendments that froze pension plan benefits for hourly employees covered by certain collective bargaining agreements, and closed one of its manufacturing facilities. These actions resulted in a net curtailment gain of $3 million. During 2006, the Company adopted plan amendments that froze pension plan benefits for hourly employees covered by certain collective bargaining agreements, and announced the closure of one of its manufacturing facilities. These actions resulted in a net curtailment gain of $0.6 million.

Operating profit was $60 million for the year 2007 as compared with $49 million for the prior year. The higher operating profit was the result of the increased gross profit combined with the gain on disposition of long-term assets and pension curtailments partly offset by increased selling, general and administrative expense and increased restructuring costs as compared with 2006.

Interest expense was $23 million for the year 2007 as compared to $29 million for the prior year. The reduction in interest expense was the result of lower average principal balances and lower interest rates during 2007 as compared to the prior year.

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Income tax expense for the year 2007 was $2 million as compared to $7 million for the year 2006. During 2007, income tax expense was reduced by the reversal of an uncertain tax position of $8 million relating to a prior period and the recognition of a net deferred tax asset for the difference between the tax basis in the stock of a subsidiary and its book basis of $8 million, due to the expectation that the difference will reverse in the foreseeable future, as a result of the impending sale of the subsidiary.

Loss from discontinued operations was $7 million for the year 2007 versus $14 million in 2006. Included in loss from discontinued operations in 2007 was an impairment charge of $6 million related to the Defiance Testing and Engineering Services business. Included in loss from discontinued operations in 2006 were impairment charges of $2 million related to the Canadian wire and cable business and $12 million related to the Noma wire and cable harness assembly business.

Results of Operations by Segment

2008 Compared with 2007


	Years Ended December 31,

	2008			2007			Change

	(In millions)
Net Revenues:
Valve actuation systems	$	115.4		$	152.1		$	(36.7	)
Performance chemicals		482.2			396.7			85.5
Corporate and other		10.5			11.5			(1.0	)

Total	$	608.0		$	560.3		$	47.7

Operating Profit (Loss):
Valve actuation systems	$	(166.4	)	$	(0.3	)	$	(166.1	)
Performance chemicals		65.3			64.8			0.5
Corporate and other		(3.9	)		(4.2	)		0.3

Total	$	(104.9	)	$	60.4		$	(165.3	)

Valve Actuation Systems Segment

Net revenues for the valve actuation systems segment were $115 million for the year 2008 as compared to $152 million for the comparable prior year period. This reduction was the result of reduced customer demand, the idling of a major customer’s facility in Brazil, and the loss of engine component programs. Gross profit was $5 million for the year 2008 as compared to $14 million for the comparable prior year period. The decrease in gross profit was driven by $6 million from reduced sales volumes, $2 million from the idling of a major customer’s facility in Brazil, $1 million from lost engine programs, $2 million from higher raw material costs and $1 million from cost associated with the cancellation of an engine program by a major customer, partly offset by $1 million from the settlement of outstanding warranty claims and $1 million from reduced operating costs. Selling, general and administrative expense was $13 million for the year 2008 as compared to $14 million for the comparable prior year period. Restructuring and impairment charges were $158 million for the year 2008 as compared to $3 million in the comparable prior period. The charges recorded in 2008 include a restructuring charge of $1 million associated with a workforce reduction implemented in the second quarter, an impairment charge of $123 million which represented the entire remaining goodwill balance associated with this segment, an impairment charge of $22 million relating to certain long-lived intangible assets and an additional impairment charge of $12 million relating to the decision to cease using certain trademarks. There were no curtailment gains for the year 2008 as compared to a $2 million gain in the comparable prior period.

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Operating loss was $166 million for the year 2008 compared to a break-even operating profit for the comparable prior year period. The operating results were driven by the restructuring and impairment charge combined with the reduced sales volumes and associated gross profit in the automotive market.

Performance Chemicals Segment

Net revenues for the performance chemicals segment were $482 million for the year 2008 as compared to $397 million for the comparable prior year period. This was due to broad based strength across all markets. Sales into the water treatment market increased by $67 million driven by $59 million resulting from increases in selling prices implemented to offset higher raw material costs, $15 million from the acquisitions made in 2007 and $5 million from increased sales of sodium nitrite partly offset by $11 million resulting from reduced sales volumes. The reduction in sales volumes sold into the water treatment market was driven by reduced demand from large pulp and paper customers, reduced consumption rates at certain customers, and unfavorable regional weather conditions. Increased revenues in the chemical processing market of $35 million were the direct result of the pass through of higher raw material costs. Increased revenues of $8 million in electronic chemicals and $7 million in the pharmaceutical and food additives market were driven by higher selling prices. These increases were partly offset by a $31 million reduction resulting from the sale of the Reheis antiperspirant actives product line. Gross profit was $99 million for the year 2008 as compared to $86 million for the comparable prior year period. The improved gross profit is driven by $15 million resulting from favorable timing in the pass through of higher production costs, $1 million from the impact of the acquisitions made in the water treatment market in 2007, and $1 million from the adjustment relating to prior periods recorded in the second quarter of 2008, partly offset by a reduction of $2 million resulting from the sale of the Reheis antiperspirant actives product line and $3 million from the income recorded in 2007 related to the recovery of expenses associated with the previously settled Richmond lawsuit. Selling, general and administrative expense was $31 million for the year 2008 as compared to $30 million in the comparable prior year period. The increase in selling, general and administrative expense was primarily the result of higher incentive compensation costs. The year 2008 included a loss on disposition of long-term assets of $2 million while the comparable prior year period included a gain of $10 million. The loss on disposition of long-term assets in 2008 is primarily the result of the sale of the Reheis antiperspirant product line. The gain on disposition of long-term assets in 2007 is the result of the sale of surplus real estate. Restructuring and impairment charges were $1 million for the year 2008 related to the closure of a production facility resulting from the sale of the antiperspirant product line. Operating profit was $65 million for the year 2008 which was flat with the comparable prior period. The stable operating profit was due to the strong gross margin performance coupled with favorable restructuring charges in the current year offset by the gain on disposition of long-term assets in 2007.

Corporate and Other Segment

Net revenues were $10 million for the year 2008 as compared to $12 million in the comparable prior year period. Gross profit for the year 2008 was $2 million as compared to $3 million in the comparable prior year period. The reduction in revenue and associated gross profit were the result of reduced volumes in the fluid handling equipment market. Selling, general and administrative expense was $6 million for 2008 as compared to $7 million in the comparable prior year period. Operating loss for 2008 was $4 million which was unchanged from the comparable prior year period.

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2007 Compared with 2006


	Years Ended December 31,

	2007			2006			Change

	(In millions)
Net Revenues:
Valve actuation systems	$	152.1		$	146.1		$	6.0
Performance chemicals		396.7			373.3			23.4
Corporate and other		11.5			12.1			(0.6	)

Total	$	560.3		$	531.6		$	28.7

Operating Profit (Loss):
Valve actuation systems	$	(0.3	)	$	10.5		$	(10.8	)
Performance chemicals		64.8			44.7			20.1
Corporate and other		(4.2	)		(6.6	)		2.4

Total	$	60.4		$	48.6		$	11.8

Valve Actuation Systems Segment

Net revenues for the valve actuation systems segment were $152 million for the year 2007 as compared to $146 million for 2006. This increase was primarily the result the full year impact of the acquisition of Precision Engine Products. Gross profit was $14 million for the year 2007 as compared to $27 million in 2006. The reduced gross profit was driven by unfavorable product mix as reduced sales of higher margin products sold to the Company’s historical OEM customer base were directly offset by increased sales of lower margin products resulting from the acquisition of Precision Engine Products. In addition, 2007 results were adversely impacted by $6 million in operational issues; which included a $3 million expense related to a warranty claim from a customer, $1 million in inefficiencies incurred in the transition of operations from the Perrysburg, OH facility into the lower cost Tallahassee, FL facility, and $1 million in higher costs to support a new product launch in the Toledo, OH facility. Selling, general and administrative expense was $14 million for 2007 which was flat to the comparable prior year period as reduced spending offset the addition of $1 million in added technical resources required to support the new business awards. Restructuring and impairment charges were $3 million for 2007 as compared to $2 million for 2006. Postretirement liability curtailment gains were $2 million for 2007 resulting from the closure of the Perrysburg, OH facility which drove the accelerated recognition of unrecognized gains resulting from previous amendments to the postretirement medical benefits plans. The valve actuation systems segment was at break-even operating profit for 2007 as compared with a $10 million operating profit for 2006. This reduction in operating profit was primarily a result of the lower gross margin performance in 2007 and higher restructuring and impairment charges partly offset by the postretirement liability curtailment gains.

Performance Chemicals Segment

Net revenues were $397 million for the year 2007 as compared with $373 million for the prior year. This increase was principally the result of higher sales into the water treatment, pharmaceutical and food additives and technology markets of $29 million, $4 million and $1 million, respectively, partially offset by lower sales into the chemical processing market of $11 million. The increase in revenues was primarily the result of the pass through of higher raw material prices and freight costs. In addition, the impact of acquisitions in the water treatment market contributed increased revenues of $15 million as compared to prior year. The reduced revenues in the chemical processing market were primarily the result of the closure of the Newark, NJ sulfuric acid facility. Gross profit for 2007 was $86 million as compared to $71 million for the prior year. The increase was principally the result of the strong volumes and increased prices in excess of previously incurred raw material cost increases. The acquisitions made

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in the water treatment market resulted in an increase in gross profit of $3 million as compared to prior year. 2007 gross profit benefited by the recovery of $3 million in expenses associated with the previously settled Richmond lawsuit and $2 million resulting from credits for the transfer of excess emission allowances partly offset by a $3 million increase to the environmental liability based on new information and regulatory requirements. Gains on disposition of long term assets of $10 million were driven by the sale of surplus real estate. Selling, general and administrative expense was $30 million for the year 2007 as compared with $26 million for 2006. The increase was principally due to increased IT system operating costs of $1 million, higher incentive compensation expenses of $1 million and increased allocations of corporate overhead costs of $2 million reflective of the performance chemicals segment comprising a larger portion of the Company. Restructuring and impairment charges were $2 million for the year 2007 as compared with a $1 million charge recorded during 2006. The 2007 charges relate to the actions to exit the Newark, NJ sulfuric acid production facility. Pension liability curtailment gains were $1 million for 2007 which was flat with the prior year. Operating income for 2007 was $65 million as compared with $45 million for 2006. The increase was principally due to the increased gross profit plus the gain on disposition of long term assets partly offset by the increased selling, general and administrative expense and restructuring charges in 2007.

Corporate and Other Segment

Net revenues were $12 million for the year 2007 which was unchanged from the prior year period. Gross profit for the year 2007 was $3 million which was unchanged from the prior period. Selling, general and administrative expense was $7 million for 2007 as compared to $9 million in 2006. Selling, general and administrative expense benefitted in 2007 from a one-time $1 million insurance settlement. Operating loss for 2007 was $4 million, as compared to $7 million in the prior year. The reduced operating loss was the result of favorable selling, general and administrative expense.

Liquidity and Capital Resources

Cash and cash equivalents were $10 million at December 31, 2008, compared with $16 million at December 31, 2007. Significant cash flows during 2008 included common stock repurchases of $16 million, capital expenditures of $40 million, and net debt payments of $22 million offset by proceeds from asset sales of $21 million, proceeds from the sale of discontinued operations of $9 million and cash provided by operations of $45 million. The Company had working capital (current assets minus current liabilities) of $88 million at December 31, 2008 as compared with working capital of $99 million at December 31, 2007.

Cash payments for employee termination costs and facility exit costs totaled $2 million in the year ended December 31, 2008.

The Company’s primary credit facilities consist of a first lien term loan and a $60 million revolving credit facility (the “Credit Facilities”). The first lien loan is due on February 28, 2011 and carries an interest rate of LIBOR plus 2 percent or base rate plus 1 percent. The $60 million revolving credit facility matures on February 28, 2010 and currently carries an interest rate of LIBOR plus 2.25 percent subject to rate changes under a pricing grid if the Company’s leverage ratio changes. The Credit Facilities are secured by liens on substantially all of the personal property and certain real property of the Company and its domestic subsidiaries. The Credit Facilities contain covenants which impose certain restrictions on the Company’s ability to, among other things, incur additional debt, pay dividends, make investments or sell assets. Additionally, certain non-recurring cash inflows such as proceeds from asset sales, insurance recoveries, and equity offerings may have to be used to pay down indebtedness and may

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not be reborrowed. The material financial covenants with which the Company must comply include a maximum leverage ratio of 3.5, a minimum interest coverage ratio of 3.00, and a maximum amount of capital expenditures of $33 million in 2009 (plus $15 million of available carryover from 2008). The maximum amount of capital expenditures will be increased if the prior year’s maximum amount was not reached by the amount of the shortfall up to a maximum increase of $15 million. At December 31, 2008, the Company was in compliance with the covenants in the Credit Facilities.

In April 2005, the Company entered into two no-cost interest rate collar agreements, effectively hedging $185 million of its LIBOR-based floating rate term debt for five years. As a result of entering into the agreements, the interest rate to be paid by the Company relating to the hedged portion of its debt will be based on a minimum three-month LIBOR rate of 4.05 percent on average and a maximum three-month LIBOR rate of 5.00 percent.

During 2008, the Company made $40 million of capital expenditures. Capital expenditures are expected to be approximately $20 to $22 million in 2009. Contributions to pension plan trusts are expected to be approximately $4 million in 2009.

On August 7, 2007, the Company’s board of directors authorized a stock repurchase program pursuant to which the Company will purchase in the aggregate up to $30 million of its common stock in open market and negotiated purchases over a period of three years, dependent upon market conditions. This program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended at any time at the Company’s discretion. During 2008, the Company repurchased 657,209 shares for a total of $16 million.

Management believes that the Company’s cash flow from operations and availability under its revolving credit facility will be sufficient to cover debt service requirements, capital expenditures, and working capital requirements during 2009.

Off-Balance Sheet Agreements

The Company has approximately $9 million of standby letters of credit outstanding as of December 31, 2008.

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Contractual Obligations


	Payments Due by Period⁽¹⁾

	(In thousands)
	Less than 1 Year		1-3 Years		3-5 Years		After 5 Years		Total

Long-term debt	$	2,534	$	210,845	$	9	$	—	$	213,388
Interest on outstanding debt⁽²⁾		12,892		10,914		—		—		23,806
Operating leases		3,561		5,485		2,636		462		12,144

Total contractual obligations	$	18,987	$	227,244	$	2,645	$	462	$	249,338




(1)	Unrecognized tax benefits and interest thereon totaling $3,959 have not been included in these amounts as the Company is unable to make reasonably reliable estimates of the periods of potential settlement.

(2)	Reflects interest on debt balances outstanding at year end using interest rates in effect at December 31, 2008. Interest is calculated based on contractual maturity dates and does not reflect any prepayments.

Environmental Matters

The Company’s various manufacturing operations, which have been conducted at a number of facilities for many years, are subject to numerous laws and regulations relating to the protection of human health and the environment in the U.S., Canada and other countries. The Company believes that it is in substantial compliance with such laws and regulations. However, as a result of its operations, the Company is involved from time to time in administrative and judicial proceedings and inquiries relating to environmental matters. Based on information available at this time with respect to potential liability involving these facilities, the Company believes that any such liability will not have a material adverse effect on its financial condition, cash flows or results of operations. However, modifications of existing laws and regulations or the adoption of new laws and regulations in the future, particularly with respect to environmental and safety standards, could require the Company to make expenditures which may be material or otherwise adversely impact the Company’s operations. See also “Item 1. Business Environmental Matters.”

The Company’s accruals for environmental liabilities are recorded based on current interpretation of environmental laws and regulations when it is probable that a liability has been incurred and the amount of such liability can be reasonably estimated. At December 31, 2008, accruals for environmental matters were $24 million. The Company maintains a comprehensive insurance program, including customary comprehensive general liability insurance for bodily injury and property damage caused by various activities and occurrences and significant excess coverage to insure against catastrophic occurrences. However, the Company generally does not maintain insurance other than as described above for potential liabilities related specifically to remediation of existing environmental contamination or future environmental contamination, if any.

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In addition, if environmental laws and regulations affecting the Company’s operations become more stringent, costs for environmental compliance may increase above historical levels.

Recent Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board, or FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted FIN 48 on January 1, 2007. The adoption, which was accounted for as a cumulative effect adjustment, resulted in an increase to the January 1, 2007 balance of retained earnings (deficit) of $2.8 million.

In September 2006, the FASB issued Statement of Financial Accounting Standards, or SFAS No. 157, Fair Value Measurements, (“SFAS 157”), to define fair value, establish a framework for measuring fair value in accordance with generally accepted accounting principles and expand disclosures about fair value measurements. SFAS 157 requires quantitative disclosures using a tabular format in all periods (interim and annual) and qualitative disclosures about the valuation techniques used to measure fair value in all annual periods. Certain provisions of SFAS 157 were effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. In February 2008, the FASB deferred the implementation of SFAS 157 for all non-financial assets and non-financial liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The implementation of SFAS 157 for financial assets and financial liabilities, effective January 1, 2008, did not have a material impact on our consolidated financial position and results of operations. The Company is currently assessing the impact of adopting SFAS 157 for non-financial assets and non-financial liabilities on its consolidated financial position and results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pensions and Other Postretirement Plans-an Amendment of FASB Statements No. 87, 88, 106 and 132(R), (“SFAS 158”). SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. Employers are required to initially recognize the funded status and provide the required disclosures beginning for fiscal year ends after December 15, 2006. The net impact on the December 31, 2006 balance sheet was to decrease prepaid pension costs by $1.7 million, decrease other current liabilities by $0.9 million, reduce accrued pension and postretirement benefit costs by $10.4 million and increase deferred tax liabilities by $1.2 million, with the offset increasing stockholders’ equity by $8.3 million. Additionally, in accordance with SFAS 158, the Company changed its measurement date for plan assets and obligations to coincide with its fiscal year end in 2008. The Company previously utilized a measurement date of October 31. The adoption of the measurement date provisions of SFAS 158 resulted in an increase of $0.3 million, net of taxes, to the Company’s retained earnings and a decrease of $0.5 million, net of tax, to accumulated other comprehensive income (loss).

In February 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and Financial Liabilities – including an Amendment of SFAS No. 115, (“SFAS 159”), which permits an

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entity to measure many financial assets and financial liabilities at fair value that are not currently required to be measured at fair value. Entities that elect the fair value option will report unrealized gains and losses in earnings at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis, with few exceptions. SFAS 159 amends previous guidance to extend the use of the fair value option to available-for-sale and held-to-maturity securities. The Statement also establishes presentation and disclosure requirements to help financial statement users understand the effect of the election. SFAS 159 is effective as of the beginning of the first fiscal year beginning after November 15, 2007. The adoption of this statement did not have a material impact on the Company’s results of operation or financial condition. The Company did not elect the fair value option for any assets or liabilities.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. FAS 141(R) is to be applied prospectively to business combinations for which the acquisition date is on or after an entity’s fiscal year that begins after December 15, 2008. The Company will assess the impact of SFAS 141R if and when a future acquisition occurs.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The Company does not anticipate that the adoption of this statement will have a material impact on the Company’s results of operation or financial condition.

In March 2008, the FASB issued SFAS No. 161, Disclosures About Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 expands quarterly disclosure requirements in SFAS 133 about an entity’s derivative instruments and hedging activities. SFAS 161 is effective for fiscal years beginning after November 15, 2008. The Company is currently assessing the impact of adopting SFAS 161 on its financial statements.

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). The intent of FSP FAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R) and other applicable accounting literature. FSP FAS 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company does not anticipate that the adoption of FSP FAS 142-3 will have a material impact on its results of operations or financial condition.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles, (“SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements. SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company does not expect that this standard will have a material impact on its results of operations, financial position or cash flow.

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Critical Accounting Policies and Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant accounting policies are described in Note 2 to the consolidated financial statements. The significant accounting policies which it believes are the most critical to the understanding of reported financial results include the following:

Revenue Recognition – GenTek recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectibility is reasonably assured. Revenue is recognized from product sales when title and risk of loss has passed to the customer consistent with the related shipping terms, generally at the time products are shipped. The Company records a provision for estimated sales returns and other allowances as a reduction of revenue at the time of revenue recognition. Provisions for sales returns and other allowances are determined using management’s judgments of required amounts, based upon the Company’s historical experience. Actual returns could differ from these estimates. However, if the total actual level of sales returns differed from management’s estimates by 10 percent, the effect would not be material.

Deferred Taxes – GenTek records a valuation allowance to reduce its deferred tax assets to the amount the Company believes is more likely than not to be realized based upon historical taxable income, projected future taxable income and available tax planning strategies. Its estimates of future taxable income are based upon its current operating forecast, which it believes to be reasonable. The Company will continue to monitor the likelihood of realizing its net deferred tax assets and future adjustments to the deferred tax asset valuation allowances will be recorded as necessary. However, different assumptions regarding its current operating forecast could materially affect its estimates.

Unrecognized tax benefits – In accordance with FIN 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109, the Company evaluates a tax position to determine whether it is more likely than not that the tax position will be sustained upon examination, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to recognize in the consolidated statement of operations and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold a tax reserve is established and no benefit is recognized. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes that its reserve for uncertain tax positions is properly recorded pursuant to the recognition and measurement provisions of FIN 48.

Purchase Accounting – GenTek applies the purchase method of accounting for acquisitions. Under this method, the purchase price, including any capitalized acquisition costs is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values, with any excess recorded as goodwill. The determination of fair values of such assets and liabilities require significant judgments and estimates such as projected cash flows, discount rates, royalty rates, and remaining useful lives. The initial fair values assigned to certain of these acquisitions are preliminary and may be revised prior to finalization, which is to be completed within a reasonable period, generally within one year of acquisition. Different assumptions and estimates that underlie the fair value assessments could materially affect its results.

-35-

Impairment of Goodwill and Indefinite Lived Intangible Assets – GenTek records impairment losses on goodwill and indefinite lived intangible assets based upon an annual review of the value of the assets or when events and circumstances indicate that the asset might be impaired and when the recorded value of the asset is more than its fair value. The Company performs its goodwill impairment testing utilizing a two-step process. In the first step, the fair value of the reporting units are compared with their carrying amounts, including goodwill. Estimates of fair value are based on a number of factors, including independent appraisals and current operating forecasts. If required, the second step of the goodwill impairment test compares the implied fair value of the goodwill with its carrying amount. The implied fair value of the goodwill is determined by allocating the fair value determined in the first step to all of the assets and liabilities included in the reporting unit as if the unit had been acquired in a business combination, then comparing the fair value of the unit to the amounts assigned to the assets and liabilities, with any excess becoming the implied fair value of goodwill. Impairment testing for indefinite lived intangible assets is performed separately from goodwill impairment testing. Significant assumptions that underlie the fair value estimates include future growth rates and weighted average cost of capital rates. However, different assumptions regarding its current operating forecast could materially affect its results.

Impairment of Long-Lived Assets – GenTek records impairment losses on long-lived assets when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amount. In this case, the Company records an impairment loss equal to the difference between the fair value of the long-lived assets and their carrying amount. Management’s estimates of fair value are based on discounted cash flow analyses and/or independent appraisals. Significant assumptions underlying these estimates include future growth rates and weighted average cost of capital rates. Its estimates of future cash flows are based upon its current operating forecast, which it believes to be reasonable. However, different assumptions regarding such cash flows or other assumptions that underlie its fair value estimates could materially affect its results.

Pension and Other Postretirement Benefits – GenTek records pension and other postretirement benefit costs based on amounts developed from actuarial valuations. Inherent in these valuations are key assumptions, including the discount rate and expected long-term rate of return on plan assets. For example, holding all other components of the calculations constant, a change in the assumed discount rate by 0.25 percent would change 2008 pension and other postretirement benefit costs by approximately $0.1 million and the projected pension and other postretirement benefit obligations by approximately $7 million. A change in the expected long-term rate of return on plan assets of one percent would change 2008 pension cost by approximately $2 million. Material changes in pension and other postretirement benefit costs may occur in the future due to changes in these assumptions, differences between actual experience and the assumptions used and changes in the benefit plans.

Environmental Liabilities – GenTek has recorded accruals for environmental liabilities based on current interpretation of environmental laws and regulations when it is probable that a liability has been incurred and the amount of such liability can be reasonably estimated. These estimates are established based upon information available to management to date, including the nature and extent of any environmental contamination, the available remedial alternatives, cost estimates obtained from outside consultants for the implementation of such remedial alternatives, the Company’s experience with similar activities undertaken at similar sites, and the legal and regulatory framework in the jurisdiction in which the liability arose. Differences between actual amounts incurred and its estimates or the receipt of new information with respect to these liabilities could have a material effect on its estimates and results of operations. In addition, discovery of unknown environmental contamination, the adoption of new laws or

-36-

regulations or modifications or changes in enforcement of existing laws and regulations could require adjustments to these accruals.

The impact and any associated risks related to these policies on its business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations where such policies affect its reported and expected financial results.


Item 7A.	*Quantitative and Qualitative Disclosures About Market Risk.*

The Company’s cash flows and earnings are subject to fluctuations resulting from changes in interest rates, foreign currency exchange rates and commodity prices and the Company selectively uses financial instruments to manage these risks. The Company’s objective in managing its exposure to changes in interest rates, foreign currency exchange rates and commodity prices is to reduce volatility on earnings and cash flow associated with such changes. The Company has not entered, and does not intend to enter, into financial instruments for speculation or trading purposes.

Interest rate risk

At December 31, 2008, the Company’s debt financing consisted primarily of amounts outstanding under the Company’s Credit Facilities. The borrowings outstanding under the Company’s Credit Facilities are collateralized by substantially all of the personal property and certain real property of the Company and its domestic subsidiaries. Borrowings under the Company’s Credit Facilities are sensitive to changes in interest rates. Given the existing level of borrowings under the credit facility of $213 million as of December 31, 2008, a one percent change in the weighted-average interest rate would have an interest impact of approximately $0.1 million each month.

The Company has two interest rate collar agreements in the aggregate notional amount of $185 million, in order to hedge against the effect that interest rate fluctuations may have on the Company’s floating rate debt. The interest rate to be paid is based on a minimum three-month LIBOR of 4.05 percent on average and a maximum three-month LIBOR of 5.00 percent. These interest rate collar agreements are scheduled to mature in 2010. The fair value of the agreements was $(7.4) million at December 31, 2008.

Foreign currency exchange rate and commodity price risks

The Company measures the market risk related to its holding of financial instruments based on changes in foreign currency rates and commodity prices using a sensitivity analysis. The sensitivity analysis measures the potential loss in fair values, cash flows and earnings based on a hypothetical 10 percent change in foreign currency exchange rates and commodity prices. Such analysis indicates that a hypothetical 10 percent change in foreign currency exchange rates or commodity prices would not have a material impact on the fair values, cash flows or earnings of the Company.

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Item 8.	*Financial Statements and Supplementary Data.*


Index

		Page No.


Report of Independent Registered Public Accounting Firm		39

Consolidated Statements of Operations – Years Ended December 31, 2008, 2007 and 2006		40

Consolidated Balance Sheets – As of December 31, 2008 and 2007		41

Consolidated Statements of Cash Flows – Years Ended December 31, 2008, 2007 and 2006		42

Consolidated Statement of Changes in Equity – Years Ended December 31, 2008, 2007 and 2006		43

Notes to the Consolidated Financial Statements		44-70

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
GenTek Inc.
Parsippany, New Jersey

We have audited the accompanying consolidated balance sheets of GenTek Inc. and subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of operations, changes in equity (deficit), and cash flows for each of the three years in the period ended December 31, 2008. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of GenTek Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, the Company adopted (1) Financial Accounting Standards Board’s Interpretation No. 48, “Accounting for Uncertainty in Income Taxes- an interpretation of FASB Statement No. 109” as of January 1, 2007 which changed the accounting for uncertain tax positions; and (2) the recognition, disclosure and measurement date provisions of Statement of Financial Accounting Standards (“SFAS”) No. 158, Employer’s Accounting for Defined Benefit Pension and Other Postretirement Plans – an Amendment of FASB Statements No. 87, 88, 106 and 132(R), which changed its method of accounting for pension and postretirement benefits.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 13, 2009 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP
Parsippany, New Jersey
March 13, 2009

-39-

GENTEK INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)


	Years Ended December 31,

	2008			2007			2006

Net revenues	$	608,039		$	560,267		$	531,599
Cost of sales		501,458			457,134			430,675
Selling, general and administrative expense		50,821			51,078			49,496
Net (gain) loss on disposition of long-term assets		1,802			(10,031	)		488
Restructuring and impairment charges		158,941			4,964			2,974
Pension and postretirement liability curtailment and settlement (gains) losses		(36	)		(3,260	)		(644	)

Operating profit (loss)		(104,947	)		60,382			48,610
Interest expense		12,803			22,685			29,137
Interest income		236			646			604
Other (income) expense, net		970			(854	)		347

Income (loss) from continuing operations before income taxes		(118,484	)		39,197			19,730
Income tax provision (benefit)		(8,419	)		2,160			7,391

Income (loss) from continuing operations		(110,065	)		37,037			12,339
Income (loss) from discontinued operations (net of tax of $678, $1,335 and $(5,987), respectively)		1,035			(7,270	)		(14,442	)

Net income (loss)	$	(109,030	)	$	29,767		$	(2,103	)


Earnings per common share – basic:
Income (loss) from continuing operations	$	(10.93	)	$	3.59		$	1.21
Income (loss) from discontinued operations		0.10			(0.70	)		(1.42	)

Net income (loss)	$	(10.83	)	$	2.89		$	(0.21	)


Earnings per common share – assuming dilution:
Income (loss) from continuing operations	$	(10.93	)	$	3.20		$	1.12
Income (loss) from discontinued operations		0.10			(0.63	)		(1.32	)

Net income (loss)	$	(10.83	)	$	2.57		$	(0.19	)

See the accompanying notes to the consolidated financial statements.

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GENTEK INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)


	December 31,

	2008			2007


ASSETS
Current assets:
Cash and cash equivalents	$	9,787		$	16,089
Receivables, net		70,564			73,892
Inventories		44,662			48,837
Deferred income taxes		33,556			39,675
Assets held for sale		—			14,346
Other current assets		9,378			6,319

Total current assets		167,947			199,158
Property, plant and equipment, net		219,444			213,900
Goodwill		22,991			145,514
Intangible assets, net		8,082			48,488
Other assets		6,848			6,919

Total assets	$	425,312		$	613,979


LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	36,145		$	44,707
Accrued liabilities		41,214			52,229
Current portion of long-term debt		2,534			2,826
Liabilities of businesses held for sale		—			294

Total current liabilities		79,893			100,056
Long-term debt		210,854			237,043
Pension and postretirement obligations		110,176			51,270
Other liabilities		46,028			80,001

Total liabilities		446,951			468,370

Equity (Deficit):
Preferred stock, $.01 par value; authorized: 10,000,000 shares; none issued or outstanding		—			—
Common stock, no par value; authorized: 100,000,000 shares; issued: 10,187,678 and 10,605,265 shares at December 31, 2008 and 2007, respectively		79,498			86,444
Warrants		3,190			7,776
Accumulated other comprehensive income (loss)		(24,839	)		21,510
Retained earnings (deficit)		(77,881	)		30,890
Treasury stock, at cost: 55,990 and 35,081 shares at December 31, 2008 and 2007, respectively		(1,607	)		(1,011	)

Total equity (deficit)		(21,639	)		145,609

Total liabilities and equity (deficit)	$	425,312		$	613,979

See the accompanying notes to the consolidated financial statements.

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GENTEK INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)


	Years Ended December 31,

	2008			2007			2006

Cash flows from operating activities:
Net income (loss)	$	(109,030	)	$	29,767		$	(2,103	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
(Income) loss from discontinued operations		(1,035	)		7,270			14,442
Pension and postretirement liability curtailment gains		(36	)		(3,260	)		(644	)
Depreciation and amortization		32,812			34,820			32,971
Asset impairment charges		156,539			914			1,231
Gain on debt repurchases		(4,049	)		(105	)		—
Net (gain) loss on disposition of long-term assets		1,802			(10,031	)		488
Long-term incentive plan costs, net		3,290			3,698			1,793
Excess tax benefit from long-term incentive plan		(141	)		(703	)		(318	)
(Increase) decrease in receivables		(8,215	)		7,538			2,295
Increase in inventories		(2,545	)		(3,328	)		(2,650	)
(Increase) decrease in deferred tax assets		2,881			(12,158	)		(4,961	)
Increase (decrease) in accounts payable		(224	)		(1,618	)		4,478
Increase (decrease) in accrued liabilities		(11,558	)		(564	)		5,614
Increase (decrease) in other liabilities and assets, net		(16,177	)		(6,348	)		2,078

Net cash provided by continuing operations		44,314			45,892			54,714
Net cash provided by (used for) discontinued operations		821			(708	)		(14,344	)

Net cash provided by operating activities		45,135			45,184			40,370

Cash flows from investing activities:
Capital expenditures		(40,059	)		(28,585	)		(19,983	)
Proceeds from sales or disposals of long-term assets		20,570			14,997			789
Proceeds from (purchases of) short-term investments		(2,419	)		—			2,367
Acquisition of businesses net of cash acquired*		—			(9,946	)		(40,119	)

Net cash used for continuing operations		(21,908	)		(23,534	)		(56,946	)
Net cash provided by discontinued operations		9,316			96,708			28,320

Net cash provided by (used for) investing activities		(12,592	)		73,174			(28,626	)

Cash flows from financing activities:
Proceeds from revolving credit facility		73,250			77,750			17,750
Repayments of revolving credit facility		(73,250	)		(87,750	)		(7,750	)
Issuance of long-term debt		—			50,000			929
Repayment of long-term debt		(22,433	)		(143,308	)		(24,564	)
Deferred financing costs		—			(378	)		(396	)
Dividends		—			—			(2,367	)
Exercise of stock options and warrants		728			887			872
Excess tax benefit from long-term incentive plan		141			703			318
Payments to acquire treasury stock		(596	)		(747	)		(178	)
Repurchase and retirement of common stock		(15,585	)		(3,560	)		—
Other		3			382			—

Net cash used for continuing operations		(37,742	)		(106,021	)		(15,386	)
Net cash used for discontinued operations		(19	)		(2,188	)		(1,763	)

Net cash used for financing activities		(37,761	)		(108,209	)		(17,149	)

Effect of exchange rate changes on cash		(1,084	)		703			10

Increase (decrease) in cash and cash equivalents		(6,302	)		10,852			(5,395	)
Cash and cash equivalents at beginning of period		16,089			5,237			10,632

Cash and cash equivalents at end of period	$	9,787		$	16,089		$	5,237

Supplemental information:
Cash paid (refunded) for income taxes	$	3,624		$	3,899		$	(287	)

Cash paid for interest	$	14,960		$	23,240		$	29,730

Capital expenditures incurred but not yet paid	$	6,877		$	9,155		$	5,681

*Acquisition of businesses, net of cash acquired:
Working capital, other than cash	$	—		$	(1,641	)	$	(10,771	)
Property, plant and equipment		—			(1,665	)		(21,647	)
Other assets		—			(7,642	)		(13,438	)
Current liabilities		—			378			—
Non-current laibilities		—			624			5,737

Total cash used to acquire businesses	$	—		$	(9,946	)	$	(40,119	)

See the accompanying notes to the consolidated financial statements.

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GENTEK INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Deficit)
For the Three Years Ended December 31, 2008
(In thousands, except per share data)


	Common Stock			Unearned Compensation			Warrants			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Deficit)			Total


Balance at January 1, 2006	$	81,395		$	(859	)	$	8,361		$	(86	)	$	(3,861	)	$	425		$	85,375
Components of comprehensive income:
Net loss		—			—			—			—			—			(2,103	)		(2,103	)
Minimum pension liability adjustment (net of tax of $2,494)		—			—			—			—			3,811			—			3,811
Foreign currency translation adjustments (net of tax of $59)		—			—			—			—			92			—			92
Change in unrealized gain on derivative instruments (net of tax of $157)		—			—			—			—			239			—			239

Comprehensive income																				2,039
Adjustment to initially apply FASB Statement No. 158 (net of tax of $1,198)		—			—			—			—			8,269			—			8,269
Long-term incentive plan grants, net		1,243			859			—			—			—			—			2,102
Exercise of warrants		48			—			(6	)		—			—			—			42
Exercise of stock options		830			—			—			—			—			—			830
Acquisition of treasury stock		—			—			—			(178	)		—			—			(178	)

Balance at December 31, 2006		83,516			—			8,355			(264	)		8,550			(1,678	)		98,479
Cumulative effect of change in accounting for uncertain tax positions		—			—			—			—			—			2,801			2,801
Components of comprehensive income:
Net income		—			—			—			—			—			29,767			29,767
Pension and postretirement liability adjustments (net of tax $12,722)		—			—			—			—			15,271			—			15,271
Foreign currency translation adjustments (net of tax of $41)		—			—			—			—			61			—			61
Change in unrealized gain/(loss) on derivative instruments (net of tax of $(1,552)		—			—			—			—			(2,372	)		—			(2,372	)

Comprehensive income																				42,727
Long-term incentive plan grants, net		4,640			—			—			—			—			—			4,640
Exercise and cancellation of warrants		586			—			(579	)		—			—			—			7
Exercise of stock options		880			—			—			—			—			—			880
Acquisition of treasury stock		—			—			—			(747	)		—			—			(747	)
Repurchase and retirement of common stock		(3,560	)		—			—			—			—			—			(3,560	)
Other		382			—			—			—			—			—			382

Balance at December 31, 2007		86,444			—			7,776			(1,011	)		21,510			30,890			145,609
Effects of changing pension and postretirement plans measurement date pursuant to FASB Statement No. 158 (net of tax of $(150))		—			—			—			—			(487	)		259			(228	)
Components of comprehensive income:
Net loss		—			—			—			—			—			(109,030	)		(109,030	)
Pension and postretirement liability adjustments (net of tax $(27,722))		—			—			—			—			(42,499	)		—			(42,500	)
Foreign currency translation adjustments (net of tax of $(269))		—			—			—			—			(412	)		—			(410	)
Change in unrealized gain/(loss) on derivative instruments (net of tax of $(1,931))		—			—			—			—			(2,951	)		—			(2,952	)

Comprehensive loss																				(154,892	)
Long-term incentive plan grants, net		3,322			—			—			—			—			—			3,322
Exercise and cancellation of warrants		5,135			—			(4,586	)		—			—			—			549
Exercise of stock options		179			—			—			—			—			—			179
Acquisition of treasury stock		—			—			—			(596	)		—			—			(596	)
Repurchase and retirement of common stock		(15,585	)		—			—			—			—			—			(15,585	)
Other		3			—			—			—			—			—			3

Balance at December 31, 2008	$	79,498		$	—		$	3,190		$	(1,607	)	$	(24,839	)	$	(77,881	)	$	(21,639	)

See the accompanying notes to the consolidated financial statements.

-43-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)

Note 1 – Basis of Presentation

GenTek Inc. (“GenTek” or the “Company”) is a holding company with no independent operations and, therefore, is dependent upon cash flow from its subsidiaries to meet obligations. GenTek’s subsidiaries operate through two primary business segments: valve actuation systems and performance chemicals. The valve actuation systems segment provides precision engineered valve actuation systems and components for gasoline and diesel engines. The performance chemicals segment provides a broad range of value-added chemical products to four principal markets: water treatment, chemical processing, pharmaceutical and food additives and technology. The Company operates over 50 manufacturing and production facilities located primarily in the U.S. and Canada.

During April 2006, the Company completed the sale of its wire and cable manufacturing business in Stouffville, Canada. On February 16, 2007, the Company completed the sale of its Noma wire and cable harness assembly business. On July 17, 2007, the Company completed the sale of its wholly owned subsidiary Defiance Testing and Engineering Services, Inc. On November 14, 2008, the Company completed the sale of its wire and cable manufacturing business in Mineral Wells, Texas. Accordingly, these businesses have been classified as discontinued operations. See Note 16.

On February 29, 2008, the Company completed the sale of its Reheis antiperspirant actives product line to Summit Research Labs, Inc. for $18,000. As part of this transaction, the Company continued to operate the antiperspirant actives manufacturing unit through September 30, 2008 under a transition services contract. This business continues to be classified as continuing operations. The Company recorded a loss on disposition of long-term assets as a result of this sale in the amount of $1,930.

Note 2 – Summary of Significant Accounting Policies

Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and all of its majority owned subsidiaries. Investments in affiliates in which ownership is at least 20 percent, but less than a majority voting interest, are accounted for using the equity method. Investments in less than 20 percent owned affiliates are accounted for using the cost method. Intercompany balances and transactions are eliminated in consolidation.

Cash and Cash Equivalents – All highly liquid instruments purchased with a maturity of three months or less are considered to be cash equivalents.

Inventories – Inventories are valued at the lower of cost or market, using the last-in, first-out (“LIFO”) method for certain domestic production inventories and the first-in, first-out (“FIFO”) or average-cost method for all other inventories. Production inventory costs include material, labor and factory overhead.

-44-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

Property, Plant and Equipment – Property, plant and equipment are carried at cost and are depreciated principally using the straight-line method. Estimated lives range from five to 35 years for buildings and leasehold improvements and three to 15 years for machinery and equipment.

Intangible Assets – Intangible assets that have finite lives are amortized using the straight-line method, over their estimated useful lives, which range from four to 15 years.

Impairment of Long-Lived Assets – The Company reviews long-lived assets for impairment whenever events and circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of these assets against the estimated undiscounted future cash flows to be generated by the assets. At the time such evaluations indicate that the future cash flows are not sufficient to recover the carrying value of such assets, the carrying values are adjusted to their fair values, which have been determined based on discounted cash flow analyses and/or independent appraisals. Assets to be disposed of are reported at the lower of their carrying amount or fair value less costs to sell.

Goodwill and Indefinite Lived Intangible Assets – The Company reviews goodwill and indefinite lived intangible assets separately for impairment annually (as of October 31) and whenever events and circumstances indicate that the recorded value of the assets might be more than its fair value. Estimated fair values are determined based upon a number of factors, including market information and current operating forecasts.

Product Warranties – Accruals for product warranties are estimated based upon historical warranty experience and are recorded at the time revenue is recognized or when a specific claim is both probable and can be estimated.

Environmental Liabilities – Accruals for environmental liabilities are recorded based on current interpretations of environmental laws and regulations when it is probable that a liability has been incurred and the amount of such a liability can be reasonably estimated.

Pension and Other Postretirement Benefits – Accruals for pension and other postretirement benefit costs utilize a number of accounting mechanisms that reduce the volatility of reported costs. Differences between actuarial assumptions and actual plan results are deferred and are amortized into expense only when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over the average remaining service period of active employees. Additionally, the impact of asset performance on pension expense is recognized over a five-year phase-in period though a “market-related” value of assets calculation. Since the market-related value of assets recognizes investment gains or losses over a five-year period, the future value of assets will be impacted as previously deferred gains or losses are recognized.

Foreign Currency Translation and Transactions – Assets and liabilities of foreign subsidiaries are translated into US dollars at the year-end exchange rate while revenues and expenses are translated monthly at the average exchange rate for each month. The resulting translation adjustments are made directly to accumulated other comprehensive income. Gains and losses resulting from transactions of the

-45-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

Company and its subsidiaries, which are made in currencies other than their functional currency (different from their own), are included in earnings as they occur and reflected within other income (expense).

Revenue Recognition – The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the amount is fixed or determinable, and collectibility is reasonably assured. Revenue is recognized from product sales when title and risk of loss has passed to the customer consistent with the related shipping terms, generally at the time products are shipped. The Company records a provision for estimated sales returns and other allowances as a reduction of revenue at the time of revenue recognition.

Shipping and Handling – The Company records shipping and handling costs in cost of sales.

Sale of Emission Credits – Certain locations within the Company’s performance chemicals segment have permitted allowances for air emissions. These locations monitor their emissions and routinely invest funds to maintain compliance levels or to improve performance. Costs for environmental maintenance and improvement projects are recorded in cost of sales and the gains from sales or transfers of these credits are likewise recorded in cost of sales. During December 2007, the Company sold excess emission credits through an open market created specifically to trade such emission credits, and recorded a gain from these sales in the amount of $1,591.

Stock-based Compensation – The Company recognizes expense for stock-based compensation based on the fair value on the grant date of the securities issued over the requisite vesting period.

Accounting for Income Taxes – Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if it is more likely than not that such assets will not be realized.

Financial Instruments – The Company does not hold or issue financial instruments for trading purposes. The Company uses derivative financial instruments primarily for purposes of hedging exposures to fluctuations in interest rates and commodity prices. Gains and losses related to qualifying hedges of firm commitments or anticipated transactions are deferred and are recognized in earnings or as adjustments of carrying amounts when the hedged transaction occurs.

-46-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

Comprehensive Income (Loss) – The components of accumulated other comprehensive income (loss) are as follows:


	December 31,

	2008			2007

Foreign currency translation	$	201		$	613
Unrecognized pension and postretirement (costs) credits		(20,535	)		22,451
Net unrealized gain/(loss) on derivative instruments		(4,505	)		(1,554	)

Accumulated other comprehensive income (loss)	$	(24,839	)	$	21,510

Recent Accounting Pronouncements – In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, (“SFAS 157”), to define fair value, establish a framework for measuring fair value in accordance with generally accepted accounting principles and expand disclosures about fair value measurements. SFAS 157 requires quantitative disclosures using a tabular format in all periods (interim and annual) and qualitative disclosures about the valuation techniques used to measure fair value in all annual periods. Certain provisions of this Statement were effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. In February 2008, the FASB deferred the implementation of SFAS No. 157 for all non-financial assets and non-financial liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The implementation of SFAS 157 for financial assets and financial liabilities, effective January 1, 2008, did not have a material impact on our consolidated financial position and results of operations. The Company is currently assessing the impact of adopting SFAS 157 for non-financial assets and non-financial liabilities on its consolidated financial position and results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pensions and Other Postretirement Plans – Amendment of FASB Statements No. 87, 88, 106 and 132(R), (“SFAS 158”). SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. Employers are required to initially recognize the funded status and provide the required disclosures beginning for fiscal year ends after December 15, 2006. The net impact on the December 31, 2006 balance sheet was to decrease prepaid pension costs by $1,749, decrease other current liabilities by $862, reduce accrued pension and postretirement benefit costs by $10,354 and increase deferred tax liabilities by $1,198, with the offset increasing stockholders’ equity by $8,269. Additionally, in accordance with SFAS 158, the Company changed its measurement date for plan assets and obligations to coincide with its fiscal year end in 2008. The Company previously utilized a measurement date of October 31. The adoption of the measurement date provisions of SFAS 158 resulted in an increase of $259, net of taxes, to the Company’s retained earnings and a decrease of $487, net of tax, to accumulated other comprehensive income (loss).

In February 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and Financial Liabilities – including an Amendment of SFAS No. 115, (“SFAS 159”), which permits an entity to measure many financial assets and financial liabilities at fair value that are not currently required to be measured at fair value. Entities that elect the fair value option will report unrealized gains and

-47-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

losses in earnings at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis, with few exceptions. SFAS 159 amends previous guidance to extend the use of the fair value option to available-for-sale and held-to-maturity securities. The Statement also establishes presentation and disclosure requirements to help financial statement users understand the effect of the election. SFAS 159 is effective as of the beginning of the first fiscal year beginning after November 15, 2007. The adoption of this statement did not have a material impact on the Company’s results of operation or financial condition. The Company did not elect the fair value option for any assets or liabilities.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The Company does not anticipate that the adoption of this statement will have a material impact on the Company’s results of operations or financial condition.

In March 2008, the FASB issued SFAS No. 161, Disclosures About Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 expands quarterly disclosure requirements in SFAS No. 133 about an entity’s derivative instruments and hedging activities. SFAS 161 is effective for fiscal years beginning after November 15, 2008. The Company is currently assessing the impact of adopting SFAS 161 on its financial statements.

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). The intent of FSP FAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R) and other applicable accounting literature. FSP FAS 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company does not anticipate that the adoption of FSP FAS 142-3 will have a material impact on its results of operations or financial condition.

-48-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company does not expect that this standard will have a material impact on its results of operations, financial position or cash flow.

Note 3 – Acquisitions

On December 31, 2007, the Company acquired Bay Chemical and Supply Company. The acquisition included the manufacturing facility in Odem, Texas. Bay Chemical and Supply is a producer of water treatment chemicals. The total cost of the acquisition was $7,000. As a result of the acquisition of Bay Chemical and Supply, the Company recognized $5,065 of goodwill, which will not be deductible for tax purposes. The goodwill is the result of synergies and cost reductions expected to be realized as the facility is assimilated into the Company’s network of water treatment chemical production facilities in the performance chemicals segment.

On February 6, 2007, the Company acquired the assets of Chalum, Inc. The total cost of the acquisition was $3,203. The acquisition included the manufacturing facility in Sacaton, Arizona. Chalum produces aluminum sulfate for the greater Phoenix, Arizona municipal water treatment market. As a result of the acquisition of Chalum, the Company recognized $2,901 of goodwill, all of which is expected to be deductible for tax purposes. The goodwill is the result of synergies and cost reductions expected to be realized as the facility is assimilated into the Company’s network of water treatment chemical production facilities in the performance chemicals segment.

On September 21, 2006, the Company acquired the assets of GAC MidAmerica, Inc. (“GAC”). The acquisition included manufacturing facilities in Toledo, Ohio, Indianapolis, Indiana, and Saukville, Wisconsin. GAC produces aluminum sulfate and bleach, as well as distributing specialty water treatment chemicals, sulfuric acid and caustic soda. The total cost of the acquisition was $8,266. The GAC acquisition resulted in goodwill of $2,879, which is expected to be tax deductible, related to synergies and cost reductions expected to be realized as the facility is assimilated into the Company’s network of water treatment chemical production facilities in the performance chemicals segment.

On July 31, 2006, the Company acquired the assets of Precision Engine Products Corp., a wholly owned subsidiary of Stanadyne Corporation. Precision Engine Products is dedicated principally to the manufacturing of hydraulic lash adjusters and die cast aluminum rocker arm assemblies utilized in valve actuation systems for both OEM and after market applications to the global automotive and light truck markets. Precision Engine Products has manufacturing facilities in Tallahassee, Florida and Curitiba, Brazil. The total cost of the acquisition was $26,262, plus the potential of an earn out for Stanadyne of up to $10,000, payable, if at all, based on certain performance metrics being achieved during the twelve months following the closing date. As part of the initial purchase price allocation, the Company recorded a liability for the excess of the fair value of assets purchased over the preliminary purchase price due to the potential for an earn-out payment. During the third quarter of 2007, it was determined that these performance metrics had not been achieved, and that no additional consideration was due. Accordingly, the liability representing the excess of the values assigned to the assets purchased over the preliminary purchase price was reversed, and the values assigned to property, plant and equipment were adjusted from $15,990 to $11,172 and the values assigned to intangible assets were adjusted from $4,100 to $3,822.

-49-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

The allocation of the purchase price of the acquisitions is based on valuation information available to the Company which is subject to change as such information is finalized. Purchase price allocations have been finalized for all acquisitions. Operating results for the acquired entities have been reflected in the Company’s consolidated financial statements from date of acquisition.

Note 4 – Restructuring and Impairment Charges

Restructuring Actions – 2008

During the second quarter of 2008, the Company initiated a workforce reduction affecting valve actuation systems employees. During the third quarter of 2008, the Company initiated actions to close a production facility included in the performance chemicals segment. The Company substantially completed implementation of these restructuring actions during 2008. The following tables summarize the Company’s costs and accruals for these restructuring actions:


	Valve Actuation Systems			Performance Chemicals			Corporate		Total

Employee Termination Costs
Cumulative costs incurred	$	1,206		$	691		$	—	$	1,897
Costs anticipated to be incurred in the future		—			—			—		—

Total costs expected to be incurred	$	1,206		$	691		$	—	$	1,897


Provisions	$	1,206		$	691		$	—	$	1,897
Amounts paid		(682	)		(437	)		—		(1,119	)

Accrual balance at December 31, 2008	$	524		$	254		$	—	$	778


	Valve Actuation Systems			Performance Chemicals			Corporate		Total

Facility Exit Costs
Cumulative costs incurred	$	—		$	504		$	—	$	504
Costs anticipated to be incurred in the future		—			18			—		18

Total costs expected to be incurred	$	—		$	522		$	—	$	522


Provisions	$	—		$	504		$	—	$	504
Amounts paid		—			(441	)		—		(441	)

Accrual balance at December 31, 2008	$	—		$	63		$	—	$	63

-50-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

Restructuring Actions – Prior to 2008

During 2007, the Company initiated actions to close its Perrysburg, Ohio facility, which is included in its valve actuation systems segment. During 2006, the Company initiated actions to close two production facilities in its performance chemicals segment. As of December 31, 2007, these restructuring actions were completed. The following tables summarize the Company’s costs and accruals for these restructuring actions:


	Valve Actuation Systems			Performance Chemicals			Corporate		Total

Employee Termination Costs
Cumulative costs incurred	$	758		$	564		$	—	$	1,322
Costs anticipated to be incurred in the future		—			—			—		—

Total costs incurred	$	758		$	564		$	—	$	1,322


Accrual balance at December 31, 2005	$	89		$	49		$	—	$	138
Provisions		337			390			—		727
Amounts paid		(426	)		(49	)		—		(475	)

Accrual balance at December 31, 2006		—			390			—		390
Provisions		421			174			—		595
Amounts paid		(384	)		(564	)		—		(948	)

Accrual balance at December 31, 2007		37			—			—		37
Provisions		—			—			—		—
Amounts paid		(37	)		—			—		(37	)

Accrual balance at December 31, 2008	$	—		$	—		$	—	$	—


	Valve Actuation Systems			Performance Chemicals			Corporate		Total

Facility Exit Costs
Cumulative costs incurred	$	2,509		$	1,962		$	—	$	4,471
Costs anticipated to be incurred in the future		—			—			—		—

Total costs incurred	$	2,509		$	1,962		$	—	$	4,471


Accrual balance at December 31, 2005	$	134		$	—		$	—	$	134
Provisions		502			514			—		1,016
Amounts paid		(636	)		(302	)		—		(938	)

Accrual balance at December 31, 2006		—			212			—		212
Provisions		2,007			1,448			—		3,455
Amounts paid		(2,007	)		(1,660	)		—		(3,667	)

Accrual balance at December 31, 2007	$	—		$	—		$	—	$	—

Impairment Charges

Upon conducting its annual test of goodwill impairment, the Company determined that the carrying amount, including goodwill, of valve actuation systems exceeded the fair value of that reporting unit. The fair value of the reporting unit was based on the present value of estimated future cash flows. The Company performed step two of the goodwill impairment test to determine the implied fair value of

-51-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

the goodwill in the same manner as if the Company had acquired the reporting unit in a business combination and the fair value was the price paid to acquire it. The Company allocated the fair value of the reporting unit to all of the assets (including any unrecognized intangible assets) of that unit, in a hypothetical calculation to determine the implied fair value of the goodwill. As a result of that calculation, a non-cash impairment charge of $122,847 was recorded, which reduced the goodwill balance of that reporting unit to $0.

As a result of the continued downturn in the valve actuation systems business, prior to completing the assessment for impairment of goodwill, the Company performed a recoverability test for the long-lived assets of valve actuation systems. The Company compared the fair value, based on operating forecasts and independent appraisals, to the carrying amount of the long-lived assets. As a result, the Company concluded that certain intangible assets were impaired and recorded a non-cash impairment charge of $21,692.

In December 2008, the Company announced that it had ceased using certain trademarks it currently utilizes within its valve actuation systems reporting unit. This was done to facilitate global customer clarity and operating efficiencies. Accordingly, the Company recorded a non-cash impairment charge of $12,000 in order to write down the existing trademarks that will no longer be used to a balance of $0.

During 2007, the Company recorded non-cash impairment charges of $914 to reflect estimated fair values of closed facilities in Waterdown, Ontario, Canada, which is included in the valve actuation systems segment, and Saukville, Wisconsin, which is included in the performance chemicals segment. The estimated fair values were determined based upon offers to purchase these facilities.

During the fourth quarter of 2006, the Company recorded a non-cash impairment charge of $728 to reflect revised fair values of machinery and equipment used for a discontinued product line in the valve actuation systems segment, based on its estimated salvage value.

During the second quarter of 2006, the Company recorded a non-cash impairment charge of $503 to reflect revised estimated fair values of fixed assets at its previously closed facilities in Waterdown, Ontario, Canada and Guelph, Ontario, Canada, which were included in the valve actuation systems segment. The revised estimates of fair values were determined based upon sales of and offers to purchase these assets.

Note 5 – Earnings Per Share

The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the foregoing and, in addition, the exercise of all warrants, stock options and restricted stock, using the treasury stock method.

-52-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

The components of the denominator for basic earnings per common share and diluted earnings per common share are reconciled as follows:


	Years Ended December 31,

	2008		2007		2006

Basic earnings per common share:
Weighted average common shares outstanding		10,070,951		10,314,526		10,166,614

Diluted earnings per common share:
Weighted average common shares outstanding		10,070,951		10,314,526		10,166,614
Warrants		—		1,088,714		644,353
Options		—		102,478		123,198
Restricted stock		—		57,339		41,015

Total		10,070,951		11,563,057		10,975,180

For the year ended December 31, 2008, 2007 and 2006, there were potentially dilutive securities totaling 1,654,048, 161,591 and 819,615, respectively, which were not included in the computation of diluted earnings per common share. These securities either had an antidilutive effect or were contingent restricted stock for which all necessary conditions had not been satisfied.

Note 6 – Income Taxes

Income (loss) from continuing operations before income taxes is as follows:


	Years Ended December 31,

	2008			2007		2006

United States	$	(116,340	)	$	36,236	$	17,073
Foreign		(2,144	)		2,961		2,657

Total	$	(118,484	)	$	39,197	$	19,730

The components of the income tax provision (benefit) are as follows:


	Years Ended December 31,

	2008			2007			2006

United States:
Current	$	(4,564	)	$	(2,834	)	$	591
Deferred		1,922			2,914			5,441
Foreign:
Current		(2,376	)		1,435			771
Deferred		(2,595	)		(500	)		(461	)
State:
Current		(166	)		177			2,234
Deferred		(640	)		968			(1,185	)

Total	$	(8,419	)	$	2,160		$	7,391

-53-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

A summary of the components of deferred tax assets and liabilities is as follows:


	December 31,

	2008		2007

Net operating loss carry forwards	$	4,957	$	9,925
Postretirement benefits		39,935		14,376
Other accruals not currently deductible		27,137		26,838
Goodwill		—		16,622
Capital loss carryforward		20,671		—
Stock basis difference in subsidiary		—		21,874
Foreign tax credits		19,705		19,705

Deferred tax assets		112,405		109,340

Intangibles		48		18,103
Property, plant and equipment		37,686		46,422
Basis differences in partnerships		8,101		8,101
Taxes on unremitted foreign earnings		5,077		3,856
Other		2,873		995

Deferred tax liabilities		53,785		77,477
Valuation allowance		26,748		34,965

Net deferred tax assets (liabilities)	$	31,872	$	(3,102	)

At December 31, 2008 and 2007, the Company had deferred tax assets of $19,705 and $19,705 related to foreign tax credits, for which a full valuation allowance had been provided. The decrease to the valuation allowance during 2008 is primarily due to the recognition of additional capital gains. Net operating loss carryforwards in foreign countries expire in future years through 2015. The Company has an unrecognized deferred tax liability for a temporary difference related to an investment in a foreign subsidiary that is essentially permanent in duration. It is not currently practicable to determine the tax effect of this temporary difference. The Company will continue to monitor the likelihood of realizing its net deferred tax assets and future adjustments to the deferred tax asset valuation allowances will be recorded as necessary.

Included in other assets on the balance sheet are deferred tax assets of $3,443 and $693 as of December 31, 2008 and 2007, respectively. Included in other liabilities on the balance sheet are deferred tax liabilities of $5,127 and $43,470 as of December 31, 2008 and 2007, respectively.

-54-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

The difference between the Company’s effective income tax rate and the United States statutory rate is reconciled below:


	Years Ended December 31,

	2008		2007		2006

U.S. federal statutory rate	(35.0	)%	35.0	%	35.0	%
State income taxes, net of federal benefit	0.1		6.9		3.6
Tax effect of foreign operations	(1.5	)	(0.6	)	3.6
Goodwill writedown	36.2		—		—
Benefit on restricted stock dividend payment	—		—		(3.5	)
Recognition of subsidiary tax basis difference	—		(53.4	)	—
Valuation allowance on subsidiary tax basis difference	—		34.9		—
Change in valuation allowance	(6.5	)	—		2.3
Change in unrecognized tax benefits	(1.8	)	(16.3	)	—
Other	1.4		(1.0	)	(3.5	)

Total	(7.1	)%	5.5	%	37.5	%

The Company adopted the provisions of FIN 48 on January 1, 2007. The adoption, which was accounted for as a cumulative effect adjustment, resulted in an increase to the January 1, 2007 balance of retained earnings (deficit) of $2,801. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	December 31,

	2008			2007


Beginning of period	$	4,940		$	11,863
Additions based on tax positions related to the current year		148			505
Additions for tax positions of prior years		(115	)		193
Expiration of statute of limitations		(2,229	)		—
Settlements		—			(7,621	)

End of period	$	2,744		$	4,940

Included in the balance at December 31, 2008 is $1,784 of unrecognized tax benefits that would, if recognized, affect the effective tax rate. During the next twelve months, it is reasonably possible that the total amount of unrecognized tax benefits will significantly change by up to approximately $1,476 due to the expiration of statute of limitations or the settlement of examinations. These unrecognized tax benefits arose in conjunction with the Company’s emergence from bankruptcy.

The Company recognizes interest and penalties related to uncertain tax positions as a component of the provision for income taxes. During the year ended December 31, 2008 and 2007, the Company recognized/(reversed) $(1,187) and $719, respectively, in interest. The Company had $1,215 and $2,402 accrued for interest at December 31, 2008 and 2007, respectively.

The Company and its affiliates are subject to tax in various jurisdictions, including the United States, various states, Canada and several other foreign jurisdictions. The Company, joined by its domestic subsidiaries, files a consolidated income tax return for Federal income tax purposes. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for tax years before 2003.

-55-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

Note 7 – Pension Plans and Other Postretirement Benefits

The Company maintains several defined benefit pension plans covering certain employees in Canada and the United States. A participating employee’s annual postretirement pension benefit is determined by the employee’s credited service and, in most plans, final average annual earnings with the Company. Vesting requirements are from two to five years.

The Company also maintains several plans providing postretirement benefits other than pensions covering certain hourly and salaried employees in Canada and the United States. The Company funds these benefits on a pay-as-you-go basis.

Accruals for pension and other postretirement benefit costs utilize a number of accounting mechanisms that reduce the volatility of reported costs. Differences between actuarial assumptions and actual plan results are deferred and are amortized into expense only when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over the average remaining service period of active employees. Additionally, the impact of asset performance on pension expense is recognized over a five-year phase-in period though a “market-related” value of assets calculation. Since the market-related value of assets recognizes investment gains or losses over a five-year period, the future value of assets will be impacted as previously deferred gains or losses are recognized.


	Pension Benefits									Other Postretirement Benefits

	Years Ended December 31,									Years Ended December 31,

	2008			2007			2006			2008			2007			2006

Components of net periodic benefit cost:
Service cost	$	992		$	1,191		$	1,613		$	688		$	966		$	1,343
Interest cost		13,798			13,478			13,417			2,414			2,666			2,674
Expected return on plan assets		(15,552	)		(15,168	)		(14,867	)		—			—			—
Amortization of net:
Prior service cost (credit)		158			128			135			(4,930	)		(4,778	)		(4,342	)
(Gain)/loss		(66	)		100			92			54			177			105

Net periodic benefit cost (income)	$	(670	)	$	(271	)	$	390		$	(1,774	)	$	(969	)	$	(220	)

During 2008, the Company adopted plan amendments that froze pension plan benefit accruals for hourly employees covered by certain collective bargaining agreements, which resulted in a pension curtailment gain of $36.

During 2008, the Company implemented plan amendments to several of its postretirement medical plans which cap the Company’s cost for providing these benefits. The effect of these changes was a reduction to the accumulated postretirement benefit obligation of $3,196 which will be amortized as a component of net periodic postretirement benefit cost over the average remaining service period until full eligibility of active plan participants.

During 2007, the Company adopted plan amendments that froze pension plan benefit accruals for hourly employees covered by certain collective bargaining agreements, and announced the closure of one of its manufacturing facilities. These actions resulted in net pension curtailment gains of $745.

-56-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

During 2007, the Company implemented plan amendments to one of its postretirement medical plans which cap the Company’s cost for providing these benefits. The effect of these changes was a reduction to the accumulated postretirement benefit obligation of $7,247 which will be amortized as a component of net periodic postretirement benefit cost over the average remaining service period until full eligibility of active plan participants. In addition, the Company completed the closure of one of its manufacturing facilities, resulting in a postretirement liability curtailment gain of $2,515.

During 2006, the Company adopted plan amendments that froze pension plan benefit accruals for hourly employees covered by certain collective bargaining agreements, and announced the closure of one of its manufacturing facilities. These actions resulted in a net curtailment gain of $644.

The Company utilized a measurement date of December 31 in 2008 for the determination of the benefit obligation, plan assets and other assumptions related to all of our pension and postretirement benefits as required by SFAS 158. The same plans utilized a measurement date of October 31 in 2007 and 2006.


	Pension Benefits December 31,						Other Postretirement Benefits December 31,

	2008			2007			2008			2007

Change in benefit obligation:
Benefit obligation at prior measurement date	$	227,776		$	240,239		$	41,976		$	50,621
Service cost		1,159			1,191			801			966
Interest cost		16,102			13,478			2,809			2,666
Actuarial (gain)/loss		2,289			(10,993	)		(2,314	)		(1,681	)
Foreign currency translation		(1,377	)		1,311			(674	)		1,040
Benefits paid		(19,017	)		(16,526	)		(4,452	)		(3,748	)
Plan amendments		477			31			(3,196	)		(7,247	)
Settlements and curtailments		(34	)		(955	)		—			(641	)

Benefit obligation at measurement date	$	227,375		$	227,776		$	34,950		$	41,976


Change in plan assets:
Fair value of assets at prior measurement date	$	217,027		$	201,557		$	—		$	—
Actual return on plan assets		(50,195	)		29,087			—			—
Employer contributions		3,885			1,483			4,413			3,748
Foreign currency translation		(1,617	)		1,426			—			—
Benefits paid		(19,017	)		(16,526	)		(4,895	)		(4,326	)
Medicare subsidy		—			—			482			578

Fair value of assets at measurement date	$	150,083		$	217,027		$	—		$	—

Funded status:
Funded status	$	(77,292	)	$	(10,749	)	$	(34,950	)	$	(41,976	)
Amounts recognized in the balance sheet:
Noncurrent assets	$	884		$	1,884		$	—		$	—
Current liabilities		—			—			(3,268	)		(3,318	)
Noncurrent liabilities		(78,176	)		(12,633	)		(31,682	)		(38,617	)

Net amount recognized	$	(77,292	)	$	(10,749	)	$	(34,950	)	$	(41,935	)

-57-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)


Amounts recognized in accumulated other comprehensive income:
Prior service cost (credit)	$	1,634	$	1,340		$	(13,391	)	$	(16,468	)
Net actuarial (gain) loss		47,655		(22,920	)		(529	)		2,390

Net amount recognized	$	49,289	$	(21,580	)	$	(13,920	)	$	(14,078	)


Amounts expected to be recognized during the next fiscal year:
Prior service cost (credit)	$	163				$	(4,821	)
Actuarial loss (gain)		360					(87	)

Total	$	523				$	(4,908	)

The accumulated benefit obligations for the defined benefit pension plans were $226,113 and $226,885 at December 31, 2008 and 2007, respectively. For pension plans included above with aggregate benefit obligations and accumulated benefit obligations in excess of plan assets, at December 31, 2008 and 2007, the projected benefit obligations were $222,121 and $220,024, respectively, the accumulated benefit obligations were $221,058 and $218,921, respectively, and the fair values of plan assets for these plans were $143,945 and $207,860, respectively.

Gross benefits expected to be paid from the plans and Medicare Part D federal subsidy payments expected to be received are as follows:


	Pension Benefits	Other Postretirement Benefits	Federal Subsidies

2009	16,400	3,200	500
2010	16,800	3,200	500
2011	16,800	3,200	600
2012	16,900	3,000	600
2013	17,300	3,100	600
2014-2018	85,900	14,100	3,500

The weighted-average assumptions used to determine benefit obligations for the plans were:


	2008		2007

Discount rate	6½	%	6¼	%
Average rate of increase in employee compensation	4	%	4	%

The weighted-average assumptions used to determine net periodic benefit cost for the plans were:


	2008		2007		2006

Discount rate	6¼	%	5¼	%	5¾	%
Long-term rate of return on assets	8	%	8	%	8	%
Average rate of increase in employee compensation	3¾	%	4	%	4	%

-58-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

The health care cost trend rate used in accounting for the medical plans in the United States was 8-9% in 2008 (decreasing to 5.5% in the year 2011 and beyond) and 9-10% in 2007 (decreasing to 5.5% in the year 2011 and beyond). The health care cost trend rate used in accounting for the medical plans in Canada was 7.6% in 2008 (decreasing to 5% in the year 2016 and beyond) and 8% in 2007 (decreasing to 5% in the year 2016 and beyond). A one percent increase in the health care trend rate would increase the accumulated postretirement benefit obligation by $315 at year-end 2008 and the net periodic cost by $139 for the year. A one percent decrease in the health care trend rate would decrease the accumulated postretirement benefit obligation by $261 at year-end 2008 and the net periodic cost by $106 for the year.

The expected long-term rate of return on assets is developed based upon the expected future return of asset classes the plans invest in, along with the expected future mix of investments in the pension trusts. The Company considers historical returns of the pension assets, independent market forecasts and management estimates when developing the expected long-term rate of return on assets.

The pension trusts’ weighted-average asset allocations at December 31, 2008 and October 31, 2007 were:


	2008		2007

Asset Category
Cash and short-term investments	1	%	5	%
Debt securities	56	%	45	%
Equity securities	43	%	50	%

	100	%	100	%

The Company’s investment policy for its pension trusts is to balance risk and return through a diversified portfolio of fixed income securities, equity securities and private equity investments. Maturities for fixed income securities are managed such that sufficient liquidity exists to meet near-term benefit payment obligations. In 2009, the Company expects to contribute approximately $4,000 to its pension plan trusts.

Note 8 – Commitments and Contingencies

Future minimum rental payments for operating leases (primarily for transportation equipment, offices and warehouses) having initial or remaining noncancellable lease terms in excess of one year as of December 31, 2008 are as follows:


Years Ending December 31,

2009	$	3,561
2010		3,511
2011		1,974
2012		1,522
2013		1,114
thereafter		462

	$	12,144

Rental expense for the years ended December 31, 2008, 2007 and 2006 was $6,650, $6,624 and $7,068, respectively.

-59-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

Environmental Matters

Accruals for environmental liabilities are recorded based on current interpretations of applicable environmental laws and regulations when it is probable that a liability has been incurred and the amount of such liability can be reasonably estimated. Estimates are established based upon information available to management to date, the nature and extent of the environmental liability, the Company’s experience with similar activities undertaken, estimates obtained from environmental studies and the legal and regulatory framework in the jurisdiction in which the liability arose. The potential costs related to environmental matters and their estimated impact on future operations are difficult to predict due to the uncertainties regarding the extent of any required remediation, the complexity and interpretation of applicable laws and regulations, possible modification of existing laws and regulations or the adoption of new laws or regulations in the future, and the numerous alternative remediation methods and their related varying costs. The material components of the Company’s environmental accruals include potential costs, as applicable, for investigation, monitoring, remediation and ongoing maintenance activities at any affected site. Accrued liabilities for environmental matters do not include third-party recoveries nor have they been discounted. The time frame over which these liabilities will be paid out is subject to significant uncertainties, and is not presently determinable. Activity in the aggregate accrued liability for environmental matters is summarized as follows:


	2008			2007

Balance at beginning of period	$	25,016		$	25,014
Accruals, net		964			3,126
Payments		(1,098	)		(1,192	)
Assumption by third parties		—			(2,012	)
Foreign exchange and other		(535	)		80

Balance at end of period	$	24,347		$	25,016

Product Warranties

Accruals for product warranties are estimated based upon historical warranty experience and are recorded at the time revenue is recognized or when a specific claim is both probable and can be estimated. Activity in the aggregate product warranty liability is summarized as follows:


	December 31,

	2008			2007


Balance at beginning of period	$	1,615		$	165
Accruals for warranties issued		1,623			3,052
Adjustments to preexisting warranties		(859	)		—
Payments		(635	)		(1,602	)

Balance at end of period	$	1,744		$	1,615

-60-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

Contingencies

The Company is involved in various claims, litigation, administrative proceedings and investigations. Although the amount of any ultimate liability which could arise with respect to these matters cannot be accurately predicted, it is the opinion of management, based upon currently available information, that any such liability will have no material adverse effect on the Company’s financial condition, results of operations or cash flows.

Note 9 – Additional Financial Information


	December 31,

	2008			2007

*Receivables*
Trade	$	72,446		$	74,836
Other		817			2,390
Allowance for doubtful accounts		(2,699	)		(3,334	)

	$	70,564		$	73,892


	December 31,

	2008		2007

*Inventories*
Raw materials	$	27,648	$	29,268
Work in process		4,664		6,001
Finished products		11,179		12,242
Supplies and containers		1,171		1,326

	$	44,662	$	48,837

Inventories valued at LIFO amounted to $20,571 and $18,221 at December 31, 2008 and 2007, respectively, which were below estimated replacement cost by $15,686 and $3,240, respectively. The impact of LIFO liquidations in 2008, 2007 and 2006 was not significant.


	December 31,

	2008			2007

*Property, Plant and Equipment*
Land and improvements	$	41,208		$	37,254
Machinery and equipment		234,096			214,675
Buildings and leasehold improvements		47,642			34,391
Construction in progress		22,195			34,040

		345,141			320,360
Less: accumulated depreciation and amortization		(125,697	)		(106,460	)

	$	219,444		$	213,900

Depreciation expense was $25,487, $25,726 and $25,647 for the years ended December 31, 2008, 2007 and 2006, respectively.

-61-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)


	Valve Actuation Systems			Performance Chemicals		Corporate and Other		Total

*Goodwill*
Balance at January 1, 2007	$	122,847		$	15,006	$	—	$	137,853
Purchase price finalization		—			19		—		19
Acquisitions		—			7,642		—		7,642

Balance at December 31, 2007		122,847			22,667		—		145,514
Purchase price finalization		—			324		—		324
Impairment (see Note 4)		(122,847	)		—		—		(122,847	)

Balance at December 31, 2008	$	—		$	22,991	$	—	$	22,991


	December 31,						Weighted Average Life

	2008			2007

*Intangible Assets*
Patents and Technology – gross	$	821		$	16,465			7 years
Accumulated amortization		(33	)		(4,859	)

Patents and Technology – net		788			11,606

Customer related – gross		7,000			35,354			6 years
Accumulated amortization		(6,028	)		(18,259	)

Customer related – net		972			17,095

Non-compete agreements – gross		6,505			6,505			5 years
Accumulated amortization		(3,183	)		(1,718	)

Non-compete agreements – net		3,322			4,787

Trademarks – indefinite life		3,000			15,000

	$	8,082		$	48,488

During the years ended December 31, 2008, 2007 and 2006, the Company recognized $5,961, $7,501 and $5,942 of amortization expense, respectively. The Company recorded significant impairment charges related to intangible assets in 2008 (See Note 4). The estimated amortization expense for each of the next 5 years is $2,474, $1,336, $830, $123 and $93.


	December 31,

	2008		2007

*Accrued Liabilities*
Wages, salaries and benefits	$	15,804	$	16,993
Interest		2,573		2,422
Environmental		5,431		9,136
Taxes, other than income taxes		2,259		2,191
Other		15,147		21,487

	$	41,214	$	52,229

-62-

GENTEK INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in thousands, except per share data)

Note 10 – Long-Term Debt


			December 31,

		Maturities	2008		2007


Revolving credit facility – floating rates		2010	$	—	$	—
First lien term loan – floating rates		2011		212,846		238,928
Other debt – various rates		2009-2012		542		941

Total debt				213,388		239,869
Less: current portion				2,534		2,826

Net long-term debt			$	210,854	$	237,043


Maturities of long-term debt are as follows:

	2009		$	2,534
	2010			158,236
	2011			52,609
	2012			9

			$	213,388

On February 28, 2005, the Company closed on a secured financing consisting of $370,000 of term loans and a $60,000 revolving credit facility (the “Credit Facilities”). The term loans included a $235,000 first lien loan due on February 28, 2011 with an initial interest rate of LIBOR plus 2.75 percent or base rate plus 1.75 percent, subject to a rate reduction of 0.25 percent if such term loan is rated B1 or better by Moody’s Investor Services, Inc. and a $135,000 second lien loan due on February 28, 2012 with an initial interest rate of LIBOR plus 5.75 percent or base rate plus 4.75 percent. On April 26, 2006, the Company entered into amendments of its first and second lien term loan agreements, which reduced the interest rate margins by 50 and 150 basis points, respectively. In addition, the debt holders agreed to allow a redemption of the second lien term loan. On May 1, 2006, the Company repaid $22,000 of its second lien term loan. In connection with the amendments, the Company recorded charges in interest expense of $3,572 for certain costs related to the amendment and to write-off certain deferred financing costs. In September, 2006, Moody’s Investor Services upgraded the first lien loan to B1, which resulted in a 0.25 percent rate reduction. On March 19, 2007, the Company completed an amendment to its credit facilities which enabled it to increase borrowings under the first lien term loan by $50 million and to use these borrowings and the net proceeds from the Noma wire and cable harness assembly business sale to redeem the entire second lien term loan. The weighted average interest rate on the first lien loan in effect at December 31, 2008 and 2007 was 6.1 percent and 7.0 percent, respectively. The $60,000 revolving credit facility matures on February 28, 2010 and carried an initial interest rate of LIBOR plus 2.75 percent or base rate plus 1.75 percent, subject to rate reductions under a pricing grid if the Company’s leverage ratio decreases. In October, 2006, the interest rate on the revolving credit facility decreased 0.25 percent as a result of the Company’s improved leverage ratio. The Credit Facilities are secured by liens on substantially all of the personal property and certain real property of the Company and its domestic subsidiaries. The Credit Facilities contain covenants which impose certain restrictions on the Company’s ability to, among other things, incur additional debt, pay dividends, make investments or sell assets. Additionally, certain non-recurring cash inflows such as proceeds from asset sales, insurance recoveries,

-63-

GENTEK INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in thousands, except per share data)

and equity offerings may have to be used to pay down indebtedness and may not be reborrowed. In addition, the Credit Facilities contain certain financial covenants which include a maximum leverage ratio, minimum interest coverage ratio and maximum annual capital expenditures.

During 2008, the Company purchased $10,000 of its first lien loans on the open market and completed a tender offer resulting in the purchase of an additional $13,715 of it first lien loans resulting in a gain on debt repurchases of $4,049. During 2007, the Company purchased $7,622 of its first lien loans on the open market resulting in a gain on debt repurchase of $105. These gains are reflected as a reduction of interest expense on the Company’s consolidated statements of operations.

Commitment fees paid for the Company’s credit facilities were $261, $237 and $212 for the years ended December 31, 2008, 2007 and 2006, respectively. The unused letter of credit balance available under the Company’s credit facilities was $33,084 and $31,927 at December 31, 2008 and 2007, respectively.

Note 11 – Warrants

The Company has the following warrants outstanding:


		December 31, 2008			December 31, 2007

	Expiration Date	Number of shares covered	Strike Price		Number of shares covered	Strike Price

Tranche B	November 10, 2008	—	$	19.98	1,786,099	$	19.98
Tranche C	November 10, 2010	955,074	$	22.03	963,013	$	22.03

The warrants were issued on November 10, 2003. During 2008, 27,381 shares of common stock were issued upon exercise of the warrants for cash proceeds of $549 and 113,812 shares of common stock were issued upon exercise of warrants utilizing the cashless exercise feature of the warrants. During 2007, 340 shares of common stock were issued upon exercise of the warrants for cash proceeds of $7 and 88,102 shares of common stock were issued upon exercise of warrants utilizing the cashless exercise feature of the warrants. During 2006, 2,037 shares of common stock were issued upon the exercise of warrants for cash proceeds of $42.

On November 10, 2008, any unexercised Tranche B warrants expired. The expiring warrants covered 1,352,525 shares.

Note 12 – Stock Incentive Plans

The Company has an incentive plan under which stock options, restricted stock and other stock–based awards may be granted to employees, officers and directors. Grants under the plan generally vest over three years and options have a maximum term of ten years. Certain restricted stock grants vest based on the achievement of performance based measures. Exercise prices for stock option grants are set at market value on the grant date. Compensation cost recorded for stock-based compensation under this plan was $3,290, $3,698 and $1,793 for the years ended December 31, 2008, 2007 and 2006,

-64-

GENTEK INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in thousands, except per share data)

respectively. As of December 31, 2008, the total number of shares authorized for grant under this plan was 1,750,000 with 580,164 shares available for future grant.

Information with respect to restricted stock is summarized below:


	Shares		Weighted Average Grant- Date Fair Value

Outstanding at December 31, 2007		256,574	$	32.11
Granted		156,719		28.88
Vested		71,110		27.76
Forfeited		56,639		34.93

Outstanding at December 31, 2008		285,544	$	31.12

The weighted average grant date fair value of restricted stock granted in 2008, 2007 and 2006 were $28.88, $34.60 and $27.90 per share, respectively.

Information with respect to stock options is summarized below:


	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value

Outstanding at December 31, 2007		347,556	$	19.47		7.8	$	3,781
Granted		80,120		29.67
Exercised		11,636		15.35
Forfeited		2,610		28.70

Outstanding at December 31, 2008		413,430	$	21.50		7.3	$	693

Vested or expected to vest at December 31, 2008		327,847	$	21.04		7.2	$	601

Exercisable at December 31, 2008		267,418	$	16.44		6.5	$	693

The fair value of each option grant was estimated using the Black-Scholes option pricing model that uses the assumptions noted in the following table. The expected term of the options was based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. Expected volatility was calculated based on the historic volatility of the Company’s stock. The risk-free rate was based on U.S. Treasury issues with a remaining term equal to the expected term of the options at the grant date.


	2008			2007			2006

Dividend yield		—			—			—
Expected volatility		36	%		19	%		31	%
Risk-free interest rate		2.87	%		4.79	%		5.02	%
Expected holding period (in years)		4			4			4
Weighted average fair value	$	9.67		$	8.39		$	8.74

-65-

GENTEK INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in thousands, except per share data)

The total intrinsic value of options exercised was $174, $1,562 and $1,126 during the years ended December 31, 2008, 2007 and 2006, respectively. The total fair value of options vested during the year ended December 31, 2008, 2007 and 2006 was $597, $646 and $473, respectively. The Company generally issues new shares upon the exercise of stock options. The total tax benefit realized as a result of stock option exercises was $50, $618 and $445 during the years ended December 31, 2008, 2007 and 2006, respectively.

As of December 31, 2008, there was $2,348 of total unrecognized compensation cost that is expected to be recognized over a weighted average period of 1.9 years. The remaining unrecognized compensation cost for performance based restricted stock may vary each reporting period based on changes in the expected achievement of performance measures.

Note 13 – Financial Instruments

Interest Rate Collar Agreements

The Company periodically enters into derivative financial instruments to reduce the Company’s exposure to investments in variable interest rates on its outstanding debt. Derivative financial instruments are only entered into with creditworthy counterparties. In April, 2005, the Company entered into two no-cost interest rate collar agreements, economically hedging $185,000 of its LIBOR-based floating rate debt for five years. In September 2005, the Company designated these agreements as cash flow hedges. On December 14, 2007, the Company de-designated $4,400 of one of the interest rate collars as a cash flow hedge. Accordingly, the affected portion of the accumulated unrealized loss ($32) related to this portion of the instrument will remain in accumulated other comprehensive income and be reclassified into earnings when the original hedged interest rate payments occur. In addition, any change in fair value on this portion of the instrument after this date will be recognized currently in other income and expense. The remaining balance of the hedge is 100 percent effective and therefore has no impact on earnings due to hedge ineffectiveness. As a result of entering into the agreements, the interest rate to be paid by the Company relating to the hedged portion of its debt will be based on a minimum three-month LIBOR rate of 4.05 percent on average and a maximum three-month LIBOR rate of 5.00 percent.

Fair Value of Financial Instruments


	December 31,

	2008						2007

	Carrying Amount			Fair Value			Carrying Amount			Fair Value


Long-term debt	$	213,388		$	172,947		$	239,869		$	235,093
Derivative instruments	$	(7,405	)	$	(7,405	)	$	(2,365	)	$	(2,365	)

The fair values of cash and cash equivalents, receivables and payables approximate their carrying values due to the short-term nature of the instruments. The fair value of the Company’s long-term debt was based on quoted market prices for traded debt and discounted cash flow analyses on its nontraded debt. The fair value of the Company’s interest rate collar agreements was valued using the income approach and information classified as level 2 in the fair value hierarchy.

-66-

GENTEK INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in thousands, except per share data)

Note 14 – Geographic and Industry Segment Information

GenTek operates through two primary business segments: valve actuation systems and performance chemicals. The business segments were determined based on several factors including products and services provided and markets served. The valve actuation systems segment provides precision engineered valve actuation systems and components for gasoline and diesel engines. The performance chemicals segment provides chemical products to four principal markets: water treatment, chemical processing, pharmaceutical and food additives and technology. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

Industry segment information is summarized as follows:


	Net Revenues						Operating Profit (Loss)

	Years Ended December 31,						Years Ended December 31,

	2008		2007		2006		2008			2007			2006

Valve actuation systems	$	115,417	$	152,076	$	146,131	$	(166,363	)	$	(290	)	$	10,497
Performance chemicals		482,150		396,683		373,347		65,335			64,825			44,710
Corporate and other		10,472		11,508		12,121		(3,919	)		(4,153	)		(6,597	)

Consolidated	$	608,039	$	560,267	$	531,599		(104,947	)		60,382			48,610

Interest expense								12,803			22,685			29,137
Other (income), expense net								734			(1,500	)		(257	)

Consolidated income (loss) from continuing operations before income taxes							$	(118,484	)	$	39,197		$	19,730


	Capital Expenditures						Depreciation and Amortization

	Years Ended December 31,						Years Ended December 31,

	2008		2007		2006		2008			2007			2006

Valve actuation systems	$	6,635	$	6,277	$	3,871	$	11,865		$	13,206		$	12,692
Performance chemicals		32,994		21,202		16,095		19,008			19,629			18,466
Corporate and other		430		1,106		17		1,939			1,985			1,813

Consolidated	$	40,059	$	28,585	$	19,983	$	32,812		$	34,820		$	32,971


										Identifiable Assets

										December 31,

										2008			2007

Valve actuation systems										$	80,874		$	266,454
Performance chemicals⁽¹⁾											306,795			297,442
Corporate and other											37,643			35,737
Assets held for sale											—			14,346

Consolidated										$	425,312		$	613,979



(1)	Includes equity method investments of $0 and $215, respectively.

-67-

GENTEK INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in thousands, except per share data)

Geographic area information is summarized as follows:


	External Revenues⁽¹⁾						Long-Lived Assets⁽²⁾

	Year Ended December 31,						December 31,

	2008		2007		2006		2008		2007

United States	$	549,100	$	451,470	$	431,382	$	215,210	$	208,919
Canada		25,699		44,326		46,618		6,700		8,813
Other foreign		33,240		64,471		53,599		937		2,394

Consolidated	$	608,039	$	560,267	$	531,599	$	222,847	$	220,126



(1)	Revenues are attributed to geographic areas based on the locations of customers.

(2)	Represents all non-current assets except deferred tax assets, goodwill and other intangible assets.

Note 15 – Related Party Transactions

GenTek provided General Chemical Industrial Products (“GCIP”) with certain administrative services pursuant to a transition support agreement entered into in connection with the spinoff of GenTek from GCIP in 1999. These services terminated in 2006. For the years ended December 31, 2008, 2007 and 2006, GenTek charged GCIP $0, $0 and $561, respectively, related to this agreement. GCIP supplies soda ash to GenTek. For the years ended December 31, 2008, 2007 and 2006, purchases from GCIP amounted to $4,956, $2,863 and $2,934, respectively.

Note 16 – Discontinued Operations

During April 2006, the Company completed the sale of its cable and wire manufacturing business in Stouffville, Canada. All requirements for classifying this business as “held for sale” were met during the first quarter of 2006. Accordingly, the Company recorded an impairment charge of $2,458 in order to reflect assets to be sold at net realizable value, which has been included in income (loss) from discontinued operations, related to property, plant and equipment and goodwill allocated to the business. This business was formerly reported as part of the manufacturing segment, which is no longer a reportable segment.

On December 22, 2006, the Company announced that it had signed a definitive agreement to sell its Noma wire and cable assembly business to Electrical Components International, Inc. Accordingly, the Company recorded an impairment charge of $11,907 in order to reflect the net assets to be sold at net realizable value, which has been included in income (loss) from discontinued operations, related to property, plant and equipment, goodwill and other intangible assets. The sale was completed on February 16, 2007. This business was formerly reported as part of the manufacturing segment, which is no longer a reportable segment.

Because the net proceeds of the Noma wire and cable assembly business sale are required to be used to repay certain outstanding indebtedness, interest expense of $677 and $5,380 for the years ending December 31, 2007 and 2006, respectively, has been allocated to discontinued operations. This allocation was performed using the estimated net proceeds of the sale and the interest costs incurred in the periods on the debt that requires the repayment.

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GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Dollars in thousands, except per share data)

On April 27, 2007, the Company signed an agreement to sell its wholly owned subsidiary Defiance Testing and Engineering Services, Inc. to Ashok Leyland of Chennai, India for $17,000 in cash, minus a working capital adjustment of $300. During the first quarter of 2007, the Company recorded an impairment charge of $6,150 to reflect the revised estimated fair value of goodwill of the business based upon the purchase offers which has been included in loss from discontinued operations. The transaction was completed on July 17, 2007. The business was formerly reported as part of the manufacturing segment, which is no longer a reportable segment.

On November 14, 2008, the Company completed the sale of its wire and cable manufacturing business in Mineral Wells, Texas to Southwire Company for cash proceeds of $9,481. In addition, the Company retained working capital of approximately $1,700. This business was formerly reported as part of the corporate and other segment.

The components of assets held for sale were as follows:


	December 31,

	2008		2007

Accounts receivable	$	—	$	112
Inventories		—		2,347
Other current assets		—		1
Property, plant and equipment		—		10,242
Goodwill		—		1,644

	$	—	$	14,346

The components of liabilities of businesses held for sale were as follows:


	December 31,

	2008		2007

Accrued liabilities	$	—	$	34
Current portion of long-term debt		—		25
Long-term debt		—		235

	$	—	$	294

The businesses included in discontinued operations had revenues of $25,379, $84,959 and $378,932 and pretax profit (loss) of $1,713, $(5,935) and $(20,429) for the years ended December 31, 2008, 2007 and 2006, respectively.

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GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Concluded)
(Dollars in thousands, except per share data)

Note 17 – Unaudited Quarterly Information


	2008

	First			Second			Third			Fourth

Net revenues⁽¹⁾	$	143,109		$	154,113		$	171,669		$	139,148
Gross profit		21,074			26,283			31,276			27,948
Net income (loss)		1,375	⁽²⁾		8,341	⁽³⁾		7,302	⁽⁴⁾		(126,048	)⁽⁵⁾

Earnings (loss) per common share – basic:
Net income (loss)	$	0.14		$	0.83		$	0.72		$	(12.63	)

Earnings (loss) per common share – diluted:
Net income (loss)	$	0.13		$	0.76		$	0.67		$	(12.63	)



(1)	Excludes revenues relating to discontinued operations of $8,259, $7,762, $7,074, and $2,284, respectively.

(2)	Includes a pension curtailment gain of $36.

(3)	Includes restructuring charges of $508.

(4)	Includes restructuring charges of $898.

(5)	Includes restructuring charges of $995 and impairment charges of $156,539.


	2007

	First			Second			Third			Fourth

Net revenues⁽¹⁾	$	141,870		$	143,006		$	141,402		$	133,989
Gross profit		26,401			26,577			22,188			27,967
Net income (loss)		(3,261	)⁽²⁾		5,045	⁽³⁾		9,183	⁽⁴⁾		18,800	⁽⁵⁾


Earnings (loss) per common share – basic:
Net income (loss)	$	(0.32	)	$	0.49		$	0.89		$	1.82

Earnings (loss) per common share – diluted:
Net income (loss)	$	(0.28	)	$	0.43		$	0.80		$	1.64



(1)	Excludes revenues relating to discontinued operations of $46,760, $19,358, $10,334, and $8,507, respectively.

(2)	Includes restructuring charges of $1,282 and a pension curtailment gain of $555.

(3)	Includes restructuring charges of $1,587 and a pension curtailment gain of $140.

(4)	Includes restructuring charges of $793, impairment charges of $914 and a pension curtailment gain of $2,565.

(5)	Includes restructuring charges of $388.

-70-


Item 9. –	*Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.*

None.


Item 9A. –	*Controls and Procedures*

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Annual Report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective at the reasonable assurance level in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

Management’s Report On Internal Control Over Financial Reporting

The management of GenTek Inc. is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as such term is defined in Exchange Act Rules 13a-15(f). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision of its principal executive and principal financial officer and with the participation of its management, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under the framework in the Internal Control – Integrated Framework issued by COSO, its management concluded that the Company’s internal control over financial reporting was effective at a reasonable assurance level as of December 31, 2008.

GenTek’s independent registered public accounting firm, Deloitte & Touche LLP, has audited GenTek’s financial statements for the year ended December 31, 2008 included in this Annual Report on Form 10-K (and issued a report dated March 13, 2009 which expressed an unqualified opinion on those financial statements) and, as part of that audit, have issued a report on internal control over financial reporting, a copy of which is included in this Annual Report on Form 10-K.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
GenTek Inc.
Parsippany, New Jersey

We have audited the internal control over financial reporting of GenTek Inc. and subsidiaries (the “Company”) as of December 31, 2008 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2008 of the Company and our report dated March 13, 2009 expressed an unqualified opinion on those financial statements and financial statement schedule.

/s/ Deloitte & Touche LLP
Parsippany, New Jersey

March 13, 2009

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Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.


Item 9B. –	*Other Information*

None.

PART III


Item 10.	*Directors, Executive Officers and Corporate Governance.*

Directors. For information relating to the Company’s Directors, see the information under the caption “Election of Directors” in the Company’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, within 120 days after the fiscal year ended December 31, 2008 or Proxy Statement, which is hereby incorporated by reference.

Executive Officers. For information relating to the Company’s executive officers, see the information contained under the caption “Item 1. - Executive Officers and Key Employees” of this Annual Report.

Compliance with Section 16(a) of the Exchange Act. For information relating to the compliance of the directors and officers of the Company, as well as any holder of ten percent or more of any registered class of the equity securities of the Company with Section 16(a) of the Exchange Act, see the information under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s Proxy Statement, which is hereby incorporated by reference.


Item 11.	*Executive Compensation.*

Executive Compensation. For information relating to the compensation of the Company’s executives, see the information under the caption “Executive Compensation” in the Company’s Proxy Statement, which is hereby incorporated by reference.


Item 12.	*Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.*

Security Ownership of Certain Beneficial Owners. For information relating to the beneficial ownership of more than five percent of the Company’s Common Stock, see the information under the caption “Security Ownership of Management and Certain Beneficial Owners” in the Company’s Proxy Statement, which is hereby incorporated by reference.

Security Ownership of Management. For information relating to the beneficial ownership of the Company’s Common Stock by Management, see the information under the caption “Security Ownership of Management and Certain Beneficial Owners” in the Company’s Proxy Statement, which is hereby incorporated by reference.

-73-

Securities Authorized for Issuance Under Equity Compensation Plans. For certain information relating to equity compensation plans, see the information under the caption “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ― Equity Compensation Plan Information” of this Annual Report.


Item 13.	*Certain Relationships and Related Transactions, and Director Independence.*

Certain Relationships and Related Transactions. For information relating to certain relationships and related transactions of the Company, see the information under the caption “Certain Relationships and Related Transactions” in the Company’s Proxy Statement, which is hereby incorporated by reference.


Item 14.	*Principal Accounting Fees and Services*

Principal Accountant Fees and Services. For information relating to the principal accountant fees and services, see the information under the caption “Principal Accountant Fees and Services” in the Company’s Proxy Statement, which is hereby incorporated by reference.

PART IV


Item 15.	Exhibits, Financial Statement Schedules.

Financial Statements

See Item 8.

Financial Statement Schedules

See Index to Financial Statement Schedule on page 79.

List of Exhibits


Exhibit No.		Description


	2.1	Joint Plan of Reorganization Under Chapter 11, Title 11, United States Code of GenTek Inc., et al., and Noma Company, Debtors, dated August 28, 2003, as filed with the United States Bankruptcy Court for the District of Delaware on August 28, 2003 (incorporated by reference to Exhibit 2.1 of the Registrant’s Form 8-K, filed with the Commission on October 21, 2003).

	2.2	First Modification to Joint Plan of Reorganization Under Chapter 11, Title 11, United States Code of GenTek Inc., et al., and Noma Company, Debtors, dated October 3, 2003 as filed with the United States Bankruptcy Court for the District of Delaware on October 3, 2003 (incorporated by reference to Exhibit 2.2 of the Registrant’s Form 8-K, filed with the Commission on October 21, 2003).

	2.3	Order confirming Joint Plan of Reorganization Under Chapter 11, Title 11, United States Code of GenTek Inc., et al., and Noma Company, Debtors, as Modified, as entered by the United States Bankruptcy Court for the District of Delaware on October 7, 2003 (incorporated by reference to Exhibit 2.3 of the Registrant’s Form 8-K, filed with the Commission on October 21, 2003).

-74-


	3.1		Third Amended and Restated Certificate of Incorporation of GenTek Inc., effective as of May 9, 2006 (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 10-Q, for the quarter ended March 31, 2006, as filed with the Securities and Exchange Commission).

	3.2		Second Amended and Restated By-Laws of GenTek Inc., effective as of August 7, 2007 (incorporated by reference to Exhibit 3.2 of the Registrant’s Form 8-K, dated August 7, 2007, as filed with the Securities and Exchange Commission).

	4.1		GenTek Inc. Tranche B Warrant Agreement, dated as of November 10, 2003 (incorporated by reference to Exhibit 4.2 of the Registrant’s Form 8-A to amend its Form 10, dated November 10, 2003, as filed with the Securities and Exchange Commission).

	4.2		GenTek Inc. Tranche C Warrant Agreement, dated as of November 10, 2003 (incorporated by reference to Exhibit 4.3 of the Registrant’s Form 8-A to amend its Form 10, dated November 10, 2003, as filed with the Securities and Exchange Commission).

	10.1		Form of Registration Rights Agreement by and among the GenTek Inc. and the holders named therein dated as of November 10, 2003 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-A to amend its Form 10, dated November 10, 2003, as filed with the Securities and Exchange Commission).

	10.2		GenTek Inc. Amended and Restated 2003 Management and Directors Incentive Plan (incorporated by reference to the Registrant’s proxy statement dated April 17, 2007, as filed with the Securities and Exchange Commission on April 25, 2007).

	10.3		GenTek Inc. Key Employee Retention Plan (incorporated by reference to Exhibit 10.14 of the Registrant’s Form 10-K for the year ended December 31, 2002, as filed with the Securities and Exchange Commission).

	10.4		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.11 of the Registrant’s Form 10-K for the year ended December 31, 2003, as filed with the Securities and Exchange Commission).

	10.5		GenTek Inc. Performance Plan (incorporated by reference to the Exhibit 10.3 to the Registrant’s Amendment No. 2 to Form 10, dated April 8, 1999, as filed with the Securities and Exchange Commission).

	10.6		Form of Director Restricted Stock Agreement (incorporated by reference to Exhibit 10.15 to the Registrant’s Form 10-Q for the quarter ended June 30, 2004, as filed with the Securities and Exchange Commission).

	10.7		Form of Performance Contingent Restricted Stock Agreement (incorporated by reference to Exhibit 10.9 to the Registrant’s Form 10-Q for the quarter ended June 30, 2007, as filed with the Securities and Exchange Commission).

-75-


	10.8		Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.17 to the Registrant’s Form 10-Q for the quarter ended June 30, 2004, as filed with the Securities and Exchange Commission).

	10.9		Form of Stock Option Agreement (incorporated by reference to Exhibit 10.18 to the Registrant’s Form 10-Q for the quarter ended June 30, 2004, as filed with the Securities and Exchange Commission).

	10.10		Form of Performance Cash Award Agreement (incorporated by reference to Exhibit 10.19 to the Registrant’s Form 10-Q for the quarter ended June 30, 2004, as filed with the Securities and Exchange Commission).

	10.11		Master Settlement Agreement, dated April 30, 2004, among GenTek Holding Corporation, General Chemical LLC, and Honeywell International Inc. (incorporated by reference to Exhibit 10.22 to the Registrant’s Form 10-Q for the quarter ended September 30, 2004, as filed with the Securities and Exchange Commission).

	10.12		First Lien Credit and Guaranty Agreement among GenTek, Inc., GenTek Holding LLC, as borrower, the other guarantors party thereto, the lenders party thereto from time to time, Goldman Sachs Credit Partners L.P., as joint lead arranger, General Electric Capital Corporation, as co-administrative agent, and Bank of America, N.A., as co-administrative agent and collateral agent, dated February 28, 2005 (incorporated by reference to Exhibit 10.18 to the Registrant’s Form 10-K for the year ended December 31, 2004, as filed with the Securities and Exchange Commission).

	10.13		Employment Agreement with William E. Redmond, Jr., dated May 23, 2005 (incorporated by reference to Exhibit 10.21 to the Registrant’s Form 10-Q for the quarter ended June 30, 2005, as filed with the Securities and Exchange Commission).

	10.14		Amendment to Employment Agreement with William E. Redmond, Jr., dated December 29, 2008.

	10.15		GenTek Inc. Executive Severance Plan.

	10.16		First Amendment to First Lien Credit and Guaranty Agreement and Pledge and Security Agreement dated April 26, 2006 (incorporated by reference to the Registrant’s Form 8-K dated April 26, 2006, as filed with the Securities and Exchange Commission).

	10.17		Second Amendment to First Lien Credit and Guaranty Agreement dated July 14, 2006 (incorporated by reference to Exhibit 10.25 to the Registrant’s Form 10-Q for the quarter ended June 30, 2006, as filed with the Securities and Exchange Commission).

	10.18		Letter Agreement with James Imbriaco, dated July 27, 2006 (incorporated by reference to the Registrant’s Form 8-K dated August 4, 2006, as filed with the Securities and Exchange Commission).

	10.19		Third Amendment to First Lien Credit and Guaranty Agreement and waiver dated March 19, 2007 (incorporated by reference to Exhibit 10.29 to the Registrant’s Form 10-K for the year ended December 31, 2006, as filed with the Securities and Exchange Commission).

-76-


	10.20		GenTek Inc. Directors’ Deferred Compensation Program (incorporated by reference to Exhibit 10.28 to the Registrant’s Form 10-Q for the quarter ended September 30, 2007, as filed with the Securities and Exchange Commission).

	10.21		Letter Agreement with Robert Novo, dated December 31, 2008.

	21		Subsidiaries of the Registrant.

	23		Consent of Independent Registered Public Accounting Firm.

	31.1		GenTek Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

-77-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 13 day of March, 2009.


GENTEK INC.

By:	/s/ William E. Redmond, Jr.

	Name:	William E. Redmond, Jr.
	Title:	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Registration Statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


Signature	Title	Date


Principal executive officer:

/s/ William E. Redmond, Jr.	President and Chief Executive Officer	March 13, 2009

William E. Redmond, Jr.

Principal financial and accounting officer:

/s/ Thomas B. Testa	Vice President and Chief Financial Officer	March 13, 2009

Thomas B. Testa

Directors:

/s/ John G. Johnson, Jr.	Chairman and Director	March 13, 2009

John G. Johnson, Jr.

/s/ Henry L. Druker	Director	March 13, 2009

Henry L. Druker

/s/ Kathleen R. Flaherty	Director	March 13, 2009

Kathleen R. Flaherty

/s/ John F. McGovern	Director	March 13, 2009

John F. McGovern

/s/ William E. Redmond, Jr.	Director	March 13, 2009

William E. Redmond, Jr.

/s/ Richard A. Rubin	Director	March 13, 2009

Richard A. Rubin

-78-

GENTEK INC.
INDEX TO FINANCIAL STATEMENT SCHEDULE


Schedule II -- Valuation and Qualifying Accounts	80

Schedules required by Article 12 of Regulation S-X, other than those listed above, are omitted because of the absence of the conditions under which they are required or because the required information is included in the consolidated financial statements or notes thereto.

-79-

GENTEK INC.
Valuation and Qualifying Accounts


	Balance at Beginning of Period		Additions Charged To Income		Deductions From Reserves			Other*			Balance at End of Period


Year ended December 31, 2008 Allowance for doubtful accounts	$	3,334	$	947	$	(1,359	)	$	(223	)	$	2,699
Year ended December 31, 2007 Allowance for doubtful accounts	$	3,181	$	272	$	(1,143	)	$	1,024		$	3,334
Year ended December 31, 2006 Allowance for doubtful accounts	$	2,757	$	409	$	(670	)	$	685		$	3,181

* Primarily foreign exchange, except for an $809 addition in 2007 for a customer deduction related to a warranty issue.

-80-

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Exhibit 10.14

AMENDMENT
TO THE
EMPLOYMENT AGREEMENT BETWEEN
GENTEK INC. AND WILLIAM E. REDMOND, JR.

     This Amendment (this “Amendment”) to that certain Employment Agreement between GenTek Inc. (the “Company”) and William E. Redmond, Jr. (the “Executive”) dated as of May 23, 2005 (the “Employment Agreement”) is made as of this 29th day of December, 2008 (the “Amendment Date”), by and among the Company and the Executive. Except as set forth is this Amendment, capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Employment Agreement.

WITNESSETH

     WHEREAS, the Company and the Executive desire to amend the terms of the Employment Agreement as a result of Section 409A of the Internal Revenue Code of 1986, as amended;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive and the Company (collectively the “Parties”) hereby agree as of the Amendment Date to the following:

     1. Amendments to the Employment Agreement. Effective as of the Amendment Date, the Employment Agreement is hereby amended as follows:

               (a) Section 6(d) of the Employment Agreement is amended to read in its entirety as follows:

                    (d) Termination by Executive. Executive may terminate his employment with or without Good Reason (as defined below). A termination of employment by Executive for "Good Reason" shall mean a termination by Executive of his employment with the Company following the occurrence, without Executive's consent, of any of the following events: (i) a material adverse change in Executive's job responsibilities, reporting responsibilities (including no longer reporting directly to the Board), titles or elected or appointed offices (including removal as a director) as in effect immediately prior to the effective date of such change; (ii) a reduction by the Company in Executive's Base Salary in effect immediately prior to the effective date of such reduction, provided that such reduction is a material diminution of Executive’s Base Salary or results in a material breach of this Agreement; (iii) the failure to make an LTI grant in accordance with Section 4(b) hereof, provided that such failure is material or results in a material breach of this Agreement; (iv) the total of Base Salary for any calendar year during the Employment Period, plus the targeted incentive bonus amount for that year, plus the value of the LTI grant for that year (at the time of the grant is made) is less than $1.8 million, provided that such amount is materially less than $1.8 million or results in a material breach of this Agreement; or (v) any change of more than 50 miles in the location of the principal place of employment of Executive immediately prior to the effective date of such change. For the purposes of this definition, no action of the type described in clause (i) above shall constitute "Good Reason" if it was an isolated and inadvertent action not taken in bad faith by the Company and if it was remedied by

the Company within 30 days after receipt of written notice thereof given by Executive (or, if the matter is not capable of remedy within 30 days, then within a reasonable period of time following such 30-day period, provided that the Company has commenced such remedy within said 30-day period); provided that "Good Reason" shall cease to exist for any action described in clauses (i) through (v) above on the 60th day following the later occurrence of such action or Executive's knowledge thereof, unless Executive has given the Company written notice thereof prior to such date. In the event Executive has given the Company written notice thereof on or prior to such 60^th day, then Executive must terminate employment for Good Reason within two years following the occurrence of the applicable Good Reason event.

               (b) Section 6(f)(i) of the Employment Agreement is amended to read in its entirety as follows:

                    In the event of a termination of Executive's employment during the Employment Period by the Company Without Cause, or a termination by Executive of his employment for Good Reason (any such termination, a "Qualifying Termination"), the Company shall pay to Executive (or, following his death, to Executive's beneficiaries) (A) his full Base Salary through the Date of Termination, plus any earned but unpaid annual Bonus under the Bonus Plan for the Bonus Year prior to year in which the Qualifying Termination occurs, plus all accrued and unused vacation for the year in which the Qualifying Termination occurs, through the Date of Termination; and (B) as liquidated damages in respect of claims based on provisions of this Agreement or Executive's employment with the Company and provided Executive executes and delivers a general release of all claims in form attached hereto as Exhibit A no later than fifty (50) days following the Date of Termination and does not revoke such release, an additional amount equal to two times the sum of his Base Salary at the rate in effect hereunder immediately prior to the Qualifying Termination, payable in a single lump sum within 60 days after the Date of Termination. In addition, upon a Qualifying Termination, Executive is entitled to retain all of his vested LTI Shares.

               (c) Section 6(g)(i) of the Employment Agreement is amended to read in its entirety as follows:

                    (A) In the event of a Change of Control (as defined below) and a termination of Executive's employment with the Company during the 12-month period immediately following such Change of Control by Executive for Good Reason, or by the Company or its Successor Without Cause (any such termination, a "Change of Control Termination"), the Company, or its Successor, shall pay to Executive (or, following his death, to Executive's beneficiaries), (1) his full Base Salary through the day of termination, plus any earned but unpaid annual Bonus under the Bonus Plan for the Bonus Year prior to the year in which such Qualifying Termination occurs, plus all accrued and unused vacation for the year in which such Qualifying Termination occurs, through the Termination Date, plus (2) as liquidated damages and respective claims based on provisions of this Agreement or Executive's employment with the Company and provided Executive executes and delivers a general release of all claims in form attached hereto as Exhibit A no later than fifty (50) days following the Date of Termination and does not revoke such release, an amount equal to three times the sum of his Base Salary at the rate in effect immediately prior to the Qualifying Termination, payable in a single

lump sum within 60 days after the date of termination. In the event Executive is entitled to receive a payment pursuant to Section 6(g)(i)(A), Executive shall not receive a payment under Section 6(f)(i).

                    (B) In the event Executive has a Qualifying Termination and is entitled to receive a severance payment pursuant to Section 6(f)(i) and such Qualifying Termination occurs within 60 days prior to a Change of Control that is effectuated; provided that at the time of such Qualifying Termination, the Company was in active substantive negotiations with a third party regarding such Change of Control (any such termination shall also be considered, a "Change of Control Termination"), the Company, or its Successor, shall pay to Executive (or, following his death, to Executive's beneficiaries), an additional amount equal to one times his Base Salary within 60 days after the Change of Control, but no later than March 15^th of the calendar year following the calendar year in which the Qualifying Termination occurs.

               (d) Section 6(h) of the Employment Agreement is amended to read in its entirety as follows:

                    Benefits Upon Termination. In the event of a Qualifying Termination, the Company shall, for a period of two years, provide Executive (i) continued coverage under the group medical and group dental plans of the Company, and (ii) continued participation in the Company’s executive medical allowance program (the "Continued Benefits") in which Executive was a participant immediately prior to the Date of Termination, subject to timely payment by Executive of all premiums, contributions and other co-payments required to be paid by Executive under the terms of such plans as in effect immediately prior to the Date of Termination. In the event of a Change of Control Termination, the Company shall, for a period of three years, provide Executive the Continued Benefits in which Executive was a participant immediately prior to the Date of Termination, subject to timely payment by Executive of all premiums, contributions and other co-payments required to be paid by Executive under the terms of such Plans as in effect immediately prior to the Date of Termination. Executive shall not have a duty to mitigate the costs to the Company under this Section 6(h), except that Continued Benefits shall be reduced to the extent of any comparable benefit coverage offered to Executive at a comparable cost to Executive by a subsequent employer or other Person for whom Executive performs services, including but not limited to, consulting services.

               (e) Section 6 of the Employment Agreement is amended by adding a new subsection 6(i) to read in its entirety as follows:

                    In the event the Executive’s employment with the Company or its Successor is involuntarily terminated Without Cause on the date of a Business Sale or following a Business Sale, Executive shall be deemed to have incurred a Change in Control Termination and shall be entitled to: (i) any payments provided under Section 6(g)(i)(A) payable at the same time such amounts are payable pursuant to Section 6(g)(i)(A) (subject to his executing and delivering a general release of all claims in form attached hereto as Exhibit A no later than fifty (50) days following the Date of Termination and not revoking such release), (ii) the benefits provided in Section 6(g)(ii) and (iii) the Continued Benefits provided in Section 6(h). For purposes of this Agreement, a “Business Sale” shall mean the sale or liquidation of all

or substantially all of the assets and/or the operating entities in one or more transactions (whether or not related) of any one of the following two lines of the Company’s business, whether by asset sale, stock sale, merger or other means of disposition, divestiture, spin off, or business combination: the General Chemicals Business or the GT Technologies Business. In the event Executive is entitled to receive a payment as a result of this Section 6(i), Executive shall not receive a payment under Section 6(f)(i).

               (f) Section 13 is hereby added to the Agreement and shall read in its entirety as follows:

                    In-Kind Benefits and Reimbursements. In-kind benefits and reimbursements provided under this Agreement during any tax year of the Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of the Executive and are not subject to liquidation or exchange for another benefit. Notwithstanding any other provision of this Agreement, reimbursement requests must be timely submitted by Executive and if timely submitted payments shall be made as soon as administratively practicable following such submission, but in no event later than the last day of Executive’s taxable year following the taxable year in which the expense was incurred.

               (g) Section 14 is hereby added to the Agreement and shall read in its entirety as follows:

                    409A. Notwithstanding anything to the contrary in this Agreement or the Company’s executive severance plan, in no event shall a Qualifying Termination or Change of Control Termination occur under this Agreement or a Termination of Employment occur under the Company’s executive severance plan unless such termination constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A -1(h). Notwithstanding anything to the contrary in this Agreement, if at the time of the Executive’s termination of employment with the Company, the Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as reasonably determined by the Company in accordance with Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in the payments or benefits ultimately paid or provided to the Executive) until the date that is at least six (6) months following the Executive’s termination of employment with the Company (or the earliest date permitted under Section 409A of the Code), whereupon the Company will pay the Executive a lump-sum amount equal to the cumulative amounts that would have otherwise been previously paid to the Executive under this Agreement during the period in which such payments or benefits were deferred. Thereafter, payments will resume in accordance with this Agreement. This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Code Section 409A(a)(1)(A) or (b) the interest and additional tax set forth within Code Section 409A(a)(1)(B) (together, referred to herein as the “Section

409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. In no event shall the Company be required to provide a tax gross-up payment to Executive or otherwise reimburse Executive with respect to Section 409A Penalties.

     2. No Other Amendment. Except as expressly set forth in this Amendment, the Employment Agreement shall remain unchanged and shall continue in full force and effect according to its terms; provided, that this Amendment shall supersede the letter agreement between the Company and Executive dated January 9, 2007.

     3. Acknowledgement. The Executive acknowledges and agrees that he has carefully read this Amendment in its entirety, fully understands and agrees to its terms and provisions and intends and agrees that it be final and legally binding on the Executive and the Company.

     4. Governing Law; Counterparts. This Amendment shall be construed in accordance with the laws of the State of New Jersey without reference to principles of conflicts of law and may be executed in several counterparts by the Parties.

[Signature Page Follows]

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and the Company has caused this Amendment to be executed in its name on its behalf, all as of the day and year first above written.

GENTEK INC.

By: /s/ Robert D. Novo
Title: VP of Human Resources & EH&S

WILLIAM E. REDMOND, JR.

/s/ William E. Redmond, Jr.

EX-10.15 4 c56928_ex10-15.htm

Exhibit 10.15

GENTEK INC.

EXECUTIVE SEVERANCE PLAN

PRELIMINARY STATEMENTS

          A. GenTek Inc. (the “Company”) is a Delaware corporation.

          B. The purpose of the Company’s Executive Severance Plan is to provide key employees of the Company and its subsidiaries with severance protection.

ARTICLE I.

DEFINITIONS AND INTERPRETATIONS

Section 1.01 Definitions. Capitalized terms used in this Plan shall have the following respective meanings, except as otherwise provided or as the context shall otherwise require:

“Annual Salary” shall mean the base salary paid to a Participant on an annual basis exclusive of any bonus payments, commission payments or additional payments under any Benefit Plan.

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934.

“Benefit Continuation” shall have the meaning set forth in Article III.

“Benefit Plan” shall mean any “employee benefit plan” (including any employee benefit plan within the meaning of Section 3(3) of ERISA), program, arrangement or practice maintained, sponsored or provided by the Company or any of its subsidiaries, including those relating to compensation, bonuses, profit-sharing, stock option, or other stock related rights or other forms of incentive or deferred compensation, vacation benefits, insurance coverage (including any self-insured arrangements) health or medical benefits, disability benefits, workers’ compensation, supplemental unemployment benefits, severance benefits and post-employment or retirement benefits (including compensation, pension, health, medical or life insurance or other benefits).

“Board” shall mean the Board of Directors of the Company.

“Cause” shall mean (a) the continued failure by the Participant substantially to perform his or her duties and obligations to the Company or any of its subsidiaries (other than any such failure resulting from his or her incapacity due to physical or mental illness), including, without limitation, repeated refusal to follow the reasonable directions of his or her employer, knowing violation of the law in the course of performance of the duties of Participant’s employment with the Company or any of its subsidiaries, repeated absences from work without a reasonable excuse, or intoxication with alcohol or illegal drugs while on the Company’s or any of its subsidiaries’ premises during regular business hours; (b) fraud or material dishonesty against the Company or any of its subsidiaries; (c) a conviction or plea of guilty or nolo contendere to the

commission of a felony or a crime involving material dishonesty or moral turpitude; or (d) willful malfeasance or misconduct in connection with a Participant’s duties to the Company or any of its subsidiaries or any act or omission that is results in demonstrable injury to the financial condition or business reputation of the Company or any of its subsidiaries. Determination of Cause shall be made by the Compensation Committee in its sole discretion.

“Change of Control” shall mean the first to occur of the following:

                    (i) any Person, (A) who is not a Beneficial Owner, directly or indirectly, of voting securities of the Company as of the Effective Date, and becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding securities or (B) who is a Beneficial Owner, directly or indirectly, of voting securities of the Company as of the Effective Date, is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities, excluding in both (A) and (B) any Person who becomes such a Beneficial Owner in connection with a transaction described in subclause (x) of clause (iii) below; or

                    (ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors as of the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended; or

                    (iii) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (x) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation (1) continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (2) continuing to be held by Persons who were holders thereof immediately prior to such merger or consolidation, or (y) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (A) who is not a Beneficial Owner, directly or indirectly, of voting securities of the Company as of the Effective Date, is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding securities or (B) who is a Beneficial Owner, directly or indirectly, of voting securities of the Company as of the Effective Date, is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities; or

                    (iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 65% of the combined voting power of the voting securities of which is owned by substantially all of the stockholders of the Company immediately prior to such sale in substantially the same proportions as their ownership of the Company immediately prior to such sale.

“Change of Control Benefit Continuation” shall have the meaning set forth in Article III.

“Change of Control Period” shall have the meaning set forth in Article III.

“Change of Control Severance Payment” shall have the meaning set forth in Article III.

“Change of Control Severance Period” shall have the meaning set forth in Article III.

“Code” shall mean the Internal Revenue Code of 1986, as amended. Reference in this Plan to any section of the Code shall be deemed to include any amendments or successor provisions to such section and any regulations under such section.

“Compensation Committee” shall mean the Compensation Committee of the Board.

“Disability” shall mean, when used with reference to any Participant, long term disability under the applicable long term disability plan maintained by the Company or one of its subsidiaries under which the Participant is covered.

“Effective Date” shall mean November 11, 2008.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Existing Key Employee Retention Plan” shall mean the GenTek Inc. Key Employee Retention Plan previously established by the Company.

“Named Executive Participant” shall mean an employee of the Company or any of its subsidiaries who is designated as a Named Executive Participant in Schedule A.

“Parachute Value” of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the accounting firm referred to in Section 3.04 for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

“Participants” shall mean those employees of the Company or any of its subsidiaries who are from time to time designated as Participants in accordance with Section 2.01(b).

“Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Named Executive Participant, whether paid or payable pursuant to this Plan or otherwise.

“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by substantially all of the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

“Plan” shall mean this GenTek Inc. Executive Severance Plan, as amended, supplemented or modified from time to time in accordance with its terms.

“Safe Harbor Amount” shall mean 2.99 times the Participant’s “base amount,” within the meaning of Section 280G(b)(3) of the Code.

“Severance Payment” shall have the meaning set forth in Article III.

“Severance Period” shall have the meaning set forth in Article III.

“Successor” shall mean a successor to all or substantially all of the business, operations or assets of the Company or such other portion of the Company’s business as shall be determined by the Committee.

“Termination Date” shall mean, with respect to any Participant, the actual date of the Participant’s Termination of Employment.

“Termination of Employment” shall mean the time when the employee-employer relationship between the Participant and the Company or any subsidiary of the Company is terminated for any reason, with or without Cause, including, but not by way of limitation, a termination by resignation, discharge, death, Disability or retirement; but excluding: (a) terminations where there is a simultaneous reemployment or continuing employment of the Participant by the Company or any subsidiary of the Company, and (b) terminations where the Successor offers to the Participant a substantially equivalent position with respect to the portion of the business of the Company that is transferred to the Successor, the same or greater base salary, a substantially equivalent target bonus opportunity from the Successor and continuing severance protection that is similar to the severance protection provided herein, without regard to Section 5.03.

“Termination Notice” shall mean written notice from the Company to any Participant purporting to terminate such Participant’s employment for Cause or Disability in accordance with Section 2.02.

Section 1.02 Interpretation. In this Plan, unless a clear contrary intention appears, (a) the words “herein,” “hereof” and “hereunder” refer to this Plan as a whole and not to any particular Article, Section or other subdivision, (b) reference to any Article or Section, means such Article or Section hereof and (c) the words “including” (and with correlative meaning “include”) means

including, without limiting the generality of any description preceding such term. The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

ARTICLE II.

ELIGIBILITY AND BENEFITS

Section 2.01 Eligible Employees.

          (a) This Plan is only for the benefit of Participants, and no other employees, personnel, consultants or independent contractors shall be eligible to participate in this Plan or to receive any rights or benefits hereunder.

          (b) The initial Participants are set forth on Exhibit A. The Compensation Committee shall be authorized from time to time after the Effective Date to designate as Participants one or more employees of the Company (including new hires).

Section 2.02 Termination Notices from Company. For purposes of this Plan, in order for the Company to terminate any Participant’s employment for Cause, the Company must give a Termination Notice to such Participant, which notice shall be dated the date it is given to such Participant, shall specify the Termination Date and shall state that the termination is for Cause and shall set forth in reasonable detail the particulars thereof. For purposes of this Plan, in order for the Company to terminate any Participant’s employment for Disability, the Company must give a Termination Notice to such Participant, which notice shall be dated the date it is given to such Participant, shall specify the Termination Date and shall state that the termination is for Disability and shall set forth in reasonable detail the particulars thereof.

ARTICLE III.

SEVERANCE AND RELATED TERMINATION BENEFITS

Section 3.01 Termination of Employment. In the event that a Participant incurs a Termination of Employment by the Company or any of its subsidiaries for any reason other than for Cause or Disability, then such Participant shall be entitled to receive, and the Company shall be obligated to pay to the Participant, within sixty (60) days after such Participant’s Termination Date, a lump sum cash payment equal to (a) the Participant’s Annual Salary, as determined on the Termination Date without regard to any reduction in such Annual Salary within the six (6) month period prior to and ending on such Termination Date, that would have been paid to Participant had Participant remained employed by the Company or any of its subsidiaries for the number of weeks (the “Severance Period”) set forth under the heading “Severance Period” on Schedule A for such Participant (the “Severance Payment”) PLUS (b) all unused vacation time accrued and available for use by such Participant as of the Termination Date under the Company’s vacation policy. In addition, for a period of weeks equal to the Participant’s applicable Severance Period, such

Participant, including Participant’s participating spouse and dependents, shall continue to be covered by all group life, group medical and group dental insurance plans (excluding disability) of the Company under which he or she was covered on the Termination Date or if such plan(s) or program(s) have been amended or terminated, in the group plan(s) or program(s) in which executives of the Company participate (the “Benefit Continuation”). The Company shall reduce the Severance Payment by the after-tax amount necessary to pay the premium payments for the Benefit Continuation, as reasonably determined by the Company, which reduction shall include amounts necessary to pay for reasonably anticipated increases in such rates over the Benefit Continuation period. Any amount that is not used to pay premiums for such coverage as a result of Section 3.05(a) or as a result of an incorrect estimate of anticipated rate increases, as reasonably determined by the Company, shall be promptly refunded to the Participant. In the event premium rates are in excess of the amount withheld, the Company may seek additional payments from the Participant and the Company may cease the Benefit Continuation in the event such additional payments are not promptly paid by the Participant to the Company. Any Severance Payment obligations arising under this Section 3.01 shall be paid to the Participant within sixty (60) days of the Termination Date. In no event shall the Participant, or Participant’s spouse or dependents, be entitled to any Severance Payment or Benefit Continuation under this Section 3.01 in the event the Participant resigns for any reason or otherwise terminates employment due to death, Disability or for Cause and in no event shall Participant, or Participant’s spouse or dependents, be entitled to receive any Change of Control Severance Payment or Change of Control Benefit Continuation if Participant becomes entitled to receive any Severance Payment or Benefit Continuation.

Section 3.02 Termination of Employment Following a Change of Control. In the event a Participant incurs a Termination of Employment by the Company or any of its subsidiaries for any reason other than for Cause or Disability during the period beginning on the date sixty-days prior to such a Change of Control and ending on the date twelve months following such a Change of Control (the “Change of Control Period”), the Participant shall be entitled to receive a lump sum cash payment equal to (a) the sum of (i) the Participant’s Annual Salary, as determined on the Termination Date without regard to any reduction in such Annual Salary within the six (6) month period prior to and ending on such Termination Date, that would have been paid to Participant had Participant remained employed by the Company or any of its subsidiaries for the number of weeks (the “Change of Control Severance Period”) set forth under the heading “Change of Control Severance Period” on Schedule A for such Participant, and (ii) such Participant’s target annual cash bonus with respect to the year in which the Termination Date occurs (collectively, the “Change of Control Severance Payment”), PLUS (b) all unused vacation time accrued and available for use by such Participant as of the Termination Date under the Company’s vacation policy. In addition, in lieu of the Benefit Continuation, for a period of weeks equal to the Participant’s Change of Control Severance Period, such Participant, including Participant’s participating spouse and dependents, shall continue to be covered by all group life, group medical and group dental insurance plans (excluding disability) of the Company under which he or she was covered on the Termination Date or if such plan(s) or program(s) have been amended or terminated, in the group plan(s) or program(s) in which executives of the Company participate (the “Change of Control Benefit Continuation”). The Company shall reduce the Change of Control Severance Payment by the after-tax amount necessary to pay the premium payments for the Benefit Continuation, as reasonably determined by the Company, which reduction shall include amounts necessary to pay

for reasonably anticipated increases in such rates over the Change of Control Benefit Continuation period. Any amount that is not used to pay premiums for such coverage as a result of Section 3.05(a) or as a result of an incorrect estimate of anticipated rate increases, as reasonably determined by the Company, shall be promptly refunded to the Participant. In the event premium rates are in excess of the amount withheld, the Company may seek additional payments from the Participant and the Company may cease the Change of Control Benefit Continuation in the event such additional payments are not promptly paid by the Participant to the Company. Any Change of Control Severance Payment obligations arising under this Section 3.02 shall be paid to the Participant within sixty (60) days of the Termination Date but no later than March 15^th of the calendar year following the calendar year in which the Participant’s Termination Date occurs. In no event shall the Participant, or Participant’s spouse or dependents, be entitled to any Change of Control Severance Payment or Change of Control Benefit Continuation under this Section 3.02 in the event the Participant resigns for any reason or otherwise terminates employment due to death, Disability or for Cause and in no event shall Participant, or Participant’s spouse or dependents, be entitled to receive any Severance Payment or Benefit Continuation if Participant becomes entitled to receive any Change of Control Severance Payment or Change of Control Benefit Continuation.

Section 3.03 Condition to Receipt of Severance Benefits. As a condition to receipt of any payment or benefits under this Article III, such Participant must, within forty-five (45) days following the Termination Date, enter into a Non-Solicitation, Non-Compete, Non-Disclosure, Claw-Back and Non-Disparagement Agreement with the Company and its subsidiaries and affiliates and an additional release of claims agreement substantially similar to the form attached hereto pursuant to which agreement Participant releases the Company and its successors, assigns, divisions, affiliates, subsidiaries, representatives, agents, officers, directors, stockholders, and employees from any claims, demands and/or causes of action relating to or arising out of his or her employment with the Company or any of its subsidiaries or the termination of his or her employment with the Company or any of its subsidiaries, including, but not limited to any statutory claims under the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990 and/or the Civil Rights Acts of 1964 and 1991.

Section 3.04 Gross-Up Payment.

          (a) In the event it shall be determined that any payment or distribution to or for the benefit of any Named Executive Participant, as set forth on Schedule A, under this Plan or under any other Company plan, contract or agreement (the “Triggering Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax, other than any interest, penalty or additional tax that may arise as a result of Section 409A of the Code, (collectively, such excise tax, together with any such interest or penalties, the “Excise Tax”), then such Named Executive Participant shall be entitled to receive from the Company an additional payment (the “Gross-up Payment”) in an amount such that after payment by such Named Executive Participant of all taxes (including any interest or penalties imposed with respect to such taxes but excluding any taxes, penalties or interest that arise as a result of Section 409A of the Code) including any Excise Tax imposed on the Gross-Up Payment, such Named Executive Participant retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Triggering Payment. Notwithstanding the foregoing sentence of this Section 3.04(a), if it shall be determined that the Named Executive Participant is

entitled to the Gross-up Payment, but that the Parachute Value of all Payments paid to the Named Executive Participant does not exceed 110% of the Safe Harbor Amount, then no Gross-Up Payment shall be made to the Named Executive Participant and the amounts payable to the Named Executive Participant under this Plan shall be reduced until the Parachute Value of all Payments paid to the Named Executive Participant, in the aggregate, equals the Safe Harbor Amount or if such reduction would not be sufficient to reduce the Parachute Payments to the Safe Harbor Amount, then the cash amounts payable to the Named Executive Participant under this Plan shall be reduced to zero. All determinations required to be made under this Section 3.04 with respect to a particular Named Executive Participant shall be made in writing within ten (10) business days of the Triggering Payment (or at such earlier time as is requested by the Company) by the independent accounting firm then retained by the Company in the ordinary course of business (which firm shall provide detailed supporting calculations to the Company and such Named Executive Participant) and such determinations shall be final and binding on the Company (including the Compensation Committee) and all Named Executive Participants. Any fees incurred as a result of work performed by any independent accounting firm pursuant to this Section 3.04 shall be paid by the Company. The Company’s obligation to make the Gross-Up Payments under this Section 3.04 shall not be conditioned upon the Executive’s “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Code). Notwithstanding the foregoing, no Participant will be entitled to a Gross-up Payment with respect to any cash severance payment paid to any Named Executive Participant under any other Company plan, contract or agreement that becomes payable as a result of such Named Executive Participant’s resignation for any or no reason.

          (b) In the event that the Excise Tax is subsequently determined by the independent accounting firm or pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the amount taken into account hereunder in calculating the Gross-Up Payment made, the Named Executive Participant shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Gross-Up Payment that would not have been paid if such Excise Tax had been applied in initially calculating such Gross-Up Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event any portion of the Gross-Up Payment to be refunded to the Company has been paid to any Federal, state or local tax authority, repayment thereof shall not be required until actual refund or credit of such portion has been made to the Named Executive Participant, and interest payable to the Company shall not exceed interest received or credited to the Named Executive Participant by such tax authority for the period it held such portion. The Named Executive Participant and the Company shall mutually agree upon the course of action to be pursued (and the method of allocating the expenses thereof) if the Named Executive Participant’s good faith claim for refund or credit is denied. In the event that the Excise Tax is later determined by the independent accounting firm or pursuant to any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into account hereunder at the time the Gross-Up Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest or penalty payable with respect to such excess, but excluding any tax, interest or penalty that relates to Section 409A of the Code) at the time that the amount of such excess if finally determined. The Gross-Up Payment (or portion thereof) provided for in this Section 3.04 shall be paid to the Named Executive

Participant (or to the applicable taxing authority) not later than sixty (60) days following the payment of the Triggering Payments; provided, however, that if the amount of such Gross-Up Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to the Named Executive Participant by such date an amount estimated in good faith by the independent accounting firm to be the minimum amount of such Gross-Up Payment and shall pay the remainder of such Gross-Up Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than ninety (90) calendar days after payment of the related Triggering Payment; provided, further, in no event shall any such Gross-Up Payment or any payment of any income or other taxes to be paid by the Company under this Section 3.04 be made later than the end of the Named Executive Participant’s taxable year next following the Named Executive Participant’s taxable year in which the Named Executive Participant remits the related taxes to the applicable taxing authority. In the event that the amount of the estimated Gross-Up Payment exceeds the amount subsequently determined to have been due, such excess shall be refunded to the Company by the Named Executive Participant on the fifth business day after written demand by the Company for payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code).

          (c) Notwithstanding anything to the contrary in this Section 3.04, no payments under this Section 3.04, shall be paid to the Participant prior to or during the 6-month period following the Participant’s “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Code) if the Company determines that paying such amounts at the time or times indicated in this Section 3.04 would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such 6-month period (or such earlier date upon which such amount can be paid under Section 409A of the Code without resulting in a prohibited distribution, including as a result of the Participant’s death), the Company shall pay the Participant a lump-sum amount equal to the cumulative amount that would have otherwise been payable to the Participant during such period.

Section 3.05 Limitation of Benefits.

          (a) Anything in this Plan to the contrary notwithstanding, the Company’s obligation to provide Benefit Continuation or Change of Control Benefit Continuation for any Participant, including Participant’s spouse and dependents, shall, to the extent permitted by applicable law, cease if and when such Participant becomes employed by a third party that provides such Participant with health and welfare benefits.

          (b) Anything in this Plan to the contrary notwithstanding but subject to Section 5.01, the amounts payable to a Participant under Article III of this Plan shall be reduced by the aggregate amount of all similar severance payments and benefits due to such Participant under any other employment agreement, severance agreement or similar agreement between the Participant and the Company.

Section 3.06 Plan Unfunded; Participant’s Rights Unsecured. The Company shall not be required to establish any special or separate fund or make any other segregation of funds or assets to assure the payment of any benefit hereunder. The right of any Participant to receive the

benefits provided for herein shall be an unsecured claim against the general assets of the Company.

ARTICLE IV.

DISPUTE RESOLUTION

Section 4.01 Negotiation. In case a claim, dispute or controversy shall arise between any Participant (or any person claiming by, through or under any Participant) and the Company (including the Compensation Committee) relating to or arising out of this Plan, either disputant shall give written notice to the other disputant (“Dispute Notice”) that it wishes to resolve such claim, dispute or controversy by negotiations, in which event the disputants shall attempt in good faith to negotiate a resolution of such claim, dispute or controversy. If the claim, dispute or controversy is not so resolved within 30 days after the effective date of the Dispute Notice (as described in Section 5.08), subject to Section 4.03, either disputant may initiate arbitration of the claim, dispute or controversy as provided in Section 4.02. All negotiations pursuant to this Section 4.01 shall be held at the Company’s principal offices in Parsippany, New Jersey (or such other place as the disputants shall mutually agree) and shall be treated as compromise and settlement negotiations for the purposes of the federal and state rules of evidence and procedure.

Section 4.02 Arbitration. Subject to Section 4.03, any claim, dispute or controversy arising out of or relating to this Plan which has not been resolved by negotiations in accordance with Section 4.01 within 30 days of the effective date of the Dispute Notice (as described in Section 5.08) shall, upon the written request of either disputant, be finally settled by arbitration conducted expeditiously in accordance with the commercial arbitration rules of the American Arbitration Association regarding resolution of employment-related disputes. The arbitrator may, without limitation, award injunctive relief, but shall not be empowered to award damages in excess of compensatory damages and each disputant shall be deemed to have irrevocably waived any damages in excess of compensatory damages, such as punitive damages. The arbitrator’s decision shall be final and legally binding on the disputants and their successors and assigns, and judgment by the arbitrator may be entered in any court having jurisdiction. Each party shall pay its own fees, disbursements, and costs relating to or arising out of any arbitration. All arbitration conferences and hearings shall be held within a thirty (30) mile radius of Parsippany, New Jersey.

Section 4.03 Exclusivity, etc. The dispute resolution procedures set forth in Sections 4.01 and 4.02 shall not apply to any matter which, by the express provisions of this Plan, is to be finally determined by the Compensation Committee or by an accounting firm. No legal action may be brought with respect to this Plan except for the purpose of specifically enforcing the provisions of this Article IV or for the purpose of enforcing any arbitration award made pursuant to Section 4.02.

ARTICLE V.

MISCELLANEOUS PROVISIONS

Section 5.01 Cumulative Benefits. Except as provided in Section 3.05 or as otherwise agreed to between the Company and the Participant, the rights and benefits provided to any Participant under this Plan are cumulative of, and are in addition to, all of the other rights and benefits provided to such Participant under any Benefit Plan or any agreement between such Participant and the Company or any of its subsidiaries; provided, that, in no event shall a Participant be entitled to participate in the Company’s Severance Pay Plan or any similar plan sponsored by the Company or any of its subsidiaries.

Section 5.02 No Mitigation. No Participant shall be required to mitigate the amount of any payment provided for in this Plan by seeking or accepting other employment following a termination of his or her employment with the Company or otherwise. The amount of any payment provided for in this Plan shall not be reduced by any compensation or benefit earned by a Participant as the result of employment by another employer or by retirement benefits.

Section 5.03 Amendment or Termination. The Board may amend or terminate the Plan at any time; provided however that no such termination or amendment may materially and adversely affect any rights of any Participant who has incurred a Termination of Employment prior to the date of such termination or amendment; provided, further, the Plan cannot be terminated or materially amended during the Change of Control Period. Notwithstanding the foregoing, the Plan shall terminate when all of the obligations to Participants hereunder have been satisfied in full.

Section 5.04 Enforceability. The failure of Participants or the Company or any of its subsidiaries to insist upon strict adherence to any term of the Plan on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of the Plan.

Section 5.05 Administration.

          (a) The Compensation Committee shall have full and final authority to make determinations with respect to the administration of this Plan, to construe and interpret its provisions and to take all other actions deemed necessary or advisable for the proper administration of this Plan, but such authority shall be subject to the provisions of this Plan. No discretionary action by the Compensation Committee shall amend or supersede the express provisions of this Plan.

          (b) The members of the Compensation Committee shall receive no additional compensation for their services relating to this Plan. Any expenses properly incurred by the Compensation Committee incident to this Plan shall be paid by the Company.

          (c) The Company shall indemnify and hold harmless each member of the Compensation Committee against and all expenses and liabilities arising out of his or her administrative functions or fiduciary responsibilities, including any expenses and liabilities that are caused by or result from an act or omission constituting the negligence of such member in the

performance of such functions or responsibilities, but excluding expenses and liabilities that are caused by or result from such member’s own gross negligence or willful cause. Expenses against which such member shall be indemnified hereunder shall include, without limitation, the amounts of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted or a proceeding brought or settlement thereof.

Section 5.06 Consolidations, Mergers, Etc. In the event of a merger, consolidation or other transaction, nothing herein shall relieve the Company from any of the obligations set forth in the Plan; provided, however, that nothing in this Section 5.06 shall prevent an acquirer of or Successor to the Company from assuming the obligations, or any portion thereof, of the Company herender pursuant to the terms of the Plan provided that such acquirer or Successor provides adequate assurances of its ability to meet this obligation. In the event that an acquirer of or Successor to the Company agrees to perform the Company’s obligations, or any portion thereof, hereunder, the Company shall require any person, firm or entity which becomes its Successor to expressly assume and agree to perform such obligations in writing, in the same manner and to the same extent that the Company would be required to perform hereunder if no such succession had taken place.

Section 5.07 Successors and Assigns. This Plan shall be binding upon and inure to the benefit of the Company and its Successors and assigns. This Plan and all rights of each Participant shall inure to the benefit of and be enforceable by such Participant and his or her personal or legal representatives, executors, administrators, heirs and permitted assigns. If any Participant should die while any amounts are due and payable to such Participant hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to such Participant’s devisees, legatees or other designees or, if there be no such devisees, legatees or other designees, to such Participant’s estate. No payments, benefits or rights arising under this Plan may be assigned or pledged by any Participant, except under the laws of descent and distribution.

Section 5.08 Notices. All notices and other communications provided for in this Plan shall be in writing and shall be sent, delivered or mailed, addressed as follows: (a) if to the Company, at the Company’s principal office address or such other address as the Company may have designated by written notice to all Participants for purposes hereof, directed to the attention of the Chief Executive Officer, and (b) if to any Participant, at his or her residence address on the records of the Company or to such other address as he or she may have designated to the Company in writing for purposes hereof. Each such notice or other communication shall be deemed to have been duly given or mailed by United States certified or registered mail, return receipt requested, postage prepaid, except that any change of notice address shall be effective only upon receipt.

Section 5.09 Tax Withholdings. The Company shall have the right to deduct from any payment or benefit hereunder all taxes (federal, state or other) which it is required to be withhold therefrom.

Section 5.10 No Employment Rights Conferred. This Plan shall not be deemed to create a contract of employment between any Participant and the Company and/or any of its subsidiaries. Nothing contained in this Plan shall (i) confer upon any Participant any right with respect to

continuation of employment with the Company or any of its subsidiaries or (ii) subject to the rights and benefits of any Participant hereunder, interfere in any way with the right of the Company or any of its subsidiaries to terminate such Participant’s employment at any time.

Section 5.11 Prior Agreements. This Plan supersedes the Company’s Existing Key Executive Retention Plan that was terminated effective on the Effective Date.

Section 5.12 Severability. If any provision of the Plan is, becomes or is deemed to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Plan shall not be affected thereby.

Section 5.13 Governing Law. This Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its conflict of laws rules, and applicable federal law.

EX-10.21 5 c56928_ex10-21.htm c56928_ex10-21.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing
Exhibit 10.21

GENTEK INC.

December 31, 2008

Robert D. Novo
2 Kingsbrook Court
Mendham, NJ 07945

Dear Rob,

As discussed, this letter agreement (the “Letter Agreement”) shall entitle you to the same rights to severance that a Severance Participant (as defined in the Gentek Inc. Key Employee Retention Plan (the “KERP”)) was entitled to receive under Section 4.01 of the KERP prior to its recent termination, subject to the following conditions and the conditions set forth in the KERP and the terms set forth in the KERP:

You agree that you may not terminate your employment with Gentek Inc. (the “Company”) for Good Reason (as defined in the KERP) later than the date two (2) years following the occurrence of the particular action that constitutes Good Reason. The two (2) year limitation shall be in addition to any other limitation on your right to terminate your employment for Good Reason under the KERP;

You agree that as a condition to your receipt of any severance pursuant to this Letter Agreement, you will need to enter into a Non-Solicitation, Non-Compete, Non-Disclosure and Non-Disparagement Agreement with the Company and its affiliates and an additional release of claims agreement referenced in the KERP, in each case, within forty-five (45) days following your Termination Date (as defined in the KERP);

You agree that in the event you become entitled to severance payments under the Gentek Inc. Executive Severance Plan (“Plan”), any payments you may be entitled to receive under Plan shall be reduced by the amount of any payments you receive pursuant to this Letter Agreement;

You agree that your “severance multiplier” for purposes of Section 4.01(a) of the KERP shall be 1.5;

You agree that you shall not be entitled to any severance under Section 4.01 of the KERP if you terminate employment due to Disability (as defined in the KERP) or death; and

You agree that this Letter Agreement shall supersede any prior letter agreement you have entered into with the Company regarding your right to severance, except for your right to severance under the Plan.

Please sign below acknowledging your agreement with the foregoing and please do not hesitate to call me with any questions.

Sincerely,

/s/ William E. Redmond, Jr.
William E. Redmond, Jr.

Acceptance:

/s/ Robert D. Novo
Robert D. Novo

EX-21 6 c56928_ex21.htm
EXHIBIT 21

SUBSIDIARIES OF THE COMPANY

Name

Formation
Jurisdiction

GenTek Financial Services Ltd.

Barbados

GenTek Holding, LLC

Delaware

General Chemical Performance Products LLC

Delaware

Fini Enterprises, Inc.

Texas

General Chemical LLC

Delaware

General Chemical West LLC

Delaware

Waterside Urban Renewal Corporation

New Jersey

General Chemical Canada Holdings Inc.

Delaware

General Chemical Performance Products Ltd.

Ontario

Reheis Holdings Inc.

Delaware

Ilminster Company

Ireland

Reheis Ireland

Ireland

Reheis Overseas

Ireland

GenTek Technologies Marketing Inc.

Delaware

Balcrank Products Inc.

Delaware

GT Technologies Europe GmbH

Germany

GT Technologies, Inc.

Delaware

GT Technologies do Brazil Componentes Automotivos Ltda

Brazil

Binderline Draftline, Inc.

Michigan

1279597 Ontario Inc.

Ontario

Sandco Automotive Ltd.

Ontario

Gentoma Holding Inc.

Delaware

Gentoma Corporation

Delaware

Cabletech Global Limited Partnership

Massachusetts

Gentoma Delaware Inc.

Delaware

Gentoma Company

Nova Scotia

Printing Developments, Inc.

Delaware

EX-23 7 c56928_ex23.htm
Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-112578 on Form S-3/A and in Registration Statement No. 333-120919 on Form S-8 of our reports dated March 13, 2009, relating to the financial statements and financial statement schedule of GenTek Inc. and subsidiaries (the “Company”) (which expressed an unqualified opinion on those financial statements and financial statement schedule and included an explanatory paragraph regarding the adoption of (1) Financial Accounting Standards Board’s Interpretation No. 48, “Accounting for Uncertainty in Income Taxes- an interpretation of FASB Statement No. 109” as of January 1, 2007 which changed the accounting for uncertain tax positions; and (2) the recognition, disclosure and the measurement date provisions of Statement of Financial Accounting Standards (“SFAS”) No. 158, Employer’s Accounting for Defined Benefit Pension and Other Postretirement Plans – an Amendment of FASB Statements No. 87, 88, 106 and 132(R, which changed its method of accounting for pension and postretirement benefits and the effectiveness of the Company’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of the Company for the year ended December 31, 2008.

/s/ Deloitte & Touche LLP
Parsippany, New Jersey
March 13, 2009

EX-31.1 8 c56928_ex31-1.htm
Exhibit 31.1

CERTIFICATION

I, William E. Redmond, Jr., certify that:

1.

I have reviewed this annual report on Form 10-K of GenTek Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date

March 13, 2009

/s/

William E. Redmond, Jr.

William E. Redmond, Jr.

President and Chief Executive Officer

EX-31.2 9 c56928_ex31-2.htm
Exhibit 31.2

CERTIFICATION

I, Thomas B. Testa, certify that:

1.

I have reviewed this annual report on Form 10-K of GenTek Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date

March 13, 2009

/s/

Thomas B. Testa

Thomas B. Testa

Vice President and Chief Financial Officer

EX-32 10 c56928_ex32.htm
Exhibit 32

Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of GenTek Inc. (the “Company”) for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), William E. Redmond, Jr., as Chief Executive Officer of the Company, and Thomas B. Testa, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

          (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/

William E. Redmond, Jr.

William E. Redmond, Jr.

Chief Executive Officer

March 13, 2009

/s/

Thomas B. Testa

Thomas B. Testa

Chief Financial Officer

March 13, 2009

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to GenTek Inc. and will be retained by GenTek Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

~~-----END PRIVACY-ENHANCED MESSAGE-----~~


Name		Formation Jurisdiction

GenTek Financial Services Ltd.		Barbados
GenTek Holding, LLC		Delaware
General Chemical Performance Products LLC		Delaware
Fini Enterprises, Inc.		Texas
General Chemical LLC		Delaware
General Chemical West LLC		Delaware
Waterside Urban Renewal Corporation		New Jersey
General Chemical Canada Holdings Inc.		Delaware
General Chemical Performance Products Ltd.		Ontario
Reheis Holdings Inc.		Delaware
Ilminster Company		Ireland
Reheis Ireland		Ireland
Reheis Overseas		Ireland
GenTek Technologies Marketing Inc.		Delaware
Balcrank Products Inc.		Delaware
GT Technologies Europe GmbH		Germany
GT Technologies, Inc.		Delaware
GT Technologies do Brazil Componentes Automotivos Ltda		Brazil
Binderline Draftline, Inc.		Michigan
1279597 Ontario Inc.		Ontario
Sandco Automotive Ltd.		Ontario
Gentoma Holding Inc.		Delaware
Gentoma Corporation		Delaware
Cabletech Global Limited Partnership		Massachusetts
Gentoma Delaware Inc.		Delaware
Gentoma Company		Nova Scotia
Printing Developments, Inc.		Delaware


1.	I have reviewed this annual report on Form 10-K of GenTek Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date	March 13, 2009	/s/	William E. Redmond, Jr.

			William E. Redmond, Jr.
			President and Chief Executive Officer


Date	March 13, 2009	/s/	Thomas B. Testa

			Thomas B. Testa
			Vice President and Chief Financial Officer


/s/	William E. Redmond, Jr.

	William E. Redmond, Jr.
	Chief Executive Officer
	March 13, 2009

/s/	Thomas B. Testa

	Thomas B. Testa
	Chief Financial Officer
	March 13, 2009

Principal Balance

Fair Value

Weighted-Average Interest Rate at
December 31, 2008

Scheduled Maturity

$213 million

$172 million

February 28, 2011