<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
GENCORP INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: __________
(2) Aggregate number of securities to which transaction applies: _____________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined): _____________________________
(4) Proposed maximum aggregate value of transaction: _________________________
(5) Total fee paid: __________________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: __________________________________________________
(2) Form, Schedule or Registration Statement No.: ____________________________
(3) Filing Party: ____________________________________________________________
(4) Date Filed: _____________________________________________________________
================================================================================
<PAGE> 2
GENCORP INC.
175 GHENT ROAD, FAIRLAWN, OHIO 44333
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------
To the Shareholders of February 8, 1995
GenCorp Inc.: Fairlawn, Ohio
The Annual Meeting of Shareholders of GENCORP INC. (the "Company") will be
held at the Akron West Hilton Inn, 3180 West Market Street, Akron, Ohio, on
March 29, 1995 at 9 o'clock a.m. to consider and act on the following matters:
1. Election of Directors to serve a term of three years. (page 2)
2. Ratification of the Board of Directors' selection of Ernst & Young
LLP as independent accountants to audit the books of account and other
corporate records of the Company for 1995. (page 21)
3. Such other matters as may properly come before the meeting or any
adjournments thereof.
The Board of Directors has fixed the close of business on February 6, 1995
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the meeting.
THE COMPANY HAS A GREAT NUMBER OF SHAREHOLDERS ENTITLED TO VOTE AT THE
MEETING WHO OWN FEWER THAN 100 SHARES. WHETHER YOU OWN ONE SHARE OR HUNDREDS OF
SHARES, YOUR VOTE IS IMPORTANT. THEREFORE, WHETHER OR NOT YOU EXPECT TO ATTEND
THE MEETING IN PERSON, YOU ARE URGED TO PROMPTLY VOTE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY. YOUR COOPERATION WILL ENABLE THE COMPANY TO AVOID ADDITIONAL
EXPENSE AND DELAY. A RETURN ENVELOPE, REQUIRING NO POSTAGE IF MAILED IN THE
UNITED STATES, IS ENCLOSED FOR YOUR CONVENIENCE.
By order of the Board of Directors,
EDWARD R. DYE, Secretary
<PAGE> 3
ANNUAL MEETING
OF
GENCORP INC.
175 GHENT ROAD, FAIRLAWN, OHIO 44333
------------------
PROXY STATEMENT
February 8, 1995
This Proxy Statement is being mailed to shareholders beginning approximately
February 8, 1995 in connection with the solicitation by the Company, on behalf
of its Board of Directors, of proxies to be used at the Annual Meeting of
Shareholders of the Company which is to be held on March 29, 1995 at the Akron
West Hilton Inn, 3180 West Market Street, Akron, Ohio, for the purposes set
forth in the accompanying Notice of Annual Meeting of Shareholders.
If the accompanying form of proxy is signed, dated and returned, it will be
voted, but it may be revoked at any time before it is voted. Shares in respect
of which a proxy or other written instruction is not received by the Company
will not be voted. The presence of a shareholder at the meeting does not revoke
any proxy previously given. A shareholder, without affecting any vote previously
taken, may revoke his or her proxy by giving notice to the Company in writing or
in open meeting.
Shares held for the accounts of shareholders participating in the Company's
automatic Dividend Reinvestment Service will be voted in accordance with the
proxies returned by the participants to the Company in respect of the underlying
shares which the participants hold of record. If such proxies are not returned
by the participants to the Company, the participants' Dividend Reinvestment
Service shares will not be voted.
For participants in the Company's savings and profit sharing plans, the
Trustees for the plans, Mellon Bank N.A. and Royal Trust Corporation of Canada,
will vote any shares held for participants' accounts in accordance with the
confidential voting instructions returned by the participants to the Trustees,
c/o the Company. If such confidential voting instructions are not returned by
the participants, the participants' shares held by the Trustees will be voted by
the Trustees in accordance with the instructions of the Benefits Management
Committee for the plans.
A copy of the Company's 1994 Annual Report, including financial statements, is
enclosed in the envelope with this Proxy Statement.
At the close of business on February 6, 1995, there were 32,312,737
outstanding shares of Common Stock and no outstanding shares of Cumulative
Preference Stock of the Company. Holders of outstanding shares of
Common Stock are entitled to one vote for each full share held on the
February 6, 1995 record date.
1
<PAGE> 4
NOMINATION AND ELECTION OF DIRECTORS
The Company's Code of Regulations provides for a Board of not less than seven
nor more than seventeen directors, and authorizes the Board to determine from
time to time the number of directors within that range that will constitute the
Board by the affirmative vote of a majority of the members then in office.
Additionally, the Company's Articles of Incorporation require that the Board of
Directors be divided into three classes having staggered terms.
Harry A. Shaw, III, a director of the Company since 1990, passed away in
September 1994. In January 1995, the Board filled the resulting vacancy by
appointing Ms. Diane E. McGarry a director of the Company.
Mr. A. William Reynolds, who has been Chairman of the Board since 1987 and a
director of the Company since 1984, will retire from the Board effective March
29, 1995. Additionally, Mrs. Jewel Lafontant-Mankarious, who has served as a
director from September 1988 until June 1989 and since January 1993, will retire
from the Board, effective March 29, 1995, in accordance with the Company's
retirement policy for directors. Mr. Reynolds' and Mrs. Lafontant-Mankarious'
contributions throughout the years have been of inestimable value, and their
participation will be greatly missed.
The Board has decided not to fill the vacancies resulting from these
retirements at this time, and has reduced the number of directors constituting
the Board from eleven to nine and set the number of directors to be elected at
this Annual Meeting at three. It is recommended that the Board's three nominees
named below be elected to serve for a three-year term expiring at the 1998
Annual Meeting.
Abstentions and non-votes are counted as present for purposes of determining
whether a quorum is present at the meeting. Directors are elected by a plurality
of the votes cast. Votes cast for a nominee will be counted in favor of
election. Withhold votes and broker non-votes will not count either in favor of,
or against, election of a nominee. It is the intention of the persons named in
the accompanying form of proxy, unless authorization to do so is withheld, to
vote for the election of the three nominees. Proxies cannot be voted for a
greater number of persons than the number of nominees named. If, prior to the
meeting, a nominee becomes unable to serve as a director for any reason, the
proxyholders reserve the right to substitute another person of their choice in
such nominee's place and stead. It is not anticipated that any nominee will be
unavailable for election.
The Company has no provision for cumulative voting in the election of
directors. Holders of Common Stock are, therefore, entitled to cast one vote for
each share held on the February 6, 1995 record date for each nominee for
director.
The information set forth below is given as of December 31, 1994 unless stated
otherwise. Each nominee for election and each director continuing in office has
had the same principal occupation or employment during the past five years
unless otherwise indicated.
2
<PAGE> 5
NOMINEES FOR ELECTION AT THIS MEETING TO THREE-YEAR TERMS EXPIRING IN 1998:
GEN. PAUL X. KELLEY
Director since 1989
Vice Chairman for Corporate Strategy of Cassidy and Associates, Inc.,
Washington, D.C. (government and public relations firm) since January 1990 (Vice
President from January 1989 until January 1990). General Kelley served as
Commandant of the United States Marine Corps from 1983 until retirement in June
1987. Director of Allied Signal Inc., Morristown, NJ; PHH Corporation, Hunt
Valley, MD; The Wackenhut Corporation, Coral Gables, FL; Sturm, Ruger and Co.,
Inc., Southport, CT; UST, Inc., Greenwich, CT and Saul Centers, Inc., Chevy
Chase, MD. Chairman of the Public Policy Committee and member of the Audit and
Nominating Committees of the Board. Age 66.
DIANE E. MCGARRY
Director since January 1995
Chairman, President and Chief Executive Officer of Xerox Canada Inc., North
York, Ontario, Canada (a manufacturer of copiers and electronic office
equipment) since October 1993; previously Director, Sales Operations for the
United Kingdom for Rank Xerox, a joint venture between Xerox and the Rank
Organization from 1991 to 1993; Executive Assistant to the Chairman and Chief
Executive Officer of Xerox from February 1990 to 1991; Vice President and Region
Manager for the Eastern (U.S.) Coastal Region for Xerox Corporation from 1988 to
1990. Age 45.
DR. R. BYRON PIPES
Director since 1993
President of Rensselaer Polytechnic Institute, Troy, NY since July 1993. Provost
of the University of Delaware from 1991 until July 1993 and Dean of the College
of Engineering from 1985 until July 1993. Member of the Nominating and Public
Policy Committees of the Board. Age 53.
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1996:
DR. ROBERT K. JAEDICKE
Director since 1990
Professor of Accounting at the Graduate School of Business, Stanford University,
Stanford, CA since 1961 (formerly served as Dean of the Graduate School of
Business from 1983 until September 1990). Director of Boise Cascade Corporation,
Boise, ID; Homestake Mining Co., San Francisco, CA; Enron Corporation, Houston,
TX; Wells Fargo & Co., San Francisco, CA; California Water Services Company, San
Jose, CA, and State Farm Insurance Companies, Bloomington, IL. Chairman of the
Audit Committee and member of the Public Policy Committee of the Board. Age 66.
ROBERT D. KUNISCH
Director since 1992
Chairman of the Board since 1989, Chief Executive Officer since 1988 and
President since 1984 of PHH Corporation, Hunt Valley, MD (a transnational
business services company). Director of CSX Corporation, Richmond, VA and
Mercantile Bankshares, Baltimore, MD. Member of the Compensation, Audit and
Executive Committees of the Board. Age 53.
3
<PAGE> 6
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1997:
JAMES M. OSTERHOFF
Director since 1990
Executive Vice President and Chief Financial Officer of US WEST Inc., Englewood,
CO (communications company) since December 1991. Previously Vice President,
Chief Financial Officer of Digital Equipment Corporation, Maynard, MA (computer
systems, software and services company). Director of Financial Security
Assurance Inc., New York, NY. Chairman of the Finance Committee and Member of
the Audit Committee of the Board. Age 58.
PAUL J. PHOENIX
Director since 1990
Chairman and Chief Executive Officer of Dofasco Inc., Hamilton, Ontario, Canada
(steel manufacturing company) from 1990 until retirement May 1, 1992. President,
Chief Executive Officer and Chief Operating Officer from 1987 until 1990.
Director of The Bank of Nova Scotia, Nova Scotia; Mutual Life of Canada,
Waterloo, Ontario; Montreal Trust Co., Montreal, Quebec; Rainy River Forest
Products Inc., Toronto, Ontario and Boise Cascade Corporation, Boise, ID.
Chairman of the Compensation Committee and member of the Finance Committee of
the Board. Age 67.
JAMES R. STOVER
Director since 1987
Chairman of the Board and Chief Executive Officer of Eaton Corporation,
Cleveland, OH (manufacturer of electronic, avionic and transportation products)
from 1986 until retirement January 1, 1992 (President and Chief Operating
Officer from 1979 until 1986). Chairman of the Executive and Nominating
Committees and member of the Compensation and Finance Committees of the Board.
Age 68.
JOHN B. YASINSKY
Director since 1993
President and Chief Executive Officer of the Company since July 1, 1994 and a
Director since November 1993 (President and Chief Operating Officer from
November 1993 until July 1994). Previously Group President, Westinghouse
Electric Corporation, Pittsburgh, PA (power generation and electrical equipment
manufacturing company) since February 1993; President, Westinghouse Power
Systems from 1990 to 1993; Executive Vice President, World Resources and
Technology from 1989 to 1990. Director of CMS Energy Corporation, Dearborn, MI
and Consumers Power Company, Jackson, MI. Member of the Executive and Public
Policy Committees of the Board.
Age 55.
4
<PAGE> 7
<TABLE>
HOLDINGS OF SHARES OF THE COMPANY'S CAPITAL STOCK
SECURITY OWNERSHIP OF MANAGEMENT
The following table lists share ownership of the Company's Common Stock by
directors and executive officers of the Company as of December 31, 1994, except
for Ms. Diane E. McGarry whose ownership is as of January 25, 1995. Unless
otherwise indicated, share ownership is direct.
<CAPTION>
AMOUNT OF PERCENT
BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS(3)
<S> <C> <C>
- ----------------------------------------------------------------------------------------
Robert K. Jaedicke 1,200 --
Paul X. Kelley 2,066 --
Robert D. Kunisch 2,000 --
Diane E. McGarry 1,000 --
Jewel Lafontant-Mankarious 1,200 --
James M. Osterhoff 3,359 --
Paul J. Phoenix 2,000 --
R. Byron Pipes 1,100 --
James R. Stover 2,500 --
John B. Yasinsky 94,363(2) --
Marvin L. Isles 38,558(2) --
Roger I. Ramseier 27,475(2) --
William E. Bachman 38,872(2) --
D. Michael Steuert 29,408(2) --
A. William Reynolds 24,993 --
All directors and executive officers as a group 539,092(2) 1.65%
(31 persons)
<FN>
- ---------------
(1) Includes shares subject to stock options which may be exercised within 60
days of December 31, 1994 as follows: Mr. Yasinsky, 87,500 shares; Mr.
Isles, 23,250 shares; Mr. Ramseier, 22,750 shares; Mr. Bachman, 22,750
shares; Mr. Steuert, 18,750 shares, and all executive officers as a group,
324,950 shares. Mr. Reynolds does not hold any options under the Company's
stock option plan, and nonemployee directors do not participate in the plan.
(2) Includes the approximate number of shares credited to the individual's
account as of December 31, 1994 under the GenCorp Profit Sharing Retirement
and Savings Plan, a savings plan for salaried employees sponsored by the
Company prior to September 1989, and under the GenCorp Retirement Savings
Plan since September 1989.
(3) No individual director, nominee for director or executive officer
beneficially owns more than 1% of the Company's Common Stock.
</TABLE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's executive officers and directors to file reports of ownership and
changes in ownership of GenCorp equity securities and certain benefit plan
interests with the Securities and Exchange Commission and the New York and
Chicago Stock Exchanges and to furnish to the Company copies of all Section
16(a) forms which they file. Based upon its review of copies of Section 16(a)
forms received by it, or written representations received from certain reporting
persons, the Company believes that its executive officers and directors have
complied with all applicable Section 16(a) filing requirements for fiscal 1994.
5
<PAGE> 8
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists the only persons believed by the Company to be the
beneficial owners of more than five percent of the 32,259,218 shares of the
Company's Common Stock outstanding as of December 31, 1994. The dates applicable
to the beneficial ownership indicated are set forth in the footnotes below.
<CAPTION>
SHARES
BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED OF CLASS
<S> <C> <C>
- ----------------------------------------------------------------------------------
GenCorp employee savings plans 6,578,937 20.40%(1)
175 Ghent Road
Fairlawn, OH 44333
Putnam Investments Inc. 3,461,902 10.73%(2)
One Post Office Square
Boston, MA 02109
Mario J. Gabelli/Gabelli Funds Inc. 3,419,687 10.60%(3)
One Corporate Center
Rye, NY 10580
<FN>
- ---------------
(1) Shares held at December 31, 1994 by the Trustee for the plans, Mellon Bank,
included 1,121,696 shares held for the GenCorp Profit Sharing Retirement and
Savings Plan, and 5,457,241 shares held for the GenCorp Retirement Savings
Plan. Shares are voted by the Trustee in accordance with instructions of the
participating employees to whose accounts such shares are allocated, except
that shares for which no employee instructions are received and shares held
for the plans which have not been allocated to participants' accounts are
voted by the Trustee in accordance with instructions of the Benefits
Management Committee ("Committee") for the plans. The Committee presently
consists of five persons, all of whom are officers of the Company.
(2) Putnam Investments Inc. reported that it had sole voting authority with
respect to 76,300 shares and no voting authority with respect to the
remainder of such shares according to Form 13F for the quarter ended
September 30, 1994 filed with the Securities and Exchange Commission.
(3) Mario J. Gabelli, directly as to 4,558 shares and through and shared with
various entities within Gabelli Funds Inc. as to the balance of the shares,
has investment discretion with respect to all shares, sole voting authority
with respect to 3,182,187 shares and no voting authority with respect to
237,500 shares, according to Amendment No. 15 to Schedule 13D dated December
29, 1994 and filed with the Securities and Exchange Commission. The
foregoing ownership interests include 397,404 shares which would be
receivable by entities within Gabelli Funds Inc. upon conversion of GenCorp
Convertible Subordinated Debentures held by such persons according to the
December 29, 1994 amendment to Schedule 13D.
</TABLE>
6
<PAGE> 9
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
MEETINGS OF THE BOARD
The Company's Board of Directors held six meetings during the 1994 fiscal
year.
COMPENSATION COMMITTEE
The Compensation Committee administers the Company's incentive and deferred
compensation plans and approves, and in some cases recommends to the Board of
Directors for approval, the compensation of employee-directors, officers, and
principal executives of the Company. Seven meetings were held in 1994.
Additional information regarding the Compensation Committee begins on page 16.
AUDIT COMMITTEE
The Audit Committee reviews the scope of the audits to be made by the
independent accountants and receives and reviews a report from the independent
accountants prior to the publication of the audited financial statements;
considers and recommends to the Board of Directors the selection of the
independent accountants to examine the consolidated financial statements of the
Company for the next year; considers the Company's system of internal control;
and receives periodic reports from the Internal Auditing and Law Departments on
a number of matters, including compliance with the Company's Policy on Legal and
Ethical Conduct. Four meetings were held in 1994. Members of the Audit Committee
during 1994 were: Robert K. Jaedicke, Chairman, Paul X. Kelley, Robert D.
Kunisch, Jewel Lafontant-Mankarious and James M. Osterhoff.
EXECUTIVE COMMITTEE
During the intervals between meetings of the Board of Directors, the Executive
Committee, unless restricted by resolution of the Board, may exercise, under the
control and direction of the Board, all of the powers of the Board of Directors
in the management and control of the business of the Company. The Executive
Committee held two meetings during 1994. Members of the Executive Committee
during 1994 were: James R. Stover, Chairman, Robert D. Kunisch, Jewel
Lafontant-Mankarious, A. William Reynolds and John B. Yasinsky.
FINANCE COMMITTEE
The Finance Committee advises the Board with regard to planning of the
Company's capital structure and raising long-term capital; reviews the
performance and management of the Company's employee benefit plan funds and
advises the Board with respect thereto; advises the Board in regard to
contributions to the pension plans of the Company, or any proposed changes in
the funding method, interest assumption and amortization of liabilities in
connection with any such plan; advises the Board with respect to the Company's
dividend policy; and takes such further action or provides such further advice
as the Board may from time to time request. Four meetings were held in 1994.
Members of the Finance Committee during 1994 were: James M. Osterhoff, Chairman,
Paul J. Phoenix, A. William Reynolds and James R. Stover.
NOMINATING COMMITTEE
The Nominating Committee recommends to the Board candidates to fill vacancies
on the Board which occur between Annual Share-
holders' Meetings, recommends replacement candidates for those Board members who
will not be candidates at the next Annual Meeting, and considers recommendations
for candidates received from shareholders. In order to be considered for
election at an Annual Meeting, shareholder recommendations must be mailed to the
Nominating Committee, 175 Ghent Road, Fairlawn, Ohio 44333, Attention:
Secretary, and must be received no later than the December 1 immediately
preceding the mailing of the proxy statement for such Annual Meeting. Three
meetings were held during 1994. Members of the Nominating Committee during 1994
were: James R. Stover, Chairman,
7
<PAGE> 10
Paul X. Kelley, R. Byron Pipes and A. William Reynolds.
PUBLIC POLICY COMMITTEE
The Public Policy Committee advises the directors with regard to significant
matters of public policy, including proposed actions of domestic and foreign
governments which may materially affect the Company, reviews and evaluates
management proposals concerning adoption of major policies and programs relating
to matters of public policy, and recommends to the directors specific action
relating to significant matters of public policy affecting the Company. Two
meetings were held during 1994. Members of the Public Policy Committee during
1994 were: Paul X. Kelley, Chairman, Robert K. Jaedicke, Jewel Lafontant-
Mankarious, R. Byron Pipes and John B. Yasinsky.
<TABLE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------- | ----------------------------------- |
| AWARDS PAYOUTS |
| ---------------- | --------------- |
OTHER ANNUAL | SECURITIES | | ALL OTHER
SALARY BONUS COMPENSATION | UNDERLYING | LTIP PAYOUTS | COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) | OPTIONS/SARS (7) | ($) (8) | ($) (9)(10)
<S> <C> <C> <C> <C> | <C> | <C> | <C>
- -----------------------------------------------------------------------------|-------------------|-----------------|------------
J. B. Yasinsky(1) 1994 $501,667 $650,000(3) $ 27,462(5) | 150,000 | -- | $ 21,647
President and Chief 1993 38,333(2) 500,000(4) 24,233(6) | 100,000 | -- | --
Executive Officer 1992 -- -- -- | -- | -- | --
| | |
M. L. Isles 1994 284,244 135,000 18,578(5) | 75,000 | -- | 32,600
Executive Vice President 1993 258,333 120,000 354(6) | 9,000 | -- | 30,283
1992 248,333 81,000 -- | -- | $ 4,635 | 28,161
| | |
R. I. Ramseier 1994 290,004 110,000 20,000(5) | 75,000 | -- | 32,107
Executive Vice President; 1993 279,041 142,000 -- | 8,000 | 68,701 | 32,937
President, Aerojet-General 1992 275,830 142,000 -- | -- | -- | 33,050
Corporation | | |
| | |
W. E. Bachman(1) 1994 241,442 120,000 16,089(5) | 75,000 | -- | 19,458
Executive Vice President 1993 162,375 90,000 14,769(6) | 8,000 | 1,857 | 15,536
1992 -- -- -- | -- | -- | --
| | |
D. M. Steuert 1994 228,333 125,000 10,000(5) | 60,000 | -- | 23,257
Senior Vice President and 1993 218,667 114,000 -- | 7,500 | -- | 20,120
Chief Financial Officer 1992 210,000 87,000 -- | -- | -- | 17,054
| | |
A. W. Reynolds 1994 562,500 330,000 279(6) | -- | -- | 161,645(11)
Retired Chairman and 1993 650,833 330,000 -- | -- | -- | 117,896
Chief Executive Officer 1992 625,000 285,000 | -- | -- | 111,120
<FN>
- ---------------
(1) Neither Mr. Yasinsky nor Mr. Bachman were officers of the Company during
1992.
(2) Salary paid to Mr. Yasinsky for the period November 1, 1993 to November 30,
1993.
(3) Includes a 1994 year-end payment of $350,000 and a one-time payment of
$300,000 pursuant to Mr. Yasinsky's employment agreement to compensate for
loss of a 1993 bonus from his former employer. This latter amount is
reported in the Bonus column of the table pursuant to a Securities and
Exchange Commission interpretation.
(4) One-time payment pursuant to Mr. Yasinsky's employment agreement intended
to compensate for the loss or forfeiture of payments, benefits or
entitlements under plans and programs of his former employer, such as long
term incentive compensation and stock options. This amount is reported in
the Bonus column of the table pursuant to a Securities and Exchange
Commission interpretation.
(5) Amounts shown for Messrs. Isles, Ramseier, Bachman and Steuert represent
cash allowances in lieu of Company-provided automobiles. Amount shown for
Mr. Yasinsky includes an $11,151
8
<PAGE> 11
reimbursement for taxes payable in connection with relocation and a $16,311
automobile allowance.
(6) Amounts shown for Messrs. Reynolds and Isles represent reimbursement for
taxes paid in connection with use of the corporate aircraft, and in the
case of Messrs. Yasinsky and Bachman, in connection with relocation.
Perquisites and other personal benefits provided during 1994, 1993 and 1992
did not exceed disclosure thresholds established by the Securities and
Exchange Commission.
(7) Represents the number of shares of GenCorp Common Stock underlying options
granted pursuant to the GenCorp Inc. 1993 Stock Option Plan.
(8) Represents the value of awards granted in years prior to 1993 which were
paid pursuant to payment elections filed by the executive at the time of
grant under the Company's Stock Incentive Compensation Plan, a predecessor
to the Company's Long Term Incentive Program described in the footnotes to
the Long Term Incentive Plan Awards table on page 11. The ultimate value of
prior awards under the Stock Incentive Compensation Plan is dependent upon
increases in the market value of GenCorp Common Stock at the payment date
over the value of the stock at the date the incentive unit awards were
granted.
(9) Includes amounts accrued as dividend and interest earnings on prior years'
awards under the Company's Stock Incentive Compensation Plan. Dividends are
accrued on phantom shares at the same rate as dividends paid on Common
Stock, and are credited to the executive's account as an additional number
of phantom shares determined by dividing the aggregate amount of the
dividend by the market value of Common Stock on the dividend date. The
actual value on a future payment date of phantom shares attributable to
these accruals will be equal to the market value of Common Stock on such
future payment date. In the case of Messrs. Ramseier and Isles, interest at
a rate equal to that earned by the Interest Income Fund of the GenCorp
Savings Plan is credited to the executive's account in respect of awards
attributable to years prior to 1987. Amounts accrued during 1994, and the
number of phantom shares attributable thereto, were: Marvin L. Isles
$14,720 (546 shares); Roger I. Ramseier $13,549 (475 shares); William E.
Bachman $6,118 (377 shares); D. Michael Steuert $7,852 (619 shares) and A.
William Reynolds $83,168 (6,560 shares). John B. Yasinsky did not
participate in the Plan during 1994 or 1993.
(10) Includes Company contributions to the executive's account in the GenCorp
Retirement Savings Plan and, where applicable, the amount credited to the
executive's account in the Company's Benefits Restoration Plan, a nonfunded
plan which restores to the individual's account amounts otherwise excluded
due to limitations imposed by the Internal Revenue Code of 1986 ("Code") on
contributions and includable compensation under qualified plans. Amounts
credited during 1994 were: John B. Yasinsky $21,647, Marvin L. Isles
$17,880, Roger I. Ramseier $18,558, William E. Bachman $13,340, D. Michael
Steuert $15,405 and A. William Reynolds $37,706.
(11) Includes $40,771 paid during 1994 pursuant to Mr. Reynolds' Transition and
Consulting Agreement described on page 14 in addition to the amounts
referred to in footnotes (9) and (10) above.
</TABLE>
9
<PAGE> 12
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION
FOR OPTION TERM
INDIVIDUAL GRANTS (TEN YEARS)(4)(5)
- ---------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES BASE PRICE EXPIRATION
NAME (#)(1) IN FISCAL YEAR ($/SHARE)(3) DATE 0% ($) 5% ($) 10%($)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John B. Yasinsky 150,000 12.82% $ 12.625 7-15-04 $ -0- $ 1,190,969 $ 3,018,150
Marvin L. Isles 75,000 6.41% 12.625 7-15-04 -0- 595,485 1,509,075
Roger I. Ramseier 75,000 6.41% 12.625 7-15-04 -0- 595,485 1,509,075
William E. Bachman 75,000 6.41% 12.625 7-15-04 -0- 595,485 1,509,075
D. Michael Steuert 60,000 5.13% 12.625 7-15-04 -0- 476,388 1,207,260
A. William Reynolds -0-(2) -- -- -- -- -- --
All Shareholders(6) N/A N/A N/A N/A -0- 256,131,565 649,087,679
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Non-qualified stock options granted pursuant to the GenCorp Inc. 1993 Stock
Option Plan ("Plan") for the number of shares of GenCorp Inc. Common Stock
indicated. No Stock Appreciation Rights were granted in 1994. Options
granted July 15, 1994 become exercisable 25% on January 12, 1995, 25% on
July 15, 1995, 25% on July 15, 1996 and 25% on July 15, 1997.
(2) Mr. Reynolds did not participate in the Plan during 1994.
(3) Exercise price equals the closing market price of GenCorp Common Stock on
the date of grant as reported in the New York Stock Exchange Composite
Transactions published in the Wall Street Journal.
(4) The 0%, 5% and 10% appreciation over 10 years' option valuation method
assumes a stock price of $12.625, $20.56 and $32.74, respectively, at
July 15, 2004.
(5) The potential realizable values are shown in the table in conformity with
Securities and Exchange Commission regulations, and are not intended to
forecast possible future appreciation. The Company is not aware of any
formula which will predict with reasonable accuracy the future appreciation
of equity securities. No gain can be realized by optionees without an
increase in stock price appreciation, which will benefit all shareholders
commensurately. A 0% gain in stock price appreciation will result in zero
dollars for an optionee.
(6) Based upon 32,259,218 shares of GenCorp Common Stock outstanding on
December 31, 1994.
</TABLE>
10
<PAGE> 13
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS/SARS AT FISCAL YEAR MONEY OPTIONS/SARS AT FISCAL
ACQUIRED END(#)(2) YEAR END ($)
ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
John B. Yasinsky -0- -0- 50,000 200,000 -0- -0-
Marvin L. Isles -0- -0- 4,500 79,500 -0- -0-
Roger I. Ramseier -0- -0- 4,000 79,000 -0- -0-
William E. Bachman -0- -0- 4,000 79,000 -0- -0-
D. Michael Steuert -0- -0- 3,750 63,750 -0- -0-
A. William
Reynolds(1) -0- -0- -0- -0- -0- -0-
<FN>
---------------
(1) Mr. Reynolds did not participate in the Company's 1993 Stock Option Plan.
(2) No SARs have been issued under the Plan.
</TABLE>
<TABLE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS UNDER NON-
NUMBER OF OTHER PERIOD STOCK PRICE-BASED PLANS(3)(4)
SHARES, UNITS UNTIL ------------------------------------
OR MATURATION OR THRESHOLD TARGET MAXIMUM
NAME OTHER RIGHTS PAYOUT ($) ($) ($)
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
John B. Yasinsky (1) 3 Years $127,750 $255,500 $511,000
Marvin L. Isles (1) 3 Years 52,405 104,811 209,622
Roger I. Ramseier (1) 3 Years 50,000 100,001 200,002
William E. Bachman (1) 3 Years 45,180 90,360 180,720
D. Michael Steuert (1) 3 Years 35,333 70,666 141,333
A. William Reynolds (2) -- -- -- --
<FN>
- ---------------
(1) Indicates awards under the GenCorp Inc. Long Term Incentive Program
("Program") pursuant to which key employees designated by the Compensation
Committee may receive incentive payments equal to specified percentages of
average annual compensation upon attainment of specified threshold, target
or maximum levels of financial performance ("performance goals") over a
three-year performance period. For the 1994-1996 performance period
threshold, target and maximum performance goals are designated percentages
of Corporate Return on Assets Employed ("ROAE"). No payments are made under
the Program if financial performance for the performance period falls below
threshold levels.
(2) Mr. Reynolds did not participate in the Program for the 1994-1996
performance period.
(3) Percentages of average annual compensation (determined for the three-year
performance period) payable to participants upon attainment of performance
goals for the 1994-1996 performance period are as follows:
THRESHOLD TARGET MAXIMUM
--------- ------ -------
President and CEO 15% 30% 60%
Executive Vice Presidents 12.5% 25% 50%
Senior Vice Presidents 10% 20% 40%
11
<PAGE> 14
(4) Future payouts, if any, will be calculated on the basis of actual average
annual compensation (salary and bonus) paid to the participant during the
three-year performance period. For purposes of the table above, estimated
future payouts have been calculated on the basis of the participant's 1994
fiscal year salary and bonus shown in the Summary Compensation Table on
page 8.
</TABLE>
<TABLE>
PENSION BENEFITS
The Company's salaried pension plans include several formulas for the
determination of benefits, and require that the formula providing the highest
benefit be utilized to determine an individual employee's actual benefit.
Benefits for Messrs. Isles, Ramseier, Bachman and Steuert have been determined
pursuant to a formula which utilizes five-year average compensation for years of
service prior to December 1, 1995 and a career average formula for service from
December 1, 1995 to normal retirement. Benefits for Messrs. Yasinsky and
Reynolds have been determined pursuant to the terms of their employment
agreements. Estimated benefits are shown below because the required calculations
do not lend themselves to a typical pension plan table where benefits can be
determined by the reader solely upon the basis of years of service and final
compensation.
<CAPTION>
ESTIMATED
APPROXIMATE ANNUAL BENEFITS
YEARS OF CREDITED PAYABLE AT
SERVICE AT NORMAL
NAME NORMAL RETIREMENT RETIREMENT(1)
<S> <C> <C>
---------------------------------------------------------------------
John B. Yasinsky(2) 41 514,108
Marvin L. Isles 31 193,019
Roger I. Ramseier 40 267,166
William E. Bachman 44 157,697
D. Michael Steuert 27 158,728
A. William Reynolds(2)(3) 38 400,775
<FN>
- ---------------
(1) Retirement benefits shown in the table for Messrs. Isles, Bachman and
Steuert were calculated pursuant to the terms of the Pension Plan for
Salaried Employees of GenCorp Inc. (the "GenCorp Pension Plan"). Mr.
Ramseier's benefit was calculated pursuant to the Aerojet-General
Corporation Consolidated Pension Plan (the "Aerojet Pension Plan"). The
formulas utilized to calculate the benefits set forth above (except as to
Messrs. Reynolds and Yasinsky) reflect amendments required by the Tax Reform
Act of 1986. There is no offset for Social Security payments. Messrs.
Reynolds' and Yasinsky's retirement benefits have been determined pursuant
to the supplemental pension provisions of their employment agreements
described on pages 14 and 15.
The benefits shown (except for Mr. Reynolds) are estimated and have not
been adjusted for any survivor option. Each estimated benefit is based upon
the assumption that the executive will remain an employee until age 65 at a
rate of compensation equivalent to that in effect on December 1, 1994 and
that the pension plan under which such estimated benefit is calculated will
remain unchanged.
Benefits for Messrs. Isles, Ramseier, Bachman and Steuert have been
determined by a formula which provides for a benefit (A) for years of
service prior to December 1, 1995 of (i) 1.125% of five-year average
compensation ("average compensation") up to the average Social Security wage
base ("ASSWB") plus 1.5% of average compensation in excess of the
12
<PAGE> 15
ASSWB multiplied by the total of such years of service up to 35 years and
(ii) 1.5% of average compensation multiplied by the total years of service
in excess of 35 years, and (B) for each year of service after December 1,
1995 (i) prior to attainment of 35 years of service, 1.625% of annual
compensation up to the ASSWB plus 2.0% of annual compensation in excess of
the ASSWB, and (ii) after attainment of 35 years of service, 2.0% of annual
compensation.
The benefits shown in the table have not been reduced to reflect either
(i) the limitation on includable compensation or the overall benefit
limitation imposed on pension plans qualified under Section 401(a) of the
Code, or (ii) a plan's own exclusions from includable compensation, such as
amounts deferred under the Company's Deferred Bonus Plan, since the amount
of any such reductions will be restored to the individual pursuant to the
terms of the Company's Benefits Restoration Plan, a nonfunded plan with
benefits payable out of the general assets of the Company.
(2) Mr. Reynolds' benefit is the product of (i) total years of service
(including 27 years credited upon Mr. Reynolds' employment with the Company,
plus additional years accrued as an employee until age 65), (ii) 1.33%, and
(iii) the average of his five highest years of compensation (salary and
year-end payment only) during the ten years preceding retirement. Mr.
Yasinsky's benefit is the product of (i) total years of service (including
30 years credited upon Mr. Yasinsky's employment with the Company, plus
additional years accrued as an employee until age 65), (ii) 1.47%, and (iii)
the average of his five highest years of compensation (salary and year-end
payment only) during the ten years preceding retirement. Under the terms of
both Mr. Reynolds' and Mr. Yasinsky's employment agreements, amounts
determined pursuant to the foregoing formulas will be paid out of Company
funds and will be offset by any payments made from the GenCorp Pension Plan
and the pension plans of their prior employers.
(3) The benefit shown for Mr. Reynolds, who retired as an employee of the
Company during 1994, reflects his actual benefit prior to election of any
survivor payment option.
</TABLE>
------------------------
COMPENSATION OF DIRECTORS
Each nonemployee director receives (a) a retainer of $22,000 per year, (b)
$850 for each Board meeting attended, (c) $425 for each meeting of a Committee
of the Board held on the same date as a Board meeting and (d) $850 for each
meeting of a Committee of the Board held on any day other than a Board meeting
date. Members of the Audit Committee receive $850 for each Committee meeting
regardless of the date of the meeting. In addition, nonemployee directors who
serve as Chairman of a Committee of the Board receive an annual fee of $2,000 in
consideration of such service.
In November 1994, in lieu of an increase in the annual retainer (which has not
changed since 1987) and in order to further align the interests of the directors
with the interests of the Company's shareholders, each nonemployee director
received a one-time grant of one thousand restricted shares of GenCorp Common
Stock pursuant to the terms of a Restricted Stock Agreement between the director
and the Company. The restricted shares vest two hundred at the date of grant and
two hundred on each of the next four anniversaries of the grant date. Dividends,
which are payable on all one thousand shares, are automatically reinvested
through the Company's Dividend Reinvestment Program (unless a director opts
out), and all shares may be voted, but ownership may not be transferred until
service on the Board terminates. Unvested shares would be forfeited in the event
of a voluntary resignation or refusal to stand for reelection, but vesting would
be accelerated in
13
<PAGE> 16
the event of death, disability or retirement pursuant to the Company's
Retirement Plan for Nonemployee Directors described below.
Each nonemployee director who terminates his or her service on the Board after
at least sixty months of service will receive an annual retirement benefit equal
to the retainer in effect on the date such director's service terminates,
payable in monthly installments, until the number of monthly payments made
equals the lesser of (a) the individual's months of service as a director, or
(b) 120 monthly payments. In the event of death prior to payment of the
applicable number of installments, the aggregate amount of unpaid monthly
installments will be paid, in a lump sum, to the retired director's surviving
spouse or other designated beneficiary, if any, or to the retired director's
estate.
Under the Board's retirement policy, a director's term of office expires at
the annual meeting following his or her seventy-second birthday regardless of
the term of the class for which such director was last elected.
Directors who are also employees of the Company are not compensated separately
for serving on the Board and are not paid a retainer or additional compensation
for attendance at Board or committee meetings.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Under the terms of a September 1984 employment agreement, Mr. Reynolds is
entitled to a supplemental pension at age 62 offset by amounts paid under the
GenCorp Pension Plan and the pension plan of his previous employer. Mr.
Reynolds' pension provisions are described further in footnote (2) on page 13.
Pursuant to a June 1994 Transition and Consulting Agreement, commencing at Mr.
Reynolds' retirement on October 1, 1994 through June 1995, GenCorp will pay Mr.
Reynolds a monthly consulting fee of approximately $20,385 per month which
amount, when added to the aggregate monthly pension benefits payable, would
equal the monthly salary received by Mr. Reynolds prior to retirement.
Additionally, GenCorp will pay a lump sum amount of $40,000 July 1, 1995 to
offset the loss of Company contributions to the GenCorp Retirement Savings Plan.
On or after July 1, 1995 and until July 1, 1998, the Company will pay a
consulting fee of $2,000 per day for any consulting services performed at the
request of GenCorp, any of its directors, or the Chairman and CEO. The foregoing
payments are in addition to amounts to which Mr. Reynolds is entitled pursuant
to the Company's pension plan or his supplemental pension arrangement. Mr.
Reynolds will also be entitled to participate in the Company's Retiree Medical
Plan and participate in the Company's financial consulting program through 1996.
Additionally, until October 1, 1998, GenCorp will provide office space,
equipment and secretarial support at a satellite office facility for use by Mr.
Reynolds and any other director, executive employee or other consultant assigned
to the facility by the Company.
The Board of Directors elected Mr. John B. Yasinsky President, Chief Operating
Officer and a director of the Company, effective November 1, 1993, and approved
the principal terms of an employment agreement between Mr. Yasinsky and the
Company. The agreement provided for an initial base salary of $460,000 per year,
and a year-end payment for fiscal 1994 of not less than $200,000. The agreement
also provides that Mr. Yasinsky may elect to terminate his employment and
receive (a) a termination payment equal to two times the sum of (i) his annual
base salary at the time of termination and (ii) his year-end payment for the
last completed fiscal year preceding termination, and (b) a supplemental pension
determined as described in footnote (2) on page 13 if the directors remove Mr.
Yasinsky as President prior to the July 1995 Board of Directors meeting, fail to
elect him Chairman and Chief Executive Officer at or before such meeting, or
after electing him
14
<PAGE> 17
Chairman and CEO, remove him from such position prior to age 65 for any reason
other than for "cause" as defined in the agreement. These termination provisions
are in lieu of a severance agreement of the type described below which the
Company has entered into with certain other executive officers. The agreement
also provided for a one-time payment of $300,000 to compensate for loss of a
bonus from his former employer (reduced by any 1993 bonus amount actually
received from his former employer), and a one-time payment of $500,000 to
compensate for the loss or forfeiture of payments, benefits, or entitlements
under plans or programs of his former employer. Pursuant to the agreement, Mr.
Yasinsky was granted an option for 100,000 shares of GenCorp Common Stock under
the Company's 1993 Stock Option Plan upon commencement of his employment, and he
will be deemed to have been a participant in the Company's Long Term Incentive
Program during the entire 1993-1995 performance period. He will participate in
the GenCorp Pension Plan, and will be entitled to a supplemental pension at any
time after age 62, offset by the amount of any pension payments made from the
GenCorp Pension Plan and any pension payment received from his former employer.
In the event of death prior to electing a payment option, the supplemental
pension will be paid to Mr. Yasinsky's surviving spouse for her life, calculated
as if he had attained age 62, retired, and elected a joint and 100% survivor
annuity. In the event of disability prior to age 62, the Company will pay Mr.
Yasinsky an amount equal to 60% of his base monthly salary (offset for payments
received under Social Security) until eligible for supplemental pension benefits
at age 62.
Under the terms of a November 1994 Retention Agreement, if prior to November
1, 1995 (i) GenCorp or Aerojet enters into an agreement for the sale of all or
substantially all of the shares of Aerojet's capital stock, all or substantially
all of Aerojet's business assets, or all or substantially all of the business
assets associated with Aerojet's electronic or propulsion operations, and (ii)
Aerojet terminates Mr. Roger I. Ramseier's employment for any reason other than
for "cause" during the three-year period thereafter and he neither accepts
employment by, nor rejects an offer of comparable employment by, the Company or
the purchaser, Mr. Ramseier will receive separation pay for the remainder of
such three-year period at an annual rate equal to the sum of (1) his base salary
in effect as of the date of such sale agreement and (2) the year-end payment
paid to him by Aerojet for Aerojet's fiscal year ended November 30, 1993. All
separation pay which may become payable to Mr. Ramseier under the Retention
Agreement will be reduced and offset by any compensation (regardless of its
form) or severance pay which he receives from Aerojet, the Company and/or the
purchaser with respect to such three-year period. Mr. Ramseier also will
continue participating in the Company's medical, dental, life insurance and
financial planning programs during such three-year period, and will be
reimbursed for the expense of outplacement assistance in an amount not to exceed
15% of his base salary. Finally, the unexercised portion of any Option granted
to Mr. Ramseier under the GenCorp Stock Option Plan prior to the termination of
his employment will remain in effect during the original term of the Option and
will become exercisable in accordance with the schedule set forth in the Option,
notwithstanding his termination of employment. Under the terms of a separate
November 1994 Employment Agreement, if Mr. Ramseier's employment is terminated
by Aerojet for any reason other than for "cause" prior to the date of a sale
agreement described above and he neither accepts employment by, nor rejects an
offer of comparable employment by, the Company or a purchaser, he will receive
separation pay and benefits equivalent to those described above.
Severance agreements between the Company and Messrs. Isles, Ramseier, Bachman
and Steuert and six additional executive of-
15
<PAGE> 18
ficers provide for payment of an amount equal to 125% of base salary multiplied
by a factor of 3 if the executive officer's employment should terminate for any
reason other than death, disability, willful misconduct or retirement within
three years after a change in control as such term is defined in the agreements.
The agreements renew annually unless terminated pursuant to provisions included
therein.
COMPENSATION COMMITTEE FUNCTION
The Committee advises and recommends to the Board of Directors the total
compensation of the Chairman of the Board, Chief Executive Officer and the
President. In addition, the Committee, with the counsel of the Chief Executive
Officer, considers and establishes salary (base pay) and year-end payment for
the executive officers of the Company elected or appointed by the Board, other
than those named above, and the base pay and year-end payments of the principal
executives of the consolidated Company are subject to ratification by the
Committee. The Committee also administers the Company's long-term incentive
plans and makes recommendations to the directors concerning awards under such
plans.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee ("Committee") of the Board is composed entirely of
nonemployee directors. Current Committee members are Mr. Paul J. Phoenix,
Committee Chairman, and Messrs. Robert D. Kunisch and James R. Stover. All
nonemployee directors participate in decisions regarding the compensation of the
Chairman of the Board and the Chief Executive Officer. Therefore, Robert K.
Jaedicke, Paul X. Kelley, Jewel Lafontant-Mankarious, James M. Osterhoff and R.
Byron Pipes participate in decisions regarding compensation of Messrs. Reynolds
and Yasinsky.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During fiscal 1994, executive compensation consisted of four components --
base pay, year-end pay, options granted pursuant to the GenCorp Inc. 1993 Stock
Option Plan and awards under the GenCorp Inc. Long Term Incentive Program.
Awards made in 1994 under the Long Term Incentive Program did not provide any
cash payments during 1994.
ANNUAL CASH COMPENSATION
Annual Cash Compensation consists of two components: base pay and year-end
pay. Each year the Compensation Committee reviews historical information and
current analyses from national executive compensation survey data provided by
Hewitt Associates Total Compensation Database, Management Compensation Services
Project 777 and Towers Perrin Compensation Data Bank. The data identified for
comparative purposes is derived from surveyed companies which are classified
into industry segments similar to the ones in which GenCorp operates and
adjusted to reflect comparable sales. The 50th percentile of this external
compensation data is used for comparative purposes.
BASE PAY
The level of base pay for the reported executives is generally targeted in the
area of 70% of competitive Annual Cash Compensation. An analysis of competitive
data indicated that an increase in these levels was appropriate for fiscal 1994.
At its January 1994 meeting the Compensation Committee reviewed the
recommendations of management and, with the concurrence of the nonemployee
directors with respect to Mr. Reynolds, made the base pay changes shown in the
Summary Compensation Table on page 8.
16
<PAGE> 19
YEAR-END PAY
Year-end payments (except for the Chairman and the CEO) are recommended by
management to the Compensation Committee. Three factors provide the basis for
these recommendations. First is the relative performance of the business segment
with respect to Return on Assets Employed compared to peer companies. Some of
these peer companies are within the S&P Diversified Industrials Index that is
utilized in the Performance Graph depicted on page 20. Some of these companies,
as well as other aerospace and defense companies, are included in the group
which is compared to GenCorp's aerospace and defense segment. Automotive
component manufacturing companies are reviewed in comparison to our automotive
segment business and chemical and plastic manufacturers are compared to our
polymer products segment business. The Committee determined that fiscal 1994
ROAE performance for the aerospace and defense and automotive segments and the
consolidated Company were below the median performance of the respective peer
groups, while the polymer products segment achieved ROAE results above the
median for its peer group. In addition to the absolute level of performance
achieved, consideration was given to the fiscal 1994 ROAE, operating income and
cash generation performance of each segment compared to the 1994 Operating Plan
and 1993 results. Due to market changes and reductions in the defense budget,
the aerospace and defense segment's results were below Plan and the prior year.
Generally, the automotive segment showed substantial improvement over 1993, the
polymer products segment was equal to or slightly below last year's record
performance, and the consolidated Company's results were also down, reflecting
principally the decline in the aerospace and defense business segment. The third
factor is individual performance. Each individual recommendation is compared on
an Annual Cash Compensation basis to the midpoint of the external market data
for comparable positions to insure that year-end payments reflect individual
performance and that Annual Cash Compensation remains competitive with
comparable positions in comparable industries.
1993 LONG TERM INCENTIVE PROGRAM
The Long Term Incentive Program has limited executive participation that
includes certain named executive officers. The purpose of the program is to
motivate executives to achieve sustained improvement in predetermined
performance objectives over a three-year period. At the March 29, 1994 meeting,
upon recommendation of the Compensation Committee, the nonemployee directors
adopted Return on Assets Employed as the specific performance measure for the
consolidated Company and each business unit, and set threshold, target, and
maximum achievement levels to be attained for the three-year fiscal period
1994-1996. These performance targets were set after reviewing historical
business unit performance of GenCorp compared to peer group performance for the
years 1993, 1992 and 1991. Potential earnings for the reported executives range
from 10% to 50% of average Annual Cash Compensation. Additional data concerning
the Program, including the percentages of compensation payable upon attainment
of performance goals, can be found in the footnotes to the Long Term Incentive
Plans -- Awards table on page 11.
STOCK OPTIONS
Stock options were granted in July 1994 to the named executive officers (other
than Mr. Reynolds) and fifteen additional executive officers of the Company in
connection with a significant restructuring of the Company's management
organization. Under the reorganized structure, each of the Company's operating
divisions became a strategic business unit with focused accountability for
financial performance. In determining the appropriate size of the individual
option awards to be recommended to the nonemployee directors, the Compensation
Committee considered general
17
<PAGE> 20
management share ownership statistics provided by AYCO Corporation and
management's recommendation that awards be larger than the prior year to further
align the interests of executive officers with the interests of shareholders, to
provide increased incentive for such executives to achieve corporate objectives
and stretch targets, to motivate sustained improvement and reinforce
accountability. The individual officer's position and ability to impact
financial performance were also considered in arriving at the size of the 1994
awards which are reported in the Option Grants table on page 10. A mandatory
five-year holding period after exercise for 20% of the option grant is required
in order to increase management share ownership.
COMPENSATION COMMITTEE POLICY WITH REGARD TO DEDUCTIBILITY OF EXECUTIVE
COMPENSATION
Since the Internal Revenue Service regulations proposed pursuant to Internal
Revenue Code Section 162(m) respecting the non-deductibility of certain
executive compensation payments in excess of $1 million are not yet final, the
Committee has decided to defer any amendatory action with regard to the
Company's compensation programs at this time. However, the Committee will
monitor payments thereunder to assure continued deductibility to the maximum
extent possible.
By: The Compensation Committee of the Board of Directors:
P. J. Phoenix
R. D. Kunisch
J. R. Stover
CEO COMPENSATION
At its meeting on January 26, 1994, the Compensation Committee reviewed Mr.
Reynolds' compensation history and comparable CEO annual cash compensation data
from the following executive compensation surveys: Hewitt Associates Total
Compensation Database, Management Compensation Services Project 777 and Towers
Perrin Compensation Data Bank. Data concerning historical executive compensation
movement and trend projections were also taken into consideration. At this time
the Committee considered generally the Company's financial performance and
determined that the performance of the automotive and polymer products segments
compared favorably to their prior year performance. The financial performance of
the consolidated Company lagged the peer group due to the continued decline in
defense spending. After review and discussion of this information, the Committee
recommended to the nonemployee directors that base pay for Mr. Reynolds be
increased 3.8% for 1994.
Base pay at the beginning of fiscal 1994 for Mr. Yasinsky was established
pursuant to his employment agreement discussed on page 14. In July 1994, the
nonemployee directors approved an increase in Mr. Yasinsky's base salary to
$560,000 per year, effective July 1, 1994, to coincide with his assumption of
the duties of Chief Executive Officer. Base pay for Mr. Yasinsky was determined
after consideration of the CEO cash compensation data from the executive
compensation surveys mentioned in the preceding paragraph.
In May 1994, the nonemployee directors approved a Transition and Consulting
Agreement commencing upon Mr. Reynolds' retirement as an employee of the
Company. Terms of the Agreement are set forth on page 14. In consideration of
Mr. Reynolds' continued service as Chairman of the Board and Mr. Yasinsky's
early transition to CEO, the directors determined it would be appropriate to
provide an arrangement which would neutralize the negative effect of the early
transition. Therefore, the amount of monthly consulting payments was established
so as to equal Mr. Reynolds' monthly salary prior to retirement when combined
with Mr. Reynolds' monthly retirement benefit. Also, provision was made for a
lump sum payment to offset the loss of Company contributions to the GenCorp
Retirement Sav-
18
<PAGE> 21
ings Plan which Mr. Reynolds would incur by virtue of his early retirement.
Year-end pay for Messrs. Reynolds and Yasinsky is determined after the close
of the fiscal year. Prior to its January 25, 1995 meeting, the Compensation
Committee members were provided data concerning Mr. Reynolds' and Mr. Yasinsky's
compensation history, comparable CEO compensation from the surveys identified
above, and information concerning the performance of the Company and the
individual executives as summarized below.
During 1994, Mr. Reynolds served as Chairman of the Board and additionally
focused upon the transition of CEO responsibilities to Mr. Yasinsky which
occurred in July 1994, and upon support of the new strategies and program for
change described below.
Early in 1994, Mr. Yasinsky began charting new strategies and initiated a
program of fundamental change aimed at achieving GenCorp's vision. The new
strategies focus on improving GenCorp's performance, establishing and managing
toward stretch targets, generating growth and introducing a well defined set of
behavioral expectations to support the Company's objectives. Some initial
actions taken during 1994 within the framework of this program of change include
elimination of levels of management, reduction of corporate expense through
restructuring and reengineering, establishment of a new business planning
process and a reexamination of GenCorp's business portfolio, including the
future role of the Company's aerospace and defense segment.
Significant accounting changes, unusual items and the decline in aerospace and
defense masked a number of positive developments in 1994. These include an 11%
sales and 22% earnings improvement in the automotive and polymer products
businesses, the sale of the ordnance business which contributed to a $54 million
debt reduction, the favorable settlement of claims against an investment banking
firm and various insurance carriers, and the removal of a major environmental
uncertainty that had clouded the Company's financial position since 1979. In
recognition of the survey data, comparative information, and 1994 financial and
individual performance, the Committee recommended that Mr. Reynolds receive a
year-end payment equal to that he received for 1993 and that Mr. Yasinsky's 1994
year-end payment be increased 16.7% compared to his payment for the prior fiscal
year. This payment reflects competitive rates of compensation, the
accomplishments described above and the additional responsibilities assumed
mid-year upon becoming CEO.
The foregoing recommendations were approved by the nonemployee directors.
By: The nonemployee members of the Board of Directors:
R. K. Jaedicke J. M. Osterhoff
P. X. Kelley P. J. Phoenix
R. D. Kunisch R. B. Pipes
J. Lafontant-Mankarious J. R. Stover
19
<PAGE> 22
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return,
assuming reinvestment of dividends, of the Company's Common Stock with the
cumulative total return, assuming reinvestment of dividends, of the Standard &
Poor's Diversified Industrials Index and Aerospace/Defense Index, and the
Standard & Poor's 500 Composite Stock Price Index.
GenCorp's aerospace and defense business has decreased substantially, and the
companies currently included in the S&P Aerospace/Defense Index which was used
by GenCorp for the preceding fiscal year are no longer representative of either
the size or product mix of GenCorp's aerospace and defense segment. GenCorp has
decided to substitute the S&P Diversified Industrials Index, since the companies
included therein more closely resemble GenCorp in size, sales volume and
diversified product mix. The returns of the S&P Aerospace/Defense Index are,
however, included again this year in compliance with Securities and Exchange
Commission requirements.
<TABLE>
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG GENCORP, S&P 500 INDEX, S&P DIVERSIFIED INDUSTRIAL INDEX
AND S&P AEROSPACE/DEFENSE INDEX
<CAPTION>
Chart depicts the value, on the November 30 of the specified year, of $100
invested on November 30, 1989 in GenCorp Common Stock, the S&P 500 Index, the
S&P Diversified Industrials Index and the S&P Aerospace/Defense Index.
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
GENCORP $100 $ 52 $ 96 $105 $143 $112
S&P 500 $100 $ 96 $116 $138 $151 $153
S&P DIVERSIFIED INDUSTRIALS $100 $ 97 $115 $135 $162 $166
S&P AEROSPACE/DEFENSE $100 $104 $119 $122 $168 $183
</TABLE>
20
<PAGE> 23
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Upon recommendation of the Audit Committee, and subject to ratification by the
shareholders at the March 29, 1995 Annual Meeting, the Board of Directors has
appointed Ernst & Young LLP as independent accountants to examine the
consolidated financial statements of the Company for the fiscal year ending
November 30, 1995.
If the Board's appointment is not ratified, or if Ernst & Young LLP declines
to act or becomes incapable of action, or if their employment is discontinued,
the Board will appoint other independent accountants whose continued employment
after the next Annual Meeting of Shareholders shall be subject to ratification
by the shareholders.
Ernst & Young representatives are expected to be present at the Annual
Meeting. They will have an opportunity to make a statement if they so desire,
and it is expected that they will respond to appropriate questions raised at the
meeting.
The persons named in the accompanying form of proxy intend to vote such
proxies to ratify the appointment of Ernst & Young LLP unless a contrary choice
is indicated.
The Board of Directors recommends a vote FOR ratification of the appointment
of independent accountants.
OTHER BUSINESS
The Board of Directors is not aware of any other matters which may come before
the meeting. However, if any other matters do properly come before the meeting,
it is the intention of the persons named in the accompanying form of proxy,
pursuant to discretionary authority conferred thereby, to vote the proxy, in
accordance with their best judgment on such matters.
GENERAL INFORMATION
SUBMISSION OF SHAREHOLDER PROPOSALS
If a holder of the Company's Common Stock wishes to present a proposal for
consideration at next year's Annual Meeting, any such proposal must be received
on or before October 11, 1995 at the Company's offices located at 175 Ghent
Road, Fairlawn, OH 44333, Attention: Secretary.
SOLICITATION EXPENSE
The Company will bear the cost of solicitation of proxies. In addition to the
use of the mails, the Company may solicit proxies by personal interview,
telephone and telegraph. The Company will reimburse brokers and other persons
holding shares for others for their reasonable expenses in sending soliciting
material to their principals. The Company has also made arrangements with
Georgeson & Company Inc., New York, NY, to assist in the solicitation of
proxies for a fee of $8,000 plus reimbursement of normal expenses.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS WHO
DO NOT EXPECT TO ATTEND IN PERSON ARE URGED TO VOTE, SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES.
By order of the Board of Directors,
EDWARD R. DYE, Secretary
February 8, 1995
21
<PAGE> 24
<TABLE>
<S> <C>
GENCORP INC.
175 GHENT ROAD -- FAIRLAWN, OHIO 44333
-------------------------------------
PROXY FOR HOLDERS OF COMMON STOCK SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
-------------------------------------
The undersigned hereby appoints JOHN B. YASINSKY, CHARLES R.
P ENNIS and EDWARD R. DYE, and each of them, his proxy, with power of
R substitution, to vote all shares of Common Stock of GenCorp Inc.
O which the undersigned is entitled to vote at the Annual Meeting of
X Shareholders to be held at the Akron West Hilton Inn, 3180 West
Y Market Street, Akron, Ohio 44333 on March 29, 1995, and any
adjournments thereof, and appoints the proxyholders to vote as
directed below and in accordance with their judgment on matters
incident to the conduct of the meeting and any matters of other
business referred to in Item 3:
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED
BY THE SHAREHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED
PROXY IS RETURNED, SUCH SHARES WILL BE VOTED FOR ALL NOMINEES IN
ITEM 1, FOR ITEM 2, AND IN ACCORDANCE WITH THE PROXYHOLDERS'
JUDGMENT ON MATTERS INCIDENT TO THE CONDUCT OF THE MEETING AND ANY
MATTERS OF OTHER BUSINESS REFERRED TO IN ITEM 3. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. ELECTION OF DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 1998
ANNUAL MEETING.
FOR ALL nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) / / to vote for all nominees listed below / /
Paul X. Kelley, Diane E. McGarry and R. Byron Pipes
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
-------------------------------------------------------------------
(CONTINUED, AND TO BE SIGNED AND DATED ON THE OTHER SIDE.)
2. TO RATIFY THE BOARD OF DIRECTORS' selection of Ernst & Young as
the independent accountants of the Company.
/ / FOR / / AGAINST / / ABSTAIN
3. Upon matters incident to the conduct of the meeting and such
other business as may properly come before the meeting or any
adjournments thereof.
Please sign exactly as name appears below. When shares are held
by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, give full title as
such. If a corporation, sign in full corporate name by President or
other authorized officer. If a partnership, sign in partnership
name by authorized person.
P PLEASE INDICATE ANY
R CHANGE IN ADDRESS
O
X
Y DATE: ..................., 1995
...............................
Signature
...............................
Signature if held jointly
PLEASE SPECIFY CHOICES, SIGN,
DATE AND RETURN IN THE ENCLOSED
POSTAGE PAID ENVELOPE.
</TABLE>
<PAGE> 25
<TABLE>
<S> <C>
CONFIDENTIAL VOTING INSTRUCTIONS
TO: MELLON BANK, N.A., TRUSTEE FOR THE GENCORP INC.
SAVINGS AND PROFIT SHARING PLANS
P I hereby authorize the Trustee to vote (or cause to be voted)
R all shares of Common Stock of GenCorp Inc. which may be allocated
O to my account in the GenCorp Stock Fund of the GenCorp Savings Plan
X and/or the GenCorp Profit Sharing Plan at the Annual Meeting of
Y Shareholders to be held at the Akron West Hilton Inn, 3180 West
Market Street, Akron, Ohio 44333 on March 29, 1995, and at any
adjournments thereof, and direct the Trustee to vote as instructed
below and in accordance with its judgment on matters incident to
the conduct of the meeting and any matters of other business
referred to in Item 3:
(THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED
BY THE PLAN PARTICIPANT. IF NO DIRECTION IS GIVEN WHEN THE DULY
EXECUTED PROXY IS RETURNED, SUCH SHARES WILL BE VOTED FOR ALL
NOMINEES IN ITEM 1, FOR ITEM 2, AND IN ACCORDANCE WITH THE
TRUSTEE'S JUDGMENT ON MATTERS INCIDENT TO THE CONDUCT OF THE
MEETING AND ANY MATTERS OF OTHER BUSINESS REFERRED TO IN ITEM 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. ELECTION OF DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 1998
ANNUAL MEETING.
FOR ALL nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) / / to vote for all nominees listed below / /
Paul X. Kelley, Diane E. McGarry and R. Byron Pipes
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
-------------------------------------------------------------------
(CONTINUED, AND TO BE SIGNED AND DATED ON THE OTHER SIDE.)
2. TO RATIFY THE BOARD OF DIRECTORS' selection of Ernst & Young as
the independent accountants of the Company.
/ / FOR / / AGAINST / / ABSTAIN
3. Upon matters incident to the conduct of the meeting and such
other business as may properly come before the meeting or any
adjournments thereof.
Please sign exactly as name appears below. YOUR SHARES MAY NOT
BE VOTED BY THE TRUSTEE UNLESS YOU SIGN AND RETURN THIS CARD SO
THAT IT WILL REACH THE TRUSTEE NOT LATER THAN MARCH 27, 1995.
PLEASE INDICATE ANY
CHANGE IN ADDRESS
P DATE: ..................., 1995
R
O ...............................
X Signature
Y
PLEASE SPECIFY CHOICES, SIGN,
DATE AND RETURN IN THE ENCLOSED
POSTAGE PAID ENVELOPE TO:
MELLON BANK, N.A.
C/O GENCORP INC.
</TABLE>
<PAGE> 26
<TABLE>
<S> <C>
CONFIDENTIAL VOTING INSTRUCTIONS
TO: ROYAL TRUST CORPORATION OF CANADA,
TRUSTEE FOR THE GENCORP CANADA INC.
SAVINGS PLAN
P I hereby authorize the Trustee to vote (or cause to be voted)
R all shares of Common Stock of GenCorp Inc. which may be allocated
O to my account in the GenCorp Stock Fund of the GenCorp Canada Inc.
X Savings Plan at the Annual Meeting of Shareholders to be held at
Y the Akron West Hilton Inn, 3180 West Market Street, Akron, Ohio
44333 on March 29, 1995, and at any adjournments thereof, and
direct the Trustee to vote as instructed below and in accordance
with its judgment on matters incident to the conduct of the
meeting and any matters of other business referred to in Item 3:
(THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED
BY THE PLAN PARTICIPANT. IF NO DIRECTION IS GIVEN WHEN THE DULY
EXECUTED PROXY IS RETURNED, SUCH SHARES WILL BE VOTED FOR ALL
NOMINEES IN ITEM 1, FOR ITEM 2, AND IN ACCORDANCE WITH THE
TRUSTEE'S JUDGMENT ON MATTERS INCIDENT TO THE CONDUCT OF THE
MEETING AND ANY MATTERS OF OTHER BUSINESS REFERRED TO IN ITEM 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. ELECTION OF DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE 1998
ANNUAL MEETING.
FOR ALL nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) / / to vote for all nominees listed below / /
Paul X. Kelley, Diane E. McGarry and R. Byron Pipes
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
-------------------------------------------------------------------
(CONTINUED, AND TO BE SIGNED AND DATED ON THE OTHER SIDE.)
2. TO RATIFY THE BOARD OF DIRECTORS' selection of Ernst & Young as
the independent accountants of the Company.
/ / FOR / / AGAINST / / ABSTAIN
3. Upon matters incident to the conduct of the meeting and such
other business as may properly come before the meeting or any
adjournments thereof.
Please sign exactly as name appears below. YOUR SHARES MAY NOT
BE VOTED BY THE TRUSTEE UNLESS YOU SIGN AND RETURN THIS CARD SO
THAT IT WILL REACH THE TRUSTEE NOT LATER THAN MARCH 27, 1995.
PLEASE INDICATE ANY
CHANGE IN ADDRESS
P
R DATE: ..................., 1995
O
X ...............................
Y Signature
PLEASE SPECIFY CHOICES, SIGN,
DATE AND RETURN IN THE ENCLOSED
POSTAGE PAID ENVELOPE.
</TABLE>
