<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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
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] No fee required.
[ ] 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 13, 1998
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 25, 1998 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 auditors to audit the books of account and other
corporate records of the Company for 1998. (page 22)
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 9, 1998
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 13, 1998
This Proxy Statement is being mailed to shareholders beginning approximately
February 13, 1998 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 25, 1998 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 to the
Company's transfer agent, The Bank of New York, 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 Bank 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.
Any shares held for the account of a shareholder participating in the
Company's dividend reinvestment program will be voted in accordance with the
participant's instructions set forth in the proxy returned to the Bank in
respect of the shares which the shareholder holds of record. If a proxy in
respect of the shares which the shareholder holds of record is not returned to
the Bank, the shareholder's dividend reinvestment program shares will not be
voted.
The Trustees for the Company's savings and profit sharing plans, Mellon Bank
N.A. and Royal Trust Corporation of Canada, and the GenCorp Trustee for the
Company's Stock Incentive Compensation Plan, will each vote any shares held for
participants' accounts in accordance with the confidential voting instructions
returned by the participants to the Trustees, (c/o) The Bank of New York. If
such confidential voting instructions are not returned, the participants' shares
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 1997 Annual Report, including financial statements, is
enclosed in the envelope with this Proxy Statement.
At the close of business on February 9, 1998, there were 41,394,118
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 9, 1998 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.
Mr. Paul J. Phoenix, who has served as a director of the Company since 1990,
will retire from the Board in accordance with the Company's retirement policy
for directors. Mr. Phoenix's contributions to the Company throughout the years
have been of inestimable value, and his participation will be greatly missed.
The Board has decided not to fill the vacancy resulting from Mr. Phoenix's
retirement at this time, and has reduced the number of directors constituting
the Board from twelve to eleven. The Board has set the number of directors to be
elected at this Annual Meeting at four and recommends that its four nominees
named below be elected to serve for a three-year term expiring at the March 2001
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 Board's four nominees. Proxies cannot be voted for
a greater number of persons than the number of directors set by the Board for
election. 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 9, 1998 record date for each nominee for
director.
The information set forth below is given as of December 31, 1997 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.
NOMINEES FOR ELECTION AT THIS MEETING TO THREE-YEAR TERMS EXPIRING IN MARCH
2001:
GEN. PAUL X. KELLEY
Director since 1989
Vice Chairman of Cassidy and Associates, Inc., Washington, D.C. (government and
public relations firm) since January 1990. Commandant of the United States
Marine Corps from 1983 until retirement in 1987. Director of AlliedSignal Inc.,
Morristown, NJ; 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 Government Affairs & Environmental Issues
Committee and member of the Audit and Nominating & Corporate Governance
Committees of the Board. Age 69.
2
<PAGE> 5
DIANE E. MCGARRY
Director since 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. Member of the Audit and
the Government Affairs & Environmental Issues Committees of the Board. Age 48.
DR. R. BYRON PIPES
Director since 1993
President of Rensselaer Polytechnic Institute, Troy, NY since 1993. Provost of
the University of Delaware from 1991 until 1993 and Dean of the College of
Engineering from 1985 until 1993. Chairman of the Nominating & Corporate
Governance Committee and member of the Executive and Government Affairs &
Environmental Issues Committees of the Board. Age 56.
STEVEN W. PERCY
Director since 1997
Chairman and Chief Executive Officer of BP America Inc., Cleveland, OH (a
petroleum extraction, refining and distribution company) since 1996; Executive
Vice President of BP America and President of BP Oil in the United States from
1992 to 1996; Group Treasurer of the British Petroleum Company, plc and Chief
Executive of BP Finance International from 1989 until 1992. Director of The
Tranzonic Companies, Pepper Pike, OH. Member of the Organization & Compensation
and Nominating & Corporate Governance Committees of the Board. Age 51.
DIRECTORS WHOSE TERMS CONTINUE UNTIL MARCH 1999:
CHARLES A. CORRY
Director since 1995
Chairman of the Executive Committee of USX Corporation, Pittsburgh, PA (producer
of energy and metal products). Chairman and Chief Executive Officer of USX from
1989 until retirement in 1995 (President and a Director since February 1988).
Director, Mellon Bank Corporation and Mellon Bank, N.A., Pittsburgh, PA. Member
of the Finance, Nominating & Corporate Governance, Organization & Compensation,
and Executive Committees of the Board. Age 65.
WILLIAM K. HALL
Director since 1995
Chairman and Chief Executive Officer of Falcon Building Products, Inc., Chicago,
IL (manufacturer of building products) since 1997 (President and Chief Executive
Officer since 1994). Also President and Chief Executive Officer of Eagle
Industries, Inc., Chicago, IL (diversified manufacturing company) from 1988
until 1997. Director of A. M. Castle & Co., Franklin Park, IL. Member of the
Finance and Organization & Compensation Committees of the Board. Age 54.
3
<PAGE> 6
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 1990). Director of Boise Cascade Corporation, Boise,
ID; 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
Finance and Government Affairs & Environmental Issues Committees of the Board.
Age 68.
ROBERT D. KUNISCH
Director since 1992
Vice Chairman of Cendant Corporation, Parsippany, NJ (a global consumer and
business services company) since December 1997. Previously Chairman of the Board
from 1989 until 1997 (Chief Executive Officer from 1988 and President from 1984)
of PHH Corporation, Hunt Valley, MD (a business services company). Director of
CSX Corporation, Richmond, VA and Mercantile Bankshares, Baltimore, MD. Member
of the Audit, Organization & Compensation and Executive Committees of the Board.
Age 56.
DIRECTORS WHOSE TERMS CONTINUE UNTIL MARCH 2000:
JAMES M. OSTERHOFF
Director since 1990
Executive Vice President and Chief Financial Officer of US WEST Inc., Englewood,
CO (communications company) from 1991 until retirement in 1995. Previously Vice
President, Chief Financial Officer of Digital Equipment Corporation, Maynard, MA
(computer systems, software and services company). Director of Financial
Security Assurance Holdings Ltd., New York, NY. Chairman of the Finance
Committee and Member of the Audit and Government Affairs & Environmental Issues
Committees of the Board. Age 61.
J. GARY COOPER
Director since January 1998
Chairman and Chief Executive Officer of Commonwealth National Bank, Mobile, AL
(a commercial bank) since January 1998. United States Ambassador to Jamaica from
November 1994 until November 1997. Previously Senior Vice President, David
Volkert and Associates (engineering and architectural firm) from 1992 until
1994. Assistant Secretary of the Air Force for Manpower, Reserve Affairs,
Installations and the Environment from 1989 to 1992. Active and reserve duty,
United States Marine Corps until 1996. Major General, United States Marine Corps
Reserve. Age 61.
JOHN B. YASINSKY
Director since 1993
Chairman of the Board since March 1995 and Chief Executive Officer and President
of the Company since July 1994. A Director of the Company since November 1993
(and 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) from February
1993 until November 1993; President, Westinghouse Power Systems from 1990 to
1993. Director of CMS Energy Corporation, Dearborn, MI and Consumers Power
Company, Jackson, MI. Chairman of the Executive Committee of the Board. Age 58.
4
<PAGE> 7
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 February 2, 1998. Unless
otherwise indicated, share ownership is direct.
<TABLE>
<CAPTION>
PERCENT
AMOUNT OF OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS(3)
- ----------------------------------------------------------------------------------------
<S> <C> <C>
J. Gary Cooper 400 --
Charles A. Corry 2,700 --
William K. Hall 3,300 --
Robert K. Jaedicke 1,525 --
Paul X. Kelley 2,425 --
Robert D. Kunisch 2,263 --
Diane E. McGarry 1,325 --
James M. Osterhoff 3,971 --
Steven W. Percy 604 --
Paul J. Phoenix 2,322 --
R. Byron Pipes 1,525 --
John B. Yasinsky 445,249(1)(2) --
D. Michael Steuert 174,630(1)(2) --
Nathaniel J. Mass 54,896(1)(2) --
William R. Phillips 34,492(1)(2) --
Kevin M. McMullen 51,371(1)(2) --
All directors and executive officers as a group 1,095,186(1)(2) 2.65%
(24 persons)
</TABLE>
- ---------------
(1) Includes shares subject to stock options which may be exercised within 60
days of February 2, 1998 as follows: Mr. Yasinsky, 360,300 shares; Mr.
Steuert, 112,500 shares; Mr. Mass 52,500 shares; Mr. Phillips, 13,200
shares; Mr. McMullen, 50,000 shares, and all executive officers as a group,
738,525 shares. Nonemployee directors do not participate in the Company's
stock option plan.
(2) Includes the approximate number of shares credited to the individual's
account as of February 2, 1998 under the GenCorp Retirement Savings Plan,
and where applicable, under the GenCorp Stock Incentive Compensation Plan
and under the GenCorp Profit Sharing Retirement and Savings Plan, a savings
plan for salaried employees sponsored by the Company prior to September
1989.
(3) No individual director, nominee for director or executive officer
beneficially owns more than 1% of the Company's Common Stock.
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 1997.
5
<PAGE> 8
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 41,324,085 shares of the
Company's Common Stock outstanding as of December 31, 1997. The dates applicable
to the beneficial ownership indicated are set forth in the footnotes below.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED OF CLASS
- ----------------------------------------------------------------------------------
<S> <C> <C>
GenCorp employee savings plans 5,753,402 13.92%(1)
175 Ghent Road
Fairlawn, OH 44333
FMR Corp. 4,406,173 10.66%(2)
82 Devonshire Street
Boston, MA 02109
Mario J. Gabelli/Gabelli Funds Inc. 3,217,875 7.79%(3)
One Corporate Center
Rye, NY 10580
Franklin Resources, Inc. 2,570,500 6.22%(4)
777 Mariners Island Boulevard
San Mateo, CA 94404
The Prudential Insurance Company of America 2,315,047 5.60%(5)
Prudential Plaza
Newark, NJ 07102
</TABLE>
- ---------------
(1) Shares held at December 31, 1997 by the Trustee for the plans, Mellon Bank,
included 590,389 shares held for the GenCorp Profit Sharing Retirement and
Savings Plan, and 5,163,013 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 four persons, all of whom are officers of the Company.
(2) FMR reported that it had sole power to vote 252,100 shares, sole dispositive
power with respect to 4,406,173 shares and no shared voting or dispositive
power in Amendment No. 3 to Schedule 13G dated January 31, 1998 and filed
with the Securities and Exchange Commission.
(3) Mario J. Gabelli, directly as to 2,625 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 3,202,875 shares and no voting authority with respect to
15,000 shares, according to Amendment No. 26 to Schedule 13D dated
January 8, 1998 and filed with the Securities and Exchange Commission.
(4) Franklin Resources, Inc. reports sole voting and dispositive authority for
1,694,600 shares held by Franklin Mutual Advisers, Inc., sole voting and
dispositive authority for 718,700 shares held by Templeton Investment
Counsel, Inc., and sole voting and dispositive power for 157,200 shares held
by Templeton Global Advisers Limited in Schedule 13G dated January 27, 1998
and filed with the Securities and Exchange Commission.
(5) Prudential reported that it had sole voting and dispositive authority with
respect to 1,518,400 shares and shared voting and dispositive authority with
respect to 791,418 shares in Amendment No. 2 to Schedule 13G dated January
28, 1997 and filed with the Securities and Exchange Commission. (The shares
referenced above included 5,229 shares receivable on conversion of
Convertible Subordinated Debentures which were called for redemption during
1997).
6
<PAGE> 9
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
MEETINGS OF THE BOARD
The Company's Board of Directors held six meetings during the 1997 fiscal
year.
ORGANIZATION & COMPENSATION COMMITTEE
The Organization & Compensation Committee reviews periodically the
organization of the Company and its management, including major changes in the
organization of the Company and the responsibility of management as proposed by
the Chief Executive Officer; monitors executive development and succession
planning, reviews the effectiveness and performance of senior management and
makes recommendations to the Board concerning the appointment and removal of
officers; periodically reviews the compensation philosophy, policies and
practices of the Company and makes recommendations to the Board concerning major
changes, as appropriate; annually reviews changes in the Company's employee
benefit, savings and retirement plans and reports thereon to the Board;
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 during 1997. Additional information
regarding the Organization & Compensation Committee begins on page 16.
AUDIT COMMITTEE
The Audit Committee reviews and evaluates the scope of the audits to be
performed, the adequacy of services performed by, and the fees and compensation
of the independent auditors and receives and reviews a report from the
independent auditors prior to the publication of the audited financial
statements; considers and recommends to the Board of Directors the selection of
the independent auditors to examine the consolidated financial statements of the
Company for the next year; reviews and evaluates the scope and appropriateness
of the Company's internal audit programs and plans and its system of internal
control; reviews and evaluates the appropriateness of the Company's accounting
principles and practices and financial reporting and receives periodic reports
from the Internal Audit and Law Departments on a number of matters, including
compliance with the Company's Policy on Legal and Ethical Conduct. Six meetings
were held during 1997. Members of the Audit Committee are: Robert K. Jaedicke,
Chairman, Paul X. Kelley, Robert D. Kunisch, Diane E. McGarry 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 one meeting during 1997. Members of the Executive Committee are:
John B. Yasinsky, Chairman, Charles A. Corry, Robert D. Kunisch and R. Byron
Pipes.
FINANCE COMMITTEE
The Finance Committee makes recommendations to the Board in regard to planning
of the Company with respect to its capital structure and raising of its
long-term capital and with regard to dividend action of the Company; reviews the
performance and management of the Company's employee benefit funds; and makes
recommendations to the Board in regard to contributions to any pension plan,
profit sharing, retirement or savings plan of the Company, or any proposed
changes in the funding method or interest assumption or in amortization of
liabilities in connection with funding any such plan. Four meetings were held
during 1997. Members of the Finance Committee are: James M. Osterhoff, Chairman,
Charles A. Corry, William K. Hall, Robert K. Jaedicke and Paul J. Phoenix.
7
<PAGE> 10
NOMINATING & CORPORATE GOVERNANCE COMMITTEE
The Nominating & Corporate Governance Committee periodically reviews and makes
recommendations to the Board concerning the criteria for selection and retention
of directors, the composition of the Board, structure and function of Board
committees, retirement policies and compensation and benefits of directors;
recommends to the Board qualified candidates to serve as directors of the
Company and aids in attracting qualified candidates to the Board; considers and
makes recommendations to the Board concerning director nominations submitted by
shareholders. To be considered for election at an Annual Meeting, shareholder
nominations must be accompanied by the written consent of each such nominee and
must be mailed to the Nominating & Corporate Governance Committee, 175 Ghent
Road, Fairlawn, Ohio 44333, Attention: Secretary, and received by the Secretary
no later than the December 1 immediately preceding the date of the annual
meeting at which the nominee is to be considered for election. Five meetings
were held during 1997. Members of the Nominating & Corporate Governance
Committee are: R. Byron Pipes, Chairman, Charles A. Corry, Paul X. Kelley,
Steven W. Percy and Paul J. Phoenix.
GOVERNMENT AFFAIRS & ENVIRONMENTAL ISSUES COMMITTEE
The Government Affairs & Environmental Issues Committee periodically reviews
and advises the Board regarding significant matters of public policy, including
proposed actions by foreign and domestic governments which may significantly
affect the Company; reviews and advises the Board regarding adoption or
amendment of major company policies and programs relating to matters of public
policy; monitors the proposed adoption or amendment of significant environmental
legislation and regulations and advises the Board regarding the impact such
proposals may have upon the Company and, where appropriate, the nature of the
Company's response thereto; periodically reviews and advises the Board regarding
the status of the Company's environmental policies and performance under its
environmental compliance programs; and periodically reviews and reports to the
Board regarding the status of, and estimated liabilities for, environmental
remediation. Three meetings were held during 1997. Members of the Government
Affairs & Environmental Issues Committee are: Paul X. Kelley, Chairman, Robert
K. Jaedicke, Diane E. McGarry, James M. Osterhoff and R. Byron Pipes.
8
<PAGE> 11
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION -------------------------------------
------------------------------------ AWARDS PAYOUTS
---------------- ----------------
OTHER ANNUAL SECURITIES
SALARY BONUS COMPENSATION UNDERLYING LTIP PAYOUTS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) OPTIONS/SARS (9) ($)
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
J. B. Yasinsky 1997 666,667 850,000(1) 16,000(7) 100,000 698,200(10)
Chairman, 1996 620,833 600,000(2) 16,000(7) 100,000 281,266(11)
Chief Executive Officer 1995 593,333 425,000(3) 16,000(7) 150,000 --
and President
R. I. Ramseier 1997 324,923 390,000(4) 16,000(7) -- 235,808(10)
former Vice President; 1996 312,404 230,000(2) 16,000(7) -- 56,340(11)
former President, Aerojet- 1995 296,732 250,000 16,000(7) 45,000 --
General Corporation
D. M. Steuert 1997 312,500 310,000(1) 10,000(7) 30,000 193,054(10)
Senior Vice President and 1996 272,083 265,000(2) 10,000(7) -- 85,291(11)(12)
Chief Financial Officer 1995 242,500 150,000(3) 10,000(7) 40,000 --
Nathaniel J. Mass 1997 320,833 285,000(1) 156,696(8) 30,000 --
Senior Vice President, 1996 144,423 250,000(5) 2,621(8) 75,000 --
Strategic Growth 1995 -- -- -- -- --
William R. Phillips 1997 245,000 250,000(1) 18,263(7)(8) 20,000 --
Senior Vice President, Law; 1996 149,728 115,000 -- 40,000 --
General Counsel 1995 -- -- -- -- --
Kevin M. McMullen 1997 250,000 175,000(1) -- 25,000 --
Vice President; President, 1996 56,890 220,000(6) 75,000 --
Decorative and Building 1995 -- -- -- -- --
Products Business Unit
<CAPTION>
ALL OTHER
COMPENSATION
NAME AND PRINCIPAL POSITION ($) (13)(14)
<S> <C>
- --------------------------------------------
J. B. Yasinsky 54,466
Chairman, 47,065
Chief Executive Officer 40,470
and President
R. I. Ramseier 47,243
former Vice President; 35,738
former President, Aerojet- 34,422
General Corporation
D. M. Steuert 36,463
Senior Vice President and 28,666
Chief Financial Officer 24,795
Nathaniel J. Mass 18,324
Senior Vice President, 6,066
Strategic Growth --
William R. Phillips 20,172
Senior Vice President, Law; 13,477
General Counsel --
Kevin M. McMullen 16,405
Vice President; President, 1,876
Decorative and Building --
Products Business Unit
</TABLE>
- ---------------
<TABLE>
<S> <C>
(1) All elected officers received 20% of their net 1997 incentive bonus in shares of
GenCorp Common Stock (based upon the closing price on January 30, 1998 as reported in
the New York Stock Exchange Composite Transactions published in the Wall Street
Journal) as follows: Mr. Yasinsky, 4,179 shares; Mr. Steuert, 1,505 shares; Mr. Mass
1,349 shares; Mr. Phillips, 1,206 shares and Mr. McMullen, 837 shares.
(2) Messrs. Yasinsky, Ramseier and Steuert each received part of their 1996 incentive bonus
in shares of GenCorp Common Stock (based upon the closing price on January 20, 1997 as
reported in the New York Stock Exchange Composite Transactions published in the Wall
Street Journal) as follows: Mr. Yasinsky, 9,140 shares; Mr. Ramseier, 2,266 shares; and
Mr. Steuert, 2,474 shares.
(3) Messrs. Yasinksy and Steuert received part of their 1995 incentive bonus in shares of
GenCorp Common Stock (based upon the closing price on January 31, 1996 as reported in
the New York Stock Exchange Composite Transactions published in the Wall Street
Journal). Mr. Yasinsky received 6,350 shares and Mr. Steuert received 1,270 shares.
(4) Includes a 1997 year-end incentive bonus of $290,000 and a one-time payment of $100,000
for successful resolution of a government contract matter per Mr. Ramseier's
supplemental employment agreement.
(5) Includes a 1996 year-end payment of $100,000 and a one-time payment of $150,000
pursuant to Mr. Mass' employment agreement to compensate him for loss of a 1996 bonus
from his former employer.
(6) Includes a 1996 year-end incentive bonus of $125,000 and a hiring bonus of $95,000
pursuant to Mr. McMullen's employment agreement.
</TABLE>
9
<PAGE> 12
<TABLE>
<S> <C>
(7) Cash allowances in lieu of a Company provided automobile. Perquisites and other
personal benefits provided to the named executive officers during 1997, 1996 and 1995
did not exceed disclosure thresholds established by the Securities and Exchange
Commission.
(8) Reimbursement for taxes payable in connection with relocation.
(9) Shares of GenCorp Common Stock underlying options granted pursuant to the GenCorp Inc.
1997 and 1993 Stock Option Plans.
(10) Amounts paid for the 1995-1997 performance period under the Company's Long-Term
Incentive Program. The net amount, after tax withholding, was paid in shares of GenCorp
Common Stock based upon the January 30, 1998 closing price shown in the New York Stock
Exchange Composite Transactions published in the Wall Street Journal. Messrs. Mass,
Phillips and McMullen did not participate during the 1995-1997 performance period.
(11) Awards paid for the 1994-1996 performance period under the Company's Long-Term
Incentive Program. The amount shown for Mr. Steuert includes $7,461 paid under the
Company's Stock Incentive Compensation Plan discussed in footnote (12).
(12) 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. Payments subsequent to 1995 are made in shares of GenCorp Common Stock. The
value of an award is dependent upon the market value of GenCorp Common Stock at the
payment date.
(13) Amounts accrued as dividend and interest earnings on prior years' awards under the
Company's Stock Incentive Compensation Plan. Dividends declared on Common Stock
credited to the executive's account in the trust fund are credited to the executive's
account as an additional number of shares determined by dividing the aggregate amount
of the dividend by the market value of Common Stock on the dividend date. The actual
value of the shares distributed on a future payment date will be based upon the market
value of Common Stock at the future payment date. Amounts accrued during 1997, and the
number of shares attributable thereto, were: Roger I. Ramseier $18,337 (802 shares),
D. Michael Steuert $12,052 (515 shares), and William R. Phillips $4,196 (183 shares).
Messrs. Yasinsky, Mass and McMullen did not participate in the Plan.
(14) 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 1997 were: John B. Yasinsky $54,466, Roger I. Ramseier $28,906,
D. Michael Steuert $24,411, Nathaniel J. Mass $18,324, William R. Phillips $15,976 and
Kevin M. McMullen $16,405.
</TABLE>
10
<PAGE> 13
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL RATES
OF
STOCK PRICE
APPRECIATION
FOR OPTION
TERM
(TEN YEARS)
INDIVIDUAL GRANTS (3)(4)
- --------------------------------------------------------------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES EXERCISE OR
GRANTED IN FISCAL BASE PRICE EXPIRATION
NAME (#)(1) YEAR ($/SHARE)(2) DATE 0% ($) 5% ($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John B. Yasinsky 100,000 9.36% $19.00 3-26-07 $ -0- $ 1,194,900
Roger I. Ramseier -0- -- -- -- -- --
D. Michael Steuert 30,000 2.80% 19.00 3-26-07 -0- 358,470
Nathaniel J. Mass 30,000 2.80% 19.00 3-26-07 -0- 358,470
William R. Phillips 20,000 1.87% 19.00 3-26-07 -0- 238,980
Kevin M. McMullen 25,000 2.34% 19.00 3-26-07 -0- 298,725
All Shareholders(5) N/A N/A N/A N/A -0- 1,278,939,021
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
NAME 10%($)
- ------------------------------------
<S> <C>
John B. Yasinsky $ 3,028,111
Roger I. Ramseier --
D. Michael Steuert 908,433
Nathaniel J. Mass 908,433
William R. Phillips 605,622
Kevin M. McMullen 757,028
All Shareholders(5) 2,036,496,647
- ------------------------------------
</TABLE>
(1) Non-qualified stock options granted pursuant to the GenCorp Inc. 1997 Stock
Option Plan ("Plan") for the number of shares of GenCorp Inc. Common Stock
indicated. No Stock Appreciation Rights were granted in 1997. Options
granted March 26, 1997 become exercisable in 25% increments on September 23,
1997 and on March 26, 1998, 1999 and 2000, respectively.
(2) 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.
(3) The 0%, 5% and 10% appreciation over 10 years' option valuation method
assumes a stock price of $19.00, $30.95 and $49.28, respectively, at
March 26, 2007.
(4) The potential realizable values are shown in the table in conformity with
Securities and Exchange Commission regulations, and are not intended to
forecast possible future appreciation. The Company is not aware of any
formula which will predict with reasonable accuracy the future appreciation
of equity securities. No gain can be realized by optionees without an
appreciation in stock price, which will benefit all shareholders
commensurately. A 0% appreciation in stock price will result in zero dollars
for an optionee.
(5) Based upon 41,324,085 shares of GenCorp Common Stock outstanding on
December 31, 1997.
11
<PAGE> 14
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS/SARS AT FISCAL YEAR MONEY OPTIONS/SARS AT FISCAL
ACQUIRED END(#)(1) YEAR END ($)
ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
John B. Yasinsky 99,200 $1,558,806 335,300 162,500 $3,606,168 $ 1,400,781
Roger I. Ramseier 116,500 2,006,828 250 11,250 3,109 155,390
D. Michael Steuert -0- -0- 105,000 32,500 1,269,375 274,531
Nathaniel J. Mass -0- -0- 45,000 60,000 422,812 513,750
William R. Phillips 27,750 412,234 8,200 36,750 57,312 336,359
Kevin M. McMullen -0- -0- 43,750 56,250 452,734 528,515
</TABLE>
- ---------------
(1) No SARs have been issued under the Plan.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<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 $227,500 $455,000 $910,000
Roger I. Ramseier (2) -- -- -- --
D. Michael Steuert (1) 3 Years 62,250 124,500 249,000
Nathaniel J. Mass (1) 3 Years 60,583 121,166 242,332
William R. Phillips (1) 3 Years 49,500 99,000 198,000
Kevin M. McMullen (1) 3 Years 42,500 85,000 170,000
</TABLE>
- ---------------
(1) Indicates awards under the GenCorp Inc. Long-Term Incentive Program
("Program") pursuant to which key employees designated by the Organization
and Compensation Committee may receive incentive payments equal to specified
percentages of average annual compensation (salary and bonus paid under the
Company's Executive Incentive Compensation Program) upon attainment of
specified threshold, target or maximum levels of financial performance
("performance goals") over a three-year performance period. For the
1997-1999 performance period, threshold, target and maximum performance
goals for corporate officers are designated percentages of corporate return
on assets employed ("ROAE") and earnings per share (EPS) growth, and for
business unit presidents, one-third corporate ROAE and two-thirds ROAE for
their respective business units. No payments are made under the Program if
financial performance for the performance period falls below threshold
levels.
(2) Mr. Ramseier will not participate in the Program during the 1997-1999
performance period.
12
<PAGE> 15
(3) Percentages of average annual compensation (determined for the three-year
performance period) payable to participants upon attainment of performance
goals for the 1997-1999 performance period are as follows:
<TABLE>
<CAPTION>
THRESHOLD TARGET MAXIMUM
--------- ------ -------
<S> <C> <C> <C>
Chairman, CEO and President 15% 30% 60%
Senior Vice Presidents/
other Corporate Officers 10% 20% 40%
Business Unit Presidents 10% 20% 40%
</TABLE>
(4) Future payouts, if any, will be calculated on the basis of actual average
annual compensation 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 1997 fiscal
year salary and bonus shown in the Summary Compensation Table on page 9.
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. Ramseier, Steuert, Mass, Phillips and McMullen have been
determined pursuant to a formula which utilizes five-year average compensation
for years of service prior to December 1, 1998 and a career average formula for
service from December 1, 1998 to normal retirement. The benefit for Mr. Yasinsky
has been determined pursuant to the terms of his employment agreement. 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.
<TABLE>
<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 $890,663
Roger I. Ramseier 40 335,253
D. Michael Steuert 27 235,320
Nathaniel J. Mass 19 157,773
William R. Phillips 18 106,512
Kevin M. McMullen 29 209,252
</TABLE>
- ---------------
(1) Retirement benefits shown in the table for Messrs. Steuert, Mass, Phillips
and McMullen 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"). There is
no offset for Social Security payments. Mr. Yasinsky's retirement benefit
has been determined pursuant to the supplemental pension provisions of his
employment agreement described on page 15.
The benefits shown 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, 1997 and that the pension plan
under which such estimated benefit is calculated will remain unchanged.
13
<PAGE> 16
Benefits for Messrs. Ramseier, Steuert, Mass, Phillips and McMullen have
been determined by a formula which provides for a benefit (A) for years of
service prior to December 1, 1998 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 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, 1998
(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. 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 Mr. Yasinsky's employment agreement, amounts
determined pursuant to the foregoing formula will be paid out of Company
funds and will be offset by any payments made from the GenCorp Pension Plan
and the pension plan of his prior employer.
------------------------
COMPENSATION OF DIRECTORS
Each nonemployee director receives a retainer of $22,000 per year and an
attendance fee of $1,000 for each Board and Committee meeting attended.
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 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, in March 1997 each nonemployee director
received two hundred restricted shares of GenCorp Common Stock pursuant to the
terms of a Restricted Stock Agreement between the director and the Company. The
restricted shares will vest March 26, 1999. Dividends on restricted shares are
automatically reinvested through the Company's dividend reinvestment program
(unless a director opts out). All shares may be voted, but ownership may not be
transferred until service on the Board terminates. Unvested shares will be
forfeited in the event of a voluntary resignation or refusal to stand for
reelection, but vesting will be accelerated in 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
14
<PAGE> 17
surviving spouse or other designated beneficiary, if any, or to the retired
director's estate.
Under the Board's retirement policy, as amended in July 1996, a director's
term of office expires at the annual meeting following his or her seventieth
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
If the directors remove Mr. Yasinsky from the position of Chairman and CEO
prior to age 65 for any reason other than for "cause" as defined in his October
18, 1993 employment agreement, 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 14. The
agreement also provides that Mr. Yasinsky will participate in the GenCorp
Pension Plan, and that his supplemental pension will be offset by the amount of
any pension payment 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.
Pursuant to a May 13, 1996 employment agreement, Mr. Nathaniel J. Mass
received an initial base salary of $300,000 per annum, increasing to $325,000
February 1, 1997. Additionally, Mr. Mass received a one time bonus of $150,000
to compensate him for loss of an expected bonus payment from his prior employer,
a prorated 1996 incentive bonus, with a minimum of $75,000 and an option to
purchase 75,000 shares of GenCorp Common Stock at an exercise price equal to the
market price on his employment commencement date. The agreement provides that if
Mr. Mass' employment is terminated by GenCorp, for reasons other than for cause
or due to disability or mandatory retirement, he will be eligible to receive
separation pay in the form of (a) continuing base salary at the rate in effect
on the date of termination and (b) continuing bonus payments, each in the
annualized amount of his last bonus payment preceding the date of termination,
for a period not to exceed the shortest of (i) two years from the date of
termination, or (ii) until he obtains comparable employment.
Pursuant to a July 16, 1996 employment agreement, Mr. Kevin M. McMullen
received an initial base salary of $250,000 per annum, subject to pro-rata
adjustment at the end of the 1996 fiscal year and review annually thereafter per
GenCorp's established practice. Mr. McMullen received a one-time hiring bonus of
$95,000, a 1996 incentive bonus of $125,000, and an option to purchase 75,000
shares of GenCorp Common Stock at an exercise price equal to the closing market
price on September 12, 1996. If Mr. McMullen's employment is terminated by
GenCorp other than for cause, disability or retirement, he will be eligible for
continuation of his base salary in effect at termination for a period not to
exceed the shorter of (i) eighteen months or (ii) until he obtains comparable
employment.
15
<PAGE> 18
Pursuant to the terms of a February 20, 1997 Supplemental Employment
Agreement, Roger I. Ramseier, formerly President of Aerojet and Vice President
of GenCorp until September 1, 1997, will continue his employment with the
Company through an initial term ending November 30, 1998. During such period Mr.
Ramseier will assist in the orderly transition of duties to a successor
President of Aerojet and in completion of various special projects, and will
support the initiatives of the Chairman of GenCorp. During the term of this
agreement, Mr. Ramseier will receive his current salary and participate in
standard GenCorp and Aerojet benefit plans. Mr. Ramseier will not be granted
stock options during 1997 or 1998, but will be eligible for participation in the
Executive Incentive Compensation Program for the entire 1997 fiscal year, and in
the Long-Term Incentive Program for the entire 1995-1997 Performance Period and
50% of the 1996-1998 Performance Period. The agreement provides for an
additional bonus upon successful resolution of a major government contract
matter, with the actual amount of such bonus dependent upon the Chairman's
assessment of Mr. Ramseier's efforts leading to a successful resolution. The
agreement may only be extended by mutual agreement of the parties and may be
terminated by mutual agreement or by Mr. Ramseier upon 30 days' notice.
During 1997 the Board of Directors authorized the Company to enter into
amended and restated severance agreements with fourteen elected officers,
including the named executive officers (other than Mr. Ramseier). The severance
agreements (which supersede agreements entered into in October 1990 or
thereafter) provide for a severance payment in an amount equal to the officer's
base salary plus bonus (as defined in the agreement) multiplied by a factor of 3
in the case of the Chief Executive Officer or a Senior Vice President, or by a
factor of 2 for other covered officers, if within three years after a change-in-
control (as such term is defined in the agreements), the officer's employment is
terminated (i) by the Company for any reason other than death, disability or
cause, or (ii) by the officer following the occurrence of one or more adverse
events enumerated in the agreement. The agreements provide for payment of
performance awards under the Long-Term Incentive Program, continuation of health
and life benefits for 24 or 36 months, as appropriate, vesting of accrued
retirement benefits, payment of the amount required to cover excise taxes, if
any, financial counseling, outplacement and accounting fees and costs of legal
representation if required to enforce the agreement. Agreements for Messrs.
Yasinsky and Mass each include a requirement that any amount which may become
payable under the severance agreement be offset by any amount which may be paid
under the individual executive's employment agreement as a result of termination
of employment due to a change in control. Mr. Yasinsky's agreement also provides
that he may terminate his employment for any reason, or without reason, during
the 30-day period immediately following the date six months after the occurrence
of a change-in-control, with the right to severance compensation under his
agreement. The severance agreements renew annually unless terminated pursuant to
provisions included therein.
ORGANIZATION & COMPENSATION COMMITTEE FUNCTION
The Organization & Compensation Committee ("Committee") advises and recommends
to the Board of Directors the total compensation of the Chairman of the Board,
Chief Executive Officer and President. In addition, the Committee, with the
counsel of the Chief Executive Officer, considers and establishes base pay and
incentive bonuses for the executive officers of the Company elected by the Board
(other than those named above). The base pay and incentive bonuses 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 and deferred
com-
16
<PAGE> 19
pensation plans and makes recommendations to the directors concerning such
plans. Further information regarding the functions of the Organization &
Compensation Committee appears on page 7.
ORGANIZATION & COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Committee is composed entirely of nonemployee directors. Current Committee
members are Mr. Paul J. Phoenix, Committee Chairman, and Messrs. Charles A.
Corry, William K. Hall, Robert D. Kunisch and Steven W. Percy. All nonemployee
directors participate in decisions regarding the compensation of the Chairman
and Chief Executive Officer. Therefore, Robert K. Jaedicke, Paul X. Kelley,
Diane E. McGarry, James M. Osterhoff and R. Byron Pipes participated in
decisions regarding Mr. Yasinsky's 1997 compensation.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION PHILOSOPHY
The Committee desires to provide an executive compensation program which
allows for the effective recruitment, retention and motivation of highly
qualified individuals who are key to the Company's current and future success.
The Committee believes the Company's executive compensation program is designed
to: create and reinforce a strategic alignment among the vision, goals and
priorities of the Company; promote the interests of GenCorp's shareholders;
respond to, and differentiate, based upon both individual responsibilities and
performance; properly balance the focus on both short and longer-term Company
performance; allow the Company to respond to changes for similar positions in
the competitive marketplace; and prudently administer the fiscal resources of
the organization. In the application of this philosophy, the Committee
recognizes the need to attract and retain individuals who, by their actions,
will add to shareholder value.
In order to strengthen the alignment between the interests of shareholders and
the interests of senior executives of the Company, in 1997 the Committee
approved share ownership guidelines which apply to the Company's fourteen
elected officers and take effect beginning in 1998. Under these guidelines, each
elected officer is expected to own shares of GenCorp Common Stock equal in
aggregate market value to a designated multiple of the officer's annual salary.
These ownership levels should be attained within five years from the effective
date of the program, and anyone who becomes an elected officer after 1998 will
be expected to comply with the ownership guidelines within five years from his
or her election. Shares beneficially owned through any GenCorp compensation or
benefit plan will be included in an officer's aggregate ownership, but
unexercised stock options do not count toward fulfillment of the guidelines.
EXECUTIVE COMPENSATION STRUCTURE
Executive compensation at GenCorp consists of four components--base pay, an
annual incentive bonus, stock options and an opportunity to participate in the
GenCorp Inc. Long-Term Incentive Program. Each of these components is intended
to meet a different objective. They are combined to focus the individual
executive on high levels of sustained performance directed at key organizational
objectives. A degree of risk/reward potential has been built into the
compensation program to provide adequate motivation to achieve superior results.
Compensation levels for executives vary depending on the scope of their
individual responsibilities, as well as on the degree of individual performance
and achievement.
ANNUAL CASH COMPENSATION
Annual cash compensation consists of two components: base pay and incentive
bonus.
17
<PAGE> 20
Each year the Committee reviews historical information and analyses of current
executive compensation trends and practices. Information for these analyses is
derived from several national executive compensation survey sources.
Data is selected from these information sources which represents organizations
which are similar to the Company in scope of sales and business focus. The 50th
percentile of this external compensation data is used as a target reference
point in comparing prevailing compensation levels within the Company.
BASE PAY
The level of base pay for the reported executives is established relative to
the 50th percentile of competitive pay levels for comparable positions at
similar organizations. Each executive position is reviewed against this
standard, and consideration is given to performance and experience. These
factors are incorporated into a determination regarding the level at which to
set, and the amount by which to change, any executive's base pay. No specific
weighting is applied universally to these factors. Rather, the collective
judgment of the Committee members is utilized in establishing the appropriate
level of base pay for the following year.
INCENTIVE BONUSES
Beginning with fiscal 1995, incentive bonuses are determined pursuant to the
Company's Executive Incentive Compensation Program which was approved by the
Committee at its January 1995 meeting.
The primary purpose of this pay-for-performance program is to reward
executives for achievement of specific corporate objectives in three primary
areas of responsibility: financial performance (for the individual business
units and Company-wide, as appropriate), continuous improvement, and special
objectives (specific to the individual). Incentive bonus amounts are intended to
vary in a consistent and predictable manner with the financial performance of
the Company and its various business units, as well as with the performance of
the individual executive.
Executives in positions which have significant scope, authority and impact on
the Company's performance may be considered for participation. The named
executive officers all participate in the program.
Annually, financial performance objectives for the consolidated Company and
each business unit are derived from stretch target goals established in the
annual operating plan (AOP). Continuous improvement objectives are also derived
from the AOP, plus a comparison to the results of the prior year.
Special objectives are activities that should be accomplished during the year
to achieve results which may be outside of the direct measurements associated
with financial performance and continuous improvement, yet are of significant
value to overall Company performance. Typically special objectives relate to
projects which will impact other measures or strategic actions that will benefit
the Company over an extended period of time.
Each participating executive will have a maximum incentive opportunity
expressed as a percentage of annual base pay. The level of this incentive
opportunity has been set after a review of prevailing incentive opportunities
for similar executive positions at similar organizations. These opportunities
vary depending on the anticipated level of potential contribution for a
particular position.
The three performance categories: financial performance, continuous
improvement, and special objectives will be taken into account, as appropriate,
in determining an incentive bonus award. The three performance categories will
be weighted in importance, and will total 100% of the incentive opportunity.
This weighting may be adjusted in any year to allow management flexibility in
focusing the executive on critical achievement areas.
18
<PAGE> 21
At the end of each fiscal year, management will prepare a written evaluation
for each executive for each of the applicable performance categories, and will
recommend to the Committee a bonus commensurate with the performance achieved.
The financial performance category will yield no bonus if the threshold level of
return on assets employed (ROAE) for the fiscal year has not been achieved. In
the continuous improvement category, no credit will be given for any item which
has results that show no improvement from the prior year's actual performance
level.
These performance evaluations, with appropriate discretionary adjustments,
form the basis for management's recommendations to the Committee. Payments under
the Executive Incentive Compensation Program are generally made in cash.
However, beginning with fiscal 1997, the Company's elected officers will receive
20% of their incentive payment in shares of GenCorp Common Stock.
LONG-TERM INCENTIVE PROGRAM
The Long-Term Incentive Program has limited executive participation that
includes the 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. The nonemployee directors set specific
threshold, target, and maximum achievement levels for each three-year
performance period after reviewing the strategic business plans of the Company.
For the 1997--1999 performance period, upon recommendation of the Committee, the
nonemployee directors have adopted ROAE as a performance measure for the
consolidated Company and each business unit, and earnings per share (EPS) growth
as an additional performance measure for corporate participants. Potential
earnings for the named executives range from 10% to 60% of average annual cash
compensation over the three-year period. The net value (after tax withholding)
of any performance awards earned by participants will be paid in shares of
GenCorp Common Stock. 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 beginning
on page 12.
STOCK OPTIONS
The Company's philosophy is to consider the interests of shareholders in the
payment of executive compensation, and specifically, to link the interests of
executives to the interests of shareholders. Stock options help accomplish this
goal and are an important component of overall compensation. In 1997 the Company
granted stock options to executives in positions that have the ability to
significantly impact the Company's performance. In determining the size of these
grants the Company followed competitive norms based on the current practice of a
broad base of companies with comparable revenues. A limited number of stock
options were also granted to employees who successfully completed the Company's
advanced training program in process improvement known as Six Sigma.
ORGANIZATION & COMPENSATION COMMITTEE POLICY WITH REGARD TO DEDUCTIBILITY OF
EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code imposes limits on the
deductibility of certain compensation in excess of $1 million paid to the Chief
Executive Officer and other named executive officers of public companies.
Management has reviewed the regulations and feels that the current compensation
program and policies are appropriate. The Company's executive compensation
program contains several elements, each of which are intended to support
organizational goals and priorities. Factors taken into consideration in setting
compensation targets and determining actual distribution of awards include:
prevailing pay practices for comparable organizations, performance of
individuals as well as business units and the Company, expansion of
19
<PAGE> 22
responsibilities, and potential for future contributions.
In those years when performance is exceptional, it is possible under the
current compensation program for one or more officers to surpass the $1 million
threshold. At this time the Committee does not believe that accommodating the
IRS regulations will produce material benefits or increases in shareholder
value. However, the Committee intends to review this issue regularly and may
change its position in future years.
By: The Organization & Compensation Committee of the Board of Directors:
P. J. Phoenix, Chairman
C. A. Corry
W. K. Hall
R. D. Kunisch
S. W. Percy
CEO COMPENSATION
At its meeting on January 20, 1997, the Committee reviewed Mr. Yasinsky's
compensation history and comparable CEO annual cash compensation data available
from several national executive compensation survey sources, including Hewitt
Associates Total Compensation Database, Management Compensation Services Project
777 and Towers Perrin Compensation Data Bank. Based on the foregoing information
and the recognition that Mr. Yasinsky's performance is meeting expectations by
providing effective strategic leadership and driving initiatives intended to
position the Company for long-term growth and increased shareholder value, the
Committee recommended to the nonemployee directors that base pay for Mr.
Yasinsky be increased 8% to $675,000 for 1997.
At its March 1997 meeting, the Board granted Mr. Yasinsky an option to
purchase 100,000 shares of GenCorp Common Stock. This grant was based on
consideration of his continued strong performance, including strategic
initiatives put in place to achieve operational excellence and value creating
growth, and the competitive status of his total long-term compensation compared
with CEOs of comparable companies. The nonemployee directors are extremely
pleased with Mr. Yasinsky's efforts in improving profit margins and return on
assets, positioning the Company for future growth and expanding the market value
of GenCorp shares during fiscal 1997.
The incentive bonus for Mr. Yasinsky is determined after the close of the
fiscal year pursuant to the Executive Incentive Compensation program discussed
on page 18. CEO performance is evaluated quantitatively in two categories:
financial performance (stretch objectives for sales, operating profit, ROAE and
cash flow) and special objectives (strategically related objectives intended to
support future growth and improve the Company's overall performance potential).
At its January 29, 1998 meeting, the Committee considered management's written
evaluation regarding attainment of corporate financial results, as well as Mr.
Yasinsky's performance relative to his special objectives. Also taken into
consideration was Mr. Yasinsky's leadership and direction in driving corporate
priorities. Overall, the Committee is very pleased with Mr. Yasinsky's progress
with a program of continuing positive change that is focused on achieving
operational excellence and sustained shareholder value creating growth.
Specific 1997 achievements considered included the following: improved EPS
from continuing operations (less unusual items) of more than 19%; aggressive
balance sheet management resulting in the lowest debt-to-capital ratio (28%) and
the first investment-grade rating in 10 years; a breakthrough agreement with the
State of California allowing future Aerojet land sales; the successful
acquisition of Printworld ($40 million sales) plus several other potential
growth initiatives underway at year-end; significantly reduced operating costs
through aggressive process improvement resulting from the Company's Six
20
<PAGE> 23
Sigma quality program, and the continuation of efforts to upgrade management to
match the Company's new challenges by the addition of 18 new executives and
senior managers in key positions.
In addition to Mr. Yasinsky's performance against his special objectives as
highlighted above, financial performance was equally strong, meeting one
financial objective and exceeding the other three financial objectives. As a
result of these accomplishments, shareholders enjoyed a fiscal 1997 total return
(stock appreciation plus dividends) of 39% compared with 20% for the Dow Jones
Industrial Average and 26% for the S&P 500.
The Committee is especially pleased with Mr. Yasinsky's leadership in creating
a strong strategic direction to achieve operational excellence and value
creating growth, and in recruiting and developing a strong senior management
team. After utilizing the specific formula and considering other terms of the
Program, the Committee determined that it would recommend to the nonemployee
directors that Mr. Yasinsky receive a 1997 incentive bonus of $850,000, of which
20%, after tax withholding, was paid in shares of GenCorp Common Stock.
In addition to stock options as described above, Mr. Yasinsky's long-term
compensation includes an opportunity for payment under the Long-Term Incentive
Program described on page 19. Performance exceeded the ROAE target for the just
completed 1995--1997 performance period under the Long-Term Incentive Program.
Based on this performance, the Committee recommended a long-term performance
payment to Mr. Yasinsky for the 1995--1997 performance period of $698,200 which,
after tax withholding, was paid in shares of GenCorp Common Stock.
The foregoing recommendations for Mr. Yasinsky were approved by the following
nonemployee members of the Board of Directors:
<TABLE>
<S> <C>
C. A. Corry D. E. McGarry
W. K. Hall J. M. Osterhoff
R. K. Jaedicke S. W. Percy
P. X. Kelley P. J. Phoenix
R. D. Kunisch R. B. Pipes
</TABLE>
21
<PAGE> 24
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 the Standard & Poor's 500 Composite
Stock Price Index.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG GENCORP, S&P 500 INDEX, AND S&P DIVERSIFIED INDUSTRIALS
[GRAPH]
Chart depicts the value, on the November 30 of the specified year, of $100
invested on November 30, 1992 in GenCorp Common Stock, the S&P 500 Index, and
the S&P Diversified Industrials Index.
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
GENCORP $100 $136 $107 $127 $209 $291
S&P 500 $100 $110 $111 $152 $195 $251
S&P DIVERSIFIED INDUSTRIALS $100 $120 $123 $181 $253 $298
</TABLE>
APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee, and subject to ratification by the
shareholders at the March 25, 1998 Annual Meeting, the Board of Directors has
appointed Ernst & Young LLP as independent auditors to examine the consolidated
financial statements of the Company for the fiscal year ending November 30,
1998.
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 auditors 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
22
<PAGE> 25
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 auditors.
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 16, 1998 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 $8,500 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 13, 1998
23
<PAGE> 26
[GENCORP LOGO]
John B. Yasinsky
Chairman and Chief Executive Officer
February 13, 1998
Dear Stockholder:
Enclosed are GenCorp's 1997 Annual Report and 1998 Proxy Statement. As our
Annual Report will demonstrate, 1997 was a milestone year for GenCorp. We
posted the highest operating profit margins and the strongest balance sheet the
Company has seen in a decade, and have now completed three years of major
positive change that establishes GenCorp as an increasingly attractive
investment opportunity. Our accomplishments reflect our disciplined commitment
to focus on our ultimate destination-our long term objectives, our two
priorities of operational excellence and value-creating growth, and the
strategies that will enable us to achieve our vision to be one of the most
respected diversified companies in the world. Our 1997 Annual Report takes a
look at the solid progress we have made and our heightened expectations for the
future.
The 1998 Annual Meeting will be held on March 25, at 9 a.m. at the Akron West
Hilton Inn in Fairlawn, Ohio. Details are provided in the enclosed Proxy
Statement.
Your vote is important to us. Whether or not you plan to attend the Annual
Meeting, please take time to complete and return the attached proxy card.
Sincerely,
/s/ John Yasinsky
John Yasinsky
DETACH PROXY CARD HERE
- -
- -------------------------------------------------------------------------------
[ ]
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS TO A THREE-YEAR FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
TERM EXPIRING AT THE MARCH 2001 listed below for all nominees listed below.
ANNUAL MEETING.
Nominees: General Paul X. Kelley, Diane E. McGarry, Dr. R. Byron Pipes and Steven W. Percy.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW).
*Exceptions
-------------------------------------------------------------------------------------------------
2. TO RATIFY THE BOARD OF DIRECTORS' selection of Ernst & Young 3. Upon matters incident to the conduct of the meeting and
LLP as the independent auditors of the Company. such other business as may properly come before the
meeting or any adjournments thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Change of Address and
or Comments Mark Here [ ]
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.
DATE _______________________________, 1998
-------------------------------------------------
Signature
-------------------------------------------------
Signature if held jointly
VOTES MUST BE INDICATED
PLEASE SPECIFY CHOICES, SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE PAID ENVELOPE. (x) IN BLACK OR BLUE INK. [X]
</TABLE>
<PAGE> 27
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 D. MICHAEL STEUERT, WILLIAM R. PHILLIPS
and EDWARD R. DYE, and each of them, his proxy, with power of substitution, to
vote all shares of Common Stock of GenCorp Inc. which the undersigned is
entitled to vote at the Annual Meeting of Shareholders to be held at the Akron
West Hilton Inn, 3180 West Market Street, Akron, Ohio 44333 on March 25, 1998,
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.
(Continued, and to be signed and dated
on the other side.)
GENCORP INC.
P.O. BOX 11104
NEW YORK, N.Y. 10203-0104
<PAGE> 28
[GENCORP LOGO]
John B. Yasinsky
Chairman and Chief Executive Officer
February 13, 1998
Dear Stockholder:
Enclosed are GenCorp's 1997 Annual Report and 1998 Proxy Statement. As our
Annual Report will demonstrate, 1997 was a milestone year for GenCorp. We
posted the highest operating profit margins and the strongest balance sheet the
Company has seen in a decade, and have now completed three years of major
positive change that establishes GenCorp as an increasingly attractive
investment opportunity. Our accomplishments reflect our disciplined commitment
to focus on our ultimate destination-our long term objectives, our two
priorities of operational excellence and value-creating growth, and the
strategies that will enable us to achieve our vision to be one of the most
respected diversified companies in the world. Our 1997 Annual Report takes a
look at the solid progress we have made and our heightened expectations for the
future.
The 1998 Annual Meeting will be held on March 25, at 9 a.m. at the Akron West
Hilton Inn in Fairlawn, Ohio. Details are provided in the enclosed Proxy
Statement.
Your vote is important to us. Whether or not you plan to attend the Annual
Meeting, please take time to complete and return the attached proxy card.
Sincerely,
/s/ John Yasinsky
John Yasinsky
DETACH PROXY CARD HERE
- -
- -------------------------------------------------------------------------------
[ ]
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS TO A THREE-YEAR FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
TERM EXPIRING AT THE MARCH 2001 listed below for all nominees listed below.
ANNUAL MEETING.
Nominees: General Paul X. Kelley, Diane E. McGarry, Dr. R. Byron Pipes and Steven W. Percy.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW).
*Exceptions
-------------------------------------------------------------------------------------------------
2. TO RATIFY THE BOARD OF DIRECTORS' selection of Ernst & Young 3. Upon matters incident to the conduct of the meeting and
LLP as the independent auditors of the Company. such other business as may properly come before the
meeting or any adjournments thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Change of Address and
or Comments Mark Here [ ]
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 23, 1998.
DATE _______________________________, 1998
-------------------------------------------------
Signature
VOTES MUST BE INDICATED
PLEASE SPECIFY CHOICES, SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE PAID ENVELOPE. (x) IN BLACK OR BLUE INK. [X]
</TABLE>
<PAGE> 29
CONFIDENTIAL VOTING INSTRUCTIONS
TO: MELLON BANK, N.A., TRUSTEE FOR THE GENCORP INC.
SAVINGS AND PROFIT SHARING PLANS
I hereby authorize the Trustee to vote (or cause to be voted) all shares
of Common Stock of GenCorp Inc. which may be allocated to my account in the
GenCorp Stock Fund of the GenCorp Retirement Savings Plan and/or the GenCorp
Profit Sharing Plan at the Annual Meeting of Shareholders to be held at the
Akron West Hilton Inn, 3180 West Market Street, Akron, Ohio 44333 on March 25,
1998, 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 TRUSTEES' 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.
(Continued, and to be signed and dated
on the other side.)
GENCORP INC.
P.O. BOX 11104
NEW YORK, N.Y. 10203-0104
<PAGE> 30
[GENCORP LOGO]
John B. Yasinsky
Chairman and Chief Executive Officer
February 13, 1998
Dear Stockholder:
Enclosed are GenCorp's 1997 Annual Report and 1998 Proxy Statement. As our
Annual Report will demonstrate, 1997 was a milestone year for GenCorp. We
posted the highest operating profit margins and the strongest balance sheet the
Company has seen in a decade, and have now completed three years of major
positive change that establishes GenCorp as an increasingly attractive
investment opportunity. Our accomplishments reflect our disciplined commitment
to focus on our ultimate destination-our long term objectives, our two
priorities of operational excellence and value-creating growth, and the
strategies that will enable us to achieve our vision to be one of the most
respected diversified companies in the world. Our 1997 Annual Report takes a
look at the solid progress we have made and our heightened expectations for the
future.
The 1998 Annual Meeting will be held on March 25, at 9 a.m. at the Akron West
Hilton Inn in Fairlawn, Ohio. Details are provided in the enclosed Proxy
Statement.
Your vote is important to us. Whether or not you plan to attend the Annual
Meeting, please take time to complete and return the attached proxy card.
Sincerely,
/s/ John Yasinsky
John Yasinsky
DETACH PROXY CARD HERE
- -
- -------------------------------------------------------------------------------
[ ]
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS TO A THREE-YEAR FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
TERM EXPIRING AT THE MARCH 2001 listed below for all nominees listed below.
ANNUAL MEETING.
Nominees: General Paul X. Kelley, Diane E. McGarry, Dr. R. Byron Pipes and Steven W. Percy.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW).
*Exceptions
-------------------------------------------------------------------------------------------------
2. TO RATIFY THE BOARD OF DIRECTORS' selection of Ernst & Young 3. Upon matters incident to the conduct of the meeting and
LLP as the independent auditors of the Company. such other business as may properly come before the
meeting or any adjournments thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Change of Address and
or Comments Mark Here [ ]
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 23, 1998.
DATE _______________________________, 1998
-------------------------------------------------
Signature
VOTES MUST BE INDICATED
PLEASE SPECIFY CHOICES, SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE PAID ENVELOPE. (x) IN BLACK OR BLUE INK. [X]
</TABLE>
<PAGE> 31
CONFIDENTIAL VOTING INSTRUCTIONS
TO: THE TRUSTEE FOR THE GENCORP INC.
STOCK INCENTIVE COMPENSATION PLAN
I hereby authorize the Trustee to vote (or cause to be voted) all shares
of Common Stock of GenCorp Inc. which may be allocated to my account in the
GenCorp Stock Incentive Compensation Plan Trust Fund at the Annual Meeting of
Shareholders to be held at the Akron West Hilton Inn, 3180 West Market Street,
Akron, Ohio 44333 on March 25, 1998, 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 TRUSTEES' 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.
(Continued, and to be signed and dated
on the other side.)
GENCORP INC.
P.O. BOX 11104
NEW YORK, N.Y. 10203-0104
<PAGE> 32
[GENCORP LOGO]
John B. Yasinsky
Chairman and Chief Executive Officer
February 13, 1998
Dear Stockholder:
Enclosed are GenCorp's 1997 Annual Report and 1998 Proxy Statement. As our
Annual Report will demonstrate, 1997 was a milestone year for GenCorp. We
posted the highest operating profit margins and the strongest balance sheet the
Company has seen in a decade, and have now completed three years of major
positive change that establishes GenCorp as an increasingly attractive
investment opportunity. Our accomplishments reflect our disciplined commitment
to focus on our ultimate destination-our long term objectives, our two
priorities of operational excellence and value-creating growth, and the
strategies that will enable us to achieve our vision to be one of the most
respected diversified companies in the world. Our 1997 Annual Report takes a
look at the solid progress we have made and our heightened expectations for the
future.
The 1998 Annual Meeting will be held on March 25, at 9 a.m. at the Akron West
Hilton Inn in Fairlawn, Ohio. Details are provided in the enclosed Proxy
Statement.
Your vote is important to us. Whether or not you plan to attend the Annual
Meeting, please take time to complete and return the attached proxy card.
Sincerely,
/s/ John Yasinsky
John Yasinsky
DETACH PROXY CARD HERE
- -
- -------------------------------------------------------------------------------
[ ]
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS TO A THREE-YEAR FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ]
TERM EXPIRING AT THE MARCH 2001 listed below for all nominees listed below.
ANNUAL MEETING.
Nominees: General Paul X. Kelley, Diane E. McGarry, Dr. R. Byron Pipes and Steven W. Percy.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW).
*Exceptions
-------------------------------------------------------------------------------------------------
2. TO RATIFY THE BOARD OF DIRECTORS' selection of Ernst & Young 3. Upon matters incident to the conduct of the meeting and
LLP as the independent auditors of the Company. such other business as may properly come before the
meeting or any adjournments thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Change of Address and
or Comments Mark Here [ ]
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 23, 1998.
DATE _______________________________, 1998
-----------------------------------------------
Signature
VOTES MUST BE INDICATED
PLEASE SPECIFY CHOICES, SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE PAID ENVELOPE. (x) IN BLACK OR BLUE INK. [X]
</TABLE>
<PAGE> 33
CONFIDENTIAL VOTING INSTRUCTIONS
TO: ROYAL TRUST CORPORATION OF CANADA, TRUSTEE FOR THE GENCORP CANADA INC.
SAVINGS PAN
I hereby authorize the Trustee to vote (or cause to be voted) all shares
of Common Stock of GenCorp Inc. which may be allocated to my account in the
GenCorp Stock Fund of the GenCorp Canada Inc. Savings Plan at the Annual
Meeting of Shareholders to be held at the Akron West Hilton Inn, 3180 West
Market Street, Akron, Ohio 44333 on March 25, 1998, 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 TRUSTEES' 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.
(Continued, and to be signed and dated
on the other side.)
GENCORP INC.
P.O. BOX 11104
NEW YORK, N.Y. 10203-0104
