<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 12, 1999
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, Fairlawn, Ohio, on
March 31, 1999 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 1999. (page 23)
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 8, 1999
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the meeting.
NOTE: THE BOARD CURRENTLY INTENDS TO CALL A SPECIAL SHAREHOLDERS MEETING
LATER IN THE YEAR TO CONSIDER THE PROPOSAL ANNOUNCED DECEMBER 17, 1998 TO
SPIN-OFF GENCORP'S PERFORMANCE CHEMICALS AND DECORATIVE & BUILDING PRODUCTS
BUSINESSES AS A SEPARATE, PUBLICLY TRADED POLYMER PRODUCTS COMPANY. SHAREHOLDERS
WILL RECEIVE ADDITIONAL INFORMATION PRIOR TO THE SPECIAL MEETING.
THE COMPANY HAS A GREAT NUMBER OF SHAREHOLDERS ENTITLED TO VOTE AT THE
ANNUAL 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 12, 1999
This Proxy Statement is being mailed to shareholders beginning approximately
February 12, 1999 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 31, 1999 at the Akron
West Hilton Inn, 3180 West Market Street, Fairlawn, 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 GenCorp
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, (CLo) 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 1998 Annual Report, including financial statements, is
enclosed in the envelope with this Proxy Statement.
At the close of business on February 8, 1999, there were 41,627,934
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 8, 1999 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.
Dr. Robert K. Jaedicke and General Paul X. Kelley ordinarily would retire at
this Annual Meeting pursuant to a Board policy that a director should retire at
the annual meeting following his or her 70th birthday. Because of the extensive
effort that will be required to complete the proposed spin-off of the Company's
Performance Chemicals and Decorative & Building Products businesses and start up
a new publicly traded polymer products company, the Board decided to waive
immediate compliance with its retirement policy in order to continue to draw
upon their experience and expertise. Dr. Jaedicke has agreed to continue as a
director as long as his services are required. However, because of other
commitments, General Kelley, who has served as a director since 1989, has
decided to retire from the Board. Additionally, Robert D. Kunisch, a director
since 1992, has decided not to stand for reelection due to anticipated
scheduling conflicts. The contributions of General Kelley and Mr. Kunisch to the
Company throughout the years have been of inestimable value, and their
participation will be greatly missed. Mr. D. Michael Steuert, who has resigned
from his position as Senior Vice President and Chief Financial Officer of the
Company effective February 14, 1999, has had significant involvement in planning
and structuring the proposed spin-off of the polymer businesses. The Board
wishes to further utilize Mr. Steuert's knowledge and experience, and has
nominated him for election as a director. The Board has, therefore, reduced the
number of directors constituting the Board from eleven to ten, and has set the
number of directors to be elected at this annual meeting at four. The Board
recommends the election of its four nominees named below.
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 8, 1999 record date for each nominee for
director.
The information set forth below is given as of December 31, 1998 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 MARCH
2002:
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.
Chairman of the Organization & Compensation Committee and member of the Finance,
Nominating & Corporate Governance and Executive Committees of the Board. Age 66.
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). Previously 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 55.
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; 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 69.
D. MICHAEL STEUERT
New nominee
Senior Vice President and Chief Financial Officer of Litton Industries, Inc.,
Woodland Hills, CA (an aerospace, defense and consumer electronics company)
effective February 15, 1999. Previously Senior Vice President and Chief
Financial Officer of GenCorp from August 1994 until February 14, 1999; Vice
President and Chief Financial Officer of the Company (from June 1990 to 1994)
and Treasurer of the Company (from May 1986 to June 1990). Age 50.
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 62.
3
<PAGE> 6
J. GARY COOPER
Director since 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. Member of the Government Affairs & Environmental Issues and Nominating
& Corporate Governance Committees of the Board. Age 62.
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 59.
DIRECTORS WHOSE TERMS CONTINUE UNTIL MARCH 2001:
DIANE E. MCGARRY
Director since 1995
Senior Vice President, Eastern Operations, North American Solutions Group of
Xerox Corporation, Rochester, NY (a manufacturer of copiers and electronic
office equipment) since January 1999; previously Vice President/General Manager,
Color Solutions Business Unit of Xerox from March 1998 until January 1999;
Chairman, President and Chief Executive Officer of Xerox Canada Inc., North
York, Ontario, Canada, from 1993 until March 1998; 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, Organization & Compensation and Government Affairs & Environmental Issues
Committees of the Board. Age 49.
DR. R. BYRON PIPES
Director since 1993
Distinguished Visiting Scientist, College of William and Mary, Williamsburg, VA
since 1998. Seventeenth President of Rensselaer Polytechnic Institute, Troy, NY
from 1993 until 1998. 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
Finance Committees of the Board. Age 57.
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 BP
America, Cleveland, OH. Member of the Organization & Compensation and Nominating
& Corporate Governance Committees of the Board. Age 52.
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 1, 1999. Unless
otherwise indicated, share ownership is direct.
<TABLE>
<CAPTION>
AMOUNT OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
J. Gary Cooper 613 --
Charles A. Corry 2,900 --
William K. Hall 3,535 --
Robert K. Jaedicke 1,768 --
Paul X. Kelley 2,661 --
Robert D. Kunisch 2,463 --
Diane E. McGarry 1,561 --
James M. Osterhoff 4,269(1) --
Steven W. Percy 822 --
R. Byron Pipes 1,761 --
John B. Yasinsky 591,442(2)(3) 1.42%
Robert A. Wolfe 66,274(2)(3) --
Nathaniel J. Mass 97,815(2)(3) --
D. Michael Steuert 210,343(2)(3) --
Kevin M. McMullen 91,334(2)(3) --
All directors and executive officers as a group 1,458,036(2)(3) 3.50%
(23 persons)
</TABLE>
- ---------------
(1) Includes 4,069 shares held indirectly through the James M. Osterhoff trust.
(2) Includes shares subject to stock options which may be exercised within 60
days of February 1, 1999 as follows: Mr. Yasinsky, 490,300 shares; Mr.
Wolfe, 48,750 shares; Mr. Mass 88,750 shares; Mr. Steuert, 142,000 shares;
Mr. McMullen, 85,000 shares, and all executive officers as a group,
1,094,400 shares. Nonemployee directors do not participate in the Company's
stock option plan.
(3) Includes the approximate number of shares credited to the individual's
account as of February 1, 1999 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.
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 1998.
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 41,525,640 shares of the
Company's Common Stock outstanding as of December 31, 1998. The dates applicable
to the beneficial ownership indicated are set forth in the footnotes below.
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- ------------------------------------------------------------------------------------------
<S> <C> <C>
GenCorp employee savings plans 5,831,479 14.04%(1)
175 Ghent Road
Fairlawn, OH 44333
FMR Corp. 4,406,173 10.61%(2)
82 Devonshire Street
Boston, MA 02109
Mario J. Gabelli/Gabelli Funds Inc. 3,217,875 7.75%(3)
One Corporate Center
Rye, NY 10580
Franklin Resources, Inc. 2,739,300 6.60%(4)
777 Mariners Island Boulevard
San Mateo, CA 94404
The Prudential Insurance Company of America 2,176,745 5.24%(5)
Prudential Plaza
Newark, NJ 07102
</TABLE>
- ---------------
(1) Shares held at December 31, 1998 by the Trustee for the plans, Mellon Bank,
included 491,669 shares held for the GenCorp Profit Sharing Retirement and
Savings Plan, and 5,339,810 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
2,020,600 shares held by Franklin Mutual Advisers, Inc., sole voting and
dispositive authority for 641,000 shares held by Templeton Investment
Counsel, Inc., and sole voting and dispositive power for 77,700 shares held
by Templeton Management Limited in Amendment No. 1 to Schedule 13G dated
January 22, 1999 and filed with the Securities and Exchange Commission.
(5) Prudential reported that it had sole voting and dispositive authority with
respect to 1,490,700 shares and shared voting and dispositive authority with
respect to 686,045 shares in Amendment No. 4 to Schedule 13G dated January
26, 1999 and filed with the Securities and Exchange Commission.
6
<PAGE> 9
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
MEETINGS OF THE BOARD
The Company's Board of Directors held six meetings during the 1998 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. Four meetings were held during 1998. 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. Four meetings
were held during 1998. 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 two meetings during 1998. 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 1998. Members of the Finance Committee are: James M. Osterhoff, Chairman,
Charles A. Corry, William K. Hall, Robert K. Jaedicke and R. Byron Pipes.
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. Four meetings
were held during 1998. Members of the Nominating & Corporate Governance
Committee are: R. Byron Pipes, Chairman, J. Gary Cooper, Charles A. Corry, Paul
X. Kelley and Steven W. Percy.
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 1998. Members of the Government
Affairs & Environmental Issues Committee are: Paul X. Kelley, Chairman, J. Gary
Cooper, Robert K. Jaedicke, Diane E. McGarry and James M. Osterhoff.
8
<PAGE> 11
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------- -------------------------------------------------
AWARDS PAYOUTS
------------------------------ ----------------
OTHER ANNUAL RESTRICTED SECURITIES
SALARY BONUS COMPENSATION STOCK UNDERLYING LTIP PAYOUTS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) AWARDS ($) OPTIONS/SARS (9) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------
John B. Yasinsky 1998 695,833 800,000(1) 16,000(6) -- 85,000 420,000(10)
Chairman, 1997 666,667 850,000(2) 16,000(6) -- 100,000 698,200(11)
Chief Executive Officer 1996 620,833 600,000(3) 16,000(6) -- 100,000 281,266(12)
and President
Robert A. Wolfe 1998 330,792 317,000(1) 18,127(7) -- 22,500 --
Vice President; 1997 81,250 150,000(2) 7,051(7) $336,712(8) 75,000 --
President, Aerojet-General 1996 -- -- -- -- -- --
Corporation
Nathaniel J. Mass 1998 338,333 295,000(1) 6,643(7) -- 24,000 98,539(10)
Senior Vice President, 1997 320,833 285,000(2) 156,696(7) -- 30,000 --
Strategic Growth 1996 144,423 250,000(4) 2,621(7) -- 75,000 --
D. Michael Steuert 1998 328,333 295,000(1) 10,000(6) -- 24,000 118,467(10)
Senior Vice 1997 312,500 310,000(2) 10,000(6) -- 30,000 193,054(11)
President & Chief 1996 272,083 265,000(3) 10,000(6) -- -- 85,291(12)(13)
Financial Officer
Kevin M. McMullen 1998 270,833 225,000(1) -- -- 20,000 125,441(10)
Vice President; President, 1997 250,000 175,000(2) -- -- 25,000 --
Decorative & Building 1996 56,890 220,000(5) -- -- 75,000 --
Products Business Unit
<CAPTION>
ALL OTHER
COMPENSATION
NAME AND PRINCIPAL POSITION ($) (14)(15)
<S> <C>
- -------------------------
John B. Yasinsky 69,563
Chairman, 54,466
Chief Executive Officer 47,065
and President
Robert A. Wolfe 21,636
Vice President; 3,438
President, Aerojet-General --
Corporation
Nathaniel J. Mass 28,050
Senior Vice President, 18,324
Strategic Growth 6,066
D. Michael Steuert 44,516
Senior Vice 36,463
President & Chief 28,666
Financial Officer
Kevin M. McMullen 20,063
Vice President; President, 16,405
Decorative & Building 1,876
Products Business Unit
</TABLE>
- ---------------
<TABLE>
<S> <C>
(1) All elected officers received 20% of their net 1998
incentive bonus in shares of GenCorp Common Stock (based
upon the closing price on January 29, 1999 as reported in
the New York Stock Exchange Composite Transactions published
in the Wall Street Journal) as follows: Mr. Yasinsky, 4,163
shares; Mr. Wolfe, 2,712 shares; Mr. Mass, 1,416 shares; Mr.
Steuert, 1,514 shares and Mr. McMullen, 1,146 shares.
(2) 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. Wolfe, 683 shares; Mr. Mass 1,349 shares; Mr.
Steuert, 1,505 shares and Mr. McMullen, 837 shares.
(3) Messrs. Yasinsky 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; and Mr. Steuert, 2,474
shares.
(4) 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.
(5) 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>
(6) Cash allowances in lieu of a Company provided automobile.
Perquisites and other personal benefits provided to the
named executive officers during 1998, 1997 and 1996 did not
exceed disclosure thresholds established by the Securities
and Exchange Commission.
(7) Reimbursement for taxes payable in connection with
relocation.
(8) Represents 12,300 shares granted September 2, 1997 at a
market price of $27.375 subject to restrictions in Mr.
Wolfe's employment agreement described on page 15. Market
value of such shares at November 30, 1998 was $302,887.
Dividends are paid during the restricted period.
(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 1996-1998 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 29, 1999 closing price shown in the
New York Stock Exchange Composite Transactions published in
the Wall Street Journal. Mr. Wolfe did not participate
during the 1996-1998 performance period.
(11) 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. Wolfe, Mass and McMullen
did not participate during the 1995-1997 performance period.
(12) Awards paid for the 1994-1996 performance period under the
Company's Long-Term Incentive Program. Messrs. Wolfe, Mass
and McMullen did not participate during the 1994-1996
performance period. The amount shown for Mr. Steuert
includes $7,461 paid under the Company's Stock Incentive
Compensation Plan discussed in footnote (13).
(13) 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 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.
(14) 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
1998, and the number of shares attributable thereto for D.
Michael Steuert were $15,791 (626 shares). Messrs. Yasinsky,
Wolfe, Mass and McMullen did not participate in the Plan.
(15) 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
</TABLE>
10
<PAGE> 13
<TABLE>
<S> <C>
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 1998 were: John B.
Yasinsky $69,563, Robert A. Wolfe $21,636, Nathaniel J. Mass
$28,050, D. Michael Steuert $28,725 and Kevin M. McMullen
$20,063.
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION
FOR OPTION TERM
INDIVIDUAL GRANTS (TEN YEARS)(3)(4)
- --------------------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES BASE PRICE EXPIRATION
NAME (#)(1) IN FISCAL YEAR ($/SHARE)(2) DATE 0% ($) 5% ($) 10%($)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John B. Yasinsky 85,000 11.30% $30.1875 3-25-08 $-0- $ 1,613,704 $ 4,089,444
Robert A. Wolfe 22,500 2.99% 30.1875 3-25-08 -0- 427,157 1,082,500
Nathaniel J. Mass 24,000 3.19% 30.1875 3-25-08 -0- 455,634 1,154,666
D. Michael
Steuert(5) 24,000 3.19% 30.1875 3-25-08 -0- 113,909 288,667
Kevin M. McMullen 20,000 2.66% 30.1875 3-25-08 -0- 379,695 962,222
All Shareholders(6) N/A N/A N/A N/A -0- 2,041,909,423 3,251,399,497
- --------------------------------------------------------------------------------------------------------------------------
</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 1998. Options
granted March 25, 1998 become exercisable in 25% increments on September 22,
1998 and on March 25, 1999, 2000 and 2001, 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 $30.1875, $49.17 and $78.30, respectively, at March
25, 2008.
(4) The potential realizable values are shown in the table in conformity with
Securities and Exchange Commission regulations, and are not intended to
forecast possible future appreciation. The Company is not aware of any
formula which will predict with reasonable accuracy the future appreciation
of equity securities. No gain can be realized by optionees without an
appreciation in stock price, which will benefit all shareholders
commensurately. A 0% appreciation in stock price will result in zero dollars
for an optionee.
(5) Projected values based upon exercisable option for 6,000 shares. Under the
terms of the 1997 Stock Option Plan, 1998 options granted to Mr. Steuert
which would have become exercisable on March 25, 1999, 2000 and 2001 will
lapse upon his February 14, 1999 resignation.
(6) Based upon 41,525,640 shares of GenCorp Common Stock outstanding on December
31, 1998.
11
<PAGE> 14
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS/SARS AT FISCAL YEAR MONEY OPTIONS/SARS AT
ACQUIRED END(#)(1) FISCAL YEAR END ($)
ON VALUE --------------------------- -----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
John B. Yasinsky 0 0 444,050 138,750 $4,304,787 $484,375
Robert A. Wolfe 0 0 43,125 54,375 -0- -0-
Nathaniel J. Mass 2,000 $12,625 75,250 51,750 606,531 264,844
D. Michael Steuert 0 0 128,500 33,000 1,399,375 84,375
Kevin M. McMullen 0 0 73,750 46,250 667,969 269,531
</TABLE>
- ---------------
(1) No SARs have been issued under the Plan.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER NON-
PERFORMANCE OR Stock Price-Based Plans(2)(3)
NUMBER OF OTHER PERIOD UNTIL -----------------------------------
SHARES, UNITS OR MATURATION OR THRESHOLD TARGET MAXIMUM
NAME OTHER RIGHTS PAYOUT ($) ($) ($)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
John B. Yasinsky (1) 3 Years 224,375 448,750 897,500
Robert A. Wolfe (1) 3 Years 64,779 129,558 259,117
Nathaniel J. Mass (1) 3 Years 63,333 126,667 253,333
D. Michael Steuert(4) (1) 3 Years -- -- --
Kevin M. McMullen (1) 3 Years 49,583 99,167 198,333
</TABLE>
- ---------------
(1) Indicates awards under the GenCorp Inc. Long-Term Incentive Program
("Program") pursuant to which key employees designated by the Organization &
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
1998-2000 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, designated percentages of corporate and business
unit ROAE and operating profit (OP) growth for their respective business
units. No payments are made under the Program if financial performance for
the performance period falls below threshold levels.
(2) Percentages of average annual compensation (determined for the three-year
performance period) payable to participants upon attainment of performance
goals for the 1998-2000 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>
12
<PAGE> 15
(3) 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 1998 fiscal
year salary and bonus shown in the Summary Compensation Table on page 9.
(4) Mr. Steuert will not participate in the Program following his February 14,
1999 resignation.
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. Mass, Steuert and McMullen have been determined pursuant to
a formula which utilizes five-year average compensation for years of service
prior to December 1, 1999 and a career average formula for service from December
1, 1999 to normal retirement. Mr. Wolfe's benefit has been determined pursuant
to the plan's career average formula. 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>
APPROXIMATE ESTIMATED
YEARS OF CREDITED ANNUAL BENEFITS
SERVICE AT PAYABLE AT
NAME NORMAL RETIREMENT NORMAL RETIREMENT(1)
<S> <C> <C>
- ---------------------------------------------------------------------
John B. Yasinsky(2) 41 $885,442
Robert A. Wolfe 6 61,298
Nathaniel J. Mass 19 224,647
D. Michael Steuert(3) 12 89,197
Kevin M. McMullen 29 245,717
</TABLE>
- ---------------
(1) Retirement benefits shown in the table for Messrs. Mass, Steuert and
McMullen were calculated pursuant to the terms of the Pension Plan for
Salaried Employees of GenCorp Inc. (the "GenCorp Pension Plan"). Mr. Wolfe'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 (except Mr. Steuert's) 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, 1998 and that
the pension plan under which such estimated benefit is calculated will
remain unchanged.
Benefits for Messrs. Mass, Steuert and McMullen have been determined by a
formula which provides for a benefit (A) for years of service prior to
December 1, 1999 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, 1999 (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,
13
<PAGE> 16
and (ii) after attainment of 35 years of service, 2.0% of annual
compensation. The benefit for Mr. Wolfe has been determined pursuant to the
same formula described in part (B) above.
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, 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 incentive bonus 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.
(3) Reflects the deferred vested pension benefit which will be payable to Mr.
Steuert at age 65. Years of service are based upon his February 14, 1999
resignation date.
------------------------
COMPENSATION OF DIRECTORS
Each nonemployee director receives a retainer of $24,000 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 March 1998 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 25,
2000. 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 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 normally
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.
Under special circumstances, however, the Board may waive immediate compliance
and request that a director postpone his or her retirement until a subsequent
date.
14
<PAGE> 17
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 incentive
bonus 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.
Mr. Robert A. Wolfe's July 28, 1997 employment agreement provided an initial
base salary of $325,000 per annum and a guaranteed 1997 incentive bonus equal to
50% of the bonus amount to which he would have been entitled if he had been
employed by Aerojet during the entire 1997 fiscal year. Upon his employment
date, Mr. Wolfe received an option to purchase 75,000 shares of GenCorp Common
Stock at an exercise price equal to the closing market price on his employment
date, and 12,300 restricted shares of GenCorp Common Stock. During a three-year
restriction period, Mr. Wolfe has full dividend and voting rights, but he will
forfeit 100% of the restricted shares if his employment at GenCorp or Aerojet
terminates within three years of his employment date other than due to death,
disability or change-in-control of Aerojet. If Mr. Wolfe's employment with
Aerojet and GenCorp terminates due to a change-in-control of Aerojet or GenCorp
within five years of his employment date, GenCorp will pay to him the accrued
pension benefits in which he failed to vest pursuant to the terms of the Aerojet
Consolidated Pension Plan and GenCorp Benefits Restoration Plan; if his
employment with Aerojet and GenCorp terminates for any reason after three years
from his employment date, GenCorp will guarantee a minimum annual retirement
income of $57,239.
Mr. Nathaniel J. Mass' May 13, 1996 employment agreement provided an initial
base salary of $300,000 per annum, increasing to $325,000 February 1, 1997, 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 closing market price on his employment date. 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.
Mr. Kevin McMullen's July 16, 1996 employment agreement provided an initial
base salary
15
<PAGE> 18
of $250,000 per annum, subject to pro-rata adjustment at the end of the 1996
fiscal year, 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 his employment date. 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.
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. 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. Mr. Wolfe's agreement includes a provision for payment
of the same severance compensation if his employment is terminated within three
years after a change-in-control of Aerojet. 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
compensation 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 Charles A. Corry, Committee Chairman, William K. Hall, Robert D.
Kunisch, Diane E. McGarry and Steven W. Percy. All nonemployee directors
participate in decisions
16
<PAGE> 19
regarding the compensation of the Chairman and Chief Executive Officer.
Therefore, J. Gary Cooper, Robert K. Jaedicke, Paul X. Kelley, James M.
Osterhoff and R. Byron Pipes participated in decisions regarding Mr. Yasinsky's
1998 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, both individual responsibilities and performance;
properly balance the focus on both short and long-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 took 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. 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 surveys.
The data selected from these surveys is representative of organizations which
are similar to the Company in sales volume and business focus. The 50th
percentile of compensation survey data is used as a reference point in
combination with actual performance, in establishing competitive compensation
levels within the Company.
17
<PAGE> 20
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, with consideration 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 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
Since fiscal 1995, incentive bonuses have been 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 objectives in three primary areas of
responsibility: financial performance, continuous improvement (operational
objectives applicable to the Company's business units) and special objectives
(specific to the individual). Incentive bonus amounts are intended to vary in a
consistent and predictable manner with the financial and operational 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 for the business
units are derived from the AOP, and are based upon 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. Two or more individuals may share a
special objective where mutual effort is required for its accomplishment.
Each participating executive has 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.
At the end of each fiscal year, management will evaluate 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. For continuous
improvement in operations, no credit will be given for any item
18
<PAGE> 21
which has results that show no improvement from the prior year's performance.
These performance evaluations, with appropriate discretionary adjustments,
form the basis for management's recommendations to the Committee. Incentive
bonuses are generally paid in cash. However, beginning with fiscal 1997, the
Company's elected officers 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 1998-2000 performance period, upon recommendation of the Committee, the
nonemployee directors have adopted ROAE as one of two performance measures (each
weighted at 50%) for the consolidated Company and each business unit. Earnings
per share (EPS) growth is the additional performance measure for corporate
participants and operating profit growth is the additional performance measure
for each business unit. 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 1998 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.
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
responsibilities, and potential for future con-
tributions.
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 re-
19
<PAGE> 22
view this issue regularly and may change its position in future years.
By: The Organization & Compensation
Committee of the Board of Directors:
C. A. Corry, Chairman
W. K. Hall
R. D. Kunisch
D. E. McGarry
S. W. Percy
CEO COMPENSATION
At its meeting on January 29, 1998, the Committee reviewed Mr. Yasinsky's
compensation history and comparable CEO annual cash compensation data available
from several national executive compensation survey sources, including the
Towers Perrin Executive Compensation Data Base and Hewitt Associates Project
777, Management Compensation Services study. Based on the foregoing information
and the recognition that Mr. Yasinsky's performance is meeting expectations by
providing effective operational and 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 3.7% to $700,000 for 1998.
At its March 1998 meeting, the Board granted Mr. Yasinsky an option to
purchase 85,000 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 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. For 1998, CEO performance was evaluated in three categories:
financial performance versus stretch objectives for sales, operating profit,
ROAE and cash flow, a special objective focused on creating new annualized sales
in targeted areas via acquisitions and new programs not in the annual operating
plan, and CEO leadership in six specific categories. At its January 28, 1999
meeting, the Committee considered management's written evaluation regarding
attainment of corporate financial results, and Mr. Yasinsky's performance
relative to his special growth objective. The Committee also evaluated Mr.
Yasinsky's leadership performance in the six key areas, as well as the Company's
overall performance in meeting top priority goals identified at the start of the
year. 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 value creating growth.
Specific 1998 achievements included the following. A corporate strategic
redirection was established that will involve the spin-off of the Polymer
Products segment businesses. With strong 1998 sales growth of 11%, reported
earnings per share increased almost 16% with more than 9% growth from
operations. Overall performance against his stretch financial objectives was
strong with an 83% of maximum achievement. Outstanding strategic execution
resulted in the completion of four key targeted acquisitions, a pending joint
venture, and new government program wins not in plan, that collectively create
about $350 million of new value creating annualized sales with strong
double-digit operating profit margins. The GenCorp portfolio was further
strengthened with the successful divestiture of the Plastics Extrusions, GenWall
and Residential Wallcovering businesses (1998 sales of $26 million and negative
$5 million operating profit). Excellent progress was made under the Operational
Excellence initiatives. Six Sigma Quality training topped 1,000 with 816
managers and 109 black belts now certified. Six Sigma-driven projects met target
with nearly $15 million in cost reductions while inventories
20
<PAGE> 23
and cycle time improved per plan with Supply Chain Management successes. Good
progress was made on moving the initial Sacramento area excess land carve-outs
through the approval and entitlement process. And progress continued on
strengthening people resources, institutionalizing GenCorp's defined culture and
seamless partnership approach to management.
The Committee concluded that Mr. Yasinsky's performance against the specific
leadership criteria was excellent, and they continue to be very pleased with his
overall performance.
After utilizing the specific formula and considering other terms of the
Program, the Committee recommended to the nonemployee directors that Mr.
Yasinsky receive a 1998 incentive bonus of $800,000, 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 met the ROAE target for the just
completed 1996-1998 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 1996 -- 1998 performance period of $420,000
which, after tax withholding, was paid fully 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>
J. G. Cooper R. D. Kunisch
C. A. Corry D. E. McGarry
W. K. Hall J. M. Osterhoff
R. K. Jaedicke S. W. Percy
P. X. Kelley 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 Manufacturing (Diversified) 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 MANUFACTURING (DIVERSIFIED) INDEX
[GRAPH]
Chart depicts the value, on the November 30 of the specified year, of $100
invested on November 30, 1993 in GenCorp Common Stock, the S&P 500 Index, and
the S&P Manufacturing (Diversified) Index.
<TABLE>
<CAPTION>
YEARS ENDING NOVEMBER 30
---------------------------------------------------------
COMPANY/INDEX 1993 1994 1995 1996 1997 1998
------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
GENCORP $ 100 $ 78.23 $ 93.19 $153.23 $213.23 $214.53
S&P 500 $ 100 $101.05 $138.41 $176.98 $227.44 $281.26
S&P MANUFACTURING (DIVERSIFIED) $ 100 $102.34 $150.03 $210.73 $248.47 $280.23
</TABLE>
SOURCE: STANDARD & POOR'S COMPUSTAT
22
<PAGE> 25
APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee, and subject to ratification by the
shareholders at the March 31, 1999 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,
1999.
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 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
To be eligible for inclusion in the Company's proxy materials for the March
2000 Annual Meeting, a shareholder proposal must be received by the Company's
Secretary on or before October 15, 1999 at the Company's offices located at 175
Ghent Road, Fairlawn, OH 44333. A shareholder who wishes to present a proposal
for consideration at the March 2000 Annual Meeting without inclusion of such
proposal in the Company's proxy materials must give notice of such proposal to
the Company at the foregoing address on or before December 29, 1999.
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 12, 1999
23
<PAGE> 26
[GENCORP LOGO]
John B. Yasinsky
Chairman and Chief Executive Officer
February 12, 1999
Dear Shareholder:
Enclosed are GenCorp's 1998 Annual Report and 1999 Proxy Statement. As our
Annual Report reflects, 1998 marked the third consecutive year of significant
operational improvement and earnings per share growth in our multi-year journey
to enhance shareholder value. It was also a year of substantial value-creating
growth as a result of several key targeted acquisitions we completed and
internal growth accomplishments.
The Annual Report also discusses the plan we announced on December 17, 1998 to
spin-off our Performance Chemicals and Decorative & Building Products businesses
to GenCorp shareholders as a separate publicly traded polymer products company.
Under the plan, GenCorp would continue to operate its aerospace and defense and
fine chemicals segment, Aerojet, and the automotive Vehicle Sealing business.
We believe the spin-off will provide renewed vitality and opportunity for
value-creating growth by creating two strong, independently focused and growing
companies. The spin-off requires approval by GenCorp shareholders. A Special
Shareholders Meeting will be scheduled later in the year to consider the
spin-off proposal.
The regular 1999 Annual Meeting will be held on March 31, 1999 at the Akron West
Hilton 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
Please Detach Proxy Card Here
- --------------------------------------------------------------------------------
[ ]
1. ELECTION OF DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE MARCH 2002 ANNUAL
MEETING.
FOR all nominees listed below [ X ]
WITHHOLD AUTHORITY to vote
for all nominees listed below. [ X ]
*EXCEPTIONS [ X ]
Nominees: Charles A. Corry, William K. Hall, Dr. Robert K. Jaedicke and
D. Michael Steuert.
(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 LLP as the
independent auditors of the Company.
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.
FOR [ X ]
AGAINST [ X ]
ABSTAIN [ X ]
Change of Address and
or Comments Mark Here [ X ]
Please sign exactly as name appears at left. 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 , 1999
-------------------------------
- --------------------------------------------------------------------------------
Signature
- --------------------------------------------------------------------------------
Signature if held jointly
VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK. [ X ]
<PAGE> 27
PLEASE DETACH HERE
You Must Detach This Portion of the Proxy Card
Before Returning It In the Enclosed Envelope
- --------------------------------------------------------------------------------
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 WILLIAM R. PHILLIPS, EDWARD R. DYE and
MICHAEL E. HICKS, 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 31, 1999,
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 12, 1999
Dear Shareholder:
Enclosed are GenCorp's 1998 Annual Report and 1999 Proxy Statement. As our
Annual Report reflects, 1998 marked the third consecutive year of significant
operational improvement and earnings per share growth in our multi-year journey
to enhance shareholder value. It was also a year of substantial value-creating
growth as a result of several key targeted acquisitions we completed and
internal growth accomplishments.
The Annual Report also discusses the plan we announced on December 17, 1998 to
spin-off our Performance Chemicals and Decorative & Building Products businesses
to GenCorp shareholders as a separate publicly traded polymer products company.
Under the plan, GenCorp would continue to operate its aerospace and defense and
fine chemicals segment, Aerojet, and the automotive Vehicle Sealing business.
We believe the spin-off will provide renewed vitality and opportunity for
value-creating growth by creating two strong, independently focused and growing
companies. The spin-off requires approval by GenCorp share-holders. A Special
Shareholders Meeting will be scheduled later in the year to consider the
spin-off proposal.
The regular 1999 Annual Meeting will be held on March 31, 1999 at the Akron West
Hilton 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
Please Detach Proxy Card Here
- --------------------------------------------------------------------------------
[ ]
1. ELECTION OF DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE MARCH 2002 ANNUAL
MEETING.
FOR all nominees listed below [ X ]
WITHHOLD AUTHORITY to vote
for all nominees listed below. [ X ]
*EXCEPTIONS [ X ]
Nominees: Charles A. Corry, William K. Hall, Dr. Robert K. Jaedicke and
D. Michael Steuert.
(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 LLP as the
independent auditors of the Company.
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.
FOR [ X ]
AGAINST [ X ]
ABSTAIN [ X ]
Change of Address and
or Comments Mark Here [ X ]
Please sign exactly as name appears at left. 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 29, 1999.
DATE , 1999
-------------------------------
- --------------------------------------------------------------------------------
Signature
Votes MUST be indicated
(x) in Black or Blue ink. [ X ]
<PAGE> 29
Please Detach Here
You Must Detach This Portion of the Proxy Card
Before Returning It In the Enclosed Envelope
- --------------------------------------------------------------------------------
CONFIDENTIAL VOTING INSTRUCTIONS
To: ROYAL TRUST CORPORATION OF CANADA, TRUSTEE FOR THE GENCORP CANADA INC.
SAVINGS 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 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 31, 1999, 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 12, 1999
Dear Shareholder:
Enclosed are GenCorp's 1998 Annual Report and 1999 Proxy Statement. As our
Annual Report reflects, 1998 marked the third consecutive year of significant
operational improvement and earnings per share growth in our multi-year journey
to enhance shareholder value. It was also a year of substantial value-creating
growth as a result of several key targeted acquisitions we completed and
internal growth accomplishments.
The Annual Report also discusses the plan we announced on December 17, 1998 to
spin-off our Performance Chemicals and Decorative & Building Products businesses
to GenCorp shareholders as a separate publicly traded polymer products company.
Under the plan, GenCorp would continue to operate its aerospace and defense and
fine chemicals segment, Aerojet, and the automotive Vehicle Sealing business.
We believe the spin-off will provide renewed vitality and opportunity for
value-creating growth by creating two strong, independently focused and growing
companies. The spin-off requires approval by GenCorp share-holders. A Special
Shareholders Meeting will be scheduled later in the year to consider the
spin-off proposal.
The regular 1999 Annual Meeting will be held on March 31, 1999 at the Akron West
Hilton 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
Please Detach Proxy Card Here
- --------------------------------------------------------------------------------
[ ]
1. ELECTION OF DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE MARCH 2002 ANNUAL
MEETING.
FOR all nominees listed below [ X ]
WITHHOLD AUTHORITY to vote
for all nominees listed below. [ X ]
*EXCEPTIONS [ X ]
Nominees: Charles A. Corry, William K. Hall, Dr. Robert K. Jaedicke and
D. Michael Steuert.
(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 LLP as the
independent auditors of the Company.
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.
FOR [ X ]
AGAINST [ X ]
ABSTAIN [ X ]
Change of Address and
or Comments Mark Here [ X ]
Please sign exactly as name appears at left. 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 29, 1999.
DATE , 1999
-------------------------------
- --------------------------------------------------------------------------------
Signature
Votes MUST be indicated
(x) in Black or Blue ink. [ X ]
<PAGE> 31
PLEASE DETACH HERE
You Must Detach This Portion of the Proxy Card
Before Returning It In the Enclosed Envelope
- --------------------------------------------------------------------------------
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 31, 1999, 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 12, 1999
Dear Shareholder:
Enclosed are GenCorp's 1998 Annual Report and 1999 Proxy Statement. As our
Annual Report reflects, 1998 marked the third consecutive year of significant
operational improvement and earnings per share growth in our multi-year journey
to enhance shareholder value. It was also a year of substantial value-creating
growth as a result of several key targeted acquisitions we completed and
internal growth accomplishments.
The Annual Report also discusses the plan we announced on December 17, 1998 to
spin-off our Performance Chemicals and Decorative & Building Products businesses
to GenCorp shareholders as a separate publicly traded polymer products company.
Under the plan, GenCorp would continue to operate its aerospace and defense and
fine chemicals segment, Aerojet, and the automotive Vehicle Sealing business.
We believe the spin-off will provide renewed vitality and opportunity for
value-creating growth by creating two strong, independently focused and growing
companies. The spin-off requires approval by GenCorp share-holders. A Special
Shareholders Meeting will be scheduled later in the year to consider the
spin-off proposal.
The regular 1999 Annual Meeting will be held on March 31, 1999 at the Akron West
Hilton 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
Please Detach Proxy Card Here
- --------------------------------------------------------------------------------
[ ]
1. ELECTION OF DIRECTORS TO A THREE-YEAR TERM EXPIRING AT THE MARCH 2002 ANNUAL
MEETING.
FOR all nominees listed below [ X ]
WITHHOLD AUTHORITY to vote
for all nominees listed below. [ X ]
*EXCEPTIONS [ X ]
Nominees: Charles A. Corry, William K. Hall, Dr. Robert K. Jaedicke and
D. Michael Steuert.
(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 LLP as the
independent auditors of the Company.
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.
FOR [ X ]
AGAINST [ X ]
ABSTAIN [ X ]
Change of Address and
or Comments Mark Here [ X ]
Please sign exactly as name appears at left. 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 29, 1999.
DATE , 1999
-------------------------------
- --------------------------------------------------------------------------------
Signature
Votes MUST be indicated
(x) in Black or Blue ink. [ X ]
<PAGE> 33
PLEASE DETACH HERE
You Must Detach This Portion of the Proxy Card
Before Returning It In the Enclosed Envelope
- --------------------------------------------------------------------------------
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 at the Annual Meeting of Shareholders to
be held at the Akron West Hilton Inn, 3180 West Market Street, Akron, Ohio 44333
on March 31, 1999, and 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
