pre14a
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
þ Preliminary Proxy Statement |
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
o Definitive Proxy Statement |
o Definitive Additional Materials |
o Soliciting Material Pursuant to §240.14a-12 |
GenCorp Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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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:
o Fee paid previously with preliminary materials.
o 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:
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P O Box 537012
Sacramento, CA
95853-7012
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February , 2008
To our Shareholders:
You are cordially invited to attend our Annual Meeting to be
held at The Ritz-Carlton located at 1150 22nd Street, N.W.,
Washington, D.C. 20037 on March 26, 2008 at
9:00 a.m. local time.
The enclosed notice and proxy statement contain details
concerning our Annual Meeting.
An investment fund managed by Steel Partners II, L.P. (Steel
Partners) has indicated that it intends to nominate and solicit
proxies in favor of six nominees in opposition to the
Boards recommendations. We do not believe this is in your
best interest. You may receive proxy solicitation materials from
Steel Partners or its affiliates. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE BOARDS
NOMINEES ON THE ENCLOSED WHITE PROXY CARD. THE BOARD OF
DIRECTORS URGES YOU TO NOT SIGN OR RETURN ANY GOLD OR OTHER
PROXY CARD SENT TO YOU BY STEEL PARTNERS. Even if you have
previously signed a proxy card sent by Steel Partners, you have
every right to change your vote by using the enclosed WHITE
proxy card to vote by telephone, by Internet or by signing,
dating and returning the enclosed WHITE proxy card in the
postage-paid envelope provided. Only the latest dated proxy card
you vote will be counted. We urge you to disregard any proxy
card sent to you by Steel Partners or its affiliates.
Your vote is extremely important regardless of the number of
shares you own. Whether or not you plan to attend the Annual
Meeting, we urge you to vote your shares at your earliest
convenience. Please complete, date, sign, and promptly return
the accompanying WHITE proxy card in the enclosed
envelope, or vote via the Internet or telephone, to be sure that
your shares will be represented and voted at the Annual Meeting.
Please refer to the enclosed WHITE proxy card for
instructions on voting via the Internet or telephone or, if your
shares are registered in the name of a broker or bank, please
refer to the information forwarded by the broker or bank to
determine if Internet or telephone voting is available to you.
If you have any questions or require any assistance with voting
your shares, please contact:
INNISFREE M&A INCORPORATED
SHAREHOLDERS CALL TOLL FREE:
877-456-3427
BANKS AND BROKERS CALL COLLECT:
212-750-5833
Thank you very much for your continued interest in GenCorp Inc.
Very truly yours,
TABLE OF CONTENTS
February ,
2008
To the Shareholders of GenCorp Inc.:
The 2008 Annual Meeting of shareholders of GenCorp Inc., an Ohio
corporation (GenCorp or the Company), will be held on
March 26, 2008 at 9:00 a.m. local time at The
Ritz-Carlton located at 1150 22nd Street, N.W.,
Washington, D.C. 20037, for the following purposes:
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1.
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To elect nine Directors to serve until the 2009 Annual Meeting;
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2.
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To ratify the Audit Committees appointment of
PricewaterhouseCoopers LLP as independent auditors of the
Company for fiscal year 2008; and
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3.
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To consider and act on such other business as may properly be
brought before the Annual Meeting or any adjournments or
postponements thereof.
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Shareholders of record at the close of business on
February 1, 2008 are entitled to notice of, and to vote at,
the Annual Meeting and any adjournments or postponements of the
Annual Meeting.
Shareholders of record may vote their shares by completing and
returning the WHITE proxy card. Most shareholders also
have the option of voting their shares via the Internet or by
telephone. If Internet or telephone voting is available to you,
voting instructions are printed on your WHITE proxy card
or included with your proxy materials. If your shares are held
in the name of a bank, broker or other holder of record, please
follow their procedures as described in the enclosed WHITE
voting form they send to you. By completing, signing, dating
and returning the accompanying WHITE proxy card, you will
revoke any proxy that may have been previously returned to Steel
Partners. You may revoke a proxy at any time prior to its
exercise at the Annual Meeting by following the instructions in
the accompanying proxy statement. Only your latest dated proxy
will count.
By Order of the Board of Directors,
MARK A. WHITNEY
Senior Vice President
General Counsel and Secretary
PROXY
STATEMENT
FOR THE 2008 ANNUAL MEETING OF SHAREHOLDERS
FREQUENTLY
ASKED QUESTIONS
The Board of Directors of GenCorp Inc., an Ohio corporation
(GenCorp or the Company) solicits the enclosed proxy for use at
the Annual Meeting of the Companys shareholders to be held
at The Ritz-Carlton located at 1150 22nd Street, N.W.,
Washington, D.C. 20037 on March 26, 2008 at
9:00 a.m. local time. This proxy statement contains
information about the matters to be voted on at the meeting and
the voting process, as well as information about the
Companys Directors and executive officers.
WHY DID I
RECEIVE THIS PROXY STATEMENT?
The Board of Directors is soliciting your proxy to vote at the
Annual Meeting because you were a shareholder at the close of
business on February 1, 2008, the record date, and
therefore you are entitled to vote at the Annual Meeting. This
proxy statement, the accompanying WHITE proxy card and
Annual Report to shareholders for the fiscal year ended
November 30, 2007 are being made available to shareholders
beginning on or about February , 2008. This
proxy statement summarizes the information you need to know to
vote at the Annual Meeting. You do not need to attend the Annual
Meeting to vote your shares.
WHAT AM I
VOTING ON?
You are voting on the following items of business at the Annual
Meeting:
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the election of nine Directors (the Boards nominees are
James J. Didion; Terry L. Hall; David A. Lorber; James M.
Osterhoff; Todd R. Snyder; William L. Trubeck; Timothy A. Wicks;
Sheila E. Widnall; and Robert C. Woods) to serve until the 2009
annual meeting and until their successors are elected and
qualified;
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the ratification of PricewaterhouseCoopers LLP as independent
accountants for the fiscal year ending November 30, 2008;
and
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any other matter that may properly be brought before the Annual
Meeting.
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WHO IS
ENTITLED TO VOTE?
Shareholders of record as of the close of business on
February 1, 2008 are entitled to vote at the Annual
Meeting. Each share of GenCorp common stock is entitled to one
vote.
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WHAT ARE
THE VOTING RECOMMENDATIONS OF THE BOARD OF DIRECTORS?
The Companys Board of Directors recommends that you vote
your shares FOR each of the Boards nine
nominees standing for election to the Board, and FOR
the ratification of PricewaterhouseCoopers LLP as the
Companys independent accountants.
HOW DO I
VOTE?
It is important that your shares are represented at the Annual
Meeting whether or not you attend the meeting in person. To make
sure that your shares are represented, we urge you to vote as
soon as possible by either (i) signing, dating and
returning the WHITE proxy card in the postage-paid
envelope provided, (ii) Internet, or (iii) telephone.
Voting Instructions are provided on the WHITE proxy card.
If you are a registered shareholder, there are four ways
to vote:
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By calling the toll-free telephone number indicated on your
WHITE proxy card. Easy-to-follow voice prompts allow you
to vote your shares and confirm that your voting instructions
have been properly recorded;
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By going to the Internet web site indicated on your WHITE
proxy card. Confirmation that your voting instructions have
been properly recorded will be provided;
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By signing, dating and returning the accompanying WHITE
proxy card; or
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By written ballot at the Annual Meeting.
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Your shares will be voted as you indicate. If you return your
WHITE proxy card and do not indicate your voting
preferences, the appointed proxies (Yasmin R. Seyal and Mark A.
Whitney) will vote your shares FOR items 1 and 2. If your
shares are owned in joint tenancy, all joint owners must vote by
the same method. If joint owners vote by mail, all of the joint
owners must sign the WHITE proxy card. If you are a
registered shareholder and you vote by telephone or via the
Internet, you do not need to return your WHITE proxy
card. Votes submitted by shareholders of record via the Internet
or by telephone must be received by 11:59 p.m. Eastern
time on March 25, 2008.
If your shares are held in a brokerage account in your
brokers name, please follow the voting directions
provided by your broker or nominee. You may sign, date and
return a voting instruction card to your broker or nominee or,
in most cases, submit voting instructions by telephone or the
Internet to your broker or nominee. If you provide specific
voting instructions by mail, telephone, or the Internet, your
broker or nominee should vote your shares as you have directed.
At the Annual Meeting, written ballots will be available to
anyone who wishes to vote in person. If you hold your shares in
a brokerage account, you must request a legal proxy from your
broker or other nominee to vote at the Annual Meeting.
If your shares are held through the GenCorp Retirement
Savings Plan, please follow the voting directions
provided by Fidelity Management Trust Company, the
Plans Trustee. You may sign, date and return a voting
instruction card to the Trustee or submit voting instructions by
telephone or the Internet. If you provide voting instructions by
mail, telephone, or the Internet, the
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Trustee will vote your shares as you have directed (or not vote
your shares, if that is your direction). If you do not provide
voting instructions, the Trustee will vote your shares in the
same proportion as shares for which the Trustee has received
voting instructions. You must submit voting instructions to the
Plan Trustee by no later than March 21, 2008 at 11:59 pm
Eastern time in order for your shares to be voted as you have
directed by the Trustee at the Annual Meeting. Plan participants
may not vote their Plan shares in person at the Annual Meeting.
WHAT
SHOULD I DO IF I RECEIVE A PROXY CARD FROM STEEL
PARTNERS?
Steel Partners has indicated that it intends to nominate, and
solicit proxies for, its own slate of nominees for election as
Directors at the Annual Meeting. You may receive an opposition
proxy statement and proxy card as well as
follow-up
solicitation materials from Steel Partners or its affiliates.
THE BOARD OF DIRECTORS URGES YOU NOT TO SIGN OR RETURN
ANY GOLD PROXY CARD OR ANY OTHER PROXY CARD SENT TO YOU BY STEEL
PARTNERS. For additional information on the factors
considered by the Board in reaching this determination, see the
section entitled Steel Partners Notice of Nominees below.
Even if you have previously signed a proxy card sent by Steel
Partners, you have every right to change your vote. You may do
so by signing, dating and mailing the enclosed WHITE
proxy card in the postage-paid envelope provided, or by
following the instructions on the WHITE proxy card to
vote by telephone or by Internet. Only the latest dated proxy
card you vote will be counted. We urge you to disregard any
proxy card sent to you by Steel Partners or its affiliates.
MAY I
ATTEND THE MEETING?
All shareholders and properly appointed proxy holders may attend
the Annual Meeting. Shareholders who plan to attend the meeting
must present valid photo identification. If you hold your shares
in a brokerage account, please also bring proof of your share
ownership, such as a brokers statement showing that you
owned shares of the Company on the record date of
February 1, 2008, or a legal proxy from your broker or
nominee. A legal proxy is required if you hold your shares in a
brokerage account and you plan to vote in person at the Annual
Meeting. Shareholders of record will be verified against an
official list available at the Annual Meeting. The Company
reserves the right to deny admittance to anyone who cannot
adequately show proof of share ownership as of the record date.
WHAT IS
THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF RECORD
AND AS A BENEFICIAL OWNER?
If your shares are registered directly in your name with the
Companys transfer agent, the Bank of New York, you are
considered, with respect to those shares, the shareholder
of record. The proxy statement, Annual Report and
WHITE proxy card have been made available directly to
shareholders of record by the Company. If your shares are held
in a stock brokerage account or by a bank or other nominee, you
are considered the beneficial owner of shares held
in that brokerage account. The proxy materials will be forwarded
to you by your broker, bank or nominee who is considered, with
respect to those shares, the shareholder of record. As the
beneficial holder, you have the right to direct your broker,
bank or nominee how to vote and you are also invited to attend
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the Annual Meeting. However, since you are not a shareholder of
record, you may only vote your shares at the Annual Meeting if
you bring a legal proxy from your broker, bank or nominee. Your
broker, bank or nominee will enclose a voting instruction card
to use in directing the broker, bank or other nominee on how to
vote your shares.
WHAT ARE
BROKER NON-VOTES AND HOW ARE THEY COUNTED?
Broker non-votes occur when nominees, such as brokers and banks
holding shares on behalf of the beneficial owners, are
prohibited from exercising discretionary voting authority for
beneficial owners who have not provided voting instructions at
least ten days before the Annual Meeting date. If no
instructions are given within that time frame, the nominees may
vote those shares on matters deemed routine by the
New York Stock Exchange. On non-routine matters, nominees cannot
vote without instructions from the beneficial owner, resulting
in so-called broker non-votes. Broker non-votes are
not counted for the purposes of determining the number of shares
present in person or represented by proxy on a voting matter. In
the event of a solicitation of proxies by Steel Partners, all
proposals on the agenda for which there is a counter-soliciation
by Steel Partners will be considered non-routine matters for any
brokerage accounts solicited by Steel Partners. As a result, if
Steel Partners or its affiliates provide you with proxy
solicitation materials through your broker, your broker will be
unable to vote your shares at the Annual Meeting on any proposal
unless they receive your specific voting instructions. For these
reasons, please promptly vote by telephone, by Internet, or
sign, date and return the voting instruction card your broker or
nominee has enclosed, in accordance with the instructions on the
card.
MAY I
CHANGE MY VOTE?
If you are a shareholder of record, you may revoke your proxy at
any time before it is voted at the Annual Meeting by:
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Returning a later-dated, signed proxy card;
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Sending written notice of revocation to the Secretary of the
Company;
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Submitting a new, proper proxy by telephone, Internet or paper
ballot, after the date of the earlier voted proxy; or
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Attending the Annual Meeting and voting in person.
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If you are a beneficial owner of shares, you may submit new
voting instructions by contacting your broker, bank or other
nominee. You may also vote in person at the Annual Meeting if
you obtain a legal proxy as described above. The Board strongly
urges you to revoke any gold or other proxy card you may have
returned which you received from Steel Partners or its
affiliates. Even if you have previously signed a proxy card sent
by Steel Partners, you have every right to change your vote by
signing, dating and returning the enclosed WHITE proxy
card in the postage-paid envelope provided, or by following the
instructions on the WHITE proxy card to vote by telephone
or by Internet. Only the latest dated proxy card you vote will
be counted.
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WHAT VOTE
IS REQUIRED TO APPROVE EACH PROPOSAL?
Directors are elected by a plurality of the votes cast at the
Annual Meeting. Votes cast for a nominee will be counted in
favor of election. Abstentions and broker non-votes will not
count either in favor of, or against, election of a nominee.
Proxies cannot be voted for a greater number of persons than the
number of Directors set by the Board for election. The
affirmative vote of the holders of at least a majority of the
votes cast at the Annual Meeting is necessary to approve
Proposal 2, the ratification of the appointment of the
Companys independent auditors. Abstentions and broker non-
votes will have no effect on the outcome of the vote on
Proposal 2.
DO
SHAREHOLDERS HAVE CUMULATIVE VOTING RIGHTS WITH RESPECT TO THE
ELECTION OF DIRECTORS?
No. Shareholders do not have cumulative voting rights with
respect to the election of Directors.
WHAT
CONSTITUTES A QUORUM?
As of the record date, 56,942,450 shares of the
Companys common stock were issued and outstanding. A
majority of the outstanding shares entitled to vote at the
Annual Meeting, represented in person or by proxy, will
constitute a quorum. Shares represented by a proxy that directs
that the shares abstain from voting or that a vote be withheld
on a matter will be included at the Annual Meeting for quorum
purposes. Shares represented by proxy as to which no voting
instructions are given as to matters to be voted upon will be
included at the Annual Meeting for quorum purposes.
WHAT DOES
IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
If you hold your shares in more than one account, you will
receive a WHITE proxy card for each account. To ensure
that all of your shares are voted, please complete, sign, date
and return a WHITE proxy card for each account or use the
WHITE proxy card to vote by telephone or Internet. As
previously noted, Steel Partners has provided notice that it
intends to nominate, and solicit proxies for, its own slate of
nominees for election as Directors at the Annual Meeting. As a
result, you may receive proxy cards from both Steel Partners and
GenCorp. To ensure shareholders have the Companys latest
proxy information and materials to vote, the Board may conduct
multiple mailings prior to the date of the Annual Meeting, each
of which will include a WHITE proxy card regardless of
whether or not you have previously voted. Only the latest proxy
card you vote will be counted.
WHO WILL
SOLICIT PROXIES ON BEHALF OF THE BOARD?
Appendix A sets forth certain information relating to the
Companys Directors and certain officers and employees of
the Company who may be deemed to be participants in
the Boards solicitation of proxies in connection with the
Annual Meeting under the applicable rules of the SEC.
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WHAT IS
THE COMPANYS INTERNET ADDRESS?
The Companys Internet address is www.gencorp.com.
You can access this proxy statement and the Companys 2007
Annual Report at this Internet address. The Companys
filings with the Securities and Exchange Commission are
available free of charge via a link from this address.
WILL ANY
OTHER MATTERS BE VOTED ON?
As of the date of this proxy statement, our management knows of
no other matter that will be presented for consideration at the
meeting other than those matters discussed in this proxy
statement. If any other matters properly come before the meeting
and call for a vote of the shareholders, validly executed
proxies in the enclosed form will be voted in accordance with
the recommendation of the Board of Directors.
WHO PAYS
THE SOLICITATION EXPENSES FOR THIS PROXY STATEMENT AND RELATED
COMPANY MATERIALS?
The Company does. In addition to sending you these materials,
some of the Companys Directors and officers, including
management and non-management employees, may contact you by
telephone, mail,
e-mail or in
person. You may also be solicited by means of press releases
issued by GenCorp and postings on our web site,
www.gencorp.com. None of the Companys officers or
employees will receive any extra compensation for soliciting
you. The Company has retained Innisfree M&A Incorporated
(Innisfree), to assist us in soliciting your proxy for an
estimated fee of $ plus reasonable
out-of-pocket expenses. Innisfree expects that
approximately
of its employees will assist in the solicitation. The Company
will reimburse banks, nominees, fiduciaries, brokers and other
custodians for their costs of sending the proxy materials to the
beneficial owners of GenCorp common stock. The Company estimates
that its total expenses related to the solicitation in excess of
those normally spent for an Annual Meeting as a result of the
potential proxy contest and excluding salaries and wages of our
regular employees and officers are expected to be approximately
$ , which includes both the
Innisfree fee of $ as well as
expenses for printing, postage, legal services and other related
items. The Company estimates that our total expenditures to date
for the proxy solicitation are approximately
$ .
ARE THERE
DISSENTERS OR APPRAISAL RIGHTS?
The Companys shareholders are not entitled to
dissenters or appraisal rights under Ohio law in
connection with any of the proposals.
WHO
SHOULD I CALL IF I HAVE ANY QUESTIONS?
If you have any questions, or need assistance voting, please
contact the Companys proxy solicitor:
Innisfree M&A Incorporated
Shareholders Call Toll Free:
877-456-3427
Banks and Brokers Call Collect:
212-750-5833
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A copy of the Companys 2007 Annual Report, including
financial statements, accompanies this proxy statement.
Shareholders who wish to receive a separate written copy of the
proxy statement, Annual Report on
Form 10-K,
now or in the future, should submit their written request to
Secretary, GenCorp Inc., P.O. Box 537012, Sacramento,
California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742).
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PROPOSAL 1
ELECTION OF DIRECTORS
The Companys Code of Regulations provides for a Board of
not less than seven or 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. The Board has set the number of Directors constituting
the Board at nine.
The Board of Directors has proposed the following nominees for
election as Directors with terms expiring at the Annual Meeting
in March 2009: James J. Didion; Terry L. Hall; David A. Lorber;
James M. Osterhoff; Todd R. Snyder; William L. Trubeck; Timothy
A. Wicks; Sheila E. Widnall; and Robert C. Woods.
Eight of these nominees are current Directors who are being
nominated for re-election. A current Director (Charles F. Bolden
Jr.) has previously announced that he would not stand for
re-election at the 2008 Annual Meeting, and in his place, the
Board has determined to nominate Mr. Trubeck, who is not
currently a Director. Mr. Trubeck has been selected in part
to continue to implement the Boards succession planning,
as Mr. Osterhoff has tentatively indicated that he may
resign at or prior to the 2009 Annual Meeting and the Board
believes Mr. Trubeck would be a qualified Chairman of the
Audit Committee upon the resignation of Mr. Osterhoff.
Each nominee elected as a Director will continue in office until
the next Annual Meeting of shareholders at which his or her
successor has been elected, or until his or her resignation,
removal from office, or death, whichever is earlier.
The Board of Directors unanimously recommends a vote FOR the
election of these nominees as Directors.
The information concerning the nominees set forth below is given
as of December 31, 2007. Each nominee has had the same
principal occupation or employment during the past five years
unless otherwise indicated.
Current
Directors Nominated for Re-Election
JAMES J.
DIDION
Director since 2002
Mr. Didion is an independent real estate investor and
consultant since 2001. Mr. Didion has significant real
estate experience having served as Chairman of the Board of CB
Richard Ellis, Inc. (formerly known as Coldwell
Banker & Company), the largest commercial real estate
services company in the world, until his retirement in 2001. At
the time of his retirement, CB Richard Ellis had revenues in
excess of $1.2 billion. Mr. Didion also served as
Chief Executive Officer of Coldwell Banker from 1987 to 1999 and
held various other management positions within the firm
(1962 1987). Mr. Didion serves as an Executive
Advisor of Real Estate to the University of California,
Berkeley. From 1993 - 1996, Mr. Didion served as the
Chairman of the Real Estate Roundtable, a non-profit public
policy organization that engages in policy research, analysis
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presentation of positions on national real estate issues before
the U.S. Congress, the White House and administrative
agencies. Mr. Didion was a trustee and honorary member of
the Urban Land Institute, a nonprofit organization that engages
in research, education and advocacy promoting sound land use
policy. He has also served on the Advisory Board of the Haas
Business School at the University of California, Berkeley.
Mr. Didion graduated from the University of California,
Berkeley. Mr. Didion currently serves as Chairman of the
Corporate Governance & Nominating Committee and as a
member of the Finance Committee. Age 68.
TERRY L.
HALL
Director since 2002
Mr. Hall serves as President and Chief Executive Officer of
the Company, positions he has held since 2002. Formerly,
Mr. Hall also held the title of Chairman of the Board of
the Company from 2003 to 2007. Mr. Hall has also served in
other capacities at the Company including: Senior Vice President
and Chief Operating Officer (2001 2002); Senior Vice
President and Chief Financial Officer (2000 2001);
Senior Vice President Chief Financial Officer and
Treasurer (1999 2000). Mr. Hall also served as
the Chief Financial Officer of Aerojet-General Corporation, a
subsidiary of GenCorp (1999). Prior to joining GenCorp,
Mr. Hall worked at U.S. Airways Group, Inc., an
$8 billion airline holding company, where he was Senior
Vice President, Finance and Chief Financial Officer
(1997 1999), responsible for all aspects of
corporate finance as well as mergers and acquisitions.
Previously, Mr. Hall served as Chief Financial Officer of
Apogee Enterprise Inc. (1995 1997), Chief Financial
Officer of Tyco International Ltd. (1994 1995), and
Vice President and Treasurer of UAL Corp. (1990
1993), Consultant to UAL Employees Acquisition Corp.
(1990) and President/General Manager of Northwest Aircraft,
Inc. (1986 1990). Mr. Hall graduated from
Bemidji State University and earned his juris doctor from the
University of Minnesota. Age 53.
DAVID A.
LORBER
Director since 2006
Mr. Lorber is a Principal and Portfolio Manager at
FrontFour Capital Group LLC, New York, NY, a hedge fund that he
helped start in 2007. Previously, Mr. Lorber served as
Director and Senior Investment Analyst at Pirate Capital LLC, a
hedge fund (2003 2006). Prior to joining Pirate
Capital, Mr. Lorber was an Analyst at Vantis Capital
Management LLC, a money management firm and hedge fund
(2001 2003) and an Associate at
Cushman & Wakefield, Inc. (2000 2001).
Mr. Lorber graduated from Skidmore College. Mr. Lorber
currently serves as a member of the Organization &
Compensation Committee and as a member of the Audit Committee.
Age 29.
JAMES M.
OSTERHOFF
Director
since 1990
Mr. Osterhoff served as Executive Vice President and Chief
Financial Officer of US WEST, Inc., a telecommunications
company, from 1991 until retirement in 1995. Prior to joining US
West, Mr. Osterhoff served as Vice President and Chief
Financial Officer of Digital Equipment Corporation and of the
Ford Motor Credit Company and its subsidiaries. Previously,
Mr. Osterhoff
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was a Director of Financial Security Assurance Holdings, Ltd.
(FSA) and Arkwright Mutual Insurance Company, was Vice Chairman
of the Private Sector Council/Research Center for Government
Financial Management, and was a member of the School of
Mechanical Engineering Advisory Council at Purdue University and
the Financial Executives Council of the Conference Board. He was
twice named in Institutional Investor as one of
Americas Top CFOs. Mr. Osterhoff
graduated from Purdue University and earned a masters
degree in business administration from the Graduate School of
Business at Stanford University. Mr. Osterhoff currently
serves as Chairman of the Audit Committee and as a member of the
Finance Committee. Age 71.
TODD R.
SNYDER
Director
since 2006
Mr. Snyder is a Managing Director of Rothschild Inc., an
international investment banking and financial advisory firm.
Before joining Rothschild in 2000, Mr. Snyder was a
Managing Director and earlier held other positions at Peter J.
Solomon Company (1997 2000) Prior to joining
Peter J. Solomon Company, Mr. Snyder was a Managing
Director at KPMG Peat Marwick (1995 1997). Prior to
his move to investment banking, Mr. Snyder practiced law in
the Business Reorganization department of Weil,
Gotshal & Manges (1988 1994).
Mr. Snyder graduated from Wesleyan University and received
a juris doctor from the University of Pennsylvania Law School.
Mr. Snyder is an adjunct faculty member of the New York
University Law School. Mr. Snyder currently serves as
Chairman of the Finance Committee and as a member of the
Organization & Compensation Committee. Age 45.
TIMOTHY
A. WICKS
Director
since 2005
Mr. Wicks is a Senior Vice President, Strategic Growth for
UnitedHealthcare, the largest operating division of UnitedHealth
Group Inc., a diversified health care company, a position he has
held since 2006. Other positions he has held at UnitedHealth
include Senior Vice President, Product Development and
Management for UnitedHealth (2004 2006), Vice
President, Platinum Broker Service (2003 2004), and
Vice President, Consumer Solutions (2002 2003).
Prior to joining UnitedHealth, Mr. Wicks served as General
Manager, Small Business Services, and Director of Global
Business Strategy of Dell Computer Corporation (2001
2002). Prior to joining Dell Computer, Mr. Wicks was the
President and Co-Founder of Great Northern Capital, a private
investment and merchant banking firm (1994 2000).
Mr. Wicks graduated from The University of Chicago and
received a masters degree in business administration from
Harvard Universitys Graduate School of Business.
Mr. Wicks currently serves as the non-executive Chairman of
the Board, as a member of the Finance Committee and as a member
of the Audit Committee. Age 42.
DR.
SHEILA E. WIDNALL
Director
since 1999
Dr. Widnall has been an Institute Professor at the
Massachusetts Institute of Technology (MIT) since 1998.
Previously, Dr. Widnall served as the Secretary of the
United States Air Force from 1993 to 1997. She is the only woman
to ever head a military service. As Secretary of the Air Force,
10
Dr. Widnall was responsible for all affairs of the
Department of the Air Force including recruiting, organizing,
training, administration, logistical support, maintenance and
welfare of personnel. Dr. Widnall was also responsible for
research and development and other activities prescribed by the
President or the Secretary of Defense. Prior to being appointed
Secretary of the Air Force, Dr. Widnall was an Associate
Provost
(1992-1993)
and Professor of Aeronautics and Astronautics (1986
1992) at MIT. Dr. Widnall was a member of the Columbia
accident investigation board and was inducted into the
Womens Hall of Fame in 2003. Dr. Widnall is a member
of the National Academy of Engineering, the American Institute
of Aeronautics and Astronautics and the American Association for
the Advancement of Science. Dr. Widnall earned her bachelor
of science degree in 1960, her master of science degree in 1961,
and her doctor of science degree in aeronautics and astronautics
in 1964 at MIT. Dr. Widnall currently serves as Chairwoman
of the Organization & Compensation Committee and as a
member of the Corporate Governance & Nominating
Committee. Age 69.
ROBERT C.
WOODS
Director
since 2006
Mr. Woods has been an Investment Banker at Cornerstone
Capital Advisors, a real estate investment bank, since 1987.
From 1983 to the present, Mr. Woods has also been a real
estate developer for Palladian Partners, a real estate
development company. At both Cornerstone and Palladian,
Mr. Woods experience includes developing and
financing master planned communities. Previously, he was a
Project Manager and Vice President of Development for Hines
Interests LLC, a real estate development company
(1980 1983), and a Project Manager for Trammell
Crow, a real estate development company (1979 1980).
Mr. Woods was also a consulting professor of real estate
finance at Stanford University from 2000 to 2005. Mr. Woods
is also a Chartered Financial Analyst. Mr. Woods was a
consulting professor of real estate finance at Stanford
University from 2000 to 2005. Mr. Woods received a
masters degree in business administration from the College
of William and Mary. Mr. Woods currently serves as a member
of the Audit Committee and as a member of the Finance Committee.
Age 55.
New
Director Nominated for Election
WILLIAM
L. TRUBECK
Mr. Trubeck served as Executive Vice President and Chief
Financial Officer of H&R Block, Inc., a financial services
company, from 2004 to 2007. Prior to joining H&R Block, he
served Waste Management Inc., a waste disposal and environmental
services company, as Executive Vice President of its Western
Group (2003 2004), Executive Vice President,
Operations Support, and Chief Administrative Officer
(2002 2003) and Executive Vice President and
Chief Financial Officer (2001 2002). Prior to
joining Waste Management, Mr. Trubeck was Senior Vice
President Finance and Chief Financial Officer of
International Multifoods, Inc., a food manufacturing company
(1997 2000), and President, Latin American
Operations of International Multifoods (1998 2000).
Mr. Trubeck is a director of YRC Worldwide Inc., a
transportation service provider, and of Dynegy Inc., a power
generation company. Mr. Trubeck serves as chairman of the
audit committees of both YRC Worldwide and of Dynegy.
Mr. Trubeck is also vice chairman
11
of the board of trustees of Monmouth College. Mr. Trubeck
graduated from Monmouth College and received a masters
degree in business administration from the University of
Connecticut. If elected, Mr. Trubeck is expected to serve
on the Audit Committee. Age 61.
The Companys Board of Directors recommends that
shareholders vote FOR these nominees as Directors by executing
and returning the WHITE proxy card or voting by one of the other
ways indicated thereon. Proxies solicited by the Board of
Directors will be so voted unless shareholders specify
otherwise.
STEEL
PARTNERS NOTICE OF NOMINEES
Steel Partners, which has reported that it and other affiliated
entities were the beneficial owner of 8,034,059 shares as
of January 30, 2008, has notified the Company of its
intention to nominate for election six individuals to the Board.
According to information provided by Steel Partners, for which
the Company disclaims any responsibility, these individuals are
Warren G. Lichtenstein, James R. Henderson, Gerald R. Dinkel,
Martin Turchin, James H. Perry and Thomas A. Corcoran.
At the date of this proxy statement, Steel Partners has
indicated it intends to solicit proxies from shareholders for
the election of its proposed nominees. If Steel Partners
proceeds to solicit proxies, the Board recommends that you do
NOT return Steel Partners gold proxy card or any
other proxy card provided by Steel Partners or otherwise vote as
recommended by Steel Partners.
The Board has determined that the election of the Steel Partners
nominees would not be in the best interests of the Company and
its shareholders. In making this determination, our Board
considered, among other factors:
Significant
Change Not Necessary
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The Board Has Several Shareholder-Designated Directors and is
Willing to Add More. The current Board includes three
shareholder-designated directors (Messrs. Lorber, Snyder
and Woods), who were initially nominated by Pirate Capital LLC
at the 2006 Annual Meeting. These Directors have since been
approved by the Board and are part of the Boards nominees.
Prior to Steel Partners delivering its notice of its intent to
nominate directors, the Board offered to nominate three of the
Steel Partners nominees to the Board. This would have increased
the number of shareholder-designated Directors to six,
representing a majority of the Board following the 2008 Annual
Meeting, but would not have given full control of the Board to
Steel Partners. The Board believes that it is committed to
having a Board that includes shareholder-designated Directors
for the benefit of all shareholders.
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Results of Operations Do Not Require Significant Change of
Board or Management. The Companys strategy over the
last five years has been to focus on two core
businesses Aerospace and Defense through its
subsidiary Aerojet-General Corporation, and Real Estate which
involves activities related to the entitlement, sale, and
leasing of our excess real estate assets. This strategy resulted
in the divestiture of non-core businesses, a compound annual
growth rate of 22% of Aerojets revenues and the release of
2,600 acres and expected soon-to-be-released
2,200 acres of the Companys excess real estate from
environmental restrictions under federal and state super fund
status. GenCorps recent results of operations demonstrate
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12
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that the Boards strategy is working and that a significant
change of the composition of the Board is not necessary. The
Company recently reported that sales for fiscal year 2007 were
$745.4 million, a 20% increase from fiscal year 2006, and
net income for fiscal year 2007 was $69.0 million, or $1.14
diluted earnings per share, compared to a net loss of
$38.5 million, or $0.69 loss per share for fiscal year 2006.
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Boards Nominees are Experienced and Independent.
The Boards nominees are seasoned executives, who are
respected, proven business leaders with extensive and relevant
experience unmatched by the Steel Partners nominees. As
executives of their own firms and as independent directors of
GenCorp (other than Mr. Hall, who is an officer of the
Company), the members of the Board have a proven record of
success. We believe the Boards nominees possess critical
industry and business experience and have taken their
responsibilities to shareholders and to the Company seriously.
Other than Mr. Trubeck who is being nominated for the first
time to serve on this Board, all of the Board members have
significant experience in dealing with the unique combination of
the Companys businesses Aerospace &
Defense and Real Estate and legacy issues.
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Current Board Focused on and Improving Corporate
Governance. The Board has taken significant steps to improve
the Companys corporate governance over the last two years,
including separating the roles of Chairman and CEO; allowing the
Companys shareholder rights plan to expire without renewal
in February 2007; amending the Companys Articles of
Incorporation to declassify the Board so that each of the
Directors would be subject to annual election; amending the
Companys Articles of Incorporation to render inapplicable
to the Company certain Ohio anti-takeover statutes that
restricted a shareholders ability to acquire shares in
excess of certain thresholds without prior Board or shareholder
approval; and adopting a majority vote policy for uncontested
elections of Directors, under which, any nominee who receives a
majority of withheld votes must submit his or her resignation to
the Board, which will promptly consider whether to accept or
reject the tendered resignation. The Board believes that it is
focused on thoughtful corporate governance improvements for the
benefit of all shareholders.
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Adverse
Effects on the Company Upon Election of Steel Partners
Nominees
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Steel Partners Seeks Control of the Board and the
Company. Steel Partners intends to have directors nominated
by it constitute a majority of the Directors on the Board. As
noted above, the Board offered to nominate several of the Steel
Partners nominees to the Board without giving Steel Partners
full control of the Board. Steel Partners rejected this offer.
Through its nominations, Steel Partners has sought control of
the Board and the Company, and therefore the ability to dictate
the Boards policies on management of the Company, business
plans, key initiatives, strategic alternatives, and
relationships with customers, suppliers and employees. Steel
Partners may have interests that differ from the interests of
the Companys shareholders other than Steel Partners.
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Election of the Steel Partners Nominees Will Result in the
Acceleration of the Companys Indebtedness and Will be an
Event of Default Under the Companys Senior Credit Facility
and Will Trigger Other Funding Requirements. The indentures
for the Companys senior and
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13
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subordinated notes and the Companys senior credit
agreement include customary provisions that provide for adverse
effects to the Company if a majority of the Board ceases to be
comprised of continuing directors (as defined under
those agreements). If the Steel Partners nominees are elected to
the Board, they will represent a majority of the Companys
Board (absent a determination by the Board to nominate for
election the Steel Partners nominees, which determination the
Board does not currently intend to make) and the Companys
obligations to pay the principal amount and interest of the
indebtedness would accelerate (either directly or as a result of
the triggering of an obligation of the Company to offer to
repurchase the indebtedness). In this event and absent a
settlement of the proxy contest, these obligations would almost
certainly need to be refinanced on terms to be negotiated on
current market terms (likely at a higher interest rates), which
may not be possible in light of the current uncertainties in the
credit markets. The Company expects that it would incur
increased annual interest expense and several million dollars in
fees if it were forced to refinance this indebtedness, if it is
possible at all. Upon the election of the Steel Partners
nominees, the Company would also cease to have access to a
revolving line of credit and a letter of credit facility, which
may have adverse effects on the Companys operations. In
addition, several of the Companys arrangements with
officers, employees and retirees include provisions that require
the Company to fund into a trust certain liabilities and
potential liabilities if a majority of the Board ceases to be
comprised of continuing directors (as defined under
those agreements). Based on the current size and composition of
the Board and current assumptions, if even one of the Steel
Partners nominees is elected to the Board, the Company may be
required to fund into a trust the liabilities associated with
the Companys Benefits Restoration Plan, and the amounts
that would be payable to officers of the Company who are party
to executive severance agreements as a result of qualifying
terminations of employment after a change of control of the
Company. The failure to elect Mr. Hall to the Board is a
qualifying termination under the executive severance agreement
between him and the Company, which will result in the incurrence
of severance liabilities described below in this proxy
statement. The Company is currently trying to estimate with
greater certainty the amounts of these obligations to the extent
practicable, which amounts are expected to be material.
|
In making the foregoing determinations, the Board also
considered the potential negative effects of opposing the Steel
Partners nominees, particularly the substantial costs that may
be involved and the fact that election contests typically
consume a substantial amount of management time and result in
the expenditure of significant expenses. However, the Board
determined that, on balance, these factors were substantially
outweighed by the other factors referenced above.
In making the foregoing determinations, the Board did not
attempt to assign relative weights to any particular factor or
to rank them in order of importance, and individual Directors
may have considered other factors in their decision-making. The
Directors may have considered the fact that they are standing
for reelection as well (other than Mr. Bolden), although
continued service on the GenCorp Board is not material to any of
them from a financial point of view.
Accordingly, if Steel Partners nominates one or more individuals
for election to the Board, the Company recommends that you vote
AGAINST Steel Partners nominees and FOR the
Companys
14
nominees. If Steel Partners in fact proceeds with these actions,
the Board expects to communicate further with shareholders prior
to the Annual Meeting.
Voting
for Directors
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 1, 2008 record date for each of the candidates for
election. Directors are elected by a plurality of the votes cast
at the Annual Meeting; however, the Board has adopted a majority
vote policy. Pursuant to such policy, in an uncontested
election, any nominee for Director who receives a greater number
of votes withheld for his or her election than votes
for such election (a Majority Withheld Vote) shall
promptly tender his or her resignation after such election for
consideration by the Corporate Governance & Nominating
Committee. Within 90 days thereafter, the Board of
Directors, taking into account the recommendation of the
Corporate Governance & Nominating Committee, must
determine whether to accept or reject the resignation. The
Director that tendered the resignation shall not participate in
the consideration or determination of whether to accept such
resignation. The Board of Directors shall disclose by press
release its decision to accept or reject the resignation and, if
applicable, the reasons for rejecting the resignation. If a
majority of the Corporate Governance & Nominating
Committee members receive a Majority Withheld Vote at the same
election, then the independent Directors who did not receive a
Majority Withheld Vote will appoint a committee of independent
Directors to consider the resignation offers and recommend to
the Board whether to accept or reject them.
Votes cast for a nominee will be counted in favor of election.
Abstentions 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 to vote for
the election of the Board of Directors nominees, unless
authorization to do so is withheld. 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 Annual Meeting, a
nominee becomes unable to serve as a Director for any reason,
the proxy holders reserve the right to substitute another person
of their choice in such nominees place and stead. It is
not anticipated that any nominee will be unavailable for
election at the Annual Meeting.
Retirement
Policy
Under the Boards retirement policy, a Directors term
of office normally expires at the Annual Meeting following his
or her
70th birthday.
The Boards retirement policy also provides that the Board
may waive immediate compliance with the policy and request that
a Director postpone his or her retirement until a subsequent
date. The Board has asked James M. Osterhoff, Chairman of the
Audit Committee, who turned 70 in 2006, to remain a Director
until the 2009 Annual Meeting, subject to re-election at the
2008 Annual Meeting.
Meetings
of the Board
The Board of Directors held sixteen meetings during fiscal year
2007. Other than Mr. Bolden who is not standing for
re-election at the 2008 Annual Meeting, all of our Directors
attended at least 75% of the regularly scheduled and special
meetings of the Board to which they were not otherwise excluded
15
(i.e. executive sessions) and Board committees on which they
served in fiscal year 2007. All of the Boards nominees for
election at the 2008 Annual Meeting are expected to attend such
Annual Meeting. All but one of the Directors then in office were
present at the Companys 2007 Annual Meeting.
Non-Executive
Chairman of the Board
In February 2007, as part of its ongoing commitment to good
corporate governance, the Board of Directors made a decision to
separate the positions of Chairman of the Board and Chief
Executive Officer. Historically, the positions of Chairman of
the Board and Chief Executive Officer have been held by the same
person. In February 2007, the Board appointed Timothy A. Wicks
as non-executive Chairman of the Board.
Meetings
of Non-Employee Directors
Non-employee Directors (consisting of all Directors other than
Mr. Hall) meet in executive session as part of each
regularly scheduled Board meeting. In 2007, Mr. Wicks,
Chairman of the Board, presided at all such executive sessions.
In the event of his absence, a non-employee Director would have
been chosen on a rotating basis.
Determination
of Independence of Directors
The Board has determined that to be considered independent, a
Director may not have a direct or indirect material relationship
with the Company. A material relationship is one which impairs
or inhibits, or has the potential to impair or inhibit, a
Directors exercise of critical and disinterested judgment
on behalf of the Company and its shareholders. In making its
assessment of independence, the Board considers any and all
material relationships not merely from the standpoint of the
Director, but also from that of persons or organizations with
which the Director has or has had an affiliation or those
relationships which may be material, including commercial,
industrial, banking, consulting, legal, accounting, charitable
and familial relationships, among others. The Board also
considers whether a Director was an employee of the Company
within the last five years. The Board consults with the
Companys counsel to ensure that the Boards
determinations are consistent with all relevant securities and
other laws and regulations regarding the definition of
independent Director, including those set forth in
pertinent listing standards of the New York Stock Exchange
(NYSE) as in effect from time to time. The NYSEs listing
standards require that all listed companies have a majority of
independent directors. For a director to be
independent under the NYSE listing standards, the
board of directors of a listed company must affirmatively
determine that the director has no material relationship with
the company, or its subsidiaries or affiliates, either directly
or as a partner, shareholder or officer of an organization that
has a relationship with the company or its subsidiaries or
affiliates. In accordance with the NYSE listing standards, the
Board of Directors has affirmatively determined that each
Director other than Mr. Hall has no material relationship
with the Company, either directly or as a partner, shareholder
or officer of an organization that has a relationship with the
Company.
16
Additionally, each Director other than Mr. Hall has been
determined to be independent under the following
NYSE listing standards, which provide that a Director is not
independent if:
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the Director is, or has been within the last three years, an
employee of the Company, or an immediate family member is, or
has been within the last three years, an executive officer, of
the Company;
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the Director has received, or has an immediate family member who
has received, during any twelve-month period within the last
three years, more than $100,000 in direct compensation from the
Company, other than director and committee fees and pension or
other forms of deferred compensation for prior service (provided
such compensation is not contingent in any way on continued
service);
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(a) the Director or an immediate family member is a current
partner of a firm that is the Companys internal or
external auditor; (b) the Director is a current employee of
such a firm; (c) the Director has an immediate family
member who is a current employee of such a firm and who
participates in the firms audit, assurance or tax
compliance (but not tax planning) practice; or (d) the
Director or an immediate family member was within the last three
years (but is no longer) a partner or employee of such a firm
and personally worked on the Companys audit within that
time;
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the Director or an immediate family member is, or has been
within the last three years, employed as an executive officer of
another company where any of the Companys present
executive officers at the same time serves or served on that
companys compensation committee; or
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the Director is a current employee, or an immediate family
member is a current executive officer, of a company that has
made payments to or received payments from, the Company for
property or services in an amount which, in any of the last
three fiscal years, exceeds the greater of $1 million, or
2% of such other companys consolidated gross revenues.
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Board
Committees
The Board maintains four standing committees: Audit; Corporate
Governance & Nominating; Organization &
Compensation; and Finance. Assignments to, and chairs of, the
committees are recommended by the Corporate
Governance & Nominating Committee and approved by the
Board. All committees report on their activities to the Board.
Each standing committee operates under a charter approved by the
Board. The charters for each of the standing committees are
posted on the Companys web site at www.GenCorp.com
(and in print to any shareholder or interested party who
requests them by writing to Secretary, GenCorp Inc.,
P.O. Box 537012, Sacramento, California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742)).
17
The table below provides current membership and fiscal year 2007
meeting information for each of the standing committees.
Committee membership is reviewed by the full Board at its first
meeting following the Annual Meeting.
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Corporate Governance
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Organization &
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Name
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Audit
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& Nominating
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Compensation
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Finance
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Charles F. Bolden Jr.
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X
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X
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James J. Didion
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X
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*
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X
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Terry L. Hall
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David A. Lorber
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X
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X
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James M. Osterhoff
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X
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*
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X
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Todd R. Snyder
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X
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X
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*
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Timothy A. Wicks
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X
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X
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Sheila E. Widnall
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X
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X
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*
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Robert C. Woods
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X
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X
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Total meetings in fiscal year 2007
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8
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6
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8
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6
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The Audit Committee is a separately designated standing
committee established in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934.
The Board has determined that each member of the Audit Committee
meets all applicable independence and financial literacy
requirements under the NYSE listing standards. The Board has
also determined that Mr. Osterhoff is an audit
committee financial expert as defined in the regulations
adopted by the Securities and Exchange Commission (SEC). The
Audit Committee reviews and evaluates the scope of the audits to
be performed by, the adequacy of services performed by, and the
fees and compensation of, the independent auditors. The Audit
Committee also reviews the Companys audited financial
statements with management and with the Companys
independent auditors and recommends to the Board of Directors to
include the audited financial statements in the Annual Report on
Form 10-K;
approves in advance all audit and permitted non-audit services
to be provided by the independent auditors; reviews and
considers matters that may have a bearing upon continuing
auditor independence; prepares the report of the Audit Committee
to be included in the Companys proxy statement; appoints
the independent auditors to examine the consolidated financial
statements of the Company; reviews and evaluates the scope and
appropriateness of the Companys internal audit function,
plans and system of internal controls; reviews and evaluates the
appropriateness of the Companys selection or application
of accounting principles and practices and financial reporting;
receives periodic reports from the internal audit and law
departments; and reviews and oversees the Companys
compliance with legal and regulatory requirements.
The Corporate Governance & Nominating Committee (the
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 (including the non-executive Chairman of
18
the Board), the structure and function of Board committees, and
the retirement policy and compensation and benefits of
Directors. The Corporate Governance Committee also assists in
identifying, and recommends to the Board, qualified candidates
to serve as Directors of the Company and considers and makes
recommendations to the Board concerning Director nominations
submitted by shareholders. The Corporate Governance Committee
also periodically reviews and advises the Board regarding
significant matters of public policy, including proposed actions
by foreign and domestic governments that 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 Companys response thereto; periodically
reviews and advises the Board regarding the status of the
Companys 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. The Board has
determined that each member of the Corporate Governance
Committee meets all applicable independence requirements under
the NYSE listing standards.
The Organization & Compensation Committee (the
Compensation Committee) advises and recommends to the
independent Directors the total compensation of the President
and Chief Executive Officer. In addition, the Compensation
Committee, with the counsel of the Chief Executive Officer,
considers and establishes base pay and incentive bonuses for the
other executive officers of the Company. The Compensation
Committee also administers the Companys deferred
compensation plan and the GenCorp 1999 Equity and Performance
Incentive Plan. The Compensation Committee periodically reviews
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 Companys
employee benefit, savings and retirement plans and reports
thereon to the Board; and approves, and in some cases recommends
to the Board of Directors for approval, the compensation of
employee-Directors,
officers, and executives of the Company.
The Finance Committee makes recommendations to the Board with
regard to the Companys capital structure and the raising
of long-term capital. The Finance Committee also reviews the
performance and management of the Companys employee
benefit funds, and makes recommendations to the Board in regard
to contributions to any Company pension, profit sharing,
retirement or savings plan, or any proposed changes in the
funding method, interest assumptions or in amortization of
liabilities in connection with the funding of any such plan.
From time to time, the Board also forms special committees when
specific matters need to be addressed.
19
Director
Nominations
The Corporate Governance & Nominating Committee
identifies potential director candidates through a variety of
means, including recommendations from members of the Corporate
Governance & Nominating Committee, the Board,
management, and shareholders. The Corporate
Governance & Nominating Committee also may retain the
services of a consultant to assist in identifying candidates.
The Corporate Governance & Nominating Committee will
consider nominations submitted by shareholders. To recommend a
nominee, a shareholder should write to the Chairman of the
Corporate Governance & Nominating Committee,
c/o Secretary,
GenCorp Inc., P.O. Box 537012, Sacramento, California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742). Any such recommendation must
include (i) the name and address of the candidate;
(ii) a brief biographical description, including his or her
occupation for at least the last five years, and a statement of
the qualifications of the candidate; and (iii) the
candidates signed consent to serve as a Director if
elected and to be named in the proxy statement.
Such nominations must be received by the Chairman of the
Corporate Governance & Nominating Committee no later
than the December 1 immediately preceding the date of the Annual
Meeting at which the nominee is to be considered for election.
Since the date of the Companys 2007 proxy statement, there
have been no material changes to the procedures by which
shareholders of the Company may recommend nominees to the Board
of Directors.
The Corporate Governance & Nominating Committee seeks
to create a Board that is, as a whole, strong in its collective
knowledge and diversity of skills and experience and background
with respect to accounting and finance, management and
leadership, business judgment, industry knowledge and corporate
governance. When the Corporate Governance & Nominating
Committee reviews a potential new candidate, it looks
specifically at the candidates qualifications in light of
the needs of the Board and the Company at that time, given the
then-current mix of Director attributes.
Communications
with Directors
Shareholders and other interested parties may communicate with
the Board or individual Directors by mail addressed to: Chairman
of the Corporate Governance & Nominating Committee,
c/o Secretary,
GenCorp Inc., P.O. Box 537012, Sacramento, California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742). The Secretary may initially
review communications to the Board or individual Directors and
transmit a summary to the Board or individual Directors, but has
discretion to exclude from transmittal any communications that
are, in the reasonable judgment of the Secretary, inappropriate
for submission to the intended recipient(s). Examples of
communications that would be considered inappropriate for
submission to the Board or a Director include, without
limitation, customer complaints, solicitations, commercial
advertisements, communications that do not relate directly or
indirectly to the Companys business or communications that
relate to improper or irrelevant topics.
20
Compensation
Committee Interlocks and Insider Participation
The Organization & Compensation Committee is composed
entirely of non-employee independent Directors. As of
November 30, 2007, the members of the
Organization & Compensation Committee included Sheila
E. Widnall (Chairwoman), Charles F. Bolden, David A. Lorber and
Todd R. Snyder. All non-employee independent Directors
participate in decisions regarding the compensation of Terry L.
Hall, the President and Chief Executive Officer. None of the
Companys executive officers serves as a member of the
board of directors or compensation committee of any entity that
has one or more of its executive officers serving as a member of
the Companys Organization & Compensation
Committee. In addition, none of the Companys executive
officers serves as a member of the compensation committee of any
entity that has one or more of its executive officers serving as
a member of the Companys Board of Directors.
Director
Compensation
The compensation of the Companys non-employee Directors is
determined by the Board upon the recommendations made by the
Corporate Governance & Nominating Committee (the
Corporate Governance Committee).
Annual
Cash Compensation
Under our Director compensation program in effect in fiscal year
2007, each non-employee Director received an annual retainer fee
of $44,000. In addition, in fiscal year 2007 each non-employee
Director received $4,000 for each Committee membership.
Non-employee Directors who served as Chairperson of a Committee
also received an additional annual fee of $8,000. In fiscal year
2007, the Board formed a steering committee consisting of
Mr. Snyder (Chairman), and Messrs. Wicks and
Osterhoff, with respect to a special project. Following Board
approval, Mr. Snyder received $8,000 for his service as
Chairman of the steering committee and Messrs. Osterhoff
and Wicks each received $4,000 for their service on the steering
committee.
In February 2007, the Board of Directors elected to separate the
office of Chairman of the Board and Chief Executive Officer and
appointed Mr. Wicks as the non-executive Chairman of the
Board. As non-executive Chairman of the Board, Mr. Wicks
received the pro-rated fee totaling $85,230 in fiscal year 2007
in lieu of the annual retainer fee paid to other non-employee
Directors.
The Corporate Governance Committees charter authorizes the
Committee to employ independent compensation and other
consultants to assist in fulfilling its duties. After reviewing
a study regarding director compensation prepared by
Hewitt & Associates, an independent compensation
consultant, the Board of Directors approved the following
changes effective as of April 2008: (i) the annual retainer
fee for non-employee Directors (other than the non-executive
Chairman of the Board) will be $50,000, and (ii) the annual
Committee fee for the Chairman of the Audit Committee will be
$15,000. The annual retainer fee for the non-executive Chairman
of the Board will be $104,000.
21
Equity
Grants
All non-employee Directors receive an annual grant of restricted
shares of the Companys Common Stock under the GenCorp 1999
Equity and Performance Incentive Plan, typically in March. In
March 2007, each non-employee Director (other than the
non-executive Chairman of the Board) received a grant of 500
restricted shares. The non-executive Chairman of the Board
received 1,000 restricted shares at that time. Provided that the
grantee remains in continuous service as a Director of the
Company, the restricted shares vest and become non-forfeitable
on the third anniversary of the grant. Non-employee Directors
also receive a one-time award of 500 restricted shares of the
Companys Common Stock as part of their initial election to
the Board. All shares may be voted, but ownership may not be
transferred until such shares are vested. Unless otherwise
approved by the Board, unvested shares will be forfeited in the
event of a voluntary resignation or refusal to stand for
re-election.
All non-employee Directors receive an annual grant of stock
options or stock appreciation rights (SARs) at the Boards
discretion, typically in January. In January 2007, each
non-employee Director received a grant of 5,000 SARs. Fifty
percent of such SARs vest six months from the date of grant with
the remaining stock options or SARs vesting one year from the
date of grant. All such stock options and SARs have a
10-year term.
Upon recommendation by the Corporate Governance Committee after
reviewing a study by Hewitt & Associates regarding
director compensation, effective in 2008, the Board of Directors
approved the following changes: (i) the annual grant of
restricted shares of the Companys Common Stock to
non-employee Directors (other than the non-executive Chairman of
the Board) will be 1,750 shares, (ii) the annual grant
of stock options or SARs to non-employee Directors (other than
the non-executive Chairman of the Board) will be 6,000 options
or SARs, and (iii) the non-executive Chairman of the Board
will receive annual grants of 3,500 restricted shares and 12,000
of stock options or SARs.
Equity
Ownership Guidelines for Non-employee Directors
In October 2007, upon the recommendation of the Corporate
Governance Committee, the Board adopted equity ownership
guidelines under which non-employee Directors are required to
own equity in the Company in an amount equal to $150,000. In
calculating the amount of equity owned by a non-employee
Director, the Board looks at the value of Company common stock
owned by such non-employee Director (restricted stock and stock
owned outright), the value of any phantom stock owned by such
non-employee Director as part of the Director Deferred
Compensation Plan, and the value of any vested in the
money options or SARs (i.e. market value of Company stock
in excess of the strike price for the stock option or SAR).
Non-employee Directors have five years to meet the thresholds
set forth in these equity ownership guidelines.
Director
Deferred Compensation Plan
Directors annually may elect to defer all or a percentage of
their cash compensation pursuant to the Director Deferred
Compensation Plan. The plan is unfunded, and deferred amounts
are deemed to be invested in, at the election of the Director,
phantom shares in a GenCorp Stock Fund, a
22
Standard & Poors 500 index fund, or a cash
deposit program. Deferred amounts and earnings thereon are
payable at or commencing at a future date, in either a lump sum
or installments as elected by the Director at the time of
deferral.
Director
Retirement Plan
Each non-employee Director elected to the Board prior to
January 1, 2002 participated in the Companys
Retirement Plan for Non-Employee Directors (the Retirement
Plan). Under the Retirement Plan, each of such Directors will
receive a monthly retirement benefit in the amount of $2,000
until the number of monthly payments made equals the
Directors months of benefit accrual under the Retirement
Plan (maximum of 120 months). 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 Directors surviving spouse or
other designated beneficiary, if any, or to the retired
Directors estate. Non-employee Directors serving on the
Board prior to January 1, 2002 were given the opportunity
to either (a) continue participating in the Retirement
Plan, or (b) freeze the retirement benefit already accrued
under the Retirement Plan and receive the annual stock option or
SARs grant in respect of future service on the Board. The
non-employee Directors who were eligible to participate in such
Plan (Mr. Osterhoff and Dr. Widnall) elected to freeze
accrued retirement benefits and to receive the annual stock
option or SARs grant. Under the terms of the Retirement Plan, in
the event a Directors service on the Board terminates for
any reason on the date of a change in control or during the two
year period following a change in control, such Director shall
be entitled to the immediate payment of the aggregate amount of
unpaid monthly installments in a lump sum.
Other
The GenCorp Foundation matches employee and Director gifts to
accredited, non-profit colleges, universities, secondary, and
elementary public or private schools located in the United
States. Gifts made are matched dollar for dollar, up to $7,500
for each year.
Each non-employee Director elected to the Board prior to
January 1, 2002 is eligible to participate in the
Healthcare Plan for Nonemployee Directors.
The Company also reimburses the Directors for travel and other
expenses incurred in attending Board and Committee meetings.
23
2007
DIRECTOR COMPENSATION TABLE
The following table sets forth information regarding
compensation for each of the Companys non-employee
Directors for fiscal year 2007.
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
SARs Awards
|
|
|
|
Compensation
|
|
|
|
|
|
Name
|
|
|
Fees Paid
($)(1)
|
|
|
|
($)(2)(3)
|
|
|
|
($)(2)(3)
|
|
|
|
($)(4)
|
|
|
|
Total ($)
|
|
J. Robert Anderson*
|
|
|
$
|
11,000
|
|
|
|
$
|
7,742
|
|
|
|
$
|
|
|
|
|
$
|
4,500
|
|
|
|
$
|
23,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles F. Bolden Jr.
|
|
|
|
52,000
|
|
|
|
|
4,573
|
|
|
|
|
31,062
|
|
|
|
|
|
|
|
|
|
87,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Didion
|
|
|
|
60,000
|
|
|
|
|
4,573
|
|
|
|
|
31,062
|
|
|
|
|
|
|
|
|
|
95,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Lorber
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|
|
|
52,000
|
|
|
|
|
7,670
|
|
|
|
|
31,062
|
|
|
|
|
|
|
|
|
|
90,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James M. Osterhoff
|
|
|
|
64,000
|
|
|
|
|
4,573
|
|
|
|
|
31,062
|
|
|
|
|
7,250
|
|
|
|
|
106,885
|
|
|
|
|
|
|
|
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|
|
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|
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|
|
|
|
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|
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|
|
|
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|
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Todd R. Snyder
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|
|
|
68,000
|
|
|
|
|
7,670
|
|
|
|
|
31,062
|
|
|
|
|
|
|
|
|
|
106,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Timothy A. Wicks
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|
108,230
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|
|
|
|
6,050
|
|
|
|
|
31,062
|
|
|
|
|
500
|
|
|
|
|
145,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheila E. Widnall
|
|
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|
60,000
|
|
|
|
|
4,573
|
|
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|
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31,062
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|
|
|
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7,500
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|
|
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103,135
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|
|
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|
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|
|
|
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|
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Robert C. Woods
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|
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52,000
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|
|
|
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7,670
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|
|
|
|
31,062
|
|
|
|
|
|
|
|
|
|
90,732
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|
|
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|
|
|
|
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*
|
|
Mr. Anderson was a Director
until his retirement from the Board at the 2007 Annual Meeting
on March 28, 2007.
|
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(1)
|
|
The amount reported in this column
for each Director reflects the dollar amount of Board of
Director and Committee fees paid or deferred in fiscal year 2007.
|
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(2)
|
|
The amounts reported in these
columns for each Director reflect the compensation costs for
financial reporting purposes for the fiscal year under Statement
of Financial Accounting Standards No. 123(R) Share-Based
Payment (SFAS 123(R)). A discussion of the assumptions
used in calculating these values may be found in Note 8c in
the audited financial statements in Companys Annual Report
on Form 10K for the fiscal year ended November 30,
2007.
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(3)
|
|
Shares of restricted stock vest in
full on the third anniversary of the grant date if the Director
is then serving on the Board. SARs awards fully vest one year
from the grant date, and stock option awards are all fully
vested.
|
24
The following table shows the shares of restricted stock and
SARs granted to each Director during fiscal year 2007, and the
aggregate grant date fair value for each award under
SFAS 123(R). The grant date fair values of SARs awards are
estimated using a Black-Scholes Model.
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Grant Date
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Grant
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Stock Awards
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SARs Awards
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|
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Fair Value
|
|
Name
|
|
|
Date
|
|
|
|
(#)
|
|
|
|
(#)
|
|
|
|
($)
|
|
J. Robert Anderson
|
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|
|
1-17-2007
|
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|
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|
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|
|
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5,000
|
|
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|
$
|
42,550
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Charles F. Bolden Jr.
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1-17-2007
|
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|
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5,000
|
|
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|
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42,550
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|
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3-28-2007
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|
|
500
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|
|
|
|
|
|
|
|
|
6,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
James J. Didion
|
|
|
|
1-17-2007
|
|
|
|
|
|
|
|
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|
5,000
|
|
|
|
|
42,550
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-28-2007
|
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
6,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Lorber
|
|
|
|
1-17-2007
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
42,550
|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
3-28-2007
|
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
6,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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James M. Osterhoff
|
|
|
|
1-17-2007
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
42,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-28-2007
|
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
6,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Todd R. Snyder
|
|
|
|
1-17-2007
|
|
|
|
|
|
|
|
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|
5,000
|
|
|
|
|
42,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-28-2007
|
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
6,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
Timothy A. Wicks
|
|
|
|
1-17-2007
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
42,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-28-2007
|
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
13,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheila E. Widnall
|
|
|
|
1-17-2007
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
42,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-28-2007
|
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
6,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert C. Woods
|
|
|
|
1-17-2007
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
42,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3-28-2007
|
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
6,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
|
The amounts reported in this column
for each Director represent matching contributions made by the
GenCorp Foundation for gifts made by Directors in fiscal year
2007.
|
25
Security
Ownership of Officers and Directors
The following table lists share ownership of the Companys
Common Stock as of February 1, 2008, by the Directors,
Mr. Trubeck and the Named Executive Officers, as well as
the number of shares beneficially owned by all of the Directors
and executive officers as a group. Unless otherwise indicated,
share ownership is direct.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of
|
|
|
|
|
Beneficial Owner
|
|
|
Beneficial
Ownership(1)(2)
|
|
|
Percent of Class
|
|
Charles F. Bolden Jr.
|
|
|
|
2,000
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
James J.
Didion(3)
|
|
|
|
20,290
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Lorber
|
|
|
|
1,500
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
James M.
Osterhoff(3)
|
|
|
|
26,365
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Todd R. Snyder
|
|
|
|
3,500
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
William L. Trubeck
|
|
|
|
0
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy A. Wicks
|
|
|
|
2,000
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheila E. Widnall
|
|
|
|
21,746
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert C. Woods
|
|
|
|
1,500
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry L. Hall
|
|
|
|
549,726
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Yasmin R. Seyal
|
|
|
|
163,610
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Scott Neish
|
|
|
|
34,522
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Whitney
|
|
|
|
60,900
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Leon Blackburn
|
|
|
|
22,661
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
All Directors and Executive
Officers(18)
|
|
|
|
1,039,855
|
|
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Less than 1.0%
|
|
(1)
|
|
The number of shares beneficially
owned by a Director or an officer of the Company includes
restricted shares granted under the GenCorp Inc. 1999 Equity and
Performance Incentive Plan and shares previously held prior to
election. The number of shares beneficially owned by an officer
of the Company includes shares credited in the GenCorp
Retirement Savings Plan as of January 31, 2008.
|
|
(2)
|
|
Includes shares issuable upon the
exercise of stock options that may be exercised within
60 days of February 1, 2008 as follows:
Mr. Didion 16,790 shares;
Mr. Osterhoff 17,414 shares;
Dr. Widnall 17,414 shares;
Mr. Hall 321,316 shares;
Ms. Seyal 71,000 shares;
Mr. Neish 2,200 shares; and
Mr. Whitney 24,000 shares; and all
executive officers and Directors as a group
529,952 shares. Neither of Messrs. Bolden, Lorber,
Snyder, Trubeck, Wicks, Woods or Blackburn holds stock options
exercisable within 60 days of February 1, 2008.
|
|
(3)
|
|
Some shares are held indirectly
through the Didion Trust and James M. Osterhoff Trust,
respectively.
|
26
Code of
Ethics and Corporate Governance Guidelines
The Company has adopted a code of ethics known as the Code of
Business Conduct that applies to the Companys employees
including the principal executive officer, principal financial
officer, principal accounting officer and controller. Copies of
the Code of Business Conduct and the Companys Corporate
Governance Guidelines are available on the Companys web
site at www.GenCorp.com (copies are available in print to
any shareholder or other interested person who requests them by
writing to Secretary, GenCorp Inc., P.O. Box 537012,
Sacramento, California
95853-7012
(if by overnight courier, then Highway 50 & Aerojet Road,
Rancho Cordova, California 95742)).
Shareholder
Agreement
On February 15, 2005, the Company and Steel Partners II,
L.P. (Steel Partners) entered into a shareholder agreement.
Pursuant to that agreement, a representative of Steel Partners
was permitted to attend all of the Board of Directors
meetings as a non-voting observer until February 15, 2007.
On February 16, 2007, the Company and Steel Partners
amended and restated the shareholder agreement to allow Steel
Partners board observer status to be extended until
February 16, 2008, at which point the agreement terminates.
27
REPORT OF
THE AUDIT COMMITTEE
The Audit Committee assists the Board of Directors in fulfilling
its responsibilities for general oversight of (i) the
quality and integrity of the Companys financial
statements, (ii) the independent auditors
qualifications and independence, (iii) the performance of
the Companys financial reporting process, internal control
system, internal audit function and independent auditors, and
(iv) the Companys compliance with legal and
regulatory requirements. The Audit Committee manages the
Companys relationship with its independent auditors, who
report directly to the Audit Committee. The Audit Committee has
the authority to obtain advice and assistance from outside
legal, accounting or other advisors as the Audit Committee deems
necessary to carry out its duties, with funding from the Company
for such advice and assistance. Management is primarily
responsible for establishing and maintaining the Companys
system of internal controls and preparing financial statements
in accordance with accounting principles generally accepted in
the United States.
In fulfilling its responsibilities, the Audit Committee reviewed
and discussed with management the audited financial statements
in the Annual Report, including a discussion of the
reasonableness of significant judgments and the clarity of
disclosures in the financial statements.
The Audit Committee reviewed and discussed the Companys
financial statements with the independent auditors, who are
responsible for expressing an opinion on the conformity of those
audited financial statements with generally accepted accounting
principles, and discussed such other matters as are required to
be discussed with the Audit Committee under generally accepted
auditing standards. In addition, the Audit Committee discussed
with the independent auditors matters required to be discussed
by Statement on Auditing Standards No. 61, as
amended, and the auditors independence from management and
the Company, including the written disclosures and letter
received from the independent auditors as required by the
Independence Standards Board Standard No. 1 and the
compatibility of their non-audit services with maintaining their
independence.
The Audit Committee also reviewed with management and the
independent auditors the preparation of the financial statements
and related disclosures contained in the Companys earnings
announcements and quarterly reports.
The Audit Committee discussed with the Companys internal
and independent auditors the overall scope and plans for their
respective audits. The Audit Committee met with the internal and
independent auditors, with and without management present, to
discuss the results of their examinations, their evaluations of
the Companys internal controls, and the overall quality of
the Companys financial reporting. The Audit Committee also
received PricewaterhouseCoopers LLPs report on the
Companys internal controls over financial reporting. The
Company outlined these reports in its Annual Report on
Form 10-K
for the fiscal year ended November 30, 2007.
28
The Audit Committee met eight times during fiscal year 2007.
In reliance on the reviews and discussions referred to in the
foregoing paragraphs, the Audit Committee recommended to the
Board of Directors (and the Board approved) that the audited
financial statements be included in the Companys Annual
Report on
Form 10-K
for the fiscal year ended November 30, 2007 for filing with
the SEC. The Audit Committee appointed PricewaterhouseCoopers
LLP as the Companys independent auditors for fiscal year
2008.
Submitted by the Audit Committee,
James M. Osterhoff, Chairman
David A. Lorber
Timothy A. Wicks
Robert C. Woods
January 22, 2008
29
COMPENSATION
COMMITTEE REPORT
The Organization & Compensation Committee has reviewed
and discussed the Compensation Discussion and Analysis required
by Item 402(b) of
Regulation S-K
with management and, based on such review and discussion, the
Organization & Compensation Committee recommended to
the Board of Directors that the Compensation Discussion and
Analysis be included in this proxy statement. The Board has
approved that recommendation.
Submitted by the Organization & Compensation Committee,
Sheila E. Widnall, Chairwoman
Charles F. Bolden Jr.
David A. Lorber
Todd R. Snyder
January 22, 2008
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Overview;
Compensation Objectives
Our compensation program is designed to support our business
goals and promote both short-term and long-term growth. In this
section of the proxy statement, we explain how our compensation
program is designed and operates with respect to our Named
Executive Officers, which include our CEO, CFO, and three most
highly compensated executive officers in fiscal year 2007.
We have designed our executive compensation program, under the
direction of the Compensation Committee of the Board, to attract
and retain high quality executive officers and directly link pay
to our performance. The Companys strategic goals include
improving the Companys financial performance, obtaining
entitlements on the Companys excess real estate, and
managing the Companys legacy liabilities. Accordingly, as
discussed in more detail below, the Compensation Committee set
performance targets for annual cash bonuses for 2007 relating to
earnings per share, cash flow and various real estate objectives
tied to the entitlement of our excess real estate.
The Compensation Committee determines all matters of executive
compensation and benefits, although the Chief Executive Officer
(CEO) provides input and initial recommendations to the
Compensation Committee with respect to the Named Executive
Officers other than the CEO. The Compensation Committee advises
and makes compensation recommendations to the independent
members of the Board of Directors with respect compensation for
the President and CEO.
30
The objectives of our executive compensation program are as
follows:
|
|
|
|
|
Performance Incentives provides a compensation
structure under which a meaningful portion of total compensation
is based on achievement of performance goals.
|
|
|
|
Competitive Compensation provides compensation that
is competitive with compensation for executive officers
providing comparable services, taking into account our size and
complexity and the markets we serve.
|
|
|
|
Retention Incentives provides incentives for
long-term continued employment with us.
|
|
|
|
Stakeholder Incentives promotes an ownership
mentality that aligns management and shareholder interests. In
this regard, the Compensation Committee approved share ownership
guidelines that apply to our Named Executive Officers, where
over a period of time, each Named Executive Officer is expected
to own shares of our Common Stock equal in total market value to
a designated multiple of such executive officers annual
salary.
|
Compensation
Benchmarking
The Compensation Committee sets base salaries, target annual
cash incentive levels and target annual long-term incentive
award values at the 50th percentile of competitive market
levels. In assessing competitive overall compensation, the
Compensation Committee reviewed a combination of relevant data
acquired from outside sources including Towers Perrin (executive
compensation database for annual revenue scope of
$500 million to $1 billion), Hewitt &
Associates (executive survey for annual revenue scope of
$500 million to $1 billion), and Mercer Human Resource
Consulting (executive survey for annual revenue scope of
$500 million to $1 billion). The Compensation
Committee did not retain a compensation consultant to assist in
creating the compensation package for the Companys
executives for fiscal year 2007. The Compensation Committee has
retained two consultants Watson Wyatt Worldwide and
FPL Associates LLP to assist in designing
compensation packages for the executives for fiscal year 2008.
Compensation
Elements
The compensation program for executive officers consists of the
following principal elements:
|
|
|
|
|
Short-term compensation, including base salaries and annual cash
incentive (bonus) awards,
|
|
|
|
Long-term compensation equity incentive awards, including
restricted stock and cash-settled stock appreciation rights
(SARs),
|
|
|
|
In-service and post-retirement/employment benefits
Pension and 401k Savings Plans, and
|
|
|
|
Change in control agreements.
|
The Committee believes that these elements of compensation
create a flexible package that reflects the long-term nature of
the Companys businesses and rewards both short and
long-term performance of the Company and individual in
accordance with the objectives of the compensation program.
31
Short-term
Compensation
Base
Salaries
Base salaries are used to provide a fixed amount of compensation
for the executives regular work. Each year, the
Compensation Committee holds a meeting (typically in January),
where it reviews and, in some cases, makes adjustments to base
salaries. Typically, the effective date of merit increases in
base salaries is in April of each year. Base salary increases
can also occur upon an executives promotion. Any base
salary increase for the Companys executive officers must
be approved by the Compensation Committee. In determining the
amount of any increases in salaries, the Compensation Committee
(i) compares current cash compensation with compensation
for comparable executive positions in industry studies and data
described under Compensation Benchmarking,
(ii) assesses the individual performance of each of the
executives, and (iii) takes into account the timing and
amount of the last salary increase for each of the executives.
Annual
Cash Incentive Program
The primary objective of our annual cash incentive awards is to
reward fiscal year performance and achievement of designated
business strategic goals to provide competitive compensation to
assist in retaining our senior management team. To those ends,
the Compensation Committee sets performance targets such that
total cash compensation (base salary plus annual cash bonus)
will be within a competitive range of total cash compensation
(generally at the 50th percentile level for comparable
executives) if performance targets are met. The annual cash
incentive program follows our pay for performance
philosophy. If targets are met, cash bonuses are paid; if
minimum targets are not met, we will pay less or nothing at all.
If targets are exceeded, the Compensation Committee has
discretion to increase payments to the executives.
In order to promote the Companys strategic goals of
improving financial performance and obtaining entitlements on
the Companys excess real estate, the Compensation
Committee set performance targets for annual cash bonuses for
our Named Executive Officers for fiscal year 2007, consisting of
earnings per share, cash flow and various real estate objectives
tied to the entitlement of our excess real estate.
In the first quarter of each fiscal year, typically in January,
the Compensation Committee approves the annual cash incentive
program for the Executive Officers of the Company. The target
annual cash bonus is established through an analysis of
compensation for comparable positions as noted in the studies
described under Compensation Benchmarking and is intended
to provide a competitive level of compensation when the
executives achieve their performance objectives. Combined
salaries and target bonus levels, on an aggregate basis, are
intended to approximate the
50th percentile
level. In the first quarter of each fiscal year, the
Compensation Committee:
|
|
|
|
|
sets the overall Company and business segment performance
objectives and payout ranges for the fiscal year,
|
|
|
|
sets performance measures for the fiscal year,
|
32
|
|
|
|
|
establishes a target, threshold, and maximum bonus opportunity
for each executive officer, and
|
|
|
|
measures performance and determines awards for the prior fiscal
year.
|
Annual cash incentive bonuses are paid at the beginning of each
fiscal year for the prior fiscal years performance.
Bonuses paid are based upon the Compensation Committees
(with input from the CEO) assessment of actual performance
(individually and Company-wide) against pre-established Company
and business segment performance objectives to determine the
appropriate amount payable with respect to the applicable target
bonus opportunity. The Compensation Committee has discretion to
increase, reduce or eliminate payments and, in the past, has
exercised its discretion to increase and decrease payments.
The Compensation Committee tailors both performance measures and
targets in order to most accurately approximate success criteria
for both of our business segments and the Companys
performance overall. For fiscal year 2007, our Named Executive
Officers had the opportunity to earn up to the following
percentages of their base salaries if all of their performance
measures were met at the maximum (100%) target levels:
|
|
|
|
|
President and Chief Executive Officer 125%
|
|
|
|
Business Unit Presidents* 100%
|
|
|
|
Senior Vice Presidents 80% 100%
|
|
|
|
Vice Presidents 50%
|
* The position of Business Unit
President for the Real Estate segment was vacant at the end of
fiscal year 2007
The criteria used in fiscal year 2007 were the following:
Corporate Executives applicable to our
corporate officers, which included all of the Named Executive
Officers except for Mr. Neish who is part of our Aerospace
and Defense Segment.
|
|
|
|
|
|
|
|
|
|
|
|
Maximum
|
|
|
|
|
Corporate Executive Targets
|
|
|
Target Opportunity
|
|
|
|
Was Target Met?
|
Economic Earnings Per
Share(1)
of $0.38
|
|
|
|
33.33
|
%
|
|
|
Yes
|
|
|
|
|
|
|
|
|
|
Positive Cash
Flow(2)
|
|
|
|
33.33
|
%
|
|
|
Yes
|
|
|
|
|
|
|
|
|
|
Real Estate Segment Milestones four
objectives (not equally weighted) relating
to the attainment of certain milestones
that were generally tied to the entitlement
of our excess real estate
|
|
|
|
33.33
|
%
|
|
|
Only one of such four milestones
was met representing 15% of
this 33.33% opportunity
(5% of the total 100% opportunity)
|
|
|
|
|
|
|
|
|
|
Total Opportunity
|
|
|
|
100.0
|
%
|
|
|
Earned 72%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
We defined economic earnings per
share to be income from continuing operations less certain
non-cash expenses (such as retirement benefit expense and
certain environmental-related and legacy expenses), and unusual
items, all at the discretion of the Compensation Committee.
|
|
(2)
|
|
We have defined cash flow to be
total net change in cash and debt balances excluding
the effects of the early payment by American Pacific Corporation
of its note payable to the Company.
|
33
Aerospace and Defense Segment applicable to
Mr. Neish as the business unit president of our Aerospace
and Defense Segment.
|
|
|
|
|
|
|
|
|
|
|
|
Maximum
|
|
|
|
|
Aerospace and Defense Segment Targets
|
|
|
Target Opportunity
|
|
|
|
Was Target Met?
|
Fiscal Year over Fiscal Year Segment Revenue Growth
|
|
|
|
20.00
|
%
|
|
|
Yes Third Cliff
|
First Cliff 9.3%
growth 30%
|
|
|
|
|
|
|
|
|
Second Cliff 12.2%
growth 75%
|
|
|
|
|
|
|
|
|
Third Cliff 18.3%
growth 100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Performance
|
|
|
|
40.00
|
%
|
|
|
Yes Third Cliff
|
First Cliff
$67.0 million 30%
|
|
|
|
|
|
|
|
|
Second Cliff
$70.4 million 75%
|
|
|
|
|
|
|
|
|
Third Cliff
$73.7 million 100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Fiscal Year Segment Cash Flow
|
|
|
|
20.00
|
%
|
|
|
Yes First Cliff
|
First Cliff
$27.0 million 30%
|
|
|
|
|
|
|
|
|
Second Cliff
$40.0 million 75%
|
|
|
|
|
|
|
|
|
Third Cliff
$54.0 million 100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Segment Cash Flow*
|
|
|
|
20.00
|
%
|
|
|
Yes Third Cliff
|
First Cliff
$(2.0) million 30%
|
|
|
|
|
|
|
|
|
Second Cliff
$3.0 million 75%
|
|
|
|
|
|
|
|
|
Third Cliff
$8.0 million 100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Opportunity
|
|
|
|
100.0
|
%
|
|
|
Earned 86%
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
We defined Average Segment Cash
Flow as the sum of quarterly cumulative cash flow divided by
four.
|
The fiscal year 2007 cash incentive awards paid to each of the
Named Executive Officers are shown in the Non-Equity
Incentive Plan Compensation column of the Summary
Compensation Table, which follows this Compensation Discussion
and Analysis.
Long-Term
Incentives (Equity-Based Compensation)
We believe that the use of long-term incentive compensation for
executives reinforces four strategic objectives:
|
|
|
|
|
To focus on the importance of returns to shareholders,
|
|
|
|
To promote the achievement of long-term performance goals,
|
|
|
|
To encourage executive retention, and
|
|
|
|
To promote higher levels of Company stock ownership by
executives.
|
Accordingly, we strive to set a sizeable portion of our Named
Executive Officers compensation in an equity-based form.
This type of compensation, coupled with our share ownership
guidelines, will result in our executives becoming shareholders
with considerable personal financial interest in the fiscal
health and performance of the Company.
34
We determine the amount of equity-based awards by subtracting
the executives annual cash compensation opportunity from
the total targeted annual compensation that is competitive with
the market (generally in the 50th percentile range). The
ultimate value of these equity-based awards is driven in part by
the executives performance in the past fiscal year and in
part by their ability to increase the value of the Company going
forward.
Our equity-based compensation in fiscal year 2007 included
awards of restricted stock and cash-settled SARs. These types of
equity are described as follows:
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|
|
Restricted stock A grant of restricted stock is an
award of shares of Common Stock that typically vests over a two-
to five-year period after the grant date (depending upon the
vesting conditions set by the Compensation Committee), provided
that underlying goals are met in the case of performance-based
grants or that the participant remains employed with the Company
for the specified amount of time in the case of non-performance
time-based grants. Restricted stock awards are designed to
attract and retain executives by providing them with some of the
benefits associated with stock ownership during the restriction
period, while incentivizing them to remain with the Company.
During the restricted period, the executives may not sell,
transfer, pledge, assign or otherwise convey their restricted
stock. However, executives may vote their shares and are
entitled to receive dividend payments, if any are made.
Executives who voluntarily resign or are terminated for cause
prior to the end of the restriction period forfeit their
restricted stock unless otherwise determined by the Compensation
Committee.
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|
Cash-Settled SARs The value of cash-settled SARs
reflects the difference between the value of shares of Common
Stock at the time of exercise of the SARs and a predetermined
exercise price. This difference is settled in cash; no shares of
Common Stock are issued. SARs are designed to attract and retain
executives by compensating them for increases in shareholder
value over time. SARs are generally exercisable in one-third
increments at one year, two years, and three years from the date
of grant and have a ten year contractual life. As with
restricted stock grants, executives who voluntarily resign or
are terminated for cause immediately forfeit all SARs that have
not vested unless otherwise determined by the Compensation
Committee.
|
Upon a change in control of the Company, any unvested equity
awards become immediately vested.
A review is conducted each year by the Compensation Committee to
determine the appropriate mix of restricted stock, SARs, and
stock options.
Because of limited availability of awardable shares under the
1999 Equity and Performance Incentive Plan, equity awards over
the last two fiscal years have been more heavily weighted to
cash-settled SARs. The split has been approximately two-thirds
SARs and one-third restricted stock. We believe that this
allocation is conducive to creating a balanced risk and reward
profile for our Named Executive Officers. SARs, like stock
options, are more sensitive to changing perceptions in the stock
market as well as the Companys performance during the life
of the SARs. We believe the risk inherent in SARs and the
relative level of stability implicit in restricted stock
appropriately motivates our Named Executive Officers to achieve
financial and operating goals that are aggressive, but
achievable.
35
Annual restricted stock and SARs grants are typically made by
the Compensation Committee to executives at the Committees
first meeting of the fiscal year usually in January
or February. The timing of the grants follows the Companys
historical practice. All such grants of SARS are made with an
exercise price equal to the fair market value of a share of
stock on the date of grant, which is defined as the closing
price on the New York Stock Exchange on the date of grant.
In order to promote improvement in the Companys financial
performance, and subject to accelerated vesting upon a change in
control, the restricted stock grants made by the Compensation
Committee to executives in fiscal year 2007 vest only upon the
achievement of financial performance goals set by the
Compensation Committee. The performance targets for the
restricted stock vesting were economic earnings per share of
$0.38 (50% weighting) and positive cash flow (50% weighting)
with vesting over two years from the date of grant. These
performance targets were met for fiscal year 2007. The SARs
awards were granted under the terms (three year vesting)
described above.
In addition, in order to promote improvement in the
Companys financial performance and achievement of certain
strategic goals, portions of the restricted stock grants in
fiscal year 2005 vested only upon the achievement in fiscal year
2007 of certain financial goals (35% weighting half
of which was tied to economic earnings per share of $0.38 and
half to positive cash flow) and the completion of certain real
estate entitlement related milestones (65% weighting). The
targets for economic earnings per share and cash flow were met,
while the entitlement related milestones were not; consequently,
only 35% of the 2005 shares that were awarded actually
vested for fiscal year 2007.
In order to strengthen the alignment between the interests of
shareholders and the interests of executives of the Company, the
Compensation Committee approved share ownership guidelines that
apply to the Companys executive officers. Under these
guidelines, each executive officer is expected to have equity in
the Company equal in aggregate market value to a designated
multiple of such officers annual salary (CEO
five times base salary; Senior Vice Presidents and Business Unit
Presidents three times base salary; and Vice
Presidents one times base salary). In calculating
the amount of equity owned by an executive, the Committee looks
at the value of Company stock owned by the executive (regardless
of whether it is restricted stock or vested), and the value of
any vested in the money options or SARs (i.e. market
value of stock in excess of the strike price for the stock
option or SAR). Newly appointed executives are expected to be in
compliance with the ownership guidelines within five years of
their appointments. As of January 31, 2008, all of the
Named Executive Officers have met, or are in the transition
period set forth in, these guidelines. The Compensation
Committee reviews these guidelines periodically, and considers
adjustments when appropriate.
Pension,
401K Savings and Other Plans
Pension
Plan
The Named Executive Officers participate in the same
tax-qualified pension and savings plans as other employees.
These plans include the GenCorp Consolidated Pension
Plan a tax-qualified
36
defined benefit plan, and the Benefits Restoration
Plan a non-qualified defined benefit plan. There are
no employee contributions required in order to participate in
these defined benefit plans.
The GenCorp Consolidated Pension Plan includes several formulas
for the determination of benefits. The Plan provides that
participants will receive the larger of the five-year
average compensation formula and the career average
formula. Both formulae define compensation to recognize
base salary and annual incentive (cash bonus) compensation.
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The five-year average compensation formula is the
sum of (A) and (B) where (A) equals the sum of
(i) 1.125% of the participants highest five-year
average compensation up to the Average Social Security Wage Base
(ASSWB), and (ii) 1.5% of such five-year average
compensation in excess of the ASSWB, which sum is multiplied by
the total of such years of service up to 35 years, and
(B) equals 1.5% of such five-year average compensation
multiplied by the total years of service in excess of
35 years.
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The career average formula provides that for each
year of service prior to attainment of 35 years of service,
the employee will be credited 1.625% of annual compensation up
to the ASSWB plus 2.0% of annual compensation in excess of the
ASSWB and, after attainment of 35 years of service, 2.0% of
annual compensation. The published ASSWB applicable to the plan
year ended November 30, 2007 is $48,600.
|
The purpose of the Benefits Restoration Plan is to restore the
pension plan benefits which executives and their beneficiaries
would otherwise lose as a result of Internal Revenue Code
limitations upon accrual
and/or
payment of benefits from a tax-qualified pension plan. By
restoring such benefits, Benefits Restoration Plan permits the
total benefits to be provided on the same basis as applicable to
all other employees under the qualified pension plan.
The GenCorp Consolidated Pension Plan and the Benefits
Restoration Plan provide an incentive for a long-term career,
which supports our goal of retaining valued employees, including
our top executives. The pension benefit formulae deliver higher
returns to participants the longer they are with the Company and
as their compensation levels increase.
If a change in control of the Company occurs, the Company is
required to fund into a grantor trust an amount equal to the
present value of the accrued pension benefits under Benefits
Restoration Plan for all participants in such plan.
Further details regarding these programs, including the
estimated value of retirement benefits for each Named Executive
Officer, are found in the section entitled 2007 Pension
Benefits beginning on page xx. The change in the
actuarial pension value from fiscal year 2006 to fiscal year
2007 is presented in the Change in Pension Value
column of the Summary Compensation Table on page xx.
401K
Savings Plan
The Named Executive Officers are also eligible to participate in
the GenCorp Retirement Savings Plan, a 401(k) plan generally
available to all Company employees. The GenCorp Retirement
Savings Plan is a tax-qualified defined contribution savings
plan in which participating employees receive a Company match.
37
The Named Executive Officers participate in the related
non-qualified Benefits Restoration Savings Plan. The Benefits
Restoration Plan Saving Plan permits personal savings and
Company matches on amounts above those permitted under the
401(k) plan due to certain limits imposed by the Internal
Revenue Code. Details about the Benefits Restoration Plan
Savings Plan are presented in the section entitled 2007
Non-qualified Deferred Compensation beginning on
page xx.
Change in
Control Agreements and Plan Provisions
The Company has change in control severance agreements with each
of the Named Executive Officers. We consider these agreements to
be in the best interest of our shareholders to foster the
continuous employment and dedication of key executives without
potential distraction or personal concern in the event of a
change in control. These agreements help to ensure that our
executives continue to perform in their roles when a potential
change in control is impending, and are protected against the
loss of their positions following a change in the ownership or
control of the Company. These agreements also provide a sense of
security to our executives that they will be treated fairly in
the event of a termination not for cause following a change in
control of the Company. If a change in control of the Company
occurs, the Company is required to fund into a grantor trust an
amount to cover potential severance payments to the
Companys executives. A description of these agreements can
be found on page xx under the section entitled Change in
Control Severance Agreements.
Other
The GenCorp Foundation matches employee and Director gifts to
accredited, non-profit colleges, universities, secondary and
elementary public or private schools located in the United
States. Gifts made are matched dollar for dollar up to $7,500
per year per donor.
Indebtedness
of Management
During fiscal year 2007, Mr. Hall had the principal sum of
$77,170 indebtedness outstanding under the GenCorp Key Employee
Loan Program (the Loan Program), which was approved by the Board
to enable employees whose restricted stock had vested to pay
taxes on the stock and retain it for as long as they remain in
the employ of the Company. Repayment provisions under the Loan
Program begin upon termination of employment. Interest, which is
calculated and payable annually, is charged at the
Companys marginal borrowing rate which for 2007 was 5.45%.
Interest accrued for fiscal year 2007 totaled $4,201 for
Mr. Hall and such amount has been paid. The largest
principal amount of indebtedness under the program during fiscal
year 2007 for Mr. Hall was $77,170. Following the enactment
of the Sarbanes-Oxley Act of 2002, the Loan Program was
terminated effective July 30, 2002, but outstanding loans
remain in effect in accordance with their existing terms.
Tax
Deductibility under Section 162(m)
Section 162(m) of the Internal Revenue Code imposes limits
on the deductibility of certain compensation in excess of
$1,000,000 paid to the CEO and other executive officers of
public companies. Management and the Compensation Committee have
reviewed the regulations and feel that the current compensation
program and policies are appropriate. Depending upon a variety
of
38
factors (including Company performance), it is possible for one
or more executive officers to surpass the $1,000,000 threshold
under the executive officer compensation program. At this time,
the Compensation Committee believes that accommodating the
Internal Revenue Service regulations will not produce material
benefits or increases in shareholder value. However, the
Compensation Committee intends to review this issue regularly
and may change its position in future years.
SUMMARY
COMPENSATION TABLE
The following table sets forth information regarding
compensation for each of the Companys Named Executive
Officers for fiscal year 2007.
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Non-Equity
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Stock
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Options/ SARs
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Incentive Plan
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Change in
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All Other
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Salary
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Awards
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Awards
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Compensation
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Pension Value
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Compensation
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Total
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Name and Principal Position
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Year
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($)(1)
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($)(2)
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($)(2)
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($)(3)
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($)(4)
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($)(5)
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($)
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Terry L. Hall
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President and Chief Executive Officer
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2007
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$
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630,000
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$
|
545,065
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|
|
|
$
|
197,032
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|
|
|
$
|
567,000
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|
|
|
$
|
111,487
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|
$
|
42,903
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|
$
|
2,093,487
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Yasmin R. Seyal
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Senior Vice President and Chief Financial Officer
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2007
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338,926
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240,700
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|
|
|
|
68,850
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|
|
|
|
297,500
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|
|
|
|
83,454
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|
|
|
|
22,007
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|
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|
1,051,437
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J. Scott Neish
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Vice President and President, Aerojet-General Corporation
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2007
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304,427
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187,281
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|
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|
60,251
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|
|
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275,203
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|
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96,602
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|
|
|
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29,041
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952,805
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|
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Mark A. Whitney
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|
Senior Vice President; General Counsel and Secretary
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2007
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|
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280,237
|
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|
|
|
100,862
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|
|
|
|
43,571
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|
|
|
|
163,013
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|
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|
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21,533
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|
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15,498
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624,714
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|
R. Leon Blackburn
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Vice President, Controller and Principal Accounting Officer
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2007
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244,582
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|
|
|
|
148,516
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|
|
|
|
21,551
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|
|
|
|
88,923
|
|
|
|
|
50,410
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|
|
|
|
13,591
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|
|
|
|
567,573
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(1)
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The amount reported in this column
for each Named Executive Officer reflects the dollar amount of
base salary paid in fiscal year 2007, including salary increases
effective in April 2007.
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(2)
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The amounts reported in these
columns for each Named Executive Officer reflect the
compensation costs for financial reporting purposes for the
fiscal year under SFAS 123(R), rather than amounts paid to
or realized by the Named Executive Officer for outstanding
equity awards granted in and prior to fiscal year 2007. A
discussion of the assumptions used in calculating these values
may be found in Note 8c in the audited financial statements
in Companys Annual Report on Form 10K for fiscal year
2007. A description of each type of equity award appears in the
narrative text following the 2007 Grants of Plan-Based Awards
table on page xx and the Outstanding Equity Awards at 2007
Fiscal Year-End table on page xx.
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(3)
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The amount reported in this column
for each Named Executive Officer reflects annual cash incentive
compensation, which is based on performance in fiscal year 2007.
This annual incentive compensation is discussed in further
detail in Compensation Discussion and Analysis beginning on
page xx.
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(4)
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The amount reported in this column
for each Named Executive Officer reflects the aggregate increase
in the actuarial present value of their accumulated benefits
under all pension plans from August 31, 2006 to
August 31, 2007 (the pension measurement date for purposes
of the Companys financial statements), determined using
interest and mortality rate assumptions consistent with those
used in the Companys financial statements and includes
amounts which the Named Executive Officer may not currently be
entitled to receive because such amounts are not vested.
Information regarding these pension plans is set forth in
further detail under 2007 Pension Benefits on page xx.
|
39
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(5)
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The amounts reported in this column
for each Named Executive Officer include the following:
|
All Other
Compensation
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|
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|
Company Matching
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|
|
|
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|
|
|
|
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|
|
Company
|
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|
|
Contribution to
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Matching
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|
|
Benefits
|
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|
|
Matching Gift
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|
|
|
|
|
|
Perquisites
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|
|
|
|
|
|
|
|
Contribution to
|
|
|
|
Restoration Plan -
|
|
|
|
by the GenCorp
|
|
|
|
Tax
|
|
|
|
And Other Personal
|
|
|
|
|
|
|
|
|
401k Plan
|
|
|
|
Savings Plan
|
|
|
|
Foundation
|
|
|
|
Gross Up
|
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|
|
Benefits
|
|
|
|
Total
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Name
|
|
|
(a)
|
|
|
|
(a)
|
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
($)
|
|
Terry L. Hall
|
|
|
$
|
10,125
|
|
|
|
$
|
30,628
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
2,150
|
|
|
|
$
|
42,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yasmin R. Seyal
|
|
|
|
7,872
|
|
|
|
|
10,135
|
|
|
|
|
4,000*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Scott Neish
|
|
|
|
9,813
|
|
|
|
|
15,949
|
|
|
|
|
|
|
|
|
|
808
|
|
|
|
|
2,471
|
|
|
|
|
29,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Whitney
|
|
|
|
10,125
|
|
|
|
|
5,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
R. Leon Blackburn
|
|
|
|
10,840
|
|
|
|
|
2,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents matching
contribution made by the GenCorp Foundation for gift made by
Ms. Seyal in fiscal year 2007.
|
|
|
(6)
|
|
In January 2008, the Compensation
Committee used its discretion and increased the cash bonus paid
to Ms. Seyal from 72% of her base salary (reflecting
certain performance targets having been met as discussed above
under Annual Cash Incentive Program) to 85% of her base
salary.
|
40
2007
GRANTS OF PLAN-BASED AWARDS
The following table provides information for each of the
Companys Named Executive Officers regarding fiscal year
2007 annual and long-term incentive award opportunities,
including the range of potential compensation under non-equity
incentive plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
Number of
|
|
|
|
|
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts Under
|
|
|
|
Estimated Future Payouts Under
|
|
|
|
Number of
|
|
|
|
Securities
|
|
|
|
Exercise
|
|
|
|
of Stock
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan
|
|
|
|
Equity Incentive Plan
|
|
|
|
Shares of
|
|
|
|
Underlying
|
|
|
|
Price of
|
|
|
|
and
|
|
|
|
|
Grant
|
|
|
|
Awards
($)(1)
|
|
|
|
Awards
(#)(2)
|
|
|
|
Stock or
|
|
|
|
Options/
|
|
|
|
Options/SARs
|
|
|
|
Option/SARs
|
|
Name
|
|
|
Date
|
|
|
|
Threshold
|
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
Threshold
|
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
Units (#)
|
|
|
|
SARs (#)
|
|
|
|
($/Sh)
|
|
|
|
Awards(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terry L. Hall
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
1-17-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
35,000
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
479,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SARs
|
|
|
|
1-17-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
$
|
13.71
|
|
|
|
|
775,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Bonus
|
|
|
|
|
|
|
|
$
|
0
|
|
|
|
$
|
420,000
|
|
|
|
$
|
787,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yasmin R. Seyal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
1-16-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
15,000
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
206,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SARs
|
|
|
|
1-16-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
|
13.75
|
|
|
|
|
272,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Bonus
|
|
|
|
|
|
|
|
|
0
|
|
|
|
$
|
187,000
|
|
|
|
$
|
350,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Scott Neish
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
1-16-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
10,000
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SARs
|
|
|
|
1-16-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
13.75
|
|
|
|
|
233,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Bonus
|
|
|
|
|
|
|
|
|
0
|
|
|
|
$
|
96,000
|
|
|
|
$
|
320,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Whitney
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
1-16-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
7,000
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SARs
|
|
|
|
1-16-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
13.75
|
|
|
|
|
116,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Bonus
|
|
|
|
|
|
|
|
|
0
|
|
|
|
$
|
121,000
|
|
|
|
$
|
226,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Leon Blackburn
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
1-16-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
5,000
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SARs
|
|
|
|
1-16-2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
13.75
|
|
|
|
|
93,348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Bonus
|
|
|
|
|
|
|
|
|
0
|
|
|
|
$
|
66,000
|
|
|
|
$
|
123,504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects the possible payout
amounts of non-equity incentive plan awards that could have been
earned in fiscal year 2007. See the Summary Compensation Table
for the amounts actually earned and paid out in January 2008.
|
|
(2)
|
|
These performance-based restricted
stock awards were granted in January 2007 and vest in two equal
installments on the first and second anniversaries of the date
of grant (January 23, 2008 and 2009 for Mr. Hall;
January 22, 2008 and 2009 all other Named Executive
Officers) provided the Company achieves earnings per share and
cash flow performance goals for 2007 (targets were met).
|
|
(3)
|
|
The fair value of SARs was
estimated using a Black-Scholes Model with the following
weighted average assumptions at the date of grant:
|
|
|
|
|
|
|
Expected life (in years)
|
|
|
|
8.0
|
|
|
|
|
|
|
|
Volatility
|
|
|
|
44
|
%
|
|
|
|
|
|
|
Risk-free interest rate
|
|
|
|
4.58
|
%
|
|
|
|
|
|
|
Dividend yield
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
41
OUTSTANDING
EQUITY AWARDS AT 2007 FISCAL YEAR END
The following table provides
information for each of the Companys Named Executive
Officers regarding stock awards, SARs, and outstanding stock
options held by the officers as of November 30, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option/SARs Awards
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service-Based
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Awards
|
|
|
|
Plan Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Payout Value
|
|
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
Unearned
|
|
|
|
of Unearned
|
|
|
|
|
Securities
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
|
Market Value
|
|
|
|
Shares, Units
|
|
|
|
Shares, Units
|
|
|
|
|
Underlying
|
|
|
|
Underlying
|
|
|
|
Option/
|
|
|
|
|
|
|
|
Units of
|
|
|
|
of Shares or
|
|
|
|
or Other
|
|
|
|
or Other
|
|
|
|
|
Unexercised
|
|
|
|
Unexercised
|
|
|
|
SARs
|
|
|
|
Option/
|
|
|
|
Stock That
|
|
|
|
Units of Stock
|
|
|
|
Rights That
|
|
|
|
Rights That
|
|
|
|
|
Options/SARs
|
|
|
|
Options/SARs
|
|
|
|
Exercise
|
|
|
|
SARs
|
|
|
|
Have
|
|
|
|
That Have
|
|
|
|
Have Not
|
|
|
|
Have Not
|
|
|
|
|
(#)
|
|
|
|
(#)
|
|
|
|
Price
|
|
|
|
Expiration
|
|
|
|
Not Vested
|
|
|
|
Not Vested
|
|
|
|
Vested
|
|
|
|
Vested
|
|
Name
|
|
|
Exercisable
|
|
|
|
Unexercisable
|
|
|
|
($)
|
|
|
|
Year
|
|
|
|
(#)
|
|
|
|
($)(2)
|
|
|
|
(#)
|
|
|
|
($)(2)
|
|
Terry L. Hall
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(1)
|
|
|
$
|
121,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,748
|
(3)
|
|
|
$
|
117,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,500
|
(4)
|
|
|
|
235,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
(5)
|
|
|
|
423,500
|
|
SARs
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
$
|
13.71
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,000
|
|
|
|
|
46,000
|
|
|
|
|
19.52
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,000
|
|
|
|
|
14,000
|
|
|
|
|
18.78
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
7.73
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
9.77
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
15.43
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
10.44
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
8.19
|
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,316
|
|
|
|
|
|
|
|
|
|
12.20
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yasmin R. Seyal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
(1)
|
|
|
|
72,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
(3)
|
|
|
|
48,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
(4)
|
|
|
|
96,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(5)
|
|
|
|
181,500
|
|
SARs
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
|
13.75
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,834
|
|
|
|
|
15,666
|
|
|
|
|
19.34
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,333
|
|
|
|
|
5,667
|
|
|
|
|
18.51
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
36,000
|
|
|
|
|
|
|
|
|
|
7.73
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
15.43
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
10.44
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
10.13
|
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Scott Neish
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(6)
|
|
|
|
181,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(5)
|
|
|
|
121,000
|
|
SARs
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
13.75
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,167
|
|
|
|
|
14,333
|
|
|
|
|
19.34
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
18.55
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500
|
|
|
|
|
18.71
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,333
|
|
|
|
|
667
|
|
|
|
|
18.71
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
2,200
|
|
|
|
|
|
|
|
|
|
9.29
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Whitney
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
(1)
|
|
|
|
30,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,248
|
(3)
|
|
|
|
15,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
(4)
|
|
|
|
30,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
(5)
|
|
|
|
84,700
|
|
SARs
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
13.75
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
15.11
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
|
|
|
|
5,000
|
|
|
|
|
19.34
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,333
|
|
|
|
|
1,667
|
|
|
|
|
18.51
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
24,000
|
|
|
|
|
|
|
|
|
|
6.53
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Leon Blackburn
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(7)
|
|
|
|
181,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
(5)
|
|
|
|
60,500
|
|
SARs
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
13.75
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,667
|
|
|
|
|
3,333
|
|
|
|
|
20.25
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42
|
|
|
(1) |
|
These shares, granted in February
2005, vested on the third anniversary of the grant date
(February 8, 2008 for Mr. Hall and February 7,
2008 for Ms. Seyal and Mr. Whitney).
|
|
(2) |
|
The market value was calculated
multiplying the number of unvested shares by the closing market
price of the Companys common stock ($12.10) on
November 30, 2007.
|
|
(3) |
|
These performance-based restricted
stock awards were granted in February 2005. Half of these
amounts vested in February 2008 after the Company achieved
earnings per share and cash flow performance goals for fiscal
year 2007. The balance of such amounts will vest in February
2009 provided the Company achieves earnings per share and cash
flow performance goals for 2008.
|
|
(4) |
|
These performance-based restricted
stock awards were granted in February 2005 and vest upon the
attainment of certain milestones that are generally tied to the
entitlement of the Companys excess real estate.
|
|
(5) |
|
These performance-based restricted
stock awards were granted in January 2007 and vest in two equal
installments on (i) January 22, 2008, and
(ii) January 17, 2009 for Mr. Hall and
January 16, 2009 for the Named Executive Officers, after
the Company achieved earnings per share and cash flow
performance goals for fiscal year 2007.
|
|
(6) |
|
These restricted stock awards were
granted on December 1, 2005 and vest on the third
anniversary of the grant date provided such individual is
employed by the Company on such date.
|
|
(7) |
|
These restricted stock awards were
granted on February 6, 2006 and vest on the third
anniversary of the grant date provided such individual is
employed by the Company on such date.
|
2007
OPTION/SARs EXERCISES AND STOCK VESTED
The following table provides information for each of the
Companys Named Executive Officers regarding stock option
and SARs exercises and stock award vestings during fiscal year
2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option/SARs
Awards(1)
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired
|
|
|
|
Value Realized
|
|
|
|
Acquired
|
|
|
|
Value Realized
|
|
|
|
|
|
|
|
|
on Exercise
|
|
|
|
on Exercise
|
|
|
|
on Vesting
|
|
|
|
on Vesting
|
|
Name of Executive Officer
|
|
|
Type of Award
|
|
|
|
(#)
|
|
|
|
($)
|
|
|
|
(#)(2)
|
|
|
|
($)(3)
|
|
Terry L. Hall
|
|
|
|
Restricted Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,338
|
|
|
|
$
|
213,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yasmin R. Seyal
|
|
|
|
Restricted Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,725
|
|
|
|
|
84,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Scott Neish
|
|
|
|
Restricted Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,500
|
|
|
|
|
51,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Whitney
|
|
|
|
Restricted Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,238
|
|
|
|
|
32,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Leon Blackburn
|
|
|
|
Restricted Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,313
|
|
|
|
|
19,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
No stock options or SARs were
exercised during fiscal year 2007.
|
|
(2)
|
|
The amounts reported in this column
for each executive reflect restricted stock awards that vested
during fiscal year 2007.
|
|
(3)
|
|
The value realized on vesting is
calculated by multiplying the number of shares by the closing
market price of the Companys common stock on the vesting
date.
|
2007
PENSION BENEFITS
GenCorp
Consolidated Pension Plan
The GenCorp Consolidated Pension Plan is a tax-qualified defined
benefit plan covering substantially all salaried and hourly
employees. Normal retirement age is 65, but certain plan
provisions allow for earlier retirement. Pension benefits are
calculated under formulas based on average earnings and length
of service for salaried employees and under negotiated non-wage
based
43
formulas for hourly employees. The two formulas applicable to
the Named Executive Officers are the five-year average
compensation formula and the career average
formula. The five-year average compensation
formula is the sum of (A) and (B) where
(A) equals the sum of (i) 1.125% of the
participants highest five-year average compensation up to
the Average Social Security Wage Base (ASSWB), and
(ii) 1.5% of such five-year average compensation in excess
of the ASSWB, which sum is multiplied by the total of such years
of service up to 35 years, and (B) equals 1.5% of such
five-year average compensation multiplied by the total years of
service in excess of 35 years. The career average
formula provides that for each year of service prior to
attainment of 35 years of service, the employee will be
credited 1.625% of annual compensation up to the ASSWB plus 2.0%
of annual compensation in excess of the ASSWB and, after
attainment of 35 years of service, 2.0% of annual
compensation. The published ASSWB applicable to the plan year
ended November 30, 2007 is $48,600.
Benefits
Restoration Plan Pension Plan
Total pension benefits for the Named Executive Officers are
determined under a combination of the Benefits Restoration Plan
(BRP), which is a non-qualified plan, and the GenCorp
Consolidated Pension Plan. As set forth above, the GenCorp
Consolidated Pension Plan is a qualified pension plan that
provides income continuation for employees, the amount of which
is limited by applicable federal tax laws and regulations. The
amount that would have been provided under this plan absent the
limit imposed by federal tax laws and regulations are payable
under the Benefits Restoration Plan. Retired executives
tax-qualified benefits are pre-funded and are paid out of the
assets of the qualified plan; however, non-qualified benefits
are not pre-funded and are paid out of the Companys
general assets. If a change in control of the Company occurs,
the Company is required to fund into a grantor trust an amount
equal to the present value of the accrued pension benefits under
Benefits Restoration Plan for all participants in such plan.
44
The following table provides information as of August 31,
2007 for each of the Companys Named Executive Officers
regarding the actuarial present value of their total accumulated
benefit under GenCorp Consolidated Pension Plan and the Benefits
Restoration Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years
|
|
|
|
of Accumulated
|
|
|
|
Payments During
|
|
|
|
|
|
|
|
Credited Service
|
|
|
|
Benefit
|
|
|
|
Fiscal year 2007
|
|
Name
|
|
|
Plan Name
|
|
|
(#)(1)
|
|
|
|
($)(2)
|
|
|
|
($)
|
|
Terry L. Hall
|
|
|
GenCorp Consolidated Pension Plan
|
|
|
|
8
|
|
|
|
$
|
209,606
|
|
|
|
|
|
|
|
|
|
BRP
|
|
|
|
8
|
|
|
|
|
497,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yasmin R. Seyal
|
|
|
GenCorp Consolidated Pension Plan
|
|
|
|
18
|
|
|
|
|
278,133
|
|
|
|
|
|
|
|
|
|
BRP
|
|
|
|
18
|
|
|
|
|
240,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Scott Neish
|
|
|
GenCorp Consolidated Pension Plan
|
|
|
|
5
|
|
|
|
|
180,275
|
|
|
|
|
|
|
|
|
|
BRP
|
|
|
|
5
|
|
|
|
|
133,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Whitney
|
|
|
GenCorp Consolidated Pension Plan
|
|
|
|
4
|
|
|
|
|
71,296
|
|
|
|
|
|
|
|
|
|
BRP
|
|
|
|
4
|
|
|
|
|
25,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Leon Blackburn
|
|
|
GenCorp Consolidated Pension Plan
|
|
|
|
2
|
|
|
|
|
68,832
|
|
|
|
|
|
|
|
|
|
BRP
|
|
|
|
2
|
|
|
|
|
3,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Credited service under the GenCorp
Consolidated Pension Plan and the BRP is determined uniformly
for all participants in accordance with such plans.
|
|
(2)
|
|
The amounts reported in this column
for each executive were calculated assuming no future service or
pay increases. Present values were calculated assuming no
pre-retirement mortality or termination. The values under the
GenCorp Consolidated Pension Plan and the BRP are the actuarial
present values as of August 31, 2007 of the benefits earned
as of that date and payable at the earliest age for unreduced
benefits (the earlier of age 65, or age 62 with
10 years of service). The discount rate assumption is 6.40%
for both plans. The post-retirement mortality assumption of the
two pension plans is RP 2000 no-collar, projected to 2005. In
order to determine the change in pension values for the Summary
Compensation Table on page xx, the values of GenCorp
Consolidated Pension Plan and the BRP were also calculated as of
August 31, 2006 for the benefits earned as of that date.
The discount rate assumption used for both plans was 6.00%,
which was the assumption used for financial reporting purposes
for fiscal year 2006. Other assumptions used to determine the
value as of August 31, 2006 were the same as those used as
of August 31, 2007. The assumptions reflected in this
footnote are the same as the ones used for GenCorp Consolidated
Pension Plan and the BRP for financial reporting purposes with
the exception of assumed retirement age and the absence of
pre-retirement mortality and termination assumptions.
|
2007
NON-QUALIFIED DEFERRED COMPENSATION
Benefits
Restoration Plan Savings Plan
The Benefits Restoration Plan Savings Plan is a non-qualified,
unfunded plan designed to enable participants to continue to
defer their compensation on a pre-tax basis when such
compensation or the participants deferrals to
tax-qualified plans exceed applicable Internal Revenue Code of
1986 (IRC) limits. Under the Benefits Restoration Plan Savings
Plan, employees who are projected to be impacted by the IRC
limits, may, on an annual basis, elect to defer compensation
earned in the current year such as salary and certain other
incentive compensation. The Company makes a matching
contribution in an amount equal to 100% of the
participants contribution not to exceed 4.5% of the
participants eligible compensation. Participants indicate
how they wish their deferred
45
compensation and the Company matching contributions to be
notionally invested among the same investment options available
through the GenCorp Retirement Saving Plan.
The following table provides information for each of the
Companys Named Executive Officers regarding aggregate
officer and Company contributions and aggregate earnings for
fiscal year 2007 and fiscal year-end account balances under the
BRP Savings Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
Executive
|
|
|
|
Company
|
|
|
|
Aggregate
|
|
|
|
Aggregate
|
|
|
|
Balance at
|
|
|
|
|
Contributions in
|
|
|
|
Contributions in
|
|
|
|
Earnings in
|
|
|
|
Withdrawals/
|
|
|
|
November 30,
|
|
|
|
|
fiscal year 2007
|
|
|
|
fiscal year 2007
|
|
|
|
fiscal year 2007
|
|
|
|
Distributions
|
|
|
|
2007
|
|
Name
|
|
|
($)(1)
|
|
|
|
($)(2)
|
|
|
|
($)(3)
|
|
|
|
($)
|
|
|
|
($)
|
|
Terry L. Hall
|
|
|
$
|
40,838
|
|
|
|
$
|
30,628
|
|
|
|
$
|
44,677
|
|
|
|
|
|
|
|
|
$
|
589,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yasmin R. Seyal
|
|
|
|
13,758
|
|
|
|
|
10,135
|
|
|
|
|
5,354
|
|
|
|
|
|
|
|
|
|
125,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Scott Neish
|
|
|
|
28,355
|
|
|
|
|
15,949
|
|
|
|
|
4,047
|
|
|
|
|
|
|
|
|
|
104,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Whitney
|
|
|
|
7,164
|
|
|
|
|
5,373
|
|
|
|
|
1,652
|
|
|
|
|
|
|
|
|
|
42,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Leon Blackburn
|
|
|
|
6,112
|
|
|
|
|
2,750
|
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
8,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The amount reported in this column
for each executive reflects amounts of compensation earned in
fiscal year 2007 and deferred under the BRP Savings Plan.
|
|
(2)
|
|
The amount reported in this column
for each executive reflects Company matches under the BRP
Savings Plan. These amounts are also included in the total
amounts shown in the All Other Compensation column
in the Summary Compensation Table on page xx.
|
|
(3)
|
|
The amount reported in this column
for each executive reflects interest credited on interest
account holdings and change in value of other investment
holdings.
|
Employment
Agreements and Indemnity Agreements
Consistent with our compensation philosophy, there are no
employment agreements with any of the Companys officers,
including the Named Executive Officers. As a result, these
officers serve at the will of the Board of Directors. This
policy enables the Company to remove a Named Executive Officer
prior to retirement whenever it is in the best interests of the
Company. When a Named Executive Officer is removed from his or
her position, the Compensation Committee exercises its business
judgment