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EXHIBIT A
October 15, 1993
Mr. John B. Yasinsky
503 West Manor Drive
Pittsburgh, PA 15238
Dear John:
I am delighted that you will be joining GenCorp. We are excited about you
and Marlene becoming part of the GenCorp family. This will confirm our
understanding concerning, and further define, the terms and conditions of your
employment with GenCorp.
1. You will initially be employed as the President and Chief Operating
Officer ("President"). In this capacity, you will devote your full time and
efforts to the performance of those duties customarily and usually
performed by the President, subject at all times to the direction of the
Chairman and Chief Executive Officer ("Chairman") and the Board of
Directors ("Directors"). At their next meeting, the Directors will elect
you as a corporate officer and as a Director.
2. We anticipate that the Directors will elect you Chairman and Chief
Executive Officer ("Chairman") of GenCorp at or before the July 1995
meeting of Directors. If the Directors remove you as President prior to
such meeting or fail to elect you Chairman at or before such meeting, or
if, after electing you as Chairman, remove you from such position prior to
your attaining age 65, you may elect to terminate your employment and
receive the termination payment specified in paragraph 3 and the
supplemental pension specified in paragraph 8. The preceding sentence
notwithstanding, you shall not be entitled to either the termination
payment specified in paragraph 3 or the supplemental pension specified in
paragraph 8 if the Directors decide to remove you as either President or
Chairman or not to elect you Chairman for or due to cause. As used herein,
"cause" means any willful (i) failure to follow any instruction or policy
of GenCorp, the Directors, or the Chairman, (ii) commission of any felony,
(iii) falsification of any company document or (iv) act committed to
provoke dismissal.
3. The term of your employment will be indefinite in duration and,
therefore, subject to termination at will by notice from you or GenCorp.
However, if GenCorp elects to terminate your employment before you reach
age 65 for any reason except cause or you elect to terminate your
employment due to any decision of the Directors which is specified in
paragraph 2 and which is not based on or due to cause, GenCorp will pay you
an amount equal to two times the sum of (i) your annual base salary at the
time of such termination and (ii) the year-end bonus which GenCorp paid to
you in respect of the last fiscal year preceding such termination; provided
that you execute and deliver to GenCorp a release of all claims and/or
causes of action that arise during or in connection with the termination of
your employment, except claims (i) to the termination payment specified in
this paragraph 3, the supplemental pension specified in paragraph 8, and
any other payment herein specified, and (ii) under any stock option awarded
to you or any employee compensation and/or benefit plan of GenCorp.
4. GenCorp will pay you as President annual compensation comprising a
base salary and a year-end bonus, which amounts are subject to adjustment
on an annual basis. Your initial annual base salary as President will be
$460,000 per year and will be payable in twenty-four semi-monthly
installments in accordance with GenCorp's normal pay practices.
Additionally, your initial year-end bonus for fiscal year 1994 will be not
less than $200,000, which will be payable by February 1, 1995 in accordance
with GenCorp's normal pay practices.
5. After commencement of your employment with GenCorp, GenCorp will
pay you the following amounts:
(a) a one-time payment of $300,000 to compensate you for loss of
any bonus payment by Westinghouse Electric, Inc. ("Westinghouse"). Such
payment will be reduced by the amount of any
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bonus payment which you receive from Westinghouse for services performed
in 1993. Such payment, if any, will be made prior to March 1, 1994.
(b) A one-time payment of $500,000 to compensate you for any other
payments, benefits, or entitlements which you may lose or forfeit under
any employee compensation or benefit plan or program of Westinghouse,
including but not limited to any bonus, long-term incentive
compensation, pension, stock option or other plan of Westinghouse. Such
payment will be made promptly after commencement of your employment with
GenCorp.
The payments specified in this paragraph 5 are in lieu of any and all
rights, benefits, and entitlements which you may lose or forfeit due to
the termination of your employment with Westinghouse and GenCorp will
have no obligation to make any other payment to you in respect thereof.
6. Concurrent with commencement of your employment with GenCorp, the
Directors will grant you an award of 100,000 shares under GenCorp's 1993
Stock Option Plan. Such award will be effective as of the first day of your
employment and the share price will be based on the market price of
GenCorp's shares on the date of the award as provided in the 1993 Stock
Option Plan.
7. As President, you will be eligible to participate in GenCorp's Long
Term Incentive Program (a copy of which is enclosed herewith) and you will
be deemed to be a participant therein during the entire 1993-1995
performance period. As you know, each performance period comprises three
consecutive years. If GenCorp achieves specified performance targets, you
would be entitled to receive an incentive payment equal to approximately
30% of your average annual compensation during the performance period.
However, such payments cannot exceed 60% of your average annual
compensation during any such period.
8. You will be entitled to participate in GenCorp's Pension Plan for
Salaried Employees ("Pension Plan") and, in addition, you will be eligible
to receive a supplemental pension as set forth in this paragraph.
(a) For purposes of calculating your supplemental pension, you
shall be credited with 30 years of service upon commencement of your
employment and you will receive one additional year of credit for each
year of service that you complete following commencement of your
employment with GenCorp.
(b) Your supplemental pension will be an annual amount which is
determined as a single-life annuity commencing at age 65 in the manner
provided in the Pension Plan and is equal to the number of your total
years of credited service multiplied by 1.47% of your average annual
compensation, reduced by the sum of any and all pension payments
(determined for this purpose as the actuarial equivalent single-life
annuity) (i) which GenCorp makes to you or to which you are entitled
under any other pension plan of GenCorp, whether qualified or
non-qualified (including GenCorp's Benefits Restoration Plan), and (ii)
which Westinghouse makes to you or to which you would be entitled under
any pension plan of Westinghouse, whether qualified or non-qualified,
assuming retirement at the same time as your retirement from GenCorp.
For this purpose, "average annual compensation" means the sum of (x)
one-fifth of the aggregate base salary paid to you during the 60 months
(consecutive or non-consecutive) in the 120-month period prior to your
retirement (including employment at Westinghouse), during which your
base salary was the highest, plus (y) the average of your five highest
year-end bonus payments in the 10-year period prior to your retirement
(including employment at Westinghouse).
(c) You shall be entitled to retire at any time after your
sixty-second birthday without any reduction in the amount of your
supplemental pension due to retirement prior to age 65. If you retire
prior to age 62, the amount of your supplemental pension shall be
reduced by 0.4 percent for each month by which your pension commencement
date precedes your sixty-second birthday and in a manner consistent with
the Pension Plan.
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(d) Your supplemental pension will be payable monthly at the same
time and in the same manner that pensions are paid under the Pension
Plan. Each monthly payment shall be 1/12 of the annual amount determined
pursuant to subparagraphs (b) and (c). Additionally, you may elect
payment of the supplemental pension in the form of (i) a single-sum
amount or (ii) a 100% or 50% joint and survivor annuity, with your wife
as the joint annuitant. Either of such optional forms of payment shall
be the actuarial equivalent of the monthly pension amount, calculated in
accordance with the terms and procedures applicable under the Pension
Plan.
(e) If you die before electing a joint and survivor annuity,
whether or not you have attained age 62, GenCorp will pay the
supplemental pension to your surviving wife for her life, calculated as
if you had attained age 62, retired, and elected a joint and 100%
survivor annuity on the last day of the month prior to your death.
(f) If you become totally disabled and unable to perform your
duties as President or Chairman, GenCorp shall pay you a monthly
disability benefit equal to 60% of your base monthly salary until you
reach age 62, at which time you shall be eligible to retire and receive
the supplemental pension under the terms of this paragraph. However,
such disability benefit shall be reduced by the amount of any disability
benefit payments which you are entitled to receive under federal laws
until such time as you retire.
9. You will be eligible to participate in GenCorp's Benefit
Restoration Plan which is designed to restore benefits under the Pension
Plan and the GenCorp Savings Plan which a participant otherwise would lose
as a result of limitations imposed by the Internal Revenue Code.
10. GenCorp will pay or reimburse you for relocation expenses which
you incur pursuant to GenCorp's Relocation Program, including assistance on
the sale of your residence, transportation of household goods, and purchase
of a residence in the greater Akron/Cleveland area. A copy of this Program
is being sent to you under separate cover.
11. You will be entitled to four weeks paid vacation during each year
of your employment. Any unused vacation may not be carried forward nor will
you be entitled to receive pay in lieu of any unused vacation. In 1993, the
period December 27 through December 31 will be company-paid holidays. If
necessary to meet your previous family commitment, additional vacation days
will be available to you during this holiday period.
12. During your employment, GenCorp will provide for your business and
personal use a U.S. manufactured automobile which you may select. Personal
use will be calculated in accordance with GenCorp's established practice
and treated as income to you.
13. GenCorp has entered into an agreement with AYCO to provide
individual financial counseling for its corporate officers. This
arrangement will be available to you on a cost-sharing basis. If you elect
to participate, your cost will be 10% of the annual fees charged by AYCO.
The first year total charge is estimated to be $10,080. AYCO is currently
charging $5,040 for subsequent years. You will have an imputed income
liability for the company-paid 90%. You may be able to offset this expense
if you are able to itemize deductions for these financial counseling
services. Consult your personal tax advisor for information regarding
deductibility.
14. Building and maintaining business relationships with community
leaders, customers, and suppliers is an important function which the
President is expected to perform. GenCorp will pay or reimburse you for
membership fees and dues at a local country club for your business and
personal use. In addition, GenCorp will reimburse you for the one-time cost
of purchasing from Westinghouse the surety bond for the Pittsburgh Field
Club membership. All such payments and reimbursements will be treated as
personal income to you in accordance with and as required by law.
15. GenCorp will provide you the opportunity to receive a physical
examination at the Greenbrier Clinic or any other qualified medical center
that you may select. The frequency and extent of any such examination will
be pursuant and subject to the provisions of GenCorp's Executive Physical
Directive.
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16. You will be eligible to participate in the GenCorp Savings Plan
which provides matching contributions equal to 75% of the first six percent
of a participant's contributions from base salary and year-end bonus
compensation. The Savings Plan allows supplemental contributions from
eligible compensation on a pre-tax and after-tax basis. The contribution
rate may be limited by certain restrictions imposed by the Internal Revenue
Code. All matching contributions vest immediately.
17. In addition to the above-mentioned employee benefit plans, you
will be eligible to participate in the other employee benefit plans which
GenCorp has established for its salaried employees (in each case, subject
to and in accordance with the provisions of the applicable plan), including
the following:
- Comprehensive Health Care
- Dental Care
- Life Insurance
- Supplemental Group Universal Life Insurance
- Long Term Disability Insurance
Nothing herein will be deemed to preclude GenCorp from changing or
terminating any employee benefit plan, program, or practice applicable
to you and other employees or require GenCorp to employ you for any
specific period of time. Participation in some of these plans is
voluntary and requires employee contributions.
18. The provisions herein contained are in lieu of a severance
agreement of the type which GenCorp heretofore has entered into with its
executive officers to provide certain severance payments in the event of
any "change in control" of GenCorp (as defined in such severance
agreement). However, if any such change in control occurs after
commencement of your employment, you may exercise any right of termination
provided in paragraph 2, if any. Additionally, if GenCorp breaches any
material obligation hereunder after any such change in control, you may
terminate this agreement and receive the termination payment specified in
paragraph 2 and the supplemental pension specified in paragraph 8.
If the foregoing meets with your understanding and approval, please
acknowledge by executing and returning to me the enclosed copy. Following that,
I will submit this agreement to the Directors as soon as possible. Upon their
approval, the agreement will then become effective.
Yours truly,
GENCORP INC.
By
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A. William Reynolds
Enclosure
Approved and accepted this
day of , 1993.
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John B. Yasinsky
copy: H. A. Shaw,
Chairman of the Nominating
Committee
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