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EXHIBIT 10g(iii)
SECOND AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
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THIS AGREEMENT, is made as of November 11, 2003, by and
between Kaman Corporation, a Connecticut corporation (the
"Company"), and Paul R. Kuhn (the "Executive").
WHEREAS, the Company considers it essential to the best
interests of its shareholders to foster the continued employment
of key management personnel; and
WHEREAS, the Board recognizes that the possibility of a
Change in Control exists and that such possibility, which will not
be addressed by an Employment Agreement, and the uncertainty and
questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment
of the Company and its shareholders; and
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention
and dedication of members of the Company's management, including
the Executive, to their assigned duties without the potential
distractions arising from the possibility of a Change in Control;
and
WHEREAS, the Company and the Executive executed a Change in
Control Agreement dated August 2, 1999 (which was amended and
restated in its entirety as of November 16, 1999) as well as an
Employment Agreement, as amended; and
WHEREAS, the parties desire to further amend and restate the
Change in Control Agreement in its entirety;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the Company and the Executive
hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms
used in this Agreement are provided in the last Section of this
Agreement.
2. Term. [Intentionally Omitted]
3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive's continued employment, the Company
agrees, under the conditions described herein, to pay the
Executive the Severance Payments and the other payments and
benefits described in this Agreement. Except as provided in
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Section 8.1 of this Agreement, no Severance Payments shall be
payable under this Agreement unless there shall have been (or,
under the terms of the second sentence of Section 5.1, there shall
be deemed to have been) a termination of the Executive's
employment with the Company following a Change in Control. This
Agreement shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in writing
between the Executive and the Company, the Executive shall not
have any right to be retained in the employ of the Company.
4. Compensation Other Than Severance Payments.
4.1 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay
the Executive's full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Date of
Termination or, if Section 15 (o)(ii) is applicable as an event or
circumstance constituting Good Reason, the rate in effect
immediately prior to such event or circumstance, together with all
compensation and benefits payable to the Executive through the
Date of Termination under the terms of the Company's compensation
and benefit plans, programs or arrangements as in effect
immediately prior to the Date of Termination (or, if more
favorable to the Executive, as in effect immediately prior to the
first occurrence of an event or circumstance constituting Good
Reason), including, but not limited to, the bonus for which the
Executive is eligible due to his or her employment during the
calendar year in which the Date of Termination occurs, with such
bonus to be pro rated and calculated in accordance with the Kaman
Corporation Cash Bonus Plan.
4.2 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay to
the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in
accordance with, the Company's retirement, insurance and other
compensation or benefit plans, programs and arrangements as in
effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good
Reason.
5. Severance Payments.
5.1 If the Executive's employment is terminated following a
Change in Control, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive without
Good Reason, then the Company shall pay the Executive the amounts,
and provide the Executive the benefits described in this Section 5
("Severance Payments") in addition to any payments and benefits to
which the Executive is entitled under Section 4 of this Agreement.
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For purposes of this Agreement, the Executive's employment shall
be deemed to have been terminated by the Company following a
Change in Control, without Cause or by the Executive with Good
Reason, if (i) the Executive's employment is terminated by the
Company without Cause prior to a Change in Control and such
termination was at the request or direction of a Person who has
entered into an agreement with the Company the consummation of
which would constitute a Change in Control, (ii) the Executive
terminates his employment for Good Reason prior to a Change in
Control and the circumstance or event which constitutes Good
Reason occurs at the request or direction of such Person, or (iii)
the Executive's employment is terminated by the Company without
Cause or by the Executive for Good Reason and such termination or
the circumstance or event which constitutes Good Reason is
otherwise in connection with or in anticipation of a Change in
Control. For purposes of any determination regarding the
applicability of the immediately preceding sentence, any position
taken by the Executive shall be presumed to be correct unless the
Company establishes to the Board by clear and convincing evidence
that such position is not correct.
(a) In lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination and in lieu of
any severance benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum severance payment,
in cash, equal to the sum of (i) three (3) times the Executive's
base salary as in effect immediately prior to the Date of
Termination or, if Section 15 (o)(ii) is applicable as an event or
circumstance constituting Good Reason, the rate in effect
immediately prior to such event or circumstance, and (ii) three
(3) times the annual bonus actually paid for the fiscal year
ending immediately prior to the fiscal year in which occurs the
Date of Termination, pursuant to any annual bonus or incentive
plan maintained by the Company.
(b) For the thirty-six (36) month period immediately
following the Date of Termination, the Company shall arrange to
provide the Executive and his dependents medical, dental, and
accidental death and disability benefits substantially similar to
those provided to the Executive and his dependents immediately
prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
date or occurrence. Benefits otherwise receivable by the
Executive pursuant to this Section 5.1(b) shall be reduced to the
extent benefits of the same type are received by or made available
to the Executive during the thirty-six (36) month period following
the Date of Termination (and any such benefits received by or made
available to the Executive shall be reported to the Company by the
Executive); provided, however, that the Company shall reimburse
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the Executive for the excess, if any, of the cost of such benefits
to the Executive over such cost immediately prior to the Date of
Termination or, if more favorable to the Executive, the first
occurrence of an event or circumstance constituting Good Reason.
(c) Notwithstanding any provision to the contrary in any
plan or agreement maintained by or through the Company pursuant to
which the Executive has been granted restricted stock, stock
options, stock appreciation rights or long-term performance
awards, effective on the Date of Termination, (i) all restrictions
with respect to any restricted stock shall lapse, (ii) all stock
appreciation rights and stock options shall be deemed fully vested
and then canceled in exchange for a cash payment equal to the
excess of the fair market value of the shares of Company stock
subject to the stock appreciation right or stock option on the
date of the Change in Control, over the exercise price(s) of such
stock appreciation rights or stock options, and (iii) all long-
term performance awards shall be deemed fully vested and fully
earned and then shall be canceled in exchange for a cash payment
equal to 100% of the target value of each such award.
(d) In addition to the retirement benefits to which the
Executive is entitled under any tax-qualified, supplemental or
excess benefit pension plan maintained by the Company and any
other plan or agreement entered into between the Executive and the
Company which is designed to provide the Executive supplemental
retirement benefits (the "Pension Plans") or any successor plan
thereto, effective upon the Date of Termination, the Executive
shall receive vesting credit under the Kaman Corporation
Supplemental Employees Retirement Plan ("SERP") equal to five
years of Continuous and Credited Service (as defined in the Kaman
Corporation Employees' Pension Plan to which the SERP is
supplemental).
(e) If the Executive would have become entitled to benefits
under the Company's post-retirement health care plans, as in
effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
first occurrence of an event or circumstance constituting Good
Reason, had the Executive's employment terminated at any time
during the period of thirty-six (36) months after the Date of
Termination, the Company shall provide such post-retirement health
care benefits to the Executive and the Executive's dependents
commencing on the later of (i) the date on which such coverage
would have first become available and (ii) the date on which
benefits described in this Section 5.1 (e) terminate.
(f) The Company shall (i) either prepay all remaining
premiums, or establish an irrevocable grantor trust holding an
amount of assets sufficient to pay all such remaining premiums
(which trust shall be required to pay such premiums), under any
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insurance policy maintained by the Company insuring the life of
the Executive, that is in effect; and (ii) shall transfer to the
Executive any and all rights and incidents of ownership in such
arrangements at no cost to the Executive.
(g) The Company shall provide the Executive with
reimbursement for outplacement services received by the Executive
for up to Thirty Thousand Dollars ($30,000), but only until the
first acceptance by the Executive of an offer of employment.
(h) The Company shall provide the Executive with his Company
automobile. The book value then attributed to it by the leasing
company will be considered "fringe benefit" income and that amount
will be subject to tax during the calendar year in which the Date
of Termination occurs.
5.2 (a) Whether or not the Executive becomes entitled to
the Severance Payments, if any of the payments or benefits
received or to be received by the Executive in connection with a
Change in Control or the Executive's termination of employment
(whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated
with the Company or such Person) (such payments or benefits,
excluding the Gross-Up Payment, being hereinafter referred to as
the "Total Payments") will be subject to the Excise Tax, the
Company shall pay to the Executive an additional amount (the
"Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments
and any federal, state and local income and employment taxes and
Excise Tax upon the Gross-Up Payment, shall be equal to the Total
Payments.
(b) For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amount of
such Excise Tax, (i) all of the Total Payments shall be treated as
"parachute payments" (within the meaning of Section 280G(b)(2) of
the Code) unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by the
accounting firm which was, immediately prior to the Change in
Control, the Company's independent auditor (the "Auditor"), such
payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of Section 280G(b)(4)(A)
of the Code, (ii) all "excess parachute payments" within the
meaning of Section 280G(b)(l) of the Code shall be treated as
subject to the Excise Tax unless, in the opinion of Tax Counsel,
such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the
meaning of Section 280G(b)(4)(B) of the Code) in excess of the
Base Amount allocable to such reasonable compensation, or are
otherwise not subject to the Excise Tax, and (iii) the value of
any noncash benefits or any deferred payment or benefit shall be
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determined by the Auditor in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Executive
shall be deemed to pay federal income tax at the highest marginal
rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rate of taxation in the state and locality of
the Executive's residence on the Date of Termination (or if there
is no Date of Termination, then the date on which the Gross-Up
Payment is calculated for purposes of this Section 5.2), net of
the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
(c) In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder
in calculating the Gross-Up Payment, the Executive shall repay to
the Company, within thirty (30) days following the time that the
amount of such reduction in the Excise Tax is finally determined,
the portion of the Gross-Up Payment attributable to such reduction
(plus that portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income and employment
taxes imposed on the Gross-Up Payment being repaid by the
Executive), to the extent that such repayment results in a
reduction in the Excise Tax and a dollar-for-dollar reduction in
the Executive's taxable income and wages for purposes of federal,
state and local income and employment taxes, plus interest on the
amount of such repayment at 120% of the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder in
calculating the Gross-Up Payment (including by reason of any
payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with
respect to such excess) within thirty (30) days following the time
that the amount of such excess is finally determined. The
Executive and the Company shall each reasonably cooperate with the
other in connection with any administrative or judicial
proceedings concerning the existence or amount of liability for
Excise Tax with respect to the Total Payments.
5.3 The Company also shall reimburse the Executive for legal
fees and expenses incurred by the Executive in disputing in good
faith any issue hereunder relating to the termination of the
Executive's employment or in seeking in good faith to obtain or
enforce any benefit or right provided by this Agreement. Such
payments shall be made within ten (10) business days after
delivery of the Executive's written request for payment
accompanied with such evidence of fees and expenses incurred as
the Company reasonably may require.
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5.4 The payments provided in subsections (a) and (c) of
Section 5.1 shall be made on the last day of the Executive's
employment. The payments provided in Section 5.2 of this
Agreement shall be made as soon as practicable following the Date
of Termination, but in no event later than thirty (30) days
following the Date of Termination. If payments are not made in
the time frame required by this subsection, interest on the unpaid
amounts will accrue at 120% of the rate provided in Section
1274(b)(2)(B) of the Code until the date such payments are
actually made. At the time that payments are made under this
Agreement, the Company shall provide the Executive with a written
statement setting forth the manner in which such payments were
calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received
from Tax Counsel, the Auditor or other advisors or consultants
(and any such opinions or advice which are in writing shall be
attached to the statement).
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control, any
purported termination of the Executive's employment (other than by
reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in
accordance with Section 9 of this Agreement. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so indicated.
Further, a Notice of Termination for Cause is required to include
a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the
Board at a meeting of the Board which was called and held for the
purpose of considering such termination (after reasonable notice
to the Executive and an opportunity for the Executive, together
with the Executive's counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, the
Executive was guilty of conduct set forth in clause (i) or (ii) of
the definition of Cause herein, and specifying the particulars
thereof in detail.
6.2 Date of Termination. "Date of Termination," with
respect to any purported termination of the Executive's employment
after a Change in Control, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall
not have returned to the full-time performance of the Executive's
duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated for any other reason, the
date specified in the Notice of Termination (which, in the case of
a termination by the Company, shall not be less than thirty (30)
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days (except in the case of a termination for Cause) and, in the
case of a termination by the Executive, shall not be less than
fifteen (15) days nor more than sixty (60) days, respectively,
from the date such Notice of Termination is given).
6.3 Dispute Concerning Termination. If within fifteen (15)
days after any Notice of Termination is given, or, if later, prior
to the Date of Termination (as determined without regard to this
Section 6.3), the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be extended until the
date on which the dispute is finally resolved, either by mutual
written agreement of the parties or by a final judgment, order or
decree of an arbitrator or a court of competent jurisdiction
(which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended
by a notice of dispute given by the Executive only if such notice
is given in good faith and the Executive pursues the resolution of
such dispute with reasonable diligence.
6.4 Compensation During Dispute. If a purported
termination occurs following a Change in Control and the Date of
Termination is extended in accordance with Section 6.3 of this
Agreement, the Company shall continue to pay the Executive the
full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation,
benefit and insurance plans in which the Executive was
participating when the notice giving rise to the dispute was
given, until the Date of Termination, as determined in accordance
with Section 6.3 of this Agreement. Amounts paid under this
Section 6.4 are in addition to all other amounts due under this
Agreement (other than those due under Section 4.1 of this
Agreement) and shall not be offset against or reduce any other
amounts due under this Agreement.
7. No Mitigation. The Company agrees that under this
Agreement, if the Executive's employment with the Company
terminates, the Executive is not required to seek other employment
or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Section 5 of this Agreement
or Section 6.4 of this Agreement. Further, the amount of any
payment or benefit provided for in this Agreement (other than as
specifically provided in Section 5.1(b) of this Agreement) shall
not be reduced by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits,
by offset against any amount claimed to be owed by the Executive
to the Company, or otherwise.
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8. Successors; Binding Agreement.
8.1 In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform
this Agreement in accordance with its terms. Failure of the
Company to obtain such agreement prior to the effectiveness of any
such succession shall be a breach of this Agreement and shall
entitle the Executive to compensation from the Company in the same
amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's
employment for Good Reason after a Change in Control, except that,
for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination.
8.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive shall die while any
amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of
the Executive) if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors,
personal representatives or administrators of the Executive's
estate.
9. Notices. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered
or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the Executive, to the
address inserted below the Executive's signature on the final page
hereof and, if to the Company, to the address set forth below, or
to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual receipt:
To the Company:
Kaman Corporation
1332 Blue Hills Ave., P.O. Box 1
Bloomfield, CT 06002
Attention: Candace A. Clark, Secretary
10. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and
the Executive Vice President of the Company or his designee. No
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waiver by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with, any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time. This Agreement supersedes any other agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which have been made by
either party. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
Connecticut. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or
local law and any additional withholding to which the Executive
has agreed. The obligations of the Company and the Executive
under this Agreement which by their nature may require either
partial or total performance after its expiration shall survive
any such expiration.
11. Validity; Counterparts. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of
this Agreement, which shall remain in full force and effect. This
Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will
constitute one and the same instrument.
12. Confidentiality. Unless required otherwise by law or
government regulation, the parties will maintain the terms and
conditions of this Agreement in confidence.
13. Settlement of Disputes. All claims by the Executive
for benefits under this Agreement shall be directed to and
determined by the Board and shall be in writing. Any denial by
the Board of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the
specific reasons for the denial and the specific provisions of
this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying
a claim and shall further allow the Executive to appeal to the
Board a decision of the Board within sixty (60) days after
notification by the Board that the Executive's claim has been
denied.
14. Arbitration. Any further dispute or controversy
arising under or in connection with this Agreement shall be
settled exclusively by arbitration in Hartford, Connecticut, in
accordance with the rules of the American Arbitration Association
then in effect; provided, however, that the evidentiary standards
set forth in this Agreement shall apply. Judgment may be entered
on the arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the contrary,
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the Executive shall be entitled to seek specific performance of
the Executive's right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or
in connection with this Agreement.
15. Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(a) "Affiliate" shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act.
(b) "Auditor " shall have the meaning set forth in Section
5.2(b) of this Agreement.
(c) "Base Amount" shall have the meaning set forth in
Section 280G(b)(3) of the Code.
(d) "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.
(e) "Board" shall mean the Board of Directors of the
Company.
(f) Cause for termination by the Company of the Executive's
employment shall mean (i) the willful and continued failure by the
Executive to substantially perform the Executive's duties with the
Company (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to
Section 6.1 of this Agreement) after a written demand for
substantial performance is delivered to the Executive by the
Board, which demand specifically identifies the manner in which
the Board believes that the Executive has not substantially
performed the Executive's duties, or (ii) the willful engaging by
the Executive in conduct which is demonstrably and materially
injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (i) and (ii) of this
definition, (x) no act, or failure to act, on the Executive's part
shall be deemed "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable belief that
the Executive's act, or failure to act, was in the best interest
of the Company and (y) in the event of a dispute concerning the
application of this provision, no claim by the Company that Cause
exists shall be given effect unless the Company establishes to the
Board by clear and convincing evidence that Cause exists.
(g) Any of the following events shall constitute the
occurrence of a "Change in Control" for purposes of this
Agreement:
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(i) any Person (as defined below) is or becomes the
Beneficial Owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 35% or more of the then outstanding securities of the
Company generally entitled to vote in the election of directors of
the Company, excluding any Person who becomes such a Beneficial
Owner in connection with a transaction described in clause (A) of
paragraph (iii) below; or any
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on November 1, 2003, constitute the Board and any
new director (other than a director whose initial assumption of
office is a result of an actual or threatened election contest,
including but not limited to a consent solicitation, relating to
the election of directors of the Company and whose appointment or
election was not approved by at least two-thirds (2/3) of the
directors of the Company in office immediately prior to any such
contest) whose appointment or election by the Board or nomination
for election by the Company's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the
directors then in office; or
(iii) there is consummated a Merger of the Company with
any other business entity, other than (A) a Merger which would
result in the securities of the Company generally entitled to vote
in the election of directors of the Company outstanding
immediately prior to such Merger continuing to represent (either
by remaining outstanding or by being converted into such
securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other fiduciary
holding such securities under an employee benefit plan of the
Company or any Subsidiary of the Company, at least 65% of the
securities of the Company or such surviving entity or any parent
thereof outstanding immediately after such Merger, generally
entitled to vote in the election of directors of the Company or
such surviving entity or any parent thereof and, in the case of
such surviving entity or any parent thereof, of a class registered
under Section 12 of the Exchange Act, or (B) a Merger effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 35% or more of the then outstanding securities of the
Company generally entitled to vote in the election of directors of
the Company; or
(iv) (A) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity where the outstanding securities
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generally entitled to vote in the election of directors of the
Company immediately prior to the sale continue to represent
(either by remaining outstanding or by being converted into such
securities of the surviving entity or any parent thereof) 65% or
more of the outstanding securities of such entity generally
entitled to vote in the election of directors immediately after
such sale and of a class registered under Section 12 of the
Exchange Act, or (B) a disposition or divestiture by the Company
or any Subsidiary of the Company to any Person of either Kaman
Aerospace Corporation or Kaman Industrial Technologies
Corporation, including, without intending to limit the foregoing,
any such disposition or divestiture effected by (x) a sale of all
or substantially all of the securities or all or substantially all
of the assets of either Kaman Aerospace Corporation or Kaman
Industrial Technologies Corporation, (y) the Merger of either
Kaman Aerospace Corporation or Kaman Industrial Technologies
Corporation with or into any Person, other than a Merger which
would result in the voting securities of the Subsidiary party to
such Merger outstanding immediately prior to such Merger
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or
any parent thereof) at least 65% of the securities of such
Subsidiary or such surviving entity or any parent thereof
outstanding immediately after such Merger and generally entitled
to vote in the election of directors of the Subsidiary or such
surviving entity or parent thereof, or (z) a spin off, dividend or
other distribution of all or substantially all of the securities
or all or substantially all of the assets (or of the stock of a
business entity owning such securities or assets) of either Kaman
Aerospace Corporation or Kaman Industrial Technologies Corporation
to the Company's stockholders.
Within five (5) days after a Change in Control has occurred,
the Company shall deliver to the Executive a written statement
memorializing the date that the Change in Control occurred.
(h) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor Code, and related
rules, regulations and interpretations.
(i) "Company" shall mean Kaman Corporation and, except in
determining under Section 15(g) hereof whether or not any Change
in Control of the Company has occurred, shall include any
successor to its business and/or assets.
(j) "Date of Termination" shall have the meaning set forth
in Section 6.2 of this Agreement.
(k) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment, if, as a
result of the Executive's incapacity due to physical or mental
illness, the Executive shall have been absent from the full-time
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performance of the Executive's duties with the Company for a
period of six (6) consecutive months, the Company shall have given
the Executive a Notice of Termination for Disability, and, within
thirty (30) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of
the Executive's duties.
(l) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(m) "Excise Tax" shall mean any excise tax imposed under
Section 4999 of the Code.
(n) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(o) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the
Executive's express written consent) after any Change in Control
(if more than one Change in Control has occurred, any reference to
a Change in Control in this subsection (o) shall refer to the most
recent Change in Control), of any one of the following acts by the
Company, or failures by the Company to act, unless, in the case of
any act or failure to act described in paragraph (i), (v), (vi),
or (vii) below, such act or failure to act is corrected prior to
the Date of Termination specified in the Notice of Termination
given in respect thereof:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's status as President, Chief
Executive Officer and Chairman of the Company or a substantial
diminution in the nature or status of the Executive's
responsibilities from those in effect immediately prior to the
Change in Control;
(ii) a reduction by the Company in the Executive's
annual base salary as in effect on the date of this Agreement or
as the same may be increased from time to time;
(iii) the relocation of the Executive's principal place
of employment to a location more than 50 miles from the
Executive's principal place of employment immediately prior to the
Change in Control or the Company's requiring the Executive to be
based anywhere other than such principal place of employment (or
permitted relocation thereof) except for required travel on the
Company's business to an extent substantially consistent with the
Executive's business travel obligations immediately prior to the
Change in Control;
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(iv) the failure by the Company to pay to the Executive
any portion of the Executive's current compensation, or to pay to
the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the
Company, within thirty (30) days of the date such compensation is
due;
(v) the failure by the Company to continue in effect
any compensation plan in which the Executive participates
immediately prior to the Change in Control which is material to
the Executive's total compensation (including, but not limited to,
the Kaman Corporation Compensation Administration Plan, Kaman
Corporation Cash Bonus Plan, and Kaman Corporation 1993 Stock
Incentive Plan), unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both
in terms of the amount or timing of payment of benefits provided
and the level of the Executive's participation relative to other
participants, as existed immediately prior to the Change in
Control;
(vi) the failure by the Company to continue to provide
the Executive with benefits substantially similar to those enjoyed
by the Executive under any of the Company's life insurance, health
and accident, or disability plans in which the Executive was
participating immediately prior to the Change in Control, the
taking of any other action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive
at the time of the Change in Control, or the failure by the
Company to provide the Executive with the number of paid vacation
days to which the Executive is entitled on the basis of years of
service with the Company in accordance with the Company's normal
vacation policy in effect at the time of the Change in Control,
provided, however, that this paragraph shall not be construed to
require the Company to provide the Executive with a defined
benefit pension plan if no such plan is provided to similarly
situated executive officers of the Company or its Affiliates; or
(vii) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 6.1 of this
Agreement; for purposes of this Agreement, no such purported
termination shall be effective.
The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's
incapacity due to physical or mental illness. The Executive's
continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
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For purposes of any determination regarding the existence of
Good Reason, any claim by the Executive that Good Reason exists
shall be presumed to be correct unless the Company establishes to
the Board by clear and convincing evidence that Good Reason does
not exist.
(p) "Gross-Up Payment" shall have the meaning set forth in
Section 5.2(a) of this Agreement.
(q) "Merger" means a merger, share exchange, consolidation
or similar business combination under applicable law.
(r) "Notice of Termination" shall have the meaning set forth
in Section 6.1 of this Agreement.
(s) "Person" shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include (A) the
Company or any of its direct or indirect Subsidiaries, (B) a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, (C) an underwriter temporarily
holding securities pursuant to an offering of such securities, (D)
a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions and with
substantially the same voting rights as their ownership and voting
rights with respect to the Company, (E) the voting trust
established pursuant to a Voting Trust Agreement dated August 14,
2000 between John C. Yavis, Jr., as General Partner of Newgate
Associates Limited Partnership and the trustees named therein (the
"Newgate Voting Trust"), provided that the following individuals
continue to constitute a majority of the voting trustees of that
voting trust: individuals serving as trustees of the Newgate
Voting Trust as of November 1, 2003 and individuals designated by
the Board in accordance with the terms of that voting trust,
provided no Change in Control pursuant to Section 15(g)(ii) of
this Agreement has occurred, (F) the individuals referred to in
the immediately preceding subsection (E) solely with respect to
their status as Beneficial Owners of securities of the Company
subject to the Newgate Voting Trust, (G) Charles H. Kaman, any
individual to whom he has directly granted a general power of
attorney, or any entity created or controlled by him, provided
that he and/or any attorneys-in-fact appointed directly by him
possess and exercise, in person or by proxy solicited by the
Board, the right to vote all securities of the Company generally
entitled to vote in the election of directors of the Company, of
which he, any such holder of his general power of attorney, or any
such entity is the Beneficial Owner, and (H) the holder of a
general power of attorney and the attorneys-in-fact referred to in
the immediately preceding subsection (G) solely with respect to
their status as Beneficial Owners of securities of the Company
because of their appointment as such.
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(t) "Severance Payments" shall have the meaning set forth in
Section 5.1 of this Agreement.
(u) "Subsidiary" shall mean any corporation within the
meaning of Section 424(f) of the Code.
(v) "Tax Counsel" shall have the meaning set forth in
Section 5.2(b) of this Agreement.
(w) "Total Payments" shall mean those payments so described
in Section 5.2(a) of this Agreement.
IN WITNESS WHEREOF, the parties have executed this agreement
as of the date and year first above written.
Kaman Corporation
By /s/ Robert M. Garneau
- --------------------------- ------------------------------
Paul R. Kuhn Name: Robert M. Garneau
Title: Executive Vice President
and CFO
Address:
3 Bedford Court
Farmington, CT 06032
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