SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-1093
KAMAN CORPORATION
(Exact Name of Registrant)
Connecticut 06-0613548
(State of Incorporation) (I.R.S. Employer Identification No.)
Blue Hills Avenue, Bloomfield, Connecticut 06002
(Address of principal executive offices)
Registrant's telephone number, including area code-(860) 243-7100
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
-Class A Common Stock, Par Value $1.00
-6% Convertible Subordinated Debentures Due 2012
-Series 2 Preferred Stock, Par Value $1.00
-Depositary Shares, each representing one quarter of a
share of Series 2 Preferred Stock
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Section 229.405 of this
chapter) is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ].
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value
shall be computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as
of a specified date within 60 days prior to the date of filing.
$1,267,088 as of February 1, 1996.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of the latest practicable
date.
Class A Common 17,796,902 shares
Class B Common 667,814 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Corporation's 1995 Annual Report to Shareholders
are incorporated by reference and filed as Exhibit 13 to this
Report. No other documents except those previously filed with
the Commission are incorporated herein by reference.
PART I
ITEM 1. BUSINESS
Kaman Corporation, incorporated in 1945, and its
subsidiaries (collectively, the "Corporation") serve government,
industrial and commercial markets through two industry segments:
Diversified Technologies and Distribution. The Diversified
Technologies group provides design and manufacture of advanced
technology products and systems, advanced technology services and
aircraft manufacturing. The Distribution segment distributes
industrial products, distributes and manufactures music products
and provides various services to its customers.
DIVERSIFIED TECHNOLOGIES
The Diversified Technologies segment consists of several
wholly-owned subsidiaries, including Kaman Diversified
Technologies Corporation, Kaman Aerospace Corporation, Kaman
Aerospace International Corporation, Kaman Sciences Corporation,
Kamatics Corporation, Kaman Electromagnetics Corporation, and
Kaman Instrumentation Corporation.
An important element of the Diversified Technologies
segment's business is aircraft manufacturing, including the
development and manufacture of helicopters and the integration of
systems related to helicopters. The Corporation has been the
prime contractor for the U.S. Navy for the SH-2 series
helicopter, a multi-mission aircraft. As a result of reductions
in the size of the U.S. Navy's fleet, the Corporation is not
presently manufacturing further aircraft for the U.S. Navy.
However, there are presently sixteen (16) such aircraft of the
SH-2G configuration in the U.S. Navy's Reserve fleet and the
Corporation expects to continue to provide logistics and spare
parts support for such SH-2G helicopters. The Corporation is
exploring the potential for use of SH-2G helicopters by foreign
military services as maritime helicopters operating off of FF 1052
class frigates provided by the U.S. government or smaller ships
built by such foreign governments. In 1995, the Corporation began
work pursuant to a letter agreement between the Republic of Egypt
and the U.S. Navy for the acquisition of ten (10) SH-2G
helicopters. Such work involves the retrofit of SH-2F helicopters
already manufactured for the U.S. Navy into the SH-2G
configuration. The contract between the Corporation and the U.S.
Navy for this work is in the process of being finalized and is
expected to have a value of approximately $135 million over
approximately a three year period. Incremental funding under such
agreement began in 1995. In addition, the corporation is exploring
the possibility of other sales to a number of foreign government
customers. The Corporation has made proposals to the Royal
Australian Navy and the Royal New Zealand Navy. In December, 1995,
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the government of New Zealand notified the Corporation that the
Corporation was one of two competitors (and the only U.S. company)
that would enter the Best and Final Offer process for the
procurement of four (4) to six (6) retrofitted aircraft.
The Corporation also produces a commercial helicopter, known as
the K-MAX (Registered Trademark) "aerial truck" incorporating
intermeshing rotor technology developed by the Corporation. The
K-MAX is an FAA type certificated medium-to-heavy lift helicopter
which is designed to provide superior operational capabilities,
and which experienced its first full year of commercial operation
in 1995. While a substantial portion of the Corporation's
research and development activities were devoted to this product
over the past several years, research and development activities
were reduced in 1995 due to the development of the product being
essentially complete. In 1995 the K-MAX was certificated in
Switzerland and Canada and approval process was initiated in
Japan. The production lot of K-MAX helicopters for 1995
consisted of six (6) aircraft and a similar number are scheduled
for production in 1996. During the third quarter of 1995 the
K-MAX was chosen as the winner of the U.S. Navy vertical
replenishment (VERTREP) demonstration competition involving two
aircraft. The demonstration was conducted for a period of two
months and the Corporation is presently in the process of
competing for a six month VERTREP project which would involve
deployment of two aircraft under a charter/lease arrangement with
the U.S. Navy.
Kaman manufactures subcontract aircraft products for
government and commercial customers on programs such as the
McDonnell Douglas C-17 and the Boeing 767 and 777, and is
involved in various programs requiring development of new
technologies such as composite structural components for the F-22
aircraft. It also manufactures ruggedized tape and disk memory
systems used primarily in aircraft, and airborne laser-based
electro-optical imaging and detection systems for military and
commercial operations. Such electro-optical systems include
imaging LIDAR systems and the Corporation's proprietary Magic
Lantern (Registered Trademark) system which allows underwater
objects to be detected from an airborne platform.
As a second category of its business, the Diversified
Technologies segment also provides advanced technology services
to a number of customers, including all branches of the armed
forces, various Government agencies, the Department of Energy,
Department of Transportation, various defense contractors,
utilities and industrial organizations. The services offered
include software engineering and maintenance, operation of
Government information analysis centers, field and laboratory
testing services, communication system design and analysis,
specialized sensor design, electromagnetic interference and
compatibility evaluations, analysis and simulation of electronic
signals, various types of artificial intelligence systems,
intrusion detection systems, and weapon systems evaluation.
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A third category of this segment's business is developing
and manufacturing various advanced technology products and
systems which are used in markets that the Corporation serves.
Among the products manufactured are self lubricating bearings for
use on aircraft, marine vessels and hydropower plants; flexible
couplings for helicopters; precision measuring instruments used
in a variety of industries; composite flyer bows used in wire
making machinery; RF transmission and delay lines;
telecommunication products; photonic and optical systems; and
safing and fuzing systems for use in missiles. The Corporation
also develops and produces various motors, generators,
alternators, launchers and electric drive systems using
electromagnetic technology. In addition, the Corporation has
contracts with the U.S. government for a number of advanced
technology programs relating to some of the systems described
above and to other proprietary systems developed by the
Corporation.
DISTRIBUTION
The Distribution segment consists of several wholly-owned
subsidiaries including the following: Kaman Industrial
Technologies Corporation, Kaman Music Corporation, and AirKaman
of Jacksonville, Inc. This segment distributes industrial
products and services, manufactures and distributes music products,
and provides aviation services.
Kaman Industrial Technologies Corporation is a national
distributor of industrial products operating through more than
150 service centers located in 29 states and British Columbia,
Canada. The Corporation supplies a broad range of industries
with original equipment, repair and replacement products needed
to maintain traditional manufacturing processes and,
increasingly, with products of higher technological content that
are required to support automated production processes. The
Corporation serves nearly every sector of heavy and light
industry, including automobile manufacturing, agriculture, food
processing, pulp and paper manufacturing, mining, chemicals,
electronics and general manufacturing. Products available
include various types of standard and precision mounted and
unmounted bearings; mechanical power transmission equipment such
as V-belts, couplings, and gear reducers; electrical power
transmission products, motors, AC/DC controls, sensors and motion
control devices; materials handling equipment, belts, conveyor
idlers and pulleys; linear motion products; hydraulic drive
systems and parts; and accessory products such as lubricants and
seals. Although the vast majority of the company's business
consists of resale of products, operations include some design,
fabrication, and assembly work in connection with products sold.
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The Corporation continues to develop certain support service
capabilities in order to meet the maintenance needs of its
customers' manufacturing operations. These services include
electrical panel and systems fabrication centers capabilities and
similar capabilities for hydraulic and pneumatic control panels,
linear positioning systems, and material handling systems. In
1995 the Corporation, on a limited basis, continued to act as a
supplier of capital equipment to various systems engineering and
manufacturing customers by acting as a sales agent for certain
equipment manufacturers. As the Corporation has entered new
market areas, it has invested in new product inventory and in
some instances it has established inventory on consignment in
customer locations. The Corporation maintains a management
information system, consisting of an on-line computer network
linking all of its mainland U.S. and Canadian industrial
distribution facilities, which enhances its ability to provide
more efficient nationwide service and to improve inventory
management. In addition, the Corporation has undertaken
initiatives to address the needs of certain national account
customers that desire to consolidate their vendor base by
entering into "partnering" relationships to broaden geographical
coverage. For larger customers, the Corporation has increasingly
been given the opportunity to provide an "integrated supply"
function involving management of parts inventories and associated
personnel as well as selection of suppliers for the customer's
facility.
Kaman Music Corporation distributes more than 13,000
different music instruments and accessories to independent
retailers in the United States and Canada and to
international distributors throughout the world. Products
include acoustic, acoustic-electric and electric guitars and
basses, music strings for all fretted instruments, drums,
percussion products and related accessories, instrument and P.A.
amplification systems, electronic tuners and metronomes,
educational percussion and brass instruments and a full range of
accessories for all musical instruments. The Corporation
manufactures and distributes certain guitars under the
Corporation's various brand names including Ovation and Hamer
guitars, fretted musical instrument strings of various brands,
and the Trace Elliot range of stringed instrument amplification
equipment. Operations of Kaman Music Corporation are conducted
through three (3) manufacturing facilities and seven (7)
distribution centers in the United States and Canada, an
international sales division based in the United States and a
manufacturing facility in Great Britain.
The segment also distributes aviation fuel and provides
aviation services at Jacksonville International Airport,
Jacksonville, Florida where the Corporation conducts fixed base
operations for general and commercial aviation under a contract
with the Port Authority of the City of Jacksonville which extends
through the year 2008.
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FINANCIAL INFORMATION
Information concerning each segment's performance for the
last three fiscal years appears in the Corporation's 1995 Annual
Report to Shareholders and is included in Exhibit 13 to this Form
10-K, and is incorporated by reference.
PRINCIPAL PRODUCTS AND SERVICES
Following is information for the three preceding fiscal
years concerning the percentage contribution of the Corporation's
classes of products and services to the Corporation's
consolidated net sales:
Years Ended December 31
1993 1994 1995
------ ------ ------
Diversified Technologies:
Advanced Technology Products
and Systems 6.5%* 6.2%* 5.3%
Advanced Technology Services 14.1 13.5 12.7
Aircraft Manufacturing 22.5* 18.2* 18.0
---- ---- ----
Segment Total 43.1 37.9 36.0
Distribution:
Industrial Products 42.9 46.7 48.0
Music Products and Other Services 14.0 15.4 16.0
---- ---- ----
Segment Total 56.9 62.1 64.0
Total 100.0% 100.0% 100.0%
===== ===== =====
*Reflects reconfiguration of certain business lines.
RESEARCH AND DEVELOPMENT EXPENDITURES
Government sponsored research expenditures by the
Diversified Technologies segment were $70.2 million in 1995,
$82.2 million in 1994 and $118.8 million in 1993. Amounts shown
for 1993 and 1994 reflect reconfiguration of certain government
sponsored contracts. Independent research and development
expenditures were $13.7 million in 1995, $21.1 million in 1994,
and $18.4 million in 1993.
Page 5
BACKLOG
Program backlog of the Diversified Technologies segment was
approximately $218.7 million at December 31, 1995, $228.9 million
at December 31, 1994, and $240.8 million at December 31, 1993.
The Corporation anticipates that approximately 90.1% of its
backlog at the end of 1995 will be performed in 1996.
Approximately 62.9% of the backlog at the end of 1995 is related
to government contracts or subcontracts which are included in
backlog to the extent that funding has been appropriated by
Congress and allocated to the particular contract by the relevant
procurement agency. Certain of these government contracts, less
than 1% of the backlog, have been funded but not signed.
GOVERNMENT CONTRACTS
During 1995, approximately 47.5% of the work performed by
the Corporation directly or indirectly for the United States
government was performed on a fixed-price basis and the balance
was performed on a cost-reimbursement basis. Under a fixed-price
contract, the price paid to the contractor is negotiated at the
outset of the contract and is not generally subject to adjustment
to reflect the actual costs incurred by the contractor in the
performance of the contract. Cost reimbursement contracts
provide for the reimbursement of allowable costs and an
additional negotiated fee.
The Corporation's United States government contracts and
subcontracts contain the usual required provisions permitting
termination at any time for the convenience of the government
with payment for work completed and associated profit at the time
of termination.
COMPETITION
The Diversified Technologies segment operates in a highly
competitive environment with many other organizations which are
substantially larger and have greater financial and other
resources. For sales of advanced technology products and
systems, the Corporation competes with a wide range of
manufacturers primarily on the basis of price and the quality,
endurance, reliability and special performance characteristics of
those products. Operations also depend in part on the ability to
develop new technologies which have effective commercial and
Page 6
military applications. Examples of proprietary or patented
products developed by the Corporation include the Magic Lantern
(Registered Trademark) system for detecting underwater objects
from a helicopter, the Kamatics line of specialty bearings and
the Corporation's line of electromagnetic motors and drives,
among others. In providing scientific services and systems
development, the Corporation competes primarily on the basis of
the technical capabilities and experience of its personnel in
specific fields. When bidding for aerospace contracts and
subcontracts, the Corporation competes on the basis of price and
quality of its products and services as well as the availability
of its facilities, equipment and personnel to perform the
contract. Defense market conditions have been significantly
affected by an ongoing slowdown in defense spending. During 1995
the Department of Defense continued to pursue its implementation
of defense acquisition reform by emphasizing the use of
commercially developed state-of-the-art technology products and
performance-based procurement standards rather than traditional
military specification standards. The change in defense program
emphasis and greater constraints in the federal budget have
increased the level of competition for defense programs. As the
U.S. Navy reduces the size of its fleet, and to the extent such
reductions are not offset by foreign military sales, the
Corporation expects a corresponding reduction in the level of
logistics and spare parts required to maintain the series SH-2
helicopters previously produced or retrofitted by the
Corporation. In providing spare parts, the Corporation competes
with other helicopter manufacturers on the basis of price,
performance and product capabilities and also on the basis of its
experience as a manufacturer of helicopters. The Corporation's
FAA certificated K-MAX helicopters will compete with military
surplus helicopters and other helicopters used for lifting, as
well as with alternative methods of meeting lifting requirements.
Distribution operations are subject to a high degree of
competition from several other national distributors and many
regional and local firms both in the U.S. and elsewhere in the
world. Certain musical instrument products of the Corporation
are subject to competition from U.S. and foreign manufacturers
also. The Corporation competes in these markets on the basis of
service, price, performance, and inventory variety and
availability.
The Corporation also competes on the basis of quality and
market recognition of its music products and has established
certain trademarks and trade names under which certain of its
music products are produced both in the United States and under
private label manufacturing in foreign countries.
FORWARD-LOOKING STATEMENTS
To the extent this report includes forward-looking
statements that describe the corporation's business prospects,
there may be other factors that could have an adverse impact on
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those prospects in addition to those described above. These
include political, economic, or other conditions, such as
recessionary or expansive trends, inflation rates, currency
exchange rates, taxes and regulations and laws affecting the
business; as well as product competition, pricing, the degree of
acceptance of new products to the marketplace, and the difficulty
of forecasting sales at various times in various markets.
EMPLOYEES
As of December 31, 1995, the Corporation employed 5,400
individuals throughout its industry segments as follows:
Diversified Technologies 2,964
Distribution 2,373
Corporate Headquarters 63
PATENTS AND TRADEMARKS
The Corporation holds patents reflecting scientific and
technical accomplishments in a wide range of areas covering both
basic production of certain products, including aerospace
products and musical instruments, as well as highly specialized
devices and advanced technology products in such areas as nuclear
sciences, strategic defense and other commercial, scientific and
defense related fields.
Although the Corporation's patents enhance its competitive
position, management believes that none of such patents or patent
applications is singularly or as a group essential to its
business as a whole. The Corporation holds or has applied for
U.S. and foreign patents with expiration dates that range through
the year 2012.
These patents are allocated among the Corporation's industry
segments as follows:
U.S. PATENTS FOREIGN PATENTS
Segment Issued Pending Issued Pending
Diversified Technologies 95 11 45 41
Distribution 23 2 14 0
Trademarks of Kaman Corporation include Adamas, Applause,
Hamer, KAflex, KAron, K-MAX, Magic Lantern, and Ovation. In all,
the Corporation maintains 202 U.S. and foreign trademarks with 53
applications pending, most of which relate to music products in
the Distribution segment.
Page 8
COMPLIANCE WITH ENVIRONMENTAL PROTECTION LAWS
In the opinion of management, based on the Corporation's
knowledge and analysis of relevant facts and circumstances, there
will be no material adverse effect upon the capital expenditures,
earnings or competitive position of the Corporation or any of its
subsidiaries occasioned by compliance with any environmental
protection laws.
The Corporation is subject to the usual reviews and
inspections by environmental agencies of the various states in
which the Corporation has facilities, and the Corporation has
entered into agreements and consent decrees at various times in
connection with such reviews. On occasion the Corporation also
has been identified as a potentially responsible party ("PRP") by
the U.S. Environmental Protection Agency in connection with its
investigation of certain waste disposal sites. In each such
instance to date, the Corporation's involvement, if any, has
been either of a de minimis nature or the Corporation has been
able to determine, based on its current knowledge, that
resolution of such matters is not likely to have a material
adverse effect on the future financial condition of the
Corporation.
In arriving at this conclusion, the Corporation has taken
into consideration site-specific information available regarding
total costs of any work to be performed, and the extent of work
previously performed. Where the Corporation has been identified
as a PRP at a particular site, the Corporation, using information
available to it, also has reviewed and considered a number of
other factors, including (i) the financial resources of other
PRP's involved in each site, and their proportionate share of the
total volume of waste at the site; (ii) the existence of
insurance, if any, and the financial viability of the insurers;
and (iii) the success others have had in receiving reimbursement
for similar costs under similar policies issued during the
periods applicable to each site.
FOREIGN SALES
Ninety two and six tenths percent (92.6%) of the sales of
the Corporation are made to customers located in the United
States. Certain retrofit work on SH-2 series helicopters for
delivery to the Republic of Egypt is presently being performed by
the Corporation under an agreement between it and the U.S. Navy
and, because such work is a "foreign military sale" with the U.S.
Government, it is not included in the calculation of foreign
sales. In 1995, the Corporation continued its efforts to develop
international markets for its products and foreign sales
(including sales for export).
Page 9
ITEM 2. PROPERTIES
The Corporation occupies approximately 4.418 million square
feet of space throughout the United States, Canada, and Great
Britain, distributed as follows:
SEGMENT SQUARE FEET (in thousands)
Diversified Technologies 1,965
Distribution 2,413
Corporate Headquarters 40
Diversified Technologies principal facilities are located in
Arizona, Colorado, Connecticut, Massachusetts, Pennsylvania and
Virginia; other facilities including offices and smaller
manufacturing and assembly operations are located in several other
states, and in 1995 the Corporation opened an office in Turner,
Australia. These facilities are used for manufacturing, scientific
research and development, engineering and office purposes. The
U.S. Government owns 154 thousand square feet of the space occupied
by Kaman Aerospace Corporation in Bloomfield, Connecticut in
accordance with a facility contract. In 1995 the Corporation sold
approximately 18 acres of land previously owned by it in Colorado
Springs, Colorado to an unrelated third party.
The Distribution segment's facilities are located throughout
the United States with principal facilities located in
California, Connecticut, Florida, New York, Texas and Utah with
smaller facilities located in several other states. Additional
Distribution segment facilities are located in British Columbia,
and Ontario, Canada; and in Essex, England. These facilities
consist principally of regional distribution centers, service
centers and office space with a portion used for fabrication and
assembly work. Also included are facilities used for
manufacturing musical instruments, and facilities leased in
Florida for aviation services operations.
Kaman Corporation occupies a 40 thousand square foot
Corporate headquarters building in Bloomfield, Connecticut.
Page 10
The Corporation's facilities are suitable and adequate to
serve its purposes. While substantially all of such properties
are currently fully utilized, the Corporation consolidated some
of its properties in the Diversified Technologies segment during
1995. Many of the properties, especially within the Distribution
segment, are leased and certain of the Corporation's properties
are subject to mortgages.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the
Corporation or any of its subsidiaries is a party or to which any
of their property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security
holders during the fourth quarter of 1995.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
CAPITAL STOCK AND PAID-IN CAPITAL
Information required by this item appears in the
Corporation's 1995 Annual Report to Shareholders and is included
in Exhibit 13 to this Form 10-K, and is incorporated herein by
reference.
DIVIDEND REINVESTMENT PLAN
Registered shareholders of Kaman Class A common stock are
eligible to participate in the Automatic Dividend Reinvestment
Program. A booklet describing the plan may be obtained by
writing to the Corporation's transfer agent, Chemical Mellon
Shareholder Services, L.L.C., P. O. Box 590, Ridgefield Park, NJ
07660.
Page 11
QUARTERLY CLASS A COMMON STOCK INFORMATION
- -----------------------------------------------------------------
High Low Close Dividend
- -----------------------------------------------------------------
1995
First $11 1/2 $10 $11 1/8 $.11
Second 13 3/8 10 7/8 12 3/4 $.11
Third 13 11 1/2 11 7/8 $.11
Fourth 12 1/8 10 1/2 11 1/8 $.11
- -----------------------------------------------------------------
1994
First $10 3/8 $ 9 $ 9 5/8 $.11
Second 10 1/8 8 7/8 9 1/8 $.11
Third 10 1/8 8 1/2 9 5/8 $.11
Fourth 11 1/8 9 1/8 11 $.11
- -----------------------------------------------------------------
QUARTERLY DEBENTURE INFORMATION (6% Conv. Subordinated)(Bid)
- -----------------------------------------------------------------
High Low Close
- -----------------------------------------------------------------
1995
First $77 $72 1/2 $74
Second 82 1/2 74 79 1/4
Third 86 80 86
Fourth 87 82 82
- -----------------------------------------------------------------
1994
First $85 $83 $83
Second 83 76 76
Third 76 74 74
Fourth 74 71 74
- -----------------------------------------------------------------
QUARTERLY DEPOSITARY SHARES INFORMATION
- -----------------------------------------------------------------
High Low Close Dividend
- -----------------------------------------------------------------
1995
First $50 $44 3/16 $45 $.81 1/4
Second 56 46 54 1/4 $.81 1/4
Third 54 50 3/4 52 $.81 1/4
Fourth 53 47 47 $.81 1/4
- -----------------------------------------------------------------
1994
First $52 $50 1/2 $50 3/4 $.81 1/4
Second 51 42 1/2 42 1/2 $.81 1/4
Third 46 40 3/4 43 5/8 $.81 1/4
Fourth 48 42 3/4 46 3/4 $.81 1/4
- -----------------------------------------------------------------
NASDAQ market quotations reflect inter-dealer prices,
without retail mark-up, mark-down, or commission and may not
necessarily represent actual transactions.
Page 12
ANNUAL MEETING
The Annual Meeting of Shareholders will be held on Tuesday,
April 16, 1996 at 11:00 a.m. in the offices of the Corporation,
1332 Blue Hills Avenue, Bloomfield, Connecticut 06002.
ITEM 6. SELECTED FINANCIAL DATA
Information required by this item appears in the
Corporation's 1995 Annual Report to Shareholders and is included
in Exhibit 13 to this Form 10-K, and is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Information required by this item appears in the
Corporation's 1995 Annual Report to Shareholders and is included
in Exhibit 13 to this Form 10-K, and is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item appears in the
Corporation's 1995 Annual Report to Shareholders and is included
in Exhibit 13 to this Form 10-K, and is incorporated herein by
reference. Additional financial information is contained in the
Financial Data Schedule included as Exhibit 27 to this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Following is information concerning each Director, Director
Nominee, and Executive Officer of Kaman Corporation including name,
age, position with the Corporation, and business experience during
the last five years:
T. Jack Cahill Mr. Cahill, 47, has held various
positions with Kaman Industrial
Technologies Corporation, a subsidiary
of the Corporation, since 1975, and has
been President of Kaman Industrial
Technologies since 1993.
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E. Reeves Callaway, III Mr. Callaway, 48, was elected a Director
at the Corporation's 1995 Annual Meeting
of Shareholders. He is President of The
Callaway Companies, Inc.
Frank C. Carlucci Mr. Carlucci, 65, has been a Director
since 1989. He is Chairman of The
Carlyle Group, merchant bankers, having
formerly served as Vice Chairman since
1989. Prior to that he served as U.S.
Secretary of Defense. Mr. Carlucci is
also a Director of Westinghouse Electric
Corporation, Ashland Oil, Inc., Bell
Atlantic Corporation, General Dynamics
Corporation, Neurogen Corporation,
Northern Telecom Limited, Quaker Oats
Company, Pharmacia and Upjohn, Inc., Sun
Resorts, Inc., Texas Biotechnology
Corporation, BDM International, and CB
Commercial Real Estate Group, Inc.
Laney J. Chouest, M.D. Dr. Chouest, 42, is a Director Nominee
for election at the Corporation's 1996
Annual Meeting of Shareholders. He is
owner-manager of Edison Chouest Offshore,
Inc.
John A. DiBiaggio Dr. DiBiaggio, 63, has been a Director
since 1984. He is President and Chief
Executive Officer of Tufts University.
Prior to that he was President and Chief
Executive Officer of Michigan State
University.
Edythe J. Gaines Dr. Gaines, 73, has been a Director
since 1982. She is a retired
Commissioner of the Public Utility
Control Authority of the State of
Connecticut.
Ronald M. Galla Mr. Galla, 45, was appointed Senior
Vice President and Chief Information
Officer in December, 1995. Prior
to that he served as Vice President and
Director of the Corporation's Management
Information Systems, a position which he
held since 1990. Mr. Galla has been
Director of the Corporation's Management
Information Systems since 1984.
Page 14
Robert M. Garneau Mr. Garneau, 51, was appointed Executive
Vice President in December, 1995 and
continues to be designated as the
Corporation's Chief Financial Officer.
Previously he served as Senior Vice
President, Chief Financial Officer and
Controller. Mr. Garneau has held
various positions with the Corporation
since 1981.
Huntington Hardisty Admiral Hardisty (USN-Ret.), 66, has
been a Director since 1991, and was
appointed President of Kaman Aerospace
International Corporation, a
subsidiary of the Corporation, in 1995.
He retired from the U.S. Navy in 1991
having served as Commander-in-Chief for
the U.S. Navy Pacific Command since
1988. He is also a Director of Contraves,
Inc., MPR Inc., and CNA Corporation.
Charles H. Kaman Mr. Kaman, 76, has been Chief Executive
Officer and Chairman of the Board of
Directors since 1945. He was also
appointed President in December, 1995,
a position he previously held from 1945
to 1990.
C. William Kaman II Mr. Kaman, 44, has been a Director
since 1992 and was appointed Executive
Vice President in December, 1995. He
has held various positions with Kaman
Music Corporation, a subsidiary of the
Corporation, since 1974, and continues
to serve as President of that
subsidiary. Mr. Kaman is the son
of Charles H. Kaman, Chairman, President
and Chief Executive Officer of the
Corporation.
Walter R. Kozlow Mr. Kozlow, 60, has held various
positions with Kaman Aerospace
Corporation, a subsidiary of the
Corporation, since 1960. He has been
President of Kaman Aerospace since 1986.
Page 15
Eileen S. Kraus Ms. Kraus, 57, was elected a Director at
the Corporation's 1995 Annual Meeting of
Shareholders. She is Chairman of Fleet
Bank, N.A. Since 1979 she has held
various positions at Shawmut Bank
Connecticut and Shawmut National
Corporation, predecessors of Fleet Bank,
N.A. and its holding company, Fleet
Financial Group. She is a Director of
Yankee Energy System, Inc., The Stanley
Works, and CPC International, Inc.
Hartzel Z. Lebed Mr. Lebed, 68, has been a Director since
1982. He is the retired President of
CIGNA Corporation and is a Director of
Shawmut National Trust Co., a subsidiary
of Fleet Financial Corporation.
Harvey S. Levenson Mr. Levenson, 55, has been a Director
since 1989. He has served as President
and Chief Operating Officer of the
Corporation from 1990 until his
retirement in December, 1995.
Mr. Levenson is also a Director of
Connecticut Natural Gas Corporation
and Security-Connecticut Corporation.
Walter H. Monteith, Jr. Mr. Monteith, 65, has been a Director
since 1987. He is the retired Chairman
of Southern New England Telecommuni-
cations Corporation. Mr. Monteith is
also a Director of Fleet Bank.
John S. Murtha Mr. Murtha, 82, has been a Director
since 1948. He is counsel to and a
former senior partner of the law firm of
Murtha, Cullina, Richter and Pinney.
Patrick L. Renehan Mr. Renehan, 62, has been a Vice
President of Kaman Diversified
Technologies Corporation, a subsidiary
of the Corporation, since 1987. Prior to
that he served as a Vice President of
Kaman Aerospace Corporation.
Wanda L. Rogers Mrs. Rogers, 63, has been a Director
since 1991. She is Chief Executive
Officer of Rogers Helicopters, Inc.
She is also Chairman of the Board of
Clovis Community Bank.
Page 16
Robert H. Saunders, Jr. Mr. Saunders, 55, was appointed Senior
Vice President in December, 1995.
Previously he was Vice President and
Chief Financial Officer of the
University of Hartford from 1993 to
1995. Prior to that he was President
of J. M. Ney Corporation.
Richard E.W. Smith Mr. Smith, 61, was appointed a Vice
President of the Corporation in 1989.
He has been President of Kaman
Diversified Technologies Corporation,
a subsidiary of the Corporation, since
1990 and prior to that he served as Vice
President of Kaman Sciences Corporation,
a subsidiary of the Corporation.
Each Director and Executive Officer has been elected for a
term of one year and until his or her successor is elected. The
terms of all such Directors and Executive Officers are expected
to expire as of the Annual Meeting of the Shareholders and
Directors of the Corporation to be held on April 16, 1996.
No Section 16(a) Reporting delinquencies occurred in 1995.
However, during the week of January 8 through January 12, 1996,
various governmental offices, including the Securities and
Exchange Commission, were closed due to the combined effects of a
blizzard and a general government shutdown mandated by Congress.
As a result of this, filing of the following two Forms 4 were
delinquent by one day: A Form 4 dated January 9, 1996, by Mr.
Murtha, a Director of the Corporation, involving one transaction;
and a Form 4 dated January 9, 1996, by Mr. Desautelle, a former
Executive Officer of the Corporation, involving five transactions.
ITEM 11. EXECUTIVE COMPENSATION
A) GENERAL. The following tables provide certain information
relating to the compensation of the Corporation's Chief Executive
Officer, its four other most highly compensated executive
officers and its Directors.
Page 17
B) SUMMARY COMPENSATION TABLE.
Annual Compensation Long Term Compensation
------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
All
Name and Other AWARDS Other
Principal Salary Bonus Annual RSA Options LTIP Comp.
Position Year ($) ($) Comp. ($)(1)(#Shares)Payments ($)(2)
- ---------------------------------------------------------------------------
C. H. Kaman 1995 660,000 275,000 ------ ------ ------ --- 56,145
Chairman and 1994 660,000 ------- ------ ------ ------ --- 55,261
Chief 1993 660,000 218,000 73,004(3) ------ ------ --- 69,768
Executive
Officer
H.S.Levenson 1995 400,000 125,000 ------ ------ ------ --- 173,279
President 1994 400,000 ------- ------ ------ ------ --- 10,743
and Chief 1993 400,000 108,000 ------ 38,000 12,000 --- 18,603
Operating
Officer
R.M.Garneau 1995 216,000 80,000 ------ 56,875 7,500 --- 6,485
Executive 1994 200,000 60,000 ------ ------ ------ --- 4,845
Vice Pres- 1993 190,000 45,000 ------ 28,500 9,000 --- 5,931
ident and
Chief
Financial
Officer
W.R.Kozlow 1995 226,000 60,000 ------ 56,875 7,500 --- 9,515
President, 1994 216,000 60,000 ------ ------ ------ --- 8,636
Kaman 1993 216,000 50,000 ------ 28,500 9,000 --- 10,446
Aerospace
Corporation
P.L.Renehan 1995 216,000 45,000 ------ 56,875 7,500 --- 9,339
Vice 1994 210,000 45,000 ------ ------ ------ --- 8,214
President 1993 205,000 40,000 ------ 28,500 9,000 --- 8,799
Kaman
Diversified
Technologies
Corporation
Page 18
1. As of December 31, 1995, aggregate restricted stock holdings and
their year end value were: C.H.Kaman, none; H.S.Levenson, none;
R.M.Garneau, 8,600 shares valued at $95,675; W.R.Kozlow, 8,600
shares valued at $95,675; P.L.Renehan, 8,300 shares valued at
$92,338. Restrictions lapse at the rate of 20% per year for all
awards, beginning one year after the grant date. Awards reported in
this column are as follows: H.S.Levenson, 4,000 shares in 1993;
R.M.Garneau, 5,000 shares in 1995 and 3,000 shares in 1993;
W.R.Kozlow, 5,000 shares in 1995 and 3,000 shares in 1993;
P.L.Renehan, 5,000 shares in 1995 and 3,000 shares in 1993.
Dividends are paid on the restricted stock.
2. Amounts reported in this column consist of: C.H. Kaman,
$53,000 - Officer 162 Insurance Program, $ 3,145 - medical expense
reimbursement program ("MERP"); H.S. Levenson, $3,653 - Senior
executive life insurance program ("Executive Life"), $11,524 -
Officer 162 Insurance Program, $1,875 - employer matching
contributions to the Kaman Corporation Thrift and Retirement Plan
(the "Thrift Plan employer match"), $1,276 - MERP, $64,710 - all
supplemental employer contributions under the Kaman Corporation
Deferred Compensation Plan ("supplemental employer contributions"),
$14,891 - company automobile provided by the Corporation upon his
retirement, $15,275 - Discretionary cash out of certain stock
options under Stock Incentive Plan, $60,075 - Discretionary lapsing
of restrictions on restricted stock awards; R.M.Garneau, $1,777 -
Executive Life, $851 - Officer 162 Insurance Program, $1,875 -
Thrift Plan employer match, $607 -MERP, $1,375 supplemental
employer contributions; W.R. Kozlow, $4,576 - Executive Life,
$1,875 - Thrift Plan employer match, $1,489 -MERP, $1,575 -
supplemental employer contributions; P.L. Renehan, $5,748 -
Executive Life, $1,875 - Thrift Plan employer match, $403 - MERP,
$1,313 - supplemental employer contributions.
3. The Corporation maintains a program pursuant to which it pays
for tax and estate planning services provided to executive officers
by third parties, up to certain limits. $62,164 of the figure
reported in this column relates to payments for such services on
behalf of Mr. Kaman.
Page 19
C) OPTION/SAR GRANTS IN THE LAST FISCAL YEAR:
- ---------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
- ---------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options/
SARs
Options/ Granted to
SARs Employees Exercise or
Granted in Fiscal Base Price Expiration
Name (#) Year ($/Sh) Date 5%($) 10%($)
- ----------------------------------------------------------------------------
C. H. Kaman none ---- --- --- --- ---
H. S. Levenson none ---- --- --- --- ---
R. M. Garneau 7,500 16.7 11.375 2/14/05 18.53 29.50
W. R. Kozlow 7,500 16.7 11.375 2/14/05 18.53 29.50
P. L. Renehan 7,500 16.7 11.375 2/14/05 18.53 29.50
D) AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR, AND
FISCAL YEAR-END OPTION/SAR VALUES.
- -------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised in-the-money
options/SARs options/SARs
Shares at FY-end (#) at FY-end ($)
acquired on Value exercisable/ exercisable/
Name Exercise(#) realized unexercisable unexercisable
(a) (b) (c) (d) (e)
- -------------------------------------------------------------------
C. H. Kaman None ------ 45,000/-0- 143,125/-0-
H. S. Levenson 27,000 92,500 ------/------ -------/------
R. M. Garneau 3,600 15,300 11,000/13,501 30,725/10,650
W. R. Kozlow 2,400 8,100 16,600/13,500 48,925/10,650
P. L. Renehan 11,700 41,513 2,800/13,400 6,300/10,338
Page 20
E) LONG TERM INCENTIVE PLAN AWARDS: No long term incentive plan
awards were made to any named Executive Officer in the last fiscal
year.
F) PENSION AND OTHER DEFINED BENEFIT DISCLOSURE. The following
table shows estimated annual benefits payable at normal retirement
age to participants in the Corporation's Pension Plan at various
compensation and years of service levels using the benefit formula
applicable to Kaman Corporation. Pension benefits are calculated
based on 60 percent of the average of the highest five consecutive
years of "covered compensation" out of the final ten years of
employment less 50 percent of the primary social security benefit,
reduced proportionately for years of service less than 30 years:
PENSION PLAN TABLE
Years of Service
Remuneration* 15 20 25 30 35
- -----------------------------------------------------------------
125,000 33,900 45,426 56,274 67,800 67,800
150,000 41,400 55,476 68,724 82,800 82,800
175,000 48,900 65,526 81,174 97,800 97,800
200,000 56,400 75,576 93,624 112,800 112,800
225,000 63,900 85,626 106,074 127,800 127,800
250,000 71,400 95,676 118,524 142,800 142,800
300,000 86,400 115,776 143,424 172,800 172,800
350,000 101,400 135,876 168,324 202,800 202,800
400,000 116,400 155,976 193,224 232,800 232,800
450,000 131,400 176,076 218,124 262,800 262,800
500,000 146,400 196,176 243,024 292,800 292,800
750,000 221,400 296,676 367,524 442,800 442,800
1,000,000 296,400 397,176 492,024 592,800 592,800
1,250,000 371,400 497,676 616,524 742,800 742,800
1,500,000 446,400 598,176 741,024 892,800 892,800
*Remuneration: Average of the highest five consecutive years of
"Covered Compensation" out of the final ten years of service.
"Covered Compensation" means "W-2 earnings" or "base
earnings", if greater, as defined in the Pension Plan. W-2
earnings for pension purposes consist of salary (including 401(k)
and Section 125 Plan contributions but not deferrals under a
non-qualified Deferred Compensation Plan), bonus and taxable
income attributable to restricted stock awards. Salary and bonus
amounts for the named Executive Officers for 1995 are as shown on
Page 21
the Summary Compensation Table. Compensation deferred under the
Corporation's non-qualified Deferred Compensation Plan is
included in Covered Compensation here because it is covered by
the Corporation's unfunded Supplemental Employees' Retirement
Plan for the participants in that plan.
Current Compensation covered by the Pension Plan for any
named executive whose Covered Compensation differs by more than
10% from the compensation disclosed for that executive in the
Summary Compensation Table: Mr. Kaman, $660,000, Mr. Levenson,
$150,000; Mr. Garneau, $307,815; Mr. Kozlow, $317,815; Mr.
Renehan, $289,114.
Federal law imposes certain limitations on annual pension
benefits under the Pension Plan. For the named executive
officers, the excess will be paid under the Corporation's
unfunded Supplemental Employees' Retirement Plan.
The Executive Officers named in Item 11(b) are participants
in the plan and as of January 1, 1995, had the number of years of
credited service indicated: Mr. Kaman - 50.10 years; Mr.
Levenson - 13.20 years; Mr. Garneau - 14.48 years; Mr. Kozlow -
35.70 years; and Mr. Renehan - 12.00 years.
Benefits are computed generally in accordance with the
benefit formula described above.
G) COMPENSATION OF DIRECTORS. Non-officer members of the Board
of Directors of the Corporation receive an annual retainer of
$14,000 and a fee of $750 for attending each meeting of the Board
and each meeting of a Committee of the Board, except that the
Chairman of the Audit Committee receives $850 for attending each
meeting of that Committee. These fees may be received on a
deferred basis.
H) EMPLOYMENT CONTRACTS AND TERMINATION, SEVERANCE AND CHANGE
OF CONTROL ARRANGEMENTS. Except as described in connection with
the Corporation's Pension Plan and the Corporation's non-
qualified Deferred Compensation Plan, the Corporation has no
employment contract, plan or arrangement with respect to any
named executive which relates to employment termination for any
reason, including resignation, retirement or otherwise, or a
change in control of the Corporation or a change in any such
executive officer's responsibilities following a change of
control, which exceeds or could exceed $100,000, except as
disclosed in Item 13.
Page 22
I) Not Applicable.
J) COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS.
1) The following persons served as members of the Personnel
and Compensation Committee of the Corporation's Board of
Directors during the last fiscal year: Dr. Gaines, Mr. Carlucci,
Admiral Hardisty (for the period April through September 1995), Mr.
Murtha, Mr. Monteith, and Mr. Newell (through April, 1995). None
of these individuals was an officer or employee of the
Corporation or any of its subsidiaries during either the last
fiscal year or any portion thereof in which he or she served as a
member of the Personnel and Compensation Committee. Mr. Murtha's
relationship with the Corporation is further disclosed in Item 13
of this report.
2) During the last fiscal year no Executive Officer of the
Corporation served as a Director of or as a member of the
Compensation Committee (or other board committee performing
equivalent functions) of another entity, one of whose executive
officers served as a Director of, or on the Personnel and
Compensation Committee of the Corporation.
K) Not Applicable.
L) Not Applicable.
Page 23
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
Following is information about persons known to the Corporation
to be beneficial owners of more than five percent (5%) of the
Corporation's voting securities. Ownership is direct unless
otherwise noted.
- -----------------------------------------------------------------
Class of Number of Shares
Common Name and Address Owned as of Percentage
Stock Beneficial Owner February 1, 1996 of Class
- -----------------------------------------------------------------
Class B Charles H. Kaman 258,375(1) 38.69%
Kaman Corporation
Blue Hills Avenue
Bloomfield, CT 06002
Class B Newgate Associates, Ltd. 199,802 29.91%
c/o John T. Del Negro
CityPlace I
185 Asylum Street
Hartford, CT 06103
Class B C. William Kaman, II 52,539(2) 7.86%
Kaman Corporation
Blue Hills Avenue
Bloomfield, CT 06002
Class B Robert D. Moses 48,729(3) 7.30%
Farmington Woods
Avon, CT 06001
(1) Excludes 1,471 shares held by Mrs. Kaman. Excludes
199,802 shares reported separately above and held by
Newgate Associates Limited Partnership, a limited
partnership in which Mr. Kaman serves as general
partner.
(2) Excludes 4,800 shares held by Mr. Kaman as Trustee in
which shares Mr. Kaman disclaims any beneficial interest.
(3) Includes 15,192 shares held by Mr. Moses and
33,537 shares held by Paulson and Company as follows:
11,481 shares for the benefit of Mr. Moses, and
22,056 shares held for a partnership controlled by Mr.
Moses.
Page 24
(b) SECURITY OWNERSHIP OF MANAGEMENT. The following is
information concerning beneficial ownership of the Corporation's
stock by each Director of the Corporation, each Executive Officer
of the Corporation named in the Summary Compensation Table, and all
Directors and Executive Officers of the Corporation as a group.
Ownership is direct unless otherwise noted.
Class of Number of Shares Owned Percentage
Name Common Stock as of February 1, 1996 of Class
- --------------------------------------------------------------------
E. Reeves Callaway -- -- --
Frank C. Carlucci Class A 3,000(1) *
John A. DiBiaggio -- -- --
Edythe J. Gaines Class A 2,057 *
Robert M. Garneau Class A 29,437(2) *
Class B 7,970 *
Huntington Hardisty -- -- --
Charles H. Kaman Class A 373,112(3) 2.18%
Class B 258,375(4) 38.69%
C. William Kaman, II Class A 67,895(5) *
Class B 52,539(6) 7.86%
Walter R. Kozlow Class A 56,064(7) *
Class B 296 *
Eileen S. Kraus Class A 500 *
Hartzel Z. Lebed Class A 7,446(8) *
Harvey S. Levenson Class A 48,280 *
Class B 19,500(9) 2.92%
Walter H. Monteith, Jr. Class A 200 *
John S. Murtha Class A 45,918(10) *
Class B 432 *
Patrick L. Renehan Class A 32,652(11) *
Wanda L. Rogers Class A 1,000 --
All Directors and
Executive Officers Class A 667,561(12) 3.75%
as a group ** Class B 339,112 50.78%
Page 25
(1) Held jointly with Mrs. Carlucci.
(2) Includes 11,000 shares subject to the exercisable portion
of stock options.
(3) Excludes the following: 24,132 shares held by Mrs. Kaman;
7,871 shares held by Fidelco Guide Dog Foundation, Inc., a
charitable foundation of which Mr. Kaman is President and
Director, in which shares Mr. Kaman disclaims beneficial
ownership; 184,434 shares held by Newgate Associates
Limited Partnership, a limited partnership of which Mr.
Kaman is the general partner; and 60,000 shares held by
the Charles H. Kaman Charitable Foundation, a private
charitable foundation. Included are 45,000 shares subject
to exercisable portion of stock options.
(4) Excludes the following: 1,471 shares held by Mrs. Kaman and
199,802 shares held by Newgate Associates Limited Partnership,
a limited partnership of which Mr. Kaman is the general
partner.
(5) Includes 14,400 shares subject to exercisable portion of
stock options; and excludes 76,496 shares held by Mr. Kaman
as Trustee, in which shares Mr. Kaman disclaims any
beneficial ownership.
(6) Excludes 4,800 shares held by Mr. Kaman as Trustee in which
shares Mr. Kaman disclaims any beneficial ownership.
(7) Includes 16,600 shares subject to exercisable portion of
stock options.
(8) Includes shares held jointly with Mrs. Lebed, excludes
480 shares held by Mrs. Lebed.
(9) Excludes 500 shares held by Mrs. Levenson.
(10)Held by Fleet National Bank pursuant to a revocable trust.
Excludes 7,980 shares held by Fleet National Bank pursuant
to a revocable trust for the benefit of Mrs. Murtha.
(11)Includes 2,800 shares subject to exercisable portion of
stock options; and includes 7,453 shares held jointly with
Mrs. Renehan.
(12)Includes 89,800 shares subject to exercisable portion of
stock options.
* Less than one percent.
** Excludes 24,612 Class A shares and 1,971 Class B shares held
by spouses of certain Directors and Executive Officers.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1995, the Corporation obtained legal services from the
Hartford, Connecticut law firm of Murtha, Cullina, Richter and
Pinney of which Mr. Murtha, a Director of the Corporation, is
counsel. In addition, the Corporation obtained consulting services
in the amount of $93,000 from Admiral Hardisty, a Director of the
Corporation prior to his employment with the Corporation. The
Corporation has also entered into a consultant's agreement with Mr.
Levenson for a term of one year wherein the Corporation has agreed
to pay Mr. Levenson a consultant's fee at the rate of $10,000 per
month. The Corporation has also agreed to pay premiums on Mr.
Levenson's Group Universal Life Insurance policy for 1996, which
premiums are estimated to be $3,600. In addition, the Corporation
has agreed to retain Mr. Levenson as a participant for 1996 in a
program pursuant to which it pays for tax and estate planning
services, up to certain limits.
Page 26
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a)(1) FINANCIAL STATEMENTS.
See Item 8 concerning financial statements appearing as
Exhibit 13 to this Report and concerning the Financial
Data Schedule appearing as Exhibit 27 to this Report.
(a)(2) FINANCIAL STATEMENT SCHEDULES.
An index to the Financial Statement Schedules immediately
precedes such schedules.
(a)(3) EXHIBITS.
An index to the exhibits filed or incorporated by
reference immediately precedes such exhibits.
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the last
quarter of the year ended December 31, 1995, which
year is covered by this report.
Page 27
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Bloomfield, State of
Connecticut, on this 22nd day of March, 1996.
KAMAN CORPORATION
(Registrant)
By Charles H. Kaman, Chairman, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature: Title: Date:
- -------------------------------------------------------------------
Charles H. Kaman Chairman, President, Chief March 22, 1996
Executive Officer and Director
(Chief Executive Officer)
Robert M. Garneau Executive Vice President March 22, 1996
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
Robert M. Garneau March 22, 1996
Attorney-in-Fact for:
E. Reeves Callaway, III Director
Frank C. Carlucci Director
John A. DiBiaggio Director
Edythe J. Gaines Director
Huntington Hardisty Director
C. William Kaman, II Director
Eileen S. Kraus Director
Hartzel Z. Lebed Director
Harvey S. Levenson Director
Walter H. Monteith, Jr. Director
John S. Murtha Director
Wanda L. Rogers Director
Page 28
KAMAN CORPORATION AND SUBSIDIARIES
Index to Financial Statement Schedules
Report of Independent Auditors
Financial Statement Schedules:
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-Term Borrowings
Schedule X - Supplemental Income Statement Information
Page 29
REPORT OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Certified Public Accountants
CityPlace II
Hartford, Connecticut 06103
The Board of Directors and Shareholders
Kaman Corporation:
Under date of January 29, 1996, we reported on the consolidated
balance sheets of Kaman Corporation and subsidiaries as of
December 31, 1995 and 1994 and the related consolidated
statements of earnings, changes in shareholders' equity and cash
flows for each of the years in the three-year period ended
December 31, 1995, as contained in the 1995 annual report to
shareholders. These consolidated financial statements and our
report thereon are included in the annual report on Form 10-K for
1995. In connection with our audits of the aforementioned
consolidated financial statements, we also audited the related
financial statement schedules as listed in the accompanying
index. These financial statement schedules are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statement schedules
based on our audits.
In our opinion, such schedules, when considered in relation to
the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set
forth therein.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
January 29, 1996
Page 30
KAMAN CORPORATION AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Thousands)
YEAR ENDED DECEMBER 31, 1993
Additions
BALANCE CHARGED TO BALANCE
JANUARY 1, COSTS AND DECEMBER 31,
DESCRIPTION 1993 EXPENSES OTHERS DEDUCTIONS 1993
Allowance for
doubtful
accounts $1,234 $1,141 $----- $ 799(A) $1,576
====== ====== ====== ====== ======
Accumulated
amortization
of goodwill $8,730 $1,268 $----- $----- $9,998
====== ====== ====== ====== ======
YEAR ENDED DECEMBER 31, 1994
Additions
BALANCE CHARGED TO BALANCE
JANUARY 1, COSTS AND DECEMBER 31,
DESCRIPTION 1994 EXPENSES OTHERS DEDUCTIONS 1994
Allowance for
doubtful
accounts $1,576 $1,198 $----- $1,109(A) $1,665
====== ====== ====== ====== ======
Accumulated
amortization
of goodwill $9,998 $1,318 $----- $7,772(B) $3,544
====== ====== ====== ====== ======
YEAR ENDED DECEMBER 31, 1995
Additions
BALANCE CHARGED TO BALANCE
JANUARY 1, COSTS AND DECEMBER 31,
DESCRIPTION 1995 EXPENSES OTHERS DEDUCTIONS 1995
Allowance for
doubtful
accounts $1,665 $2,476 $----- $1,852(A) $2,289
====== ====== ====== ====== ======
Accumulated
amortization
of goodwill $3,544 $ 355 $----- $----- $3,899
====== ====== ====== ====== ======
(A) Write-off of bad debts, net of recoveries
(B) Write-off of accumulated amortization of goodwill related to
the write-down of goodwill in Raymond Engineering Inc.
Page 31
KAMAN CORPORATION AND SUBSIDIARIES
SCHEDULE IX -- SHORT-TERM BORROWINGS
(Dollars in Thousands)
YEAR ENDED DECEMBER 31, 1993
Maximum Average Weighted
Amount Amount Average
Category of Weighted Out- Out- Interest
Aggregate Balance Average standing standing Rate
Short-Term Dec. 31, Interest During the During the During
Borrowings 1993 Rate Year Year the Year
- ---------- -------- -------- ---------- ---------- --------
Notes Payable
- -- Bank $31,161 3.6% $62,880 $43,158 3.5%
======== ======== ======= ======= ====
YEAR ENDED DECEMBER 31, 1994
Maximum Average Weighted
Amount Amount Average
Category of Weighted Out- Out- Interest
Aggregate Balance Average standing standing Rate
Short-Term Dec. 31, Interest During the During the During
Borrowings 1994 Rate Year Year the Year
- ---------- -------- -------- ---------- ---------- --------
Notes Payable
- -- Bank $52,659 5.9% $81,053 $45,546 5.0%
======== ======== ======= ======= ====
YEAR ENDED DECEMBER 31, 1995
Maximum Average Weighted
Amount Amount Average
Category of Weighted Out- Out- Interest
Aggregate Balance Average standing standing Rate
Short-Term Dec. 31, Interest During the During the During
Borrowings 1995 Rate Year Year the Year
- ---------- -------- -------- ---------- ---------- --------
Notes Payable
- -- Bank $62,851 6.2% $88,587 $72,302 6.5%
======== ======== ======= ======= ====
Page 32
KAMAN CORPORATION AND SUBSIDIARIES
Schedule X -- Supplemental Income Statement Information
(Dollars in Thousands)
Charged to Costs
ITEM and Expenses
- ---- ----------------
Year Ended December 31, 1993
Maintenance and repairs $ 8,650
=======
Year Ended December 31, 1994
Maintenance and repairs $10,482
=======
Year Ended December 31, 1995
Maintenance and repairs $ 7,864
=======
Depreciation and amortization of intangible assets, preoperating
costs and similar deferrals; taxes, other than payroll and income
taxes; royalties and advertising costs were not included above
since they were not of a significant amount.
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KAMAN CORPORATION
INDEX TO EXHIBITS
Exhibit 3a The Amended and Restated by reference
Certificate of Incorporation
of the Corporation, as amended,
including the form of amendment
designating the Corporation's
Series 2 Preferred Stock has been
filed as Exhibits 2.1 and 2.2 to the
Corporation's Form 8-A (Document
No. 0-1093 filed on September 27, 1993),
and is incorporated in this report
by reference.
Exhibit 3b The By-Laws of the Corporation by reference
were filed as Exhibit 3(b) to
the Corporation's Annual Report
on Form 10-K for 1990 (Document
No. 0-1093, filed with the
Securities and Exchange Commission
on March 14, 1991).
Exhibit 4a Indenture between the Corporation by reference
and Manufacturers Hanover Trust
Company, as Indenture Trustee,
with respect to the
Corporation's 6% Convertible
Subordinated Debentures, has
been filed as Exhibit 4.1 to
Registration Statement No. 33 -
11599 on Form S-2 of the
Corporation filed with the
Securities and Exchange
Commission on January 29, 1987
and is incorporated in this
report by reference.
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Exhibit 4b The Revolving Credit Agreements by reference
between the Corporation and The
Shawmut Bank Connecticut, as
agent, and between the Corporation
and the Bank of Nova Scotia, as agent,
both dated as of July 15, 1994
were previously filed as Exhibits
to the Corporation's Quarterly
Report on Form 10-Q for the period
ending June 30, 1994 (Document
No. 0-1093 filed with the Securities
and Exchange Commission on August 11,
1994) and are incorporated in this
report by reference.
Exhibit 4c The Revolving Credit Agreement attached
between the Corporation and The
Bank of Nova Scotia and Fleet National
Bank of Connecticut, as
Co-Administrative Agents, dated
as of January 29, 1996.
Exhibit 4d Deposit Agreement dated as of by reference
October 15, 1993 between the
Corporation and Chemical Bank as
Depositary and Holder of Depositary
Shares has been filed as
Exhibit (c)(1) to Schedule 13E-4
(Document No. 5-34114 filed with the
Securities and Exchange Commission
on September 15, 1993) and is
incorporated in this report by
reference.
Exhibit 4e The Corporation is party to certain by reference
long-term debt obligations, such
as real estate mortgages, copies
of which it agrees to furnish to
the Commission upon request.
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Exhibit 10a The 1983 Stock Incentive Plan by reference
(formerly known as the 1983
Stock Option Plan) has been
filed as Exhibit 10b(iii) to the
Corporation's Annual Report on
Form 10-K for 1988 (Document No.
0-1093 filed with the Securities
and Exchange Commission on
March 22, 1989) and is incorporated
in this report by reference.
Exhibit 10b The Kaman Corporation 1993 Stock by reference
Incentive Plan has been filed as
Exhibit 10(b) to the Corporation's
Annual Report on Form 10-K for 1993
(Document No. 0-1093 filed with the
Securities and Exchange Commission on
March 11, 1994) and is incorporated
herein by reference.
Exhibit 10c The Kaman Corporation Employees by reference
Stock Purchase Plan as amended has
been filed as Exhibit 10(c) to the
Corporation's Annual Report on Form 10-K
for 1993 (Document No. 0-1093 filed with
the Securities and Exchange Commission on
March 11, 1994) and is incorporated
herein by reference.
Exhibit 11 Statement regarding computation Attached
of per common share earnings.
Exhibit 13 Portions of the Corporation's Attached
1995 Annual Report to
Shareholders as required by
Item 8.
Exhibit 21 Subsidiaries. Attached
Exhibit 23 Consent of Independent Auditors. Attached
Exhibit 24 Power of attorney under which Attached
this report has been signed on
behalf of certain Directors.
Exhibit 27 Financial Data Schedule Attached
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