KAMAN CORPORATION AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
Exhibit
10g (x)
KAMAN
CORPORATION
AMENDED AND
RESTATED
THIS
AGREEMENT, is made effective as of January 1, 2007 (the “Effective Date”),
by and between Kaman Corporation, a Connecticut corporation (the “Company”), and
Xxxxxxx X. Xxxxx (the “Executive”) and is amended and restated as of November
11, 2008.
WHEREAS, the Company and the Executive
are parties to the Kaman Corporation Change in Control Agreement dated as of
September 21, 1999, as amended by an Addendum to Change in Control Agreement
dated as of September 11, 2001, and a Second Addendum to Change in Control
Agreement dated as of November 11, 2003 (the “Prior Agreement”);
and
WHEREAS, the Company and the Executive
have agreed to replace and supersede the Prior Agreement as set forth
below.
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. Definitions of capitalized terms used in this Agreement
are provided in the last Section of this Agreement.
2. Term. This
Agreement shall terminate on the fifth anniversary of the Effective
Date. The term of this Agreement shall be automatically extended
thereafter for successive one (1) year periods unless, at least ninety (90) days
prior to the end of the fourth anniversary of the Effective Date or the then
current succeeding one-year extended term of this Agreement, the Company or
Executive has notified the other that the term hereunder shall expire at the end
of the then-current term. Notwithstanding any such notice, the term
of this Agreement shall not expire before the second anniversary of a Change in
Control that occurs within the term of this Agreement. The initial
term of this Agreement, as it may be extended under this Section 2, is herein
referred to as the “Term.”
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 Section 5.1 of
this Agreement, no Severance Payments (as defined in Section 5) shall be payable
under this Agreement unless there shall 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 18(n)(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). In addition, if the
Executive’s employment is terminated for any reason following a Change in
Control other than (a) by the Company for Cause and (b) by the Executive without
Good Reason, then the Company shall pay a pro-rata portion of the Executive’s
annual bonus for the performance year in which such termination occurs to the
Executive on the later of (x) the date that annual bonuses are generally paid to
other senior executives and (y) the date that is the first business day after
the date that is six months after the Date of Termination. This
pro-rata bonus shall be determined by multiplying the amount the Executive would
have received based upon actual financial performance through such termination,
as reasonably determined by the Company, by a fraction, the numerator of which
is the number of days during such performance year that the Executive is
employed by the Company and the denominator of which is 365.
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 during the twenty-four (24) month
period immediately 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 (collectively, the
“Severance Payments”) in addition to any payments and benefits to which the
Executive is entitled under Section 4 of this Agreement. The
Executive shall also be entitled to Severance Payments under this Agreement if
the Executive’s employment is terminated without Cause by the Company or by the
Executive for Good Reason at any time beginning on the first day of the 90 day
period immediately prior to the execution of a definitive purchase and sale
agreement that results in such Change in Control and the closing of such Change
in Control.
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(a)
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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
payable to the Executive under the Executive’s Employment Agreement with
the Company or otherwise, the Company shall pay to the Executive a lump
sum severance payment,
in cash, equal to the sum of (i) two (2) times the Executive’s base salary
as in effect immediately prior to the Date of Termination or, if Section
18(n)(ii) is applicable as an event or circumstance constituting Good
Reason, the rate in effect immediately prior to such event or
circumstance, and (ii) two (2) times the last annual bonus paid or awarded
(to the extent not yet paid) to the Executive in the previous three years
(if any) immediately preceding the Date of Termination, pursuant to any
annual bonus or incentive plan maintained by the
Company.
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(b)
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For
the twenty-four (24) month period immediately following the Date of
Termination, the Company shall arrange to provide the Executive and her
dependents medical, dental, and accidental death and dismemberment
benefits on a monthly basis that is substantially similar to such benefits
as provided to the Executive and her dependents immediately prior to the
Date of Termination or, if more favorable to the Executive, those provided
to the Executive and her 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. The parties intend that the
first 18 months of continued medical and dental coverage shall not
constitute a “deferral of compensation” under Treas. Reg. Sect.
1.409A-1(b), and that continued accidental death and dismemberment
benefits hereunder shall qualify as a “limited payment” of an “in kind”
benefit under Treas. Reg. Sect. 1.409A-1(b)(9)(v)(C) and
(D). Any portion of the continued medical, dental and
accidental death and dismemberment coverage under this Section 5.1(b) that
is subject to Section 409A is intended to qualify as a “reimbursement or
in-kind benefit plan” under Treas. Reg. Sect.
1.409A-3(i)(1)(iv). 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 by a
subsequent employer to the Executive during the twenty-four (24) 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 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. Any such reimbursement
under this Section 5.1(b) shall be made promptly in accordance with
Company policy, but in any event on or before the last day of the
Executive’s taxable year following the taxable year in which the expense
or cost was incurred. In no event shall the amount that the
Company pays for any such benefit in any one year affect the amount that
it will pay in any other year and in no event shall the benefits described
in this paragraph be subject to liquidation or
exchange.
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(c)
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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 service
and performance based restrictions with respect to any then unvested
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 Termination,
over the exercise price(s) of such stock appreciation rights or stock
options, and (iii) all unvested long-term performance awards (each, an
“LTIP Award”) 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; provided, however that, if necessary for such
compensation to qualify as “performance-based compensation” under Section
162(m) of the Code, an unvested Post January 1, 2009 Award (as defined
herein) shall only vest when such award would otherwise have vested and
the actual amount that the Executive shall receive with respect to any
such award will be determined by multiplying the amount the Executive
would have received based upon actual performance for the entire period by
a fraction, the numerator which is the number of days the Executive
remained employed with the Company during such award’s performance period
and the denominator of which is the total number of days during such
award’s performance period. For purposes of this Section
5.1(c), a “Post January 1, 2009 Award” shall mean an LTIP Award intended
to qualify as “performance-based compensation” within the meaning of
Section 162(m) of the Code with a performance period beginning after
January 1, 2009.
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(d)
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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 be credited with an additional two years of “Credited
Service” and “Continuous Service” (as defined in the Kaman Corporation
Amended and Restated Employees’ Pension Plan) when calculating the
Executive’s benefit under Post-2004 Kaman Corporation Supplemental
Employees Retirement Plan (“SERP”). The enhancement to the SERP
provided under this Section 5.1(d) shall be paid at the same time and in
the same manner as other benefits provided to the Executive under the
SERP. For avoidance of doubt, the Severance Payments payable
under this Agreement shall be disregarded when determining the Executive’s
Final Average Salary (as defined under the Kaman Corporation
Amended and Restated Employees’ Pension Plan) for purposes of calculating
the benefits payable under the SERP as modified by this Section
5.1(d).
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(e)
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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 twenty-four (24) 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
Section 5.1 (b)
terminate.
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(f)
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The
Company (i) shall establish an irrevocable grantor trust holding an amount
of assets sufficient to pay all remaining premiums (which trust shall be
required to pay such premiums), under any 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. Notwithstanding the foregoing, in no event shall the
Company establish or fund any such rabbi trust in a manner or on terms
that would result in the imposition of any tax, penalty or interest under
Section 409A(b)(1) of the Code and in no event shall the Company be
obligated to, nor shall it, fund any such rabbi trust “in connection with
a change in the employer’s financial health” within the meaning of Section
409A(b)(2) of the Code. In the event that one or more premiums
become due and payable during the six-month period beginning on the
Executive’s employment termination, the Company shall timely notify the
Executive so that any such premium payment can be made by the Executive
directly to the insurance carrier. At the end of such six-month
period, the Company shall reimburse the Executive for all such premiums
paid by the Executive, with interest at the applicable federal rate under
Section 1274 of the Code, determined as of the Date of
Termination.
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(g)
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The
Company shall provide the Executive with reimbursement for up to Thirty
Thousand Dollars ($30,000) in the aggregate for outplacement services,
relocation costs, or both provided however that reimbursement shall only
be provided until the earlier of the first anniversary of the Date of
Termination or the Executive’s first day of employment with a new
employer. It is intended that reimbursements under this Section
5.1(g) shall not constitute a “deferral of compensation” for purposes of
Section 409A of the Code pursuant to Treas. Reg. Sect.
1.409A-1(a)(9)(v)(A) and (C).
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(h)
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The
Executive shall be entitled to the Company automobile provided to the
Executive immediately prior to employment termination under this Section
5.1 at no cost for a period of six months after employment termination
(the “Car Lease Benefit”). Notwithstanding the foregoing, the
Executive must pay the Company for the fair market value of the Car Lease
Benefit to the extent that it, when added to the cost of continued
accidental death and dismemberment coverage under Section 5.1(b) during
this six month period, exceeds the applicable dollar amount under Section
402(g)(1)(B) of the Code. It is intended that the Car Lease
Benefit qualify as a “limited payment” of an “in-kind” benefit under
Treas. Reg. Sect. 1.409A-1(a)(9)(v)(C) and (D). The Company
shall continue to maintain an insurance policy that will cover the
Executive’s use during the period of the Car Lease
Benefit.
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(i)
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On
the first business day following expiration of the Car Lease Benefit, the
Company shall transfer all of its then current rights to the Company
automobile described in Section 5.1(h) above to the
Executive.
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(j)
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The
Executive acknowledges that the Car Lease Benefit (less payments by the
Executive, if any) and the Company’s transfer of its rights to the Company
automobile to the Executive will constitute taxable compensation
reportable by the Company on IRS Form
W-2.
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5.2 Section 4999 Excise
Tax.
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(a)
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If
any payments, rights or benefits (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement of Executive
with the Company or with any person affiliated with the Company and
whether or not the Executive’s employment has then terminated (the
“Payments”)) received or to be received by Executive will be subject to
the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any
similar tax that may hereafter be imposed), then, except as set forth in
Section 5.2(b) below, the Company shall pay to Executive an amount in
addition to the Payments (the “Gross-Up Payment”) as calculated
below. The Gross-Up Payment shall be in an amount such that,
after deduction of any Excise Tax on the Payments and any federal, state
and local income and employment tax and Excise Tax on the Gross-Up
Payment, but before deduction for any federal, state or local income and
employment tax on the Payments, the net amount retained by the Executive
shall be equal to the Payments.
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(b)
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Notwithstanding
anything in this Agreement to the contrary, if the amount of Payments that
will be subject to the Excise Tax does not
exceed the amount of Payments that Executive could receive without having
any Payments become subject to the Excise Tax by at least
$100,000, then Executive’s taxable cash-based benefits under
this Agreement will first be reduced in the order selected by Executive,
and then, if necessary, Executive’s equity-based compensation (based on
the value of such equity-based compensation as a “parachute payment” as
defined in Treasury Regulations promulgated under Section 280G of the Code
and IRS revenue rulings, revenue procedures and other official guidance)
shall be reduced in the order selected by Executive, and then any other
Payments shall be reduced as reasonably determined by the Company, to the
extent necessary to avoid imposition of the Excise Tax. If
Executive does not select the amount to be reduced within the time
prescribed by the Company, the reductions specified herein shall be made
by the Company in its sole discretion from such compensation as it shall
determine. Any amount so reduced shall be irrevocably forfeited
and Executive shall have no further rights to receive
it.
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(c)
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The process for calculating the Excise Tax,
determining the amount of any Gross-Up Payment and other procedures
relating to this Section 5.2 are set forth in Appendix A attached
hereto. For purposes of making the determinations and
calculations required herein, the Consultant may rely on reasonable, good
faith interpretations concerning the application of Section 280G and 4999
of the Code, provided that the Consultant shall make such determinations
and calculations on the basis of “substantial authority” (within the meaning
of Section 6662 of the Code) and shall provide opinions to
that effect to both the Company and
Executive.
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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.
5.4 The
Company shall pay the cash amounts described in subsections (a) and (c)(iii) of
Section 5.1 and shall provide the benefits described in Section 5.1(f) and (i)
to the Executive on the first business day after the date that is six months
following the Date of Termination; provided, however, that in the case of a Post
January 1, 2009 Award under Section 5.1(c)(iii), the date for payment shall be
the later of (a) the date that such award is generally paid to other senior
executives and (b) the date that is the first business day after the date that
is six months after the Date of Termination. The cash amounts described in
subsections (a) and (c)(iii) of Section 5 shall be paid with interest at the
applicable federal rate under Section 1274 of the Code determined as of the Date
of Termination. In addition, to the extent that payment of the
pro-rata portion of the annual bonus provided for in Section 4.1 is delayed
until the date that it is the first business day after the date that is six
months following the Date of Termination as described above, the pro-rata bonus
payment shall be credited with interest at the short-term applicable federal
rate under Section 1274 of the Code determined as of March 15th of the year
following such termination from such March 15th to the date that payment is made
to the Executive hereunder. 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 determined as of
the first day following the time frame provided for herein 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 the Consultant or other advisors (and any
such opinions or advice which are in writing shall be attached to the
statement).
5.5 Coordination with Employment
Agreement.
Severance
Payments made under this Section 5 shall be in lieu of any severance benefit
payable to the Executive under the Executive’s Employment Agreement with the
Company or otherwise.
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
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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) 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). For purposes of
determining the date on which to make the severance payments described under
Section 5.4, a “Date of Termination” shall only occur upon the Executive’s
“separation from service” within the meaning of Section 409A of the Code and as
determined after applying the presumptions set forth in Treas. Reg. Section
1.409A-1(h)(1).
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. Notwithstanding anything
to the contrary in Section 6.3 and 6.4, if the Company, after delivery of a
Notice of Termination, promptly (and in any event within 30 days) determines
that grounds existed prior to the delivery of the Notice of Termination to
terminate the Executive’s employment for Cause after complying with the
procedural requirements of this Agreement, the Company shall have the right to
recover any payments that have been made to the Executive or on the Executive’s
behalf under this Agreement including but not limited to offset against or
reduction of any amounts due under this
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Agreement
or otherwise.
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.
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.
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. Notice. For
the purpose of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given (a) on the date of delivery if delivered by hand, (b) on the date of
transmission, if delivered by confirmed facsimile, (c) on the first business day
following the date of deposit if delivered by guaranteed overnight delivery
service, or (d) on the fourth business day following the date delivered or
mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: at the address (or
to the facsimile number) shown on the records of the Company.
If to the Company: Kaman Corporation,
0000 Xxxx Xxxxx Xxxxxx, X.X. Xxx 0, Xxxxxxxxxx, XX 00000 - Attention: Chief
Executive Officer (Facsimile No.: 860 243-7397), or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon
receipt.
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10. Obligations after the Date
of Termination.
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(a)
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Confidentiality. The
Executive agrees that the Executive shall not, directly or indirectly,
use, make available, sell, disclose or otherwise communicate to any
person, other than in the course of the Executive’s employment and for the
benefit of the Company, at any time following the Date of Termination, any
nonpublic, proprietary
or confidential information, knowledge or data relating to the Company,
any of its subsidiaries, affiliated companies or businesses, which shall
have been obtained by the Executive during the Executive’s employment by
the Company. The foregoing shall not apply to information that
(i) was known to the public prior to its disclosure to the Executive; (ii)
becomes known to the public subsequent to disclosure to the Executive
through no wrongful act of the Executive or any representative of the
Executive; or (iii) the Executive is required to disclose by applicable
law, regulation or legal process (provided that the Executive provides the
Company with prior notice of the contemplated disclosure and reasonably
cooperates with the Company at its expense in seeking a protective order
or other appropriate protection of such
information). Notwithstanding clauses (i) and (ii) of the
preceding sentence, the Executive’s obligation to maintain such disclosed
information in confidence shall not terminate where only portions of the
information are in the public
domain.
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(b)
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Non-Solicitation. In
the event that the Executive receives Severance Payments under Section 5
of this Agreement, the Executive agrees that for the two (2) year period
following the Date of Termination, the Executive will not, directly or
indirectly, individually or on behalf of any other person, firm,
corporation or other entity, knowingly solicit, aid or induce any
managerial level employee of the Company or any of its subsidiaries or
affiliates to leave such employment in order to accept employment with or
render services to or with any other person, firm, corporation or other
entity unaffiliated with the Company or knowingly take any action to
materially assist or aid any other person, firm, corporation or other
entity in identifying or hiring any such employee (provided, that the
foregoing shall not be violated by general advertising not targeted at
Company employees nor by serving as a reference for an employee with
regard to an entity with which the Executive is not
affiliated). For the avoidance of doubt, if a managerial level
employee on his or her own initiative contacts the Executive for the
primary purpose of securing alternative employment, any action taken by
the Executive thereafter shall not be deemed a breach of this Section
10(b).
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(c)
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Non-Competition. The
Executive acknowledges that the Executive performs services of a unique
nature for the Company that are irreplaceable, and that the Executive’s
performance of such services to a competing business will result in
irreparable harm to the Company. Accordingly, in the event that
the Executive receives Severance Payments described in Section 5 of this
Agreement, the Executive agrees that for a period of two (2) years
following the Date of Termination, the Executive will not, directly or
indirectly, become connected with, promote the interest of, or engage in
any other business or activity competing with the business of the Company
within the geographical area in which the business of the Company is
conducted.
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(d)
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Non-Disparagement. Each
of the Executive and the Company (for purposes hereof, “the Company” shall
mean only (i) the Company by press release or otherwise and (ii) the
executive officers and directors thereof and not any other employees)
agrees not to make any public statements that disparage the other party,
or in the case of the Company, its respective affiliates, officers,
directors, products
or services. Notwithstanding the foregoing, statements made in
the course of sworn testimony in administrative, judicial or arbitral
proceedings (including, without limitation, depositions in connection with
such proceedings) or otherwise as required by law shall not be subject to
this Section 10(d).
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- 10
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(e)
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Return of Company
Property and Records. The Executive agrees that upon
termination of the Executive’s employment, for any cause whatsoever, the
Executive will surrender to the Company in good condition (reasonable wear
and tear excepted) all property and equipment belonging to the Company and
all records kept by the Executive containing the names, addresses or any
other information with regard to customers or customer contacts of the
Company, or concerning any proprietary or confidential information of the
Company or any operational, financial or other documents given to the
Executive during the Executive’s employment with the
Company.
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(f)
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Cooperation. The
Executive agrees that, following termination of the Executive’s employment
for any reason, the Executive shall upon reasonable advance notice, and to
the extent it does not interfere with previously scheduled travel plans
and does not unreasonably interfere with other business activities or
employment obligations, assist and cooperate with the Company with regard
to any matter or project in which the Executive was involved during the
Executive’s employment, including any litigation. The Company
shall compensate the Executive for any lost wages (or, if the Executive is
not then employed, provide reasonable compensation as determined by the
Compensation Committee) and expenses associated with such cooperation and
assistance.
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(g)
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Assignment of
Inventions. The Executive will promptly communicate and
disclose in writing to the Company all inventions and developments
including software, whether patentable or not, as well as patents and
patent applications (hereinafter collectively called “Inventions”), made,
conceived, developed, or purchased by the Executive, or under which the
Executive acquires the right to grant licenses or to become licensed,
alone or jointly with others, which have arisen or jointly with others,
which have arisen or which arise out of the Executive’s employment with
the Company, or relate to any matters directly pertaining to the business
of the Company or any of its subsidiaries. Included herein as
if developed during the employment period is any specialized equipment and
software developed for use in the business of the Company. All
of the Executive’s right, title and interest in, to, and under all such
Inventions, licenses, and right to grant licenses shall be the sole
property of the Company. As to all such Inventions, the
Executive will, upon request of the Company execute all documents which
the Company deems necessary or proper to enable it to establish title to
such Inventions or other rights, and to enable it to file and prosecute
applications for letters patent of the United States and any foreign
country; and do all things (including the giving of evidence in suits and
other proceedings) which the Company deems necessary or proper to obtain,
maintain, or assert patents for any and all such Inventions or to assert
its rights in any Inventions not
patented.
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(h)
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Equitable Relief and
Other Remedies. The parties acknowledge and agree that
the
other party’s remedies at law for a breach or threatened breach of any of
the provisions of this Section would be inadequate and, in recognition of
this fact, the parties agree that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the other party,
without posting any bond, shall be entitled to obtain equitable relief in
the form of specific performance, temporary restraining order, a temporary
or permanent injunction or any other equitable remedy which may then be
available.
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(i)
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Reformation. If
it is determined by a court of competent jurisdiction in any state that
any restriction in this Section 10 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of that state, it is the
intention of the parties that such restriction may be modified or amended
by the court to render it enforceable to the maximum extent permitted by
the law of that state.
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(j)
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Survival of
Provisions. The obligations contained in this Section 10
shall survive the termination or expiration of the Executive’s employment
with the Company and shall be fully enforceable
thereafter.
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11. Conditions. Any
payments or benefits made or provided pursuant to this Agreement are subject to
the Executive’s:
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(a)
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compliance
with the provisions of Section 10
hereof;
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(b)
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delivery
to the Company of an executed Agreement and General Release (the “General
Release”), which shall be substantially in the form attached hereto as
Appendix B (with such changes therein or additions thereto as needed under
then applicable law to give effect to its intent and purpose) within 21
days of presentation thereof by the Company to the Executive (which
presentation shall be made by the Company no later than two (2) business
days following the Date of Termination);
and
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(c)
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delivery
to the Company of a resignation from all offices, directorships and
fiduciary positions with the Company, its affiliates and employee benefit
plans with the General Release.
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If the
Executive fails to return an executed General Release to the Company within such
21-day period, or the Executive subsequently revokes such timely release, the
Company shall not have any obligation to pay any amounts or benefits under
Section 5 of this Agreement. The Executive shall provide the General
Release in the same manner as providing written notice to the Company under
Section 9 above.
12. 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 President of the Company or his designee. No 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. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of Connecticut without regard to
its conflicts of law principles. 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.
- 12
-
13. 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.
14. Prior
Agreements. This Agreement supersedes and replaces the Prior
Agreement. 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. By
signing this Agreement, the Executive releases and discharges the Company from
any and all obligations and liabilities heretofore or now existing under or by
virtue of the Prior Agreement.
15. Coordination with Employment
Agreement. In the event that the Executive receives
compensation or benefits under the Executive’s Employment Agreement and
thereafter becomes entitled to similar compensation or benefits under this
Agreement, the compensation and benefits paid or provided under the Employment
Agreement shall be an offset against the similar compensation and benefits
payable or to be provided under this Agreement.
16. 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.
17. 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, 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.
18. Definitions. For
purposes of this Agreement, the following terms shall have the meanings
indicated below:
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(a)
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“Affiliate”
shall have the meaning set forth in Rule 12b-2 promulgated under Section
12 of the Exchange Act.
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(b)
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“Beneficial
Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange
Act.
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(c)
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“Board”
shall mean the Board of Directors of the
Company.
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(d)
|
“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. Notwithstanding the foregoing,
Cause shall not include any act or omission of which the Audit Committee
of the Board (or the full Board) has had actual knowledge of all material
facts related thereto for at least 90 days without asserting that the act
or omission constitutes Cause.
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(e)
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“Change
in Control” for purposes of this Agreement shall mean any of the following
events, provided that such an event is not also a Management
Buyout:
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(i)
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any
Person is or becomes the Beneficial Owner directly or indirectly, of
securities of the Company representing thirty-five (35%) or more of the
combined voting power of the Company’s then outstanding voting securities
generally entitled to vote in the election of directors of the Company;
provided, however, that no Change in Control will be deemed to have
occurred as a result of a change in ownership percentage resulting solely
from an acquisition of securities by the Company or a transaction
described in clause (A) of paragraph (iii)
below;
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(ii)
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during
any period of two consecutive years, individuals who, as of the beginning
of such period, constitute the Board (the “Incumbent Board”) cease to
constitute at least a majority of the Board; provided, that any person
becoming a director of the Company subsequent to the beginning of such
period whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption
of office occurs as a result of either 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 a majority of the directors of
the Company in office immediately before any such
contest;
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- 14
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|
(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, at least 50% of the combined voting power of the voting
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 combined voting power of the Company’s then outstanding
voting securities generally entitled to vote in the election of directors
of the Company; or
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(iv)
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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
generally entitled to vote in the election of directors of the Company
immediately prior to the transaction continue to represent (either by
remaining outstanding or by being converted into such securities of the
surviving entity or any parent thereof) 50% or more of the combined voting
power of the outstanding voting securities of such entity generally
entitled to vote in such entity’s election of directors immediately after
such sale and of a class registered under Section 12 of the Exchange
Act.
|
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.
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(f)
|
“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.
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(g)
|
“Company”
shall mean Kaman Corporation and, except in determining under Section
18(e) hereof whether or not any Change in Control of the Company has
occurred, shall include any successor to its business and/or
assets.
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(h)
|
“Consultant”
shall have the meaning set forth in Appendix A of this
Agreement.
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- 15
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(i)
|
“Date
of Termination” shall have the meaning set forth in Section 6.2 of this
Agreement.
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(j)
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“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 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.
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“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time
to time.
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(l)
|
“Excise
Tax” shall mean any excise tax imposed under Section 4999 of the
Code.
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(m)
|
“Executive”
shall mean the individual named in the preamble to this
Agreement
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(n)
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“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 (n)
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:
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(i)
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the
assignment to the Executive of any duties inconsistent with the
Executive’s status as Senior Vice President, Chief Legal Officer and
Secretary 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;
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(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;
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|
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(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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- 16
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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;
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(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 2003 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;
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(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;
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(vii)
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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;
or
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(viii)
|
the
failure of any successor to Company (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 prior to the
effectiveness of any such
succession.
|
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.
- 17
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Notwithstanding
anything to the contrary above, the Executive shall not have “Good Reason” to
terminate employment due solely to one or more of the following events: (1)
there is a diminution of the business of the Company or any of its subsidiaries,
including, without limitation, a sale or other transfer of property or other
assets of the Company or its subsidiaries, or a reduction in the Executive’s
business unit’s head count or budget, or (2) a suspension of the Executive’s
position, job functions, authorities, duties and responsibilities while on paid
administrative leave due to a reasonable belief by the Board that the Executive
has engaged in conduct that would give adequate grounds to terminate the
Executive’s employment for Cause.
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(o)
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“Gross-Up
Payment” shall have the meaning set forth in Section 5.2 of this
Agreement.
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(p)
|
“Management
Buyout” means any event or transaction which would otherwise constitute a
Change in Control (a “Transaction”) if, in connection with the
Transaction, the Executive, members of the Executive’s immediate family,
and/or the “Executive’s Affiliates” (as defined below) participate,
directly or beneficially, as an equity investor in, or have the option or
right to acquire, whether or not vested, equity interests of, the
acquiring entity or any of its Affiliates (the “Acquiror”) having a
percentage interest therein greater than 1%. For purposes of
the preceding sentence, a party shall not be deemed to have participated
as an equity investor in the Acquiror by virtue of (i) obtaining
beneficial ownership of any equity interest in the Acquiror as a result of
the grant to the party of an incentive compensation award under one or
more incentive plans of the Acquiror (including, but not limited to, the
conversion in connection with the Transaction of incentive compensation
awards of the Company into incentive compensation awards of the Acquiror),
on terms and conditions substantially equivalent to those applicable to
other employees of the Company at a comparable level as such party
immediately prior to the Transaction, after taking into account normal
differences attributable to job responsibilities, title and the like, or
(ii) obtaining beneficial ownership of any equity interest in the Acquiror
on terms and conditions substantially equivalent to those obtained in the
Transaction by all other shareholders of the Company or (iii) the party’s
interests in any tax-qualified defined benefit or defined contribution
pension or retirement plan in which such party or any family member is a
participant or beneficiary. The “Executive’s Affiliates” at any
time consist of any entity in which the Executive and/or members of the
Executive’s immediate family then own, directly or beneficially, or have
the option or right to acquire, whether or not vested, greater than 10% of
such entity’s equity interests, and all then current directors and
executive officers of the Company who are members of any group, that also
includes the Executive, a member of the Executive’s immediate family
and/or any such entity, in which the members have agreed to act together
for the purpose
of participating in the Transaction. The Executive’s immediate
family consists of the Executive’s spouse, parents, children and
grandchildren.
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- 18
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|
(q)
|
“Merger”
means a merger, share exchange, consolidation or similar business
combination under applicable law.
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(r)
|
“Notice
of Termination” shall have the meaning set forth in Section 6.1 of this
Agreement.
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|
(s)
|
“Payments”
shall have the meaning set forth in Section 5.1 of this
Agreement.
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|
(t)
|
“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 (i) the Company or any of its direct or indirect
Subsidiaries, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) 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.
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|
(u)
|
“Subsidiary”
shall mean any corporation within the meaning of Section 424(f) of the
Code.
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(v)
|
“Term”
shall mean the period of time described in Section 2 of this
Agreement.
|
19. Payment of
Compensation. The parties intend that the benefits and
payments provided under this Agreement shall be exempt from, or comply with, the
requirements of Section 409A of the Code. Notwithstanding the
foregoing, the Company shall in no event be obligated to indemnify the Executive
for any taxes or interest that may be assessed by the IRS pursuant to Section
409A of the Code. References to paying an annual bonus at the same
time as paid to other senior executives shall mean that the payment date is to
be determined under the terms of the Company’s annual bonus plan or program then
in effect.
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IN
WITNESS WHEREOF, the parties have executed this agreement.
Kaman
Corporation
|
By:
|
Xxxx
X. Xxxxxxx
|
Date
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|
| Its: |
President
and Chief Executive Officer
|
||
| Executive | |||
|
Xxxxxxx
X. Xxxxx
|
Date
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||
- 20
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TAX
GROSS-UP PAYMENT RULES AND PROCEDURES
1. Subject
to Paragraph 3 below, all determinations required to be made under Section 5.2
of this Agreement, including whether a Gross-Up Payment is required and the
amount of such Gross-Up Payment, shall be made by an accounting firm (the
“Consultant”) selected in accordance with Paragraph 2 below. The
Consultant shall provide detailed supporting calculations both to the Company
and Executive within 15 business days of the event that results in the potential
for an excise tax liability for the Executive, which could include but is not
limited to a Change in Control and the subsequent vesting of any cash payments
or awards, or the Executive’s termination of employment, or such earlier time as
is required by the Company. The initial Gross-Up Payment, if any, as
determined pursuant to this Paragraph 1, shall be paid on the Executive’s behalf
to the applicable taxing authorities within five (5) days of the receipt of the
Consultant’s determination, but in no event later than the end of the calendar
year next following the calendar year in which the related taxes are remitted to
the applicable taxing authorities. If the Consultant determines that
the Executive is not subject to Excise Tax, it shall furnish the Executive with
a written report indicating that she has substantial authority not to report any
Excise Tax on her federal income tax return. Any determination by the
Consultant shall be binding upon the Company and Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Consultant hereunder, it is possible
that Gross-Up Payments which will not have been made by the Company should have
been made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies
pursuant to Paragraph 3 below and Executive thereafter is required to make a
payment or additional payment of any Excise Tax, the Consultant shall determine
the amount of the Underpayment that has occurred and any such Underpayment,
increased by all applicable interest and penalties associated with the
Underpayment, shall be promptly paid by the Company to or for the benefit of
Executive. For purposes of determining the amount of the Gross-Up
Payment, 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 on earned income
at the highest marginal rate of taxation in the state and locality of
Executive’s residence on the Date of Termination, (or the date of the Change in
Control if the Executive is subject to Excise Tax prior to the issuance of a
Notice of Termination) net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local
taxes.
2. The
Consultant shall be a nationally recognized public accounting firm, benefits
consultant or law firm proposed by the Company and agreed upon by the
Executive. If Executive and the Company cannot agree on the firm to
serve as the Consultant within ten (10) days after the date on which the Company
proposed to Executive an entity to serve as the Consultant, then Executive and
the Company shall each select one and those two firms shall jointly select the
entity to serve as the Consultant within ten (10) days after being requested by
the Company and Executive to make such selection. The Company shall
pay the Consultant’s fee.
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3. Executive
shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as practicable, but
no later than fifteen (15) business days after Executive knows of such claim and
Executive shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay
such claim prior to the expiration of the period ending on the date that any
payment of taxes with respect to such claim is due or the thirty day period
following the date on which Executive gives such notice to the Company,
whichever period is shorter. If the Company notifies Executive in
writing prior to the expiration of such period that it desires to contest such
claim, Executive shall (i) give the Company any information reasonably requested
by the Company relating to such claim, (ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company, (iii)
cooperate with the Company in good faith in order effectively to contest such
claim, and (iv) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including attorneys fees and any additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax
or income tax, including interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs and
expenses. Without limitation of the foregoing provisions of this
Paragraph 3, the Company shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect to such claim and may, at its sole option, either direct
Executive to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Executive to pay such
claim and xxx for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax and income tax, including
interest or penalties with respect thereto, imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other
authority.
4. If,
after the receipt by Executive of an amount advanced by the Company pursuant to
Paragraph 3 above, Executive becomes entitled to receive any refund with respect
to such claim, Executive shall (subject to the Company’s complying with the
requirements of Paragraph 3), promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto).
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APPENDIX
B
FORM
OF RELEASE
AGREEMENT
AND GENERAL RELEASE
Kaman
Corporation, its affiliates, subsidiaries, divisions, successors and assigns in
such capacity, and the current, future and former employees, officers,
directors, trustees and agents thereof (collectively referred to throughout this
Agreement as “Employer”), and Xxxxxxx X. Xxxxx (“Executive”), the Executive’s
heirs, executors, administrators, successors and assigns (collectively referred
to throughout this Agreement as “Employee”) agree:
1. Last
Day of Employment. Executive’s last day of employment with Employer
is ______________. In addition, effective as of DATE, Executive
resigns from the Executive’s positions as Senior Vice President, Chief Legal
Officer, and Secretary of Employer and will not be eligible for any benefits or
compensation after ________, including payments under the Executive’s Employment
Agreement, other than as specifically provided under the Change in Control
Agreement between Employer and Executive effective as of January 1, 2007 (the
“Change in Control Agreement”). Executive further
acknowledges and agrees that, after DATE, the Executive will not represent the
Executive as being a director, employee, officer, trustee, agent or
representative of Employer for any purpose. In addition, effective as
of DATE, Executive resigns from all offices, directorships, trusteeships,
committee memberships and fiduciary capacities held with, or on behalf of,
Employer or any benefit plans of Employer. These resignations will
become irrevocable as set forth in Section 3 below.
2. Consideration. The
parties acknowledge that this Agreement and General Release is being executed in
accordance with Section 11 of the Change in Control Agreement.
3. Revocation. Executive
may revoke this Agreement and General Release for a period of seven (7) calendar
days following the day Executive executes this Agreement and General
Release. Any revocation within this period must be submitted, in
writing, to Employer and state, “I hereby revoke my acceptance of our Agreement
and General Release.” The revocation must be personally delivered to
Employer’s Chief Executive Officer, or his/her designee, or mailed to Kaman
Corporation, 0000 Xxxx Xxxxx Xxxxxx, X.X. Xxx 0, Xxxxxxxxxx, XX 00000,
Attention: Chief Executive Officer, and postmarked within seven (7) calendar
days of execution of this Agreement and General Release. This
Agreement and General Release shall not become effective or enforceable until
the revocation period has expired. If the last day of the revocation
period is a Saturday, Sunday, or legal holiday in Hartford, Connecticut, then
the revocation period shall not expire until the next following day which is not
a Saturday, Sunday, or legal holiday.
4. General
Release of Claim. Subject to the full satisfaction by the Employer of
its obligations under the Change in Control Agreement, Employee knowingly and
voluntarily releases and forever discharges Employer from any and all claims,
causes of action, demands, fees and liabilities of any kind whatsoever, whether
known and unknown, against Employer, Employee has, has ever had or may have as
of the date of execution of this Agreement and General Release, including, but
not limited to, any alleged violation of:
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Title
VII of the Civil Rights Act of 1964, as
amended;
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The
Civil Rights Act of 1991;
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Sections
1981 through 1988 of Title 42 of the United States Code, as
amended;
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The
Employee Retirement Income Security Act of 1974, as
amended;
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The
Immigration Reform and Control Act, as
amended;
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The
Americans with Disabilities Act of 1990, as
amended;
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The
Age Discrimination in Employment Act of 1967, as
amended;
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The
Older Workers Benefit Protection Act of
1990;
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The
Worker Adjustment and Retraining Notification Act, as
amended;
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The
Occupational Safety and Health Act, as
amended;
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The
Family and Medical Leave Act of
1993;
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Any
wage payment and collection, equal pay and other similar laws, acts and
statutes of the State of
Connecticut;
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Any
other federal, state or local civil or human rights law or any other
local, state or federal law, regulation or
ordinance;
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Any
public policy, contract, tort, or common law;
or
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Any
allegation for costs, fees, or other expenses including attorneys fees
incurred in these matters.
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Notwithstanding
anything herein to the contrary, the sole matters to which the Agreement and
General Release do not apply are: (i) Employee’s express rights under any
pension (including but not limited to any rights under the Kaman Corporation
Supplemental Retirement Plan) or claims for accrued vested benefits under any
other employee benefit plan, policy or arrangement maintained by Employer or
under COBRA; (ii) Employee’s rights under the provisions of the Change in
Control Agreement which are intended to survive termination of employment; or
(iii) Employee’s rights as a stockholder.
5. No
Claims Permitted. Employee waives Executive’s right to file any
charge or complaint against Employer arising out of Executive’s employment with
or separation from Employer before any federal, state or local court or any
state or local administrative agency, except where such waivers are prohibited
by law.
6. Affirmations. Employee
affirms Executive has not filed, has not caused to be filed, and is not
presently a party to, any claim, complaint, or action against Employer in any
forum. Employee further affirms that the Executive has been paid
and/or has received all compensation, wages, bonuses, commissions, and/or
benefits to which Executive may be entitled and no other compensation, wages,
bonuses, commissions and/or benefits are due to Executive, except as provided
under the Change in Control Agreement. Employee also affirms
Executive has no known workplace injuries.
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7. Cooperation;
Return of Property. In accordance with Section 10(f) of the Change in
Control Agreement Employee agrees to reasonably cooperate with Employer and its
counsel in connection with any investigation, administrative proceeding or
litigation relating to any matter that occurred during Executive’s employment in
which Executive was involved or of which Executive has knowledge and Employer
will reimburse the Employee for any reasonable out-of-pocket travel, delivery or
similar expenses incurred and lost wages (or will provide reasonable
compensation if Executive is not then employed) in providing such service to
Employer. The Employee represents the Executive has complied with
Section 10(e) of the Change in Control Agreement regarding the return of
Employer property and records.
8. Governing
Law and Interpretation. This Agreement and General Release shall be
governed and conformed in accordance with the laws of the State of Connecticut
without regard to its conflict of laws provisions. In the event
Employee or Employer breaches any provision of this Agreement and General
Release, Employee and Employer affirm either may institute an action to
specifically enforce any term or terms of this Agreement and General
Release. Should any provision of this Agreement and General Release
be declared illegal or unenforceable by any court of competent jurisdiction and
should the provision be incapable of being modified to be enforceable, such
provision shall immediately become null and void, leaving the remainder of this
Agreement and General Release in full force and effect. Nothing
herein, however, shall operate to void or nullify any general release language
contained in the Agreement and General Release.
9. No
Admission of Wrongdoing. Employee agrees neither this Agreement and
General Release nor the furnishing of the consideration for this Release shall
be deemed or construed at any time for any purpose as an admission by Employer
of any liability or unlawful conduct of any kind.
10. Amendment. This
Agreement and General Release may not be modified, altered or changed except
upon express written consent of both parties wherein specific reference is made
to this Agreement and General Release.
11. Entire
Agreement. This Agreement and General Release sets forth the entire
agreement between the parties hereto and fully supersedes any prior agreements
or understandings between the parties; provided, however, that notwithstanding
anything in this Agreement and General Release, the provisions in the Change in
Control Agreement which are intended to survive termination of the Change in
Control Agreement, including but not limited to those contained in Section 10
thereof, shall survive and continue in full force and
effect. Employee acknowledges Executive has not relied on any
representations, promises, or agreements of any kind made to Executive in
connection with Executive’s decision to accept this Agreement and General
Release.
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EMPLOYEE
HAS BEEN ADVISED THAT EXECUTIVE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO
REVIEW THIS AGREEMENT AND GENERAL RELEASE AND HAS BEEN ADVISED IN WRITING TO
CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND GENERAL
RELEASE.
EMPLOYEE
AGREES ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND
GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE
(21) CALENDAR DAY CONSIDERATION PERIOD.
HAVING
ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES
SET FORTH HEREIN, AND TO RECEIVE THE SUMS AND BENEFITS SET FORTH IN THE CHANGE
IN CONTROL AGREEMENT, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE
CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO
WAIVE, SETTLE AND RELEASE ALL CLAIMS EXECUTIVE HAS OR MIGHT HAVE AGAINST
EMPLOYER.
IN
WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this
Agreement and General Release as of the date set forth below:
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KAMAN
CORPORATION
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By:
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| Name: | |||
| Title: | |||
| Date: | |||
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Xxxxxxx
X. Xxxxx
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| Date: | |||
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