EXHIBIT 10c(II)
AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, is made as of November 16, 1999, by and
between Kaman Corporation, a Connecticut corporation (the "Company"),
and Xxxx X. Xxxx (the "Executive").
WHEREAS, the Company considers it essential to the best
interests of its shareholders to xxxxxx the continued employment of
key management personnel; and
WHEREAS, the Board recognizes that the possibility of a Change
in Control exists and that such possibility, which will not be
addressed by an Employment Agreement, and the uncertainty and
questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment
of the Company and its shareholders; and
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention
and dedication of members of the Company's management, including
the Executive, to their assigned duties without the potential
distractions arising from the possibility of a Change in Control;
and
WHEREAS, the Company and the Executive have executed a Change
in Control Agreement dated August 2, 1999 and an Employment
Agreement of the same date (which Employment Agreement was amended
and restated in its entirety as of November 16, 1999); and
WHEREAS, the parties desire to amend and restate the Change in
Control Agreement in its entirety;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the Company and the Executive
hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms used
in this Agreement are provided in the last Section of this
Agreement.
2. Term. [Intentionally Omitted]
3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive's continued employment, the Company
agrees, under the conditions described herein, to pay the Executive
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the Severance Payments and the other payments and benefits
described in this Agreement. Except as provided in Section 8.1 of
this Agreement, no Severance Payments shall be payable under this
Agreement unless there shall have been (or, under the terms of the
second sentence of Section 5.1, there shall be deemed to have been)
a termination of the Executive's employment with the Company
following a Change in Control. This Agreement shall not be
construed as creating an express or implied contract of employment
and, except as otherwise agreed in writing between the Executive
and the Company, the Executive shall not have any right to be
retained in the employ of the Company.
4. Compensation Other Than Severance Payments.
4.1 If the Executive's employment shall be terminated for any
reason following a Change in Control, the Company shall pay the
Executive's full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Date of
Termination or, if Section 15 (o)(II) is applicable as an event or
circumstance constituting Good Reason, the rate in effect
immediately prior to such event or circumstance, together with all
compensation and benefits payable to the Executive through the Date
of Termination under the terms of the Company's compensation and
benefit plans, programs or arrangements as in effect immediately
prior to the Date of Termination (or, if more favorable to the
Executive, as in effect immediately prior to the first occurrence
of an event or circumstance constituting Good Reason), including,
but not limited to, the bonus for which the Executive is eligible
due to his or her employment during the calendar year in which the
Date of Termination occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan.
4.2 If the Executive's employment shall be terminated for any
reason following a Change in Control, the Company shall pay to the
Executive the Executive's normal post-termination compensation and
benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in
accordance with, the Company's retirement, insurance and other
compensation or benefit plans, programs and arrangements as in
effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good
Reason.
5. Severance Payments.
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5.1 If the Executive's employment is terminated following a
Change in Control, other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive without Good
Reason, then the Company shall pay the Executive the amounts, and
provide the Executive the benefits described in this Section 5
("Severance Payments") in addition to any payments and benefits to
which the Executive is entitled under Section 4 of this Agreement.
For purposes of this Agreement, the Executive's employment shall be
deemed to have been terminated by the Company following a Change in
Control, without Cause or by the Executive with Good Reason, if (i)
the Executive's employment is terminated by the Company without
Cause prior to a Change in Control and such termination was at the
request or direction of a Person who has entered into an agreement
with the Company the consummation of which would constitute a
Change in Control, (ii) the Executive terminates his employment for
Good Reason prior to a Change in Control and the circumstance or
event which constitutes Good Reason occurs at the request or
direction of such Person, or (iii) the Executive's employment is
terminated by the Company without Cause or by the Executive for
Good Reason and such termination or the circumstance or event which
constitutes Good Reason is otherwise in connection with or in
anticipation of a Change in Control. For purposes of any
determination regarding the applicability of the immediately
preceding sentence, any position taken by the Executive shall be
presumed to be correct unless the Company establishes to the Board
by clear and convincing evidence that such position is not correct.
(a) In lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination and in lieu of
any severance benefit otherwise payable to the Executive, the
Company shall pay to the Executive a lump sum severance payment, in
cash, equal to the sum of (i) three (3) times the Executive's base
salary as in effect immediately prior to the Date of Termination
or, if Section 15 (o)(II) is applicable as an event or circumstance
constituting Good Reason, the rate in effect immediately prior to
such event or circumstance, and (ii) three (3) times the annual
bonus actually paid for the fiscal year ending immediately prior to
the fiscal year in which occurs the Date of Termination, pursuant
to any annual bonus or incentive plan maintained by the Company.
(b) For the thirty-six (36) month period immediately
following the Date of Termination, the Company shall arrange to
provide the Executive and his dependents medical, dental, and
accidental death and disability benefits substantially similar to
those provided to the Executive and his dependents immediately
prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
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date or occurrence. Benefits otherwise receivable by the Executive
pursuant to this Section 5.1(b) shall be reduced to the extent
benefits of the same type are received by or made available to the
Executive during the thirty-six (36) month period following the
Date of Termination (and any such benefits received by or made
available to the Executive shall be reported to the Company by the
Executive); provided, however, that the Company shall reimburse the
Executive for the excess, if any, of the cost of such benefits to
the Executive over such cost immediately prior to the Date of
Termination or, if more favorable to the Executive, the first
occurrence of an event or circumstance constituting Good Reason.
(c) Notwithstanding any provision to the contrary in any plan
or agreement maintained by the Company pursuant to which the
Executive has been granted restricted stock, stock options or stock
appreciation rights, effective on the Date of Termination, (i) all
restrictions with respect to any restricted stock shall lapse, and
(ii) all stock appreciation rights and stock options shall become
fully vested and then canceled in exchange for a cash payment equal
to the excess of the fair market value of the shares of Company
stock subject to the stock appreciation right or stock option on
the date of the Change in Control, over the exercise price(s) of
such stock appreciation rights or stock options.
(d) In addition to the retirement benefits to which the
Executive is entitled under any tax-qualified, supplemental or
excess benefit pension plan maintained by the Company and any other
plan or agreement entered into between the Executive and the
Company which is designed to provide the Executive supplemental
retirement benefits (the "Pension Plans") or any successor plan
thereto, effective upon the Date of Termination, the Executive
shall receive vesting credit under the Kaman Corporation
Supplemental Employees Retirement Plan ("SERP") equal to five years
of Continuous and Credited Service (as defined in the Kaman
Corporation Employees' Pension Plan to which the SERP is
supplemental).
(e) If the Executive would have become entitled to benefits
under the Company's post-retirement health care plans, as in effect
immediately prior to the Date of Termination or, if more favorable
to the Executive, as in effect immediately prior to the first
occurrence of an event or circumstance constituting Good Reason,
had the Executive's employment terminated at any time during the
period of thirty-six (36) months after the Date of Termination, the
Company shall provide such post-retirement health care benefits to
the Executive and the Executive's dependents commencing on the
later of (i) the date on which such coverage would have first
become available and (ii) the date on which benefits described in
this Section 5.1 (e) terminate.
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(f) The Company shall (i) either prepay all remaining
premiums, or establish an irrevocable grantor trust holding an
amount of assets sufficient to pay all such remaining premiums
(which trust shall be required to pay such premiums), under any
insurance policy maintained by the Company insuring the life of the
Executive, that is in effect; and (ii) shall transfer to the
Executive any and all rights and incidents of ownership in such
arrangements at no cost to the Executive.
(g) The Company shall provide the Executive with
reimbursement for outplacement services received by the Executive
for up to Thirty Thousand Dollars ($30,000), but only until the
first acceptance by the Executive of an offer of employment.
(h) The Company shall provide the Executive with his Company
automobile. The book value then attributed to it by the leasing
company will be considered "fringe benefit" income and that amount
will be subject to tax during the calendar year in which the Date
of Termination occurs.
5.2 (A) Whether or not the Executive becomes entitled to the
Severance Payments, if any of the payments or benefits received or
to be received by the Executive in connection with a Change in
Control or the Executive's termination of employment (whether
pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with the
Company or such Person) (such payments or benefits, excluding the
Gross-Up Payment, being hereinafter referred to as the "Total
Payments") will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up Payment") such
that the net amount retained by the Executive, after deduction of
any Excise Tax on the Total Payments and any federal, state and
local income and employment taxes and Excise Tax upon the Gross-Up
Payment, shall be equal to the Total Payments.
(B) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) all of the Total Payments shall be treated as
"parachute payments" (within the meaning of Section 280G(b)(2) of
the Code) unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by the
accounting firm which was, immediately prior to the Change in
Control, the Company's independent auditor (the "Auditor"), such
payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of Section 280G(b)(4)(A) of
the Code, (ii) all "excess parachute payments" within the meaning
of Section 280G(b)(l) of the Code shall be treated as subject to
the Excise Tax unless, in the opinion of Tax Counsel, such excess
parachute payments (in whole or in part) represent reasonable
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compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be determined by
the Auditor in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment
is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the
Executive's residence on the Date of Termination (or if there is no
Date of Termination, then the date on which the Gross-Up Payment is
calculated for purposes of this Section 5.2), net of the maximum
reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is finally determined to
be less than the amount taken into account hereunder in calculating
the Gross-Up Payment, the Executive shall repay to the Company,
within thirty (30) days following the time that the amount of such
reduction in the Excise Tax is finally determined, the portion of
the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and
federal, state and local income and employment taxes imposed on the
Gross-Up Payment being repaid by the Executive), to the extent that
such repayment results in a reduction in the Excise Tax and a
dollar-for-dollar reduction in the Executive's taxable income and
wages for purposes of federal, state and local income and
employment taxes, plus interest on the amount of such repayment at
120% of the rate provided in Section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount
taken into account hereunder in calculating the Gross-Up Payment
(including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of
such excess (plus any interest, penalties or additions payable by
the Executive with respect to such excess) within thirty (30) days
following the time that the amount of such excess is finally
determined. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.
Page 6
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 payments provided in subsections (a) and (c) of
Section 5.1 shall be made on the last day of the Executive's
employment. The payments provided in Section 5.2 of this Agreement
shall be made as soon as practicable following the Date of
Termination, but in no event later than thirty (30) days following
the Date of Termination. If payments are not made in the time
frame required by this subsection, interest on the unpaid amounts
will accrue at 120% of the rate provided in Section 1274(b)(2)(B)
of the Code until the date such payments are actually made. At the
time that payments are made under this Agreement, the Company shall
provide the Executive with a written statement setting forth the
manner in which such payments were calculated and the basis for
such calculations including, without limitation, any opinions or
other advice the Company has received from Tax Counsel, the Auditor
or other advisors or consultants (and any such opinions or advice
which are in writing shall be attached to the statement).
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control, any
purported termination of the Executive's employment (other than by
reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in
accordance with Section 9 of this Agreement. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. Further,
a Notice of Termination for Cause is required to include a copy of
a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board) finding that, in
the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
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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).
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.
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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. Failure of the Company to
obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle
the Executive to compensation from the Company in the same amount
and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's
employment for Good Reason after a Change in Control, except that,
for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination.
8.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive shall die while any amount
would still be payable to the Executive hereunder (other than
amounts which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors,
personal representatives or administrators of the Executive's
estate.
9. Notices. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered
or mailed by United States registered mail, return receipt
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requested, postage prepaid, addressed, if to the Executive, to the
address inserted below the Executive's signature on the final page
hereof and, if to the Company, to the address set forth below, or
to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual receipt:
To the Company:
Kaman Corporation
0000 Xxxx Xxxxx Xxx., X.X. Xxx 0
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Secretary
10. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and
an authorized officer of the Company. 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. This Agreement supersedes
any other agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof which have
been made by either party. The validity, interpretation,
construction and performance of this Agreement shall be governed by
the laws of Connecticut. Any payments provided for hereunder shall
be paid net of any applicable withholding required under federal,
state or local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and the
Executive under this Agreement which by their nature may require
either partial or total performance after its expiration shall
survive any such expiration.
11. Validity; Counterparts. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of
this Agreement, which shall remain in full force and effect.
This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together
will constitute one and the same instrument.
12. Confidentiality. Unless required otherwise by law or
government regulation, the parties will maintain the terms and
conditions of this Agreement in confidence.
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13. Settlement of Disputes. All claims by the Executive for
benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a
claim for benefits under this Agreement shall be delivered to the
Executive in writing and shall set forth the specific reasons for
the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim and shall
further allow the Executive to appeal to the Board a decision of
the Board within sixty (60) days after notification by the Board
that the Executive's claim has been denied.
14. Arbitration. Any further dispute or controversy arising
under or in connection with this Agreement shall be settled
exclusively by arbitration in Hartford, Connecticut, in accordance
with the rules of the American Arbitration Association then in
effect; provided, however, that the evidentiary standards set forth
in this Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the contrary,
the Executive shall be entitled to seek specific performance of the
Executive's right to be paid until the Date of Termination during
the pendency of any dispute or controversy arising under or in
connection with this Agreement.
15. Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(a) "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.
(b) "Auditor" shall have the meaning set forth in Section 5.2
of this Agreement.
(c) "Base Amount" shall have the meaning set forth in Section
280G(b)(3) of the Code.
(d) "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Cause" for termination by the Company of the Executive's
employment shall mean (i) the willful and continued failure by the
Executive to substantially perform the Executive's duties with the
Company (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such actual or
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anticipated failure after the issuance of a Notice of Termination
for Good Reason by the Executive pursuant to Section 6.1 of this
Agreement) after a written demand for substantial performance is
delivered to the Executive by the Board, which demand specifically
identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties,
or (ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise. For purposes of clauses (i)
and (ii) of this definition, (x) no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted
to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was
in the best interest of the Company and (y) in the event of a
dispute concerning the application of this provision, no claim by
the Company that Cause exists shall be given effect unless the
Company establishes to the Board by clear and convincing evidence
that Cause exists.
(g) The first to occur of any one of the following events
shall constitute the occurrence of a "Change in Control" for
purposes of this Agreement:
(I) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing
35% or more of the then outstanding securities of the Company
generally entitled to vote in the election of directors of the
Company, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (i) of
paragraph (III) below; or
(II) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date of this Agreement, constitute the
Board and any new director (other than a director whose initial
assumption of office is a result of an actual or threatened
election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company
and whose appointment or election was not approved by at least
two-thirds (2/3) of the directors of the Company in office
immediately prior to any such contest) whose appointment or
election by the Board or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then in office; or
(III) there is consummated a merger or consolidation of
the Company with any other business entity, other than (i) a merger
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or consolidation 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 or
consolidation continuing to represent (either by remaining
outstanding or by being converted into such securities of the
surviving entity or any parent thereof), in combination with the
ownership of any trustee or other fiduciary holding such securities
under an employee benefit plan of the Company or any Subsidiary of
the Company, at least 65% of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately
after such merger or consolidation and generally entitled to vote
in the election of directors of the Company or such surviving
entity or any parent thereof, or (ii) a merger or consolidation
effected to implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing
35% or more of the then outstanding securities of the Company
generally entitled to vote in the election of directors of the
Company; or
(IV) (i) 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 sale continue to represent (either
by remaining outstanding or by being converted into such securities
of the surviving entity or any parent thereof) 65% or more of the
outstanding securities of such entity generally entitled to vote in
the election of directors immediately after such sale , or (ii) a
disposition or divestiture by the Company or any Subsidiary of the
Company to any Person of either Kaman Aerospace Corporation or
Kaman Industrial Technologies Corporation, including, without
intending to limit the foregoing, any such disposition or
divestiture effected by (a) a sale of all or substantially all of
the securities or all or substantially all of the assets of either
Kaman Aerospace Corporation or Kaman Industrial Technologies
Corporation, (b) the merger or consolidation of either Kaman
Aerospace Corporation or Kaman Industrial Technologies Corporation
with or into any Person, other than a merger or consolidation which
would result in the voting securities of the merged or consolidated
Subsidiary outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 65% of the
securities of such Subsidiary or such surviving entity or any
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parent thereof outstanding immediately after such merger or
consolidation and generally entitled to vote in the election of
directors of the Subsidiary or such surviving entity or parent
thereof, or (c) a spin off, dividend or other distribution of all
or substantially all of the securities or all or substantially all
of the assets (or of the stock of a business entity owning such
securities or assets) of either Kaman Aerospace Corporation or
Kaman Industrial Technologies Corporation to the Company's
stockholders.
Within five (5) days after a Change in Control has occurred,
the Company shall deliver to the Executive a written statement
memorializing the date that the Change in Control occurred.
(h) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(i) "Company" shall mean Kaman Corporation and, except in
determining under Section 15(g) hereof whether or not any Change in
Control of the Company has occurred, shall include any successor to
its business and/or assets.
(j) "Date of Termination" shall have the meaning set forth in
Section 6.2 of this Agreement.
(k) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment, if, as a
result of the Executive's incapacity due to physical or mental
illness, the Executive shall have been absent from the full-time
performance of the Executive's duties with the Company for a period
of six (6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within
thirty (30) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of
the Executive's duties.
(l) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(m) "Excise Tax" shall mean any excise tax imposed under
Section 4999 of the Code.
(n) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(o) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the
Executive's express written consent) after any Change in Control,
Page 14
of any one of the following acts by the Company, or failures by the
Company to act, unless, in the case of any act or failure to act
described in paragraph (I), (V), (VI), or (VII) below, such act or
failure to act is corrected prior to the Date of Termination
specified in the Notice of Termination given in respect thereof:
(I) the assignment to the Executive of any duties
inconsistent with the Executive's status as President and Chief
Executive Officer of the Company or a substantial diminution in the
nature or status of the Executive's responsibilities from those in
effect immediately prior to the Change in Control;
(II) a reduction by the Company in the Executive's
annual base salary as in effect on the date of this Agreement or as
the same may be increased from time to time;
(III) the relocation of the Executive's principal place
of employment to a location more than 50 miles from the Executive's
principal place of employment immediately prior to the Change in
Control or the Company's requiring the Executive to be based
anywhere other than such principal place of employment (or
permitted relocation thereof) except for required travel on the
Company's business to an extent substantially consistent with the
Executive's business travel obligations immediately prior to the
Change in Control;
(IV) the failure by the Company to pay to the Executive
any portion of the Executive's current compensation, or to pay to
the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the
Company, within thirty (30) days of the date such compensation is
due;
(V) the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately
prior to the Change in Control which is material to the Executive's
total compensation (including, but not limited to, the Kaman
Corporation Compensation Administration Plan, Kaman Corporation
Cash Bonus Plan, and Kaman Corporation 1993 Stock Incentive Plan),
unless an equitable arrangement (embodied in an ongoing substitute
or alternative plan) has been made with respect to such plan, or
the failure by the Company to continue the Executive's
participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the
amount or timing of payment of benefits provided and the level of
the Executive's participation relative to other participants, as
existed immediately prior to the Change in Control;
Page 15
(VI) the failure by the Company to continue to provide
the Executive with benefits substantially similar to those enjoyed
by the Executive under any of the Company's life insurance, health
and accident, or disability plans in which the Executive was
participating immediately prior to the Change in Control, the
taking of any other action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive
at the time of the Change in Control, or the failure by the Company
to provide the Executive with the number of paid vacation days to
which the Executive is entitled on the basis of years of service
with the Company in accordance with the Company's normal vacation
policy in effect at the time of the Change in Control, provided,
however, that this paragraph shall not be construed to require the
Company to provide the Executive with a defined benefit pension
plan if no such plan is provided to similarly situated executive
officers of the Company or its Affiliates; or
(VII) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 6.1 of this
Agreement; for purposes of this Agreement, no such purported
termination shall be effective.
The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's incapacity
due to physical or mental illness. The Executive's continued
employment shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting Good Reason
hereunder.
For purposes of any determination regarding the existence of
Good Reason, any claim by the Executive that Good Reason exists
shall be presumed to be correct unless the Company establishes to
the Board by clear and convincing evidence that Good Reason does
not exist.
(p) "Gross-Up Payment" shall have the meaning set forth in
Section 5.2 of this Agreement.
(q) "Notice of Termination" shall have the meaning set forth
in Section 6.1 of this Agreement.
Page 16
(r) "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, (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, or (v) Xxxxxxx X. Xxxxx or any
entity created or controlled by him, provided that he possesses and
exercises, in person or by proxy solicited by the Board, the right
to vote all securities of the Company generally entitled to vote in
the election of directors of the Company, of which he or any such
entity is the Beneficial Owner.
(s) "Severance Payments" shall have the meaning set forth in
Section 5.1 of this Agreement.
(t) "Subsidiary" shall mean any corporation of which the
Company owns, directly or indirectly, a majority of securities
entitled to vote in the election of directors.
(u) "Tax Counsel" shall have the meaning set forth in
Section 5.2 of this Agreement.
(v) "Term" shall mean the period of time described in
Section 2 of this Agreement.
(w) "Total Payments" shall mean those payments so described
in Section 5.2 of this Agreement.
IN WITNESS WHEREOF, the parties have executed this agreement
as of the date and year first above written.
Kaman Corporation
/s/ Xxxxxx X. Xxxxxxx
/s/Xxxx X. Xxxx Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice
President and CFO
Address:
0 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
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