EMPLOYMENT AGREEMENT
TO: KAMAN CORPORATION
In consideration of my employment by Kaman Corporation ("Kaman" or
"the Company") and the compensation paid for my services:
I. (a) I agree to abide by all of Kaman's rules and
regulations now or hereafter established and agree that the posting
of any such rules or regulations on the bulletin boards of the
various departments and/or as listed in any employee handbooks will
constitute personal notice thereof to me. I understand that no
statements made in any such company publications or elsewhere shall
operate to change the terms and conditions of my employment as
described in this Agreement.
(b) I understand and agree that I may become aware of
certain secret and/or confidential information during the course of
my employment and such information includes, but is not limited to,
that pertaining to methods, processes, designs, equipment,
catalogues, computer disks, customer lists, inventions, sales and
company operating procedures. I agree that all tangible
confidential information such as computer disks, reports, customer
lists, etc. are the sole property of Kaman and I agree that upon
termination of employment with Kaman, I will return, on demand, any
and all confidential information in my possession. During and
after my employment, I will disclose to you and will not divulge or
appropriate to my own use or to the use of others, including any
other employer, any such confidential information or knowledge
obtained by me during such employment, whether in tangible or
intangible form, including, but not limited to data, plans,
decisions, methods, processes, designs, equipment, catalogues,
customer lists, inventions, and sales and operating procedures.
(c) Recognizing that, by virtue of my employment, I may
learn information, not generally available, concerning business
methods, customer lists or other trade secrets, I agree that during
my employment I will not, directly or indirectly, become connected
with, promote the interest of, or engage in any other business or
activity competing with the business to which my employment relates
within the geographical area in which the business of the Company
is conducted. I further agree that if any court or arbitrator
should find this covenant and agreement against competition not to
be reasonable as to the scope of prohibited activities, then such
portion of this covenant and agreement held to be unreasonable
shall be regarded as severable and stricken from this Agreement,
and such covenant and agreement shall be of full force and effect
for the activities which are determined not to be unreasonable.
Page 1
(d) I will treat as for your sole benefit, and fully and
promptly disclose and assign to you without additional
compensation, all ideas, discoveries, inventions and improvements,
patentable or not, which, while I am employed, are made, conceived
or reduced to practice by me, alone or with others, during or after
usual working hours either on or off my job, and which are related
directly or indirectly to your business or interest or which result
from tasks assigned to me by you.
(e) I agree, at your expense, at any time during or
after my employment, to sign all papers and do such other acts
reasonably required of me to protect your rights to said ideas,
discoveries, inventions and improvements, including applying for,
obtaining and enforcing patents on said discoveries, inventions,
improvements in any and all countries.
(f) I represent that there are no agreements,
understandings or legal requirements applicable to me which
prohibit the execution of this agreement or prohibit or otherwise
limit the performance of my obligations hereunder or my duties as
an employee of the Company nor will the execution of this agreement
and the performance of my obligations or duties result in a
conflict of interest between me and any other party.
II. I understand that, as an employee of Kaman, I owe a duty of
loyalty to Kaman. As part of this duty of loyalty, I will:
(a) avoid personal investment, interests or associations
which might interfere with the independent exercise of my judgment
on business related matters;
(b) not, directly or through a member of my immediate
family or otherwise, accept any gratuitous payment, loan, service,
or other consideration of value from any party doing or seeking to
do business with Kaman;
(c) fully disclose all facts concerning services that I,
or any other person of whom I have knowledge, may have rendered to
any party competing, dealing, or seeking to deal with Kaman, if it
is required to determine if a conflict of interest exists; and
(d) not buy or sell the company's stock if I have
information about the company that is not already available to the
public nor will I tell other people about any information of that
kind. I understand and acknowledge that Kaman's policies prohibit
such behavior and in many cases, it will be in violation of the
securities laws.
Page 2
III. I understand and agree that my employment with Kaman
is an "at will" relationship and such employment and compensation
can be terminated, with or without cause, and with or without
notice, at any time, at the option of either myself or Kaman. I
understand that this Agreement can be changed only by a written
document signed by me and the President or other designated officer
of Kaman. No application, brochure, policy statement, procedure,
benefit plan, summary, work rules, employee handbook, or any other
written or oral communication between the company and its employees
is intended to create an employment contract. I understand and
agree that as a condition of my "at will" employment, if any
disputes arise out of my termination of employment with the company
that I will first seek to resolve all such disputes by engaging in
good faith discussions with appropriate managerial personnel of the
company.
IV. I understand that if my employment ends under any
circumstances (other than due to a violation of law on my part),
after my Date of Hire (being August 2, 1999), and the Change in
Control Agreement dated August 2, 1999 between Kaman and me is not
applicable, that coincident with such employment termination, the
company will provide me with:
a. a lump sum cash payment equal to two (2) times my
then current base annual salary rate plus one (1) times my most
recent cash bonus payment;
b. if my employment ends within less than one (1) year
from my Date of Hire, vesting of the stock option award and stock
appreciation rights (payable only in cash) award approved by the
Company's Board of Directors on July 20, 1999, in an amount equal
to twenty percent (20%) of each such award, exercisable in
accordance with the terms of the company's 1993 Stock Incentive
Plan together with a lapsing of the restrictions on the restricted
stock award approved by the Board of Directors on July 20, 1999, in
an amount equal to twenty percent (20%) of such award;
c. if my employment ends within two (2) years from my
Date of Hire and subsection IV(b) is not applicable, vesting of the
stock option award and stock appreciation rights (payable only in
cash)award approved by the Company's Board of Directors on July
20, 1999, in an amount equal to forty percent (40%) of each such
award, exercisable in accordance with the terms of the company's
1993 Stock Incentive Plan together with a lapsing of the
restrictions on the restricted stock award approved by the Board of
Directors on July 20, 1999, in an amount equal to forty percent
(40%) of such award;
d. if my employment ends within two (2) years from my
Date of Hire, vesting credit under the Supplemental Employees
Retirement Plan (SERP) to achieve a total of eight (8) years of
Page 3
Continuous and Credited Service (as defined in the Kaman
Corporation Employees' Pension Plan (the "Plan") to which the SERP
is supplemental) at that date which would have been my normal
retirement date (generally, attainment of age 65) had my employment
not ended. I understand that my benefit from the plan will be due
and payable at that normal retirement date.
e. reimbursement for COBRA premium payments for
applicable group medical/dental benefits until I accept employment
elsewhere, but in any event for not more than eighteen (18) months;
f. premium payments for one (1) year with regard to the
Mass Mutual group universal life insurance policy issued in my name
at my Date of Hire;
g. my 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
then current calendar year.
/s/ Xxxx X. Xxxx
Signature of Employee
August 2, 1999
Date
Xxxx X. Xxxx
Employee's Typed Name
Acknowledged and Agreed this 2nd day of August, 1999.
KAMAN CORPORATION
/s/ Xxxxxxx X. Xxxxx
By Xxxxxxx X. Xxxxx
Its Chairman
Page 4
EMPLOYMENT AGREEMENT
This Agreement is made as of September 21, 1999 (the "Effective
Date") by and between Xxxxxx X. Xxxxxxx ("I" , "me", or "my") and
Kaman Corporation ("Kaman" or "the Company").
WITNESSETH:
WHEREAS, the Company and I have already established an employment
relationship; and
WHEREAS, the parties now desire to have the terms and conditions of
that relationship more definitively described, including in
particular the circumstances under which certain severance payments
will be due and payable and a commitment regarding non-competition
following termination of employment under certain circumstances;
NOW THEREFORE, in consideration of the mutual promises contained in
this Agreement, the Company and I agree as follows:
I. (a) I will abide by all of Kaman's rules and regulations
now or hereafter established and agree that the posting of any such
rules or regulations on the bulletin boards of the various
departments and/or as listed in any employee handbooks will
constitute personal notice thereof to me. I understand that no
statements made in any such publications or elsewhere shall operate
to change the terms and conditions of my employment as described in
this Agreement.
(b) I understand and agree that I may become aware of
certain secret and/or confidential information during the course of
my employment and such information includes, but is not limited to,
that pertaining to methods, processes, designs, equipment,
catalogues, computer disks, customer lists, inventions, sales and
operating procedures. I agree that all tangible confidential
information such as computer disks, reports, customer lists, etc.
are the sole property of Kaman and I agree that upon termination of
employment with Kaman, I will return, on demand, any and all
confidential information in my possession. During and after my
employment, I will disclose to Kaman and will not divulge or
appropriate to my own use or to the use of others, including any
other employer, any such confidential information or knowledge
obtained by me during such employment, whether in tangible or
intangible form, including, but not limited to data, plans,
decisions, methods, processes, designs, equipment, catalogues,
customer lists, inventions, and sales and operating procedures.
(c) Recognizing that, by virtue of my employment, I may
learn information, not generally available, concerning business
methods, customer lists or other trade secrets, I agree that during
my employment I will not, directly or indirectly, become connected
Page 5
with, promote the interest of, or engage in any other business or
activity competing with the business to which my employment relates
within the geographical area in which the business of the Company
is conducted. I further agree that if any court or arbitrator
should find this covenant and agreement against competition not to
be reasonable as to the scope of prohibited activities, then such
portion of this covenant and agreement held to be unreasonable
shall be regarded as severable and stricken from this Agreement,
and such covenant and agreement shall be of full force and effect
for the activities which are determined not to be unreasonable.
(d) I will treat as for Kaman's sole benefit, and fully
and promptly disclose and assign to Kaman without additional
compensation, all ideas, discoveries, inventions and improvements,
patentable or not, which, while I am employed, are made, conceived
or reduced to practice by me, alone or with others, during or after
usual working hours either on or off my job, and which are related
directly or indirectly to Kaman's business or interest or which
result from tasks assigned to me by Kaman.
(e) I agree, at Kaman's expense, at any time during or
after my employment, to sign all papers and do such other acts
reasonably required of me to protect Kaman's rights to said ideas,
discoveries, inventions and improvements, including applying for,
obtaining and enforcing patents on said discoveries, inventions,
improvements in any and all countries.
(f) I represent that there are no agreements,
understandings or legal requirements applicable to me which
prohibit the execution of this Agreement or prohibit or otherwise
limit the performance of my obligations hereunder or my duties as
an employee of the Company nor will the execution of this Agreement
and the performance of my obligations or duties result in a
conflict of interest between me and any other party.
II. I understand that, as an employee of Kaman, I owe a duty of
loyalty to Kaman. As part of this duty of loyalty, I will:
(a) avoid personal investment, interests or associations
which might interfere with the independent exercise of my judgment
on business related matters;
(b) not, directly or through a member of my immediate
family or otherwise, accept any gratuitous payment, loan, service,
or other consideration of value from any party doing or seeking to
do business with Kaman;
(c) fully disclose all facts concerning services that I,
or any other person of whom I have knowledge, may have rendered to
any party competing, dealing, or seeking to deal with Kaman, if it
is required to determine if a conflict of interest exists; and
Page 6
(d) not buy or sell Kaman Corporation stock if I have
information about Kaman Corporation or any of its subsidiaries that
is not already available to the public nor will I tell other people
about any information of that kind. I understand and acknowledge
that Kaman's policies prohibit such behavior and in many cases, it
will be in violation of the securities laws.
III. I understand and agree that my employment with Kaman
is an "at will" relationship and such employment and compensation
can be terminated, with or without cause, and with or without
notice, at any time, at the option of Kaman or me. I understand
that this Agreement can be changed only by a written document
signed by me and the President or other designated officer of
Kaman. No application, brochure, policy statement, procedure,
benefit plan, summary, work rules, employee handbook, or any other
written or oral communication between the Company and its employees
is intended to create an employment contract. I understand and
agree that as a condition of my "at will" employment, if any
disputes arise out of my termination of employment with the Company
that I will first seek to resolve all such disputes by engaging in
good faith discussions with appropriate managerial personnel of the
Company.
IV. (a) Notwithstanding any other provision of this
Agreement, it is understood that, beginning on the Effective Date
of this Agreement and ending on September 20, 2001, if Kaman
terminates my employment for any reason (other than due to my
willful refusal to perform proper responsibilities of my position
or a violation of law on my part) or if I terminate my employment
for "good reason", and the Change in Control Agreement dated
September 21, 1999 between Kaman and me is not applicable, that on
my last day of employment (the "Termination Date"), the Company
will provide me with:
1) a lump sum cash payment equal to two (2) times my
then current base annual salary rate (which rate cannot be less
than the salary rate for the most recently completed calendar year
prior to the Termination Date or the salary rate in effect as of
the Effective Date, whichever is higher);
2) a lump sum cash payment equal to two (2) times my
most recent cash bonus payment; and the bonus for which I am
eligible due to my employment during the calendar year in which the
Termination Date occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan;
3) with regard to all restricted stock, stock
appreciation rights or stock option awards that I have received,
(i) all restrictions with respect to any restricted stock shall
lapse, and (ii) all stock appreciation rights and stock options
Page 7
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 Kaman Corporation stock subject to the stock appreciation right
or stock option on the Termination Date over the exercise price(s)
of such stock appreciation rights or stock options; and
4) my 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 Termination Date occurs.
In addition to the aforementioned items, the Company will
provide me with:
5) reimbursement for COBRA premium payments for
applicable group medical/dental benefits until I accept employment
elsewhere, but in any event for not more than twelve (12) months;
and
6) premium payments for one (1) year with regard to
the Mass Mutual group universal life insurance policy issued in my
name.
(b) It is understood that I will have "good reason" to
terminate my employment with the Company if any one of the
following acts, or failures to act, by the Company, occurs:
1) I am removed from the officer position held by me
at the Effective Date; or
2) I am assigned any duties or responsibilities
inconsistent with the officer position held by me at the Effective
Date or there is a substantial diminution in the nature or status
of my responsibilities from those existing on the Effective Date;
or
3) the Company reduces my annual base salary from that
existing on the Effective Date; or
4) the Company significantly reduces my annual cash
bonus from the "modified target bonus opportunity" figure that is
calculated each year in accordance with the Kaman Corporation Cash
Bonus Plan.
(c) My right to terminate my employment for good reason
shall not be affected by my incapacity due to physical or mental
illness. My continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act
constituting good reason under this Agreement.
(d) It is understood that for purposes of any determination
regarding the existence of good reason, any claim by me that good
reason exists shall be presumed to be correct unless the Company
establishes to its Board of Directors by clear and convincing
evidence that good reason does not exist.
Page 8
(e) In the event that the items described in Section IV
(a) are provided to me pursuant to this Agreement, I agree that for
a period of two (2) years following the Termination Date, I 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.
(f) Unless required otherwise by law or government
regulation, the parties will maintain the terms and conditions of
this Agreement in confidence.
V. This Agreement supersedes any previous agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which may exist between the
parties, except that both parties acknowledge the validity of that
certain Change in Control Agreement dated September 21,1999,
between the parties. 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 I have agreed.
In Witness Whereof, the parties have executed, or caused this
Agreement to be executed, on his or its behalf.
/s/ Xxxxxx X. Xxxxxxx
Signature of Employee
November 4, 1999
Date
Xxxxxx X. Xxxxxxx
Employee's Typed Name
Acknowledged and Agreed this 4th day of November, 1999.
Kaman Corporation
/s/ Xxxx X. Xxxx
By Xxxx X. Xxxx
Its President
Page 9
EMPLOYMENT AGREEMENT
This Agreement is made as of September 21, 1999 (the "Effective
Date") by and between Xxxxxx X. Xxxxx ("I", "me", or "my") and
Kaman Corporation ("Kaman" or "the Company").
WITNESSETH:
WHEREAS, the Company and I have already established an employment
relationship; and
WHEREAS, the parties now desire to have the terms and conditions of
that relationship more definitively described, including in
particular the circumstances under which certain severance payments
will be due and payable and a commitment regarding non-competition
following termination of employment under certain circumstances;
NOW THEREFORE, in consideration of the mutual promises contained in
this Agreement, the Company and I agree as follows:
I. (a)I will abide by all of Kaman's rules and regulations now
or hereafter established and agree that the posting of any such
rules or regulations on the bulletin boards of the various
departments and/or as listed in any employee handbooks will
constitute personal notice thereof to me. I understand that no
statements made in any such publications or elsewhere shall operate
to change the terms and conditions of my employment as described in
this Agreement.
(b) I understand and agree that I may become aware of
certain secret and/or confidential information during the course of
my employment and such information includes, but is not limited to,
that pertaining to methods, processes, designs, equipment,
catalogues, computer disks, customer lists, inventions, sales and
operating procedures. I agree that all tangible confidential
information such as computer disks, reports, customer lists, etc.
are the sole property of Kaman and I agree that upon termination of
employment with Kaman, I will return, on demand, any and all
confidential information in my possession. During and after my
employment, I will disclose to Kaman and will not divulge or
appropriate to my own use or to the use of others, including any
other employer, any such confidential information or knowledge
obtained by me during such employment, whether in tangible or
intangible form, including, but not limited to data, plans,
decisions, methods, processes, designs, equipment, catalogues,
customer lists, inventions, and sales and operating procedures.
(c) Recognizing that, by virtue of my employment, I may
learn information, not generally available, concerning business
methods, customer lists or other trade secrets, I agree that during
my employment I will not, directly or indirectly, become connected
Page 10
with, promote the interest of, or engage in any other business or
activity competing with the business to which my employment relates
within the geographical area in which the business of the Company
is conducted. I further agree that if any court or arbitrator
should find this covenant and agreement against competition not to
be reasonable as to the scope of prohibited activities, then such
portion of this covenant and agreement held to be unreasonable
shall be regarded as severable and stricken from this Agreement,
and such covenant and agreement shall be of full force and effect
for the activities which are determined not to be unreasonable.
(d) I will treat as for Kaman's sole benefit, and fully
and promptly disclose and assign to Kaman without additional
compensation, all ideas, discoveries, inventions and improvements,
patentable or not, which, while I am employed, are made, conceived
or reduced to practice by me, alone or with others, during or after
usual working hours either on or off my job, and which are related
directly or indirectly to Kaman's business or interest or which
result from tasks assigned to me by Kaman.
(e) I agree, at Kaman's expense, at any time during or
after my employment, to sign all papers and do such other acts
reasonably required of me to protect Kaman's rights to said ideas,
discoveries, inventions and improvements, including applying for,
obtaining and enforcing patents on said discoveries, inventions,
improvements in any and all countries.
(f) I represent that there are no agreements,
understandings or legal requirements applicable to me which
prohibit the execution of this Agreement or prohibit or otherwise
limit the performance of my obligations hereunder or my duties as
an employee of the Company nor will the execution of this Agreement
and the performance of my obligations or duties result in a
conflict of interest between me and any other party.
II. I understand that, as an employee of Kaman, I owe a duty of
loyalty to Kaman. As part of this duty of loyalty, I will:
(a) avoid personal investment, interests or associations
which might interfere with the independent exercise of my judgment
on business related matters;
(b) not, directly or through a member of my immediate
family or otherwise, accept any gratuitous payment, loan, service,
or other consideration of value from any party doing or seeking to
do business with Kaman;
(c) fully disclose all facts concerning services that I,
or any other person of whom I have knowledge, may have rendered to
any party competing, dealing, or seeking to deal with Kaman, if it
is required to determine if a conflict of interest exists; and
Page 11
(d) not buy or sell Kaman Corporation stock if I have
information about Kaman Corporation or any of its subsidiaries that
is not already available to the public nor will I tell other people
about any information of that kind. I understand and acknowledge
that Kaman's policies prohibit such behavior and in many cases, it
will be in violation of the securities laws.
III. I understand and agree that my employment with Kaman is an
"at will" relationship and such employment and compensation can be
terminated, with or without cause, and with or without notice, at
any time, at the option of Kaman or me. I understand that this
Agreement can be changed only by a written document signed by me
and the President or other designated officer of Kaman. No
application, brochure, policy statement, procedure, benefit plan,
summary, work rules, employee handbook, or any other written or
oral communication between the Company and its employees is
intended to create an employment contract. I understand and agree
that as a condition of my "at will" employment, if any disputes
arise out of my termination of employment with the Company that I
will first seek to resolve all such disputes by engaging in good
faith discussions with appropriate managerial personnel of the
Company.
IV. (a) Notwithstanding any other provision of this Agreement,
it is understood that, beginning on the Effective Date of this
Agreement and ending on September 20, 2001, if Kaman terminates my
employment for any reason (other than due to my willful refusal to
perform proper responsibilities of my position or a violation of
law on my part) or if I terminate my employment for "good reason",
and the Change in Control Agreement dated September 21, 1999
between Kaman and me is not applicable, that on my last day of
employment (the "Termination Date"), the Company will provide me
with:
1) a lump sum cash payment equal to two (2) times my
then current base annual salary rate (which rate cannot be less
than the salary rate for the most recently completed calendar year
prior to the Termination Date or the salary rate in effect as of
the Effective Date, whichever is higher);
2) a lump sum cash payment equal to two (2) times my
most recent cash bonus payment; and the bonus for which I am
eligible due to my employment during the calendar year in which the
Termination Date occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan;
3) with regard to all restricted stock, stock
appreciation rights or stock option awards that I have received,
(i) all restrictions with respect to any restricted stock shall
lapse, and (ii) all stock appreciation rights and stock options
Page 12
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 Kaman Corporation stock subject to the stock appreciation right
or stock option on the Termination Date over the exercise price(s)
of such stock appreciation rights or stock options; and
4) my 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 Termination Date occurs.
In addition to the aforementioned items, the Company will
provide me with:
5) reimbursement for COBRA premium payments for
applicable group medical/dental benefits until I accept employment
elsewhere, but in any event for not more than twelve (12) months;
and
6) premium payments for one (1) year with regard to
the Mass Mutual group universal life insurance policy issued in my
name.
(b) It is understood that I will have "good reason" to
terminate my employment with the Company if any one of the
following acts, or failures to act, by the Company, occurs:
1) I am removed from the officer position held by me
at the Effective Date; or
2) I am assigned any duties or responsibilities
inconsistent with the officer position held by me at the Effective
Date or there is a substantial diminution in the nature or status
of my responsibilities from those existing on the Effective Date;
or
3) the Company reduces my annual base salary from that
existing on the Effective Date; or
4) the Company significantly reduces my annual cash
bonus from the "modified target bonus opportunity" figure that is
calculated each year in accordance with the Kaman Corporation Cash
Bonus Plan.
(c) My right to terminate my employment for good reason
shall not be affected by my incapacity due to physical or mental
illness. My continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act
constituting good reason under this Agreement.
Page 13
(d) It is understood that for purposes of any
determination regarding the existence of good reason, any claim by
me that good reason exists shall be presumed to be correct unless
the Company establishes to its Board of Directors by clear and
convincing evidence that good reason does not exist.
(e) In the event that the items described in Section IV
(a) are provided to me pursuant to this Agreement, I agree that for
a period of two (2) years following the Termination Date, I 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.
(f) Unless required otherwise by law or government
regulation, the parties will maintain the terms and conditions of
this Agreement in confidence.
V. This Agreement supersedes any previous agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which may exist between the
parties, except that both parties acknowledge the validity of that
certain Change in Control Agreement dated September 21,1999,
between the parties. 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 I have agreed.
In Witness Whereof, the parties have executed, or caused
this Agreement to be executed, on his or its behalf.
/s/ Xxxxxx X. Xxxxx
Signature of Employee
November 4, 1999
Date
Xxxxxx X. Xxxxx
Employee's Typed Name
Acknowledged and Agreed this 4th day of November, 1999.
Kaman Corporation
/s/ Xxxx X. Xxxx
By Xxxx X. Xxxx
Its President
Page 14
EMPLOYMENT AGREEMENT
This Agreement is made as of September 21, 1999 (the "Effective
Date") by and between Xxxxxxx X. Xxxxx ("I", "me", or "my") and
Kaman Corporation ("Kaman" or "the Company").
WITNESSETH:
WHEREAS, the Company and I have already established an employment
relationship; and
WHEREAS, the parties now desire to have the terms and conditions of
that relationship more definitively described, including in
particular the circumstances under which certain severance payments
will be due and payable and a commitment regarding non-competition
following termination of employment under certain circumstances;
NOW THEREFORE, in consideration of the mutual promises contained in
this Agreement, the Company and I agree as follows:
I. (a) I will abide by all of Kaman's rules and regulations
now or hereafter established and agree that the posting of any such
rules or regulations on the bulletin boards of the various
departments and/or as listed in any employee handbooks will
constitute personal notice thereof to me. I understand that no
statements made in any such publications or elsewhere shall operate
to change the terms and conditions of my employment as described in
this Agreement.
(b) I understand and agree that I may become aware of
certain secret and/or confidential information during the course of
my employment and such information includes, but is not limited to,
that pertaining to methods, processes, designs, equipment,
catalogues, computer disks, customer lists, inventions, sales and
operating procedures. I agree that all tangible confidential
information such as computer disks, reports, customer lists, etc.
are the sole property of Kaman and I agree that upon termination of
employment with Kaman, I will return, on demand, any and all
confidential information in my possession. During and after my
employment, I will disclose to Kaman and will not divulge or
appropriate to my own use or to the use of others, including any
other employer, any such confidential information or knowledge
obtained by me during such employment, whether in tangible or
intangible form, including, but not limited to data, plans,
decisions, methods, processes, designs, equipment, catalogues,
customer lists, inventions, and sales and operating procedures.
(c) Recognizing that, by virtue of my employment, I may
learn information, not generally available, concerning business
methods, customer lists or other trade secrets, I agree that during
my employment I will not, directly or indirectly, become connected
with, promote the interest of, or engage in any other business or
activity competing with the business to which my employment relates
within the geographical area in which the business of the Company
Page 15
is conducted. I further agree that if any court or arbitrator
should find this covenant and agreement against competition not to
be reasonable as to the scope of prohibited activities, then such
portion of this covenant and agreement held to be unreasonable
shall be regarded as severable and stricken from this Agreement,
and such covenant and agreement shall be of full force and effect
for the activities which are determined not to be unreasonable.
(d) I will treat as for Kaman's sole benefit, and fully
and promptly disclose and assign to Kaman without additional
compensation, all ideas, discoveries, inventions and improvements,
patentable or not, which, while I am employed, are made, conceived
or reduced to practice by me, alone or with others, during or after
usual working hours either on or off my job, and which are related
directly or indirectly to Kaman's business or interest or which
result from tasks assigned to me by Kaman.
(e) I agree, at Kaman's expense, at any time during or
after my employment, to sign all papers and do such other acts
reasonably required of me to protect Kaman's rights to said ideas,
discoveries, inventions and improvements, including applying for,
obtaining and enforcing patents on said discoveries, inventions,
improvements in any and all countries.
(f) I represent that there are no agreements,
understandings or legal requirements applicable to me which
prohibit the execution of this Agreement or prohibit or otherwise
limit the performance of my obligations hereunder or my duties as
an employee of the Company nor will the execution of this Agreement
and the performance of my obligations or duties result in a
conflict of interest between me and any other party.
II. I understand that, as an employee of Kaman, I owe a duty of
loyalty to Kaman. As part of this duty of loyalty, I will:
(a) avoid personal investment, interests or associations
which might interfere with the independent exercise of my judgment
on business related matters;
(b) not, directly or through a member of my immediate
family or otherwise, accept any gratuitous payment, loan, service,
or other consideration of value from any party doing or seeking to
do business with Kaman;
(c) fully disclose all facts concerning services that I,
or any other person of whom I have knowledge, may have rendered to
any party competing, dealing, or seeking to deal with Kaman, if it
is required to determine if a conflict of interest exists; and
(d) not buy or sell Kaman Corporation stock if I have
information about Kaman Corporation or any of its subsidiaries that
is not already available to the public nor will I tell other people
about any information of that kind. I understand and acknowledge
Page 16
that Kaman's policies prohibit such behavior and in many cases, it
will be in violation of the securities laws.
III. I understand and agree that my employment with Kaman is an
"at will" relationship and such employment and compensation can be
terminated, with or without cause, and with or without notice, at
any time, at the option of Kaman or me. I understand that this
Agreement can be changed only by a written document signed by me
and the President or other designated officer of Kaman. No
application, brochure, policy statement, procedure, benefit plan,
summary, work rules, employee handbook, or any other written or
oral communication between the Company and its employees is
intended to create an employment contract. I understand and agree
that as a condition of my "at will" employment, if any disputes
arise out of my termination of employment with the Company that I
will first seek to resolve all such disputes by engaging in good
faith discussions with appropriate managerial personnel of the
Company.
IV. (a) Notwithstanding any other provision of this Agreement,
it is understood that, beginning on the Effective Date of this
Agreement and ending on September 20, 2001, if Kaman terminates my
employment for any reason (other than due to my willful refusal to
perform proper responsibilities of my position or a violation of
law on my part) or if I terminate my employment for "good reason",
and the Change in Control Agreement dated September 21, 1999
between Kaman and me is not applicable, that on my last day of
employment (the "Termination Date"), the Company will provide me
with:
1) a lump sum cash payment equal to two (2) times my
then current base annual salary rate (which rate cannot be less
than the salary rate for the most recently completed calendar year
prior to the Termination Date or the salary rate in effect as of
the Effective Date, whichever is higher);
2) a lump sum cash payment equal to two (2) times my
most recent cash bonus payment; and the bonus for which I am
eligible due to my employment during the calendar year in which the
Termination Date occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan;
3) with regard to all restricted stock, stock
appreciation rights or stock option awards that I have received,
(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 Kaman Corporation stock subject to the stock appreciation right
or stock option on the Termination Date over the exercise price(s)
of such stock appreciation rights or stock options; and
Page 17
4) my 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 Termination Date occurs.
In addition to the aforementioned items, the Company will
provide me with:
5) reimbursement for COBRA premium payments for
applicable group medical/dental benefits until I accept employment
elsewhere, but in any event for not more than twelve (12) months;
and
6) premium payments for one (1) year with regard to
the Mass Mutual group universal life insurance policy issued in my
name.
(b) It is understood that I will have "good reason" to
terminate my employment with the Company if any one of the
following acts, or failures to act, by the Company, occurs:
1) I am removed from the officer position held by me
at the Effective Date; or
2) I am assigned any duties or responsibilities
inconsistent with the officer position held by me at the Effective
Date or there is a substantial diminution in the nature or status
of my responsibilities from those existing on the Effective Date;
or
3) the Company reduces my annual base salary from that
existing on the Effective Date; or
4) the Company significantly reduces my annual cash
bonus from the "modified target bonus opportunity" figure that is
calculated each year in accordance with the Kaman Corporation Cash
Bonus Plan.
(c) My right to terminate my employment for good reason
shall not be affected by my incapacity due to physical or mental
illness. My continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act
constituting good reason under this Agreement.
(d) It is understood that for purposes of any
determination regarding the existence of good reason, any claim by
me that good reason exists shall be presumed to be correct unless
the Company establishes to its Board of Directors by clear and
convincing evidence that good reason does not exist.
Page 18
(e) In the event that the items described in
Section IV (a) are provided to me pursuant to this Agreement, I
agree that for a period of two (2) years following the Termination
Date, I 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.
(f) Unless required otherwise by law or
government regulation, the parties will maintain the terms and
conditions of this Agreement in confidence.
V. This Agreement supersedes any previous agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which may exist between the
parties, except that both parties acknowledge the validity of that
certain Change in Control Agreement dated September 21,1999,
between the parties. 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 I have agreed.
In Witness Whereof, the parties have executed, or caused
this Agreement to be executed, on his or its behalf.
/s/ Xxxxxxx X. Xxxxx
Signature of Employee
November 4, 1999
Date
Xxxxxxx X. Xxxxx
Employee's Typed Name
Acknowledged and Agreed this 4th day of November, 1999.
Kaman Corporation
/s/ Xxxx X. Xxxx
By Xxxx X. Xxxx
Its President
Page 19
EMPLOYMENT AGREEMENT
This Agreement is made as of September 21, 1999 (the "Effective
Date") by and between T. Xxxx Xxxxxx ("I", "me", or "my") and
Kaman Industrial Technologies Corporation ("Kaman" or "the
Company").
WITNESSETH:
WHEREAS, the Company and I have already established an employment
relationship; and
WHEREAS, the parties now desire to have the terms and conditions of
that relationship more definitively described, including in
particular the circumstances under which certain severance payments
will be due and payable and a commitment regarding non-competition
following termination of employment under certain circumstances;
NOW THEREFORE, in consideration of the mutual promises contained in
this Agreement, the Company and I agree as follows:
I. (a) I will abide by all of Kaman's rules and regulations
now or hereafter established and agree that the posting of any such
rules or regulations on the bulletin boards of the various
departments and/or as listed in any employee handbooks will
constitute personal notice thereof to me. I understand that no
statements made in any such publications or elsewhere shall operate
to change the terms and conditions of my employment as described in
this Agreement.
(b) I understand and agree that I may become aware of
certain secret and/or confidential information during the course of
my employment and such information includes, but is not limited to,
that pertaining to methods, processes, designs, equipment,
catalogues, computer disks, customer lists, inventions, sales and
operating procedures. I agree that all tangible confidential
information such as computer disks, reports, customer lists, etc.
are the sole property of Kaman and I agree that upon termination of
employment with Kaman, I will return, on demand, any and all
confidential information in my possession. During and after my
employment, I will disclose to Kaman and will not divulge or
appropriate to my own use or to the use of others, including any
other employer, any such confidential information or knowledge
obtained by me during such employment, whether in tangible or
intangible form, including, but not limited to data, plans,
decisions, methods, processes, designs, equipment, catalogues,
customer lists, inventions, and sales and operating procedures.
(c) Recognizing that, by virtue of my employment, I may
learn information, not generally available, concerning business
methods, customer lists or other trade secrets, I agree that during
Page 20
my employment I will not, directly or indirectly, become connected
with, promote the interest of, or engage in any other business or
activity competing with the business to which my employment relates
within the geographical area in which the business of the Company
is conducted. I further agree that if any court or arbitrator
should find this covenant and agreement against competition not to
be reasonable as to the scope of prohibited activities, then such
portion of this covenant and agreement held to be unreasonable
shall be regarded as severable and stricken from this Agreement,
and such covenant and agreement shall be of full force and effect
for the activities which are determined not to be unreasonable.
(d) I will treat as for Kaman's sole benefit, and fully
and promptly disclose and assign to Kaman without additional
compensation, all ideas, discoveries, inventions and improvements,
patentable or not, which, while I am employed, are made, conceived
or reduced to practice by me, alone or with others, during or after
usual working hours either on or off my job, and which are related
directly or indirectly to Kaman's business or interest or which
result from tasks assigned to me by Kaman.
(e) I agree, at Kaman's expense, at any time during or
after my employment, to sign all papers and do such other acts
reasonably required of me to protect Kaman's rights to said ideas,
discoveries, inventions and improvements, including applying for,
obtaining and enforcing patents on said discoveries, inventions,
improvements in any and all countries.
(f) I represent that there are no agreements,
understandings or legal requirements applicable to me which
prohibit the execution of this Agreement or prohibit or otherwise
limit the performance of my obligations hereunder or my duties as
an employee of the Company nor will the execution of this Agreement
and the performance of my obligations or duties result in a
conflict of interest between me and any other party.
II. I understand that, as an employee of Kaman, I owe a duty of
loyalty to Kaman. As part of this duty of loyalty, I will:
(a) avoid personal investment, interests or associations
which might interfere with the independent exercise of my judgment
on business related matters;
(b) not, directly or through a member of my immediate
family or otherwise, accept any gratuitous payment, loan, service,
or other consideration of value from any party doing or seeking to
do business with Kaman;
(c) fully disclose all facts concerning services that I,
or any other person of whom I have knowledge, may have rendered to
any party competing, dealing, or seeking to deal with Kaman, if it
is required to determine if a conflict of interest exists; and
Page 21
(d) not buy or sell Kaman Corporation stock if I have
information about Kaman Corporation or any of its subsidiaries that
is not already available to the public nor will I tell other people
about any information of that kind. I understand and acknowledge
that Kaman's policies prohibit such behavior and in many cases, it
will be in violation of the securities laws.
III. I understand and agree that my employment with Kaman is an
"at will" relationship and such employment and compensation can be
terminated, with or without cause, and with or without notice, at
any time, at the option of Kaman or me. I understand that this
Agreement can be changed only by a written document signed by me
and an officer of the Company, or his designee, who is also an
officer of Kaman Corporation. No application, brochure, policy
statement, procedure, benefit plan, summary, work rules, employee
handbook, or any other written or oral communication between the
Company and its employees is intended to create an employment
contract. I understand and agree that as a condition of my "at
will" employment, if any disputes arise out of my termination of
employment with the Company that I will first seek to resolve all
such disputes by engaging in good faith discussions with
appropriate managerial personnel of the Company.
IV. (a) Notwithstanding any other provision of this Agreement,
it is understood that, beginning on the Effective Date of this
Agreement and ending on September 20, 2001, if Kaman terminates my
employment for any reason (other than due to my willful refusal to
perform proper responsibilities of my position or a violation of
law on my part) or if I terminate my employment for "good reason",
and the Change in Control Agreement dated September 21, 1999
between Kaman and me is not applicable, that on my last day of
employment (the "Termination Date"), the Company will provide me
with:
1) a lump sum cash payment equal to two (2) times my
then current base annual salary rate (which rate cannot be less
than the salary rate for the most recently completed calendar year
prior to the Termination Date or the salary rate in effect as of
the Effective Date, whichever is higher);
2) a lump sum cash payment equal to two (2) times my
most recent cash bonus payment; and the bonus for which I am
eligible due to my employment during the calendar year in which the
Termination Date occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan;
Page 22
3) with regard to all restricted stock, stock
appreciation rights or stock option awards that I have received,
(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 Kaman Corporation stock subject to the stock appreciation right
or stock option on the Termination Date over the exercise price(s)
of such stock appreciation rights or stock options; and
4) my 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 Termination Date occurs.
In addition to the aforementioned items, the Company will
provide me with:
5) reimbursement for COBRA premium payments for
applicable group medical/dental benefits until I accept employment
elsewhere, but in any event for not more than twelve (12) months;
and
6) premium payments for one (1) year with regard to
the Mass Mutual group universal life insurance policy issued in my
name.
(b) It is understood that I will have "good reason" to
terminate my employment with the Company if any one of the
following acts, or failures to act, by the Company, occurs:
1) I am removed from the officer position held by me
at the Effective Date; or
2) I am assigned any duties or responsibilities
inconsistent with the officer position held by me at the Effective
Date or there is a substantial diminution in the nature or status
of my responsibilities from those existing on the Effective Date;
or
3) the Company reduces my annual base salary from that
existing on the Effective Date; or
4) the Company significantly reduces my annual cash
bonus from the "modified target bonus opportunity" figure that is
calculated each year in accordance with the Kaman Corporation Cash
Bonus Plan.
(c) My right to terminate my employment for good reason
shall not be affected by my incapacity due to physical or mental
illness. My continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act
constituting good reason under this Agreement.
Page 23
(d) It is understood that for purposes of any
determination regarding the existence of good reason, any claim by
me that good reason exists shall be presumed to be correct unless
the Company establishes to its Board of Directors by clear and
convincing evidence that good reason does not exist.
(e) In the event that the items described in Section IV
(a) are provided to me pursuant to this Agreement, I agree that for
a period of two (2) years following the Termination Date, I 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.
(f) Unless required otherwise by law or government
regulation, the parties will maintain the terms and conditions of
this Agreement in confidence.
V. This Agreement supersedes any previous agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which may exist between the
parties, except that both parties acknowledge the validity of that
certain Change in Control Agreement dated September 21,1999,
between the parties. 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 I have agreed.
In Witness Whereof, the parties have executed, or caused this
Agreement to be executed, on his or its behalf.
/s/ T. Xxxx Xxxxxx
Signature of Employee
November 10, 1999
Date
T. Xxxx Xxxxxx
Employee's Typed Name
Acknowledged and Agreed this 10th day of November, 1999.
Kaman Industrial Technologies Corporation
/s/ Xxxxxx X. Xxxxxxx
By Xxxxxx X. Xxxxxxx
Its Vice President
Page 24
EMPLOYMENT AGREEMENT
This Agreement is made as of September 21, 1999 (the "Effective
Date") by and between Xxxxxx X. Xxxxxxxx, Xx. ("I", "me", or "my")
and Kaman Music Corporation ("Kaman" or "the Company").
WITNESSETH:
WHEREAS, the Company and I have already established an employment
relationship; and
WHEREAS, the parties now desire to have the terms and conditions of
that relationship more definitively described, including in
particular the circumstances under which certain severance payments
will be due and payable and a commitment regarding non-competition
following termination of employment under certain circumstances;
NOW THEREFORE, in consideration of the mutual promises contained in
this Agreement, the Company and I agree as follows:
I. (a) I will abide by all of Kaman's rules and regulations
now or hereafter established and agree that the posting of any such
rules or regulations on the bulletin boards of the various
departments and/or as listed in any employee handbooks will
constitute personal notice thereof to me. I understand that no
statements made in any such publications or elsewhere shall operate
to change the terms and conditions of my employment as described in
this Agreement.
(b) I understand and agree that I may become aware of
certain secret and/or confidential information during the course of
my employment and such information includes, but is not limited to,
that pertaining to methods, processes, designs, equipment,
catalogues, computer disks, customer lists, inventions, sales and
operating procedures. I agree that all tangible confidential
information such as computer disks, reports, customer lists, etc.
are the sole property of Kaman and I agree that upon termination of
employment with Kaman, I will return, on demand, any and all
confidential information in my possession. During and after my
employment, I will disclose to Kaman and will not divulge or
appropriate to my own use or to the use of others, including any
other employer, any such confidential information or knowledge
obtained by me during such employment, whether in tangible or
intangible form, including, but not limited to data, plans,
decisions, methods, processes, designs, equipment, catalogues,
customer lists, inventions, and sales and operating procedures.
(c) Recognizing that, by virtue of my employment, I may
learn information, not generally available, concerning business
methods, customer lists or other trade secrets, I agree that during
my employment I will not, directly or indirectly, become connected
Page 25
with, promote the interest of, or engage in any other business or
activity competing with the business to which my employment relates
within the geographical area in which the business of the Company
is conducted. I further agree that if any court or arbitrator
should find this covenant and agreement against competition not to
be reasonable as to the scope of prohibited activities, then such
portion of this covenant and agreement held to be unreasonable
shall be regarded as severable and stricken from this Agreement,
and such covenant and agreement shall be of full force and effect
for the activities which are determined not to be unreasonable.
(d) I will treat as for Kaman's sole benefit, and fully
and promptly disclose and assign to Kaman without additional
compensation, all ideas, discoveries, inventions and improvements,
patentable or not, which, while I am employed, are made, conceived
or reduced to practice by me, alone or with others, during or after
usual working hours either on or off my job, and which are related
directly or indirectly to Kaman's business or interest or which
result from tasks assigned to me by Kaman.
(e) I agree, at Kaman's expense, at any time during or
after my employment, to sign all papers and do such other acts
reasonably required of me to protect Kaman's rights to said ideas,
discoveries, inventions and improvements, including applying for,
obtaining and enforcing patents on said discoveries, inventions,
improvements in any and all countries.
(f) I represent that there are no agreements,
understandings or legal requirements applicable to me which
prohibit the execution of this Agreement or prohibit or otherwise
limit the performance of my obligations hereunder or my duties as
an employee of the Company nor will the execution of this Agreement
and the performance of my obligations or duties result in a
conflict of interest between me and any other party.
II. I understand that, as an employee of Kaman, I owe a duty of
loyalty to Kaman. As part of this duty of loyalty, I will:
(a) avoid personal investment, interests or associations
which might interfere with the independent exercise of my judgment
on business related matters;
(b) not, directly or through a member of my immediate
family or otherwise, accept any gratuitous payment, loan, service,
or other consideration of value from any party doing or seeking to
do business with Kaman;
(c) fully disclose all facts concerning services that I,
or any other person of whom I have knowledge, may have rendered to
any party competing, dealing, or seeking to deal with Kaman, if it
is required to determine if a conflict of interest exists; and
Page 26
(d) not buy or sell Kaman Corporation stock if I have
information about Kaman Corporation or any of its subsidiaries that
is not already available to the public nor will I tell other people
about any information of that kind. I understand and acknowledge
that Kaman's policies prohibit such behavior and in many cases, it
will be in violation of the securities laws.
III. I understand and agree that my employment with Kaman is an
"at will" relationship and such employment and compensation can be
terminated, with or without cause, and with or without notice, at
any time, at the option of Kaman or me. I understand that this
Agreement can be changed only by a written document signed by me
and an officer of the Company, or his designee, who is also an
officer of Kaman Corporation. No application, brochure, policy
statement, procedure, benefit plan, summary, work rules, employee
handbook, or any other written or oral communication between the
Company and its employees is intended to create an employment
contract. I understand and agree that as a condition of my "at
will" employment, if any disputes arise out of my termination of
employment with the Company that I will first seek to resolve all
such disputes by engaging in good faith discussions with
appropriate managerial personnel of the Company.
IV. (a) Notwithstanding any other provision of this Agreement,
it is understood that, beginning on the Effective Date of this
Agreement and ending on September 20, 2001, if Kaman terminates my
employment for any reason (other than due to my willful refusal to
perform proper responsibilities of my position or a violation of
law on my part) or if I terminate my employment for "good reason",
and the Change in Control Agreement dated September 21, 1999
between Kaman and me is not applicable, that on my last day of
employment (the "Termination Date"), the Company will provide me
with:
1) a lump sum cash payment equal to two (2) times my
then current base annual salary rate (which rate cannot be less
than the salary rate for the most recently completed calendar year
prior to the Termination Date or the salary rate in effect as of
the Effective Date, whichever is higher);
2) a lump sum cash payment equal to two (2) times my
most recent cash bonus payment; and the bonus for which I am
eligible due to my employment during the calendar year in which the
Termination Date occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan;
Page 27
3) with regard to all restricted stock, stock
appreciation rights or stock option awards that I have received,
(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 Kaman Corporation stock subject to the stock appreciation right
or stock option on the Termination Date over the exercise price(s)
of such stock appreciation rights or stock options; and
4) my 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 Termination Date occurs.
In addition to the aforementioned items, the Company will
provide me with:
5) reimbursement for COBRA premium payments for
applicable group medical/dental benefits until I accept employment
elsewhere, but in any event for not more than twelve (12) months;
and
6) premium payments for one (1) year with regard to
the Mass Mutual group universal life insurance policy issued in my
name.
(b) It is understood that I will have "good reason" to
terminate my employment with the Company if any one of the
following acts, or failures to act, by the Company, occurs:
1) I am removed from the officer position held by me
at the Effective Date; or
2) I am assigned any duties or responsibilities
inconsistent with the officer position held by me at the Effective
Date or there is a substantial diminution in the nature or status
of my responsibilities from those existing on the Effective Date;
or
3) the Company reduces my annual base salary from that
existing on the Effective Date; or
4) the Company significantly reduces my annual cash
bonus from the "modified target bonus opportunity" figure that is
calculated each year in accordance with the Kaman Corporation Cash
Bonus Plan.
(c) My right to terminate my employment for good reason
shall not be affected by my incapacity due to physical or mental
illness. My continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act
constituting good reason under this Agreement.
Page 28
(d) It is understood that for purposes of any
determination regarding the existence of good reason, any claim by
me that good reason exists shall be presumed to be correct unless
the Company establishes to its Board of Directors by clear and
convincing evidence that good reason does not exist.
(e) In the event that the items described in Section IV
(a) are provided to me pursuant to this Agreement, I agree that for
a period of two (2) years following the Termination Date, I 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.
(f) Unless required otherwise by law or government
regulation, the parties will maintain the terms and conditions of
this Agreement in confidence.
V. This Agreement supersedes any previous agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which may exist between the
parties, except that both parties acknowledge the validity of that
certain Change in Control Agreement dated September 21,1999,
between the parties. 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 I have agreed.
In Witness Whereof, the parties have executed, or caused this
Agreement to be executed, on his or its behalf.
/s/ Xxxxxx X. Xxxxxxxx, Xx.
Signature of Employee
November 10, 1999
Date
Xxxxxx X. Xxxxxxxx, Xx.
Employee's Typed Name
Acknowledged and Agreed this 10th day of November, 1999.
Kaman Music Corporation
/s/ Xxxxxx X. Xxxxxxx
By Xxxxxx X. Xxxxxxx
Its Vice President
Page 29
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated August 2, 1999, is made 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, 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;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the Company and the Executive
hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms
used in this Agreement are provided in the last Section of this
Agreement.
2. Term. [Intentionally Omitted]
3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive's continued employment, the Company
agrees, under the conditions described herein, to pay the Executive
the Severance Payments and the other payments and benefits
described in this Agreement. Except as provided in 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.
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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 higher, the rate in effect immediately prior to
the first occurrence of an event or circumstance constituting Good
Reason, 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.
4.2 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay to
the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in
accordance with, the Company's retirement, insurance and other
compensation or benefit plans, programs and arrangements as in
effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good
Reason.
5. Severance Payments.
5.1 If the Executive's employment is terminated following
a Change in Control, other than (A) by the Company for Cause, (B)
by reason of death or Disability, or (C) by the Executive without
Good Reason, then the Company shall pay the Executive the amounts,
and provide the Executive the benefits described in this Section 5
("Severance Payments") in addition to any payments and benefits to
which the Executive is entitled under Section 4 of this Agreement.
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 (whether or not a Change in
Control ever occurs) 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 (whether or not a Change in
Control ever occurs) and the circumstance or event which
constitutes Good Reason occurs at the request or direction of such
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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 (whether or not a Change in Control ever occurs).
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 higher, in effect immediately prior to the
first occurrence of an event or circumstance constituting Good
Reason, and (ii) one (1) times the "target bonus" applicable to the
Executive at the Date of Termination or, if higher, the annual
bonus actually paid for the fiscal year ending immediately prior to
the fiscal year in which occurs the Date of Termination, in either
case pursuant to any annual bonus or incentive plan maintained by
the Company. For purposes of this Agreement, the "target bonus" is
an amount equal to the Executive's annual base salary rate at the
Date of Termination times the target bonus opportunity percentage
applicable to the Executive's salary grade at the Date of
Termination.
(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,
accidental death and disability benefits substantially similar to
those provided to the Executive and his dependents immediately
prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
date or occurrence. Benefits otherwise receivable by the Executive
pursuant to this Section 5.1(b) shall be reduced to the extent
benefits of the same type are received by or made available to the
Executive during the thirty-six (36) month period following the
Executive's termination of employment (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.
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(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, (i) all restrictions with respect to any
such restricted stock held by the Executive shall lapse, (ii) all
stock appreciation rights held by the Executive shall become fully
vested and exercisable, and (iii) all stock options held by the
Executive shall be 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 option on the date of the Change in Control over the
aggregate exercise price of such stock option.
(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, the Company shall pay the Executive a lump sum amount, in
cash, equal to the excess of (i) the actuarial equivalent of the
aggregate retirement pension (taking into account any early
retirement subsidies associated therewith and determined as a
straight life annuity (or such other annuity form for which the
Executive is eligible under the Kaman Corporation Employees'
Pension Plan (the "Plan"), the actuarial equivalent of which is
greatest) commencing at the date (but in no event earlier than the
fifth anniversary of the Date of Termination) as of which the
actuarial equivalent of such annuity is greatest) which the
Executive would have accrued under the terms of all Pension Plans
(without regard to any amendment to any Pension Plan made
subsequent to a Change in Control and on or prior to the Date of
Termination, which amendment adversely affects in any manner the
computation of retirement benefits thereunder), determined as if
the Executive were fully vested thereunder and had accumulated
(after the Date of Termination) sixty (60) additional months of
service credit thereunder and had been credited under each Pension
Plan during such period with compensation equal to the Executive's
compensation (as defined in each such Pension Plan) during the
twelve (12) months immediately preceding Date of Termination or, if
higher, during the twelve months immediately prior to the first
occurrence of an event or circumstance constituting Good Reason,
over (ii) the actuarial equivalent of the aggregate retirement
pension (taking into account any early retirement subsidies
associated therewith and determined as a straight life annuity
commencing at the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of such annuity
is greatest) which the Executive had accrued pursuant to the
provisions of the Pension Plans as of the Date of Termination. For
purposes of this Section 5.1(d), "actuarial equivalent" shall be
determined using the same assumptions utilized for purposes of
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determining optional forms of benefit under the Plan immediately
prior to the Date of Termination or, if more favorable to the
Executive, immediately prior to the first occurrence of an event or
circumstance constituting Good Reason.
(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 subsection (B) of this Section 5.1(e)
terminate.
(f) The Company shall (i) either prepay all remaining
premiums, or establish an irrevocable grantor trust holding an
amount of assets sufficient to pay all such remaining premiums
(which trust shall be required to pay such premiums), under any
insurance policy insuring the life of the Executive in effect
between the Executive and the Company, 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
outplacement services suitable to the Executive's position for a
period of two years or, if earlier, until the first acceptance by
the Executive of an offer of employment.
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.
Page 34
(B) For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amount of
such Excise Tax, (i) all of the Total Payments shall be treated as
"parachute payments" (within the meaning of section 280G(b)(2) of
the Code) unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by the
accounting firm which was, immediately prior to the Change in
Control, the Company's independent auditor (the "Auditor"), such
payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of section 280G(b)(4)(A) of
the Code, (ii) all "excess parachute payments" within the meaning
of section 280G(b)(l) of the Code shall be treated as subject to
the Excise Tax unless, in the opinion of Tax Counsel, such excess
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered (within the meaning of
section 280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be 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 five (5) business 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
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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 five (5) business days following the
time that the amount of such excess is finally determined. The
Executive and the Company shall each reasonably cooperate with the
other in connection with any administrative or judicial proceedings
concerning the existence or amount of liability for Excise Tax with
respect to the Total Payments.
5.3 The Company also shall reimburse the Executive for
legal fees and expenses incurred by the Executive in disputing in
good faith any issue hereunder relating to the termination of the
Executive's employment or in seeking in good faith to obtain or
enforce any benefit or right provided by this Agreement. Such
payments shall be made within five (5) 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), (c) and (d)
of Section 5.1 and in Section 5.2 of this Agreement shall be made
not later than the fifth day following the Date of Termination;
provided, however, that if the amounts of such payments cannot be
finally determined on or before such day, the Company shall pay to
the Executive on such day an estimate, as determined in good faith
by the Executive or, in the case of payments under Section 5.2 of
this Agreement, in accordance with Section 5.2 of this Agreement,
of the minimum amount of such payments to which the Executive is
clearly entitled and shall pay the remainder of such payments
(together with interest on the unpaid remainder (or on all such
payments to the extent the Company fails to make such payments when
due) at 120% of the rate provided in section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined but in no
event later than the thirtieth (30th) day after the Date of
Termination. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) business day after demand by
the Company (together with interest at 120% of the rate provided in
section 1274(b)(2)(B) of the Code). 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).
Page 36
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control, any
purported termination of the Executive's employment (other than by
reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in
accordance with Section 9 of this Agreement. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. Further,
a Notice of Termination for Cause is required to include a copy of
a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board) finding that, in
the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
6.2 Date of Termination. "Date of Termination," with
respect to any purported termination of the Executive's employment
after a Change in Control, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall
not have returned to the full-time performance of the Executive's
duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) 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
Page 37
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 4.2 of this Agreement) and shall not be offset
against or reduce any other amounts due under this Agreement.
7. No Mitigation. The Company agrees that under this
Agreement, if the Executive's employment with the Company
terminates, the Executive is not required to seek other employment
or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Section 5 of this Agreement or
Section 6.4 of this Agreement. Further, the amount of any payment
or benefit provided for in this Agreement (other than as
specifically provided in Section 5.1(b) of this Agreement) shall
not be reduced by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits,
by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.
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.
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8.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive shall die while any amount
would still be payable to the Executive hereunder (other than
amounts which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors,
personal representatives or administrators of the Executive's
estate.
9. Notices. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be
in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return
receipt requested, postage prepaid, addressed, if to the Executive,
to the address inserted below the Executive's signature on the
final page hereof and, if to the Company, to the address set forth
below, or to such other address as either party may have furnished
to the other in writing in accordance herewith, except that notice
of change of address shall be effective only upon actual receipt:
To the Company:
Kaman Corporation
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
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. 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; provided, however,
that this Agreement shall supersede any agreement setting forth the
terms and conditions of the Executive's employment with the Company
only in the event that the Executive's employment with the Company
is terminated on or following a Change in Control, by the Company
other than for Cause or by the Executive for Good Reason. The
validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of Connecticut. Any
Page 39
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. 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.
12. Counterparts. 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.
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.
Page 40
(c) "Base Amount" shall have the meaning set forth in
section 280G(b)(3) of the Code.
(d) "Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
(e) "Board" shall mean the Board of Directors of the
Company.
(f) "Cause" for termination by the Company of the
Executive's employment shall mean (i) the willful and continued
failure by the Executive to substantially perform the Executive's
duties with the Company (other than any such failure resulting from
the Executive's incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section
6.1 of this Agreement) after a written demand for substantial
performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the
Executive's duties, or (ii) the willful engaging by the Executive
in conduct which is demonstrably and materially injurious to the
Company or its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act, or failure
to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive's act, or failure to
act, was in the best interest of the Company and (y) in the event
of a dispute concerning the application of this provision, no claim
by the Company that Cause exists shall be given effect unless the
Company establishes to the Board by clear and convincing evidence
that Cause exists.
(g) A "Change in Control" shall be deemed to have
occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates)
representing 50% 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
Page 41
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 still in office who either
were directors on the date of this Agreement or whose appointment,
election or nomination for election was previously so approved or
recommended; or
(III) there is consummated a merger or consolidation
of the Company with any other business entity, other than (i) a
merger or consolidation which would result in the voting securities
of the Company 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), in combination with the
ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any subsidiary of
the Company, at least 50% 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
25% 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 an agreement for 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, at least
50% of the combined voting power of the securities of which are
owned by stockholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior to
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
Page 42
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 50% of the securities of such Subsidiary 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 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
corporation owning such assets) of either Kaman Aerospace
Corporation or Kaman Industrial Technologies Corporation to the
Company's stockholders.
(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.
Page 43
(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,
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 Chief Executive Officer
and President of the Company or a substantial adverse alteration 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 present business travel obligations;
(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 seven (7) 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
Page 44
Incentive Plan) , unless an equitable arrangement (embodied in
an ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in
terms of the amount or timing of payment of benefits provided and
the level of the Executive's participation relative to other
participants, as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to continue to
provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Company's life insurance,
health and accident, or disability plans in which the Executive was
participating immediately prior to the Change in Control, the
taking of any other action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive
at the time of the Change in Control, or the failure by the Company
to provide the Executive with the number of paid vacation days to
which the Executive is entitled on the basis of years of service
with the Company in accordance with the Company's normal vacation
policy in effect at the time of the Change in Control, provided,
however, that this paragraph shall not be construed to require the
Company to provide the Executive with a defined benefit pension
plan if no such plan is provided to similarly situated executive
officers of the Company or its affiliates; or
(VII) any purported termination of the
Executive's employment which is not effected pursuant to a Notice
of Termination satisfying the requirements of Section 6.1 of this
Agreement; for purposes of this Agreement, no such purported
termination shall be effective.
The Executive's right to terminate the Executive's
employment for Good Reason shall not be affected by the Executive's
incapacity due to physical or mental illness. The Executive's
continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
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 45
(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 or any of its Affiliates, (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 as their ownership of stock of the Company, or (v)
Xxxxxxx X. Xxxxx.
(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
By: /S/ Xxxxxxx X. Xxxxx
/S/Xxxx X. Xxxx Name: Xxxxxxx X. Xxxxx
Title: Chairman
Address:
0 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Page 46
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, is made as of September 21, 1999, by and between
Kaman Corporation, a Connecticut corporation (the "Company"), and
Xxxxxx X. Xxxxxxx(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, in furtherance of this objective, the Company and
Executive have executed an Employment Agreement dated as of
September 21, 1999; and
WHEREAS, the Board recognizes that the possibility of a Change
in Control exists and that such possibility, which will not be
addressed by the 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;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby
agree as follows:
1. Defined Terms. The definitions of capitalized terms
used in this Agreement are provided in the last Section of this
Agreement.
2. Term. [Intentionally Omitted]
3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive's continued employment, the Company
agrees, under the conditions described herein, to pay the Executive
the Severance Payments and the other payments and benefits
described in this Agreement. Except as provided in 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)
Page 47
a termination of the Executive's employment with the Company
following a Change in Control. This Agreement shall not be
construed as creating an express or implied contract of employment
and, except as otherwise agreed in writing between the Executive
and the Company, the Executive shall not have any right to be
retained in the employ of the Company.
4 Compensation Other Than Severance Payments.
4.1 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay the
Executive's full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Date of
Termination or, if Section 15 (o)(II) is applicable as an event or
circumstance constituting Good Reason, the rate in effect
immediately prior to such event or circumstance, together with all
compensation and benefits payable to the Executive through the Date
of Termination under the terms of the Company's compensation and
benefit plans, programs or arrangements as in effect immediately
prior to the Date of Termination (or, if more favorable to the
Executive, as in effect immediately prior to the first occurrence
of an event or circumstance constituting Good Reason), including,
but not limited to, the bonus for which the Executive is eligible
due to his or her employment during the calendar year in which the
Date of Termination occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan.
4.2 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay to
the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in
accordance with, the Company's retirement, insurance and other
compensation or benefit plans, programs and arrangements as in
effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good
Reason.
5. Severance Payments.
5.1 If the Executive's employment is terminated during the
thirty-six (36) month period 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
Page 48
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) two (2) 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) two (2)
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 twenty-four (24) month period immediately
following the Date of Termination, the Company shall arrange to
provide the Executive and his dependents medical, dental, and
accidental death and disability benefits substantially similar to
those provided to the Executive and his dependents immediately
prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
date or occurrence. Benefits otherwise receivable by the Executive
pursuant to this Section 5.1(b) shall be reduced to the extent
benefits of the same type are received by or made available to the
Executive during the twenty-four (24) month period following the
Date of Termination (and any such
Page 49
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 two 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 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.
(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
Page 50
(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
Page 51
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 52
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.
Page 53
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.
Page 54
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
Page 55
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
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. 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.
Page 56
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 anticipated failure after the issuance of a Notice
Page 57
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 or consolidation which would result in the
securities of the Company generally entitled to vote in the
Page 58
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
Page 59
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 65% of the
securities of such Subsidiary or such surviving entity or any
parent thereof outstanding immediately after such merger 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.
(a) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(b) "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.
(c) "Date of Termination" shall have the meaning set
forth in Section 6.2 of this Agreement.
(d) "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.
(e) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(f) "Excise Tax" shall mean any excise tax imposed
under Section 4999 of the Code.
(g) "Executive" shall mean the individual named in the
first paragraph of this Agreement.
Page 60
(h) "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,
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 Executive Vice
President and Chief Financial Officer of the Company or a substan-
tial 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 61
(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.
(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
Page 62
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
By: /S/ Xxxx X. Xxxx
/s/Xxxxxx X. Xxxxxxx Name: Xxxx X. Xxxx
Title: President and CEO
Address:
00 Xxxxxxxxxxx Xxxx
Xxxxx Xxxxxxxxxxx, XX 00000
Page 63
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, is made as of September 21, 1999, by and between
Kaman Corporation, a Connecticut corporation (the "Company"), and
Xxxxxx X. Xxxxx (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, in furtherance of this objective, the Company and
Executive have executed an Employment Agreement dated as of
September 21, 1999; and
WHEREAS, the Board recognizes that the possibility of a Change
in Control exists and that such possibility, which will not be
addressed by the 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;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby
agree as follows:
1. Defined Terms. The definitions of capitalized terms
used in this Agreement are provided in the last Section of this
Agreement.
2. Term. [Intentionally Omitted]
3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive's continued employment, the Company
agrees, under the conditions described herein, to pay the Executive
the Severance Payments and the other payments and benefits
described in this Agreement. Except as provided in 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
Page 64
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.
Page 65
5.1 If the Executive's employment is terminated during the
thirty-six (36) month period 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) two (2) 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) two (2)
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 twenty-four (24) 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
Page 66
Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
date or occurrence. Benefits otherwise receivable by the Executive
pursuant to this Section 5.1(b) shall be reduced to the extent
benefits of the same type are received by or made available to the
Executive during the 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.
(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 two 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
Page 67
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.
(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.
Page 68
(B) For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amount of
such Excise Tax, (i) all of the Total Payments shall be treated as
"parachute payments" (within the meaning of Section 280G(b)(2) of
the Code) unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by the
accounting firm which was, immediately prior to the Change in
Control, the Company's independent auditor (the "Auditor"), such
payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of Section 280G(b)(4)(A) of
the Code, (ii) all "excess parachute payments" within the meaning
of Section 280G(b)(l) of the Code shall be treated as subject to
the Excise Tax unless, in the opinion of Tax Counsel, such excess
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be 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.
Page 69
In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder in calculating the Gross-Up Payment
(including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of
such excess (plus any interest, penalties or additions payable by
the Executive with respect to such excess) within thirty (30) days
following the time that the amount of such excess is finally
determined. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.
5.3 The Company also shall reimburse the Executive for
legal fees and expenses incurred by the Executive in disputing in
good faith any issue hereunder relating to the termination of the
Executive's employment or in seeking in good faith to obtain or
enforce any benefit or right provided by this Agreement. Such
payments shall be made within ten (10) business days after delivery
of the Executive's written request for payment accompanied with
such evidence of fees and expenses incurred as the Company
reasonably may require.
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
Page 70
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. Further,
a Notice of Termination for Cause is required to include a copy of
a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board) finding that, in
the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
6.2 Date of Termination. "Date of Termination," with
respect to any purported termination of the Executive's employment
after a Change in Control, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall
not have returned to the full-time performance of the Executive's
duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) 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
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was given (including, but not limited to, salary) and continue the
Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was participating when the
notice giving rise to the dispute was given, until the Date of
Termination, as determined in accordance with Section 6.3 of this
Agreement. Amounts paid under this Section 6.4 are in addition to
all other amounts due under this Agreement (other than those due
under Section 4.1 of this Agreement) and shall not be offset
against or reduce any other amounts due under this Agreement.
7. No Mitigation. The Company agrees that under this
Agreement, if the Executive's employment with the Company
terminates, the Executive is not required to seek other employment
or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Section 5 of this Agreement or
Section 6.4 of this Agreement. Further, the amount of any payment
or benefit provided for in this Agreement (other than as
specifically provided in Section 5.1(b) of this Agreement) shall
not be reduced by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits,
by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.
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
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Executive) if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors,
personal representatives or administrators of the Executive's
estate.
9. Notices. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered
or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the Executive, to the
address inserted below the Executive's signature on the final page
hereof and, if to the Company, to the address set forth below, or
to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual receipt:
To the Company:
Kaman Corporation
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
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. 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.
Page 73
11. Validity; Counterparts. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of
this Agreement, which shall remain in full force and effect.
This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together
will constitute one and the same instrument.
12. Confidentiality. Unless required otherwise by law or
government regulation, the parties will maintain the terms and
conditions of this Agreement in confidence.
13. Settlement of Disputes. All claims by the Executive
for benefits under this Agreement shall be directed to and
determined by the Board and shall be in writing. Any denial by the
Board of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the
specific reasons for the denial and the specific provisions of this
Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a
claim and shall further allow the Executive to appeal to the Board
a decision of the Board within sixty (60) days after notification
by the Board that the Executive's claim has been denied.
14. Arbitration. Any further dispute or controversy
arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Hartford, Connecticut, in accordance
with the rules of the American Arbitration Association then in
effect; provided, however, that the evidentiary standards set forth
in this Agreement shall apply. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
Notwithstanding any provision of this Agreement to the contrary,
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.
Page 74
(d) "Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
(e) "Board" shall mean the Board of Directors of the
Company.
(f) "Cause" for termination by the Company of the
Executive's employment shall mean (i) the willful and continued
failure by the Executive to substantially perform the Executive's
duties with the Company (other than any such failure resulting from
the Executive's incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section
6.1 of this Agreement) after a written demand for substantial
performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the
Executive's duties, or (ii) the willful engaging by the Executive
in conduct which is demonstrably and materially injurious to the
Company or its subsidiaries, monetarily or otherwise. For purposes
of clauses (i) and (ii) of this definition, (x) no act, or failure
to act, on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive's act, or failure to
act, was in the best interest of the Company and (y) in the event
of a dispute concerning the application of this provision, no claim
by the Company that Cause exists shall be given effect unless the
Company establishes to the Board by clear and convincing evidence
that Cause exists.
(g) 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
Page 75
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 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
Page 76
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
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.
Page 77
(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,
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 Senior Vice President
and Chief Information 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
Page 78
Incentive Plan), unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in
terms of the amount or timing of payment of benefits provided and
the level of the Executive's participation relative to other
participants, as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to continue to
provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Company's life insurance,
health and accident, or disability plans in which the Executive was
participating immediately prior to the Change in Control, the
taking of any other action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive
at the time of the Change in Control, or the failure by the Company
to provide the Executive with the number of paid vacation days to
which the Executive is entitled on the basis of years of service
with the Company in accordance with the Company's normal vacation
policy in effect at the time of the Change in Control, provided,
however, that this paragraph shall not be construed to require the
Company to provide the Executive with a defined benefit pension
plan if no such plan is provided to similarly situated executive
officers of the Company or its Affiliates; or
(VII) any purported termination of the
Executive's employment which is not effected pursuant to a Notice
of Termination satisfying the requirements of Section 6.1 of this
Agreement; for purposes of this Agreement, no such purported
termination shall be effective.
The Executive's right to terminate the Executive's
employment for Good Reason shall not be affected by the Executive's
incapacity due to physical or mental illness. The Executive's
continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
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.
Page 79
(q) "Notice of Termination" shall have the meaning set
forth in Section 6.1 of this Agreement.
(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
By: /s/ Xxxx X. Xxxx
/s/Xxxxxx X. Xxxxx Name: Xxxx X. Xxxx
Title: President and CEO
Address:
000 Xxxxxxxx Xxx.
Xxxxxxx, XX 00000
Page 80
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, is made as of September 21, 1999, by and between
Kaman Corporation, a Connecticut corporation (the "Company"), and
Xxxxxxx X. Xxxxx (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, in furtherance of this objective, the Company and
Executive have executed an Employment Agreement dated as of
September 21, 1999; and
WHEREAS, the Board recognizes that the possibility of a Change
in
Control exists and that such possibility, which will not be
addressed by the 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;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby
agree as follows:
1. Defined Terms. The definitions of capitalized terms
used in this Agreement are provided in the last Section of this
Agreement.
2. Term. [Intentionally Omitted]
3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive's continued employment, the Company
agrees, under the conditions described herein, to pay the Executive
the Severance Payments and the other payments and benefits
described in this Agreement. Except as provided in 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
Page 81
following a Change in Control. This Agreement shall not be
construed as creating an express or implied contract of employment
and, except as otherwise agreed in writing between the Executive
and the Company, the Executive shall not have any right to be
retained in the employ of the Company.
4. Compensation Other Than Severance Payments.
4.1 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay the
Executive's full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Date of
Termination or, if Section 15 (o)(II) is applicable as an event or
circumstance constituting Good Reason, the rate in effect
immediately prior to such event or circumstance, together with all
compensation and benefits payable to the Executive through the Date
of Termination under the terms of the Company's compensation and
benefit plans, programs or arrangements as in effect immediately
prior to the Date of Termination (or, if more favorable to the
Executive, as in effect immediately prior to the first occurrence
of an event or circumstance constituting Good Reason), including,
but not limited to, the bonus for which the Executive is eligible
due to his or her employment during the calendar year in which the
Date of Termination occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan.
4.2 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay to
the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in
accordance with, the Company's retirement, insurance and other
compensation or benefit plans, programs and arrangements as in
effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good
Reason.
5. Severance Payments.
5.1 If the Executive's employment is terminated during the
thirty-six (36) month period 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
Page 82
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) two (2) 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) two (2)
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 twenty-four (24) month period immediately
following the Date of Termination, the Company shall arrange to
provide the Executive and his dependents medical, dental, and
accidental death and disability benefits substantially similar to
those provided to the Executive and his dependents immediately
prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
date or occurrence. Benefits otherwise receivable by the Executive
Page 83
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 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.
(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 two 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 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.
Page 84
(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 her
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
Page 85
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be 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 86
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.
Page 87
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.
Page 88
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
requested, postage prepaid, addressed, if to the Executive, to the
Page 89
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: Xxxx X. Xxxx, President
10. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and
the 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. 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.
Page 90
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 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
Page 91
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 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
Page 92
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
parent thereof outstanding immediately after such merger or
Page 93
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,
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:
Page 94
(I) the assignment to the Executive of any duties
inconsistent with the Executive's status as Senior Vice President
and Chief Legal 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;
(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
Page 95
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.
(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.
Page 96
(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
By: /s/ Xxxx X. Xxxx
/s/Xxxxxxx X. Xxxxx Name: Xxxx X. Xxxx
Title: President and CEO
Address:
00 Xxxxxxx Xxxx
Xxxx, XX 00000
Page 97
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, is made as of September 21, 1999, by and between
Kaman Industrial Technologies Corporation, a Connecticut
corporation (the "Company"), and T. Xxxx Xxxxxx (the "Executive").
WHEREAS, the Company considers it essential to the best
interests
of its shareholder to xxxxxx the continued employment of key
management personnel; and
WHEREAS, in furtherance of this objective, the Company and
Executive have executed an Employment Agreement dated as of
September 21, 1999; and
WHEREAS, the Board recognizes that the possibility of a Change
in Control exists and that such possibility, which will not be
addressed by the 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 shareholder; 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;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby
agree as follows:
1. Defined Terms. The definitions of capitalized terms
used in this Agreement are provided in the last Section of this
Agreement.
2. Term. [Intentionally Omitted]
3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive's continued employment, the Company
agrees, under the conditions described herein, to pay the Executive
the Severance Payments and the other payments and benefits
described in this Agreement. Except as provided in 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.
Page 98
4. Compensation Other Than Severance Payments.
4.1 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay the
Executive's full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Date of
Termination or, if Section 15 (o)(II) is applicable as an event or
circumstance constituting Good Reason, the rate in effect
immediately prior to such event or circumstance, together with all
compensation and benefits payable to the Executive through the Date
of Termination under the terms of the Company's compensation and
benefit plans, programs or arrangements as in effect immediately
prior to the Date of Termination (or, if more favorable to the
Executive, as in effect immediately prior to the first occurrence
of an event or circumstance constituting Good Reason), including,
but not limited to, the bonus for which the Executive is eligible
due to his or her employment during the calendar year in which the
Date of Termination occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan.
4.2 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay to
the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in
accordance with, the Company's retirement, insurance and other
compensation or benefit plans, programs and arrangements as in
effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good
Reason.
5. Severance Payments.
5.1 If the Executive's employment is terminated during the
thirty-six (36) month period 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
Page 99
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) two (2) 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) two (2)
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 or through the Company.
(b) For the twenty-four (24) month period immediately
following the Date of Termination, the Company shall arrange to
provide the Executive and his dependents medical, dental, and
accidental death and disability benefits substantially similar to
those provided to the Executive and his dependents immediately
prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
date or occurrence. Benefits otherwise receivable by the Executive
pursuant to this Section 5.1(b) shall be reduced to the extent
benefits of the same type are received by or made available to the
Executive during the 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.
Page 100
(c) Notwithstanding any provision to the contrary in
any plan or agreement maintained by or through the Company pursuant
to which the Executive has been granted restricted stock, stock
options 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 Parent 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 or through 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 two 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 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.
(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 or through 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.
Page 101
(g) The Company shall provide the Executive with
reimbursement for outplacement services received by the Executive
for up to Thirty Thousand Dollars ($30,000), but only until the
first acceptance by the Executive of an offer of employment.
(h) The Company shall provide the Executive with his
Company automobile. The book value then attributed to it by the
leasing company will be considered "fringe benefit" income and that
amount will be subject to tax during the calendar year in which the
Date of Termination occurs.
5.2 (A) Whether or not the Executive becomes entitled to
the Severance Payments, if any of the payments or benefits received
or to be received by the Executive in connection with a Change in
Control or the Executive's termination of employment (whether
pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with the
Company or such Person) (such payments or benefits, excluding the
Gross-Up Payment, being hereinafter referred to as the "Total
Payments") will be subject to the Excise Tax, the Company shall pay
to the Executive an additional amount (the "Gross-Up Payment") such
that the net amount retained by the Executive, after deduction of
any Excise Tax on the Total Payments and any federal, state and
local income and employment taxes and Excise Tax upon the Gross-Up
Payment, shall be equal to the Total Payments.
(B) For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amount of
such Excise Tax, (i) all of the Total Payments shall be treated as
"parachute payments" (within the meaning of Section 280G(b)(2) of
the Code) unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by the
accounting firm which was, immediately prior to the Change in
Control, the Company's independent auditor (the "Auditor"), such
payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of Section 280G(b)(4)(A) of
the Code, (ii) all "excess parachute payments" within the meaning
of Section 280G(b)(l) of the Code shall be treated as subject to
the Excise Tax unless, in the opinion of Tax Counsel, such excess
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be determined by
the Auditor in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining the
Page 102
amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment
is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the
Executive's residence on the Date of Termination (or if there is no
Date of Termination, then the date on which the Gross-Up Payment is
calculated for purposes of this Section 5.2), net of the maximum
reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder
in calculating the Gross-Up Payment, the Executive shall repay to
the Company, within thirty (30) days following the time that the
amount of such reduction in the Excise Tax is finally determined,
the portion of the Gross-Up Payment attributable to such reduction
(plus that portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income and employment taxes
imposed on the Gross-Up Payment being repaid by the Executive), to
the extent that such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the Executive's taxable
income and wages for purposes of federal, state and local income
and employment taxes, plus interest on the amount of such repayment
at 120% of the rate provided in Section 1274(b)(2)(B) of the Code.
In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder in calculating the Gross-Up Payment
(including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of
such excess (plus any interest, penalties or additions payable by
the Executive with respect to such excess) within thirty (30) days
following the time that the amount of such excess is finally
determined. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.
5.3 The Company also shall reimburse the Executive for
legal fees and expenses incurred by the Executive in disputing in
good faith any issue hereunder relating to the termination of the
Executive's employment or in seeking in good faith to obtain or
enforce any benefit or right provided by this Agreement. Such
payments shall be made within ten (10) business days after delivery
of the Executive's written request for payment accompanied with
such evidence of fees and expenses incurred as the Company
reasonably may require.
Page 103
5.4 The payments provided in subsections (a) and (c) of
Section 5.1 shall be made on the last day of the Executive's
employment. The payments provided in Section 5.2 of this Agreement
shall be made as soon as practicable following the Date of
Termination, but in no event later than thirty (30) days following
the Date of Termination. If payments are not made in the time
frame required by this subsection, interest on the unpaid amounts
will accrue at 120% of the rate provided in Section 1274(b)(2)(B)
of the Code until the date such payments are actually made. At the
time that payments are made under this Agreement, the Company shall
provide the Executive with a written statement setting forth the
manner in which such payments were calculated and the basis for
such calculations including, without limitation, any opinions or
other advice the Company has received from Tax Counsel, the Auditor
or other advisors or consultants (and any such opinions or advice
which are in writing shall be attached to the statement).
6. Termination Procedures and Compensation During Dispute.
6.1 Notice of Termination. After a Change in Control, any
purported termination of the Executive's employment (other than by
reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in
accordance with Section 9 of this Agreement. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. Further,
a Notice of Termination for Cause is required to include a copy of
a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board) finding that, in
the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
6.2 Date of Termination. "Date of Termination," with
respect to any purported termination of the Executive's employment
after a Change in Control, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall
not have returned to the full-time performance of the Executive's
duties during such thirty (30) day period), and (ii) if the
Page 104
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.
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.
Page 105
8. Successors; Binding Agreement.
8.1 In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this
Agreement in accordance with its terms. Failure of the Company to
obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle
the Executive to compensation from the Company in the same amount
and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's
employment for Good Reason after a Change in Control, except that,
for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination.
8.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive shall die while any amount
would still be payable to the Executive hereunder (other than
amounts which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors,
personal representatives or administrators of the Executive's
estate.
9. Notices. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered
or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the Executive, to the
address inserted below the Executive's signature on the final page
hereof and, if to the Company, to the address set forth below, or
to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual receipt:
To the Company:
c/o Kaman Corporation
0000 Xxxx Xxxxx Xxx., X.X. Xxx 0
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Secretary
Page 106
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 officer of the Company, or his designee, who is also an officer
of the Parent 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.
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.
Page 107
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 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
Page 108
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 (i) the Parent Company
representing 35% or more of the then outstanding securities of the
Parent Company generally entitled to vote in the election of
directors of the Parent Company, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described
in clause (i) of paragraph (II) below, or (ii) any Person is or
becomes the Beneficial Owner, directly or indirectly, of securities
of (i) 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) there is consummated a merger or
consolidation of the Parent Company with any other business entity,
other than (i) a merger or consolidation which would result in the
securities of the Parent Company generally entitled to vote in the
election of directors of the Parent 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
Parent Company or any subsidiary of the Parent Company, at least
65% of the securities of the Parent 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 Parent Company or such surviving
entity or any parent thereof, or (ii) a merger or consolidation
effected to implement a recapitalization of the Parent Company (or
similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the
Parent Company representing 35% or more of the then outstanding
securities of the Parent Company generally entitled to vote in the
election of directors of the Parent Company; or
Page 109
(III) there is consummated a merger or
consolidation of the Company with any other business entity, other
than (i) a merger 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, (iii) any merger or consolidation with
another direct or indirect subsidiary of the Parent Company; or
(iv) any merger or consolidation of the Company with a Subsidiary
of the Company;
(IV) the stockholders of the Parent Company
approve a plan of complete liquidation or dissolution of the Parent
Company or there is consummated the sale or disposition by the
Parent Company of all or substantially all of the Parent Company's
assets, other than a sale or disposition by the Parent Company of
all or substantially all of the Parent Company's assets to an
entity where the outstanding securities generally entitled to vote
in the election of directors of the Parent 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;
(V) the following individuals cease for any
reason to constitute a majority of the number of directors of the
board of directors of the Parent Company then serving: individuals
who, on the date of this Agreement, constitute the board of
directors of the Parent Company 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 Parent Company and whose appointment or election was not
approved by at least two-thirds (2/3) of the directors of the
Parent Company in office immediately prior to any such contest)
whose appointment or
Page 110
election by the board of directors of the Parent Company or
nomination for election by the Parent Company's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of
the directors then in office;
(VI) 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, of which at
least 65% of the outstanding securities generally entitled to vote
in the election of directors are owned by the Parent Company or a
direct or indirect subsidiary of the Parent Company.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur in the event of a distribution or spin-off of
shares of the capital stock of the Company to the shareholders of
the Parent Company and this Agreement shall terminate on the date
that such distribution or spin off is effectuated.
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 Industrial Technologies
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.
Page 111
(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,
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 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 112
(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.
(r) "Parent Company" shall mean Kaman Corporation
and, except in determining under Section 15(g) hereof whether or
not any Change in Control of the Parent Company has occurred, shall
include any successor to its business and/or assets.
(s) "Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof, except that such term shall not include (i) the
Parent Company or the Company or any of their direct or indirect
Page 113
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 stockholder 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 of directors of the Parent Company, the
right to vote all securities of the Parent Company generally
entitled to vote in the election of directors of the Parent
Company, of which he or any such entity is the Beneficial Owner.
(t) "Severance Payments" shall have the meaning set
forth in Section 5.1 of this Agreement.
(u) "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.
(v) "Tax Counsel" shall have the meaning set forth in
Section 5.2 of this Agreement.
(w) "Term" shall mean the period of time described in
Section 2 of this Agreement.
(x) "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 Industrial Technologies
Corporation
By: /s/ Xxxxxx X. Xxxxxxx
/s/ T. Xxxx Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Address:
0 Xxxxxxx Xxxx Xx.
Xxxxxxxx, XX 00000
Page 114
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, is made as of September 21, 1999, by and between
Kaman Music Corporation, a Connecticut corporation (the "Company"),
and Xxxxxx X. Xxxxxxxx, Xx. (the "Executive").
WHEREAS, the Company considers it essential to the best
interests
of its shareholder to xxxxxx the continued employment of key
management personnel; and
WHEREAS, in furtherance of this objective, the Company and
Executive have executed an Employment Agreement dated as of
September 21, 1999; and
WHEREAS, the Board recognizes that the possibility of a Change
in
Control exists and that such possibility, which will not be
addressed by the 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 shareholder; 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;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby
agree as follows:
1. Defined Terms. The definitions of capitalized terms
used in this Agreement are provided in the last Section of this
Agreement.
2. Term. [Intentionally Omitted]
3. Company's Covenants Summarized. In order to induce the
Executive to remain in the employ of the Company and in
consideration of the Executive's continued employment, the Company
agrees, under the conditions described herein, to pay the Executive
the Severance Payments and the other payments and benefits
described in this Agreement. Except as provided in 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
Page 115
construed as creating an express or implied contract of employment
and, except as otherwise agreed in writing between the Executive
and the Company, the Executive shall not have any right to be
retained in the employ of the Company.
4. Compensation Other Than Severance Payments.
4.1 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay the
Executive's full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Date of
Termination or, if Section 15 (o)(II) is applicable as an event or
circumstance constituting Good Reason, the rate in effect
immediately prior to such event or circumstance, together with all
compensation and benefits payable to the Executive through the Date
of Termination under the terms of the Company's compensation and
benefit plans, programs or arrangements as in effect immediately
prior to the Date of Termination (or, if more favorable to the
Executive, as in effect immediately prior to the first occurrence
of an event or circumstance constituting Good Reason), including,
but not limited to, the bonus for which the Executive is eligible
due to his or her employment during the calendar year in which the
Date of Termination occurs, with such bonus to be pro rated and
calculated in accordance with the Kaman Corporation Cash Bonus
Plan.
4.2 If the Executive's employment shall be terminated for
any reason following a Change in Control, the Company shall pay to
the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in
accordance with, the Company's retirement, insurance and other
compensation or benefit plans, programs and arrangements as in
effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good
Reason.
5. Severance Payments.
5.1 If the Executive's employment is terminated during the
thirty-six (36) month period 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
Page 116
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) two (2) 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) two (2)
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 or through the Company.
(b) For the twenty-four (24) month period immediately
following the Date of Termination, the Company shall arrange to
provide the Executive and his dependents medical, dental, and
accidental death and disability benefits substantially similar to
those provided to the Executive and his dependents immediately
prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
date or occurrence. Benefits otherwise receivable by the Executive
pursuant to this Section 5.1(b) shall be reduced to the extent
benefits of the same type are received by or made available to the
Executive during the twenty-four (24) month period following the
Date of Termination (and any such benefits received by or made
Page 117
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 or through 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 Parent 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 or through 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 two 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 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.
Page 118
(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 or through 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
Page 119
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the Base Amount
allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be determined by
the Auditor in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment
is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the
Executive's residence on the Date of Termination (or if there is no
Date of Termination, then the date on which the Gross-Up Payment is
calculated for purposes of this Section 5.2), net of the maximum
reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
(C) In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder
in calculating the Gross-Up Payment, the Executive shall repay to
the Company, within thirty (30) days following the time that the
amount of such reduction in the Excise Tax is finally determined,
the portion of the Gross-Up Payment attributable to such reduction
(plus that portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income and employment taxes
imposed on the Gross-Up Payment being repaid by the Executive), to
the extent that such repayment results in a reduction in the Excise
Tax and a dollar-for-dollar reduction in the Executive's taxable
income and wages for purposes of federal, state and local income
and employment taxes, plus interest on the amount of such repayment
at 120% of the rate provided in Section 1274(b)(2)(B) of the Code.
In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder in calculating the Gross-Up Payment
(including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of
such excess (plus any interest, penalties or additions payable by
the Executive with respect to such excess) within thirty (30) days
following the time that the amount of such excess is finally
determined. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.
5.3 The Company also shall reimburse the Executive for
legal fees and expenses incurred by the Executive in disputing in
good faith any issue hereunder relating to the termination of the
Page 120
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.
Page 121
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.
Page 122
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
requested, postage prepaid, addressed, if to the Executive, to the
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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:
c/o 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 officer of the Company, or his designee, who is also an officer
of the Parent 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.
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
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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 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
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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 (i) the Parent Company
representing 35% or more of the then outstanding securities of the
Parent Company generally entitled to vote in the election of
directors of the Parent Company, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described
in clause (i) of paragraph (II) below, or (ii) any Person is or
becomes the Beneficial Owner, directly or indirectly, of securities
of (i) 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) there is consummated a merger or
consolidation of the Parent Company with any other business entity,
other than (i) a merger or consolidation which would result in the
securities of the Parent Company generally entitled to vote in the
election of directors of the Parent 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
Parent Company or any subsidiary of the Parent Company, at least
65% of the securities of the Parent 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 Parent Company or such surviving
entity or any parent thereof, or (ii) a merger or consolidation
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effected to implement a recapitalization of the Parent Company (or
similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the
Parent Company representing 35% or more of the then outstanding
securities of the Parent Company generally entitled to vote in the
election of directors of the Parent Company; or
(III) there is consummated a merger or
consolidation of the Company with any other business entity, other
than (i) a merger 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, (iii) any merger or consolidation with
another direct or indirect subsidiary of the Parent Company; or
(iv) any merger or consolidation of the Company with a Subsidiary
of the Company;
(IV) the stockholders of the Parent Company
approve a plan of complete liquidation or dissolution of the Parent
Company or there is consummated the sale or disposition by the
Parent Company of all or substantially all of the Parent Company's
assets, other than a sale or disposition by the Parent Company of
all or substantially all of the Parent Company's assets to an
entity where the outstanding securities generally entitled to vote
in the election of directors of the Parent 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;
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(V) the following individuals cease for any
reason to constitute a majority of the number of directors of the
board of directors of the Parent Company then serving: individuals
who, on the date of this Agreement, constitute the board of
directors of the Parent Company 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 Parent Company and whose appointment or election was not
approved by at least two-thirds (2/3) of the directors of the
Parent Company in office immediately prior to any such contest)
whose appointment or election by the board of directors of the
Parent Company or nomination for election by the Parent Company's
stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then in office;
(VI) 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, of which at
least 65% of the outstanding securities generally entitled to vote
in the election of directors are owned by the Parent Company or a
direct or indirect subsidiary of the Parent Company.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur in the event of a distribution or spin-off of
shares of the capital stock of the Company to the shareholders of
the Parent Company and this Agreement shall terminate on the date
that such distribution or spin off is effectuated.
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 Music 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)
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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,
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 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;
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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 1993 Stock
Incentive Plan), unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in
terms of the amount or timing of payment of benefits provided and
the level of the Executive's participation relative to other
participants, as existed immediately prior to the Change in
Control;
(VI) the failure by the Company to continue to
provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Company's life insurance,
health and accident, or disability plans in which the Executive was
participating immediately prior to the Change in Control, the
taking of any other action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive
at the time of the Change in Control, or the failure by the Company
to provide the Executive with the number of paid vacation days to
which the Executive is entitled on the basis of years of service
with the Company in accordance with the Company's normal vacation
policy in effect at the time of the Change in Control, provided,
however, that this paragraph shall not be construed to require the
Company to provide the Executive with a defined benefit pension
plan if no such plan is provided to similarly situated executive
officers of the Company or its Affiliates; or
(VII) any purported termination of the
Executive's employment which is not effected pursuant to a Notice
of Termination satisfying the requirements of Section 6.1 of this
Agreement; for purposes of this Agreement, no such purported
termination shall be effective.
The Executive's right to terminate the Executive's
employment for Good Reason shall not be affected by the Executive's
incapacity due to physical or mental illness. The Executive's
continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
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.
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(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.
(r) "Parent Company" shall mean Kaman Corporation
and, except in determining under Section 15(g) hereof whether or
not any Change in Control of the Parent Company has occurred, shall
include any successor to its business and/or assets.
(s) "Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof, except that such term shall not include (i) the
Parent Company or the Company or any of their 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 stockholder 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 of directors of the Parent Company, the
right to vote all securities of the Parent Company generally
entitled to vote in the election of directors of the Parent
Company, of which he or any such entity is the Beneficial Owner.
(t) "Severance Payments" shall have the meaning set
forth in Section 5.1 of this Agreement.
(u) "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.
(v) "Tax Counsel" shall have the meaning set forth in
Section 5.2 of this Agreement.
(w) "Term" shall mean the period of time described in
Section 2 of this Agreement.
(x) "Total Payments" shall mean those payments so
described in Section 5.2 of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this agreement
as of the date and year first above written.
Kaman Music Corporation
By: /s/ Xxxxxx X. Xxxxxxx
/s/Xxxxxx X. Xxxxxxxx, Xx. Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Address:
000 Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
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