UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
- --- SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED
September 30, 2001.
------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
- --- SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM TO
--------------- --------------.
Commission File No. 0-1093
KAMAN CORPORATION
----------------------------------------------------
(Exact Name of Registrant as specified in its charter)
Connecticut 06-0613548
- --------------------------------- --------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1332 Blue Hills Avenue
Bloomfield, Connecticut 06002
----------------------------------------
(Address of Principal Executive Offices)
(860) 243-7100
--------------------------------------------------
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of October 31, 2001:
Class A Common 21,698,521
Class B Common 667,814
Page 1 of 20 Pages
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets(In thousands)
Assets September 30, 2001 December 31, 2000
------ ------------------ ------------------
Current assets:
Cash and cash equivalents $ 20,792 $ 48,157
Accounts receivable (net of
allowance for doubtful
accounts of $4,315 in
2001, $4,636 in 2000) 208,396 212,374
Inventories:
Contracts and other
work in process 64,712 65,918
Finished goods 42,613 41,590
Merchandise for resale 85,611 192,936 88,640 196,148
------- -------
Other current assets 30,875 25,321
-------- -------
Total current assets 452,999 482,000
Property, plant & equip., at cost 171,077 170,895
Less accumulated depreciation
and amortization 110,933 107,190
------- -------
Net property, plant & equipment 60,144 63,705
Other assets 9,911 8,125
-------- --------
$523,054 $553,830
======== ========
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Notes payable $ 4,228 $ 3,720
Accounts payable 44,377 58,057
Accrued liabilities 28,254 30,300
Advances on contracts 36,356 41,905
Other current liabilities 33,149 35,244
Income taxes payable --- 4,116
-------- -------
Total current liabilities 146,364 173,342
Deferred credits 23,103 23,556
Long-term debt, excl. current portion 23,226 24,886
Shareholders' equity 330,361 332,046
-------- --------
$523,054 $553,830
======== ========
- 2 -
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 1. Financial Statements, Continued:
Condensed Consolidated Statements of Operations
(In thousands except per share amounts)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- ------------------
2001 2000 2001 2000
---- ---- ---- ----
Revenues $219,419 $255,433 $658,752 $778,810
Costs and expenses:
Cost of sales 164,243 191,540 514,800 586,420
Selling, general and
administrative expense 43,352 49,071 139,671 149,905
Interest (income)/expense, net 215 (466) 207 (1,380)
Other (income)/expense, net 208 378 (2,323) 1,103
-------- -------- -------- --------
208,018 240,523 652,355 736,048
-------- -------- -------- --------
Earnings before income taxes 11,401 14,910 6,397 42,762
Income taxes 2,875 5,375 1,625 15,400
-------- -------- -------- --------
Net earnings $ 8,526 $ 9,535 $ 4,772 $ 27,362
======== ======== ======== ========
Net earnings per share:
Basic $ .38 $ .41 $ .21 $ 1.18
Diluted* $ .37 $ .40 $ .21 $ 1.15
======== ======== ======== ========
Dividends declared per share $ .11 $ .11 $ .33 $ .33
======== ======== ======== ========
*The calculated diluted per share amount for the nine months ended September
30, 2001 is anti-dilutive, therefore, amount shown is equal to the basic per
share calculation.
- 3 -
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 1. Financial Statements, Continued:
Condensed Consolidated Statements of Cash Flows
(In thousands)
For the Nine Months
Ended September 30,
--------------------
2001 2000
--------- --------
Cash flows from operating activities:
Net earnings $ 4,772 $ 27,362
Depreciation and amortization 8,558 8,657
Net gain on sale of assets (2,679) -
Deferred income taxes (4,875) (1,650)
Other, net 1,299 4,999
Changes in assets and liabilities, excluding
effects of acquisition:
Accounts receivable 9,320 (42,818)
Inventory 7,983 4,677
Accounts payable (16,262) 4,796
Advances on contracts (5,549) (5,591)
Income taxes payable (4,116) 2,179
Changes in other current assets
and liabilities (7,634) 1,387
-------- --------
Cash provided by (used in) operating
activities (9,183) 3,998
-------- --------
Cash flows from investing activities:
Proceeds from sale of assets 4,043 -
Expenditures for property, plant & equipment (5,627) (7,081)
Acquisition of business, less cash acquired (8,270) -
Other, net (213) (623)
-------- --------
Cash provided by (used in) investing
activities (10,067) (7,704)
-------- --------
Cash flows from financing activities:
Additions/(reductions) to notes payable 508 (448)
Reductions to long-term debt (1,660) (1,660)
Purchase of treasury stock (806) (1,116)
Dividends paid (7,370) (7,640)
Proceeds from sale of stock 1,213 1,477
-------- --------
Cash provided by (used in) financing
activities (8,115) (9,387)
-------- --------
Net increase (decrease) in cash and cash equivalents (27,365) (13,093)
Cash and cash equivalents at beginning of period 48,157 76,249
-------- --------
Cash and cash equivalents at end of period $ 20,792 $63,156
======== ========
- 4 -
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 1. Financial Statements, Continued:
Notes to Condensed Consolidated Financial Statements
(In thousands)
Basis of Presentation
- ----------------------
The December 31, 2000 condensed consolidated balance sheet amounts
have been derived from the previously audited consolidated balance
sheet of Kaman Corporation and subsidiaries.
In the opinion of management, the balance of the condensed
financial information reflects all adjustments which are necessary
for a fair presentation of the financial position, results of
operations and cash flows for the interim periods presented and are
of a normal recurring nature, unless otherwise disclosed in this
report.
The statements should be read in conjunction with the notes to the
consolidated financial statements included in Kaman Corporation's
2000 Annual Report.
Gain From The Sale Of Facilities
- --------------------------------
Included in "Other (income)/expense, net" for 2001 are the gains
from the sale of facilities of $2,679 for the nine-month period.
Cash Flow Items
- ---------------
Cash payments for interest were $2,056 and $2,215 for the nine
months ended September 30, 2001 and 2000, respectively. Cash
payments for income taxes for the comparable periods were $11,930
and $14,682, respectively.
Comprehensive Income
- --------------------
Comprehensive income was $4,634 and $27,235 for the nine months
ended September 30, 2001 and 2000, respectively. Comprehensive
income was $8,428 and $9,481 for the three months ended
September 30, 2001 and 2000, respectively. The changes to net
earnings used to determine comprehensive income are foreign
currency translation adjustments.
- 5 -
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 1. Financial Statements, Continued:
Notes to Condensed Consolidated Financial Statements
(In thousands)
Shareholders' Equity
- --------------------
Changes in shareholders' equity were as follows:
Balance, January 1, 2001 $332,046
Net earnings 4,772
Foreign currency translation adjustment (138)
-------
Comprehensive income 4,634
Dividends declared (7,386)
Purchase of treasury stock (806)
Employee stock plans 1,873
--------
Balance September 30, 2001 $330,361
========
Recent Accounting Standards
- ---------------------------
In June 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 141,
"Business Combinations" ("SFAS 141"), and No. 142,
"Goodwill and Other Intangible Assets" ("SFAS 142"), which
are effective July 1, 2001 and January 1, 2002, respectively,
for the corporation. SFAS 141 requires all business combinations
initiated after June 30, 2001 to use the purchase method of
accounting. SFAS 142 will discontinue the amortization of
goodwill, including goodwill recorded in past business
combinations, upon adoption of this standard. All goodwill and
intangible assets with indefinite useful lives will be evaluated on
an ongoing basis for impairment in accordance with the provisions
of the Statement. Based upon the corporation's initial assessment
of these Statements, adoption is not anticipated to have a material
impact on the corporation's financial position or results of
operations.
- 6-
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 1. Financial Statements, Continued:
Business Segments
- -----------------
Summarized financial information by business segment is as follows:
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
--------------------- --------------------
2001 2000 2001 2000
--------- --------- --------- --------
Net sales:
Aerospace $ 77,095 $ 85,608 $223,807 $280,958
Industrial Distribution 109,577 133,464 345,681 403,003
Music Distribution 32,430 36,088 88,441 94,013
-------- -------- -------- --------
$219,102 $255,160 $657,929 $777,974
======== ======== ======== ========
Operating profit (loss):
Aerospace $ 8,052 $ 10,856 $ (2,688) $ 33,047
Industrial Distribution 2,676 5,200 11,336 16,845
Music Distribution 2,278 2,527 4,160 4,556
-------- -------- -------- --------
13,006 18,583 12,808 54,448
Interest, corporate and
other expense, net (1,605) (3,673) (6,411) (11,686)
-------- -------- -------- --------
Earnings before income
taxes $ 11,401 $ 14,910 $ 6,397 $ 42,762
======== ======== ======== ========
September 30, December 31,
2001 2000
-------- --------
Identifiable assets:
Aerospace $293,715 $307,762
Industrial Distribution 138,387 137,297
Music Distribution 52,847 53,444
Corporate 38,105 55,327
-------- --------
$523,054 $553,830
======== ========
- 7-
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
- ---------------------
Consolidated revenues for the quarter and nine months ended
September 30, 2001 were $219.4 million and $658.8 million
respectively, compared to $255.4 million and $778.8 million for the
comparable periods of 2000. These results reflect a weak global
economy and were affected by a second quarter sales and pre-tax
earnings adjustment in the Aerospace segment of $31.2 million,
substantially all of which was associated with a change in
estimated costs to complete the SH-2G(A) helicopter program for
Australia. This adjustment has had the effect of lowering the
profit rate on the Australia program as of June 30 and for the
balance of the contract. The cost growth is related to a contract
dispute settlement with Litton Guidance and Control Systems (now
part of Northrop Grumman) regarding development of an advanced
Integrated Tactical Avionics System (ITAS) that is unique to the
Australia program. The corporation is in the process of completing
negotiations for replacement subcontracts, a principal element of
that cost growth.
Aerospace segment net sales were $77.1 million and $223.8 million
for the third quarter and nine-month period of 2001, respectively,
compared to $85.6 million and $281.0 million in the same periods of
last year. The Aerospace segment's principal programs include
helicopter manufacturing, aircraft structures subcontract work and
manufacture of components such as self-lubricating bearings and
drive-line couplings for aircraft applications, and advanced
technology products.
The corporation's helicopter programs include the SH-2G
multi-mission naval helicopter and the K-MAX (registered trademark)
medium-to-heavy lift helicopter. Helicopter programs represented
approximately 43 percent of segment net sales for the third quarter
of 2001, compared to approximately 54 percent for 2000. The lower
percentage for the third quarter is due to a tapering off in
revenues from the SH-2G program as the Australia and New Zealand
programs mature and lower K-MAX program sales.
The SH-2G helicopter program (which constituted virtually all of
the segment's total helicopter program sales in the third quarter)
generally involves retrofit of the corporation's SH-2F helicopters,
previously manufactured for the U.S. Navy (and in storage) to the
SH-2G configuration. The corporation is currently performing this
work under commercial contracts with the governments of Australia
and New Zealand.
Page 8
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The program for New Zealand involves five (5) aircraft and support
for the Royal New Zealand Navy. The contract has an anticipated
value of about $185 million (US), of which 92 percent has now been
recorded as revenue. Two aircraft were shipped during the second
quarter and two aircraft are scheduled for shipment before the end
of the year, with final acceptance of these four aircraft to follow
thereafter. Delivery of the fifth aircraft, which was ordered after
the initial contract, is planned for next year.
The program for Australia involves eleven (11)helicopters with
support, including a support services facility, for the Royal
Australian Navy. The total contract has an anticipated value of
about $700 million (US). The helicopter production portion of the
work is currently valued at $580 million, of which 81 percent
(including the effect of the second quarter adjustment) has
been recorded as revenue.
One result of the process of negotiating new subcontracts for
production of the full ITAS software is that Kaman will have
responsibility for aircraft integration testing (a task previously
subcontracted to Litton). This new responsibility along with the
estimated time frame for the subcontractors' development of the
full ITAS software suggests that there will be a longer delay than
previously anticipated in delivery of the full ITAS software to
Australia. The corporation is working with the Royal Australian
Navy to develop satisfactory procedures for approval of the new
software subcontractor arrangements being made, and thereafter
procedures for interim acceptance of the aircraft without the full
ITAS software. When fully equipped with ITAS, the SH-2G (A) will
provide the most sophisticated, integrated cockpit and weapons
available in an intermediate-weight helicopter.
The corporation believes that international market opportunities
for the SH-2G are good, even though the market is highly
competitive and influenced by political and economic conditions.
The corporation is currently in a competition to provide six search
and rescue helicopters for the government of Egypt, however, an
award decision is not expected until after the end of this year.
The corporation is also in discussions with the U.S. Navy regarding
refurbishment of four of the U.S. Naval Reserve's surplus SH-2G
helicopters for the Polish navy, along with future training and
support.
Page 9
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The corporation has taken a consignment of the Navy's inventory of
SH-2 spare parts under a multi-year agreement that provides the
corporation the ability to utilize certain inventory for support of
the corporation's other SH-2 programs.
On the K-MAX helicopter program, the corporation continues its
efforts to refocus sales development on global market opportunities
in industry and government, including oil and gas exploration,
power line and other utility construction, fire fighting, law
enforcement, unmanned vehicle applications and the movement of
equipment.
Net sales for the portion of the Aerospace segment that performs
subcontract work and manufactures aircraft components represented
about 40 percent of sales for the third quarter, compared to
approximately 32 percent in the period last year. The segment is
involved in a number of commercial and defense aviation programs,
including production of wing structures and other components for
virtually all Boeing commercial aircraft as well as components for
the Boeing C-17 transport and F-22 fighter. The Aerospace
segment's component manufacturing includes self-lubricating
bearings for use principally in aircraft flight controls, turbine
engines and landing gear, and driveline couplings for helicopters;
this business had another favorable quarter with increased sales
compared to last year. Given the importance of Boeing as a customer
to the Aerospace subcontract and component manufacturing business,
management is concerned by Boeing's warnings of a significant
decline in commercial aircraft production for 2002 and 2003, a
situation made worse by the tragic events of September 11,
2001. Management intends to monitor the situation closely.
The Aerospace segment also produces advanced technology products,
including missile safe, arm and fuzing devices, precision measuring
systems, mass memory systems, electromagnetic motors, microwave
cabling, and electro-optic devices. Net sales for this portion of
the segment's business was about 17 percent of segment sales in the
third quarter, compared to approximately 14 percent last year.
Industrial Distribution segment net sales were $109.6 million and
$345.7 million for the third quarter and nine months ended
September 30, 2001 respectively, compared to $133.5 million
and $403.0 million for the same periods of 2000. Management
believes that these results reflect the fact that the U.S.
industrial sector has been in decline for more than a year
with manufacturing already in recession conditions. The
corporation began implementing programs last year to
streamline operations and control costs and these efforts have
helped the segment to remain competitive and profitable in a
challenging environment.
Page 10
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
At the end of the third quarter, the Industrial Distribution
segment acquired the industrial distribution business of A-C
Supply, Inc. of Wisconsin. The acquisition strengthens the
segment's presence in key industrial markets in the upper Midwest
and will facilitate service to national account customers with
operating plants in that region. This acquisition also represents
an incremental step in the Corporation's overall strategy of
building the value of its businesses through acquisitions and
internal growth.
Music Distribution net sales were $32.4 million and $88.4 million
for the quarter and nine months ended September 30, 2001
respectively, compared to $36.1 million and $94.0 million a year
ago. This business has been affected by overall weakness in
consumer markets both internationally and in the U.S.. Although the
second half of the year has traditionally been the stronger sales
period in this business, management is watching for evidence of
consumer willingness and ability to spend in view of the current
weak economy and world situation. The business is focusing on cost
reduction and implementing strategies to enhance its already strong
market position.
The corporation's segments, in total, had operating profit of $13.0
million and $12.8 million for the quarter and nine months ended
September 30, 2001, respectively, compared to an operating profit
of $18.6 million and $54.4 million for the same periods of 2000.
The nine months results reflect the second quarter sales and
earnings adjustment of $31.2 million. For the Aerospace segment,
there were operating profits of $8.1 million for the third quarter,
compared to $10.9 million last year. This segment had an operating
loss of $2.7 million for the nine-month period of 2001, primarily
due to the second quarter sales and earnings adjustment, compared
to an operating profit of $33.0 million in the same period last
year. Operating profits for the Industrial Distribution
segment were $2.7 million and $11.3 million for the third
quarter and nine months of 2001, respectively, compared to
$5.2 million and $16.8 million for the same periods last year,
reflecting lower sales volume due to adverse economic
conditions. Operating profits for the Music Distribution
business were $2.3 million in the third quarter and $4.2
million for the nine-month period, compared to $2.5 million
and $4.6 million for the same periods of 2000.
For the nine months ended September 30, 2001, interest income
earned from investment of cash virtually offset interest expense.
Page 11
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Other income for 2001 includes gains from the sale of facilities of
$2.7 million during the nine months ended September 30, 2001.
As a result of the $31.2 million sales and earnings adjustment, the
corporation has adjusted its 2001 estimated effective tax rate
to 25.0 percent, primarily due to reduced tax considerations on the
Australia SH-2G program. The consolidated effective income tax rate
for the same period last year was 36.0 percent.
The corporation had net earnings of $8.5 million ($0.37 cents
per share diluted)for the third quarter compared to $9.5 million
($0.40 cents per share diluted) last year. As a result of the
sales and earnings adjustment, for the nine months ended September
30, 2001, the corporation had net earnings of $4.8 million ($0.21
cents per share diluted)compared to $27.4 million ($1.15 per share
diluted)in the same period last year. Results for the 2001 nine-
month period include pre-tax gains of $2.7 million from the sale of
two facilities in the first half and $2.1 million from a reduction
in the stock appreciation rights accrual in the third quarter.
Liquidity and Capital Resources
- -------------------------------
On an annual basis, the corporation's cash flow from operations has
generally been sufficient to finance a significant portion of its
working capital and other capital requirements.
During the first nine months of 2001, operating activities used
cash, in part due to reductions in accounts payable for each of the
corporation's business segments as well as the Aerospace segment's
advances on contracts. This was offset to some extent by a
decrease in inventories, largely in the Industrial Distribution
segment. Other items include a decrease in accounts receivable,
which is generally due to the $31.2 million sales and earnings
adjustment and a reduction in income taxes payable and an increase
in other current assets, which relate primarily to the tax benefits
associated with the adjustment.
Page 12
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
During the first nine months of 2001, cash was used in investing
activities for the A-C Supply asset acquisition and for the
purchase of items such as machinery and computer equipment, which
usage was partially offset by proceeds from the sale of assets.
Cash used by financing activities was primarily attributable to the
payment of dividends to common shareholders, and to a lesser degree
the sinking fund requirement for the corporation's debentures
(described below)and repurchase of the Corporation's Class A common
stock.
At September 30, 2001, the corporation had $24.9 million of its 6%
convertible subordinated debentures outstanding. The debentures
are convertible into shares of Class A common stock at any time on
or before March 15, 2012 at a conversion price of $23.36 per share,
generally at the option of the holder. Pursuant to a sinking fund
requirement that began March 15, 1997, the corporation redeems
approximately $1.7 million of the outstanding principal of the
debentures each year.
In November 2000, the corporation's board of directors authorized a
replenishment of the corporation's stock repurchase program,
providing for the repurchase of an aggregate of 1.4 million Class A
shares for use in administration of the corporation's stock plans
and general corporate purposes. As of September 30, 2001, 61,150
shares had been repurchased.
The corporation had $20.8 million in cash and cash equivalents
at September 30, 2001, with an average of $37.3 million for
the first nine months of 2001. These funds have been invested
in high quality short term investments.
The corporation maintains a revolving credit agreement involving a
group of financial institutions. The agreement has a maximum
unsecured line of credit of $225 million, which consists of a $150
million commitment for five (5) years and a $75 million commitment
under a "364 day" arrangement which is renewable annually for an
additional 364 days. The $75 million commitment was so renewed on
November 9, 2001. The most restrictive of the covenants contained
in the agreement requires the corporation to have EBITDA, as
defined, at least equal to 300% of net interest expense and a ratio
of consolidated total indebtedness to total capitalization of not
more than 55%.
Page 13
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Letters of credit are generally considered borrowings for purposes
of the revolving credit agreement. A total of $51.6 million in
letters of credit are currently outstanding under the revolver,
most of which is related to the Australia SH-2G helicopter program.
Reductions to the Australia letter of credit are anticipated as
certain contract milestones are reached and as the corporation and
the Australian government agree upon a modified acceptance schedule
for the SH-2G(A)s.
Average bank borrowings for the nine months ended September 30,
were $2.2 million, compared to $2.6 million for the same period of
2000.
Management believes that the corporation's cash flow from
operations and available unused bank line of credit under its
revolving credit agreement will be sufficient to finance its
working capital and other capital requirements for the foreseeable
future.
Management also believes that its strong balance sheet provides
flexibility for it to identify and pursue appropriate opportunities
to expand its businesses.
Forward-Looking Statements
- --------------------------
This report contains forward-looking information relating to the
corporation's business and prospects, including the SH-2G and K-MAX
helicopter programs, aircraft structures and components, the
industrial and music distribution businesses, earnings expectations
for future periods and other matters that involve a number of
uncertainties that may cause actual results to differ materially
from expectations. Those uncertainties include, but are not
limited to: 1) the successful conclusion of competitions and
thereafter contract negotiations with government authorities,
including foreign governments; 2) political developments in
countries where the corporation intends to do business; 3)
standard government contract provisions permitting renegotiation of
terms and termination for the convenience of the government; 4)
economic and competitive conditions in markets served by the
corporation, including industry consolidation in the United
States and global economic conditions; 5) negotiation of
subcontracts for, and timing of satisfactory completion of,
the Australian SH-2G(A) program; 6) timing, degree and scope
of market acceptance for products such as a repetitive lift
Page 14
KAMAN CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION, Continued
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
helicopter; 7) U.S. industrial production levels; 8) changes
in supplier sales policies; 9) the effect of price increases
or decreases; 10) currency exchange rates, taxes, laws and
regulations, inflation rates, general business conditions and
other factors; and 11) potential effects of the September 11
attacks on the World Trade Center in New York and the Pentagon
in Washington, D.C.. Any forward-looking information should be
considered with these factors in mind.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
The corporation has various market risk exposures that arise
from its normal business operations, including currency
exchange rates, supplier price changes, and interest rates as
well as other factors described in the Forward-Looking
Statements section of this report.
The corporation's exposure to currency exchange rates is
managed at the corporate and subsidiary operations levels as
an integral part of the business.
The corporation's exposure to supplier sales policies and price
changes relates primarily to its distribution businesses and the
corporation seeks to manage this risk through its procurement
policies and maintenance of favorable relationships with suppliers.
The corporation's exposure to interest rate risk relates primarily
to its financial instruments, which include short-term investments
with market interest rates and debt obligations with fixed interest
rates. Currently the corporation has limited exposure in this area
due to the level of its fixed rate debt obligation and borrowings
under its financing arrangements. Where it currently exists,
interest rate risk is managed through the use of a combination of
fixed rate long-term debt and variable rate borrowings under its
financing arrangements. Letters of credit are generally considered
borrowings for purposes of the corporation's revolving credit
agreement; they are not subject to interest rate risk, however,
fees are charged based upon the corporation's usage and credit
rating.
There has been no significant change in the corporation's exposure
to these market risk factors during the third quarter of 2001.
Management believes that any near-term change in the market risk
factors described above should not materially affect the
consolidated financial position, results of operations or cash
flows of the corporation.
Page 15
KAMAN CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 5. Other Information
Employment agreements between certain members of management and
their Kaman employers expired in September, 2001 and these
agreements were replaced with new agreements that are attached to
this report as Exhibits 10a (i) through 10a (v). One employment
agreement between a member of management and his Kaman employer was
modified as of September 11, 2001 and that agreement is attached to
this report as Exhibit 10a (vi). Certain Change in Control
agreements between members of management and their Kaman employers
were amended as of September 11, 2001 and these agreements are
attached to this report as Exhibits 10a(vii) through (xii).
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits to Form 10-Q:
(10)(a)(i) Employment Agreement between Kaman Corporation
and Robert M. Garneau (Executive Vice
President and Chief Financial Officer) dated
September 20, 2001.
(10)(a)(ii) Employment Agreement between Kaman Corporation
and Candace A. Clark (Senior Vice President and
Chief Legal Officer) dated September 20, 2001.
(10)(a)(iii) Employment Agreement between Kaman Corporation
and Ronald M. Galla (Senior Vice President and
Chief Information Officer) dated September 20,
2001.
(10)(a)(iv) Employment Agreement between Kaman Industrial
Technologies Corporation and T. Jack Cahill
(its President) dated September 20, 2001.
(10)(a)(v) Employment Agreement between Kaman Music
Corporation and Robert H. Saunders, Jr., (its
President) dated September 20, 2001.
Page 16
KAMAN CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION - Continued
(10)(a)(vi) Amendment No. 1 to Employment Agreement between
Kaman Aerospace Corporation and Joseph H.
Lubenstein (its President) dated as of
September 11, 2001.
(10)(a)(vii) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Robert M. Garneau (Executive Vice President
and CFO, Kaman Corporation).
(10)(a)(viii) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Candace A. Clark (Senior Vice President and
CLO, Kaman Corporation).
(10)(a)(ix) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Ronald M. Galla (Senior Vice President and CIO,
Kaman Corporation).
(10)(a)(x) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Joseph H. Lubenstein (President, Kaman
Aerospace Corporation).
(10)(a)(xi) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
T. Jack Cahill (President, Kaman Industrial
Technologies Corporation).
(10)(a)(xii) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Robert H. Saunders, Jr. (President, Kaman Music
Corporation).
(11) Earnings per share computation.
(b) Reports on Form 8-K filed in the third quarter of 2001:
A report on Form 8-K was filed on September 25,
2001 reporting that the company had reached an
agreement to acquire the industrial distribution
business of A-C Supply, Inc.
-17-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
KAMAN CORPORATION
Registrant
Date: November 14, 2001 By: /s/Paul R. Kuhn
----------------------------
Paul R. Kuhn
Chairman, President and Chief
Executive Officer
(Duly Authorized Officer)
Date: November 14, 2001 By: /s/Robert M. Garneau
-----------------------------
Robert M. Garneau
Executive Vice President and
Chief Financial Officer
- 18 -
KAMAN CORPORATION AND SUBSIDIARIES
Index to Exhibits
(10)(a)(i) Employment Agreement between Kaman Corporation
and Robert M. Garneau (Executive Vice
President and Chief Financial Officer) dated
September 20, 2001.
(10)(a)(ii) Employment Agreement between Kaman Corporation
and Candace A. Clark (Senior Vice President and
Chief Legal Officer) dated September 20, 2001.
(10)(a)(iii) Employment Agreement between Kaman Corporation
and Ronald M. Galla (Senior Vice President and
Chief Information Officer) dated September 20,
2001.
(10)(a)(iv) Employment Agreement between Kaman Industrial
Technologies Corporation and T. Jack Cahill
(its President) dated September 20, 2001.
(10)(a)(v) Employment Agreement between Kaman Music
Corporation and Robert H. Saunders, Jr., (its
President) dated September 20, 2001.
(10)(a)(vi) Amendment No. 1 to Employment Agreement between
Kaman Aerospace Corporation and Joseph H.
Lubenstein (its President) dated as of
September 11, 2001.
(10)(a)(vii) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Robert M. Garneau (Executive Vice President
and CFO, Kaman Corporation).
(10)(a)(viii) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Candace A. Clark (Senior Vice President and
CLO, Kaman Corporation).
(10)(a)(ix) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Ronald M. Galla (Senior Vice President and CIO,
Kaman Corporation).
Page 19
KAMAN CORPORATION AND SUBSIDIARIES
Index to Exhibits (continued)
(10)(a)(x) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Joseph H. Lubenstein (President, Kaman
Aerospace Corporation).
(10)(a)(xi) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
T. Jack Cahill (President, Kaman Industrial
Technologies Corporation).
(10)(a)(xii) Addendum to Change in Control Agreement dated
as of September 11, 2001 and applicable to
Robert H. Saunders, Jr. (President, Kaman Music
Corporation).
(11) Earnings per share computation.
-20-
EMPLOYMENT AGREEMENT
This Agreement is made as of September 20, 2001 (the "Effective
Date") by and between Robert M. Garneau ("I" , "me", or "my") and
Kaman Corporation ("Kaman" or "the Company").
WITNESSETH:
WHEREAS, the Company and I entered an employment agreement dated
September 21, 1999, which agreement expires on this date; and
WHEREAS, the parties desire to continue the employment relationship
on the terms and conditions contained in this Agreement;
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 1
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 2
(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,
(I) if Kaman terminates my employment before I attain normal
retirement age (as defined in the Kaman Corporation Employees'
Pension Plan), if there is then existing a written Company policy
requiring executives to retire at that age, or at any time, if
there is no such then existing policy, 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 (II) if I terminate
my employment for "good reason", and (III) the Change in Control
Agreement dated September 21, 1999, as amended, between Kaman and
me is not applicable, then 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,
Page 3
(ii) at my election, to be made in writing on or before the
Termination Date, either (a) 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, or (b) all stock appreciation rights and stock options
shall become fully vested and following the Termination Date, I
shall have the right to exercise such stock appreciation right or
stock options for the periods provided by the Kaman Corporation
1993 Stock Incentive Plan, as amended, with respect to an employee
who has terminated employment; 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) It is understood that "good reason" will not be deemed to
exist if I am required to retire due to a then existing written
Company policy requiring executives to retire at normal retirement
age (as defined in the Kaman Corporation Employees' Pension Plan).
Page 4
(d) 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.
(e) 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.
(f) 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.
(g) 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, as
amended, 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/ Robert M. Garneau
Date September 20, 2001 Signature of Employee
Robert M. Garneau
Employee's Typed Name
Acknowledged and Agreed this 20th day of
September, 2001.
Kaman Corporation
/s/ Paul R. Kuhn
By Paul R. Kuhn
Its President
Page 5
EMPLOYMENT AGREEMENT
This Agreement is made as of September 20, 2001 (the "Effective
Date") by and between Candace A. Clark ("I" , "me", or "my") and
Kaman Corporation ("Kaman" or "the Company").
WITNESSETH:
WHEREAS, the Company and I entered an employment agreement dated
September 21, 1999, which agreement expires on this date; and
WHEREAS, the parties desire to continue the employment relationship
on the terms and conditions contained in this Agreement;
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 is conducted. I further agree that if any
court or arbitrator should find this covenant and agreement against
Page 1
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
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 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,
(I) if Kaman terminates my employment before I attain normal
retirement age (as defined in the Kaman Corporation Employees'
Pension Plan), if there is then existing a written Company policy
requiring executives to retire at that age, or at any time, if
there is no such then existing policy, 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 (II) if I terminate
my employment for "good reason", and (III) the Change in Control
Agreement dated September 21, 1999, as amended, between Kaman and
me is not applicable, then 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) at my election, to be made in writing on or before the
Termination Date, either (a) 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, or (b) all stock appreciation rights and stock options
shall become fully vested and following the Termination Date, I
Page 3
shall have the right to exercise such stock appreciation right or
stock options for the periods provided by the Kaman Corporation
1993 Stock Incentive Plan, as amended, with respect to an employee
who has terminated employment; 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) It is understood that "good reason" will not be deemed to
exist if I am required to retire due to a then existing written
Company policy requiring executives to retire at normal retirement
age (as defined in the Kaman Corporation Employees' Pension Plan).
(d) 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 4
(e) 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.
(f) 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.
(g) 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, as
amended, 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/ Candace A. Clark
Date September 20, 2001 Signature of Employee
Candace A. Clark
Employee's Typed Name
Acknowledged and Agreed this 20th day of
September, 2001.
Kaman Corporation
By /s/Paul R. Kuhn
Its President
Page 5
EMPLOYMENT AGREEMENT
This Agreement is made as of September 20, 2001 (the "Effective
Date") by and between Ronald M. Galla ("I" , "me", or "my") and
Kaman Corporation ("Kaman" or "the Company").
WITNESSETH:
WHEREAS, the Company and I entered an employment agreement dated
September 21, 1999, which agreement expires on this date; and
WHEREAS, the parties desire to continue the employment relationship
on the terms and conditions contained in this Agreement;
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
Page 1
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 2
(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,
(I) if Kaman terminates my employment before I attain normal
retirement age (as defined in the Kaman Corporation Employees'
Pension Plan), if there is then existing a written Company policy
requiring executives to retire at that age, or at any time, if
there is no such then existing policy, 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 (II) if I terminate
my employment for "good reason", and (III) the Change in Control
Agreement dated September 21, 1999, as amended, between Kaman and
me is not applicable, then 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,
Page 3
(ii) at my election, to be made in writing on or before the
Termination Date, either (a) 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, or (b) all stock appreciation rights and stock options
shall become fully vested and following the Termination Date, I
shall have the right to exercise such stock appreciation right or
stock options for the periods provided by the Kaman Corporation
1993 Stock Incentive Plan, as amended, with respect to an employee
who has terminated employment; 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) It is understood that "good reason" will not be deemed to
exist if I am required to retire due to a then existing written
Company policy requiring executives to retire at normal retirement
age (as defined in the Kaman Corporation Employees' Pension Plan).
Page 4
(d) 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.
(e) 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.
(f) 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.
(g) 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, a
amended, 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/ Ronald M. Galla
Signature of Employee
Date September 27, 2001 Signature of Employee
Ronald M. Galla
Employee's Typed Name
Acknowledged and Agreed this 20th day of
September, 2001.
Kaman Corporation
/s/ Paul R. Kuhn
By Paul R. Kuhn
Its President
Page 5
EMPLOYMENT AGREEMENT
This Agreement is made as of September 20, 2001 (the "Effective
Date") by and between T. Jack Cahill ("I" , "me", or "my") and
Kaman Industrial Technologies Corporation ("Kaman" or "the
Company").
WITNESSETH:
WHEREAS, the Company and I entered an employment agreement dated
September 21, 1999, which agreement expires on this date; and
WHEREAS, the parties desire to continue the employment relationship
on the terms and conditions contained in this Agreement;
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
Page 1
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 2
(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 a
"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,
(I) if Kaman terminates my employment before I attain normal
retirement age (as defined in the Kaman Corporation Employees'
Pension Plan), if there is then existing a written Company policy
requiring executives to retire at that age, or at any time, if
there is no such then existing policy, 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 (II) if I terminate
my employment for "good reason", and (III) the Change in Control
Agreement dated September 21, 1999, as amended, between Kaman and
me is not applicable, then 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,
Page 3
(ii) at my election, to be made in writing on or before the
Termination Date, either (a) 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, or (b) all stock appreciation rights and stock options
shall become fully vested and following the Termination Date, I
shall have the right to exercise such stock appreciation right or
stock options for the periods provided by the Kaman Corporation
1993 Stock Incentive Plan, as amended, with respect to an employee
who has terminated employment; 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) It is understood that "good reason" will not be deemed to
exist if I am required to retire due to a then existing written
Company policy requiring executives to retire at normal retirement
age (as defined in the Kaman Corporation Employees' Pension Plan).
Page 4
(d) 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.
e) 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.
(f) 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.
(g) 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, as
amended, 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. Jack Cahill
Date October 4, 2001 Signature of Employee
T. Jack Cahill
Employee's Typed Name
Acknowledged and Agreed this 20th day
of September, 2001.
Kaman Industrial Technologies Corporation
/s/ Robert M. Garneau
By Robert M. Garneau
Its Vice President
Page 5
EMPLOYMENT AGREEMENT
This Agreement is made as of September 20, 2001 (the "Effective
Date") by and between Robert H. Saunders, Jr. ("I" , "me", or "my")
and Kaman Music Corporation ("Kaman" or "the Company").
WITNESSETH:
WHEREAS, the Company and I entered an employment agreement dated
September 21, 1999, which agreement expires on this date; and
WHEREAS, the parties desire to continue the employment relationship
on the terms and conditions contained in this Agreement;
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
Page 1
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 2
(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,
(I) if Kaman terminates my employment before I attain normal
retirement age (as defined in the Kaman Corporation Employees'
Pension Plan), if there is then existing a written Company policy
requiring executives to retire at that age, or at any time, if
there is no such then existing policy, 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 (II) if I terminate
my employment for "good reason", and (III) the Change in Control
Agreement dated September 21, 1999, as amended, between Kaman and
me is not applicable, then 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,
Page 3
(ii) at my election, to be made in writing on or before the
Termination Date, either (a) 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, or (b) all stock appreciation rights and stock options
shall become fully vested and following the Termination Date, I
shall have the right to exercise such stock appreciation right or
stock options for the periods provided by the Kaman Corporation
1993 Stock Incentive Plan, as amended, with respect to an employee
who has terminated employment; 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) It is understood that "good reason" will not be deemed to
exist if I am required to retire due to a then existing written
Company policy requiring executives to retire at normal retirement
age (as defined in the Kaman Corporation Employees' Pension Plan).
Page 4
(d) 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.
(e) 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.
(f) 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.
(g) 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, as
amended, 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/ Robert H. Saunders, Jr.
Date September 25, 2001 Signature of Employee
Robert H. Saunders, Jr.
Employee's Typed Name
Acknowledged and Agreed this 20th day
of September, 2001.
Kaman Music Corporation
/s/ Robert M. Garneau
By Robert M. Garneau
Its Vice President
Page 5
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
This Agreement is made as of September 11, 2001 (the "Effective
Date") by and between Joseph H. Lubenstein ("I" , "me", or "my")
and Kaman Aerospace Corporation ("Kaman" or "the Company").
WITNESSETH:
WHEREAS, the Company and I entered an employment agreement dated
July 9, 2001, which agreement expires on this date; and
WHEREAS, the parties desire to continue the employment relationship
on the terms and conditions contained in this Agreement;
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
is conducted. I further agree that if any court or arbitrator
Page 1
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
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 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,
(I) if Kaman terminates my employment before I attain normal
retirement age (as defined in the Kaman Corporation Employees'
Pension Plan), if there is then existing a written Company policy
requiring executives to retire at that age, or at any time, if
there is no such then existing policy, 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 (II) if I terminate
my employment for "good reason", and (III) the Change in Control
Agreement dated July 9, 2001, as amended, between Kaman and me is
not applicable, then 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) at my election, to be made in writing on or before the
Termination Date, either (a) 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
Page 3
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, or (b) all stock appreciation rights and stock options
shall become fully vested and following the Termination Date, I
shall have the right to exercise such stock appreciation right or
stock options for the periods provided by the Kaman Corporation
1993 Stock Incentive Plan, as amended, with respect to an employee
who has terminated employment; 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) It is understood that "good reason" will not be deemed to
exist if I am required to retire due to a then existing written
Company policy requiring executives to retire at normal retirement
age (as defined in the Kaman Corporation Employees' Pension Plan).
(d) 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 4
(e) 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.
(f) 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.
(g) 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 July 9, 2001, as amended,
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/ Joseph H. Lubenstein
Date 11/13/01 Signature of Employee
Joseph H. Lubenstein
Employee's Typed Name
Acknowledged and Agreed this 13th day of
November, 2001.
Kaman Aerospace Corporation
/s/ Robert M. Garneau
By Robert M. Garneau
Its Vice President
Page 5
Addendum to Change in Control Agreement
This Addendum is made as of September 11, 2001, by and between
Kaman Corporation, a Connecticut corporation (the "Company"), and
Robert M. Garneau (the "Executive").
WHEREAS, the Company and the Executive entered into a Change
in Control Agreement (the "Agreement") dated as of September 21,
1999; and
WHEREAS, by letter dated August 17, 2000, the Company has
advised the Executive of the occurrence of a Change in Control, as
defined in the Agreement; and
WHEREAS, in furtherance of the objectives of the Agreement,
the Company and the Executive wish to amend the Agreement so that
it shall continue to apply, in accordance with its terms, with
respect to any future Change in Control event;
NOW, THEREFORE, in consideration of the premises and the
mutual understandings herein contained, the Company and the
Executive hereby further agree as follows:
1. The initial clause of subsection (g) of Section 15 of the
Agreement is hereby modified and amended to read as follows:
"(g) Any of the following events shall constitute
the occurrence of a "Change in Control" for purposes of
this Agreement:"
2. Except as expressly modified herein, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum as
of the day and year first above written.
KAMAN CORPORATION
Name: Paul R. Kuhn
Title: President & CEO
By:/s/ Robert M. Garneau
Robert M. Garneau
Address:
47 Bittersweet Lane
South Glastonbury, CT 06073
____________________
(.continued)
(continued.)
Addendum to Change in Control Agreement
This Addendum is made as of September 11, 2001, by and between
Kaman Corporation, a Connecticut corporation (the "Company"), and
Candace A. Clark (the "Executive").
WHEREAS, the Company and the Executive entered into a Change
in Control Agreement (the "Agreement") dated as of September 21,
1999; and
WHEREAS, by letter dated August 17, 2000, the Company has
advised the Executive of the occurrence of a Change in Control, as
defined in the Agreement; and
WHEREAS, in furtherance of the objectives of the Agreement,
the Company and the Executive wish to amend the Agreement so that
it shall continue to apply, in accordance with its terms, with
respect to any future Change in Control event;
NOW, THEREFORE, in consideration of the premises and the
mutual understandings herein contained, the Company and the
Executive hereby further agree as follows:
1. The initial clause of subsection (g) of Section 15 of the
Agreement is hereby modified and amended to read as follows:
"(g) Any of the following events shall constitute
the occurrence of a "Change in Control" for purposes of
this Agreement:
2. Except as expressly modified herein, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum as
of the day and year first above written.
KAMAN CORPORATION
/s/ Candace A. Clark By:/s/ Paul R. Kuhn
Candace A. Clark Name: Paul R. Kuhn
Title: President & CEO
Address:
290 Waterville Rd.
Avon, CT 06001
____________________
(.continued)
(continued.)
Addendum to Change in Control Agreement
This Addendum is made as of September 11, 2001, by and between
Kaman Corporation, a Connecticut corporation (the "Company"), and
Ronald R. Galla (the "Executive").
WHEREAS, the Company and the Executive entered into a Change
in Control Agreement (the "Agreement") dated as of September 21,
1999; and
WHEREAS, by letter dated August 17, 2000, the Company has
advised the Executive of the occurrence of a Change in Control, as
defined in the Agreement; and
WHEREAS, in furtherance of the objectives of the Agreement,
the Company and the Executive wish to amend the Agreement so that
it shall continue to apply, in accordance with its terms, with
respect to any future Change in Control event;
NOW, THEREFORE, in consideration of the premises and the
mutual understandings herein contained, the Company and the
Executive hereby further agree as follows:
1. The initial clause of subsection (g) of Section 15 of the
Agreement is hereby modified and amended to read as follows:
"(g) Any of the following events shall constitute
the occurrence of a "Change in Control" for purposes of
this Agreement:
2. Except as expressly modified herein, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum as
of the day and year first above written.
KAMAN CORPORATION
/s/ Ronald R. Galla By:/s/ Paul R. Kuhn
Ronald R. Galla Name: Paul R. Kuhn
Title: President & CEO
Address:
757 Palisado Ave.
Windsor, CT 06095
____________________
(.continued)
(continued.)
Addendum to Change in Control Agreement
This Addendum is made as of September 11, 2001, by and between
Kaman Aerospace Corporation, a Delaware corporation (the
"Company"), and Joseph H. Lubenstein (the "Executive").
WHEREAS, the Company and the Executive entered into a Change
in Control Agreement (the "Agreement") dated July 9, 2001; and
WHEREAS, in furtherance of the objectives of the Agreement,
the Company and the Executive wish to amend the Agreement so that
it shall apply, in accordance with its terms, with respect to any
future Change in Control event;
NOW, THEREFORE, in consideration of the premises and the
mutual understandings herein contained, the Company and the
Executive hereby further agree as follows:
1. The initial clause of subsection (g) of Section 15 of the
Agreement is hereby modified and amended to read as follows:
"(g) Any of the following events shall constitute the
occurrence of a "Change in Control" for purposes of this
Agreement:
2. Except as expressly modified herein, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum as
of the day and year first above written.
KAMAN AEROSPACE CORPORATION
/s/ Joseph H. Lubenstein By:/s/ Robert M. Garneau
Joseph H. Lubenstein Name: Robert M. Garneau
Title: Vice President
Address:
108 Milllington Rd.
East Haddam, CT 06423
____________________
(.continued)
(continued.)
Addendum to Change in Control Agreement
This Addendum is made as of September 11, 2001, by and between
Kaman Industrial Technologies Corporation, a Connecticut
corporation (the "Company"), and T. Jack Cahill (the "Executive").
WHEREAS, the Company and the Executive entered into a Change
in Control Agreement (the "Agreement") dated as of September 21,
1999; and
WHEREAS, by letter dated August 17, 2000, the Company has
advised the Executive of the occurrence of a Change in Control, as
defined in the Agreement; and
WHEREAS, in furtherance of the objectives of the Agreement,
the Company and the Executive wish to amend the Agreement so that
it shall continue to apply, in accordance with its terms, with
respect to any future Change in Control event;
NOW, THEREFORE, in consideration of the premises and the
mutual understandings herein contained, the Company and the
Executive hereby further agree as follows:
1. The initial clause of subsection (g) of Section 15 of the
Agreement is hereby modified and amended to read as follows:
"(g) Any of the following events shall
constitute the occurrence of a "Change in Control" for
purposes of this Agreement:
2. Except as expressly modified herein, all provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum as
of the day and year first above written.
KAMAN INDUSTRIAL
TECHNOLOGIES CORPORATION
/s/ T. Jack Cahill By:/s/ Robert M. Garneau
T. Jack Cahill Name: Robert M. Garneau
Title: Vice President
Address:
9 Whitman Pond Rd.
Simsbury, CT 06070
____________________
(.continued)
(continued.)
Addendum to Change in Control Agreement
This Addendum is made as of September 11, 2001, by and
between Kaman Music Corporation, a Connecticut corporation (the
"Company"), and Robert H. Saunders, Jr. (the "Executive").
WHEREAS, the Company and the Executive entered into a Change
in Control Agreement (the "Agreement") dated as of September 21,
1999; and
WHEREAS, by letter dated August 17, 2000, the Company has
advised the Executive of the occurrence of a Change in Control,
as defined in the Agreement; and
WHEREAS, in furtherance of the objectives of the Agreement,
the Company and the Executive wish to amend the Agreement so that
it shall continue to apply, in accordance with its terms, with
respect to any future Change in Control event;
NOW, THEREFORE, in consideration of the premises and the
mutual understandings herein contained, the Company and the
Executive hereby further agree as follows:
1. The initial clause of subsection (g) of Section 15 of
the Agreement is hereby modified and amended to read as follows:
"(g) Any of the following events shall constitute the
occurrence of a "Change in Control" for purposes of this
Agreement:
2. Except as expressly modified herein, all provisions of
the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum
as of the day and year first above written.
KAMAN MUSIC CORPORATION
/s/ Robert H. Saunders, Jr. By:/s/ Robert M. Garneau
Robert H. Saunders, Jr. Name: Robert M. Garneau
Title: Vice President
Address:
837 Neipsic Road
Glastonbury, CT 06033
____________________
(.continued)
(continued.)
KAMAN CORPORATION AND SUBSIDIARIES
EXHIBIT 11 - EARNINGS PER SHARE COMPUTATION
(In thousands except per share amounts)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- ------------------
2001 2000 2001 2000
---- ---- ---- ----
Basic:
Net earnings $ 8,526 $ 9,535 $ 4,772 $ 27,362
======== ======== ======== ========
Weighted average number
of shares outstanding 22,429 23,217 22,372 23,169
======== ======== ======== ========
Net earnings per share $ .38 $ .41 $ .21 $ 1.18
- basic ======== ======== ======== ========
Diluted:
Net earnings $ 8,526 $ 9,535 $ 4,772 $ 27,362
Elimination of interest expense
on 6% subordinated convertible
debentures(net after taxes) 278 255 814 777
-------- -------- -------- --------
Net earnings (as adjusted) $ 8,804 $ 9,790 $ 5,586 $ 28,139
======== ======== ======== ========
Weighted average number of
shares outstanding 22,429 23,217 22,372 23,169
Weighted average shares issuable
on conversion of 6% subordinated
convertible debentures 1,065 1,136 1,084 1,156
Weighted average shares issuable
on exercise of diluted stock
options 176 108 230 57
-------- -------- -------- -------
Total 23,670 24,461 23,686 24,382
======== ======== ======== =======
Net earnings per share
- diluted* $ .37 $ .40 $ .21 $ 1.15
======== ======== ======== ========
*The calculated diluted per share amount for the nine months ended
September 30, 2001 is anti-dilutive, therefore, amount shown is equal to
the basic per share calculation.
