UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
report (Date of earliest event reported): September 25, 2006 (September 19,
2006)
Kaman
Corporation
(Exact
Name of Registrant as Specified in Its Charter)
Connecticut
(State
or
Other Jurisdiction of
Incorporation)
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0-1093
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06-0613548
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1332
Blue Hills Avenue, Bloomfield, Connecticut
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06002
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(860)
243-7100
(Registrant's
Telephone Number, Including Area Code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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1
Item
8.01 Other
Events.
At
a
regular meeting held on September 19, 2006, the Board of Directors of Kaman
Corporation approved an amendment to its Corporate Governance Principles which
sets forth a policy to be followed by the Board of Directors under certain
circumstances when a nominee for election as a director does not receive a
majority of the votes cast (as defined in the amendment) "for" that
director. The amended Corporate Governance Principles of the Kaman
Corporation Board of Directors are attached as Exhibit 99.1 hereto and are
included on the Corporation's website at
www.kaman.com
under
the caption "Corporate Governance."
Item
9.01 Financial
Statements and Exhibits.
(c)
Exhibits.
The
following document is furnished as an Exhibit pursuant to Item 8.01
hereof:
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Exhibit
99.1
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Kaman
Corporation Board of Directors Corporate Governance
Principles
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2
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 hereunto
duly authorized.
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KAMAN
CORPORATION
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By:
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/s/
Robert M. Garneau
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Robert
M. Garneau
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Executive
Vice President and
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Chief
Financial Officer
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Date:
September 25, 2006
3
KAMAN
CORPORATION AND SUBSIDIARIES
Index
to
Exhibits
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Exhibit
99.1
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Kaman
Corporation Board of Directors Corporate Governance
Principles
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Attached
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4
Exhibit 99.1
KAMAN
CORPORATION BOARD OF DIRECTORS
CORPORATE
GOVERNANCE PRINCIPLES
Table
of Contents
Philosophy
and Role of the Board
Selection
and Composition of the Board
1. Board
Membership Criteria
2. Selection
and Orientation of New Directors
3. Director
Elections [Adopted September 19, 2006]
Board
Leadership
4. Selection
of Chairman and CEO
5. Lead
Director
Board
Composition and Performance
6. Size
of
the Board
7. Independence
of the Board
8.
Directors
Who Change Their Present Job Responsibility
9. Term
Limits
10. Retirement
Age
11. Board
Compensation; Stock Ownership Guidelines
12. Executive
Sessions of Independent Directors
13. Assessing
the Board’s Performance
14.
Board’s
Interaction with Institutional Investors, Press, Customers,
etc.
Board
Relationship to Senior Management
15.
Regular Attendance of Non-Directors at Board Meetings
16.
Board
Access to Senior Management
Meeting
Procedures
17. Selection
of Agenda Items for Board Meetings; Board Materials
Committee
Matters
18. Number,
Structure and Independence of Committees
19. Assignment
and Rotation of Committee Members
20. Frequency
and Length of Committee Meetings
21. Committee
Agenda
Leadership
Development
22. Formal
Evaluation of the Chief Executive Officer
23. Succession
Planning and Management Development
September
19, 2006
1
Philosophy
and Role of the Board
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The
primary mission of the Board is to represent and protect the interests
of
the company’s shareholders. In so doing, the Board has the legal
responsibility for overseeing the affairs of the company and has
certain
specified powers and authorities with respect to corporate action
provided
by Connecticut law. The Board’s oversight function can and should be
exercised through the election and appointment of competent officers.
The
Board nevertheless remains responsible for oversight and thus has
an
obligation to keep informed in order to assist management in formulating
and developing plans; it also sets necessary criteria and serves
as a body
to review and advise management on the operations of the company.
These
duties should be discharged by the full Board, the Board’s committees, or
the independent members of the Board, as appropriate in the
circumstances.
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Specific
duties include:
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(a)
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Selecting
the Chief Executive Officer; evaluating performance of the Chief
Executive
Officer; establishing compensation for the Chief Executive Officer;
approving the selection of senior management; evaluating the performance
of senior management; establishing compensation of senior management;
periodic review of plans for management succession; and assessment
of the
soundness of the organizational
structure;
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(b)
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Encouraging
the long-term success of the company by exercising sound and independent
business judgment with respect to significant strategic and operational
issues, including major capital expenditures, diversifications,
acquisitions, divestitures and new
ventures;
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(c)
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Safeguarding
corporate assets by periodically reviewing the financial affairs
and
policies of the company and overseeing the company’s financial reporting
process and internal controls;
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(d)
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Ensuring
the company’s compliance with applicable laws and
regulations;
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(e)
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Being
sensitive to the public and political environment, taking into account
the
responsibility of the company to it’s shareholders, employees, customers,
and the community;
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(f)
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Evaluating
the effectiveness of the Board as a
body;
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(g)
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Reviewing
and recommending the structure, composition, and responsibilities
of the
committees of the Board; and
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2
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(h)
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Meeting
in executive session regularly to allow full and candid discussion
among
Board members on matters of importance to the
company.
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Selection
and Composition of the Board
| 1. |
Board
Membership Criteria
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The
Corporate Governance Committee is responsible for reviewing with the Board,
on a
periodic basis, the appropriate skills and characteristics required of Board
members in the context of the current composition of the Board. This assessment
should include issues of diversity, age, skills such as understanding of
industries in which the company does business, international, financial or
systems background, etc.—all in the context of an assessment of the perceived
needs of the Board at that point in time.
| 2. |
Selection
and Orientation of New
Directors
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The
Board
is responsible for selecting its own members and in recommending them for
election by the shareholders. The Board delegates the screening process involved
to the Corporate Governance Committee which consults with the Chairman and
Chief
Executive Officer and an independent consultant after which it provides
recommendations to the Board. The Board and the company have an orientation
process for new Directors that includes background material, meetings with
senior management and visits to company facilities. Once the Board has made
the
determination to add a new Director, the invitation to join the Board should
be
extended by the Chairman of the Board.
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3.
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Director
Elections
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Majority
Vote.
In an uncontested election for Directors (one in which the number
of
nominees does not exceed the number of Directors to be elected) at
a
meeting of shareholders duly called and held, any Director nominee
who
does not receive a majority of the votes cast but is elected pursuant
to a
plurality vote, shall promptly tender his or her resignation following
certification of the shareholder vote by the Company's tabulation
agent.
For purposes of this policy, a "majority of the votes cast" means
that the
number of shares voted "for" a Director's election exceeds fifty
percent
(50%) of the number of votes cast with respect to that Director's
election. "Votes cast" include votes to withhold authority and exclude
abstentions with respect to that Director's
election.
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3
The
Process.
The
Corporate Governance Committee shall make a recommendation to the Board as
to
acceptance or rejection of the tendered resignation or whether other action
should be taken, and, depending on the recommendation, whether or not a
resulting vacancy should be filled. The Board will act on the tendered
resignation, taking into account the Committee's recommendation. The Board
will
publicly disclose its decision and the rationale therefor in a press release
to
be disseminated in the customary manner together with the filing of an SEC
Form
8-K. This deliberation and disclosure process shall be completed within ninety
(90) days after the aforementioned shareholder vote certification. A Director
who has tendered his or her resignation in accordance with this Section 3 shall
not participate in the Corporate Governance Committee's determination process
and/or the Board’s action regarding the matter.
Factors.
In
arriving at their recommendations/decision, the Corporate Governance Committee
and the Board shall evaluate such tendered resignation in light of the best
interests of the Company and its shareholders and may consider any information
that they consider relevant and appropriate, including the:
| · |
Director's
qualifications in light of the overall composition of the
Board;
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| · |
Director's
past and anticipated future contributions to the
Board;
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| · |
stated
reasons, if any, for the "withheld" votes and if the underlying cause
can
be otherwise addressed; and
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| · |
potential
adverse consequences of accepting the resignation, including failure
to
comply with any applicable rule or regulation (including NASDAQ rules
or
federal securities laws) or triggering defaults or other adverse
consequences under material contracts or the acceleration of
change-in-control provisions and other rights in employment agreements,
if
applicable.
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Determination;
Board Vacancies.
If the
Board determines to accept the resignation of a Director nominee, the Board
may,
in its sole discretion, (a) fill the resulting vacancy with any other person
pursuant to the provisions of Article Seventh of the Company’s Amended and
Restated Certificate of Incorporation, or (b) reduce the number of Directors
of
the Board to equal the number of remaining Directors pursuant to the provisions
of Article Seventh of the Company’s Amended and Restated Certificate of
Incorporation. In the event the Board elects to fill the resulting vacancy
on
the Board, the term of the Director so elected shall expire at the next annual
meeting of shareholders at which Directors are to be elected.
4
If
the
Board determines not to accept the resignation of a Director nominee, such
Director will continue to serve until the annual meeting for the year in which
such Director’s term expires and until such Director’s successor shall be duly
elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office.
Board
Leadership
| 4. |
Selection
of Chairman and CEO
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The
Board
should be free to make this choice any way that seems best for the company
at a
given point in time. Therefore, the Board does not have a policy on whether
or
not the role of the Chief Executive and Chairman should be separate and, if
it
is to be separate, whether the Chairman should be selected from the non-employee
Directors or be an employee.
| 5. |
Lead
Director
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Each
year, the Board shall appoint from among its members an individual to serve
as
Lead Director. The Lead Director will be responsible for facilitating
communication between the Board and the Chief Executive Officer, as appropriate,
and shall preside at Board meetings when, at the request of the Board, the
Chairman and Vice Chairman (if there is a Vice Chairman then serving) are not
in
attendance.
Board
Composition and Performance
| 6. |
Size
of the Board
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The
size
of the Board is currently nine members, with fifteen being the maximum number
permitted by the Bylaws. It is the sense of the Board that a size of nine to
eleven is appropriate at this time.
| 7. |
Independence
of the Board
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The
Board
believes that as a matter of policy, a significant majority of the Board should
consist of independent Directors. A Director will generally be considered
'independent' if he or she is not a current employee, does not receive
remuneration from the company other than by virtue of his or her service as
a
Director, and does not have a business relationship with the company. In all
cases, the Board follows legal and regulatory requirements for the definition
of
'independence' relative to Board Committee service.
As
of
January 1, 2006, all Directors were independent, except for Paul Kuhn, the
Chief
Executive Officer.
5
| 8. |
Directors
Who Change Their Present Job
Responsibility
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Individual
Directors who change the responsibility they held when they were elected to
the
Board should submit a letter of resignation to the Board. It is not the sense
of
the Board that in every instance the Directors who retire or change from the
position they held when they came on the Board should necessarily leave the
Board. There should, however, be an opportunity for the Board, via the Corporate
Governance Committee, to review the continued appropriateness of Board
membership under these circumstances. The Board believes this is a matter to
be
decided in each individual instance. It is assumed that when the Chief Executive
Officer resigns from that position, he/she should submit his/her resignation
from the Board at the same time. Whether the individual continues to serve
on
the Board is a matter for discussion at that time with the new Chief Executive
Officer and the Board.
| 9. |
Term
Limits
|
The
Board
does not believe it should establish term limits. While term limits could help
insure that there are fresh ideas and viewpoints available to the Board, they
hold the disadvantage of losing the contribution of Directors who have been
able
to develop, over a period of time, increasing insight into the company and
its
operations and, therefore, provide an increasing contribution to the Board
as a
whole.
| 10. |
Retirement
Age
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The
Bylaws of the company provide for mandatory retirement at age 72 with the
members of the Board serving at November 14, 2000 being grandfathered to age
75.
| 11. |
Board
Compensation; Stock Ownership
Guidelines
|
The
Corporate Governance Committee reviews the Board’s compensation structure on a
biennial basis with a view to determining its competitiveness related to other
similar U.S. companies. As part of a Director’s total compensation and to create
a direct linkage with corporate performance, the Board believes that a
meaningful portion of a Director’s compensation should be provided in Common
Stock.
6
Effective
February 21, 2006, the Board adopted stock ownership guidelines for itself
consisting of a requirement that each Director own three times the current
annual retainer and non-employee Directors who are not currently at this level
are required to retain one-third of any newly vested restricted stock grants
until the required level of ownership is achieved. In determining the value
of
the shares owned, the per share value will be the greater of the then current
share value or the share value on the date the guidelines were
adopted.
| 12. |
Executive
Sessions of Independent
Directors
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The
independent Directors of the Board will meet in Executive Session following
each
regular meeting of the Board, with the Lead Director presiding as chairman.
After each of these meetings, the Lead Director will discuss any relevant items
with the Chief Executive Officer.
| 13. |
Assessing
the Board’s Performance
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The
Corporate Governance Committee is responsible to report annually to the Board
an
assessment of the Board’s performance. This will be discussed with the full
Board. This review will ordinarily be performed during the fourth quarter of
each year.
This
assessment should be of the Board’s contribution as a whole and specifically
review areas in which the Board and/or management believes a better contribution
could be made. Its purpose is to increase the effectiveness of the Board, not
to
target individual Board members.
| 14. |
Board’s
Interaction with Institutional Investors, Press, Customers,
Etc.
|
The
Board
believes that management speaks for the company. Individual Board members may,
from time to time at the request of the management, meet or otherwise
communicate with various constituencies that are involved with the company.
If
comments from the Board are appropriate, they should, in most circumstances,
come from the Chairman.
Board
Relationship to Senior Management
| 15. |
Regular
Attendance of Non-Directors at Board
Meetings
|
The
Board
welcomes the regular attendance at each Board meeting of non-Board members
as
determined by the Chief Executive Officer.
| 16. |
Board
Access to Senior Management
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Board
members have complete access to the company’s management.
7
It
is
assumed that Board members will use judgment to be sure that this contact is
not
distracting to the business operation of the company and that such contact,
if
in writing, be copied to the Chairman and Chief Executive Officer.
Furthermore,
the Board encourages management to, from time to time, bring managers into
Board
meetings who: (a) can provide additional insight into the items being discussed
because of personal involvement in these areas, and/or (b) represent managers
with future potential that the senior management believes should be given
exposure to the Board.
Meeting
Procedures
| 17. |
Selection
of Agenda Items for Board Meetings; Board
Materials
|
The
Chairman and Chief Executive Officer establishes the agenda for each Board
Meeting, with input by the Corporate Governance Committee, as appropriate.
Each
Board member is free to suggest the inclusion of item(s) on the
agenda.
Information
that is important to the Board’s understanding of the business should be
distributed in writing to the Board before the Board meets. Management will
make
every attempt to see that this material is as brief as possible while still
providing the desired information.
Committee
Matters
| 18. |
Number,
Structure and Independence of
Committees
|
The
current standing committees of the Board are considered appropriate. The
standing committees are Corporate Governance, Audit, Personnel &
Compensation, and Finance. From time to time, the Board may form a new committee
or dissolve a current committee, as it deems appropriate. Each committee will
adopt a charter to outline its responsibilities, which charter will be discussed
with, and subject to approval by the Board. Each committee will review its
charter on a periodic basis.
| 19. |
Assignment
and Rotation of Committee
Members
|
The
Corporate Governance Committee is responsible, after consultation with the
Chief
Executive Officer and with consideration of the desires of individual Board
members, for the assignment of Board members to various Committees. The
Corporate Governance Committee shall consist of the chairmen of the standing
committees and the Lead Director, if that individual is not already a standing
committee chairman.
8
Each
Director shall have the opportunity to serve on two committees. Consideration
should be given to rotating certain Committee members periodically at about
a
three year interval. The Board does not feel that such a rotation should be
mandated as a policy since there may be reasons at a given point in time to
maintain an individual Director’s Committee membership for a longer
period.
| 20. |
Frequency
and Length of Committee
Meetings
|
The
Committee Chairman, in conjunction with Committee members, will determine the
frequency and length of the meetings of the Committee.
| 21. |
Committee
Agenda
|
The
Chairman of the Committee, in conjunction with the appropriate members of
management and staff, will develop the Committee’s agenda.
Leadership
Development
| 22. |
Formal
Evaluation of the Chief Executive
Officer
|
The
Board
believes that CEO performance should be evaluated annually and as a regular
part
of any decision with respect to CEO compensation. The Board and the Corporate
Governance and Personnel and Compensation Committees currently share this
responsibility. The Board has delegated responsibility to the Corporate
Governance Committee to evaluate CEO performance and discuss its findings with
the Personnel and Compensation Committee. The Corporate Governance Committee
is
responsible for setting annual and long-term performance goals for the CEO
and
for evaluation of his performance against such goals. The Committee meets
annually with the CEO to receive his or her recommendations concerning such
goals and to evaluate his or her performance against the prior year’s goals. The
evaluation will be used by the Personnel and Compensation Committee in the
course of its deliberations when considering the compensation of the
CEO.
The
CEO’s
salary, bonus and long-term incentives will be ratified by the Board (with
the
CEO excusing himself from the meeting) following the Personnel &
Compensation Committee’s action. Discussion of the CEO’s performance is part of
the ratification process. The Chairman of the Corporate Governance Committee
reviews comments of the Board with the CEO following each such meeting, as
appropriate.
9
The
Board
believes the evaluation of the CEO should be a process based on both qualitative
and quantitative factors, including performance of the business, accomplishments
of long-term objectives, positioning of the company for the future development
of management and leadership in the industry.
| 23. |
Succession
Planning and Management
Development
|
There
should be an annual review on succession planning given by the Chief Executive
Officer to the Board. There should also be an annual review by the Chief
Executive Officer with the Board on the company’s program for management
development.
There
should also be available, on a continuing basis, the Chief Executive Officer’s
recommendation as to a successor should he/she be unexpectedly
disabled.
10