UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )

 

Check the appropriate box:

KAMAN CORPORATION

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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BLOOMFIELD, CONNECTICUT

NEAL J. KEATING
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

February 28, 2011

To Our Shareholders:

I would like to extend a personal invitation to you to join us at our Annual Meeting of Shareholders which will be held on Wednesday, April 27, 2011 at 11:00 A.M. local time at the company’s corporate headquarters, 1332 Blue Hills Avenue, Bloomfield, Connecticut 06002.

At this year’s meeting, you will be asked to vote on the election of three (3) directors, to provide the Board with your advisory vote on our executive compensation program and the frequency that you would like to have this vote, and to ratify KPMG LLP as the company’s independent auditors. We encourage you to attend the meeting, however if you are unable to attend, your voice is important to us so please vote your shares.

We also want to let you know that Charles H. Kaman, our founder, passed away recently at the age of 91. Charlie was a visionary aerospace executive, an accomplished inventor, a highly talented musician, and a leader and mentor to many long-serving Kaman employees. His contribution to our company, our industry and our country cannot be overstated. His legacy will endure and he will continue to serve as an inspiration to all Kaman employees.

On behalf of our Board of Directors, we look forward to seeing you at the meeting.

Sincerely,

Neal J. Keating
Chairman of the Board, President and
Chief Executive Officer

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
APRIL 27, 2011

The Annual Meeting of Kaman Corporation’s Shareholders will be held at the company’s corporate headquarters, 1332 Blue Hills Avenue, Bloomfield, Connecticut 06002, on Wednesday, April 27, 2011, at 11:00 a.m., local time, for the following purposes:

1. To elect three (3) Class 3 Directors to serve for terms of three (3) years each and until their successors are duly elected and qualify.

2. To provide an advisory vote on executive compensation.

3. To provide an advisory vote on the frequency of the executive compensation advisory vote.

4. To ratify the appointment of KPMG LLP as the company’s independent registered public accounting firm.

5. To transact such other business as may properly come before the meeting.

The close of business on February 18, 2011 has been fixed as the record date for determining the holders of Common Stock entitled to notice of, and to vote at, the meeting.

In connection with our meeting, we have prepared a meeting notice, a proxy statement, and our annual report to shareholders, all of which provide details of our activities and financial performance. On February 28, 2011, we mailed the meeting notice (called a Notice of Internet Availability of Proxy Materials) which contains details for our shareholders’ use of this process to access these materials online and instructions for submitting proxies by telephone or the Internet. We have used this online access format since 2008 when it was first permitted by the Securities and Exchange Commission (“SEC”) because we think that electronic delivery expedites the delivery of materials, reduces printing and postage costs and eliminates bulky paper documents from your files, creating a more efficient process for both shareholders and the company.

If you receive a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the materials, unless you specifically request one. This notice contains instructions on how to obtain a paper copy of the materials. If you have received paper copies of the materials, a proxy card will also be enclosed.

You may vote by using the Internet, by telephone or mail, or by attending the meeting in person. If you plan to attend in person, you will need to provide proof of share ownership, such as an account or brokerage statement and a form of personal identification in order to vote your shares.

All shareholders are cordially invited to attend the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Candace A. Clark
Senior Vice President, Chief Legal Officer, and Secretary

Dated February 28, 2011

YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, THE BOARD OF DIRECTORS ENCOURAGES YOU TO VOTE YOUR SHARES USING THE TOLL-FREE TELEPHONE NUMBER OR THE INTERNET, AS DESCRIBED IN THIS PROXY STATEMENT AND THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS. AS AN ALTERNATIVE, IF YOU RECEIVED A PAPER COPY OF THE PROXY CARD BY MAIL, YOU MAY SIGN, DATE AND MAIL THE PROXY CARD IN THE ENVELOPE PROVIDED, WHICH DOES NOT REQUIRE POSTAGE. VOTING OVER THE INTERNET, BY THE TOLL FREE NUMBER OR COMPLETING AND MAILING A PROXY CARD WILL NOT LIMIT YOUR RIGHT TO VOTE IN PERSON AT THE ANNUAL MEETING. YOUR PROMPT RESPONSE IS MUCH APPRECIATED.

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		Page #
GENERAL INFORMATION			1
Information About Voting at the Annual Meeting			1
Voting Rights and Outstanding Shares			1
Submitting Your Proxy			1
How to Submit Your Proxy if you are a “Beneficial Owner”			2
How Your Proxy Will be Voted			2
How to Revoke Your Proxy			2
Vote Required for Quorum and Adoption of Proposals 1, 2, 3 and 4			2
Board Recommendations “FOR” Proposals 1, 2 and 4; Consideration of Proposal 3 Results			3
Vote Results			3
Policy Regarding Director Elections Where a Majority Vote Is Not Received			3
Solicitation Costs			4
Copies			4
ELECTION OF THREE CLASS 3 DIRECTORS FOR THREE-YEAR TERMS (Proposal 1)			5
The Board of Directors Recommends a Vote “FOR” All Nominees			5
Class 3 Director Nominees for Election at the 2011 Annual Meeting			5
Continuing Directors			7
Class 1 Directors Whose Term Expires in 2012.			7
Class 2 Directors Whose Term Expires in 2013			8
Director Whose Term Will End at the 2011 Annual Meeting			9
INFORMATION ABOUT THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE.			10
Board Leadership Structure.			10
Board Meetings and Committees			10
Corporate Governance Committee			11
Audit Committee.			11
Personnel & Compensation Committee			12
Finance Committee			12
Director Nominees			13
The Board’s Role in Oversight of the Company’s Risk Management Process			13
Board and Committee Independence Requirements			14
Specific Experience, Qualifications, Attributes and Skills of Current Board Members and Director Nominees			14
Transactions With Related Persons			15
Other Information about the Board’s Structure			15
Section 16(a) Beneficial Ownership Reporting Compliance			15

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		Page #
NON-EMPLOYEE DIRECTOR COMPENSATION			16
Code of Business Conduct and Other Governance Documents Available on the Company’s Website			17
Communications with the Board			17
Director Education			18
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS			19
EXECUTIVE COMPENSATION			21
Compensation Discussion and Analysis			21
Executive Summary			21
The Pay Elements; Performance Metrics and Evaluation of Market Pay Practices			21
How the Pay Elements Work in Practice			22
Actions to Modify Supplemental Pension /Perquisites/Management Agreements			24
Our Willingness to Respond to Economic Circumstances			25
Additional Information about the Committee			25
Compensation Policies			25
Components of the Executive Compensation Program			27
Base Salaries			27
Annual Cash Incentives			28
Award Opportunities			28
Corporate Named Executive Officers			29
Performance Measures			29
2010 Company Financial Performance			29
2010 Individual Performance			30
Actual 2010 Annual Cash Incentive Award Payments			31
Business Segment Named Executive Officers			31
Aerospace Segment Named Executive Officer			31
Performance Measures			31
2010 Actual Financial Performance			32
Actual 2010 Cash Incentive Award Payments			33
Industrial Distribution Segment Named Executive Officer			33
Performance Measures			33
2010 Actual Financial Performance			34
Actual 2010 Cash Incentive Award Payments			35
Long-Term Incentives (“LTIP”)			35
Three-year average return on investment			36
Average Annual Compounded Growth in Earnings per Share			36
Three-Year Total Return to Shareholders			36
Retirement Benefits			37
Other Benefits			38

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		Page #
Employment Agreements and Change in Control Arrangements			38
Stock Ownership Guidelines for Directors and Executive Officers			39
Material Tax and Accounting Implications of the Program			40
Personnel & Compensation Committee Report			40
SUMMARY COMPENSATION TABLE			41
Employment Agreements and Change in Control Agreements			42
Grants of Plan-Based Awards in 2010 Fiscal Year			42
Outstanding Equity Awards at 2010 Fiscal Year-End			43
Option Exercises and Stock Vested in Fiscal Year 2010			44
Pension Benefits			44
Non-Qualified Deferred Compensation Plan			45
POST TERMINATION PAYMENTS AND BENEFITS			46
Payments Made Upon Termination			46
Payments Made Upon Termination for Cause By the Executive Officer or Without Good Reason			46
Payments Made Upon Retirement			47
Payments Made Upon Death or Disability			47
Payments Made Upon Involuntary Termination of Employment without Cause or by the Executive Officer for Good Reason			48
Payments Made Due to Qualifying Employment Termination on or After a Change in Control			49
Coordination Between Employment Agreements and Change in Control Agreements			51
Assumptions Regarding Post Termination Payment Tables			51
Tables			54
Risk Assessment of Compensation Policies and Practices			63
PROVIDE AN ADVISORY VOTE ON EXECUTIVE COMPENSATION (Proposal 2)			64
The Board Recommends a Vote “FOR” this Proposal			64
Background			64
Board Recommendation			65
PROVIDE AN ADVISORY VOTE ON THE FREQUENCY OF THE EXECUTIVE COMPENSATION ADVISORY VOTE (Proposal 3)			66
Background			66
Board Recommendation			66
RATIFICATION OF APPOINTMENT OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE COMPANY (Proposal 4)			67
The Board of Directors Recommends a Vote “FOR” this Proposal			67
Board Recommendation			67
AUDIT COMMITTEE REPORT			68
SHAREHOLDER PROPOSALS FOR 2012 ANNUAL MEETING			69
Exhibit 1 – National Survey Data Used by Independent Compensation Consultant.			70

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PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 2011

GENERAL INFORMATION

The Board of Directors (the “Board” or “board”) of Kaman Corporation (the “company” or “Company”) is soliciting proxies from our shareholders in connection with our annual meeting of shareholders (the “meeting” or “annual meeting”) to be held on Wednesday, April 27, 2011 (or at any adjournments or postponements thereof), at the time, place and for the purposes described in the accompanying Notice of Annual Meeting of Shareholders dated February 28, 2011. We will only conduct business at the meeting if shares representing a majority of all outstanding Common Stock entitled to vote are either present in person or represented by proxy at the meeting. We believe that the only matters to be brought before the meeting are those referenced in this proxy statement. If any other matters are presented, the persons named as proxies may vote your shares in their discretion.

On February 28, 2011, this proxy statement and our annual report to shareholders were mailed to those shareholders who have previously requested paper copies and made available to all shareholders at (http://www.proxyvoting.com/kamn). On this date, all shareholders of record and beneficial owners will have the ability to access all of the proxy materials on a web site referred to in the Notice of Internet Availability of Proxy Materials that accompanies this proxy statement. You will not receive a printed copy of our proxy materials unless you request it by following the instructions provided in the Notice of Internet Availability of Proxy Materials. Instead, the Notice of Internet Availability of Proxy Materials explains how you may access and review all of the important information contained in the proxy materials. The Notice of Internet Availability of Proxy Materials also explains how you may submit your proxy via telephone or the Internet. Our proxy materials, whether in paper or electronic form, and proxy submission, are available to you free of charge.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held On April 27, 2011.

The proxy statement, proxy card and annual report to shareholders are available at: (http://www.proxyvoting.com/kamn)

Information About Voting at the Annual Meeting

Voting Rights and Outstanding Shares

Only holders of record of the company’s Common Stock at the close of business on February 18, 2011 (the “record date”) are entitled to notice of and to vote at the annual meeting. As of February 18, 2011, the company had 26,090,481 shares of Common Stock outstanding, each of which is entitled to one vote on each matter properly brought before the meeting. All votes will be counted by the company’s transfer agent, BNY Mellon Shareowner Services, who will be appointed as inspector of election for the annual meeting and who will separately tabulate “for”, “against” and “withhold” votes, votes on the frequency of holding an advisory vote on executive compensation, abstentions and broker non-votes.

Submitting Your Proxy

Before the annual meeting, you can appoint a proxy to vote your shares of Common Stock by following the instructions contained in the Notice of Internet Availability of Proxy Materials. You can do this by (i) using the Internet (http://www.proxyvoting.com/kamn), (ii) calling the toll-free telephone number (1-866-540-5760) or (iii) if you have a printed copy of our proxy materials, by completing, signing and dating the proxy card where indicated and mailing or otherwise returning the card to us prior to the beginning of the annual meeting. Voting using the Internet or telephone will be available until 11:59 PM on Tuesday, April 26, 2011.

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How to Submit Your Proxy if you are a “Beneficial Owner”

If your shares of Common Stock are held in the name of a bank or broker, you should follow the instructions on the form you receive from that firm. The availability of Internet or telephone voting will depend on that firm’s voting processes. If you choose not to vote by Internet or telephone, please return your proxy card, properly signed, and the shares represented will be voted in accordance with your directions. If you do not provide instructions to the broker, that firm will only be able to vote your shares with respect to “routine” matters. Please note that pursuant to recent revised broker voting regulations, the only routine matter for the company’s 2011 annual meeting and the only matter for which brokers will have the discretion to vote, is Proposal 4 (Ratification of Auditors). The broker must have proper instructions from you in order to vote with respect to Proposals 1 (Election of Directors), Proposal 2 (Advisory Vote on Executive Compensation) and Proposal 3 (Advisory Vote on Frequency of Executive Compensation Advisory Votes). Without proper instructions from you, the broker will not have the power to vote on those three proposals and this will be considered a “broker non-vote” for each such proposal. We recommend that you contact your broker to assure that your shares are properly voted.

How Your Proxy Will be Voted

All properly submitted proxies received prior to the annual meeting will be voted in accordance with their terms. If a proxy is returned signed, but without instructions for voting, the shares of Common Stock it represents will be voted as recommended by the Board of Directors. If a proxy is returned improperly marked, the Common Stock it represents will be counted as present for purposes of determining a quorum but will be treated as an abstention for voting purposes. Unsigned proxies will not be counted for any purpose.

Broker non-votes and proxies marked to abstain or withhold from voting with respect to any item to be voted upon at the annual meeting generally are not considered for purposes of determining the tally of votes cast for or against such item and, therefore, will not affect the outcome of the voting with regard to any proposal, except that proxies marked to withhold authority for the election of any Director (a “Director” or “director”) are included in the tally of votes cast for purposes of our majority voting policy, which is described below. Accordingly, a vote to withhold authority for the election of any director has the same effect as a negative vote under our majority voting policy.

How to Revoke Your Proxy

Whichever voting method you choose, a properly submitted proxy may be revoked at any time before it is counted at the annual meeting. You may revoke your previously submitted proxy by (i) casting a new vote using the Internet or by telephone; (ii) giving written notice to the company’s Corporate Secretary or submitting a written proxy bearing a later date prior to the beginning of the annual meeting, or (iii) attending the annual meeting and voting in person. If you submit a later dated proxy, it will have the effect of revoking any proxy that you submitted on an earlier date and will constitute a revocation of all previously granted authority to vote for every proposal included on any previously submitted proxy. If you plan to revoke a proxy for shares of Common Stock that are held in the name of a bank or broker, please be sure to contact your bank or broker to ensure that your revocation has been properly processed, or if you plan to revoke a proxy for such shares by voting in person at the annual meeting, be sure to bring personal identification and a statement of your bank or brokerage that shows your ownership of such shares.

Attendance at the annual meeting will not by itself revoke a proxy. Written revocations or later-dated proxies should be hand-delivered to the Corporate Secretary at the annual meeting or sent to Kaman Corporation, Corporate Headquarters, 1332 Blue Hills Avenue, Bloomfield, CT 06002, Attention: Corporate Secretary.

Vote Required for Quorum and Adoption of Proposals 1, 2, 3 and 4

Under Connecticut law, our Common Stock holders may only take action on a matter at the annual meeting if a quorum exists with respect to that matter. A majority of the issued and outstanding shares of Common Stock entitled to vote, represented in person or by proxy, will constitute a quorum for the transaction of business. With respect to each of Proposals 1, 2, 3 and 4, a majority of the votes entitled to be cast on each matter by Common Stock holders will constitute a quorum for action on that matter. For this purpose, only

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shares of Common Stock held by those present at the annual meeting or for which proxies are properly provided by telephone, Internet or in writing and returned to the company as provided herein will be considered to be represented at the annual meeting. All shares of Common Stock represented at the annual meeting will be counted for quorum purposes without regard to abstentions or broker non-votes as to any particular item.

Directors (Proposal 1) are elected by a plurality of the votes cast, but our Board has supplemented the state law voting requirement with a majority voting policy which is described in more detail below. Proxies may be voted only for the number of nominees named by the Board of Directors. Approval of the Advisory Vote on Executive Compensation (Proposal 2) requires that there be more votes cast for the Proposal than against the Proposal. Approval of the Advisory Vote on Frequency of the Advisory Executive Compensation Vote (Proposal 3) also requires that there be more votes cast for the Proposal than against the Proposal. If none of the frequency choices receives sufficient votes for approval under the state law voting requirement, the frequency choice that receives the most votes will be considered by the Board to be the expression of the company’s shareholders as to their preference and will be taken into account by the Board in making its determination as to the frequency of future advisory votes on executive compensation. Approval of the ratification of KPMG LLP as the company’s independent registered public accounting firm (Proposal 4) requires that there be more votes cast for the Proposal than against the Proposal.

Board Recommendations “FOR” Proposals 1, 2, and 4; Consideration of Proposal 3 Results

The Board of Directors recommends a vote “For” Proposals 1, 2, and 4 and as to Proposal 3, the board recommends a vote for “One Year”. The Board does not know of any matters to be presented for consideration at the meeting other than the matters described in those Proposals and the notice of annual meeting of shareholders. However, if other matters are presented, the persons named in the proxy intend to vote on such matters in accordance with their judgment.

Vote Results

We will announce preliminary voting results at the annual meeting. We will file a Current Report on Form 8-K containing the final voting results with the SEC within four business days of the annual meeting or, if final results are not available at that time, within four business days of the date on which final voting results become available.

Policy Regarding Director Elections Where a Majority Vote Is Not Received

Since 2006 the Board has maintained a policy (described in its Governance Principles which are available at http://www.kaman.com by clicking on “Corporate Governance”) that addresses certain circumstances when a Director nominee has not received a majority of the votes cast with respect to that director’s elections or re-election. Briefly, 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 properly called and held meeting of shareholders, any Director nominee who is elected by a plurality vote, but does not receive a majority of the votes cast for that nominee shall promptly tender his or her resignation once the shareholder vote has been certified by the company’s tabulation agent. 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 and broker non-votes with respect to that Director’s election. The Corporate Governance Committee will thereafter recommend to the Board whether to accept or reject that resignation and, depending on the recommendation, whether or not a resulting vacancy should be filled. The Board will then act, 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 a Current Report on Form 8-K with the SEC. This process shall be completed within ninety (90) days after the shareholder vote certification. A Director who has tendered his or her resignation shall not participate in the Corporate Governance Committee’s determination process and/or the Board’s action regarding the matter.

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In determining whether or not to accept a Director’s resignation for failure to secure a majority of the votes cast for him or her, the Corporate Governance Committee and the Board will consider the matter 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:

If the Board accepts the resignation, it may, in its sole discretion, (a) fill the resulting vacancy with any other person, or (b) reduce the number of Directors of the Board to equal the number of remaining Directors. If 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.

If the Board does not accept the resignation, that 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.

Solicitation Costs

The company pays the cost of preparing, printing and mailing proxy material, as well as the cost of any required solicitation of proxies. The solicitation will be made by mail and Internet and may also include participation of the company’s officers and employees personally or by telephone, facsimile, or Internet, without additional compensation. The company has engaged BNY Mellon Shareowner Services to assist with the solicitation of proxies and expects to pay approximately $7,500 for these services, plus expenses. The company may also be required to reimburse brokers, dealers, banks, voting trustees or their nominees for reasonable expenses in sending proxies, proxy material and annual reports to beneficial owners.

Copies

Upon a shareholder’s written request, the company will provide free of charge, a copy of its annual report to shareholders, which includes the company’s annual report on Form 10-K, including financial statements and the financial statement schedules for the year ended December 31, 2010.

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PROPOSAL 1

ELECTION OF THREE CLASS 3 DIRECTORS FOR THREE-YEAR TERMS

The Board of Directors Recommends a Vote “FOR” All Nominees

In accordance with the company’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws (the “Bylaws”), each director holds office until the annual meeting for the year in which such director’s term expires and until his or her successor shall be elected and shall qualify, unless he or she dies, resigns, retires, or is removed from office and further subject to the company’s majority voting policy, described at page 3. Three individuals are nominated for election at the 2011 Annual Meeting for three-year terms that will expire at the annual meeting in 2014, each of whom is currently a Board member. This group includes: Brian E. Barents, George E. Minnich, and Thomas W. Rabaut.

Following is information about each of the three director nominees, in addition to the six directors whose terms continue after the annual meeting, including name, age, and professional experience during the last five years as well as the qualifications, attributes and skills that the Board believes qualifies each individual for service on the Board. None of the organizations listed as business affiliates of the directors is an affiliate of the company.

Class 3 Director Nominees for Election at the 2011 Annual Meeting

		Brian E. Barents
		Mr. Barents, 67, has been a director since 1996. He is the retired President and Chief Executive Officer of Galaxy Aerospace Corp. Prior to that, he was President and Chief Executive Officer of Learjet, Inc. He is also a director of CAE, Inc., and during the past five years was a director at Hawker Beechcraft, Nordam Corp. and Aerion Corp. These positions demonstrate Mr. Barents’ extensive history of senior executive leadership and board participation in the aerospace industry. His professional background provides the Board with additional perspectives about the aerospace industry from both commercial and defense-related standpoints as well as regarding marketing and sales trends, and international markets.

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		George E. Minnich
		Mr. Minnich, 61, has been a director since 2009. He served as Senior Vice President and Chief Financial Officer of ITT Corporation, then a $9 billion commercial and defense business, from 2005 until his retirement in 2007. Prior to that, he served for twelve years in several senior finance positions at United Technologies Corporation, including Vice President and Chief Financial Officer of Otis Elevator Company and of Carrier Corporation. As a Certified Public Accountant, he also held various increasingly senior positions with Pricewaterhouse Coopers (then Price Waterhouse) from 1971 to 1993, culminating in Audit Partner from 1984 to 1993. He is a director of AGCO Corporation and Belden Corporation. Mr. Minnich also possesses a Bachelor of Science degree in Accounting from Albright College.
		As described above, Mr. Minnich provides the Board with extensive financial and accounting experience gained over a more than thirty-five year career,. This experience was important to the Board in connection with his initial election as a means to provide additional depth of capability to the board’s Finance and/or Audit Committees. As a current member of the Audit Committee, he is designated an “audit committee financial expert” as defined by SEC regulations. Mr. Minnich has also served on the boards and audit committees of other organizations during the past five years, including AGCO Corporation, a manufacturer and distributor of agricultural equipment and Belden Corporation, a manufacturer of high-speed electronic cables, connectivity and networking products. Mr. Minnich’s senior-level operational background also provides the Board with additional perspectives regarding the aerospace industry, defense contracting, international sales and acquisitions.
		Thomas W. Rabaut
		Mr. Rabaut, 62, has been a director since 2008. Mr. Rabaut has served as a Senior Advisor to The Carlyle Group, a global private equity firm, since January 2007. From June 2005 to January 2007, he was President of the Land & Armaments Operating Group of BAE Systems, a global leader in the design, development and production of military systems. From January 1994 to June 2005, he served as President and Chief Executive Officer of United Defense Industries, Inc., which was acquired by BAE Systems in 2005. He is a director of Cytec Industries, Inc., a premier supplier of advanced composite products. These positions demonstrate Mr. Rabaut’s extensive history of senior executive leadership in the defense and aerospace industries. At Carlyle, Mr. Rabaut also serves in the chairman role at Radio Holdings, the owner of ARINC, a Carlyle portfolio company that provides communication and information technology products and services to government and industry. Early in his career, Mr. Rabaut was also associated with FMC Corporation, a predecessor of United Defense Industries in a variety of increasingly senior operations roles. His professional and board experience provide the Board with additional perspectives about the aerospace industry, defense markets, international markets, acquisitions from both commercial and defense-related standpoints as well as market and sales trends.

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Continuing Directors

Class 1 Directors Whose Term Expires in 2012

		E. Reeves Callaway III
		Mr. Callaway, 63, has been a director since 1995. He is the Founder and President and Chief Executive Officer of The Callaway Companies, an engineering services firm which is involved in the high technology composites industry and has presence in Europe and the U.S. With this background, Mr. Callaway provides the Board with senior executive insight into the conduct of global operations, the composites business, and marketing and sales trends.
		Karen M. Garrison
		Ms. Garrison, 62, has been a director since 2006. She retired as President of Pitney Bowes Business Services, a major manufacturer of postal equipment/software and service provider, in 2004. She is a director of Standard Parking Corporation and Tenet Healthcare and during the past five years was a director at North Fork Bank. These positions demonstrate Ms. Garrison’s senior executive roles which provide operational insight to the Board, particularly from acquisition, human resources, information technology, government contracting and distribution perspectives. Ms. Garrison also brings to the Board extensive experience in finance and accounting, from her Bachelor of Science degree in Accounting from Rollins College and Master of Business Administration from Florida Institute of Technology to progressively senior roles as Controller, Worldwide Controller, Vice President — Finance and Chief Financial Officer over a ten-year period during her tenure at Pitney Bowes and its subsidiary, Dictaphone Corporation. This experience was important to the Board in connection with her initial election as a means to provide additional depth of capability to the Finance and/or Audit Committees. In fact, during her previous tenure on the Board’s Audit Committee, Ms. Garrison was designated an “audit committee financial expert” as defined by SEC regulations.

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		A. William Higgins
		Mr. Higgins, 52, has been a director since 2009. He is Chairman, CEO and President of CIRCOR International, Inc., a global diversified manufacturing company that designs, manufactures, and supplies valves, related products and services to OEMs, processors, manufacturers, the military, and utilities that rely on fluid-control to accomplish their missions. Prior to March 2008, he held the offices of President and Chief Operating Officer and Executive Vice President and Chief Operating Officer of CIRCOR. Prior to joining CIRCOR in 2005, Mr. Higgins spent thirteen years in a variety of senior management positions with Honeywell International and Allied Signal. Leslie Controls, Inc., a wholly owned subsidiary of CIRCOR and an entity for which Mr. Higgins serves as a director and vice president, filed for bankruptcy in July 2010 attributable to asbestos litigation involving Leslie Controls. Mr. Higgins’ professional background provides the board with additional perspective on international operations, the defense industry, acquisitions, and both distribution and aerospace markets. In addition to his service at CIRCOR, Mr. Higgins’ experience at Honeywell International and Allied Signal provided him with a strong background in the aerospace industry. The fact that Mr. Higgins is a sitting CEO also provides the Board with important insights regarding the perspective of an executive leading another company of roughly similar size in the current global economic environment.

Class 2 Directors Whose Term Expires in 2013

		Neal J. Keating
		Mr. Keating, 55, was elected President and Chief Operating Officer as well as a Director of the company in September 2007. In January 2008, he became President and Chief Executive Officer and in March 2008 he was appointed to the additional position of Chairman. Prior to joining the company, Mr. Keating served as Chief Operating Officer at Hughes Supply, a $5.4 billion wholesale distributor that was acquired by Home Depot in 2006. Prior to that, he held senior positions at GKN Aerospace, an aerospace subsidiary of GKN, plc, and Rockwell Collins, Commercial Systems, and was a board member for GKN, plc Augusta-Westland. He is a director of Hubbell Incorporated. These positions demonstrate Mr. Keating’s extensive history of senior executive leadership and board participation in both of the company’s business segments (Aerospace and Industrial Distribution) with emphasis on international operations and acquisitions experience. The Board believes that Mr. Keating’s combined role of CEO and Chairman provides the company’s shareholders with the benefits of board leadership by an executive with extensive professional background as well as day-to-day knowledge of the company’s businesses and markets, strategic plan execution, and future needs.

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		Eileen S. Kraus
		Ms. Kraus, 72, has been a Director since 1995 and currently serves as the board’s Lead Independent Director. She is the retired Chairman of Fleet Bank Connecticut and is a director of Stanley Black & Decker, Inc. and Rogers Corporation.
		Ms. Kraus provides the Board with broad financial and operational management experience in the banking industry, having served in several positions at Fleet Bank, N.A. and its predecessors over approximately a twenty-year period. Her industry experience provides the Board with additional perspective on the banking and financial industries, and marketing and acquisitions. She also has significant board organizational leadership experience with manufacturing companies, including membership on the Corporate Governance Committee of the boards of Stanley Black & Decker and Rogers Corporation; at Rogers Corporation she is Chairman of that committee. She is also chairman of the Stanley Black & Decker board audit committee.

		Richard J. Swift
		Mr. Swift, 66, has been a Director since 2002. He is former Chairman of the Financial Accounting Standards Advisory Council and retired Chairman, President and Chief Executive Officer of Foster Wheeler Ltd., a provider of design, engineering, construction, and other services. He is a director of Ingersoll-Rand Company, Ltd., Public Service Enterprise Group Incorporated, Hubbell Incorporated and CVS Caremark Corporation. Mr. Swift brings to the Board broad operations management experience in a career with Foster Wheeler, Ltd. that spanned almost thirty years and involved increasingly senior executive leadership positions culminating in his role as Chairman and CEO for seven years. Mr. Swift also has finance experience with a Masters of Business Administration from Fairleigh Dickinson University and service in the role of Chairman of the Financial Accounting Standards Advisory Council for about five years. He is also a Licensed Professional Engineer. In addition, he has audit committee and/or compensation committee membership experience on the boards of Ingersoll-Rand Company, Ltd, Public Service Enterprise Group Incorporated, Hubbell Incorporated, and CVS Caremark Corporation. This type of experience is important to the Board as a means to provide additional depth of capability to the Audit and Personnel & Compensation Committees. Mr. Swift’s background also provides the Board with additional perspective on international operations, acquisitions, and finance-related matters.

Director Whose Term Will End at the 2011 Annual Meeting

Mr. Edwin A. Huston, a director since 2002, will retire coincident with the 2011 annual meeting as he has reached mandatory retirement age under the company’s Bylaws. With Mr. Huston’s retirement, the Board will decrease its size to nine members. Mr. Huston has served the board with distinction, including in his role as chairman of the board’s Audit Committee since 2006. The company and other board members are grateful for Mr. Huston’s guidance and support over the years.

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INFORMATION ABOUT THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

The Board is elected by our shareholders to oversee their interests as owners of the company. The Board is the ultimate decision-making authority for the company except for those matters that are reserved for, or shared with, our shareholders. The Board appoints and oversees the company’s senior management, which is responsible for conducting the company’s business.

Board Leadership Structure

Our Bylaws and Governance Principles permit the Board flexibility to select and revise its leadership structure on the basis of the best interests of the company and its shareholders at a given point in time. The Board evaluates this structure in connection with the annual appointments to the positions of Chairman of the Board (“Chairman”) and Chief Executive Officer (“CEO”). The Board believes that it is currently in the best interests of the company and its shareholders to combine the Chairman and CEO roles and to appoint a Lead Independent Director annually. In this way, the company’s shareholders have the benefit of Board leadership by Mr. Keating, an executive with extensive day-to-day knowledge of the company’s operations, strategic plan execution, as well as future needs together with an independent director who provides Board member leadership. In arriving at its determination, the Board has also considered the fact that the Board consists entirely of participative independent directors (other than Mr. Keating) having diverse professional and Board experience.

The Board’s Lead Independent Director is Eileen S. Kraus. The Lead Independent Director position (formerly known as our Lead Director) has existed since 2002 and its responsibilities currently include membership on the Corporate Governance Committee; Chair of the Board’s Executive Sessions and of Board meetings at which the Chairman is not in attendance; review and approval of all Board and committee meeting agendas; liaison between the Chairman and the independent Directors, which includes facilitating communications and assisting in the resolution of conflicts, if any, between the independent Directors and the company’s management; providing counsel to the Chairman and CEO, including provision of appropriate feedback regarding effectiveness of Board meetings, and otherwise as needed or requested; and such other responsibilities as the Board delegates. In performing these responsibilities, the Lead Independent Director is expected to consult with the chairpersons of other Board committees as appropriate and solicit their participation in order to avoid the appearance of diluting the authority or responsibility of the Board committees and their chairpersons.

Board Meetings and Committees

The Board met six times in 2010 and its committees met a total of 26 times. Overall, attendance at such meetings was 90% or more. Each director attended 75% or more of the aggregate of all meetings of the Board and committees upon which he or she served during 2010. Most of the current directors were able to attend the 2010 annual meeting and all directors are strongly encouraged to attend the 2011 annual meeting.

The Board maintains the following standing committees: Corporate Governance, Audit, Personnel & Compensation, and Finance. Each committee has a charter that has been approved by the Board. The complete text of each committee charter is available on the company’s website located at www.kaman.com by first clicking on the “Corporate Governance” link followed by the “Board Committee Charters” link. Each committee and the Board periodically, but not less than annually, review and revise committee charters, as appropriate.

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The following table describes the current members of each committee and the number of meetings held during 2010:

Board Member		Audit Committee		Corporate Governance Committee		Finance Committee		Personnel & Compensation Committee
Brian E. Barents		X						X
E. Reeves Callaway III						X		X
Karen M. Garrison				X		Chair
A. William Higgins						X
Edwin A. Huston		Chair		X
Neal J. Keating(1)
Eileen S. Kraus(2)		X		Chair
George E. Minnich		X				X
Thomas W. Rabaut						X		X
Richard J. Swift				X				Chair
Number of Meetings		8		5		7		6

Following is a summary of the various committees’ responsibilities:

Corporate Governance Committee

Under its charter, the Corporate Governance Committee consists of the chairpersons of the standing committees and the Lead Independent Director, if the Lead Independent Director is not already a Committee chairperson. The committee assists the Board in fulfilling its corporate governance responsibilities and serves as the Board’s nominating committee. These corporate governance responsibilities include board and committee organization and function, membership, compensation, and annual performance evaluation; annual goals development and evaluation for the CEO with participation by the Personnel & Compensation Committee and the Board in executive session; succession planning; development and periodic review of governance policies and principles; monitoring director compliance with stock ownership guidelines; consideration and recommendation of shareholder proposals; establishment of selection criteria for, and review and recommendation of, new Board members; and administration of the company’s majority voting policy for director elections.

Audit Committee

The committee is responsible for assisting the Board in fulfilling its responsibility to oversee the company’s financial reporting and accounting policies and procedures, its system of internal accounting and financial controls, the internal audit function and the annual independent audit of the company’s financial statements. The committee is also responsible for overseeing the performance, qualifications and independence of the company’s independent registered public accounting firm (which reports directly to the committee) as well as the performance of the internal audit department. The committee reviews the company’s business risk assessment framework and identifies principal business risks with management, the independent auditor and the internal audit director (however, this committee is not the only board committee that reviews such business risks), and pre-approves all auditing services and permitted non-audit services to be performed by its independent auditor (which approval authority has been delegated to the committee’s chairman for certain immaterial items subject to ratification at the committee’s next meeting).

The committee has also established a policy for the company’s hiring of current or former employees of the independent auditor to ensure that the auditor’s independence under applicable SEC rules and accounting standards is not impaired. The committee has also established, and monitors management’s operation of, and procedures for the receipt, retention, and treatment of complaints received by the company regarding accounting, internal accounting controls, auditing, or other matters; as well as the confidential, anonymous submission by the company’s employees of concerns regarding questionable accounting, auditing, or other

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matters. The committee meets regularly in executive session with the chief internal audit director and the independent auditor without management present.

A committee member may not simultaneously serve on the audit committees of more than three companies whose stock is publicly traded (including this committee) unless the Board has provided its consent. No such determination is currently required.

While the board has determined that Edwin A. Huston, George E. Minnich and Eileen S. Kraus are “audit committee financial experts” within the meaning of Item 407(d)(5) of Regulation S-K, Mr. Huston will retire coincident with the 2011 annual meeting. Mr. Minnich is scheduled to become chairman of the committee at that time.

Personnel & Compensation Committee

The committee’s role is to review and approve the terms of, as well as oversee, the company’s executive compensation strategies (including the plans and policies to execute those strategies), administer its equity plans (including review and approval of equity grants to executive officers) and annually review and approve compensation decisions relating to executive officers, including those for the CEO and the other executive officers named in the Summary Compensation Table (collectively, the “named executive officers”) at page 41. This committee considers the CEO’s recommendations when determining the compensation of the other executive officers. The CEO has no role in determining his own compensation although as part of the annual CEO evaluation process, he prepares a self-assessment for review by the Corporate Governance Committee, which shares that evaluation with this committee. This committee then submits its determinations regarding proposed CEO compensation at an executive session of the Board for consideration and approval.

The committee also monitors management’s compliance with stock ownership guidelines adopted from time to time by the Board; reviews and approves employment, severance, change in control (“change in control” or “Change in Control”), and termination arrangements for all executive officers and periodically reviews the company’s policies and procedures for management development.

During each of the last seven years, the committee has directly engaged Geoffrey A. Wiegman, founder and president of Wiegman Associates LLC, an independent compensation consulting firm, to assist the committee in fulfilling its responsibilities (Mr. Wiegman is sometimes referred to in this proxy statement as the “independent consultant”). This independent consultant attends each committee meeting, including executive sessions. Mr. Wiegman advises the committee on marketplace trends in executive compensation, evaluates proposals for compensation programs and executive officer compensation decisions and has also provided services to the Corporate Governance Committee in connection with its evaluation of director compensation. He may interact with company management in his capacity as an advisor to the committee. He is retained directly by the committee and his invoices are submitted to the Committee chairman for approval and payment by the company. The committee determines Mr. Wiegman’s assignments and provides the instructions for completing those assignments. The independent consultant may from time to time also provide services at the request of the company’s management that are not related to his work for the committee, however any work for management must be approved by the committee. The independent consultant did provide company management with competitive data for non-executive positions during 2010. Except for these services, he did not provide any services to the Board or the company beyond those related to executive or director compensation.

The committee regularly meets in executive session with its independent consultant without any participation by management. The committee’s Chairman regularly reports the committee’s recommendations on executive compensation to the Board of Directors. The committee is supported in its work by the company’s human resources, legal and financial management personnel and its charter has provided for the retention of independent third-party consultants and experts at the company’s expense for several years.

Finance Committee

This committee assists the board in fulfilling its responsibilities concerning matters of a material financial nature, including the company’s strategies, policies and financial condition, insurance-related risk management programs, financing agreements, dividend policy, significant derivative instrument or foreign currency positions, and administration of tax-qualified defined contribution and defined benefit plans. The committee’s

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responsibilities also include review of the company’s annual business plan and long range planning strategies; all forms of major debt issuances; the financial aspects of proposed acquisitions or divestitures that exceed transaction levels for which the Board has delegated authority to management; material capital expenditures; methods of financing; and the company’s relationship with its lenders.

Director Nominees

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 CEO and a third-party consultant, after which it provides recommendations to the Board. While the Corporate Governance Committee does not have specific minimum qualifications for potential directors, its policy is that all candidates, including those recommended by shareholders, will be evaluated on the same basis. The committee utilizes a nationally recognized third-party consultant to assist in identifying potential candidates; the consultant is provided with the Committee’s assessment of the skill sets and experience required in the context of current board composition and will identify potential candidates for introduction to the Committee; thereafter, consideration of any such individuals is the responsibility of the Committee in consultation with the CEO. No searches were conducted during 2010.

Under our Bylaws, only individuals nominated in accordance with certain procedures are eligible for election as directors of the company (except for the rights of preferred stock holders, of which there are none). Generally, nominations are made by the Board of Directors or any shareholder (i) who is a shareholder of record on the date of the giving of written notice in respect of the nomination for director and on the record date for the determination of stockholders entitled to notice of and to vote at a meeting where directors are to be elected, and (ii) who provides advance written notice, all of the foregoing in accordance with the Bylaws. A shareholder’s written notice of a proposed nomination must describe (i) the name, age, business address and residence address of the nominee, (ii) the principal occupation or employment of the nominee, (iii) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by the person, if any, and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934 (“Exchange Act”), and its rules and regulations. The shareholder making the proposal must also provide (i) its name and record address, (ii) the class or series and number of shares of capital stock of the corporation which are owned beneficially or of record by the shareholder, (iii) a description of all arrangements or understandings between the shareholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such shareholder, (iv) a representation that the shareholder intends to appear in person or by proxy at the meeting to nominate the persons identified in its notice, and (v) any other information relating to such shareholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and its rules and regulations. The written notice must be accompanied by a written consent of each proposed nominee to being named or referred to as a nominee and to serve as a director if elected. The Board may require any proposed nominee to furnish such other information (which may include meetings to discuss the furnished information) as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director.

The Board’s Role in Oversight of the Company’s Risk Management Process

The Board oversees the company’s processes to identify, report and address risks across the full spectrum of company operations. To that end, each of the Board’s committees has been delegated responsibility for evaluating specific risk management processes and issues resulting therefrom. The Board receives regular reports from these committees and, where appropriate, directs that action be taken. The board also conducts direct oversight of certain risk management processes.

The following description of specific Board committee risk management oversight activities is not intended to be exhaustive in nature. The company’s Internal Audit Department reports directly to the Audit Committee and the committee regularly reviews with management the company’s financial reporting and accounting policies, internal controls over financial reporting, internal accounting controls, business risk assessment framework and principal business risks, and Code of Business Conduct compliance. The Finance

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Committee reviews the company’s short and long-term business plans, certain proposed acquisitions or divestitures (including consideration of any substantial diversification from current business operations), any significant debt/equity issuances, and risk management programs from an insurance coverage perspective. The company’s Assistant Vice President — Corporate Risk, Safety and Environmental Management also reports directly to the committee on a periodic basis. The Personnel & Compensation Committee reviews and approves the company’s executive compensation strategies and programs related to annual, longer term and equity incentives and the business unit and corporate performance goals associated therewith, monitors management progress in compliance with stock ownership guidelines, considers and approves all employment-related agreements or termination arrangements with the company’s Exchange Act Section 16 “executive officers” and periodically reviews policies related to management development. The Corporate Governance Committee reviews the company’s succession plan for the CEO and other top senior management, assures annual evaluation of Board performance, establishes selection criteria for new directors, and manages the annual CEO evaluation process. The charters of each Committee are more fully described above beginning at page 11.

In addition to its consideration of matters brought to its attention by the Board’s committees, the Board conducts direct oversight of various business risk management functions. At each regular meeting, the Board receives senior management reports about current operations as well as the identification of, and progress in addressing, principal business risks. The Board also receives direct reports from management regarding its Enterprise Risk Management program for identification and development of mitigation activities relative to longer-term business risks. In addition to the regular reports provided regarding current principal business risks, the Audit Committee will also periodically receive summary reports regarding the Enterprise Risk Management program. Annually, the Board reviews and approves the company’s strategic plan objectives with periodic reviews thereafter about progress to that plan and any changes that are being considered. The Board’s oversight role in this area has not affected its approach to the Board’s leadership structure at least in part due to the level of direct communication that the Board and its committees experience with a variety of management employees that are involved in operations, finance, human resources, risk management and legal roles.

Board and Committee Independence Requirements

Our Governance Principles contemplate that a significant majority of the Board should consist of independent directors and that 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, does not have a business relationship with the company and meets the legal and regulatory requirements (e.g., SEC, Nasdaq, Internal Revenue Code) for the definition of independence relative to Board committee service. Based on the review and recommendation of the Corporate Governance Committee, the Board has determined that all of the current directors are independent under this definition, with the exception of Mr. Keating, the company’s Chairman, President and CEO. The Board has also determined that all members of the Corporate Governance, Audit, Personnel & Compensation and Finance Committees satisfy the relevant SEC, Nasdaq and Governance Principles’ independence requirements.

There were no transactions, relationships or arrangements not disclosed in this proxy statement under the caption “Transactions with Related Persons” that were considered by the Board in determining the independence of any of its members.

Specific Experience, Qualifications, Attributes and Skills of Current Board Members and Director Nominees

The Corporate Governance Committee is responsible for reviewing with the Board, on a periodic basis, the appropriate characteristics required of Board members in the context of the board’s current composition. This includes review of the suitability for continued service of each Board member when his or her term expires and when he or she has a significant change in status. Overall, the assessment includes areas such as senior leadership positions; professional experience in areas relevant to the company’s businesses, including aerospace, industrial distribution, international, government, regulatory, mergers and acquisitions, financial, accounting, human resources or information technology systems experience; other public company board service; diversity, age and evidence of the intangible characteristics that are vital to the successful operation of any board. Diversity in this context has traditionally referred to encouragement of the identification of

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candidates from so-called “minority” categories, including women and individuals of varied national origin. Consideration of diversity has been an element communicated to the third-party search firms in each of the director searches in the past several years.

The Board believes that intangible characteristics include a demonstrated understanding of a director’s policy making role while constructively challenging management to seek and attain competitive targets and increase shareholder value; a demonstrated understanding of the company’s values and strategic plan; capacity for critical thought; maintenance of objectivity in not being unreasonably influenced by personal experience or other Board members in situation analysis; and the independence required for participation on the Board and its committees. In addition, Board members are evaluated with respect to their active contributions, including regular attendance and preparation for/participation at meetings while maintaining an ongoing understanding of the issues and trends affecting the company.

In addition to these intangible characteristics, we have described specific experience, qualifications, attributes and skills that the Board believes qualify each current director for his or her position on the Board in the summary of biographical information described above, beginning at page 5. Those descriptions are not intended as comprehensive descriptions of the types of expertise or contributions provided by each director. At this time, the Board believes that each of these directors possesses the experience, qualifications, attributes and skills as well as the intangible characteristics described above, which, taken together, qualify them for their positions on the Board.

Transactions With Related Persons

The company’s Code of Business Conduct requires that all business transactions be at arms’ length, negotiated in good faith and based on merit alone. All of the company’s employees have a responsibility and duty of loyalty to the company and all business decisions are to be made in the best interests of the company, which means putting the company’s interests first. Should a situation arise that would constitute a related-party transaction under SEC rules, the independent and disinterested Board members will review the propriety of, and approve or disapprove, such transaction.

There were no transactions, relationships or arrangements proposed between executive officers of the company and the company or any of its subsidiaries during 2010.

Other Information about the Board’s Structure

Board Size:  With Mr. Huston’s retirement, the company’s Board size has been set at nine for 2011, with three directors to be elected at the 2011 annual meeting. The company’s Amended and Restated Certificate of Incorporation provides that the Board will consist of at least three and not more than fifteen directors and while the Board is permitted to increase its size during the year, any director so elected may only serve until the annual meeting immediately following his or her election. Under our Governance Principles, a Board size of nine to eleven individuals continues to be considered appropriate.

Mandatory Retirement:  The company’s Bylaws provide for mandatory director retirement at age 72 (age 75 for directors serving as of November 14, 2000). The Board’s policy in implementing this requirement is that if a director attains mandatory retirement age during his or her then current term, the director may continue to serve the remaining portion of that term. In addition, the Board is permitted to make an exception to this requirement, but it intends to exercise this right only under extraordinary circumstances. Mr. Huston will retire as of the 2011 annual meeting in accordance with the Bylaws and this policy.

Change of Principal Occupation:  In addition, our Governance Principles require directors who change their principal occupation, position, or responsibility held at the time of election to submit a letter of resignation to the Board and a judgment will be made in each case as to the appropriateness of continued membership under the circumstances. No such circumstance occurred during 2010.

Section 16(a) Beneficial Ownership Reporting Compliance

Based upon information provided to the company by persons required to file reports under Section 16(a) of the Exchange Act, there were no Section 16(a) reporting delinquencies during 2010.

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NON-EMPLOYEE DIRECTOR COMPENSATION

The Corporate Governance Committee reviews our non-employee director compensation policies on a biennial basis with the assistance of the independent consultant to the Personnel & Compensation Committee. In light of economic conditions at the time, the 2009 regular review was postponed with the approval of the Corporate Governance Committee and the Board. The review was then conducted in 2010 with assistance from the independent consultant, who analyzed reports of the Conference Board, the National Association of Corporate Directors and Towers Watson as well as the director pay practices of the Russell 2000 peer companies against which the company benchmarks its executive compensation program (Exhibit 1 to this proxy statement). This analysis resulted principally in a recommendation to the Corporate Governance Committee to provide a larger portion of director fees in the form of equity by determining the equity portion of director fees equivalent to a fixed dollar amount and to increase the cash retainer for committee chairs except for the Audit Committee. The Board approved the recommended fee schedule, effective July 1, 2010. The following table compares the previous and revised fee schedules:

Kaman Corporation Board of Directors Retainer and Meeting Fees
		Effective 1/09 – 6/30/10				Effective 7/1/10
Cash
Retainer Fees (payable quarterly in arrears):
Board		$	45,000			$	45,000
Lead Director			30,000				30,000
Committee Chairmen:
Audit Committee			15,000				15,000
Corporate Governance Committee			6,000				7,500
Personnel & Compensation Committee			7,500				10,000
Finance Committee			6,000				6,500
Board per Meeting Fee			1,500				1,500
Committee per Meeting Fee			1,500				1,500
Committee Chairman per Meeting Fee			1,800				1,800
Vice Chairman (non-employee, per meeting when serving as Chair)			N/A				N/A
Restricted Stock Award**			2,000 shares				Shares having fair market value equal to $80,000
Estimated Annual Fees
Total estimated annual compensation for a Director sitting on two committees (non chair, 5 meetings per Committee) and stock price of $28 per share		$	125,000			$	149,000

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The following table shows the total compensation actually paid to each non-employee Director in 2010:

Director Compensation

Name		Fees Earned or Paid in Cash ($)				Stock Awards(1) ($)				Total ($)
Brian E. Barents		$	75,000			$	52,090			$	127,090
E. Reeves Callaway III		$	72,000			$	52,090			$	124,090
Karen M. Garrison		$	80,350			$	52,090			$	132,440
A. William Higgins		$	60,000			$	52,090			$	112,090
Edwin A. Huston		$	90,900			$	52,090			$	142,990
Eileen S. Kraus		$	111,750			$	52,090			$	163,840
George E. Minnich		$	73,500			$	52,090			$	125,590
Thomas W. Rabaut		$	70,500			$	52,090			$	122,590
Richard J. Swift		$	81,050			$	52,090			$	133,140

From time to time, special activities may be undertaken by one or more directors at the direction of the Board and in such cases, additional fees will ordinarily be paid. There were no such special activities during 2010.

Directors may defer all, or a portion of, their cash compensation. Interest accrues on such deferrals at the Applicable Interest Rate, which is the same rate that applies to our Deferred Compensation Plan for company executives. When a director ends his or her service on the Board, distributions are made either in quarterly installments over a maximum period of 10 years or in a lump sum, based on prior elections made in connection with each year of deferral. Distributions are made beginning either in the next calendar quarter after the date service ends or on the following January 1 at the prior election of the director.

Mr. Keating receives no compensation for his Board service.

The Board has adopted stock ownership guidelines for non-employee Directors. The Corporate Governance Committee periodically reviews the progress of each non-employee director toward achieving these guidelines. As of December 31, 2010, all independent directors were in compliance with these guidelines, except the directors who most recently joined the Board.

Code of Business Conduct and Other Governance Documents Available on the Company’s Website

The company has for several years maintained a Code of Business Conduct applicable to all of its employees and the Board of Directors. This Code of Business Conduct is also applicable to the company’s principal executive officer, principal financial officer, principal accounting officer, controller, and persons performing similar functions. The current Code of Business Conduct, which was last amended in 2009, may be accessed on the company’s web site at www.kaman.com by first clicking on “Corporate Governance” and then “Kaman Code of Conduct”.

In addition to the Code of Business Conduct and committee charters already referenced, our other governance documents including Bylaws, Amended and Restated Certificate of Incorporation, and Governance Principles can be accessed on the company’s web site at www.kaman.com by first clicking on “Corporate Governance” and then the link for each document.

Communications with the Board

Shareholders or others wishing to communicate with any member of the Board, a Board committee, or the Lead Independent Director may do so by mail, addressed to Kaman Corporation Corporate Headquarters, c/o Corporate Secretary, 1332 Blue Hills Ave., Bloomfield, Connecticut 06002 or by e-mail through the

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Kaman Corporation web site at www.kaman.com using the tab “Contact Information” and choosing the “Corporate Secretary’s Office” link. The Corporate Secretary will compile all such communications and forward each item to the individual to whom it is directed or, if the communication is not directed to any particular board member, to the entire board. Items that the Corporate Secretary determines are frivolous, unlawful or that constitute commercial advertisements will not be included.

Director Education

The Board maintains a policy that Directors should be regularly exposed to discussion of current developments in their roles and responsibilities as directors and their attendance at such sessions is reimbursed by the company. The Board’s policy also encompasses receipt of information regarding developments in the law and conditions in the market segments in which the company operates. During the past few years, several Board members have participated in seminars sponsored by various national organizations and received presentations from outside industry experts regarding developments and trends in certain of the company’s market segments and various corporate governance/compensation aspects of the Dodd-Frank Act. In addition, 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.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Stock Ownership Of Directors and Executive Officers

Following is information about beneficial ownership of the company’s Common Stock by each Director and Director nominee, each executive officer named in the Summary Compensation Table, and all Directors and executive officers as a group, as of February 1, 2011. Ownership is direct unless otherwise noted. The beneficial ownership percentages have been calculated based on 26,085,417 shares of Common Stock outstanding on February 1, 2011.

Name		Number of Shares Beneficially Owned as of February 1, 2011				Percentage
Brian E. Barents			15,500				*
E. Reeves Callaway III			10,500				*
Candace A. Clark			52,684	(1)			*
William C. Denninger			32,421	(2)			*
Karen M. Garrison			10,000				*
A. William Higgins			4,000				*
Edwin A. Huston			13,500				*
Neal J. Keating			139,361	(3)			*
Eileen S. Kraus			18,499				*
George E. Minnich			4,000				*
Thomas W. Rabaut			10,400				*
Steven J. Smidler			2,100				*
Gregory L. Steiner			39,816	(4)			*
Richard J. Swift			11,000				*
All Directors and Executive Officers as a group			434,506	(5)			1.67	%

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Beneficial Owners Of More Than 5% Of Common Stock

Following is information about persons known to the company to be beneficial owners of more than five percent (5%) of the company’s voting securities. Except as otherwise indicated, all information is given as of February 1, 2011.

Name and Address of Beneficial Owner		Number of Shares Beneficially Owned				Percentage of Common Stock
Gabelli Funds, LLC(1)			3,583,862				13.7	%
One Corporate Center Rye, NY 10580
BlackRock, Inc. f/k/a Barclays Global Investors, N.A.(2)			2,024,951				7.8	%
40 East 52nd Street New York, NY 10022
FMR LLC(3)			1,430,849				5.5	%
82 Devonshire Street Boston, MA 02109
T. Rowe Price Associates, Inc.(4)			1,379,121				5.3	%
100 East Pratt Street Baltimore, MD 21202

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

This section explains our executive compensation program as it applies to our named executive officers (whose compensation information is contained in the tables following this discussion) as well as the role, responsibilities and philosophy of our Board’s Personnel & Compensation Committee (the “Committee” or the “committee”), which oversees the design and operation of the program. The named executive officers are:

Neal J. Keating		Chairman, President and Chief Executive Officer
William C. Denninger		Senior Vice President and Chief Financial Officer
Gregory L. Steiner		President, Kaman Aerospace Group, Inc.
Steven J. Smidler		President, Kaman Industrial Technologies Corporation
Candace A. Clark		Senior Vice President, Chief Legal Officer and Secretary

Our goals are to:

The Pay Elements; Performance Metrics and Evaluation of Market Pay Practices

We have designed our executive compensation program to achieve these goals in a variety of ways with the intention of providing reasonable pay for a company of our size and incentive opportunities that challenge and correspondingly reward our executives when, and to the extent that, the company succeeds. First, we use a combination of pay elements, each of which over time is intended to approximate the market median compensation for each position. These elements include base salary, annual and longer-term cash incentive opportunities, and benefits. The opportunities afforded by each pay element are determined on the basis of comparison to objective criteria to assure consistency with companies of similar revenue size, which include national surveys and a sampling of the Russell 2000 companies recommended by the Committee’s independent consultant which approximate the company’s revenue size (but is not reflective of our unique combination of business segments in one organization).

Actual annual and longer-term incentive pay is then determined by comparing selected metrics of company financial and operational performance to the entire Russell 2000 index of companies. The Committee uses the Russell 2000 because it believes that this continues to be the most likely group that both current and potential shareholders would use to evaluate the company in making their investment decisions; this is largely due to the fact that our two business segments (Aerospace and Industrial Distribution) are so diverse from each other that it is not feasible to compare us to a peer group of companies. The Committee regularly reviews the continued appropriateness of using the Russell 2000 for comparison and has reconfirmed its use for 2011.

The financial performance metrics upon which annual and longer-term incentive opportunities are based are those that management uses to evaluate business performance. For corporate participants, annual incentive metrics include return on investment, growth in earnings per share, and growth in earnings per share compared to the company’s annual plan projection for earnings per share; for business segment participants, metrics include accomplishment of predetermined financial goals and other operational performance factors

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approved by the Committee. Longer-term incentive metrics are the same for corporate and business segment executives and consist of the company’s average return on investment, compounded growth in earnings per share and total return to shareholders over a three-year period. The weightings of these metrics in the overall determination of award payments differ for the annual cash incentive and longer-term incentive, as discussed below.

As discussed below, during the past few years, the Committee has taken a number of steps to assure that the benefits provided to the named executive officers more closely approximate the benefits that are provided to other employees. These include the elimination of essentially all perquisites and phase out of the supplemental employees’ retirement plan in the same manner as the basic tax-qualified pension plan. In addition, the Committee has also aligned existing employment and change-in-control agreements for the named executive officers with current market practices.

How the Pay Elements Work in Practice

The pay elements of our executive compensation program are designed to work together in a way that results in above average compensation when the company achieves above average financial performance compared to the Russell 2000 index of companies. Set forth below are charts comparing our performance to the 50^th and 75^th percentiles of our market (as described above) for both annual and long-term incentive award determination purposes.

Annual Cash Incentive Awards.

This chart compares our 2010 financial performance with the 50^th and 75^th percentile performance of the Russell 2000 companies for the period 2005 – 2009 (which is the period we use to evaluate our results for annual cash incentive awards purposes):

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Our 2010 return on investment (ROI) performance was at the 66^th percentile of the Russell 2000 and earnings per share (EPS) growth was at the 71^st percentile. These two factors combined with achieving 97% of our budgeted earnings per share resulted in Mr. Keating earning base salary and target annual cash incentive for 2010 at the 65^th percentile as illustrated by the chart below:

Please see the discussion at page 25 for information on our independent consultant’s determination of the 50^th and 75^th percentile for this market comparison.

Performance Related to Long-Term Incentive Award Determination.

The following chart compares the Company’s three year (2008 – 2010) performance against the Russell 2000 companies for the same three-year period based on available data as of February 1, 2011. Approximately 20% of the Russell 2000 companies reported data as of February 1, 2011. As illustrated below, our performance was at almost the 75^th percentile for compounded growth in EPS growth and above the 75^th percentile for average return on investment. Total return to shareholders for this period was at the 40^th percentile due in significant part to global economic difficulties in 2008. Based on these performance levels, we have accrued approximately $1.8 million for Mr. Keating’s LTIP award for the 2008-2010 performance period. This amount represents approximately the 61^st percentile of the competitive market for other chief executive officers in similar companies. We will report the final figure earned by Mr. Keating (and our other named executive officers) for the 2008-2010 LTIP award and an update of the 3-Year Performance Period vs. Russell 2000 chart in an 8-K filing later this year once all 2010 operating results for Russell 2000 companies become available and the Committee has approved the awards.

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In addition, each of the other named executive officers’ target performance-based compensation (which is comprised of annual cash incentive and LTIP) was at least 60% of their total cash and stock-based compensation in 2010, up approximately 5 percentage points from 2009 (except for Mr. Smidler, who joined the company in December of 2009).

Our emphasis on goal achievement to drive incentive compensation is balanced by policies and plan features that emphasize alignment of the executive’s financial interest with those of company’s shareholders. These include the existence of stock ownership guidelines, the long-term incentive feature of the Stock Incentive Plan that requires executives to receive at least one-third of an award payment in company stock if stock ownership guidelines have not been met, and caps imposed upon total annual cash incentives and cash-based long-term incentive awards. In February 2011, the committee also recommended, and the Board adopted, an anti-hedging policy which provides that no director or executive officer may speculate in company stock or debt securities, including hedging or any type of arrangement that would have a similar economic effect.

The Committee also introduced a claw back policy in 2010 applicable to the company’s CEO and chief financial officer and Messrs. Keating and Denninger’s employment agreements were amended last year to reflect the policy. When SEC regulations are issued in final form to provide guidance on the requirements of a comprehensive “claw back” policy as required by recent federal legislation, the Board will establish a claw back policy. This policy will immediately apply to all named executive officers as their employment agreements currently provide that each executive is bound by any claw back policy adopted by the company.

Actions to Modify Supplemental Pension/Perquisites/Management Agreements

The Committee has modified the supplemental pension plan, perquisites and management agreements provided to our named executive officers over the past few years consistent with market practice as follows:

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Our Willingness to Respond to Economic Circumstances

Although salaries for our named executive officers are determined with reference to market surveys and a sampling of comparable Russell 2000 companies and therefore incorporate the effects of general economic conditions, we are also mindful of other actions that might be in the best interests of the company and its shareholders. We did not increase salaries for calendar year 2009 for corporate officers and business segment presidents, including each of the named executive officers (other than Mr. Smidler who did not join the company until December 2009) and corporate officers took a one-week furlough during that year. No additional amount was included to “make up” for the freeze in 2009 in determining any salary increase for named executive officers in 2010.

Additional Information about the Committee

A detailed discussion of the Committee’s structure, roles and responsibilities and related matters and the role of the independent consultant are located under the caption “Personnel & Compensation Committee” on page 12.

Following is more detailed information about our executive compensation program as it relates to our named executive officers:

Compensation Policies

Our Comparison to External Market Practices

The Committee determines the threshold, target and maximum level of base salary, annual cash incentive and long term incentive targets for our named executive officers using a market report prepared biennially by the Committee’s independent consultant. As described above, the Committee has been advised by our independent consultant that our business segment diversity makes identification of a sensible peer group to benchmark compensation unworkable. Instead, the independent consultant’s market report (the most recent being in 2009) estimates the 25^th percentile, 50^th percentile and 75^th percentile for base salary, annual cash incentive awards and the annualized cash value of long-term incentives using information for manufacturing companies contained in nationally recognized compensation surveys published by Hewitt Associates and Towers Watson, two large independent consulting firms. Exhibit 1 to this proxy statement identifies these surveys (which are not prepared at the company’s request), along with the number, type and size of the covered organizations. In all cases, the revenue size of organizations was adjusted by the independent consultant for each position to provide a more accurate view of the market data. This revenue-size adjustment was made utilizing a regression analysis applied to the scope of each position, generally based on revenue

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responsibility. In order to test the reliability of this information, the independent consultant evaluated the compensation levels of a sample of twenty-two (22) other Russell 2000 companies having annual revenues similar to ours, which are also identified on Exhibit 1 to this proxy statement. These are the companies that the company has sampled in prior years (except for one company that was acquired during 2009). Our independent consultant has advised the Committee that the data from this sample is consistent with the national compensation surveys when adjusted for company revenue size. During 2011, the independent consultant will update this market report.

The Committee’s policy is that the base salary, annual cash incentive targets, the annualized value of long-term incentives and other benefits (including perquisites and retirement programs) should each, over time, approximate the market median. As of the most recent comprehensive competitive compensation analysis by our independent consultant, our base salary and target incentive annual cash award opportunities for our named executive officers as compared to the median of the competitive market for 2009 were as follows:

Neal J. Keating(1)		Base Salary				Target Annual Cash Incentive Award %
Market Median		$	795,000				100	%
Kaman		$	725,000				100	%

William C. Denninger(1)		Base Salary				Target Annual Cash Incentive Award %
Market Median		$	376,000				60	%
Kaman		$	478,200				60	%

Gregory L. Steiner(2)		Base Salary				Target Annual Cash Incentive Award %
Market Median		$	429,600				60	%
Kaman		$	371,725				60	%

Steven J. Smidler(2)		Base Salary				Target Annual Cash Incentive Award %
Market Median		$	335,600				48	%
Kaman		$	330,000				55	%

Candace A. Clark(2)		Base Salary				Target Annual Cash Incentive Award %
Market Median		$	332,400				50	%
Kaman		$	374,170				50	%

Based on the competitive analysis, for 2010 the committee set the target annual cash incentive award percentages for the named executive officers to the competitive levels shown above. Our independent consultant has advised us that the 2010 market rates for the positions will likely be 2% to 5% higher than those shown above.

Annual cash incentive targets and annualized value of long-term incentives for each named executive officer approximate market medians. Currently, Messrs. Keating, Steiner and Smidler are positioned at or below the midpoint of their salary grades, while Mr. Denninger and Ms. Clark are positioned above the midpoint. Ms. Clark’s variation from the market median is primarily due to her 26-year length of service with the company while Mr. Denninger’s variation reflects his many years of experience as a chief financial officer in both the distribution and aerospace industries. Based on the manner in which the company manages base salaries, it is expected that actual and market salaries will converge over time. Since annual cash incentive

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targets, the annualized value of long-term incentive targets and retirement income formulas are applied to actual annual base salaries, total compensation levels may similarly differ from market median total compensation levels.

Our policy also results in a greater percentage of total compensation (excluding benefits) being based on performance-based total cash and stock-based compensation (excluding benefits) for the named executive officers. As the table below shows, 2010 total performance-related percentages for all these executives increased compared to prior year, except for Mr. Smidler who became president of Industrial Distribution on September 1, 2010 and is not yet a participant in the long-term incentive feature of the Stock Incentive Plan.

Allocation of 2010 Total Cash and Stock-based Compensation

		Fixed				Performance-Based*
Name		Salary (% of Total)				Annual Cash Incentive (% of Total)				Long-Term Incentive (% of Total)				Total Performance Related (% of Total)
Neal J. Keating			25	%			25	%			50	%			75	%
William C. Denninger			36	%			22	%			42	%			64	%
Gregory L. Steiner			36	%			22	%			42	%			64	%
Steven J. Smidler			67	%			33	%			0	%			33	%
Candace A. Clark			39	%			20	%			41	%			61	%

Allocation of 2009 Total Cash and Stock-based Compensation

		Fixed				Performance-Based*
Name		Salary (% of Total)				Annual Cash Incentive (% of Total)				Long-Term Incentive (% of Total)				Total Performance Related (% of Total)
Neal J. Keating			29	%			24	%			47	%			71	%
William C. Denninger			41	%			20	%			39	%			59	%
Gregory L. Steiner			41	%			20	%			39	%			59	%
Steven J. Smidler			67	%			33	%			0	%			33	%
Candace A. Clark			41	%			20	%			39	%			59	%

Components of the Executive Compensation Program

The total compensation program for our named executive officers has consisted of the following elements:

While base salaries, long-term incentives, and retirement and other benefits generally are determined in similar ways for each of our named executive officers, different annual cash incentive awards apply to those named executive officers employed at Corporate Headquarters (Messrs. Keating and Denninger and Ms. Clark), Aerospace (Mr. Steiner) and Industrial Distribution (Mr. Smidler).

Base Salaries

Base salaries are a traditional pay element established initially based upon the individual’s professional experience and knowledge of his or her area of management responsibility. The Committee annually reviews and determines base salaries of the CEO and other named executive officers. Its determination regarding the CEO is subject to the Board’s approval. Adjustments to base salary are determined as follows: An overall salary increase budget guideline is developed, based on market data and the use of nationally recognized

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surveys of anticipated salary increases published by Towers Watson, Mercer, CompData Surveys, and World at Work. Within the overall budget guideline, a narrow range of salary adjustment percentages is then established for each salary grade, with slightly higher percentages for individuals who are below the grade midpoint and slightly lower percentages for individuals who are above the grade midpoint. Salary adjustments, if any, are then determined within this narrow range based upon an annual performance rating given to the named executive officer by Mr. Keating and recommended to the Committee. The performance rating determination is primarily based upon the officer’s level of substantive performance in executing each category of responsibilities as described in his or her position description.

The Committee’s recommendation to the Board regarding the CEO’s salary is made after consultation with the Corporate Governance Committee concerning its assessment of the CEO’s performance for the year. The Corporate Governance Committee solicits input from all independent directors in connection with the CEO performance assessment.

The 2010 salaries for the named executive officers are shown in the Summary Compensation Table that follows this Compensation Discussion and Analysis.

Annual Cash Incentives

Our annual cash incentive award plan (“Cash Bonus Plan”) is intended to reward employees for financial and operational performance that drives shareholder value and focus our organization on meeting or exceeding designated individual goals. The plan provides employees, including our named executive officers, the opportunity to earn cash awards based on the degree to which the company achieves pre-determined performance measures for the year. Each executive also has the opportunity to earn up to an additional 10% of his or her target award based upon the degree to which the executive actually achieved his or her individual performance goals set in early 2010.

Amounts paid under our Cash Bonus Plan (other than due to individual performance goals or with respect to employees hired during the year) are intended to qualify as “performance-based compensation” under Section 162(m) of the Code. For 2010, the Committee approved a discretionary bonus of approximately $44,000 for Mr. Steiner that was not performance-based under Section 162(m) as explained below, but which did not affect the tax deductibility of Mr. Steiner’s compensation.

The elements used to determine awards include:

Award Opportunities

The Committee establishes the target award opportunity for each named executive officer using the independent consultant’s market report and advice. Positioning award targets at the market median reinforces the Committee’s strategy that annual cash incentive payments should exceed target levels only when financial performance exceeds the company’s targeted objectives. The 2010 target performance award opportunity for each named executive officer was as follows:

Named Executive Officer		2010 Target Award Opportunity Expressed as % of Base Salary
Neal J. Keating			100	%
William C. Denninger			60	%
Gregory L. Steiner			60	%
Steven J. Smidler			55	%
Candace A. Clark			50	%

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Corporate Named Executive Officers

Performance Measures

2010 annual cash incentive awards for Messrs. Keating and Denninger and Ms. Clark were almost entirely determined by comparing the company’s degree of achievement of the following performance factors compared against the benchmark indicated:

Performance Measure		Benchmark		Weighting
Actual return on investment		Russell 2000 index for 2005 – 2009		33%
Growth in earnings per share (fully diluted)		Russell 2000 index for 2005 – 2009		33%
Actual earnings per share (fully diluted)		2010 business plan performance goal		34%

We use the five-year period for the Russell 2000 index primarily because many of the company’s military and commercial aerospace programs are longer-term in nature, the time period between sales efforts and actual revenues can be very long, and revenues are often not evenly spread from year to year. Further, because the Russell 2000 index includes companies in a variety of industries that may experience different business cycles, the Committee determined that averaging performance of these companies over a period of time provided a better comparison than just one year. During 2011, the Committee will be re-evaluating the continued appropriateness of the five-year timeframe. We cannot include the last completed fiscal year in the analysis because sufficient data for the Russell 2000 index is not available until the June 2011 time frame. We use these performance measures because they are the metrics used by management and the Board to evaluate the company’s performance.

Company performance in the bottom quartile of the Russell 2000 earns no cash incentive award payment for the performance goal; performance at the median results in a cash incentive award at 100% of target for the performance goal; and performance at the top of, or above, the top quartile results in a maximum cash incentive award payment at 200% of the target for the performance goal. Interpolation is used to determine payments for financial performance between the 25^th percentile up to median, and above median up to the 75^th percentile. This performance measurement methodology remains constant through the years although the performance of the Russell 2000 changes annually, thus increasing or decreasing the targets annually.

The company’s annual business plan is developed jointly by business segment and corporate senior management, incorporating revenue, earnings and cash flow generation goals that take into account global economic circumstances, market conditions, and existing or targeted business opportunities. The business plan is reviewed and approved by both the Finance Committee and the full Board. If the company’s actual earnings per share meet the business plan projection, the target award for this factor is earned. To the extent that actual earnings per share exceed the business plan projection, a greater award is earned, up to a maximum of 200% of target.

2010 Company Financial Performance

The following tables show the relationship between the company’s 2010 actual financial performance and each performance factor described above, the degree to which each performance factor was attained, the Russell 2000 index comparison for the 25^th percentile, median and 75^th percentiles, and the resulting corporate performance factor. While the company’s 2010 return on investment and growth in earnings per share results compared very favorably to the Russell 2000, actual earnings per share did not reach the business plan projection, resulting in a corresponding lower contribution to the overall corporate performance factor.

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Benchmark 5 Year Russell 2000 Performance — 2005 – 2009

		25th Percentile				Median				75th Percentile
Compounded EPS Growth			-8.4	%			4.3	%			18.1	%
Average Return on Investment			-2.5	%			4.2	%			9.5	%

		Earnings per Share (fully diluted)
		2009 Actual				2010 Plan				2010 Actual
		$	1.27			$	1.51			$	1.47

		2010 Actual Results				Median Return For Prior 5-Year Period — Russell 2000				Percentage Of Factor Earned				Weighting Factor				% Of Target Award*
Return on Investment			7.5	%			4.2	%			162.3	%			33				53.5	%
Growth In Earning per share			15.7	%			4.3	%			182.6	%			33				60.3	%
Actual versus projected Earnings per share performance			97.4	%			N/A				94.8	%			34				32.2	%
Corporate Performance Factor																			146.0	%

2010 Individual Performance

Mr. Keating’s degree of individual goal attainment was determined by the Committee and the Board against specific measurable written goals established early in the year by the Board for his role as CEO and Chairman. These goals included achievement of the company’s 2010 plan for operating earnings, earnings per share, return on investment and free cash flow; completing the closure of the company’s basic pension plan and supplemental retirement plan; strengthening the company’s business development capabilities; strengthening and formalizing the company’s management development program; achievement of specific business unit operational goals; and effective management of time, subject matter and responsiveness to the Board as chairman. The Board determined that Mr. Keating earned a 5% addition to his target award based on performance against these goals.

The degree of individual goal attainment for Mr. Denninger and Ms. Clark was recommended to the Committee by Mr. Keating based upon his evaluation against specific measurable written goals established for each of them early in the year. Mr. Denninger’s 2010 individual goals related to implementing changes to the company’s pension plan and modifying its investment approach; coordinating financial due diligence in support of acquisitions; directing development of a master plan for more efficient use of company facilities; streamlining certain accounting processes; and developing an implementation plan for adoption of international financial reporting standards. Based on the extent to which the Board determined that these goals were achieved, Mr. Denninger earned an additional 9% of his target award. Ms. Clark’s 2010 goals related to developing a plan for improvements to the department functional alignment to better serve the company; implementation of a web portal for Board and committee meetings to reduce costs and improve efficiency; developing maximum fee arrangements where feasible for all outside counsel projects during the year; enhancing efficiency of acquisition support activities; and providing leadership and coordination in the management of company legal disputes. Based on the extent to which the Board determined that these goals were achieved, Ms. Clark earned an additional 9% of her target award.

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Actual 2010 Annual Cash Incentive Award Payments

Following are total annual cash incentive awards earned for calendar year 2010 for the Corporate named executive officers:

Named Executive Officer		2010 Cash Incentive Award				Incentive Award Expressed as a Percentage of Base Salary
Neal J. Keating		$	1,094,750				151.0	%
William C. Denninger		$	444,726				93.0	%
Candace A. Clark		$	289,982				77.5	%

Business Segment Named Executive Officers

Aerospace Segment Named Executive Officer

Performance Measures.  The 2010 annual cash incentive award for Mr. Steiner, president of the Aerospace segment, was calculated based on (i) predetermined financial goals for this business segment as recommended by the CEO and adopted by the committee; and (ii) performance relative to other factors described below. The financial goals and their weighting for this business segment were:

Performance Goal		Benchmark		Weighting
Budgeted return on investment		Target return on investment		20%
Actual return on investment		Budgeted return on investment		20%
Actual return on investment		Target return on investment		40%
Growth in segment operating income year over year		Operating income		20%

Target return on investment performance goal is the average return on investment for the three previous calendar years (i.e., the average of 2007, 2008 and 2009 for the 2010 performance year). The budgeted return on investment performance goal measures the business segment’s annual business plan versus the target return on investment. This performance goal is included in order to incent management to develop both aggressive and realistic goals. Accomplishing just this performance goal alone is not sufficient to earn a cash incentive award.

There are also other performance goals (referred to below as “other factors”) for Mr. Steiner established by the committee based on the CEO’s recommendation. The extent to which each of the performance goals is achieved, results in the earning of “points”. The Cash Bonus Plan requires that a minimum number of points be accumulated for a cash incentive award to be earned and the more points that are earned, the greater the cash incentive award. Varying point levels are assigned to each factor based upon the Committee’s assessment of the degree of attainment difficulty, after consultation with management. Possible point values ranged from 0 to 6 for each “other factor” with a maximum of 20 points.

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Following is a conversion chart demonstrating how the total number of points is converted into a percentage of the target award:

		CONVERSION CHART EXAMPLE
		Total Points Earned				Percent of Target Award Earned
			Below 50				0
			50				20
			60				30
			70				45
			80				60
			90				80
			100				100
			110				120
			120				140
			130				160
			140				180
			150 & Above				200

Because the maximum percentage of target award earned is 200%, the maximum number of points available for each of the predetermined financial goals is 150. Interpolation is used to determine payments if the number of points falls between two stated levels of total points earned in this table.

2010 Actual Financial Performance.  The following table illustrates the performance parameters and calculation method to determine Mr. Steiner’s 2010 annual cash incentive payment. Mr. Steiner earned 66.3 points based on actual 2010 business segment results as measured against the described financial goals. Mr. Steiner’s “other factors” related to achieving a signed contract for the sale/lease of the SH-2G(I) aircraft, profitability of the Wichita operation, establishing a low cost manufacturing facility, obtaining a signed purchase agreement for an acquisition and securing a production commitment from a significant customer for a specific program. For 2010, Mr. Steiner earned a total of 11 points (out of 20) for his achievements with respect to the other factors involving the Wichita operations (4 points), establishing a low cost manufacturing facility (3 points) and signing an acquisition purchase agreement (4 points). Given the weightings described above, 2010 financial performance by the Aerospace segment and achievement of other segment performance factors resulted in a total of 77.3 points and a performance factor of 56.0% out of a maximum of 200%.

		Average Return on Investment (“ROI”)												Operating Income (in millions)
		2010 Target				2010 Plan				2010 Actual				2009				2010
			21.5	%			23.9	%			18.1	%		$	75.0			$	67.2

		Performance %				Points Earned				Performance Range
Plan vs. Target ROI			111.2	%			28.9				50% = 0				100% = 20				125% = 40
Actual Performance vs Plan ROI			75.5	%			10.2				50% = 0				100% = 20				125% = 40
Actual Performance vs Target ROI			84.0	%			27.2				50% = 0				100% = 40				125% = 80
Growth in Operating Income			-10.5	%			—				0% = 0				8% = 20				12% = 40
Points Earned based on Financial Performance							66.3
Other Factors (20 point maximum)							11.0
Total Points Earned							77.3

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Actual 2010 Cash Incentive Award Payments

Following is the total annual cash incentive award earned for calendar year 2010 for Mr. Steiner:

Named Executive Officer		2010 Cash Incentive Award				Incentive Award Expressed as a Percentage of Base Salary
Gregory L. Steiner		$	124,899				33.6	%

A special one-time discretionary bonus of approximately $44,000 was also awarded to Mr. Steiner and was specifically designated by the committee as non-performance based under Internal Revenue Code Section 162(m) because the committee determined that Mr. Steiner’s should be compensated for the company’s receipt of a $6.6 million payment related to the claim for “look-back” interest that we filed with the IRS in connection with the former Australia SH-2G program and gain on the sale of certain assets of the Aerospace segment during the year. These items are included in the company’s overall financial results.

Industrial Distribution Segment Named Executive Officer

Performance Measures.  The 2010 annual cash incentive award for Mr. Smidler, president of the Industrial Distribution segment, was calculated based on (i) predetermined financial goals for this business segment as recommended by the CEO and adopted by the Committee for Mr. Smidler; and (ii) performance relative to other factors described below.

Performance Goal		Benchmark		Weighting
Budgeted return on investment		Target return on investment		15%
Actual return on investment		Budgeted return on investment		15%
Actual return on investment		Target return on investment		30%
Growth in segment operating income year over year		Operating income		20%
Growth in sales year over year		Sales		20%

The target return on investment performance goal is established as the average return on investment for the three previous calendar years (i.e., the average of 2007, 2008 and 2009 for the 2010 performance year). The budgeted return on investment performance goal measures the business segment’s annual business plan versus the target return on investment. This performance goal is included in order to incent management to develop both aggressive and realistic goals. Accomplishing just this factor alone is not sufficient to earn a cash incentive award.

There are also other performance goals (referred to below as “other factors”) for Mr. Smidler’s performance that are established by the committee based on the CEO’s recommendation. The extent to which each of these factors performance goals is achieved results in the earning of “points”. The Cash Bonus Plan requires that a minimum number of points be accumulated for a cash incentive award to be earned and the more points that are earned, the greater the cash incentive award. Varying point levels are assigned to each performance goal based upon the committee’s assessment of the degree of attainment difficulty, after consultation with management. Possible point values ranged from 0 to 6 for each “other factor” with a maximum of 80 points.

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Following is a conversion chart demonstrating how the total number of points is converted into a percentage of the target award:

		CONVERSION CHART EXAMPLE
		Total Points Earned				Percent of Target Award Earned
			Below 50				0
			50				20
			60				30
			70				45
			80				60
			90				80
			100				100
			110				120
			120				140
			130				160
			140				180
			150 & Above				200

Because the maximum percentage of target award earned is 200%, the maximum number of points available for each of the predetermined financial goals is 150. Interpolation is used to determine payments if the number of points falls between two stated levels of total points earned in this table.

2010 Actual Financial Performance.  The following table illustrates the performance parameters and calculation method to determine Mr. Smidler’s 2010 annual cash incentive payment. Mr. Smidler earned 135.4 points based on actual 2010 business segment results as measured against predetermined financial goals. Mr. Smidler’s “other factors” related to implementing Kaman’s Goal Achievement culture of continuous improvement and a monthly reporting and review process; achieving organic growth and market penetration by retaining significant national accounts; expanding by 5% the number of customers doing more than a designated minimum of annual sales; completing acquisitions that would add an incremental $100 million of annualized sales; executing the segment’s organizational redesign; and increasing the segment’s net gross margin. For 2010, Mr. Smidler earned a total of 68 points (out of 80) for achievements with respect to the other factors involving the Kaman Goal Achievement Process (20 points), organic growth and market penetration (12 points), acquired growth and profitability (12 points), executing Industrial Distribution’s organizational redesign (16 points) and increasing Industrial Distribution’s net gross margin (8 points). Given the weightings described above, 2010 financial performance by the Industrial Distribution segment and achievement of other segment performance factors resulted in a total of 203.4 points and a performance factor of 200% out of a maximum of 200%.

Sales (in millions)						Average Return on Investment (“ROI”)												Operating Income (in millions)
2009		2010				2010 Target				2010 Plan				2010 Actual				2009				2010
$645.6		$	832.2				18.7	%			13.0	%			15.9	%		$	12.6			$	30.3

		Performance %				Points Earned				Performance Range
Plan vs. Target ROI			69.6	%			5.9				50% = 0				100% = 15				125% = 30
Actual Performance vs Plan ROI			122.3	%			28.4				50% = 0				100% = 15				125% = 30
Actual Performance vs Target ROI			85.1	%			21.1				50% = 0				100% = 30				125% = 60
Growth in Operating Income			139.9	%			40.0				0% = 0				8% = 20				12% = 40
Growth in Sales			28.9	%			40.0				0% = 0				8% = 20				16% = 40
Points Earned based on Financial Performance							135.4
Other Factors (80 point maximum)							68.0
Total Points Earned							203.4

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Actual 2010 Cash Incentive Award Payments

Following is the total annual cash incentive award earned for calendar year 2010 for Mr. Smidler. Mr. Smidler’s target annual incentive opportunity increased from 50% to 55% on September 1, 2010 when he became President of the segment. His total award for 2010 utilizes the increased incentive opportunity percentage only for the September 1, 2010 — December 31, 2010 period.

Named Executive Officer		2010 Cash Incentive Award				Incentive Award Expressed as a Percentage of Base Salary
Steven J. Smidler		$	321,000				97.3	%

Long-Term Incentives (“LTIP”)

The Committee uses cash-based awards under the company’s long-term incentive feature of the Stock Incentive Plan (“LTIP”) to focus executive officers on long-term performance. LTIP Awards are based on the company’s actual performance during a three-year performance period with respect to performance measures selected under the company’s Stock Incentive Plan. The payment amount for completed performance periods is determined by a comparison of the company’s financial performance for the three-year period with performance of the Russell 2000 Index for the same period. Payments attributable to completed performance periods are made in cash unless a participant has not yet achieved his or her required stock ownership level under the company’s guidelines, in which case, up to one-third of the earned award will be paid in the form of company stock. These awards are intended to qualify as performance-based compensation in accordance with the requirements of Internal Revenue Code Section 162(m).

In 2010, the Committee granted LTIP Awards for the performance period 2010 – 2012 in lieu of equity grants for Mr. Keating and Ms. Clark because each of them already own a significant personal equity position in the company and have met their stock ownership requirements. Messrs. Denninger and Steiner who both joined the company in 2008 were granted LTIP Awards for the 2010 – 2012 performance period and also received restricted stock awards of 8,580 and 6,530 respectively and stock option grants of 24,300 and 18,490 shares, respectively, during 2010. Mr. Smidler did not become an executive officer until September 1, 2010 and thus was not a participant in the 2010 – 2012 LTIP performance period.

It has been the company's practice to include new executive officer participants in the three-year LTIP award performance cycle that follows their hire date. This has resulted in no LTIP payment for at least three years after first becoming a participant. In the interim, these new executives have received stock options and restricted stock grants as described above. In February 2011, the Committee determined that, as a better means of relating a new executive's incentive compensation to the company's performance against the Russell 2000 companies, it would utilize LTIP awards with one and two year performance cycles in addition to the traditional three-year performance cycle, beginning in 2011. These LTIP awards would correspondingly use one, two and three-year Russell 2000 index performance periods to determine the LTIP payment. These awards would be of similar value as, and would replace, stock options and restricted stock awards for new executive officers, beginning with the award year during which these LTIP awards are made. As a result, Mr. Smidler, who joined the company in December 2009, will participate in three separate LTIP award cycles beginning January 2, 2011 covering the periods January 1, 2011 through December 31, 2011, January 1, 2011 through December 31, 2012, and January 1, 2011 through December 31, 2013. He will receive stock option and restricted stock grants in February 2011, attributable to performance in the 2010 award year; he will not receive such grants for the 2011 award year and in the future.

The Committee uses the following performance measures and weightings based on its determination of their importance as indicators of the company’s long-term success:

Performance Factor		Weighting
Three-year average return on investment			40	%
Average annual compounded growth in earnings per share			40	%
Three-year total return to shareholders			20	%

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The Committee chooses the Russell 2000 Index companies for long-term financial performance comparison for much the same reason that it does for annual cash incentive awards — the Committee believes that these are the type of companies against which an investor would likely compare the company’s performance in considering investment decisions. This performance measurement methodology remains constant through the years although the performance of the Russell 2000 changes annually, thus increasing or decreasing the targets annually.

The financial measures and target performance goals used in the estimated calculation for the 2008 – 2010 performance period are as follows:

Three-year average return on investment

Our three-year average return on total investment is 8.6%, which represents the average for the three-year performance period shown on the following table. The company defines total investment as total shareholder equity plus total long-term debt (including current portion). Return on investment is net earnings divided by total investment as follows:

		(In Millions)
		2010				2009				2008
Net Earnings		$	38,324			$	32,649				35,107
Total Equity		$	362,670			$	312,900			$	274,271
Total Debt		$	148,423			$	63,635			$	94,165
Total Investment		$	511,093			$	376,535			$	368,436
Return on investment			7.5	%			8.7	%			9.5	%

Average Annual Compounded Growth in Earnings per Share

Our average annual compounded growth in diluted earnings per share represents the average diluted earnings per share growth rate over the three-year performance period, which is calculated as follows:

		2005				2006				2007				3 Year Average				2008				2009				2010				3 Year Average
EPS		$	0.22			$	1.01			$	1.46			$	0.90			$	1.38			$	1.27			$	1.47			$	1.37

Average Compounded Annual Growth = ($1.37 ÷ $0.90) ^1/3 – 1 = 15.03%.

Three-Year Total Return to Shareholders

Return to shareholders combines share price appreciation and dividends reinvested. The total return to shareholders is based on a computation that is obtained from Standard & Poor’s Compustat, an independent research service. The company’s total return to shareholders for the performance period from 2008 – 2010 is -14.6%; this performance reflects the significant global economic difficulties that began in 2008 resulting in an almost 50% decline in that year. The total return to shareholders for the two-year period 2009 and 2010 is approximately 69%.

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The following table shows the estimated awards for the 2008-2010 performance period. The table reflects complete Russell 2000 Index data for 2008 and 2009 however, as of February 1, 2011, only 18.8% of Russell 2000 Index data is available for the 2010 fiscal year. Actual Russell 2000 performance for the 2008 – 2010 performance period may be higher or lower than what is illustrated. The company will disclose actual payments for the performance period when they are made, by filing a Form 8-K.

		Company Performance				Est. Russell Performance at 50th Percentile				Estimated Percentage Earned				Performance Weighting				Estimated Award
Three-year Average Return on Investment			8.6	%			2.0	%			200.0	%			40	%			80.0	%
Average Annual Compounded Growth in Earnings per Share			15.03	%			1.7	%			197.1	%			40	%			78.8	%
Three-Year Total Return to Shareholders			-14.6	%			-0.6	%			55.7	%			20	%			11.1	%
Total Estimated Award																			169.9	%

Financial performance in the 1^st quartile results in no award payment; performance at the median results in an award payment at 100% of target; and performance at the top of, or above, the 3^rd quartile results in a maximum award payment at 200% of the target. Interpolation is used to determine payments for financial performance within these quartiles. The methodology for determining the financial targets remains the same year to year, although the actual targets vary for each performance period based on the three-year performance of the Russell 2000 companies. Grants made for the performance period beginning on January 1, 2010 through December 31, 2012 are shown in the “Grant of Plan-Based Awards” table on page 42.

Payments earned, if any, are generally made in June of the year following the end of the performance period. This payment date gives the committee time to collect and analyze more complete performance results of the Russell 2000 companies for the performance period. As explained above, amounts earned for the performance period January 1, 2008 – December 31, 2010 are not yet determinable and are not reflected in the Summary Compensation Table. The following table shows the estimated LTIP payment amounts for the 2008 – 2010 performance period for the named executive officers that received LTIP Awards for that performance period:

Estimated Long-Term Performance-Based Cash Award — 2008 – 2010

Named Executive Officer		2008 Base Salary				Award Opportunity as a % of Base				Target Award				Performance Factor				Estimated Awards
Neal J. Keating		$	675,000				160	%		$	1,080,000				169.9	%		$	1,834,920
Candace A. Clark		$	339,000				95	%		$	322,050				169.9	%		$	547,163

Retirement Benefits

The company offers a tax qualified defined benefit pension plan (“pension plan”) for most of its employees including the named executive officers. Tax rules restrict the amount of benefit that can be accrued for higher paid employees under this plan. The company maintains a Supplemental Employees’ Retirement Plan, which we refer to as the SERP, to pay the difference in retirement benefits between what the officer would be entitled to receive from the company’s qualified pension plan, but for government imposed restrictions, and what is actually received from the qualified plan. The purpose of these plans is to provide a reasonable level of retirement income taking into account pre-retirement earnings and length of service with the company. In recent years, maintenance of the company’s pension plan has become an increasingly greater use of the company’s cash resources due to the continued implementation of the federal Pension Protection Act funding legislation and the effect of economic conditions upon interest rates. In order to balance the increasing costs of maintaining the pension plan with our interest in providing a long-term savings vehicle for our employees, in early 2010 the Board approved closing the pension plan to all new hires on or after March 1, 2010 and continued it for then existing employees with the following changes:

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These changes apply equally to the SERP in which the named executive officers participate (with the exception of Mr. Smidler because Industrial Distribution closed the pension plan to new employees before Mr. Smidler joined the company) except that the SERP already provides for use of non-consecutive years of service for benefit calculations. As a result of the SERP changes, participating executives will realize a reduced retirement income. The Committee also determined in early 2010 that the reduction would result in a less than competitive total compensation package and that there should be a reallocation of the reduction to performance-based elements of the total compensation package in the best interests of shareholders. Therefore, the Committee approved increases to the 2010 LTIP award targets for each participant, including the named executive officers. LTIP awards are a feature of the Company’s 2003 Stock Incentive Plan. The Company, with the assistance of its actuaries, has estimated that if the new target LTIP award is earned each year, the additional LTIP payment would be substantially equivalent to the retirement benefit that would have been earned but for the suspension of the SERP. If the LTIP performance goals are not met, the amount earned pursuant to the new LTIP targets would be less than that which would have been received under the SERP.

The change in the value of the tax-qualified pension plan and SERP benefits in 2010 is shown in the Summary Compensation Table at page 41 and the full value of these benefits at normal retirement age is shown in the Pension Benefits Table at page 44.

Effective January 1, 2011, the company has doubled the matching contributions under its 401(k) plan to $1.00 for each $1.00 that a participant contributes as a pre-tax 401(k) contribution, up to 5% of compensation (not to exceed the tax law limit on compensation ($245,000 for 2011)). If a participant saves 5% of his or her compensation, the company will match it with another 5% for a total savings of 10%. Participants in the 401(k) plan are always vested in their own contributions and upon reaching 3 years of service with the company, they will also be vested in all employer-matching contributions.

Other Benefits

A select group of highly compensated management employees, including the named executive officers, are eligible to participate in our Deferred Compensation Plan, which permits deferral of certain types of compensation. The plan does not provide for above-market returns. For more information about the Deferred Compensation Plan, please refer to “Non-Qualified Deferred Compensation Plan” following the Non-Qualified Deferred Compensation Plan Table, below at page 45. As explained above, in February 2010, all perquisites with the exception of institution of a vehicle allowance in place of a leased company vehicle were ended for the named executive officers. The Summary Compensation Table provides information regarding the incremental cost of perquisites for the named executive officers for the portion of 2010 during which they were in place. In addition, the company maintains one corporate aircraft, which was used solely for business purposes in 2010, except for limited spousal travel to accompany executives on business trips.

Employment Agreements and Change in Control Arrangements

The company has entered into employment agreements and change in control agreements with our named executive officers. The terms and conditions of the agreements are described beginning on page 46. The Committee has extended employment agreements for the named executive officers in order to encourage the retention of valuable executive talent, discourage competitors from attempting to hire those executives, and to protect the company in the event that an executive departs by strictly prohibiting the disclosure of confidential information, limiting the executive’s ability to compete with the company after employment termination, requiring the signing of a release agreement before the payment of severance benefits and imposing reasonable post-employment cooperation obligations. The Committee believes that the change in control agreements serve the interests of our company and its shareholders by ensuring that if a hostile or friendly change of control is ever under consideration, our executives will be able to advise our board of directors about the potential transaction in the best interests of shareholders, without being unduly influenced by personal considerations.

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The current agreements restrict the circumstances under which an executive would be entitled to an IRC Section 280G tax gross-up payment, require a signed release in exchange for severance benefits in all events, and contain provisions such that payments under the agreements are exempt from, or comply with, the requirements of IRC Section 409A. The Committee will address the terms of each executive’s change in control agreement at the time that it expires.

In early 2010, the Committee notified the company’s executive officers that in the event their management agreements were renewed, it did not intend to provide an excise tax gross-up benefit. The Committee took this action in light of evolving market practices for change in control agreements. The company will address the terms of each executive officer’s control agreement at the end of its term. Additionally, no future employment or change in control agreement entered into with any other officers will contain a company obligation to make a Section 280G tax gross-up payment; which is reflected in Mr. Smidler’s agreements. The employment agreements and change in control agreements for Messrs. Keating and Denninger also provide the company with a right to “claw back” compensation paid or received, or to be paid or received, by these officers relating to Incentive Compensation (as defined in the agreements) awards made on or after January 1, 2010 with respect to fiscal periods beginning with 2010 where there is a Mandatory Restatement (as defined in the agreements) of the company’s financial statements for fiscal 2010 or any year thereafter that arises directly from the fraudulent or knowing, intentional misconduct of the officer. This “claw back” provision will be modified and added to all executive officer management agreements when the SEC issues final regulations to provide guidance on specific claw back requirements of recent federal legislation.

The employment and change in control agreements for Mr. Keating are essentially the same as the agreements entered into by the other named executive officers, except for differences reflecting Mr. Keating’s position as President and CEO. Information regarding each of the named executive officers’ agreements and the payments that would be received under different termination circumstances is set forth below under the caption “Payments Made Due to Qualifying Employment Termination on or After a Change In Control” at page 49.

Stock Ownership Guidelines for Directors and Executive Officers

Since 2006, the Board has maintained stock ownership guidelines for both non-employee directors and corporate management. The Board believes that the directors and senior management should have a significant equity position in the company and that these guidelines further the Board’s interest in encouraging a longer-term focus in managing the company.

Under the guidelines, non-employee directors are required to have an ownership multiple of 3 times their annual cash retainer of $45,000 in 2010. Directors who do not meet the ownership guidelines must hold shares received pursuant to restricted stock grants (with such shares being netted for the income tax effect thereof) for a period of 3 years or until the guidelines are met, whichever is earlier. The stock ownership guidelines for senior management require covered executives to retain one-third of the net after-tax gain realized under equity-based compensation awards granted after the adoption of the guidelines, until they achieve and continue to maintain the following stock ownership levels:

President and CEO			3 times salary
Participants in the LTIP under the 2003 Stock Incentive Plan (generally, fewer than 10 individuals)			2 times salary
All Other Corporate Officers (generally, about 10 individuals)			1 times salary

The Committee reviews stock ownership levels of executives subject to these guidelines on a quarterly basis. Exercisable stock options are not included in the determination of compliance with the ownership levels set forth above. Mr. Keating and Ms. Clark met stock ownership requirements during 2010; the other named executive officers are making progress toward compliance and have each been associated with the company for less than three years.

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In determining whether the guidelines have been achieved at any particular point, the price of the company’s stock will be the higher of (i) the then current market value determined by the closing price on the date of the determination; or (ii) the closing price on February 21, 2006, which was $21.13. The closing price of the stock on December 31, 2010 was $29.07 and was used for the final determination of compliance for 2010.

Material Tax and Accounting Implications of the Program

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation paid in excess of $1 million for any fiscal year to the company’s CEO and the three other most highly compensated executive officers (excluding the Chief Financial Officer). However, “performance-based compensation” that meets certain requirements under Section 162(m) is exempt from this deduction limitation. Except as specifically noted above in the case of the special discretionary bonus to Mr. Steiner, the Committee structures incentive compensation such as annual cash incentive awards (under its Cash Bonus Plan) and cash-based LTIP awards (under its Stock Incentive Plan) to qualify for this exemption. In 2010, Mr. Keating’s compensation exceeded the Section 162(m) limit by $481,000 due to the vesting of previously granted restricted stock awards.

Context of This Discussion

If this discussion has contained future individual or company performance targets and goals, they are disclosed in the limited context of the company’s executive compensation program, so you should not consider them to be statements of management expectations or estimates of results or other guidance. We specifically encourage investors not to apply these statements in other contexts.

Personnel & Compensation Committee Report

The Committee has reviewed and discussed this Compensation Discussion and Analysis with management and concurs with its contents. Based on this review and discussion, the Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the company’s proxy statement on Schedule 14A and incorporated in its annual report to the SEC on Form 10-K for the year ended December 31, 2010.

Personnel & Compensation Committee
  
Richard J. Swift, Chair
Brian E. Barents
E. Reeves Callaway III
Thomas W. Rabaut

This report shall not be deemed to be incorporated by reference by any general statement incorporating this proxy statement by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, as amended, and shall not otherwise be deemed filed under such statutes.

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SUMMARY COMPENSATION TABLE

The table, footnotes and narrative below describe the aggregate compensation earned by each of our named executive officers for our 2008, 2009 and 2010 fiscal years. For information on the role of each component of our executive compensation program, please, see the description under “Compensation Discussion and Analysis” beginning on page 21.

Name and Principal Position		Year				Salary ($)				Bonus ($)(1)				Stock Awards(2) ($)				Option Awards(3)				Non-Equity Incentive Plan Compensation(4) ($)				Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) ($)				All Other Compensation(6) ($)				Total ($)
NEAL J. KEATING Chairman, President and Chief Executive Officer			2010				725,000				—				—				—				1,094,750				251,650				65,901				2,137,301
			2009				662,019				—				1,111,250				—				730,080				162,419				41,932				2,707,700
			2008				675,000				—				910,650				—				446,040				97,766				434,015				2,563,471
WILLIAM C. DENNINGER Senior Vice President, and Chief Financial Officer(7)			2010				478,200				—				223,681				225,781				444,726				126,992				31,653				1,531,033
			2009				431,538				—				—				—				297,440				50,255				39,683				818,916
			2008				54,098				—				53,175				85,816				21,801				—				1,575				216,465
GREGORY L. STEINER President, Kaman Aerospace Group(8)			2010				371,725				43,715				170,237				171,798				124,899				91,270				26,180				999,824
			2009				328,558				—				129,083				128,845				226,460				36,583				26,710				876,239
			2008				162,910				—				107,975				173,946				81,455				9,243				51,442				586,971
STEVEN J. SMIDLER President, Kaman Industrial Technologies(9)			2010				307,500				137,500				—				—				321,000				—				116,383				882,383
			2009				—				—				—				—				—				—				—				—
			2008				—				—				—				—				—				—				—				—
CANDACE A. CLARK Senior Vice President and Chief Legal Officer			2010				374,170				—				—				—				289,982				524,335				22,968				1,211,455
			2009				332,481				—				—				—				848,564				503,679				27,037				1,711,761
			2008				339,000				—				—				—				540,892				269,550				42,415				1,191,857

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Employment Agreements and Change in Control Agreements

We currently have employment agreements and change in control agreements with all named executive officers. The term of the employment agreements generally extend until January 1, 2012, subject to annual renewal thereafter, at the discretion of the Board. The change in control agreements generally extend through 2012, subject to annual renewal thereafter, at the discretion of the Board. Pursuant to the employment agreements in place during 2010, the named executive officers were provided the 2010 salary levels listed in the Summary Compensation Table and target annual bonus opportunities, representing a percentage of annual base salary as described under the caption “Award Opportunities” on page 28. These agreements further provide for participation in our employee benefit programs generally applicable to our senior executives, except that Mr. Keating and Mr. Steiner are entitled to continued premium payments for their lifetime under our Senior Executive Life Insurance Program under certain circumstances. The estimated post termination compensation payable to our named executive officers under these agreements are described in detail under the caption “Post Termination Payments and Benefits” beginning at page 46.

Grants of Plan-Based Awards in 2010 Fiscal Year

The following grants were made during the 2010 fiscal year to our named executive officers pursuant to the company’s Cash Bonus Plan and 2003 Stock Incentive Plan. There are no estimated future payouts under equity incentive plans.

Grants of Plan-Based Awards

		Estimated Future Payouts Under Non-Equity Incentive Plan Awards																All Other Stock Awards Number of Shares of Stock or Units (#)				All Other Option Awards Number of Securities Underlying Options (#)				Exercise or Base Price of Option Awards ($/Sh)				Grant Date Fair Value of Stock and Option Awards ($/Sh)
Name		Grant Date				Threshold ($)				Target ($)				Maximum ($)
Neal J. Keating			1/1/2010 (1)			$	0			$	725,000			$	1,450,000
			1/1/2010 (2)								1,413,750				2,827,500
William C. Denninger			1/1/2010 (1)			$	0			$	286,920			$	573,840
			1/1/2010 (2)								549,930				1,099,860
			2/22/2010 (3)																8,580											$	26.07
			2/22/2010 (4)																				24,300			$	26.07
Gregory L. Steiner			1/1/2010 (1)			$	0			$	223,035			$	446,070
			1/1/2010 (2)								427,484				854,968
			2/22/2010 (3)																6,530											$	26.07
			2/22/2010 (4)																				18,490			$	26.07
Steven J. Smidler			1/1/2010 (1)								181,500				363,000
			1/1/2010 (2)				—				—
Candace A. Clark			1/1/2010 (1)			$	0			$	187,085			$	374,170
			1/1/2010 (2)								392,879				785,757

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Outstanding Equity Awards at 2010 Fiscal Year-End

The following table lists the outstanding stock options and restricted stock awards at December 31, 2010 for each of our named executive officers.

		Option Awards																				Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable				Number of Securities Underlying Unexercised Options (#) Unexercisable(1)				Option Exercise Price ($)				Option Grant Date				Option Expiration Date				Stock Awards				Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Number of Shares or Units of Stock That Have Not Vested ($)(2)(3)
Neal J. Keating																							9/17/2007				8,000			$	232,560
																							9/23/2008				18,000			$	523,260
																							10/13/2009				33,333			$	968,990
William C. Denninger			4,000				6,000			$	21.27				11/17/2008				11/17/2018				11/17/2008				1,500			$	43,605
			—				24,300			$	26.07				2/22/2010				2/22/2020				2/22/2010				8,580			$	249,421
Gregory L. Steiner																							7/7/2008				3,000			$	87,210
			8,000				12,000			$	21.60				7/7/2008				7/7/2018
			4,005				16,020			$	16.35				2/23/2009				2/23/2019				2/23/2009				6,316			$	183,606
			—				18,490			$	26.07				2/22/2010				2/22/2020				2/22/2010				6,530			$	189,827
Steven J. Smidler																							12/1/2009				1,680			$	48,838
Candace A. Clark			6,000							$	16.31				2/13/2001				2/13/2011
			10,530							$	14.50				2/12/2002				2/12/2012

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Option Exercises and Stock Vested in Fiscal Year 2010

The following table provides information about the value realized by our named executive officers on the exercise of stock options and the lapse of restrictions with respect to restricted stock awards during the 2010 fiscal year.

		Option Awards												Stock Award
Name		Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($)(1)				Exercise Date				Number of Shares Acquired on Vesting (#)				Value Realized on Vesting ($)(2)				Vesting Date
Neal J. Keating															4,000			$	95,680				9/17/10
															6,000			$	153,900				9/23/10
															16,667			$	432,175				10/13/10
William C. Denninger															500			$	13,315				11/17/10
Gregory L. Steiner															1,000			$	21,490				7/7/10
															1,579			$	37,817				3/1/10
Steven J. Smidler															420			$	11,831				12/1/10
Candace A. Clark			4,500			$	42,019				9/23/10
			5,470			$	60,991				9/23/10

Pension Benefits

The table below shows the present value of accumulated benefits payable to each of our named executive officers at age 65 and the number of years of service credited to each of them under the Kaman Corporation Employees’ Pension Plan, which we call the “pension plan” and the SERP as of December 31, 2010.

Name		Plan Name				Number of Years of Service (#)				Present Value of Accumulated Benefit(1) ($)				Payments During Last Fiscal Year ($)
Neal J. Keating			Kaman Corporation Employees’ Pension Plan				3.38				95,473			$	—
			SERP				3.38				422,481			$	—
William C. Denninger			Kaman Corporation Employees’ Pension Plan				2.12				80,681			$	—
			SERP				2.12				96,566			$	—
Gregory L. Steiner			Kaman Corporation Employees’ Pension Plan				2.73				75,420			$	—
			SERP				2.73				61,676			$	—
Steven J. Smidler(2)			Kaman Corporation Employees’ Pension Plan				0				0			$	—
			SERP				0				0			$	—
Candace A. Clark			Kaman Corporation Employees’ Pension Plan				26				1,022,089			$	—
			SERP				26				2,260,640			$	—

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The pension plan is a tax-qualified plan that provides benefits for the full-time U.S. employees hired prior to June 1, 2009 at Kaman Industrial Technologies and prior to March 1, 2010 at Kaman Corporation and other participating subsidiaries (with the exception of certain acquired companies that have not adopted the pension plan). Employees become participants upon their completion of certain hours of service requirements and become vested in their pension benefits generally upon attaining five years of continuous service, as defined by the pension plan. Normal retirement, as defined by the pension plan, is generally age 65, however employees that work beyond age 65 may continue to accrue benefits. Employees may retire as early as age 55 with 5 years of service in accordance with pension plan provisions. The annual benefit under the pension plan is generally 60 percent of the average of the highest five consecutive years of “Covered Compensation” out of the final ten years of employment less 50 percent of the primary social security benefit, reduced proportionately for years of service less than 30 years. At Kaman Corporation, the parent company, participants who joined the company prior to 2004, have 30 years of service, and have attained age 63, are permitted to retire with a pension benefit unreduced for early retirement. The pension plan limits the amount of pension benefits that may be provided to participants under this formula in accordance with certain limits under federal tax laws. To the extent that these limits apply to certain executive officers, the company provides an additional benefit under the SERP program. Except as provided below, our SERP program generally makes each participant whole for the benefits under the retirement formula described above that could not be provided under the pension plan due to these limits. Only salary and annual bonus are treated as pensionable earnings on and after January 1, 2006. Benefits under the SERP will be based on the highest five years of pensionable earnings over the last ten years whether or not consecutive. In February 2007, the Board provided that payments that were not made to a named executive officer as a lump sum SERP retirement benefit during his or her lifetime would be paid as a death benefit to the named executive officer’s surviving spouse or the executive’s estate.

In February 2007, the Board also amended our SERP in order to comply with requirements of Internal Revenue Code Section 409A. In order to preserve grandfathering treatment for benefits accrued under our SERP for years prior to January 1, 2005, we adopted a separate plan document for SERP benefits accrued by our executive officers after December 31, 2004.

As described above under the caption “Retirement Benefits” at page 37, the pension plan was amended by the Board in early 2010 to close the plan to new hires on or after March 1, 2010. Existing employees at that time continue to participate in the pension plan subject to the following changes when calculating pension benefits; 1) changes in pay after 2010 will be disregarded; 2) compensation in the highest five years out of the last ten years of service prior to 2011 will be taken into account, whether or not consecutive; and 3) a participant’s years of service as defined by the pension plan will continue to count for accruing benefits under the pension plan through December 31, 2015. Corresponding changes were made to the SERP at the same time to assure consistency with the pension plan changes. These changes did not affect individuals who were already retired or had terminated employment and were vested in their pension benefit.

Non-Qualified Deferred Compensation Plan

The following table presents contribution, earnings and balance information under the company’s Deferred Compensation Plan for our named executive officers for 2010:

Name		Executive Contributions in Last FY ($)				Registrant Contributions in Last FY ($)				Aggregate Earnings in Last FY ($)(1)				Aggregate Withdrawals/ Distributions ($)				Aggregate Balance at Last FYE ($)
Neal J. Keating		$	—			$	—			$	—			$	—			$	—
William C. Denninger		$	—			$	—			$	—			$	—			$	—
Gregory L. Steiner		$	—			$	—			$	—			$	—			$	—
Steven J. Smidler(2)		$	—			$	30,750			$	678			$	—			$	31,428
Candace A. Clark		$	—			$	—			$	19,042			$	—			$	405,464