<PAGE>
SCHEDULE 14a INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
KAMAN CORPORATION
(Name of Registrant as Specified in its Charter)
Glenn M. Messemer
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 1a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule a-11.1
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
<PAGE>
<PAGE>
KAMAN
To the Holders of Class A Common Stock and Class B Common Stock:
The Annual Meeting of Shareholders of Kaman Corporation will
be held on April 18, 1994 to consider, in addition to the election
of directors, certain other matters. These matters include
proposals to approve the Corporation's 1993 Stock Incentive Plan
which replaces the 1983 Stock Incentive Plan and approve an
amendment increasing the shares reserved for the Corporation's
Employees Stock Purchase Plan. These two proposals are to be voted
on by both the Class A and Class B shareholders and are described
in detail in the Proxy Statement which follows this letter and the
Notice of Annual Meeting. The Class A shareholders are being
invited to vote on these stock plans at the request of the Board of
Directors. The other proposals set forth in the Notice of Annual
Meeting, including the election of directors and the adoption of
the Amended and Restated Certificate of Incorporation, are to be
voted on only by the Class B shareholders and are not discussed in
the Proxy Statement.
The Board of Directors recommends a vote by the Class A
shareholders in favor of the proposals to approve the 1993 Stock
Incentive Plan and approve the amendment to the Employees Stock
Purchase Plan. The Board recommends a vote by the Class B
shareholders in favor of all of the proposals set forth in the
Notice of Annual Meeting.
The adoption of the proposals to approve the 1993 Stock
Incentive Plan and to approve the amendment to the Employees Stock
Purchase Plan will require approval by the holders of a majority of
the outstanding shares of each class present in person or by proxy
and voting at the meeting. The adoption of all other proposals
will require approval by the holders of a majority of the Class B
common stock represented in person or by proxy at the Annual
Meeting except that the adoption of the Amended and Restated
Certificate of Incorporation will require the affirmative vote of
holders of a majority of all shares of Class B common stock
entitled to vote.
Your prompt return of the enclosed proxy, signed and
completed, in the envelope which has been enclosed for your
convenience, will be greatly appreciated.
Sincerely,
/s/ Charles H. Kaman
Chairman
March 14, 1994
<PAGE>
<PAGE>
KAMAN
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held
Monday, April 18, 1994
To the Holders of Class A Common Stock and
Class B Common Stock of Kaman Corporation:
Notice is hereby given that the Annual Meeting of Shareholders
of Kaman Corporation will be held at the offices of the
Corporation, Blue Hills Avenue, Bloomfield, Connecticut on Monday,
April 18, 1994 at 11:00 A.M., local time, for the following
purposes:
1. To elect twelve (12) directors to serve for the ensuing
year and until their successors are duly elected and qualify:
2. To consider and act upon a proposal to authorize the Board
of Directors to elect one additional director during the ensuing
year to serve for the balance of such year and until his or her
successor is duly elected and qualifies;
3. To consider and act upon a proposal to approve the
Corporation's 1993 Stock Incentive Plan;
4. To consider and act upon a proposal to approve an
amendment to the Corporation's Employees Stock Purchase Plan;
5. To consider and act upon a proposal to adopt an Amended
and Restated Certificate of Incorporation of the Corporation;
6. To consider and act upon a proposal to appoint KPMG Peat
Marwick as auditors for the Corporation for the ensuing year; and
7. To transact such other business as may properly come
before the meeting.
The Board of Directors has fixed the close of business on
March 1, 1994 as the record date for determining shareholders
entitled to notice of and to vote at the Annual Meeting.
Proposals 3 and 4, which are to be considered and acted upon
at the Annual Meeting by the holders of Class A common stock as
well as the holders of Class B common stock, are discussed in the
accompanying Proxy Statement. The Board of Directors has requested
a vote of the Class A shareholders on these plans because of the
interest in the plans which they may have even though no such vote
is otherwise required. Proposals 1, 2, 5 and 6 will be acted upon
only by the Class B shareholders and are not discussed in the Proxy
Statement.
<PAGE>
<PAGE>
In the absence of unforeseen developments, it is anticipated
that proxies with respect to the Class B common stock will be voted
for the election of the following individuals as directors (all of
whom are presently directors): Frank C. Carlucci, John A.
DiBiaggio, Edythe J. Gaines, Huntington Hardisty, Charles H. Kaman,
C. William Kaman, II, Hartzel Z. Lebed, Harvey S. Levenson, Walter
H. Monteith, John S. Murtha, Robert L. Newell and Wanda Lee Rogers;
and in favor of proposals 2, 3, 4, 5 and 6 above. The proposed
Amended and Restated Certificate of Incorporation is intended to
simply restate the current charter of the corporation and all
amendments thereto in one document with several non-substantive
changes for purposes of consistency and clarification and the
elimination of outdated provisions.
The election of the proposed slate of directors and approval
of the other proposals will require the affirmative vote of a
majority of the Class B common stock present in person or by proxy
and voting at the meeting. The adoption of the Amended and Restated
Certificate of Incorporation will require the affirmative vote of
holders of a majority of all shares of Class B common stock
entitled to vote. The adoption of proposals 3 and 4 will require
the affirmative vote of a majority of the Class A and Class B
common stock, present in person or by proxy and voting at the
meeting, voting as separate classes.
All shareholders are cordially invited to attend the meeting.
By Order of the Board of Directors
/s/ Glenn M. Messemer, Secretary
Dated: March 14, 1994
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON,
THE DIRECTORS URGE YOU TO COMPLETE, SIGN AND RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE.
<PAGE>
<PAGE>
KAMAN CORPORATION
Blue Hills Avenue
Bloomfield, Connecticut 06002
Telephone (203) 243-7100
PROXY STATEMENT
This Proxy Statement is being furnished to the holders of
Class A common stock of Kaman Corporation (the "Corporation") in
connection with the solicitation by the management of the
Corporation of proxies for use at the Annual Meeting of
Shareholders of the Corporation to be held on Monday, April 18,
1994, at the time, place and for the purposes set forth in the
accompanying Notice of Annual Meeting dated March 14, 1994.
Copies are also being provided to the holders of Class B common
stock for their information.
The Board of Directors has fixed the close of business on
March 1, 1994 as the record date for determining shareholders
entitled to notice of and to vote at the Annual Meeting. A
majority of the issued and outstanding shares of Class A common
stock entitled to vote, represented in person or by proxy, shall
constitute a quorum for the transaction of business by the holders
of such class. Any stockholder giving a proxy has the power to
revoke it at any time before it is voted by executing and
delivering to the Corporation (i) written notice of its revocation
or (ii) a later dated proxy.
The Corporation intends to mail this Proxy Statement and the
accompanying form of proxy to Class A common stockholders on or
about March 14, 1994.
VOTING RIGHTS
The Class A common stock is nonvoting common stock except that
under Connecticut law certain matters must be approved by the
affected class of shares. The requirement for approval by the
Class A shareholders of the Corporation's 1993 Stock Incentive Plan
and approval of an amendment to the Corporation's Employees Stock
Purchase Plan has been requested by the Corporation's Board of
Directors in recognition of the interest which such shareholders
may have in the plans and is not pursuant to any legal requirement.
Therefore, approval of the 1993 Stock Incentive Plan and approval
of the amendment to the Employees Stock Purchase Plan will require
the affirmative vote of the holders of a majority of Class A common
stock and Class B common stock represented in person or by proxy,
voting as separate classes. Proxies are being solicited from the
Class A shareholders with respect to these proposals only.
Page 1
<PAGE>
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS. On March 1, 1994, there were
issued and outstanding shares of the Corporation's
Class A common stock and 667,814 shares of Class B common
stock. The only persons who on March 1, 1994 owned beneficially
more than 5% of the Corporation's voting securities, the Class B
common stock, are identified in the following table:
<TABLE>
Title of Amount and Percent
Class of Name and Address Nature of of
Common Stock of Beneficial Owner Beneficial Ownership Class
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Class B Charles H. Kaman
Kaman Corporation
Blue Hills Avenue
Bloomfield, CT 06002 258,375(1) 38.69%
Class B Newgate Associates, Ltd.
c/o J. T. Del Negro
CityPlace I
185 Asylum Street
Hartford, CT 06103 199,802 29.91%
Class B Robert D. Moses
Farmington Woods
Avon, CT 06001 48,729(2) 7.30%
Class B Glenn M. Messemer
Kaman Corporation
Blue Hills Avenue
Bloomfield, CT 06002 33,500 5.02%
</TABLE>
(1) Excludes 1,471 shares held by Mrs. Kaman. Excludes 199,802
shares reported separately above and held by Newgate
Associates Limited Partnership, a limited partnership in which
Mr. Kaman serves as general partner.
(2) Includes 15,192 shares held by Mr. Moses as Trustee, and
33,537 shares held by Paulson & Company as follows: 11,481
shares for the benefit of Mr. Moses, and 22,056 shares held
for a partnership controlled by Mr. Moses.
Page 2
<PAGE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT. The following is
information concerning beneficial ownership of the Corporation's
stock by each Director of the Corporation, each Executive Officer
of the Corporation named in the Summary Compensation Table, and
all Directors and Executive Officers of the Corporation as a
group. Ownership is direct unless otherwise noted.
<TABLE>
Class of Number of Shares Owned Percentage
Name Common Stock as of February 1, 1994 of Class
- -----------------------------------------------------------------
<S> <C> <C> <C>
Frank C. Carlucci Class A 3,000(1) *
John A. DiBiaggio -- -- --
Edythe J. Gaines Class A 1,816 *
Huntington Hardisty -- -- --
Charles H. Kaman Class A 469,620(2) 2.46%
Class B 258,375(3) 38.69%
C. William Kaman, II Class A 100,864(4) *
Class B 7,567(5) 1.13%
Walter R. Kozlow Class A 47,233(6) *
Class B 296 *
Hartzel Z. Lebed Class A 7,221(7) *
Harvey S. Levenson Class A 94,984(8) *
Class B 19,500(9) 2.91%
Walter H. Monteith, Jr. Class A 200 *
John S. Murtha Class A 48,618(10) *
Class B 432 *
Robert L. Newell Class A 2,880 *
Patrick L. Renehan Class A 31,133(11) *
Wanda L. Rogers -- -- --
Richard E. W. Smith Class A 35,545(12) *
All Directors and Class A 805,153(13) 5.23%
Executive Officers
as a group ** Class B 300,273 44.96%
</TABLE>
Page 3
<PAGE>
<PAGE>
(1) Held jointly with Mrs. Carlucci.
(2) Excludes the following: 24,132 shares held by Mrs. Kaman;
6,685 shares held by Fidelco Guide Dog Foundation, Inc., a
charitable foundation of which Mr. Kaman is President and
Director, in which shares Mr. Kaman disclaims beneficial
ownership; and 184,434 shares held by Newgate Associates
Limited Partnership, a limited partnership of which Mr.
Kaman is the general partner. Included are 45,000 shares
subject to exercisable portion of stock options.
(3) Excludes the following: 1,471 shares held by Mrs. Kaman and
199,802 shares held by Newgate Associates Limited
Partnership, a limited partnership of which Mr. Kaman is the
general partner.
(4) Includes 10,400 shares subject to exercisable portion of
stock options; and excludes 69,290 shares held by Mr. Kaman
as Trustee, in which shares Mr. Kaman disclaims any
beneficial ownership.
(5) Includes 4,800 shares held by Mr. Kaman as Trustee in which
shares Mr. Kaman disclaims any beneficial ownership.
(6) Includes 15,400 shares subject to exercisable portion of
stock options.
(7) Includes 7,121 shares held jointly with Mrs. Lebed, excludes
480 shares held by Mrs. Lebed.
(8) Includes 24,800 shares subject to exercisable portion of
stock options.
(9) Excludes 500 shares held by Mrs. Levenson.
(10)Held by Fleet National Bank pursuant to a revocable trust.
Excludes 7,980 shares held by Fleet National Bank pursuant
to a revocable trust for the benefit of Mrs. Murtha.
(11)Includes 10,700 shares subject to exercisable portion of
stock options; and includes 1,275 shares held jointly with
Mrs. Renehan.
(12)Includes 7,500 shares subject to exercisable portion of
stock options; and includes 7,478 shares held jointly with
Mrs. Smith.
(13)Includes 126,776 shares subject to exercisable portion of
stock options.
* Less than one percent.
** Excludes 24,612 Class A shares and 1,971 Class B shares held
by wives of certain Directors and Executive Officers.
Page 4
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
GENERAL
The following tables provide certain information
relating to the compensation of the Corporation's Chief Executive
Officer, its four other most highly compensated executive officers
and its directors.
SUMMARY COMPENSATION TABLE
<TABLE>
Annual Compensation Long Term Compensation
------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
All
Name and Other AWARDS Other
Principal Salary Bonus Annual RSA Options LTIP Comp.
Position Year ($) ($) Comp. ($)(1)(#Shares) Payments ($)(2)
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. H. Kaman 1993 660,000 218,000 73,004(3) ------ ------ --- 69,768
Chairman and 1992 660,000 290,000 ------ ------ ------ --- 57,956
Chief 1991 660,000 330,000 ------ 80,000 10,000 --- *
Executive
Officer
H.S.Levenson 1993 400,000 108,000 ------ 38,000 12,000 --- 18,603
President 1992 400,000 144,000 ------ 49,375 ------ --- 10,664
and Chief 1991 400,000 150,000 ------ 40,000 5,000 --- *
Operating
Officer
W.R.Kozlow 1993 216,000 50,000 ------ 28,500 9,000 --- 10,446
President, 1992 210,000 60,000 ------ 29,625 ------ --- 6,271
Kaman 1991 204,000 65,000 ------ 24,000 3,000 --- *
Aerospace
Corporation
R.E.W.Smith 1993 210,000 50,000 ------ 28,500 9,000 --- 9,212
Vice 1992 200,000 55,000 ------ 29,625 ------ --- 6,244
President 1991 180,000 50,000 ------ 24,000 3,000 --- *
P.L.Renehan 1993 205,000 40,000 ------ 28,500 9,000 --- 8,799
Vice 1992 198,000 50,000 ------ 24,688 ------ --- 6,479
President, 1991 192,000 50,000 ------ 20,000 2,500 --- *
Kaman
Diversified
Technologies
Corporation
</TABLE>
*Information for years ending prior to December 15, 1992 is not
required to be disclosed.
Page 5
<PAGE>
<PAGE>
1. As of December 31, 1993, aggregate restricted stock holdings
and their year end value were: C.H. Kaman, none; H.S. Levenson,
32,200 shares valued at $326,025; W.R. Kozlow, 9,000 shares valued
at $91,125; R.E.W. Smith, 8,900 shares valued at $90,113; P.L.
Renehan, 7,900 shares valued at $79,988. Restrictions lapse at the
rate of 50% per year on Mr. Kaman's awards and 20% per year for all
other awards, beginning one year after the grant date. Awards
reported in this column are as follows: C. H. Kaman, 10,000 shares
in 1991; H.S. Levenson, 4,000 shares in 1993 and 5,000 shares each
in 1992 and 1991; W.R. Kozlow, 3,000 shares each in 1993, 1992 and
1991; R. E. W. Smith, 3,000 shares each in 1993, 1992, and 1991; P.
L. Renehan, 3,000 shares in 1993, and 2,500 shares each in 1992 and
1991. Dividends are paid on the restricted stock.
2. Amounts reported in this column consist of: C. H. Kaman,
$53,000 - Officer 162 Insurance Program, $16,768 - medical expense
reimbursement program ( MERP ); H.S. Levenson, $2,729 - Senior
executive life insurance program ( Executive Life ), $4,524 -
Officer 162 Insurance Program, $2,249 - employer matching
contributions to the Kaman Corporation Thrift and Retirement Plan
(the Thrift Plan employer match ), $4,101 - supplemental employer
contributions under the Deferred Compensation Plan ( supplemental
matching contributions ), $5,000 - MERP; W. R. Kozlow, $3,767 -
Executive Life, $2,249 - Thrift Plan employer match, $1,077 -
supplemental matching contributions, $3,353 - MERP; R. E. W. Smith,
$4,148 - Executive Life, $2,068 - Thrift Plan employer match,
$1,182 - supplemental matching contributions, $1,814 - MERP; P. L.
Renehan, $4,606 - Executive Life, $2,249 - Thrift Plan employer
match, $814 - supplemental matching contributions, $1,130 - MERP.
3. The Corporation maintains a program pursuant to which it pays
for tax and estate planning services provided to executive officers
by third parties, up to certain limits. $62,164 of the figure
reported in this column relates to payments for such services on
behalf of Mr. Kaman.
Page 6
<PAGE>
<PAGE>
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR:
<TABLE>
- ----------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
- ----------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options/
SARs
Options/ Granted to
SARs Employees Exercise or
Granted in Fiscal Base Price Expiration
Name (#) Year ($/Sh) Date 5%($) 10%($)
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C. H. Kaman --- --- --- --- --- ---
H.S. Levenson 12,000 6.8% 9.50 11/30/03 71,640 181,680
W. R. Kozlow 9,000 5.1% 9.50 11/30/03 53,730 136,260
P. L. Renehan 9,000 5.1% 9.50 11/30/03 53,730 136,260
R. E. W. Smith 9,000 5.1% 9.50 11/30/03 53,730 136,260
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR, AND
FISCAL YEAR-END OPTION/SAR VALUES.
- -------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised in-the-money
options/SARs options/SARs
Shares at FY-end (#) at FY-end ($)
acquired on Value exercisable/ exercisable/
Name Exercise(#) realized unexercisable unexercisable
(a) (b) (c) (d) (e)
- -------------------------------------------------------------------
<S> <C> <C> <C> <C>
C. H. Kaman None --- 45,000/-0- 103,750/0
H. S. Levenson 16,080 32,287 23,600/18,600 54,200/22,875
W. R. Kozlow None --- 14,800/12,600 30,725/13,950
P. L. Renehan None --- 10,300/11,900 20,913/12,338
R. E. W. Smith None --- 7,300/12,200 15,400/13,050
</TABLE>
Page 7
<PAGE>
<PAGE>
LONG TERM INCENTIVE PLAN AWARDS. No long term incentive plan
awards were made to any named executive officer in the last
fiscal year.
PENSION AND OTHER DEFINED BENEFIT DISCLOSURE. The following
table shows estimated annual benefits payable at normal
retirement age to participants in the Corporation's pension plan
at various compensation and years of service levels using the
benefit formula applicable to Kaman Corporation. Pension
benefits are calculated based on 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:
Page 8
<PAGE>
<PAGE>
Pension Plan Table
Years of Service
<TABLE>
Remuneration* 15 20 25 30 35
- -----------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
125,000 34,116 45,715 56,632 68,232 68,232
150,000 41,616 55,765 69,082 83,232 83,232
175,000 49,116 65,815 81,532 98,232 98,232
200,000 56,616 75,865 93,982 113,232 113,232
225,000 64,116 85,915 106,432 128,232 128,232
250,000 71,616 95,965 118,882 143,232 143,232
300,000 86,616 116,065 143,782 173,232 173,232
350,000 101,616 136,165 168,682 203,232 203,232
400,000 116,616 156,265 193,582 233,232 233,232
450,000 131,616 176,365 218,482 263,232 263,232
500,000 146,616 196,465 243,382 293,232 293,232
750,000 221,616 296,965 367,882 443,232 443,232
1,000,000 296,616 397,465 492,382 593,232 593,232
1,250,000 371,616 497,965 616,882 743,232 743,232
1,500,000 446,616 598,465 741,382 893,232 893,232
</TABLE>
*Remuneration: Average of the highest five consecutive years of
"Covered Compensation" out of the final ten years of service.
"Covered Compensation" means "W-2 earnings" or "base
earnings", if greater, as defined in the Pension Plan. W-2
earnings for pension purposes consist of salary (including 401(k)
and Section 125 Plan contributions but not deferrals under a non-
qualified deferred compensation plan), bonus and taxable income
attributable to restricted stock awards. Salary and bonus amounts
for the named Executive Officers for 1993 are as shown on the
Summary Compensation Table. Compensation deferred under the
Corporation's non-qualified deferred compensation plan is included
in Covered Compensation here because it is covered by the
Corporation's unfunded supplemental employees retirement plan.
Current Compensation covered by the Pension Plan for any
named executive whose Covered Compensation differs by more than
10% from the compensation disclosed for that executive in the
Summary Compensation Table: Mr. Kaman, $927,075; Mr. Levenson,
$679,669.
Federal law imposes certain limitations on annual pension
benefits under the Pension Plan. For the named executive officers,
the excess will be paid under the Corporation's unfunded
supplemental retirement plan.
Page 9
<PAGE>
<PAGE>
The Executive Officers named in the Summary Compensation Table
are participants in the plan and as of January 1, 1994, had the
number of years of credited service indicated: Mr. Kaman - 48
years; Mr. Levenson - 11 years; Mr. Kozlow - 34 years; Mr. Renehan
- - 10 years; and Mr. Smith - 34 years.
Benefits are computed generally in accordance with the
benefit formula described above.
COMPENSATION OF DIRECTORS. Non-officer members of the Board
of Directors of the Corporation receive an annual retainer of
$14,000 and a fee of $750 for attending each meeting of the Board
and each meeting of a Committee of the Board, except that the
Chairman of the Audit Committee receives $850 for attending each
meeting of that Committee. These fees may be received on a
deferred basis.
EMPLOYMENT CONTRACTS AND TERMINATION, SEVERANCE AND CHANGE OF
CONTROL ARRANGEMENTS. The Corporation has no employment
contract, plan or arrangement with respect to any named executive
which relates to employment termination for any reason, including
resignation, retirement or otherwise (except as described in
connection with the Corporation's Pension Plan) or a change in
control of the Corporation or a change in any such executive
officer's responsibilities following a change of control (except as
described in the Corporation's Deferred Compensation Plan), which
exceeds or could exceed $100,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS.
The following persons served as members of the Personnel
and Compensation Committee of the Corporation's Board of
Directors during the last fiscal year: Dr. Gaines, Mr. Carlucci,
Mr. Murtha, Mr. Newell and Mr. Monteith. None of these
individuals was an officer or employee of the Corporation or any
of its subsidiaries during the last fiscal year. Mr. Murtha was
Secretary of the Corporation in years prior to April 1989 and is
of counsel to the law firm of Murtha, Cullina, Richter and
Pinney which provides legal services to the Corporation.
During the last fiscal year no executive officer of the
Corporation served as a director of or as a member of the
compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive
officers served as a director of, or on the Personnel and
Compensation Committee of the Corporation.
Page 10
<PAGE>
<PAGE>
APPROVAL OF THE 1993 STOCK INCENTIVE PLAN
The Board of Directors unanimously recommends that the
Corporation's 1993 Stock Incentive Plan (the "1993 Plan") be
approved in the form attached hereto as Exhibit A. The 1993 Plan
is a successor to the Corporation's 1983 Stock Incentive Plan (the
"Predecessor Plan") which has expired. The Predecessor Plan, in
the opinion of the Board of Directors, has served its intended
purpose to advance the interests of the Corporation by encouraging
and enabling the acquisition of larger stock interests in the
Corporation by key employees of the Corporation and its
subsidiaries and other persons upon whose judgment and loyalty the
Corporation is largely dependent for the successful conduct of its
operations. The Board of Directors believes that the 1993 Plan
will enhance the Corporation's ability to attract and retain key
personnel of outstanding abilities by affording the Corporation
greater flexibility in awarding equity-based incentive
compensation.
The Predecessor Plan provided for the granting of incentive
stock options, nonstatutory options, stock appreciation rights and
restricted stock awards. The 1993 Plan contains substantially the
same terms as the Predecessor Plan as amended, including certain
expanded features concerning the methods of exercising options and
meeting tax withholding requirements. The Board of Directors
approved the 1993 Plan on September 20, 1993, subject to
shareholder approval.
DESCRIPTION OF THE 1993 PLAN
The 1993 Plan will expire on October 31, 2003. The 1993 Plan
permits the Corporation to grant incentive stock options,
nonstatutory stock options, stock appreciation rights and
restricted stock awards to key employees of the Corporation and its
subsidiaries (and except for Incentive Stock Options, to other
persons) upon whose judgment and loyalty the Corporation is largely
dependent for the successful conduct of its operations. As of
March 1, 1994, there were approximately 400 such employees, of
which 277 held stock options covering an aggregate of 807,893
shares of the Corporation's Class A common stock. As of March 1,
1994, restricted stock awards covering an aggregate of 275,000
shares of the Corporation's Class A common stock have been granted
to 19 employees. Nonemployee directors other than those serving on
the Personnel and Compensation Committee (the "Committee") of the
Board of Directors of the Corporation (which Committee administers
the 1993 Plan) are eligible to receive awards under the 1993 Plan.
As of March 1, 1994, no awards under the 1993 Plan had been made to
nonemployees of the Corporation.
Page 11
<PAGE>
<PAGE>
DURATION AND EXERCISE OF OPTIONS
Each incentive stock option ("incentive option") granted under
the 1993 Plan shall have a term not in excess of ten (10) years
from the date on which it is granted, except in the case of any
incentive option granted to an individual owning stock possessing
more than ten percent (10%) of the total combined voting power of
all classes of stock of the Corporation (a "Principal
Shareholder"). Any incentive option granted to a Principal
Shareholder shall have a term not in excess of five (5) years from
the date on which it is granted. Each nonstatutory option granted
under the 1993 Plan shall have a term not in excess of ten (10)
years and one(1) day from the date on which it is granted.
Each option granted under the 1993 Plan shall become
exercisable on such date or dates and in such amount or amounts as
the Committee shall determine. In the absence of any other
provisions by the Committee, each option shall become exercisable
with respect to not more than twenty percent (20%) of the shares
subject thereto after the expiration of one (1) year following the
date of its grant, and shall be exercisable as to an additional
twenty percent (20%) of such shares after the expiration of each of
the succeeding four (4) years, on a cumulative basis, so that such
option, or any unexercised portion thereof, shall be fully
exercisable after a period of five (5) years from the date of its
grant. In the case of an incentive option granted to a Principal
Shareholder, each such incentive option shall become exercisable to
the extent of twenty-five percent (25%) after one (1) year and an
additional twenty-five percent (25%) after each of the succeeding
three (3) years unless otherwise provided by the Committee. No
optionee other than nonemployees granted nonstatutory options may
exercise his option or any part thereof unless at the time of such
exercise he shall be employed by the Corporation or a subsidiary
and shall have been so employed continuously since the date of
grant of his option, excepting leaves of absence approved by the
Committee and except that unexercised options granted to an
employee on or after June 23, 1987 shall terminate on the date
three (3) months following the date on which such optionee ceases
to be employed by the Corporation or a subsidiary.
The purchase price under each incentive option shall be as
determined by the Committee, but not less than 100 percent of the
fair market value of the shares subject to such option on the date
of grant, except that such option price shall not be less than 110
percent of such fair market value in the case of any incentive
option granted to a Principal Shareholder. The purchase price
under each nonstatutory option shall be as determined by the
Committee, but shall not be less than 85 percent of the fair market
value of the shares subject to such option on the date of grant.
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"Fair market value" shall be the closing price of the stock in The
Nasdaq Stock Market on the day of grant or, if no sales of stock
occurred on that day, the most recent day on which sales were
reported.
In the event of death or disability of an optionee while in
the employ of the Corporation or a subsidiary, his option shall
expire one (1) year after the date of death or disability, except
that in no event shall such an incentive option be exercisable
later than ten (10) years from the date on which it was granted
(five (5) years in the case of an incentive option granted to a
Principal Shareholder) or later than ten (10) years and one (1) day
in the case of a nonstatutory option.
DURATION AND EXERCISE OF STOCK APPRECIATION RIGHTS
Each stock appreciation right granted under the 1993 Plan
shall become exercisable on such date or dates and in such amount
or amounts as the Committee shall determine; provided, however,
that any stock appreciation right granted in tandem with a stock
option shall be exercisable in relative proportion to and to the
extent that such related stock option is exercisable. Each stock
appreciation right shall have a term not in excess of ten (10)
years from the date on which it is granted (ten (10) years and one
(1) day if granted in tandem with a nonstatutory option).
Generally, in the absence of any other provision by the Committee,
each stock appreciation right granted under the 1993 Plan shall be
exercisable with respect to not more than twenty percent (20%) of
the shares subject thereto after the expiration of one (1) year
following the date of its grant, and shall be exercisable as to an
additional twenty percent (20%) of such shares after the expiration
of each of the succeeding four (4) years.
A stock appreciation right granted in tandem with a
nonstatutory option may be granted either at or after the time of
grant of such option. A stock appreciation right granted in tandem
with an incentive option may be granted only at the time of the
grant of such option. A stock appreciation right or applicable
portion thereof granted in tandem with a given stock option shall
terminate and no longer be exercisable upon the termination or
exercise of the related stock option.
LAPSE OF RESTRICTIONS ON RESTRICTED STOCK AWARDS
The Committee may from time to time grant to participants
shares of the Corporation's Class A common stock subject to such
restrictions, if any, that the Committee, in its sole discretion,
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may from time to time determine. Shares of restricted stock
granted to employees of the Corporation or a subsidiary shall be
subject to forfeiture to the Corporation upon termination of
employment with the Corporation or a subsidiary, and those granted
to nonemployee directors of the Corporation shall be subject to
forfeiture to the Corporation upon cessation of service as a
director. In the absence of any other provision by the Committee,
such restrictions shall lapse with respect to not more than twenty
percent (20%) of the shares subject to the restricted stock award
on the date one (1) year following the date of grant and with
respect to an additional twenty percent (20%) of such shares after
the expiration of each of the succeeding four (4) years thereafter,
such that such restricted stock shall be free of all such
restrictions on the date five (5) years following the date of
grant.
FEDERAL TAX CONSEQUENCES
The following discussion of the federal tax consequences
associated with the 1993 Plan is necessarily general and does not
include all aspects of federal income tax laws which may be
relevant to any participant in the plan. Accordingly, each
participant should consult a tax advisor to determine all tax
effects.
INCENTIVE OPTIONS. Incentive options granted under the 1993
Plan are intended to qualify as incentive stock options under
Section 422 of the Internal Revenue Code of 1986, as amended.
Under current federal tax laws, an optionee who is granted an
incentive option does not realize income either upon receiving the
option or exercising the option. However, the excess of the fair
market value of the stock over the option price at the time of
exercise will be treated as a tax preference item for purposes of
the alternative minimum tax. When the shares acquired by exercise
of the option are sold, any gain will be taxed as long-term capital
gain, provided that the optionee has not sold the shares within two
years from the date the option was granted or within one year after
the shares acquired pursuant to the option were transferred to him,
whichever is later. Under current federal tax laws, long-term
capital gain may be taxed at a lower rate than ordinary income.
If an optionee disposes of stock acquired pursuant to the
exercise of an incentive option before the expiration of the
requisite holding period, the employee will realize ordinary income
in the year of the disqualifying disposition in an amount equal to
the difference between the option price and the fair market value
of the stock on the date the option was exercised (or fair market
value on the date of disposition, if lower), and the Corporation is
entitled to a tax deduction in an equivalent amount.
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NONSTATUTORY OPTIONS. An Optionee will not realize any
taxable income upon the grant of a nonstatutory option, nor will
the Corporation be entitled to a deduction. However, an optionee
will realize ordinary taxable income at the time of exercise in an
amount equal to the excess of the fair market value of the stock
acquired over the option price, and the Corporation will be
entitled to a corresponding deduction. The fair market value of
the stock on the date of exercise becomes the optionee's tax basis
in the stock to be used for purposes of computing gain or loss on
any subsequent disposition. When the shares acquired by exercise
of a nonstatutory option are sold, any gain will be taxed as
capital gain. Under current federal tax laws, long-term capital
gain (gain on the sale of shares held at least one year) may be
taxed at a lower rate than ordinary income.
STOCK APPRECIATION RIGHTS. The grant of stock appreciation
rights will not produce taxable income to the employee or a
deduction for the Corporation. Upon exercise of the stock
appreciation rights the amount of any cash received and the fair
market value of any shares of Class A common stock received will be
taxable to the employee as ordinary income, and the Corporation
ordinarily will be entitled to a corresponding deduction.
RESTRICTED STOCK AWARDS. Participants in the 1993 Plan are not
allowed to make an election under Section 83(b) of the Internal
Revenue Code to be taxed currently upon the receipt of a restricted
stock award. Consequently, the recipient of a restricted stock
award will not recognize income upon the receipt of a restricted
stock award. Recipients of restricted stock awards will recognize
income equal to the fair market value of the stock upon the lapse
of the restrictions. Generally, the Corporation is entitled to a
corresponding deduction. If dividends are paid on restricted stock
during the restriction period, such dividends are treated as
compensation to the employee rather than as dividends for federal
tax purposes.
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APPROVAL OF AMENDMENT TO KAMAN CORPORATION EMPLOYEES STOCK
PURCHASE PLAN
The Corporation's Employees Stock Purchase Plan (the "Stock
Purchase Plan"), in the opinion of the Board of Directors, has been
successful in giving employees as expanded opportunity to acquire
shares of the Corporation's Class A common stock. On September 20,
1993, the Board of Directors approved, subject to shareholder
approval, a replenishment of the number of shares available under
the Plan to the Plan's original allotment of 1,500,000 shares,
effective November 1, 1993 (an increase of 1,183,242 shares). This
replenishment is reflected in a copy of the Stock Purchase Plan set
forth on Exhibit B attached. The Board of Directors recommends
that shareholders approve the Plan as so replenished.
The Stock Purchase Plan grants to employees the right to
purchase Class A common stock of the Corporation through payroll
deductions at prices which are 85% of the market value of the Class
A common stock at the time each purchase is made. The Stock
Purchase Plan provides for the granting of rights to purchase up to
a maximum of 1,500,000 shares of Class A common stock in the
aggregate, from and after November 1, 1993.
The Stock Purchase Plan provides for offering periods of
between one (1) and five (5) years beginning on any given
January 1. The current offering period is for two years beginning
January 1, 1993 and ending December 31, 1994. All full-time
regular employees of the Corporation and its subsidiaries with at
least three (3) months or more service as of the first day of any
calendar quarter, will be eligible to participate in the Stock
Purchase Plan subject to such rules as may be prescribed from time
to time by the Personnel and Compensation Committee (the
"Committee") of the Board of Directors of the Corporation, which
administers the plan. As of March 1, 1994, the Corporation had
approximately 5,363 full-time regular employees. Each employee
participant in an offering under the Stock Purchase Plan will be
granted a right to purchase shares of the Corporation's Class A
common stock with an aggregate purchase price under the Stock
Purchase Plan of up to 10% of his or her compensation during each
pay period of each offering period in which he or she participates.
However, in no event may an employee be granted a right to purchase
Class A common stock at a rate which exceeds $25,000 of fair market
value of such stock for any calendar year in which such rights are
outstanding. The Stock Purchase Plan shall continue until
terminated by the Board of Directors or until the aggregate number
of shares authorized to be issued under such plan have been issued.
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FEDERAL TAX CONSEQUENCES
The following discussion of the federal tax consequences
associated with the Stock Purchase Plan is necessarily general and
does not include all aspects of federal income tax laws which may
be relevant to any participant in such plan. Accordingly, each
participant should consult a tax advisor to determine all tax
effects.
The Stock Purchase Plan is intended to qualify as an "Employee
Stock Purchase Plan" as defined in Section 423 of the Internal
Revenue Code of 1986, as amended. Rights issued to an employee
under such plans do not result in taxable income to the employee
either upon the grant of rights or upon their exercise even if the
exercise price is less than the fair market value of the stock at
the time of exercise. However, the lesser of (a) the difference
between the fair market value on the date of disposition and the
price paid for the shares, or (b) the difference between the fair
market value on the date of grant and the exercise price on that
date, will be treated as compensation income in the year in which
the employee disposes of such shares of stock or in the year of the
employee's death (whenever occurring) if the employee's death
occurs while owning such shares. If the employee disposes of such
shares of stock prior to two years after the grant of the right or
if he or she disposes of the shares within one year of the
acquisition of the stock, the employee will realize ordinary income
(compensation) to the extent of the difference between the exercise
price and the fair market value of the stock at the date the right
was exercised.
Neither the issuance nor exercise of rights under the Plan nor
the subsequent qualifying disposition of shares of stock acquired
under the Plan will create an item of income or deduction to the
Corporation. However, a deduction is allowed to the Corporation if
the employee incurs ordinary income tax on the difference between
the exercise price and the value at the time of exercise by reason
of a disqualifying disposition.
If upon the sale of the shares by the employee, gain is
realized over the amount paid for the shares plus any amount
treated as ordinary income (compensation) to the employee, such
gain, under current tax laws, would be long-term capital gain.
Under current federal tax laws, long-term capital gain may be taxed
at a lower rate than ordinary income.
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SHAREHOLDER PROPOSALS
Shareholder proposals relating to the Corporation's 1995
Annual Meeting of Shareholders must be received by the Corporation
at its offices, Blue Hills Avenue, Bloomfield, Connecticut no later
than December 20, 1994. However, no assurance can be given that
there will be any matters upon which the holders of Class A common
stock will be entitled to vote at the 1995 Annual Meeting. In
addition, the fact that a shareholder proposal is received in a
timely manner does not insure its inclusion in the proxy material,
since there are other requirements in the proxy rules relating to
such inclusion.
OTHER MATTERS
The entire cost of soliciting proxies will be borne by the
Corporation, and, in following up the original solicitation of
proxies by mail, the Corporation may make arrangements with
brokerage houses and other custodians, nominees and fiduciaries to
send proxies and proxy material to beneficial owners and may
reimburse them for their expenses in so doing. In addition to
solicitation by mail, proxies may be solicited by certain directors
and officers of the Corporation. The Corporation has engaged
Chemical Bank to aid in the solicitation of proxies, for which the
Corporation will pay a fee of approximately $5,500.00, plus
certain out-of-pocket disbursements.
It is not expected that any matters upon which the holders of
Class A common stock would be entitled to vote will be brought
before the meeting other than the proposals described herein. The
persons named in the form of proxy solicited by management intend
to vote proxies in favor of these proposals, and, if any other
matters are properly brought before the meeting upon which any such
shareholders may vote, then to vote thereon in accordance with
their best judgment.
By Order of the Board of Directors
/s/ Glenn M. Messemer
SECRETARY
Date: March 14, 1994
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EXHIBIT A
KAMAN CORPORATION
1993 STOCK INCENTIVE PLAN
1. PURPOSE. This Plan includes a continuation and extension of
the incentive stock program of the Corporation set forth in the
Predecessor Plan and is designed to give directors, officers and
key employees of the Corporation and other persons an expanded
opportunity to acquire stock in the Corporation or receive other
long-term incentive remuneration in order that they may better
participate in the Corporation's growth and be motivated to remain
with the Corporation and promote its further development and
success.
2. DEFINITIONS. The following terms shall have the meanings
given below unless the context otherwise requires:
(a) "Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Award" or "Awards" except where referring to a
particular category of grant under the Plan shall include Incentive
Stock Options, Non-Statutory Stock Options, Stock Appreciation
Rights and Restricted Stock Awards.
(c) "Board" means the Board of Directors of the
Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as
amended, and any successor Code, and related rules, regulations and
interpretations.
(e) "Committee" means the committee of the Board
established under Section 9 hereof.
(f) "Corporation" means Kaman Corporation.
(g) "Disability" or "disabled" means disability or
disabled as defined by the Code.
(h) "Disinterested Person" shall have the meaning set
forth in Rule 16b-3(c)(2)(i) promulgated under the Act, and any
successor to such rule.
(i) "Eligible Person" means any person, including a
person who is not an employee of the Corporation or a Subsidiary,
or entity who satisfies all the eligibility requirements set forth
in either Section 3(a) or 3(b) hereof, excluding, however, any
member of the Committee and any alternate member of the Committee.
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(j) "Fair Market Value" of the Stock on any given date
shall be the closing price of the Stock in the NASDAQ National
Market System on such date, or, if no sales of the Stock occurred
on that day, the then most recent prior day on which sales were
reported.
(k) "Incentive Stock Option" means a stock option
qualifying under the provisions of Section 422 of the Code.
(l) "Non-Employee Director Participant" means an
Eligible Person, who at the time of grant of an Award is a director
of the Corporation but not an employee of the Corporation or a
Subsidiary.
(m) "Non-Statutory Option" means a stock option not
qualifying for incentive stock option treatment under the pro-
visions of Section 422 of the Code.
(n) "Optionee" means the holder of any option granted
under the Plan.
(o) "Participant" means the holder of any Award granted
under the Plan.
(p) "Plan" means the Kaman Corporation 1993 Stock
Incentive Plan.
(q) "Predecessor Plan" means the Kaman Corporation 1983
Stock Incentive Plan.
(r) "Principal Shareholder" means any individual owning
stock possessing more than ten percent (10%) of the total combined
voting power of all classes of capital stock of the Corporation.
(s) "Restricted Stock" means Stock received pursuant to
a Restricted Stock Award.
(t) "Restricted Stock Award" is defined in Section 8(a).
(u) "Stock" or "shares" means shares of Class A Common
Stock of the Corporation.
(v) "Stock Appreciation Right" or "Right" means a right
described in Section 7.
(w) "Subsidiary" means any corporation in which the
Corporation owns, directly or indirectly, a majority of the out-
standing voting stock.
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3. ELIGIBILITY.
(a) Incentive Stock Options. Incentive Stock Options
may be granted to any Eligible Persons who are full-time, salaried
employees of the Corporation or a Subsidiary and who in the sole
opinion of the Committee are, from time to time, responsible for
the management and/or growth of all or part of the business of the
Corporation.
(b) Awards Other than Incentive Stock Options. Awards,
other than Incentive Stock Options, may be granted to any Eligible
Persons who in the sole opinion of the Committee are, from time to
time, responsible for the growth and/or the management of all or a
part of the business of the Corporation.
(c) Substitute Awards. The Committee, in its dis-
cretion, may also grant Awards in substitution for any stock
incentive awards previously granted by companies acquired by the
Corporation or one of its Subsidiaries. Such substitute awards may
be granted on such terms and conditions as the Committee deems
appropriate in the circumstances, provided, however, that
substitute Incentive Stock Options shall be granted only in
accordance with the Code.
4. TERM OF PLAN. The Plan shall take effect on November 1, 1993
and shall remain effective for ten (10) years thereafter, expiring
on October 31, 2003.
5. STOCK SUBJECT TO THE PLAN. The aggregate number of shares of
Stock which may be issued pursuant to all Awards granted under the
Plan shall not exceed 960,000 shares of Stock, subject to
adjustment as hereinafter provided in Section 10, which shall be in
addition to all shares of Stock reserved for issuance under the
Predecessor Plan but remaining unissued on the effective date of
the Plan, and which may be treasury shares or authorized but
unissued shares. In the event that any Award under the Plan for
any reason expires, is terminated, forfeited, reacquired by the
Corporation, or satisfied without the issuance of Stock (except in
the cases of (i) a Stock Appreciation Right to the extent settled
in cash; (ii) the Stock otherwise issuable under an Award but
retained by the Corporation for payment of the exercise price of an
option under Section 6(e)(iv)(C) or for the payment of withholding
taxes under Section 14(b) hereof; and (iii) stock otherwise issu-
able under a stock option but for which the Corporation has made a
discretionary payment under Section 7(d) hereof) the shares
allocable to the unexercised or forfeited portion of such Award may
again be made subject to an Award under the Plan.
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6. STOCK OPTIONS. The following terms and conditions shall apply
to each option granted under the Plan and shall be set forth in a
stock option agreement between the Corporation and the Optionee
together with such other term and conditions not inconsistent
herewith as the Committee may deem appropriate in the case of each
Optionee:
(a) OPTION PRICE. The purchase price under each
Incentive Stock Option shall be as determined by the Committee but
not less than 100% of the Fair Market Value of the shares subject
to such option on the date of grant, provided that such option
price shall not be less than 110% of such Fair Market Value in the
case of any Incentive Stock Option granted to a Principal
Shareholder. The purchase price per share of Stock deliverable
upon the exercise of a Non-Statutory Option shall be determined by
the Committee, but shall not be less than 85% of the Fair Market
Value of such Stock on the date of grant and in no event less than
the par value per share of such Stock.
(b) TYPE OF OPTION. All options granted under the Plan
shall be either Incentive Stock Options or Non-Statutory Options.
All provisions of the Plan applicable to Incentive Stock Options
shall be interpreted in a manner consistent with the provisions of,
and regulations under, Section 422 of the Code.
(c) PERIOD OF INCENTIVE STOCK OPTION. Each Incentive
Stock Option shall have a term not in excess of ten (10) years from
the date on which it is granted, except in the case of any
Incentive Stock Option granted to a Principal Shareholder which
shall have a term not in excess of five (5) years from the date on
which it is granted; provided that any Incentive Stock Option
granted or the unexercised portion thereof, to the extent exer-
cisable at the time of termination of employment, shall terminate
at the close of business on the day three (3) months following the
date on which the Optionee ceases to be employed by the Corporation
or a Subsidiary unless sooner expired or unless a longer period is
provided under Subsection (g) of this Section in the event of the
death or disability of such an Optionee.
(d) PERIOD OF NON-STATUTORY OPTION. Each Non-Statutory
Option granted under the Plan shall have a term not in excess of
ten (10) years and one (1) day from the date on which it is
granted; provided that any Non-Statutory Option granted to an
employee of the Corporation or a Subsidiary or to a Non-Employee
Director Participant, or the unexercised portion thereof shall
terminate not later than the close of business on the day three (3)
months following the date on which such employee ceases to be
employed by the Corporation or a Subsidiary or the date on which
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such Non-Employee Director ceases to be a director of the
Corporation, as the case may be, unless a longer period is provided
under Subsection (g) of this Section in the event of the death or
disability of such an Optionee. Such an Optionee's Non-Statutory
Option shall be exercisable, if at all, during such three (3) month
period only to the extent exercisable on the date such Optionee's
employment terminates or the date on which such Optionee ceases to
be a director, as the case may be.
(e) EXERCISE OF OPTION.
(i) Each option granted under the Plan shall become
exercisable on such date or dates and in such amount or
amounts as the Committee shall determine. In the absence of
any other provision by the Committee, each option granted
under the Plan shall be exercisable with respect to not more
than twenty percent (20%) of such shares subject thereto after
the expiration of one (1) year following the date of its
grant, and shall be exercisable as to an additional twenty
percent (20%) of such shares after the expiration of each of
the succeeding four (4) years, on a cumulative basis, so that
such option, or any unexercised portion thereof, shall be
fully exercisable after a period of five (5) years following
the date of its grant; provided, however, that in the absence
of any other provision by the Committee, each Incentive Stock
Option granted to a Principal Shareholder shall be exercisable
with respect to not more than twenty-five percent (25%) of the
shares subject thereto after the expiration of one (1) year
following the date of its grant, and shall be exercisable as
to an additional twenty-five percent (25%) after the
expiration of each of the succeeding three (3) years, on a
cumulative basis, so that such option, or any unexercised
portion thereof, shall be fully exercisable after a period of
four (4) years following the date of its grant.
(ii) The Committee, in its sole discretion, may,
from time to time and at any time, accelerate the vesting
provisions of any outstanding option, subject, in the case of
Incentive Stock Options, to the provisions of Subsection
(6)(i) relating to "Limit on Incentive Options".
(iii) Notwithstanding anything herein to the
contrary, except as provided in subsection (g) of this
Section, no Optionee who was, at the time of the grant of an
option, an employee of the Corporation or a Subsidiary, may
exercise such option or any part thereof unless at the time of
such exercise he shall be employed by the Corporation or a
Subsidiary and shall have been so employed continuously since
the date of grant of such option, excepting leaves of absence
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approved by the Committee; provided that the option agreement
may provide that such an Optionee may exercise his option, to
the extent exercisable on the date of termination of such
continuous employment, during the three (3) month period,
ending at the close of business on the day three (3) months
following the termination of such continuous employment unless
such option shall have already expired by its term.
(iv) An option shall be exercised in accordance
with the related stock option agreement by serving written
notice of exercise on the Corporation accompanied by full
payment of the purchase price in cash. As determined by the
Committee, in its discretion, at (or, in the case of Non-
Statutory Options, at or after) the time of grant, payment in
full or in part may also be made by delivery of (A)
irrevocable instructions to a broker to deliver promptly to
the Corporation the amount of sale or loan proceeds to pay the
exercise price, or (B) previously owned shares of Stock not
then subject to restrictions under any Corporation plan (but
which may include shares the disposition of which constitutes
a disqualifying disposition for purposes of obtaining
incentive stock option treatment for federal tax purposes), or
(C) shares of Stock otherwise receivable upon the exercise of
such option; provided, however, that in the event the
Committee shall determine in any given instance that the
exercise of such option by withholding shares otherwise
receivable would be unlawful, unduly burdensome or otherwise
inappropriate, the Committee may require that such exercise be
accomplished in another acceptable manner. For purposes of
subsections (B) and (C) above, such surrendered shares shall
be valued at Fair Market Value on the date of exercise.
(f) NONTRANSFERABILITY. No option granted under the
Plan shall be transferable by the Optionee otherwise than by will
or by the laws of descent and distribution, and such option shall
be exercisable, during his lifetime, only by him.
(g) DEATH OR DISABILITY OF OPTIONEE. In the event of
the death or disability of an Optionee while in the employ of the
Corporation or a Subsidiary or while serving as a director of the
Corporation, his stock option or the unexercised portion thereof
may be exercised within the period of one (1) year succeeding his
death or disability, but in no event later than (i) ten (10) years
(five (5) years in the case of a Principal Shareholder) from the
date the option was granted in the case of an Incentive Stock
Option, and (ii) ten (10) years and one (1) day in the case of a
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Non-Statutory Option, by the person or persons designated in the
Optionee's will for that purpose or in the absence of any such
designation, by the legal representative of his estate, or by the
legal representative of the Optionee, as the case may be.
Notwithstanding anything herein to the contrary and in the absence
of any contrary provision by the Committee, during the one-year
period following termination of employment or cessation as a
director by reason of death or disability, an Optionee's stock
option shall continue to vest in accordance with its terms and be
and become exercisable as if employment or service as a director
had not ceased.
(h) SHAREHOLDER RIGHTS. No Optionee shall be entitled
to any rights as a shareholder with respect to any shares subject
to his option prior to the date of issuance to him of a stock
certificate representing such shares.
(i) LIMIT ON INCENTIVE STOCK OPTIONS. The aggregate
Fair Market Value (determined at the time an option is granted) of
shares with respect to which Incentive Stock Options granted to an
employee are exercisable for the first time by such employee during
any calendar year (under all incentive stock option plans of the
Corporation and its Subsidiaries to the extent required under the
Code) shall not exceed $100,000.
(j) NOTIFICATION OF DISQUALIFYING DISPOSITION. Partici-
pants granted Incentive Stock Options shall undertake, in the
Incentive Stock Option agreements, as a precondition to the
granting of such option by the Corporation, to promptly notify the
Corporation in the event of a disqualifying disposition (within the
meaning of the Code) of any shares acquired pursuant to such
Incentive Stock Option agreement and provide the Corporation with
all relevant information related thereto.
7. STOCK APPRECIATION RIGHTS; DISCRETIONARY PAYMENTs.
(a) NATURE OF STOCK APPRECIATION RIGHT. A Stock
Appreciation Right is an Award entitling the Participant to receive
an amount in cash or shares of Stock (or forms of payment permitted
under Section 7(d) hereof) or a combination thereof, as determined
by the Committee at the time of grant, having a value equal to (or
if the Committee shall so determine at time of grant, less than)
the excess of the Fair Market Value of a share of Stock on the date
of exercise over the Fair Market Value of a share of Stock on the
date of grant (or over the option exercise price, if the Stock
Appreciation Right was granted in tandem with a stock option)
multiplied by the number of shares with respect to which the Stock
Appreciation Right shall have been exercised.
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(b) GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS.
(i) Stock Appreciation Rights may be granted in
tandem with, or independently of, any stock option granted
under the Plan. In the case of a Stock Appreciation Right
granted in tandem with a Non-Statutory Option, such Right may
be granted either at or after the time of grant of such
option. In the case of a Stock Appreciation Right granted in
tandem with an Incentive Stock Option such Right may be
granted only at the time of the grant of such option. A Stock
Appreciation Right or applicable portion thereof granted in
tandem with a given stock option shall terminate and no longer
be exercisable upon the termination or exercise of the related
stock option, except that a Stock Appreciation Right granted
with respect to less than the full number of shares covered by
a related stock option shall not be reduced until the exercise
or termination of the related stock option exceeds the number
of shares not covered by the Stock Appreciation Right.
(ii) Each Stock Appreciation Right granted under
the Plan shall become exercisable on such date or dates and in
such amount or amounts as the Committee shall determine;
provided, however, that any Stock Appreciation Right granted
in tandem with a stock option shall be exercisable in relative
proportion to and to the extent that such related stock option
is exercisable; provided further, however, that, not-
withstanding anything herein to the contrary, any Stock
Appreciation Right granted in tandem with a Non-Statutory
Option which has a purchase price at the date of grant of less
than Fair Market Value shall not be exercisable at all until
at least one (1) year after the date of grant of such option.
Except as provided in the immediately preceding sentence, in
the absence of any other provision by the Committee, each
Stock Appreciation Right granted under the Plan shall be exer-
cisable with respect to not more than twenty percent (20%) of
such shares subject thereto after the expiration of one (1)
year following the date of its grant, and shall be exercisable
as to an additional twenty percent (20%) of such shares after
the expiration of each of the succeeding four (4) years, on a
cumulative basis, so that such Right, or any unexercised
portion thereof, shall be fully exercisable after a period of
five (5) years following the date of its grant. The
Committee, in its sole discretion, may, from time to time and
at any time, accelerate the vesting provisions of any
outstanding Stock Appreciation Right.
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(iii) Notwithstanding anything herein to the con-
trary, except as provided in subsections (c)(v) and (c)(vi) of
this Section, no Participant who was, at the time of the grant
of a Stock Appreciation Right, an employee of the Corporation
or a Subsidiary, may exercise such Right or any part thereof
unless at the time of such exercise, he shall be employed by
the Corporation or a Subsidiary and shall have been so
employed continuously since the date of grant of such Right,
excepting leaves of absence approved by the Committee;
provided that the Stock Appreciation Right agreement may
provide that such a Participant may exercise his Stock
Appreciation Right, to the extent exercisable on the date of
termination of such continuous employment unless such Right
shall have already expired by its terms.
(iv) Notwithstanding anything herein to the con-
trary, except as provided in subsections (c)(v) and (c)(vi) of
this Section, no Non-Employee Director Participant may
exercise a Stock Appreciation Right or part thereof unless at
the time of such exercise he shall be a director of the
Corporation and shall have been a director of the Corporation
continuously since the date of grant of such Right excepting
leaves of absence approved by the Committee; provided that the
Stock Appreciation Right agreement may provide that such
Participant may exercise his Stock Appreciation Right, to the
extent exercisable on the date he ceased to be a director of
the Corporation, during the three (3) month period ending at
the close of business on the day three (3) months following
the cessation of such continuous service as a director unless
such Right shall already have expired by its terms.
(v) A Stock Appreciation Right shall be exercised
in accordance with the related Stock Appreciation Right
Agreement by serving written notice of exercise on the
Corporation.
(c) TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.
Stock Appreciation Rights shall be subject to such terms and
conditions as shall be determined from time to time by the
Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem
with stock options shall be exercisable only at such time or
times and to the extent that the related stock options shall
be exercisable;
(ii) Upon the exercise of a Stock Appreciation
Right, the applicable portion of any related stock option
shall be surrendered.
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(iii) Stock Appreciation Rights granted in tandem
with a stock option shall be transferable only with such
option. Stock Appreciation Rights shall not be transferable
otherwise than by will or the laws of descent and distribu-
tion. All Stock Appreciation Rights shall be exercisable
during the Participant's lifetime only by the Participant or
the Participant's legal representative.
(iv) A Stock Appreciation Right granted in tandem
with a stock option may be exercised only when the then Fair
Market Value of the Stock subject to the stock option exceeds
the exercise price of such option. A Stock Appreciation Right
not granted in tandem with a stock option may be exercised
only when the then Fair Market Value of the Stock exceeds the
Fair Market Value of the Stock on the date of grant of such
Right.
(v) Each Stock Appreciation Right shall have a term
not in excess of ten (10) years from the date on which it is
granted (ten (10) years and one (1) day in the case of a Stock
Appreciation Right granted in tandem with a Non-Statutory
Option); provided that any Stock Appreciation Right granted to
(aa) an employee of the Corporation or a Subsidiary shall
terminate not later than the close of business on the day
three (3) months following the date such Participant ceases to
be employed by the Corporation or a Subsidiary, excepting
leaves of absences approved by the Committee, and (bb) a Non-
Employee Director Participant shall terminate not later than
the close of business on the day three (3) months following
the date such Participant ceases to be a director of the
Corporation, unless a longer period is provided under
subsection (c)(vi) below in the event of death or disability
of a Participant. Such a Participant's Stock Appreciation
Right shall be exercisable, if at all, during such three (3)
month period only to the extent exercisable on the date his
employment terminates or the date he ceases to be a director,
as the case may be.
(vi) In the event of the death or disability of a
Participant while in the employ of the Corporation or a Sub-
sidiary or while serving as a director of the Corporation, his
Stock Appreciation Right or the unexercised portion thereof
may be exercised within the period of one (1) year succeeding
his death or disability, but in no event later than (i) ten
(10) years from the date on which it was granted (ten (10)
years and one (1) day in the case of a Non-Statutory Option),
by the person or persons designated in the Participant's will
for that purpose or in the absence of any such designation, by
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the legal representative of his estate, or by the legal
representative of the Participant, as the case may be.
Notwithstanding anything herein to the contrary and in the
absence of any contrary provision by the Committee, during the
one-year period following termination of employment or
cessation as a director by reason of death or disability, a
Participant's Stock Appreciation Right shall continue to vest
in accordance with its terms and be and become exercisable as
if employment or service as a director had not ceased.
(d) DISCRETIONARY PAYMENTS. Upon the written request of
an Optionee whose stock option is not accompanied by a Stock
Appreciation Right, the Committee may, in its discretion, cancel
such option if the Fair Market Value of the shares subject to the
option at the exercise date exceeds the exercise price thereof; in
that event, the Corporation shall pay to the Optionee an amount
equal to the difference between the Fair Market Value of the shares
subject to the cancelled option (determined as of the date the
option is cancelled) and the exercise price. Such payment shall be
by check or in Stock having a Fair Market Value (determined on the
date the payment is to be made) equal to the amount of such
payments or any combination thereof, as determined by the
Committee.
(e) RULES RELATING TO EXERCISE. In the case of a
Participant subject to the restrictions of Section 16(b) of the
Act, no stock appreciation right (as referred to in Rule 16b-3(e)
or any successor Rule under the Act), including a Stock Appreci-
ation Right granted hereunder, shall be settled in cash (and no
request for payment under paragraph (d) above shall be honored by
the Corporation or made by such a Participant) except in compliance
with any applicable requirements of Rule 16b-3(e) or any successor
rule.
8. RESTRICTED STOCK.
(a) Nature of Restricted Stock Award. A Restricted
Stock Award is an Award entitling the Participant to receive shares
of Stock, subject to such conditions, including a Corporation right
during a specified period or periods to require forfeiture of such
shares upon the Participant's termination of employment with the
Corporation or a Subsidiary or cessation as a director of the
Corporation, as the case may be, as the Committee may determine at
the time of grant. The Committee, in its sole discretion, may,
from time to time and at any time, waive any or all restrictions
and/or conditions contained in the Restricted Stock Award
agreement. Notwithstanding anything herein to the contrary, the
Committee, in its discretion, may grant Restricted Stock without
any restrictions or conditions whatsoever. Restricted Stock shall
be granted in respect of past services or other valid
consideration.
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(b) AWARD AGREEMENT. A Participant who is granted a
Restricted Stock Award shall have no rights with respect to such
Award unless the Participant shall have accepted the Award within
60 days (or such shorter date as the Committee may specify)
following the Award date by executing and delivering to the
Corporation a Restricted Stock Award Agreement in such form as the
Committee shall determine.
(c) RIGHTS AS A SHAREHOLDER. Upon complying with para-
graph (b) above, a Participant shall have all the rights of a
shareholder with respect to the Restricted Stock including voting
and dividend rights, subject to nontransferability and Corporation
forfeiture rights described in this Section 8 and subject to any
other conditions contained in the Award agreement. Unless the
Committee shall otherwise determine, certificates evidencing shares
of Restricted Stock shall remain in the possession of the
Corporation until such shares are free of any restrictions under
the Plan. The Committee in its discretion may, as a precondition
of the Corporation's obligation to issue a Restricted Stock Award,
require the Participant to execute a stock power or powers or other
agreement or instruments necessary or advisable in connection with
the Corporation's forfeiture rights with respect to such shares.
(d) RESTRICTIONS. Shares of Restricted Stock may not be
sold, assigned, transferred or otherwise disposed of or pledged or
otherwise encumbered. In the event of termination of employment of
the Participant with the Corporation or a Subsidiary for any
reason, or cessation as a director of the Corporation in the case
of a Non-Employee Director Participant, such shares shall be
forfeited to the Corporation, except as set forth below:
(i) The Committee at the time of grant shall
specify the date or dates (which may depend upon or be related
to the attainment of performance goals and other conditions)
on which the nontransferability of the Restricted Stock and
the Corporation's forfeiture rights with respect thereto shall
lapse. The Committee at any time may accelerate such date or
dates and otherwise waive or, subject to Section 13, amend any
conditions of the Award.
(ii) Except as may otherwise be provided in the
Award agreement, in the event of termination of a Participant
with the Corporation or a Subsidiary for any reason or
cessation as a director of the Corporation for any reason, all
of the Participant's Restricted Stock shall be forfeited to
the Corporation without the necessity of any further act by
the Corporation, the Participant or the Participant's legal
representative; provided, however, that in the event of
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termination of employment or cessation of service as a
director of the Corporation by reason of death or disability,
all conditions and restrictions relating to a Restricted Stock
Award held by such a Participant shall thereupon be waived and
shall lapse.
(iii) In the absence of any other provision by the
Committee, each Restricted Stock Award granted to (A) an
employee of the Corporation or a Subsidiary shall be subject
to forfeiture to the Corporation conditioned on the
Participant's continued employment and (B) Non-Employee
Director Participants shall be subject to forfeiture to the
Corporation conditioned on the Participant's continued service
as a director of the Corporation, and in the case of clause
(A) or (B), such forfeiture rights shall lapse as follows:
with respect to twenty percent (20%) of the shares subject to
the Restricted Stock Award on the date one year following the
date of grant, and with respect to an additional twenty
percent (20%) of such shares after the expiration of each of
the succeeding four (4) years thereafter, on a cumulative
basis, so that such Restricted Stock shall be free of such
risk of forfeiture on the date five (5) years following the
date of its grant.
(e) WAIVER, DEFERRAL, AND INVESTMENT OF DIVIDENDS. The
Restricted Stock Award agreement may require or permit the
immediate payment, waiver, deferral or investment of dividends paid
with respect to the Restricted Stock.
9. THE COMMITTEE.
(a) ADMINISTRATION. The Committee shall be a committee
of not less than three (3) members of the Board who are
Disinterested Persons, appointed by the Board. Vacancies occurring
in membership of the Committee shall be filled by the Board. The
Committee shall keep minutes of its meetings. One or more members
of the Committee may participate in a meeting of the Committee by
means of conference telephone or similar communications equipment
provided all persons participating in the meeting can hear one
another. A majority of the entire Committee shall constitute a
quorum, and the acts of a majority of the members present at or so
participating in any meeting at which a quorum is constituted shall
be the acts of the Committee. The Committee may act without
meeting by unanimous written consent. Absent some other provision
by the Board, the power and responsibilities of the Committee shall
be vested in and assumed by the Personnel and Compensation
Committee of the Board.
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(b) AUTHORITY OF COMMITTEE. Subject to the provisions
of the Plan, the Committee shall have full and final authority to
determine the persons to whom Awards shall be granted, the number
of shares to be subject to each Award, the term of the Award, the
vesting provisions of the Award, if any, restrictions on the Award,
if any, and the price at which the shares subject thereto may be
purchased. The Committee is empowered, in its discretion, to
modify, extend or renew any Award theretofore granted and adopt
such rules and regulations and take such other action as it shall
deem necessary or proper for the administration of the Plan. The
Committee shall have full power and authority to construe, inter-
pret and administer the Plan, and the decisions of the Committee
shall be final and binding upon all interested parties.
10. ADJUSTMENTS. Any limitations, restrictions or other
provisions of this Plan to the contrary notwithstanding, each Award
agreement shall make such provision, if any, as the Committee may
deem appropriate for the adjustment of the terms and provisions
thereof (including, without limitation, terms and provisions
relating to the exercise price and the number and class of shares
subject to the Award) in the event of any merger, consolidation,
reorganization, recapitalization, stock dividend, divisive
reorganization, issuance of rights, combination or split-up or
exchange of shares, or the like. In the event of any merger
consolidation, reorganization, recapitalization, stock dividend,
divisive reorganization, issuance of rights, combination or split-
up or exchange of shares, or the like, the Committee shall make an
appropriate adjustment in the number of shares authorized to be
issued pursuant to the Plan.
11. OPTIONS UNDER PREDECESSOR PLAN. Options presently
outstanding which have been granted under the Predecessor Plan
shall continue to be governed and interpreted under the terms of
such plan and not by the terms hereof.
12. AMENDMENT TO AND TERMINATION OF THE PLAN. The Board may from
time to time amend the Plan in such way as it shall deem advisable
provided the Board may not extend the expiration date of the Plan,
change the class of Eligible Persons, increase the maximum Award
term, decrease the minimum exercise price or increase the total
number of authorized shares (except in accordance with Section 10
hereof) for which Awards may be granted. The Board, in its
discretion, may at any time terminate the Plan prior to its
expiration in accordance with Section 4 hereof. No amendment to or
termination of the Plan shall in any way adversely affect Awards
then outstanding hereunder.
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13. STATUS OF PLAN. Until shares pursuant to an Award or exercise
thereof are actually delivered to a Participant, a Participant
shall have no rights to or with respect to such shares greater than
those of a general creditor of the Corporation unless the Committee
shall otherwise expressly determine in connection with any Award or
Awards.
14. GENERAL PROVISIONS.
(a) OTHER COMPENSATION ARRANGEMENTS; NO RIGHT TO RECEIVE
AWARDS; NO EMPLOYMENT OR OTHER RIGHTS. Nothing contained in this
Plan shall prevent the Board from adopting other or additional
capital stock based compensation arrangements, subject to
stockholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only
in specific cases. No Eligible Person shall have any right to
receive Awards except as the Committee may determine. The Plan
does not confer upon any employee any right to continued employment
with the Corporation or a Subsidiary or upon any director or
officer of the Corporation any right to continued service as a
director or officer of the Corporation, nor does it interfere in
any way with the right of the Corporation or a Subsidiary to
terminate the employment of any of its employees or for the
Corporation to remove a director or officer with or without cause
at any time.
(b) TAX WITHHOLDING, ETC. Any obligation of the
Corporation to issue shares pursuant to the grant or exercise of
any Award shall be conditioned on the Participant having paid or
made provision for payment of all applicable tax withholding obli-
gations, if any, satisfactory to the Committee. The Corporation
and its Subsidiaries shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any kind
otherwise due to the Participant. In the case of Non-Statutory
Options, and Stock Appreciation Rights exercisable only for Stock,
the Participant exercising such an award shall satisfy federal
income tax withholding requirements occasioned by the exercise
thereof by the surrender of shares otherwise to be received on the
exercise of such award, such shares to be valued at the Fair Market
Value thereof on the date of exercise; provided, however, that in
the event the Committee shall determine in any given instance that
the satisfaction of federal income tax withholding requirements by
the surrender of shares would be unlawful, unduly burdensome or
otherwise inappropriate, the Committee may require that such income
tax withholding requirements be satisfied in another acceptable
manner.
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(c) SECTION 83(B) OF THE CODE. Participants may not
make, and each Award agreement shall prohibit, an election under
Section 83(b) of the Code, with respect to any Award.
(d) RESTRICTIONS ON TRANSFERS OF SHARES. Although the
Corporation presently intends to register under applicable securi-
ties laws all shares acquired or received by Participants under the
Plan, the Corporation is not required to cause such shares to be
registered under the Securities Act of 1933 or the securities laws
of any State. Accordingly, the shares acquired or received may be
"restricted securities" as defined in Rule 144 under said
Securities Act of 1933 or other rule or regulation of the
Securities and Exchange Commission. Any certificate evidencing any
such shares may bear a legend restricting the transfer of such
shares, and the recipient may be required to assert that the shares
are being acquired for his own account and not with a view to the
distribution thereof as a condition to the granting or exercise of
an Award.
(e) ISSUANCE OF SHARES. Any obligation of the
Corporation to issue shares pursuant to the grant or exercise of
any Award shall be conditioned on the Corporation's ability at
nominal expense to issue such shares in compliance with all
applicable statutes, rules or regulations of any governmental
authority. The Participant shall provide the Corporation with any
assurances or agreements which the Committee, in its sole
discretion, shall deem necessary or advisable in order that the
issuance of such shares shall comply with any such statutes, rules
or regulations.
(f) DATE OF GRANT. The date on which each Award under
the Plan shall be considered as having been granted shall be the
date on which the award is authorized by the Committee, unless a
later date is specified by the Committee; provided, however, in the
case of options intended to qualify as Incentive Stock Options, the
date of grant shall be determined in accordance with the Code.
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EXHIBIT B
KAMAN CORPORATION
EMPLOYEES STOCK PURCHASE PLAN
1. PURPOSE; AUTHORIZED SHARES. The Kaman Corporation Employees
Stock Purchase Plan (the "Plan") was adopted by the Board of
Directors (the "Board") of Kaman Corporation (the "Corporation") on
February 28, 1989 for the purpose of providing employees of the
Corporation and its subsidiaries an opportunity to purchase Kaman
Corporation Class A common stock through payroll deductions during
consecutive offerings commencing July 1, 1989. One Million Five
Hundred Thousand (1,500,000) shares of the Corporation's Class A
common stock in the aggregate have been approved for purposes of
the Plan by the Board.
2. OFFERING PERIODS. Each offering shall be made over a period
of one or more whole or partial Plan Years as determined by the
Committee (as defined in paragraph 3), provided that in no event
shall an offering period be greater than five (5) Plan Years.
3. ADMINISTRATION. The Plan will be administered by a committee
(the "Committee") appointed by the Board, consisting of at least
three of its members. Members of the Committee shall not be
eligible to participate in the Plan. The Committee will have
authority to make rules and regulations for the administration of
the Plan, and its interpretations and decisions with respect to the
Plan shall be final and conclusive. Absent some other provision by
the Board, the power and responsibilities of the Committee shall be
vested in and assumed by the Personnel and Compensation Committee
of the Board.
4. ELIGIBILITY. All full-time regular employees of the Corpora-
tion and its subsidiaries, with at least three (3) months of
service as of the effective date of each offering hereunder, will
be eligible to participate in the Plan, subject to such rules as
may be prescribed from time to time by the Committee. Such rules,
however, shall neither permit nor deny participation in the Plan
contrary to the requirements of the Internal Revenue Code of 1986,
as amended (the "Code"), including, but not limited to, Section 423
thereof, and regulations promulgated thereunder. To the extent
consistent with Code Section 423, and regulations promulgated
thereunder, the Committee may permit persons who are not full-time
regular employees of the Corporation or one of its subsidiaries at
the commencement of an offering period, or who have not satisfied
the aforementioned three (3) month service requirement at the
commencement of an offering period, to participate in such offering
beginning on the date or at a specified date after such person has
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been a full-time, regular employee of the Corporation or one of its
subsidiaries for at least three (3) months. No employee may be
granted a right under the Plan if such employee, immediately after
the right is granted, would own five percent (5%) or more of the
total combined voting power or value of the stock of the
Corporation or any subsidiary. For purposes of the preceding
sentence, the rules of Section 425(d) of the Code shall apply in
determining stock ownership of an employee, and stock which the
employee may purchase under outstanding rights shall be treated as
stock owned by the employee.
5. PARTICIPATION. An eligible employee may begin participation
in an offering at any time by completing and forwarding a payroll
deduction authorization form to the employee's appropriate payroll
location. The form will authorize a regular payroll deduction from
the employee's compensation, and must specify the date on which
such deduction is to commence. The authorization may not be
retroactive.
6. DEDUCTIONS. Payroll deduction accounts will be maintained for
all participating employees. An employee may authorize a payroll
deduction in terms of dollars and cents per payroll period of not
less than $1.00 or more than ten (10%) percent of the compensation
of the employee during any such payroll period.
7. DEDUCTION CHANGES. An employee may at any time increase or
decrease the employee's payroll deduction by filing a new payroll
deduction authorization form. The change may not become effective
sooner than the next pay period after receipt of the form. A
payroll deduction may be increased only twice and may be reduced
only twice during any Plan Year of an offering period, unless any
such additional change is required to permit the purchase of the
whole number of shares for which rights have been granted to the
employee under the provisions of paragraph 10.
8. INTEREST. Since the amount of time that the Corporation will
be holding funds withheld from employees' compensation is minimal,
no interest will be credited to employees' accounts.
9. WITHDRAWAL OF FUNDS. An employee may at any time and for any
reason permanently withdraw the balance of funds accumulated in the
employee's payroll deduction account, and thereby withdraw from
participation in an offering. Upon any such withdrawal, the
employee shall be entitled to receive in cash the value of any
fractional share (rounded to four decimal places) allocated to such
employee's account determined on the basis of the market value
thereof as of the date of withdrawal. The employee may thereafter
begin participation again only once during each Plan Year of an
offering period. Partial withdrawals will not be permitted.
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10. PURCHASE OF SHARES. Subject to the payroll deduction
limitation set forth in paragraph 6 and the limitation below, each
employee participating in an offering under this Plan will be
granted a right to purchase shares of the Corporation's
Class A common stock which have an aggregate purchase price
(determined under paragraph 11) equal to the sum of (a) up to
ten percent (10%)of his or her compensation during each pay
period of each offering period in which he or she participates
and (b) any cash dividends reinvested in accordance with
paragraph 12. In no event may an employee be granted a right
which permits such employee's rights to purchase stock under this
Plan, and any other stock purchase plan of the Corporation and its
subsidiaries, to accrue at a rate which exceeds $25,000 of fair
market value of stock (determined at the date of grant of the
right) for each calendar year in which the right is outstanding
at any time. No right may be exercised in any manner other than
by payroll deduction as specified in paragraph 6 or dividend
reinvestment as specified in paragraph 12.
11. PURCHASE PRICE AND PAYMENT. The purchase price to
participating employees for each share of Class A common stock
purchased under the Plan will be 85% of its market value at the
time of purchase. Purchases of shares pursuant to the Plan shall
be made on the fifteenth (15th) day of each month. The number of
whole and fractional shares allocated to each employee's account as
of each date of purchase shall be based upon the balance of funds
in an employee's account available for the purchase of shares as of
the close of the immediately preceding month. A participating
employee's payroll deduction account shall be charged with the
purchase price of each whole and fractional share allocated to the
employee as of the date of purchase and the employee shall be
deemed to have exercised a right to acquire such whole and
fractional share as of such date. Additional shares covered by the
participating employee's rights under the Plan will be purchased in
the same manner, provided funds have again accrued in his account.
12. DIVIDENDS. Any cash dividends paid with respect to the shares
held under the Plan shall be paid in cash to the participating
employees for whom shares are so held on the basis of the number of
whole and fractional shares so held or, if a participating employee
so elects, such dividends shall be combined with payroll
deductions, added to the funds held under the Plan, and applied to
the purchase of additional shares of stock purchased pursuant to
the Plan. A participating employee choosing to have dividends
reinvested under this paragraph may terminate such election during
an offering period by filing a written form at the appropriate
payroll location, but may thereafter resume his election to
reinvest such cash dividends only once during each Plan Year of an
offering period. An election to either stop or resume dividend
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reinvestment will be effective with respect to the dividend payment
next following receipt of the form; provided that if the form is
filed within thirty (30) days before a dividend record date
declared by the Board, then such election will not be effective
with respect to that particular dividend declaration.
13. STOCK CERTIFICATES. Stock certificates will only be issued to
participating employees promptly after their request or promptly
after the participating employee's withdrawal from the Plan for any
reason.
14. REGISTRATION OF CERTIFICATES. Certificates may be registered
only in the name of the employee, or if the employee so indicates
on the employee's payroll deduction authorization form, in the
employee's name jointly with a member of the employee's family,
with right of survivorship. An employee who is a resident of a
jurisdiction which does not recognize such a joint tenancy may have
certificates registered in the employee's name as tenant in common
with a member of the employee's family, without right of
survivorship.
15. DEFINITIONS. The following terms when used herein shall have
the meanings set forth below:
(a) The phrase "market value" or "fair market value"
means the closing price of the Corporation's Class A
common stock in the Over-the-Counter NASDAQ National
Market System, as reported in the Hartford, Connecticut
local issue of The Wall Street Journal, on the business
day immediately preceding the day of purchase or the
effective date of the offering as the context requires.
(b) The term "subsidiary" means a subsidiary of the
Corporation within the meaning of Section 425(f) of the
Internal Revenue Code and the regulations thereunder,
provided, however, that each consecutive offering under
this Plan shall not be deemed to cover the employees of
any subsidiary acquired or established after the
effective date of such offering, unless so authorized by
the Committee.
(c) a "Plan Year" means the calendar year.
16. RIGHTS AS A SHAREHOLDER. None of the rights or privileges of
a shareholder of the Corporation shall exist with respect to (a)
rights granted to a participating employee under the Plan or, (b)
except as provided in paragraph 12, any fractional shares credited
to the participating employee's account.
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17. RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF EMPLOYMENT. In
the event of a participating employee's retirement, death or
termination of employment, no payroll deduction shall be taken from
any pay due and owing to an employee at such time, and the balance
in the employee's account (including the value of any fractional
shares calculated in the manner described in paragraph 9) shall be
paid to the employee or, in the event of the employee's death, to
the employee's estate; provided, however, that in the event shares
credited to the account of a deceased employee would have been
issued to the employee and a joint tenant with right of
survivorship as permitted in paragraph 14 if issued immediately
prior to such employee's death, then such shares shall be issued to
such joint tenant, if living at the time such shares are issued.
18. OBLIGATION OF CORPORATION TO PURCHASE. In the event of
personal or family circumstances of an emergency nature, for a
period of one year after the exercise of a right to purchase a
share or shares as described in paragraphs 10 and 11, a
participating employee shall have the right to offer such shares
back to the Corporation at the price at which such shares were pur-
chased, and the Corporation shall have the obligation to make such
repurchase.
19. RIGHTS NOT TRANSFERABLE. Rights under this Plan are not
transferable by a participating employee and are exercisable during
an employee's lifetime only by the employee.
20. APPLICATION OF FUNDS. All funds received or held by the
Corporation under this Plan may be used for any corporate purpose.
21. ADJUSTMENT IN CASES OF CHANGES AFFECTING CLASS A STOCK. In
the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, combination, issuance of rights,
split-up or spin-off of the Corporation, or the like, the number of
shares approved for this Plan shall be increased appropriately and
such other adjustments to the terms of this Plan shall be made as
may be deemed equitable by the Board. In the event of any other
change affecting such stock, such adjustments shall be made as may
be deemed equitable by the Board to give proper effect to such
event.
22. AMENDMENT OF THE PLAN. The Board may at any time, or from
time to time, amend this Plan in any respect, except that, without
the approval of each class of stock of the Corporation then issued
and outstanding and entitled to vote on the matter by applicable
law, no amendment shall be made (i) increasing the number of shares
approved for this Plan (other than as provided in paragraph 21);
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(ii) decreasing the purchase price per share; (iii) withdrawing the
administration of this Plan from the Committee; or (iv) changing
the designation of subsidiaries eligible to participate in the
Plan, except adding a subsidiary as provided in paragraph 15(b).
23. TERMINATION OF PLAN. This Plan and all rights of employees
under an offering hereunder shall terminate:
(a) on the date that participating employees'
accumulated payroll deductions pursuant to paragraph 6
and amounts reinvested pursuant to paragraph 12 are
sufficient to purchase a number of shares equal to or
greater than the number of shares remaining available for
purchase. If the number of shares so purchasable is
greater than the shares remaining available, the
available shares shall be allocated by the Committee
among such participating employees in such manner as it
deems equitable, or
(b) at any time at the discretion of the Board.
Upon termination of the Plan all amounts in the accounts of
participating employees not applied to the purchase of shares
hereunder, together with the value of any fractional shares
calculated in the manner described in paragraph 9, shall be
promptly refunded.
24. GOVERNMENT REGULATIONS. The Corporation's obligation to sell
and deliver shares of its Class A common stock under this Plan is
subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such stock.
25. SHARES USED TO FUND PLAN. The Corporation may utilize
unissued or treasury shares to fund the Plan. Purchases of
outstanding shares may also be made pursuant to and on behalf of
the Plan, upon such terms as the Corporation may approve, for
delivery under the Plan.
26. QUALIFIED PLAN. This Plan is intended to qualify as an
Employee Stock Purchase Plan as defined in Section 423 of the Code.
The term "right" as used herein shall mean "option" as used in
Section 423, and is used herein only to avoid confusion with
"options" granted under the Kaman Corporation 1983 Stock Incentive
Plan.
27. SUCCESSOR CORPORATION. The rights and obligations of the
Corporation under this Plan shall inure to and be binding upon any
successor to all or substantially all of the Corporation's assets
and business.
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28. BUSINESS DAYS. If any event provided for in this Plan is
scheduled to take place on a day which is not a business day then
such event shall take place on the immediately preceding business
day.
29. SPECIAL RULE APPLICABLE TO EXECUTIVE OFFICERS AND DIRECTORS OF
THE CORPORATION. Notwithstanding any other provision of the Plan,
participants who are Executive Officers or Directors and who cease
to participate in the Plan shall be thereafter prohibited, for a
period of six (6) months following the date of such cessation from
again electing to participate in the Plan. For purposes of this
section, the term "Executive Officer" means an "Executive Officer"
as defined in Section 3b-7 of the Securities Exchange Act of 1934.
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