ex10-3.htm

 

    
      

    
Exhibit 10.3

    AMENDMENT
NO. 1

    TO

    EXECUTIVE
EMPLOYMENT AGREEMENT

    


    


    This AMENDMENT NO. 1 (“Amendment”) to
Executive Employment Agreement (the “Agreement”) is made as of the 1st day
of January 2010 between KAMAN CORPORATION, a Connecticut corporation (the
“Company”) and WILLIAM C. DENNINGER (“Executive”).

    


    W I T N E
S S E T H:

    


    WHEREAS,
the Company and the Executive have entered into the Agreement as of November 17,
2008; and

    


    WHEREAS,
the Company and the Executive desire to amend the Agreement;

    


    NOW
THEREFORE, in consideration of the foregoing, of the mutual promises contained
herein and of the other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:

    


    1.             The
last sentence of Section 4 (Bonuses) of the Agreement is amended in its entirety
to read as follows:  “Except as provided under Sections 5A and 8 of
the Agreement, the Executive shall receive payments with respect to the plans
and programs described in this Section 4 in accordance with the terms of such
plans and programs.”

     

    2.   A new
Section 5A is hereby added to the Agreement::

    


     

    5A.           Recovery of Amounts Related
to Mandatory Restatements.

     

    a)       Right of
Recapture.  Effective January 1, 2010 and subject to the terms
of this section 5A but otherwise notwithstanding any other provision of this
Agreement or the terms of any compensation arrangement, plan or program,
Executive shall pay the Company a sum equal to the Recapture Amount if, and to
the extent that, (i) payment of Incentive Compensation is or was contingent
upon the achievement of one or more specified financial performance targets and
(ii) the amount of such Incentive Compensation is, or would have been,
affected by a Mandatory Restatement that the Company is required to implement
that results directly from Executive’s fraudulent or knowing, intentional
misconduct.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    b)       Definitions. For
purposes of this section 5A:

     

    “Recapture
Amount” means i) the difference between a) the amount of Incentive Compensation
paid or received, or to be paid or received by the Executive pursuant to an
award made, within the twelve-month period following first issuance of financial
statements that are subsequently determined to be subject to a Mandatory
Restatement, and b) the amount that would have been paid or received by the
Executive based on the financial results reported in the Mandatory Restatement,
in each case as determined in good faith by the Personnel & Compensation
Committee that exists at the time of determination; provided that, ii) the
amount that the Executive shall be required to reimburse the Company from
previously received Incentive Compensation shall be reduced by the Net Tax Cost
of such compensation to the Executive, and iii) to the extent that the price of
the Company’s Common Stock is or was a component of the performance objectives
upon which the Incentive Compensation was payable, the value of the stock taken
into account for purposes of re-determining the level of achievement based on
the Mandatory Restatement will be equitably adjusted by the Personnel &
Compensation  Committee, utilizing a third-party consultant with
expertise in equity valuations.

     

     “Incentive
Compensation” means amounts paid or received, or to be paid or received, under
awards made on or after January 1, 2010 with respect to fiscal periods beginning
with 2010, pursuant to: i) annual cash incentive awards under the Company’s Cash
Bonus Plan; ii) long term performance awards under the Company’s Stock Incentive
Plan; iii) other equity-based awards under such Stock Incentive Plan if vesting
or lapse of restrictions is dependent upon achievement of financial performance
objectives, and iv) like compensation under other or successor plans when
entitlement to payments is dependent upon achievement of financial performance
objectives.  For the avoidance of doubt, Incentive Compensation does
not include the proceeds of any stock option grant, restricted stock or
restricted stock unit award, long-term performance award or any other variety of
equity-based award that has a vesting schedule based on the passage of time and
the continued performance of services rather than the achievement of financial
performance objectives.

     

    “Mandatory
Restatement” means a restatement of the Company’s financial statements for
fiscal year 2010 or any year thereafter which, in the good faith opinion of the
Company’s Independent Registered Public Accounting Firm (the “Auditors”), is
required to be implemented pursuant to generally accepted accounting principles,
but excluding any restatement which is so required with respect to a particular
year as a consequence of a change in generally accepted accounting rules
effective after the publication of the financial statements for such year.
Notwithstanding the immediately preceding sentence, a Mandatory Restatement
shall not include any restatement that (i) occurs more than three years
following the date of the Executive’s termination of employment, or (ii) in
the good faith judgment of the Audit Committee of the Board (the “Audit
Committee”), (A) is required due to a change in the manner in which the
Company’s Auditors (including for this purpose, any successor accounting firm
retained by the Company which was not engaged at the time that the original
financial statement in question was prepared) or governmental authorities
interpret the application of generally accepted accounting principles (as
opposed to a change in a prior accounting conclusion due to a change in the
facts upon which such conclusion was based), or (B) is otherwise required
due to events, facts or changes in law or practice that the Audit Committee
concludes were immaterial.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Net Tax
Cost” means the net amount of any federal, foreign, state or local income,
employment or other taxes paid by the Executive in respect of Incentive
Compensation received, after taking into account any and all available
deductions, credits or other offsets allowable to the Executive, and which are
not recoverable by the Executive through timely amending any prior income or
other tax returns. The Executive shall seek all recoverable amounts in a prompt
and diligent manner.

     

        c)  Personnel & Compensation
Committee Administration; Executive Right of Appeal.  A) The
Personnel & Compensation Committee shall determine in good faith whether or
not the Executive’s fraudulent or knowing, intentional misconduct has resulted
in a Mandatory Restatement and the Executive shall be given a reasonable
opportunity to provide his view (which may include any financial advisors he may
engage for assistance) of the matter to the Personnel & Compensation
Committee as part of the determination process.  If the Personnel
& Compensation Committee agrees with the Executive’s position, it shall, in
its sole discretion, specify an amount to be repaid to the Company, if any, that
it concludes is equitable and appropriate under the circumstances. If the
Personnel & Compensation Committee does not agree with the Executive’s
position, no adjustment shall be made in the determinations made under this
section 5A.  Subject to subsection B, the Personnel & Compensation
Committee’s judgments and actions in accordance with the two immediately
preceding sentences shall be final, binding and conclusive on the Company, the
Executive, and all persons claiming an interest through either such
party.

    


    B) Not
withstanding subsection A, if the Executive believes that any determination made
under this section 5A, is incorrect, excessive or otherwise inequitable, he
shall have the right to appeal to the Board of Directors for a review of any
such determinations.

    


    d)  Repayment Due
Dates.  Payment of the Recapture Amount shall be made as
follows: The Executive shall pay to the Company the Recapture Amount less any
taxes previously paid by the Executive in respect of the Recapture Amount, such
payment to be made promptly by the Executive following written demand by the
Company, but in any event within 30 days following the later of the date of
receipt of such written demand or the final resolution of any appeal to the
Board or the Personnel & Compensation Committee, as provided in this
Agreement.  The Executive shall pay to the Company all tax refunds
received by the Executive in respect of his amending any prior income or other
tax return as required by this Agreement, such payment to be made within 30 days
of Executive’s receipt of any such refund.

    


    e)           Effect on Other Enforcement
Provisions of this Agreement.   This section 5A does not
supersede the Company’s right to enforce any provision of this Agreement nor
shall it affect the Executive’s entitlement to any other benefits provided in
accordance with this Agreement.  

    


    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.        The
following new subsection (7) is added to Section 8 (d) (Consequences of
Termination) in order to correct an administrative oversight in the
Agreement:

    


    “(7)           the
Company shall continue to pay all premiums on the life insurance coverage issued
to the Executive for 24 months but in no event later than the Retirement
Eligibility Date.”

    


      4.           Capitalized
Terms.  Capitalized terms not otherwise defined in this
Amendment shall have the meaning ascribed to them in the Agreement.

    


      5.           Full Force and
Effect.  As modified by this Amendment, the Agreement shall
remain in full force and effect.

    


    


    IN
WITNESS WHEREOF, the parties have executed this Amendment.

    


    
      	
            	KAMAN
      CORPORATION
	 	 
	 
      	
              By:  

            	
              /s/ Candace
      A. Clark

            
	 
      	
              Its:

            	
              Senior
      Vice President, Chief Legal Officer

            
	 
      	 
      	
              and
      Secretary

            
	 
      	 
      	 
      
	 
      	
              Date:

            	
              February
      23, 2010

            


    



    
      	 
      	 
      	
               WILLIAM
      C. DENNINGER

               

            
	 
      	 
      	
              /s/ William
      C. Denninger

            
	 
      	 
      	 
      
	 
      	 
      	
              Date:  February
      23, 2010

            


    


    
      
         


      

      
        4