Kaman Corporation Exhibit 10.1


    
      

    


    Exhibit
      10.1

    


    LONG-TERM
      PERFORMANCE PROGRAM

    2006
      - 2008 PERFORMANCE PERIOD

    


    


    Performance
      Period

    


    This
      performance period approved by the Personnel and Compensation Committee at
      the November 8, 2005 meeting measures Kaman performance for the period January
      1, 2006 through December 31, 2008.

    


    


    Participants
      and Target Awards

    


    The
      participants approved by the Personnel and Compensation Committee at the
      November 8, 2005 meeting for participation for this performance period and
      their
      target awards are:

    


               

      
        	
                 

                 

                 

                 

                Participant

              	
                Target

                Award

                as
                  %

                of
                  Base

                Salary

              
	 	 
	
                Paul
                  R. Kuhn

              	
                110%

              
	 	 
	
                Robert
                  M. Garneau

              	
                80%

              
	 	 
	
                T.
                  Jack Cahill

              	
                65%

              
	 	 
	
                Candace
                  A. Clark

              	
                65%

              
	 	 
	
                Robert
                  H. Saunders, Jr.

              	
                65%

              
	 	 
	
                Ronald
                  M. Galla

              	
                60%

              
	 	 
	
                Russell
                  H. Jones

              	
                60%

              
	 	 
	
                John
                  C. Kornegay

              	
                60%

              


      

    

    


    These
      participants are designated as Covered Employees under Section 2 (j) of the
      Kaman Corporation 2003 Stock Incentive Plan.

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    


    Performance
      Measures

    


    The
      specific performance measures and their weighting are:

     

    

      
        	
                Performance
                  Measure

              	
                Weighting

              
	
                 

              	
                 

              
	
                Average
                  return on total capital

              	
                40%

              
	
                Growth
                  in earnings per share

              	
                40%

              
	
                Total
                  return to shareholders

              	
                20%

              


      

      


    

    Average
      return on capital will be the simple average of total return on capital achieved
      in each of the three (3) years of the performance period.

    


    Growth
      in
      earnings per share will be calculated by taking the simple average of Kaman’s
      earnings per share for each of the three (3) years of the performance period
      and
      computing the compound growth rate of that average over the base period
      EPS. The base period EPS is the simple average of Kaman’s EPS for the years 2004
      and 2005.

     

    Total
      return to shareholders will be calculated on a dividends reinvested basis and
      will measure the change in value of an investment in Kaman shares for the period
      January 1, 2006 through December 31, 2008.

    


    Benchmark
      for Performance Comparison

    


    Kaman
      performance will be measured on a relative basis against the performance of
      the
      Russell 2000 index companies for the period January 1, 2006 through December
      31,
      2008 using the same performance measures:

    


    
      	 	
              •

            	
              Average
                return on total capital

            


    

    
      	 	
              •

            	
              Growth
                in earnings per share

            


    

    
      	 	
              •

            	
              Total
                return to shareholders

            


    

    


    In
      measuring the performance of the Russell 2000 companies, average return on
      total
      capital and total return to shareholders will be measured in the same way as
      Kaman’s performance is measured.

    


    In
      measuring growth in earnings per share for the Russell 2000 index companies,
      the
      calculation will be the same except that the base year will be the earnings
      per
      share for 2005.

    


    Determination
      of Earned Award

    


     In
      determining the actual award
      earned, each performance measure will be measured separately and the total
      of
      the three calculations will equal the total award earned

    


    The
      actual award earned for each performance measure will be based on a comparison
      of Kaman’s performance as compared to that of the Russell 2000 index companies
      as follows:

    


    
      
        	
                Kaman
                  Performance vs. Russell 2000 Companies 

              	
                %
                  of Target Award Earned

              
	
                Below
                  25th percentile

              	
                None

              
	
                25th
                  percentile

              	
                25%

              
	
                50th
                  percentile

              	
                100%

              
	
                75th percentile
                  & above

              	
                200%

              


      

      
The
        percent of the target award earned for actual performance between the
        25th
        and the
        50th percentile
        and between the 50th
        and
        75th percentile
        will be determined on a straight-line interpolation.

    

    


    All
      payments are meant to qualify as Qualified Performance-Based Awards under
      Section 15 (c) of the Kaman Corporation 2003 Stock Incentive Plan.

    


    An
      example of how an actual award would be determined is shown on the attached
      page.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              LONG-TERM
                PERFORMANCE PROGRAM

            
	
              EXAMPLE
                OF PLAN CALCULATIONS

            
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	
              PERFORMANCE
                MEASURES*

            	 
	 	 	 	 	
              EPS

            	 	
              Total
                Return

            	 
	 	 	 	 	
              Growth

            	
              ROTC

            	
              To
                S/H

            	 
	 	 	 	 	 	 	 	 
	
              Kaman
                Performance:

            	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              Year

            	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              2004

            	 	 	 	
              $
                0.10 

            	 	 	 
	
              2005

            	 	 	 	
              $
                0.20 

            	 	 	 
	
              2006

            	 	 	 	
              $
                0.30 

            	
              16%

            	 	 
	
              2007

            	 	 	 	
              $
                0.20 

            	
              15%

            	 	 
	
              2008

            	 	 	 	
              $
                0.40 

            	
              17%

            	 	 
	 	 	 	 	 	 	 	 
	
              2004
                - 2005 average

            	 	 	
              $
                0.15 

            	 	 	 
	
              2006
                - 2008 average

            	 	 	
              $
                0.30 

            	
              16%

            	 	 
	
              Compound
                growth rate in EPS

            	 	
              26%

            	 	 	 
	
              Total
                return to shareholders (assumed)

            	 	 	
              25%

            	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              Russell
                2000 Index Company Performance (assumed):

            	 	 
	 	 	 	 	 	 	 	 
	 	
              25th
                percentile

            	 	
              12%

            	
              5%

            	
              15%

            	 
	 	
              50th
                percentile

            	 	
              22%

            	
              12%

            	
              30%

            	 
	 	
              75th
                percentile

            	 	
              36%

            	
              22%

            	
              40%

            	 
	 	 	 	 	 	 	 	 
	
               *Performance
                measures are hypothetical and not intended as projections of future
                performance.

            
	 	 	 	 	 	 	 	 
	
              COMPUTATION
                OF ACTUAL AWARD EARNED

            	
               

            	
               

            	
               

            
	
               

            	 	 	 	 	 	 	
              Percent
                of

            
	
               

            	 	 	 	 	
              %
                of Factor

            	
              Factor

            	
              Target
                Award

            
	
               

            	 	 	 	 	
              Value
                Earned

            	
              Weighting

            	
              Earned

            
	
               

            	 	 	 	 	 	 	
               

            
	
               

            	 	 	 	 	 	 	
               

            
	
              Growth
                in Earnings Per Share

            	 	 	
              129%

            	
              40%

            	
              52%

            
	
               

            	 	 	 	 	 	 	
               

            
	
              Average
                Return on Total Capital

            	 	 	
              140%

            	
              40%

            	
              56%

            
	
               

            	 	 	 	 	 	 	
               

            
	
              Total
                Return to Shareholders

            	 	 	
              75%

            	
              20%

            	
              15%

            
	
               

            	 	 	 	 	 	 	
               

            
	
               

            	
              Total
                % of Target Award Earned

            	
               

            	
               

            	
               

            	
              123%

            
	 	 	 	 	 	 	 	 


    

    


    
      
        
        

      

      
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