Document:

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%

            
	 	 	 	 	 	 	 	 

    

    

    
      
        
        

      

      
        3Kaman Corporation Exhibit 10.2

    
      

    

    Exhibit
      10.2

    

    LONG-TERM
      PERFORMANCE AWARD AGREEMENT

    (Under
      the Kaman Corporation

    2003
      Stock Incentive Plan)

    

    

    THIS
      AGREEMENT, made and entered into as of the ________ day of_____________, 20___,
      by and between KAMAN CORPORATION, a Connecticut corporation, with its principal
      office in Bloomfield, Connecticut (the "Corporation"), and
      ________________________ ("Participant");

    

    W
      I T N E
      S S E T H :

    

    WHEREAS,
      it has been determined that the Participant is an Eligible Person under the
      Corporation’s 2003 Stock Incentive Plan (the “Plan”) and

    

    [WHEREAS,
      the Participant has been designated as a Covered Employee under the Plan;
      and]

    

    WHEREAS,
      the Committee wishes to grant to the Participant a Long-Term Performance Award,
      as hereinafter described (the “Long-Term Performance Award”); [and]

    

    [WHEREAS,
      the Committee intends the Long-Term Performance Award to be a Qualified
      Performance-Based Award meeting the criteria of the Section 162(m) Exemption
      including Qualified Performance Criteria, as those terms are defined in the
      Plan;] 

    

    NOW,
      THEREFORE, in consideration of the premises, and of the mutual covenants and
      agreements herein contained, the parties hereto hereby agree as
      follows:

    

    1.  Long-Term
      Incentive Award.
      

     

    (a)  Subject
      to the terms and conditions of this Agreement, the Participant is awarded a
      Long-Term Performance Award which shall entitle the Participant to a payment
      based upon the performance criteria, Performance Period, payment computation
      formula and other factors set forth in Exhibit
      A
      to this
      Agreement which is incorporated herein by reference. The Long-Term Performance
      Award is subject to forfeiture as more particularly described in Section 2
      of
      this Agreement. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (b)  In
      order
      for the Participant to be eligible to receive the payment which the Participant
      may otherwise earn pursuant to the Long-Term Performance Award, the Participant
      must execute and deliver a copy of this Agreement to the President of the
      Corporation at its offices in Bloomfield, Connecticut within sixty (60) days
      of
      the date on which the Participant has received this Agreement. The Participant
      must execute both the signature page of this Agreement and a copy of Exhibit
      A
      to this Agreement. In the event that this Agreement is executed by the
      Corporation and the Participant prior to the completion of Exhibit
      A,
      the
      Corporation shall complete Exhibit A within a reasonable time. The Participant
      shall not be entitled to any payment under this Agreement except in accordance
      with the performance criteria and other factors with respect to such payment
      as
      shall have been set forth on a copy of Exhibit
      A
      that
      shall have been executed by both the Corporation and the Participant and
      attached to this Agreement. 

     

    (c)  Notwithstanding
      the acceptance of Exhibit A by the Corporation and the Executive, as evidenced
      by their execution and attachment hereto of a copy thereof, the performance
      factors applicable to the Long-Term Performance Award may be adjusted as the
      Committee deems necessary or appropriate in the manner permitted by and subject
      to the Plan. 

     

    2.  Termination
      and Forfeiture.
      

     

    (a)  If
      a
      Participant terminates his or her employment or his or her consultancy during
      the Performance Period related to the Long-Term Performance Award because of
      death or Disability, the Committee may in its discretion provide for an earlier
      payment and settlement of the Long-Term Performance Award, which payment may
      be
      in such amount and under such terms and conditions as the Committee deems
      appropriate. 

     

    (b)  If
      a
      Participant terminates his or her employment or his or her consultancy during
      a
      Performance Period because of Retirement, then such Participant shall continue
      to be entitled to a prorata portion of any payment with respect to the Long-Term
      Performance Award subject to such Performance Period in accordance with the
      payment terms set forth in subsection (e) of Section 9 of the Plan, determined
      by multiplying such payment, calculated as if the Participant's employment
      or
      consultancy had not been terminated, by a fraction the numerator of which is
      the
      number of days from the beginning of the Performance Period to the date of
      such
      termination and the denominator of which is the total number of days during
      the
      Performance Period.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (c)  If
      a
      Participant terminates employment or his or her consultancy during a Performance
      Period for any reason other than death, Disability or Retirement, then such
      a
      Participant shall not be entitled to any payment with respect to the Long-Term
      Performance Award subject to such Performance Period, unless the Committee
      shall
      otherwise determine in its discretion. 
       

    

    3.  Payment.
      The
      earned portion of the Long-Term Performance Award shall be paid in cash within
      two hundred seventy (270) days following the close of the applicable Performance
      Period, provided that the Committee may elect to pay up to one-third (1/3)
      of
      such amount in whole shares of Stock or, at the discretion of the Committee,
      such earned portion may be paid in whole shares of Stock to the extent requested
      by the Participant. Any such shares of Stock shall be valued at their Fair
      Market Value at the close of business on the most recent trading day proceeding
      the date of such payment. 

     

    4.  No
      Employment Rights.
      No
      provision of this Agreement shall: 

     

    (a)  confer
      or
      be deemed to confer upon the Participant any right to continue in the employ
      of
      the Corporation or any Subsidiary or shall in any way affect the right of the
      Corporation or any Subsidiary to dismiss or otherwise terminate the
      Participant’s employment at any time for any reason with or without case, or

     

    (b)  be
      construed to impose upon the Corporation or any Subsidiary any liability for
      any
      forfeiture of the Long-Term Performance Award which may result under this
      Agreement if the Participant’s employment is so terminated, or 

     

    (c)  affect
      the Corporation’s right to terminate or modify any contractual relationship with
      the Participant if the Participant is not an employee of the Corporation or
      a
      Subsidiary; 

     

    5.  No
      Liability for Business Acts or Omissions.
      The
      Participant recognizes and agrees that the Board or the officers, agents or
      employees of the Corporation in their conduct of the business and affairs of
      the
      Corporation, may cause the Corporation to act, or to omit to act, in a manner
      that may, directly or indirectly, affect the amount of or the ability of the
      Participant to earn the Long-Term Performance Award under this Agreement. No
      provision of this Agreement shall be interpreted or construed to impose any
      liability upon the Corporation, the Board or any officer, agent or employee
      of
      the Corporation for any effect on the Participant’s entitlement under the
      Long-Term Performance Award that may result, directly or indirectly, from any
      such action or omission.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    6.  Change
      in Control.
      

     

    (a)    Upon
      the
      occurrence of a Change in Control followed by the termination of the
      Participant’s employment during the succeeding thirty-six (36) months other than
      (A) by the Corporation for Cause, (B) by reason of death or Disability, or
      (C)
      by the Participant without Good Reason, then, and only then, the Long-Term
      Performance Award shall be deemed fully vested and fully earned and shall be
      canceled in exchange for a cash payment equal to 100% of the target value of
      such Award. 

     

     (b)    In
      the event
      that, following a Change in Control, and provided the provisions of Section
      15(i)(i) of the Plan are inapplicable, the Committee shall determine in its
      sole
      discretion that the event(s) or transaction(s) constituting the Change in
      Control have caused the Committee to be unable to determine whether or not
      the
      performance factors and/or other criteria applicable to one or more Long-Term
      Performance Awards granted and outstanding under Section 9 of the Plan have
      (or
      have not), in fact been met or satisfied, then, with respect to each such
      Long-Term Performance Award, the Committee shall: (A) cancel the Award and
      make
      a payment to the Participant in an amount equal to 100% of the initial target
      value of such Award as previously determined by the Committee under Section
      9(b)
      of the Plan; or (B) cancel the Award, modify the provisions of Section 9 of
      the Plan as may be necessary to grant Long Term Performance Awards which are
      substantially equivalent to those permitted prior to such Change in Control,
      and
      grant to the Participant a new Long-Term Performance Award under such terms
      and
      conditions as the Committee shall establish under Section 9 of the Plan, which
      will provide a payment opportunity to the Participant substantially equivalent
      to such cancelled Award. 

     

    7.    Committee’s
      Discretion.
      If the
      Committee has designated the Long-Term Performance Award as a Qualified
      Performance-Based Award, as defined in the Plan, then the Committee shall not
      exercise any discretion that it might otherwise have the ability to exercise
      under Section 9(c), or any other section, of the Plan in a way that would
      increase the amount of the Long-Term Performance Award in a manner that is
      inconsistent with the exemption for performance-based compensation set forth
      in
      Section 162(m) of the Code.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    8.    Changes
      in Capitalization.
      

     

    (a)  This
      Agreement and the issuance of any shares of Stock in payment or partial payment
      of the Long-Term Performance Award shall not affect in any way the right or
      power of the Corporation or its shareholders to make or authorize any or all
      adjustments, recapitalizations, reorganizations or other changes in the
      Corporation’s capital structure or its business, or any merger or consolidation
      of the Corporation, or any issue of bonds, debentures, preferred or prior
      preference stocks ahead of or affecting the Stock or the rights thereof, or
      the
      transfer of all or any part of its assets or business, or any other corporate
      act or proceedings, whether of a similar character or otherwise. 

     

    (b)  In
      the
      event of recapitalization, stock split, stock dividend, divisive reorganization
      or other change in capitalization affecting the Corporation’s shares of Stock,
      an appropriate adjustment will be made in respect of any shares of Stock
      delivered to the Participant in payment of any or all of Participant’s
      entitlement under the Long-Term Performance Award. 

     

    9.    Capitalized
      Terms.
      All
      capitalized terms not defined herein shall have the meaning ascribed to them
      in
      the Plan. 

     

    10.   Interpretation.
      This
      Agreement shall at all times be interpreted, administered and applied in a
      manner consistent with the provisions of the Plan. In the event of any
      inconsistency between the terms of this Agreement and the terms of the Plan,
      the
      terms of the Plan shall control and the Plan is incorporated herein by
      reference. 

     

    11.    Amendment;
      Modification; Waiver.
      No
      provision of this Agreement may be amended, modified or waived unless such
      amendment, modification or waiver shall be authorized by the Committee and
      shall
      be agreed to in writing by the Participant. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    12.    Complete
      Agreement.
      This
      Agreement contains the entire Agreement of the parties relating to the subject
      matter of this Agreement and supersedes any prior agreements or understandings
      with respect thereto. 

     

    13.    Agreement
      Binding.
      This
      Agreement shall be binding upon and inure to the benefit of the Corporation,
      its
      successors and assigns and the Participant, his heirs, devisees and legal
      representatives. 

     

    14.    Legal
      Representative.
      In the
      event of the Participant’s death or a judicial determination of his
      incompetence, reference in this Agreement to the Participant shall be deemed
      to
      refer to his legal representative, heirs or devisees, as the case may be.

     

    15.    Business
      Day.
      If any
      event provided for in this Agreement is scheduled to take place on a day on
      which the Corporation’s corporate offices are not open for business, such event
      shall take place on the next succeeding day on which the Corporation’s corporate
      offices are open for business. 

     

    16.    Titles.
      The
      titles to sections or paragraphs of this Agreement are intended solely for
      convenience and no provision of this Agreement is to be construed by reference
      to the title of any section or paragraph. 

     

    17.    Notices.
      

     

    (a)    Any
      notice to the Corporation pursuant to any provision of this Agreement will
      be
      deemed to have been delivered when delivered in person to the ____________
      of
      the Corporation or when deposited in the United States mail, addressed to the
      _________________ of the Corporation, at the Corporation’s corporate offices, or
      such other address as the Corporation may from time to time designate in
      writing. 

     

    (b)    Any
      notice to
      the Participant pursuant to any provision of this Agreement will be deemed
      to
      have been delivered when delivered to the Participant in person or when
      deposited in the United States mail, addressed to the Participant at this
      address on the shareholder records of the Corporation or such other address
      as
      the Participant may from time to time designate in writing. 

     

    
      
         

        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
      the
      date first written above. 

     

     

    
      
        	
                 

                Participant   

              	 	
                 

                 

              	
                 

                KAMAN
                  CORPORATION

                 

              
	 	 	
                By:  

              	
                 

              
	
                 

              	 	
                Its

              
	
                 

              	 	
                 

              
	
                 

              	 	 

      

      

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Dated:
      _______________

     

    
      	
               

              Participant   

            	 	
               

               

            	
               

              KAMAN
                CORPORATION

               

            
	 	 	
              By:  

            	
               

            
	
               

            	 	
              Its

            
	
               

            	 	
               

            
	
               

            	 	 

    

     

     

    
      
        
        

      

      
        8

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