|
Exhibit 10.7
KAMAN CORPORATION
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, is made effective as of January
1, 2007 (the
"Effective Date"), by and between Kaman Corporation, a Connecticut
corporation (the "Company"), and Candace A. Clark (the
"Executive").
WHEREAS, the Company and the Executive are
parties to the Kaman Corporation Change in Control Agreement dated
as of September 21, 1999, as amended by an Addendum to Change in
Control Agreement dated as of September 11, 2001, and a Second
Addendum to Change in Control Agreement dated as of November 11,
2003 (the "Prior Agreement"); and
WHEREAS, the Company and the Executive have
agreed to replace and supersede the Prior Agreement as set forth
below.
NOW, THEREFORE, in consideration of the premises
and the mutual covenants herein contained, the Company and the
Executive hereby agree as follows:
1. Defined
Terms . Definitions of capitalized terms used in this
Agreement are provided in the last Section of this
Agreement.
2. Term . This Agreement shall terminate on the fifth
anniversary of the Effective Date. The term of this Agreement shall
be automatically extended thereafter for successive one (1) year
periods unless, at least ninety (90) days prior to the end of the
fourth anniversary of the Effective Date or the then current
succeeding one-year extended term of this Agreement, the Company or
Executive has notified the other that the term hereunder shall
expire at the end of the then-current term. Notwithstanding any
such notice, the term of this Agreement shall not expire before the
second anniversary of a Change in Control that occurs within the
term of this Agreement. The initial term of this Agreement, as it
may be extended under this Section 2, is herein referred to as the
"Term."
3. Company’s Covenants Summarized . In order to
induce the Executive to remain in the employ of the Company and in
consideration of the Executive’s continued employment, the
Company agrees, under the conditions described herein, to pay the
Executive the Severance Payments and the other payments and
benefits described in this Agreement. Except as provided in
Sections 5.1 and 8.1 of this Agreement, no Severance Payments (as
defined in Section 5) shall be payable under this Agreement unless
there shall have been a termination of the Executive’s
employment with the Company following a Change in Control. This
Agreement shall not be construed as creating an express or implied
contract of employment and, except as otherwise agreed in writing
between the Executive and the Company, the Executive shall not have
any right to be retained in the employ of the Company.
1
4. Compensation Other Than Severance Payments .
4.1 If
the Executive’s employment shall be terminated for any reason
following a Change in Control, the Company shall pay the
Executive’s full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Date of
Termination or, if Section 18(n)(II) is applicable as an event or
circumstance constituting Good Reason, the rate in effect
immediately prior to such event or circumstance, together with all
compensation and benefits payable to the Executive through the Date
of Termination under the terms of the Company’s compensation
and benefit plans, programs or arrangements as in effect
immediately prior to the Date of Termination (or, if more favorable
to the Executive, as in effect immediately prior to the first
occurrence of an event or circumstance constituting Good Reason).
In addition, if the Executive's employment is terminated for any
reason following a Change in Control other than (a) by the Company
for Cause and (b) by the Executive without Good Reason, then the
Company shall pay a pro-rata portion of the Executive’s
annual bonus for the performance year in which such termination
occurs to the Executive at the time that annual bonuses are paid to
other senior executives. This pro-rata bonus shall be determined by
multiplying the amount the Executive would have received based upon
actual financial performance through such termination, as
reasonably determined by the Company, by a fraction, the numerator
of which is the number of days during such performance year that
the Executive is employed by the Company and the denominator of
which is 365.
4.2 If
the Executive’s employment shall be terminated for any reason
following a Change in Control, the Company shall pay to the
Executive the Executive’s normal post-termination
compensation and benefits as such payments become due. Such
post-termination compensation and benefits shall be determined
under, and paid in accordance with, the Company’s retirement,
insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Date of
Termination or, if more favorable to the Executive, as in effect
immediately prior to the occurrence of the first event or
circumstance constituting Good Reason.
5. Severance Payments.
5.1 If
the Executive’s employment is terminated during the
twenty-four (24) month period immediately following a Change in
Control, other than (A) by the Company for Cause, (B) by reason of
death or Disability, or (C) by the Executive without Good Reason,
then the Company shall pay the Executive the amounts, and provide
the Executive the benefits described in this Section 5
(collectively, the "Severance Payments") in addition to any
payments and benefits to which the Executive is entitled under
Section 4 of this Agreement. The Executive shall also be entitled
to Severance Payments under this Agreement if the Executive’s
employment is terminated without Cause by the Company or by the
Executive for Good Reason at any time beginning on the first day of
the 90 day period immediately prior to the execution of a
definitive purchase and sale agreement that results in such Change
in Control and the closing of such Change in Control.
|
(a)
|
In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in
lieu of any severance benefit payable to the Executive under the
Executive’s Employment Agreement with the Company or
otherwise, the Company shall pay to the Executive a lump sum
severance payment, in cash, equal to the sum of (i) two (2) times
the Executive’s base salary as in effect immediately prior to
the Date of Termination or, if Section 18(n)(II) is applicable as
an event or circumstance constituting Good Reason, the rate in
effect immediately prior to such event or circumstance, and (ii)
two (2) times the last annual bonus paid or awarded (to the extent
not yet paid) to the Executive in the previous three years (if any)
immediately preceding the Date of Termination, pursuant to any
annual bonus or incentive plan maintained by the
Company.
|
2
|
(b)
|
For the twenty-four (24) month period immediately
following the Date of Termination, the Company shall arrange to
provide the Executive and her dependents medical, dental, and
accidental death and disability benefits substantially similar to
those provided to the Executive and her dependents immediately
prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and her dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater cost to the
Executive than the cost to the Executive immediately prior to such
date or occurrence. Benefits otherwise receivable by the Executive
pursuant to this Section 5.1(b) shall be reduced to the extent
benefits of the same type are received by or made available by a
subsequent employer to the Executive during the twenty-four (24)
month period following the Date of Termination (and any such
benefits received by or made available to the Executive shall be
reported to the Company by the Executive); provided, however, that
the Company shall reimburse the Executive for the excess, if any,
of the cost of such benefits to the Executive over such cost
immediately prior to the Date of Termination or, if more favorable
to the Executive, the first occurrence of an event or circumstance
constituting Good Reason.
|
|
(c)
|
Notwithstanding any provision to the contrary in
any plan or agreement maintained by or through the Company pursuant
to which the Executive has been granted restricted stock, stock
options, stock appreciation rights or long-term performance awards,
effective on the Date of Termination, (i) all service and
performance based restrictions with respect to any restricted stock
shall lapse, (ii) all stock appreciation rights and stock options
shall be deemed fully vested and then canceled in exchange for a
cash payment equal to the excess of the fair market value of the
shares of Company stock subject to the stock appreciation right or
stock option on the date of the Change in Control, over the
exercise price(s) of such stock appreciation rights or stock
options, and (iii) all long-term performance awards shall be deemed
fully vested and fully earned and then shall be canceled in
exchange for a cash payment equal to 100% of the target value of
each such award.
|
|
(d)
|
In addition to the retirement benefits to which
the Executive is entitled under any tax-qualified, supplemental or
excess benefit pension plan maintained by the Company and any other
plan or agreement entered into between the Executive and the
Company which is designed to provide the Executive supplemental
retirement benefits (the "Pension Plans") or any successor plan
thereto, effective upon the Date of Termination, the Executive
shall be credited with an additional two years of "Credited
Service" and "Continuous Service" (as defined in the Kaman
Corporation Amended and Restated Employees’ Pension Plan)
when calculating the Executive’s benefit under Kaman
Corporation Supplemental Employees Retirement Plan ("SERP"). For
avoidance of doubt, the Severance Payments payable under this
Agreement shall be disregarded when determining the Executive's
Final Average Salary (as defined under the Kaman Corporation
Amended and Restated Employees' Pension Plan) for purposes of
calculating the benefits payable under the SERP or this Section
5.1(d).
|
3
|
(e)
|
If the Executive would have become entitled to
benefits under the Company’s post-retirement health care
plans, as in effect immediately prior to the Date of Termination
or, if more favorable to the Executive, as in effect immediately
prior to the first occurrence of an event or circumstance
constituting Good Reason, had the Executive’s employment
terminated at any time during the period of twenty-four (24) months
after the Date of Termination, the Company shall provide such
post-retirement health care benefits to the Executive and the
Executive’s dependents commencing on the later of (i) the
date on which such coverage would have first become available and
(ii) the date on which benefits described in Section 5.1 (b)
terminate.
|
|
(f)
|
The Company (i) shall establish an irrevocable
grantor trust holding an amount of assets sufficient to pay all
remaining premiums (which trust shall be required to pay such
premiums), under any insurance policy maintained by the Company
insuring the life of the Executive, that is in effect and (ii)
shall transfer to the Executive any and all rights and incidents of
ownership in such arrangements at no cost to the
Executive.
|
|
(g)
|
The Company shall provide the Executive with
reimbursement for up to Thirty Thousand Dollars ($30,000) in the
aggregate for outplacement services, relocation costs, or both
provided however that reimbursement shall only be provided until
the earlier of the first anniversary of the Date of Termination or
the Executive’s first day of employment with a new
employer.
|
|
(h)
|
The Company shall provide the Executive with her
Company automobile. The book value then attributed to it by the
leasing company will be considered "fringe benefit" income and that
amount will be subject to tax during the calendar year in which the
Date of Termination occurs.
|
5.2 Section 4999
Excise Tax .
|
(a)
|
If any payments, rights or benefits (whether
pursuant to the terms of this Agreement or any other plan,
arrangement or agreement of Executive with the Company or with any
person affiliated with the Company and whether or not the
Executive’s employment has then terminated (the "Payments"))
received or to be received by Executive will be subject to the tax
(the "Excise Tax") imposed by Section 4999 of the Code (or any
similar tax that may hereafter be imposed), then, except as set
forth in Section 5.2(b) below, the Company shall pay to Executive
an amount in addition to the Payments (the "Gross-Up Payment") as
calculated below. The Gross-Up Payment shall be in an amount such
that, after deduction of any Excise Tax on the Payments and any
federal, state and local income and employment tax and Excise Tax
on the Gross-Up Payment, but before deduction for any federal,
state or local income and employment tax on the Payments, the net
amount retained by the Executive shall be equal to the
Payments.
|
4
|
(b)
|
Notwithstanding anything in this Agreement to the
contrary, if the amount of Payments that will be subject to the
Excise Tax does not exceed the amount of Payments that Executive
could receive without having any Payments become subject to the
Excise Tax by at least $100,000,
then Executive’s taxable cash-based benefits
under this Agreement will first be reduced in the order selected by
Executive, and then, if necessary, Executive’s equity-based
compensation (based on the value of such equity-based compensation
as a "parachute payment" as defined in Treasury Regulations
promulgated under Section 280G of the Code and IRS revenue rulings,
revenue procedures and other official guidance) shall be reduced in
the order selected by Executive, and then any other Payments shall
be reduced as reasonably determined by the Company, to the extent
necessary to avoid imposition of the Excise Tax. If Executive does
not select the amount to be reduced within the time prescribed by
the Company, the reductions specified herein shall be made by the
Company in its sole discretion from such compensation as it shall
determine. Any amount so reduced shall be irrevocably forfeited and
Executive shall have no further rights to receive
it.
|
|
(c)
|
The process for calculating the Excise Tax,
determining the amount of any Gross-Up Payment and other procedures
relating to this Section 5.2 are set forth in Appendix A attached
hereto. For purposes of making the determinations and calculations
required herein, the Consultant may rely on reasonable, good faith
interpretations concerning the application of Section 280G and 4999
of the Code, provided that the Consultant shall make such
determinations and calculations on the basis of "substantial
authority" (within the meaning of Section 6662 of the
Code) and shall provide opinions to that effect to both the Company
and Executive.
|
5.3 The
Company also shall reimburse the Executive for legal fees and
expenses incurred by the Executive in disputing in good faith any
issue hereunder relating to the termination of the
Executive’s employment or in seeking in good faith to obtain
or enforce any benefit or right provided by this Agreement. Such
payments shall be made within ten (10) business days after delivery
of the Executive’s written request for payment accompanied
with such evidence of fees and expenses incurred as the Company
reasonably may require.
5.4 The
payments provided in subsections (a) and (c) of Section 5.1 shall
be made on the last day of the Executive’s employment. The
payments provided in Section 5.2 of this Agreement, if any, as
determined under Appendix A, shall be paid on the Executive’s
behalf to the applicable taxing authorities within five (5) days of
the receipt of the Consultant’s determination of the Gross-Up
Payment. If payments are not made in the time frame required by
this subsection, interest on the unpaid amounts will accrue at 120%
of the rate provided in Section 1274(b)(2)(B) of the Code until the
date such payments are actually made. At the time that payments are
made under this Agreement, the Company shall provide the Executive
with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations
including, without limitation, any opinions or other advice the
Company has received from the Consultant or other advisors (and any
such opinions or advice which are in writing shall be attached to
the statement).
5
5.5 Coordination with Employment Agreement .
Severance Payments made under this Section 5
shall be in lieu of any severance benefit payable to the Executive
under the Executive’s Employment Agreement with the Company
or otherwise.
6. Termination Procedures and Compensation During Dispute
.
6.1 Notice
of Termination . After a Change in Control, any purported
termination of the Executive’s employment (other than by
reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in
accordance with Section 9 of this Agreement. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated.
Further, a Notice of Termination for Cause is required to include a
copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the
Board at a meeting of the Board which was called and held for the
purpose of considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive, together with
the Executive’s counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, the Executive
was guilty of conduct set forth in clause (i) or (ii) of the
definition of Cause herein, and specifying the particulars thereof
in detail.
6.2 Date of Termination . "Date of Termination," with
respect to any purported termination of the Executive’s
employment after a Change in Control, shall mean (i) if the
Executive’s employment is terminated for Disability, thirty
(30) days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of
the Executive’s duties during such thirty (30) day period),
and (ii) if the Executive’s employment is terminated for any
other reason, the date specified in the Notice of Termination
(which, in the case of a termination by the Company, shall not be
less than thirty (30) days (except in the case of a termination for
Cause) and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty (60) days,
respectively, from the date such Notice of Termination is
given).
6
6.3 Dispute
Concerning Termination . If within fifteen (15) days after
any Notice of Termination is given, or, if later, prior to the Date
of Termination (as determined without regard to this Section 6.3),
the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date of
Termination shall be extended until the date on which the dispute
is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree of an arbitrator or
a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no
appeal has been perfected); provided, however, that the Date of
Termination shall be extended by a notice of dispute given by the
Executive only if such notice is given in good faith and the
Executive pursues the resolution of such dispute with reasonable
diligence.
6.4 Compensation During Dispute . If a purported termination
occurs following a Change in Control and the Date of Termination is
extended in accordance with Section 6.3 of this Agreement, the
Company shall continue to pay the Executive the full compensation
in effect when the notice giving rise to the dispute was given
(including, but not limited to, salary) and continue the Executive
as a participant in all compensation, benefit and insurance plans
in which the Executive was participating when the notice giving
rise to the dispute was given, until the Date of Termination, as
determined in accordance with Section 6.3 of this Agreement.
Amounts paid under this Section 6.4 are in addition to all other
amounts due under this Agreement (other than those due under
Section 4.1 of this Agreement) and shall not be offset against or
reduce any other amounts due under this Agreement. Notwithstanding
anything to the contrary in Section 6.3 and 6.4, if the Company,
after delivery of a Notice of Termination, promptly (and in any
event within 30 days) determines that grounds existed prior to the
delivery of the Notice of Termination to terminate the
Executive’s employment for Cause after complying with the
procedural requirements of this Agreement, the Company shall have
the right to recover any payments that have been made to the
Executive or on the Executive’s behalf under this Agreement
including but not limited to offset against or reduction of any
amounts due under this Agreement or otherwise.
7. No
Mitigation . The Company agrees that under this Agreement,
if the Executive’s employment with the Company terminates,
the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive
by the Company pursuant to Section 5 of this Agreement or Section
6.4 of this Agreement. Further, the amount of any payment or
benefit provided for in this Agreement (other than as specifically
provided in Section 5.1(b) of this Agreement) shall not be reduced
by any compensation earned by the Executive as the result of
employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by the Executive to the
Company, or otherwise.
8. Successors; Binding Agreement .
8.1 In addition to any obligations
imposed by law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and
agree to perform this Agreement in accordance with its terms.
Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive
would be entitled to hereunder if the Executive were to terminate
the Executive’s employment for Good Reason after a Change in
Control, except that, for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be
deemed the Date of Termination.
7
8.2 This
Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the Executive shall die while any amount would still
be payable to the Executive hereunder (other than amounts which, by
their terms, terminate upon the death of the Executive) if the
Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or
administrators of the Executive’s estate.
9. Notice . For the purpose of this Agreement, notices and
all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given (a) on the date
of delivery if delivered by hand, (b) on the date of transmission,
if delivered by confirmed facsimile, (c) on the first business day
following the date of deposit if delivered by guaranteed overnight
delivery service, or (d) on the fourth business day following the
date delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: at the address (or to the
facsimile number) shown on the records of the Company
If to the Company:
Kaman Corporation
1332 Blue Hills Avenue, P.O. Box 1
Bloomfield, CT 06002
Attention: Chief Financial Officer
Facsimile No.: 860 243-7397
or to such other address as either party may have
furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon
receipt.
10. Obligations after the Date of Termination.
|
(a)
|
Confidentiality . The Executive agrees
that the Executive shall not, directly or indirectly, use, make
available, sell, disclose or otherwise communicate to any person,
other than in the course of the Executive’s employment and
for the benefit of the Company, at any time following the Date of
Termination, any nonpublic, proprietary or confidential
information, knowledge or data relating to the Company, any of its
subsidiaries, affiliated companies or businesses, which shall have
been obtained by the Executive during the Executive’s
employment by the Company. The foregoing shall not apply to
information that (i) was known to the public prior to its
disclosure to the Executive; (ii) becomes known to the public
subsequent to disclosure to the Executive through no wrongful act
of the Executive or any representative of the Executive; or (iii)
the Executive is required to disclose by applicable law, regulation
or legal process (provided that the Executive provides the Company
with prior notice of the contemplated disclosure and reasonably
cooperates with the Company at its expense in seeking a protective
order or other appropriate protection of such information).
Notwithstanding clauses (i) and (ii) of the preceding sentence, the
Executive’s obligation to maintain such disclosed information
in confidence shall not terminate where only portions of the
information are in the public domain.
|
8
|
(b)
|
Non-Solicitation . In the event that
the Executive receives Severance Payments under Section 5 of this
Agreement, the Executive agrees that for the two (2) year period
following the Date of Termination, the Executive will not, directly
or indirectly, individually or on behalf of any other person, firm,
corporation or other entity, knowingly solicit, aid or induce any
managerial level employee of the Company or any of its subsidiaries
or affiliates to leave such employment in order to accept
employment with or render services to or with any other person,
firm, corporation or other entity unaffiliated with the Company or
knowingly take any action to materially assist or aid any other
person, firm, corporation or other entity in identifying or hiring
any such employee (provided, that the foregoing shall not be
violated by general advertising not targeted at Company employees
nor by serving as a reference for an employee with regard to an
entity with which the Executive is not affiliated). For the
avoidance of doubt, if a managerial level employee on his or her
own initiative contacts the Executive for the primary purpose of
securing alternative employment, any action taken by the Executive
thereafter shall not be deemed a breach of this Section
10(b).
|
|
(c)
|
Non-Competition . The Executive
acknowledges that the Executive performs services of a unique
nature for the Company that are irreplaceable, and that the
Executive’s performance of such services to a competing
business will result in irreparable harm to the Company.
Accordingly, in the event that the Executive receives Severance
Payments described in Section 5 of this Agreement, the Executive
agrees that for a period of two (2) years following the Date of
Termination, the Executive will not, directly or indirectly, become
connected with, promote the interest of, or engage in any other
business or activity competing with the business of the Company
within the geographical area in which the business of the Company
is conducted.
|
|
(d)
|
Non-Disparagement . Each of the
Executive and the Company (for purposes hereof, "the Company" shall
mean only (i) the Company by press release or otherwise and (ii)
the executive officers and directors thereof and not any other
employees) agrees not to make any public statements that disparage
the other party, or in the case of the Company, its respective
affiliates, officers, directors, products or services.
Notwithstanding the foregoing, statements made in the course of
sworn testimony in administrative, judicial or arbitral proceedings
(including, without limitation, depositions in connection with such
proceedings) or otherwise as required by law shall not be subject
to this Section 10(d).
|
|
(e)
|
Return of Company Property and Records
. The Executive agrees that upon termination of the
Executive’s employment, for any cause whatsoever, the
Executive will
|
|
