Execution Copy
EXECUTIVE EMPLOYMENT AGREEMENT
This
EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”)
is effective as of 7 Jul, 2008 (the
“Effective Date”) between Kaman Aerospace Group,
Inc. (the “Company”), a subsidiary of Kaman
Corporation (a Connecticut corporation) (“Kaman”),
and Gregory L. Steiner (the
“Executive”).
W
I T N E S S E T H:
WHEREAS,
the Company has offered employment to the Executive on the
terms set forth below; and
WHEREAS,
the Executive is prepared to accept such employment, subject
to such terms;
NOW,
THEREFORE, in consideration of the foregoing, of the mutual
promises contained herein and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as
follows:
1. EMPLOYMENT
TERM.
The
Executive’s term of employment under this Agreement
shall be for an initial term commencing on the Effective Date
and shall end on the third 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 initial term of this Agreement 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 terminate upon its expiration
date. The initial term of this Agreement, as it may
be extended from year to year thereafter, is herein referred
to as the “Employment Term.” In all
events hereunder, Executive’s employment is subject to
earlier termination pursuant to Section 7 hereof, and upon
such earlier termination the Employment Term shall be deemed
to have ended.
2. POSITION
& DUTIES.
(a) The
Executive shall serve as the President of the Company under
this Agreement during the Employment Term. As
President of the Company, the Executive shall have such
duties, authorities and responsibilities commensurate with the
duties, authorities and responsibilities of persons in similar
capacities in similarly sized companies and such other duties
and responsibilities as the CEO of Kaman or the
Company’s Board of Directors (the “Sub
Board”) shall designate that are consistent with the
Executive’s position as President of the
Company.
(b) During
the Employment Term, the Executive shall use the
Executive’s best reasonable efforts to perform
faithfully and efficiently the duties and responsibilities
assigned to the Executive hereunder (including applicable
obligations under state law) and devote substantially all of
the Executive’s business time (excluding periods of
vacation and other approved leaves of absence) to the
performance of the Executive’s duties with the Company,
provided the foregoing shall not prevent the Executive from
(i) participating in charitable, civic, educational,
professional, community or industry affairs or, with prior
written approval of the Sub Board, serving on the board of
directors or advisory boards of other companies; and (ii)
managing the Executive’s and the Executive’s
family’s personal investments so long as such activities
do not materially interfere with the performance of the
Executive’s duties hereunder or create a potential
business conflict or the appearance thereof. If at
any time service on any board of directors or advisory board
would, in the good faith judgment of the Sub Board, conflict
with the Executive’s fiduciary duty to the Company or
create any appearance thereof, the Executive shall promptly
resign from such other board of directors or advisory board
after written notice of the conflict is received from the Sub
Board.
(c) The
Executive further agrees to serve without additional
compensation as an officer and director of any of the
Company’s subsidiaries and agrees that any amounts
received from any such corporation may be offset against the
amounts due hereunder.
3. BASE
SALARY. The Company agrees to pay the Executive a
base salary (the “Base Salary”) during the
Employment Period at an annual rate of $335,000 (subject to
possible increase if Kaman’s Board of Directors (the
“Parent Board”), in its sole discretion, so
determines), payable in accordance with the regular payroll
practices of the Company, but not less frequently than monthly
.
4. BONUSES. The
Executive shall be eligible to participate in the
Company’s bonus and other short- and long-term incentive
compensation plans and programs for the Company’s senior
executives at a level commensurate with the Executive’s
position during the Employment Term. The Executive
shall have the opportunity to earn an annual target bonus
measured against performance criteria to be determined by the
Parent Board (or a committee thereof) of at least 50% of Base
Salary as an initial target bonus opportunity as described in
the terms of the Company’s annual bonus plan as then in
effect. Except as provided under Section 8 of the
Agreement, the Executive shall receive payments with respect
to the plans and programs described in Section 4 in accordance
with the terms of such plans and programs.
5. EQUITY
AWARDS. The Executive shall be eligible to receive
additional grants of stock options, stock appreciation rights,
restricted stock and other equity awards at the sole
discretion of the Parent Board or its Personnel and
Compensation Committee (the
“Committee”). The Executive shall be
subject to, and shall comply with, Kaman’s stock
ownership guidelines (unless waived by the Compensation
Committee) and Kaman’s reasonable policies regarding
forfeitures of cash and equity incentive awards due to
material financial restatements due to executive misconduct,
as may be in effect from time to time, it being agreed that
any such policies shall only be effective with respect to
awards made on or after the Effective Date. If
there is a Change in Control (as defined in the Kaman
Corporation 2003 Stock Incentive Plan in effect on the date
hereof), all then outstanding unvested equity awards granted
to the Executive (for example, stock options, stock
appreciation rights and restricted stock), whether under this
Agreement or otherwise, will fully vest and become
non-forfeitable and remain exercisable in accordance with the
terms of the applicable Company plans.
6. EMPLOYEE
BENEFITS.
(a) BENEFIT
PLANS. The Executive shall be entitled to
participate in all employee benefit plans of the Company
including, but not limited to, pension, thrift, profit
sharing, medical coverage, education, other retirement or
welfare benefits and perquisites (as approved by the
Committee) that the Company has adopted or may adopt, maintain
or contribute to for the benefit of its senior executives at a
level commensurate with the Executive’s position subject
to satisfying the applicable eligibility
requirements.
(b) VACATION. The
Executive shall be entitled to at least 3 weeks paid vacation
per year. Vacation may be taken at such times as the Executive
elects with due regard to the needs of the
Company. Unused vacation at the end of a calendar
year shall be forfeited according to the Company's vacation
policy.
(c) AUTOMOBILE. The
Company shall provide the Executive with a leased automobile
as approved by the Committee as per the Company’s
perquisites policy from time to time.
(d) BUSINESS
AND ENTERTAINMENT EXPENSES. Upon presentation of
appropriate documentation, the Executive shall be reimbursed
in accordance with the Company’s expense reimbursement
policy for all reasonable and necessary business and
entertainment expenses incurred in connection with the
performance of the Executive’s duties
hereunder.
(e) CERTAIN
AMENDMENTS. Nothing herein shall be construed to
prevent the Company from amending, altering, eliminating or
reducing any plans, benefits or programs so long as the
Executive continues to receive compensation and benefits
consistent with Sections 3 through 6.
(f) LIFETIME
LIFE INSURANCE. During the Employment Term and
thereafter (regardless of the reason for the termination of
the Employment Term), the Company shall cause Kaman to
continue to make regular periodic premium payments for life
insurance coverage issued under the Senior Executive Life
Insurance Program for the remainder of the Executive’s
life.
7. TERMINATION. The
Executive’s employment and the Employment Term shall
terminate on the first of the following to occur:
(a) DISABILITY. Upon
written notice by the Company to the Executive of termination
due to Disability, while the Executive remains
Disabled. For purposes of this Agreement,
“Disability” shall be deemed the reason for the
termination by the Company of the Executive’s
employment, if, as a result of the Executive incapacity due to
physical or mental illness, the Executive shall have been
absent from fully performing the Executive’s duties with
the Company for a period of 6 consecutive months, the Company
shall have provided a notice of termination under this Section
7(a), and, within thirty days after such notice being given,
the Executive shall not have returned to the fully performing
the Executive’s duties hereunder.
(b) DEATH. Automatically
on the date of death of the Executive.
(c) CAUSE. Immediately
upon written notice by the Company to the Executive of a
termination for Cause. “Cause” shall
mean (i) Executive’s conviction of (or a plea of guilty
or nolo contendere to) a felony or any crime involving moral
turpitude, dishonesty, fraud, theft or financial impropriety;
or (ii) a determination by a majority of the Parent Board in
good faith that Executive has (A) willfully and continuously
failed to perform substantially the Executive’s duties
(other than any such failure resulting from the
Executive’s Disability or incapacity due to bodily
injury or physical or mental illness), after a written demand
for substantial performance is delivered to the Executive by
the Parent Board that specifically identifies the manner in
which the Parent Board believes that the Executive has not
substantially performed the Executive’s duties, (B)
engaged in illegal conduct, an act of dishonesty or gross
misconduct, in each case which is in the course of the
Executive’s employment and materially injurious to
Kaman or the Company, or (C) willfully violated a material
requirement of Kaman’s or the Company’s code of
conduct or the Executive’s fiduciary duty to the
Company. No act or failure to act on the part of
the Executive shall be considered “willful”
unless it is done, or omitted to be done, by the Executive in
bad faith and without reasonable belief that the
Executive’s action or omission was in, or not opposed
to, the best interests of the
Company. Notwithstanding the foregoing, Cause
shall not include any act or omission of which the Audit
Committee of the Parent Board (or the full Parent Board) has
had actual knowledge of all material facts related thereto
for at least 90 days without asserting that the act or
omission constitutes Cause.
(d) WITHOUT
CAUSE. Upon written notice by the Company to the
Executive of an involuntary termination without Cause and
other than due to death or Disability.
(e) GOOD
REASON. Upon written notice by the Executive to the
Company of a termination for Good Reason, unless such events
are corrected in all material respects by the Company within
30 days following written notification by the Executive to the
Company, that the Executive intends to terminate the
Executive’s employment hereunder for one of the reasons
set forth below. “Good Reason” shall
mean, without the Executive’s express written consent,
the occurrence of any of the following events:
(1) the
Company removing the Executive from the position of President
of the Company (other than for Cause);
(2) a
reduction of the Executive’s Base Salary, annual initial
target bonus opportunity or modified bonus opportunity to the
extent the modification to the initial target bonus
opportunity is adverse to the Executive relative to the
modification made to the initial target bonus opportunity of
other senior officers of the Executive’s business
unit;
(3) a
failure to pay the Executive’s compensation or benefits
provided or referred to under this Agreement;
(4) the
Executive being required to relocate to a principal place of
employment more than 50 miles from the Executive’s
principal place of employment with the Company as of the
Effective Date;
(5) the
assignment of duties to the Executive that are materially
inconsistent with the Executive’s position as President
of the Company; or
(6) the
Executive no longer being a direct report to the CEO of Kaman
prior to a Change in Control (as defined in the Change in
Control Agreement).
Notwithstanding
the foregoing, (i) a suspension of the Executive’s title
and authority while on administrative leave due to a
reasonable belief that the Executive has engaged in
misconduct, whether or not the suspected misconduct
constitutes Cause for employment termination, shall not be
considered “Good Reason”; provided that if such
leave is unpaid and either the Executive returns to full-time
employment under this Agreement or it is subsequently
determined the Executive’s employment is to be
terminated without Cause, then the compensation and benefits
that would have been payable during such leave will be paid as
soon as reasonably practicable with interest at the prime rate
beginning as of the date such leave commenced plus 100 basis
points; (ii) an event shall not be considered Good Reason if
the Executive fails to deliver notice of termination for Good
Reason within 90 days of the Executive’s actual
knowledge of the event, and (iii) prospective changes to
employee benefits (as defined in Section 6) for future
employment made on an across-the-board basis to all similarly
situated executives of the Company and its subsidiaries shall
not be considered Good Reason.
(f) WITHOUT
GOOD REASON. Upon 60 days’ prior written
notice by the Executive to the Company of the
Executive’s termination of employment without Good
Reason (which the Company may, in its sole discretion, make
effective earlier than any notice date).
(g) RETIREMENT. Upon
remaining employed with the Company until at least the
attainment of age 65 (the “Retirement Eligibility
Date”). Nothing herein shall be construed as
limiting the Executive’s right, if any, to terminate
employment prior to the Retirement Eligibility Date and
receive compensation and benefits, as applicable, provided
under the respective terms of the Company’s benefit
plans.
8. CONSEQUENCES
OF TERMINATION. Any termination payments made and
benefits provided under this Agreement to the Executive shall
be in lieu of any termination or severance payments or
benefits for which the Executive may be eligible under any of
the plans, policies or programs of the Company or its
affiliates as may be in effect from time to time including but
not limited to the Change in Control
Agreement. Except to the extent otherwise provided
in this Agreement, all benefits, including, without
limitation, stock options, stock appreciation rights,
restricted stock units and other awards under the
Company’s long-term incentive programs, shall be subject
to the terms and conditions of the plan or arrangement under
which such benefits accrue, are granted or are
awarded. Subject to Section 9, the following
amounts and benefits shall be due to the
Executive.
(a) DISABILITY. Upon
employment termination due to Disability, the Company shall
pay or provide the Executive (i) any unpaid Base Salary
through the date of termination and any accrued vacation in
accordance with Company policy; (ii) any unpaid bonus or other
short-term and long-term incentive compensation as described
in Section 4 above earned with respect to any completed fiscal
year; (iii) reimbursement for any unreimbursed expenses
incurred through the date of termination; (iv) all other
payments and benefits to which the Executive may be entitled
under the terms of any applicable compensation arrangement or
benefit, equity or perquisite plan or program or grant or this
Agreement, including but not limited to any applicable
pension, retirement and insurance benefits (collectively,
“Accrued Amounts”). Executive will also
be paid a pro-rata portion of the Executive’s annual
bonus for the performance year in which the Executive’s
termination occurs, payable at the time that annual bonuses
are paid to other senior executives (determined by multiplying
the amount the Executive would have received had employment
continued through the end of the performance year by a
fraction, the numerator of which is the number of days during
the performance year of termination that the Executive is
employed by the Company and the denominator of which is
365).
(b) DEATH. In
the event the Employment Term ends on account of the
Executive’s death, the Executive’s estate (or to
the extent a beneficiary has been designated in accordance
with a program, the beneficiary under such program) shall be
entitled to any Accrued Amounts, including but not limited to
proceeds from any Company sponsored life insurance
programs. Executive’s estate (or beneficiary)
will also be paid a pro-rata portion of the Executive’s
annual bonus for the performance year in which the
Executive’s death occurs, payable at the time that
annual bonuses are paid to other senior executives (determined
by multiplying the amount the Executive would have received
based upon target performance had employment continued through
the end of the performance year by a fraction, the numerator
of which is the number of days during the performance year of
termination that the Executive is employed by the Company and
the denominator of which is 365).
(c) TERMINATION
FOR CAUSE OR WITHOUT GOOD REASON. If the
Executive’s employment should be terminated (i) by the
Company for Cause, or (ii) by the Executive without Good
Reason, the Company shall pay to the Executive any Accrued
Amounts.
(d) TERMINATION
WITHOUT CAUSE OR FOR GOOD REASON. If the
Executive’s employment by the Company is terminated by
the Company other than for Cause (other than a termination due
to Disability or death) or by the Executive for Good Reason,
then the Company shall pay or provide the Executive
with:
(1) Accrued
Amounts;
(2) a
pro-rata portion of the Executive’s annual bonus for the
performance year in which the Executive’s termination
occurs, payable at the time that annual bonuses are paid to
other senior executives (determined by multiplying the amount
the Executive would have received based upon actual financial
performance had employment continued through the end of the
performance year by a fraction, the numerator of which is the
number of days during the performance year of termination that
the Executive is employed by the Company and the denominator
of which is 365);
(3) an
amount equal to the product of two times the sum of (i) the
Executive’s then Base Salary and (ii) the most recent
annual bonus paid to the Executive (or awarded by the Parent
Board or the Committee for the preceding calendar year if not
then paid), payable in a single lump sum commencing on the
earliest payroll date that does not result in adverse tax
consequences to Executive under Section 409A of the
Code. Notwithstanding the foregoing, if the
Executive terminates employment within two years of his
Retirement Eligibility Date, the lump sum amount described in
the immediately preceding sentence shall be reduced by
multiplying it by a fraction, the numerator of which is the
number of days from the Executive’s employment
termination date until the Retirement Eligibility Date, and
the denominator of which is 730;
(4) each
cash-based long-term performance award for which the
performance period has not yet been completed as of the date
of such termination shall be deemed fully vested and fully
earned and then shall be cancelled in exchange for a cash
payment equal to 100% of the target value of such award
multiplied by a fraction, the numerator which is the number of
days the Executive remained employed with the Company during
the award’s performance period and the denominator of
which is the total number of days during the award’s
performance period;
(5) title
to the Company automobile to the Executive on an “as
is” basis, with the automobile’s fair market value
being taxable to the Executive; and
(6) subject
to the Executive’s continued co-payment of premiums, if
required under Company policy, continued participation for 24
months but in no event later than the Retirement Eligibility
Date in all medical, dental and vision plans which cover the
Executive (and eligible dependents) upon the same terms and
conditions (except for the requirements of the
Executive’s continued employment) in effect for active
employees of the Company. In the event the
Executive obtains other employment that offers substantially
similar or improved benefits, as to any particular medical,
dental or vision plan, such continuation of coverage by the
Company for such similar or improved benefit under such plan
under this subsection shall immediately cease. The
continuation of health benefits under this subsection shall
reduce and count against the Executive’s rights under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”).
(e) RETIREMENT. If
the Executive terminates employment on or following the
Executive’s Retirement Eligibility Date, the Company
shall pay to the Executive:
(1) any
Accrued Amounts;
(2) a
pro-rata portion of the Executive’s annual bonus for the
performance year in which the Executive’s retirement
occurs, payable at the time that annual bonuses are paid to
other senior executives (determined by multiplying the amount
the Executive would have received based upon actual financial
performance had employment continued through the end of the
performance year by a fraction, the numerator of which is the
number of days during the performance year of termination that
the Executive is employed by the Company and the denominator
of which is 365);
(3) each
cash-based long-term performance award for which the
performance period has not yet been completed as of the date
of such termination shall be deemed fully vested and fully
earned and then shall be cancelled in exchange for a cash
payment within 10 business days after the date of the
Executive's retirement with payment equal to 100% of the
target value of such award multiplied by a fraction, the
numerator which is the number of days the Executive remained
employed with the Company during the award’s performance
period and the denominator of which is the total number of
days during the award’s performance period;
(4) title
to the Company automobile to the Executive on an “as
is” basis, with the automobile’s fair market value
being taxable to the Executive; and
(5) the
Executive shall be considered to have “retired” on
the Executive’s date of termination of employment with
the Company on or following the Executive’s Retirement
Eligibility Date for purposes of any plans, programs,
agreements or arrangements with the Company or its
affiliates.
(f) ACCELERATION
OF EQUITY AWARDS
If
the Executive’s employment by the Company is terminated
by the Company for Disability (as defined in Section 7(a)) or
without Cause (as defined in Section 7(c)), or by the
Executive for Good Reason (as defined in Section 7(e)),
Retirement (as defined in Section 7(g)) or due to death, all
then outstanding unvested equity awards granted to the
Executive (for example, stock options, stock appreciation
rights and restricted stock), whether under this Agreement or
otherwise, will fully vest and become non-forfeitable and
remain exercisable in accordance with the terms of the
applicable Company plans.
(g) COORDINATION
WITH CHANGE IN CONTROL AGREEMENT.
9. CONDITIONS. Any
payments or benefits made or provided pursuant to Section 8
(other than Accrued Amounts) are subject to the
Executive’s:
(a) compliance
with the provisions of Section 11 hereof;
(b) &nbs
