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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
|
x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 |
| |
FOR
THE FISCAL YEAR ENDED December
31, 2004. |
OR
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE TRANSITION PERIOD FROM _________ TO
_________ |
Commission
File No. 0-1093
KAMAN
CORPORATION
(Exact
name of registrant as specified in its charter)
|
Connecticut
|
|
06-0613548 |
|
(State
or other jurisdiction |
|
(I.R.S.
Employer |
|
of
incorporation or organization) |
|
Identification
No.) |
1332 Blue
Hills Avenue
Bloomfield,
Connecticut 06002
(Address
of principal executive offices)
(860)
243-7100
Registrant's
telephone number, including area code
Securities
registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
|
-
Class A Common Stock, Par Value $1.00 |
|
-
6% Convertible Subordinated Debentures Due
2012 |
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x
No o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated herein by reference in Part III of
this Form 10-K or any amendment to this Form 10-K x
Indicate
by check mark whether the registrant is an accelerated filer (as defined in
Exchange Act Rule 12b-2). Yes x
No o
State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant's most recently completed second fiscal
quarter.
$291,018,917
as of June 30, 2004.
Indicate
the number of shares outstanding of each of the registrant's classes of common
stock as of the latest practicable date (January 15, 2005).
|
Class
A Common |
22,106,361 |
|
Class
B Common |
667,814 |
Documents
Incorporated Herein By Reference
Portions
of the Corporation's 2004 Annual Report to Shareholders are incorporated herein
by reference and filed as Exhibit 13 to this report.
Kaman
Corporation
Index
to Form 10-K
Year
Ended December 31, 2004
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Page |
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Part
I |
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Business |
3 |
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Properties |
10 |
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Legal
Proceedings |
11 |
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Submission
of Matters to a Vote of Security Holders |
11 |
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Part
II |
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Market
for Registrant’s Common Equity, Related Shareholder Matters and Issuer
Purchases of Equity Securities |
11 |
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Selected
Financial Data |
12 |
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations |
12 |
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Quantitative
and Qualitative Disclosures About Market Risk |
12 |
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Financial
Statements and Supplementary Data |
13 |
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure |
13 |
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Controls
and Procedures |
13 |
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Other
Information |
13 |
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Part
III |
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Directors
and Executive Officers of the Registrant |
14 |
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Executive
Compensation |
16 |
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters |
21 |
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Certain
Relationships and Related Transactions |
24 |
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Principal
Accounting Fees and Services |
24 |
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Part
IV |
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Exhibits
and Financial Statement Schedules |
25 |
PART
I
INTRODUCTION
Kaman
Corporation, incorporated in 1945, reports information for itself and its
subsidiaries (collectively, the "corporation") in the following business
segments: Aerospace, Industrial Distribution, and Music.
During
2004, the Aerospace segment's programs were conducted through three principal
businesses, consisting of Aircraft Structures and Components, Advanced
Technology Products, and Helicopter Programs. The Aircraft Structures and
Components business involves commercial and military aircraft programs,
including proprietary aircraft bearings, the production of aircraft
subassemblies and other parts for commercial airliners as well as the C-17
military transport, and helicopter subcontract work. This business constituted
about 46 percent of Aerospace segment sales for the year ended December 31,
2004. The Advanced Technology Products business manufactures products for
military and commercial markets, including safe, arm and fuzing devices for a
number of major missile and bomb programs; and precision measuring systems, mass
memory systems and electro-optic systems. This business constituted
approximately 25 percent of segment sales for the year ended December 31, 2004.
Helicopter Programs include the SH-2G Super Seasprite multi-mission maritime
helicopter and the K-MAX medium-to-heavy external lift helicopter along with
spare parts and support. This business constituted about 29 percent of segment
sales for the year ended December 31, 2004.
The
Industrial Distribution segment is the third largest North American industrial
distributor servicing the bearings, electrical/mechanical power transmission,
fluid power, motion control and materials handling markets. This segment offers
more than 1.5 million items, as well as value-added services to a base of more
than 50,000 customers spanning nearly every sector of industry from its
geographically broad-based footprint of nearly 200 locations in the United
States, Canada, and Mexico.
The Music
segment is the largest independent distributor of musical instruments and
accessories in the United States, offering more than 15,000 products from
several facilities in the United States and Canada to retailers of all sizes
worldwide for professional and amateur musicians.
AEROSPACE
SEGMENT
This
segment had an operating loss of $14.3 million for the year ended December 31,
2004. The loss involved a variety of factors, including principally, lack of new
helicopter orders, a negative $18.2 million sales adjustment associated with the
MD Helicopters, Inc. ("MDHI") program, lack of sufficient work at the
Jacksonville facility, adjustments involving various aspects of the segment's
operations, and the delay experienced in achieving final qualification for the
JPF fuze program. These items are discussed below.
The
corporation undertook a realignment of segment operations in 2004, creating
three new operating divisions from existing Aerospace subsidiary operations. The
purpose of the realignment was to address differences among the segment's
various businesses and the changing markets they serve with the expectation that
each division will be in a position to effectively control expenses for the
services and functions that they require and achieve optimal customer service.
The three new operating divisions are: Aerostructures, responsible for the
Aerospace subsidiary's Jacksonville facility and the PlasticFab operation in
Wichita; Fuzing, responsible for the Aerospace subsidiary's Middletown, Conn.
facility and Orlando (Dayron) operations; and Helicopters, responsible for the
Aerospace subsidiary's Bloomfield, Conn. operation. These divisions, together
with Kamatics, a separate subsidiary in the Aerospace segment (including RWG
Frankenjura-Industrie Flugwerklager GmbH, the corporation's German aircraft
bearing manufacturer) constitute the four principal operating elements of the
Aerospace segment. For the year 2004, results for the segment have been reported
in the traditional format. Beginning with results for the first quarter of 2005,
the corporation will separately report sales and discuss business developments
for each of the Aerospace subsidiary's divisions and Kamatics.
Aircraft
Structures and Components
Aircraft
Structures and Components business involves commercial and military aircraft
programs, including proprietary aircraft bearings produced and sold by Kamatics,
the production of aircraft subassemblies and other parts for commercial
airliners as well as the C-17 military transport, and helicopter subcontract
work. Operations are generally conducted at the Jacksonville and Wichita
facilities, and at Kamatics located in Bloomfield.
The move
from Moosup, Conn. to the expanded Jacksonville aircraft subassemblies and parts
facility was completed in 2003. Since then, the Jacksonville operation has been
addressing the complexities of training new workers and requalifying
manufacturing processes at the facility. This, together with an insufficient
volume of sales, has resulted in an inability to achieve profitability at this
location. This has resulted in overhead and general and administrative
expenditures being absorbed at higher rates by active programs and generally
lower profitability or losses for these programs. Improving performance metrics
and reestablishing levels of customer satisfaction continue to be a focus at the
Jacksonville facility and management believes that progress was made during 2004
as the operation completed much of the requalification task and began to win new
business. The principal example is that in 2004, Sikorsky Aircraft Corporation
awarded the corporation a multi-year contract with an initial two-year value of
$27.7 million under which the corporation will manufacture the pilot cockpit for
four models of the Sikorsky BLACK HAWK helicopter. The initial work covers
approximately 84 units and includes installation of all wiring harnesses,
hydraulic assemblies, control pedals and sticks, seat tracks, pneumatic lines,
and the composite structure that holds the windscreen. The contract includes
follow-on options that, if fully exercised, would include the fabrication of
approximately 349 units, and bring the total potential value of the contract to
approximately $100.0 million over five years.
Regarding
potential future work, in January 2005, the U.S. government selected an
international team that includes Lockheed Martin, Bell Helicopter, and
AgustaWestland to provide the next "Marine One" presidential helicopter. As a
member of the winning team, the corporation anticipates that it will have the
opportunity to share in the work being sourced into the United States.
Management
continues to believe that operating conditions at the Jacksonville facility will
improve and that the move from Moosup to Jacksonville will ultimately provide a
lower cost structure from which to compete.
During
2004, the corporation recorded non-cash adjustments in two programs conducted in
the Aircraft Structures and Components operation. The first relates to the
corporation's multi-year contracts with MDHI for production of fuselages for the
MDHI 500 and 600 series helicopters and composite rotor blades for the MD
Explorer helicopter. The corporation stopped work on the program in 2003 due to
payment issues with this customer. It had been the corporation's expectation
that MDHI would be successful in executing its strategy to improve its then
current financial and operational circumstances, however, in the third quarter
of 2004 MDHI management indicated that it had not thus far been able to resolve
the situation. As a result, the corporation recorded a sales and non-cash
pre-tax earnings charge of $20.1 million, consisting of an $18.2 million
negative sales adjustment and a $1.9 million addition to the corporation's bad
debt reserve, eliminating its investment in the program. The charge is not
expected to result in any future cash expenditures. The corporation intends to
maintain a business relationship with MDHI should it be successful in improving
its financial and operational situation.
The
second program is the corporation's contract with Boeing called "Harbour Pointe"
covering parts and subassemblies for various Boeing aircraft. This contract has
generated a lower than expected order flow and an unprofitable mix of work. In
the second quarter of 2004, the corporation determined that future demand for
these parts, many of which are associated with programs that Boeing is either
cutting back or eliminating, would be lower than previously anticipated. As a
result, the corporation recorded a $7.1 million non-cash adjustment, consisting
of an estimated accrued contract loss of $4.3 million and a valuation adjustment
of $2.8 million associated with portions of the program inventory.
Kamatics
manufactures proprietary self-lubricating bearings used in aircraft flight
controls, turbine engines and landing gear and produces driveline couplings for
helicopters. Market conditions improved during 2004 and the company experienced
increased order activity from Boeing, Airbus and other customers in both the
commercial and military sectors. While the market for specialized
high-performance products is becoming increasingly competitive, Kamatics parts
are currently in use in almost every jet-powered aircraft built in North and
South America and Europe.
Advanced
Technology Products
This
business involves manufacture of products for military and commercial markets,
including safe, arm and fuzing devices for a number of major missile and bomb
programs, and precision measuring systems, mass memory systems and electro-optic
systems. Principal operations are conducted at the Middletown, Conn. and Orlando
facilities. In conjunction with the realignment of the Aerospace segment during
the year, management worked to identify and correct certain internal operational
issues that have adversely affected the Orlando facility, which consists of the
Dayron operation that was acquired by the corporation in 2002.
A $3.5
million charge was recorded in the fourth quarter of 2004 to provide for two
product warranty-related issues. The first involves a supplier's recall of a
switch embedded in certain of Dayron's bomb fuzes. The other involves bomb fuzes
manufactured according to procedures in place at the time that Dayron was
acquired that have been found to contain an incorrect part. Management is
currently working with its customers and other parties to resolve these issues
appropriately.
Dayron
has a contract with the U.S. Air Force for production of the advanced FMU-152A/B
joint programmable fuze ("JPF"). This contract, which was the principal
motivation for the acquisition of Dayron, achieved final qualification in the
second quarter of 2004, about a year later than originally anticipated. The JPF
contract has a value of $13.6 million covering low rate initial production and
production of Lot 1 that extends through 2005 and includes options for eight
additional years of production, which, if fully exercised, would bring the total
potential value of the contract to $168.7 million. In the past few months, the
Air Force has released production for Lot 2 (including some additional
production) for $11.4 million. These releases under the contract, plus
development and engineering activity along with special tool and test equipment,
bring the total to
approximately $36.4 million to date. Work has continued on materials flow and
manpower ramp-up to meet production requirements. Now that final qualification
has been achieved, the fuze is ready to market to allied militaries. Management
expects program profitability to improve as deliveries to the U.S. military ramp
up and be further enhanced once orders are received from allied militaries.
Since
2001, the Electro-Optics Development Center ("EODC") portion of this business
(located in Tucson, Ariz.) had been teamed with the University of Arizona
("University") to build a 6.5-meter aperture collimator that will be used for
testing large optical systems in a vacuum environment. EODC had been working
under a $12.8 million fixed-price contract to design and fabricate the
structural, electrical, mechanical and software control systems for the
collimator. EODC has experienced significant cost growth in its portion of the
program which it believes is a result of changes in the scope of the project,
and in April 2004 submitted a claim in the amount of $6.3 million to the
University to recover these additional costs. Having been unable to
satisfactorily resolve this matter, the company filed suit against the
University on September 17, 2004 to recover these costs and stopped production
on the program. The University has since filed a counterclaim and the litigation
process is ongoing. Although additional efforts were made to resolve the matter
out of court, it became clear during the fourth quarter that EODC is not likely
to complete the project and therefore, a $3.5 million sales and pre-tax earnings
adjustment was recorded in the fourth quarter to reflect the contract's
curtailed status.
Helicopter
Programs
The
segment's helicopter products include the SH-2G Super Seasprite multi-mission
maritime helicopter and the K-MAX medium-to-heavy external lift helicopter along
with spare parts and support. Operations are conducted at the Bloomfield
facility. The vast majority of 2004 activity was attributable to the SH-2G
helicopter.
SH-2G
programs have generally consisted of retrofit of the corporation's SH-2F
helicopters to the SH-2G configuration or refurbishment of existing SH-2G
helicopters. The SH-2, including its F and G configurations, was originally
manufactured for the U.S. Navy. The SH-2G aircraft is currently in service with
the Egyptian Air Force and the New Zealand and Polish navies.
Work
continues on the SH-2G(A) program for Australia which involves eleven
helicopters with support, including a support services facility, for the Royal
Australian Navy ("RAN"). The total contract has a current anticipated value of
about $738 million. The helicopter production portion of the program is valued
at approximately $605 million, essentially all of which has been recorded as
sales through December 31, 2004. This contract has been in a loss position since
2002, due to increases in anticipated costs to complete the program. The
in-service support center portion of the program has a current anticipated value
of about $133 million of which about 31 percent has been recorded as sales
through December 31, 2004.
Production
of the eleven SH-2G(A) aircraft for the program is essentially complete. The
aircraft lack the full Integrated Tactical Avionics System ("ITAS") software and
progress is continuing on this element of the program. The Australian government
provisionally accepted three additional helicopters during the fourth quarter of
2004, bringing the number of aircraft now provisionally accepted to eight. The
corporation currently expects to deliver the first fully operational aircraft by
mid-year 2005, to be followed by the final acceptance process for all eleven
aircraft. Due to the complexity of the integration process and test results that
indicate additional work to be done, the corporation added $5.5 million to its
accrued contract loss during the year, $3.8 million of which was added in the
fourth quarter, to reflect the current estimate of costs to complete the
program.
The
corporation maintains a consignment of the U.S. Navy's inventory of SH-2 spare
parts under a multi-year agreement that provides the corporation the ability to
utilize certain inventory for support of its SH-2G programs.
Although
no retrofit orders have been awarded since 1997, the corporation continues to
market the SH-2G helicopter on an international basis, recognizing that this
market is highly competitive and heavily influenced by economic and political
conditions.
The
corporation continues to support K-MAX helicopters that are operating with
customers, which number less than thirty. At December 31, 2004, K-MAX
inventories included approximately $20.1 million in K-MAX spare parts and $9.8
million in aircraft owned by the corporation. As previously reported, the
corporation wrote down the value of existing aircraft, excess spare parts, and
equipment inventories in 2002, following a market evaluation of the K-MAX
helicopter program, which had experienced several years of market difficulties.
Management
is currently in discussions with the U.S. Naval Air Systems Command ("NAVAIR")
regarding the potential purchase of a portion of the Bloomfield campus that the
Aerospace subsidiary currently leases from NAVAIR and has operated for several
decades for the principal purpose of performing U.S. government contracts.
Management believes that ownership of the facility, which is currently utilized
for flight and ground test operations and limited parts manufacturing, can be
helpful to its ongoing operations. As part of its decision-making process, the
company is discussing with NAVAIR and the General Services Administration the
method that would be used to calculate the purchase price of the facility, which
could possibly include the company undertaking some level of the environmental
remediation that may be legally required in the event of a sale of the property.
In applying the guidance of Statement of Financial Accounting Standards No. 5
"Accounting for Contingencies", the corporation's management has concluded that,
while not probable, it is reasonably possible that the corporation may agree to
undertake some level of environmental remediation, should the facility be sold
to the corporation. Based on the discussions so far, however, it is not possible
to determine the magnitude, if any, of such a potential undertaking. Therefore,
no liability for environmental remediation at the facility has been recorded to
date.
The
corporation is also working with government and environmental authorities to
prepare the closed Moosup facility for eventual sale.
INDUSTRIAL
DISTRIBUTION SEGMENT
This
segment experienced significant increases in sales and operating profits for the
year ended December 31, 2004. These results reflect the combined effects of an
improved industrial economy, a full year of benefit from the acquisition of
Industrial Supplies, Inc., and market share gains as well as the impact of cost
control, process improvement, and the company’s “lean-thinking” practices that
were implemented during the difficult economic times of the past few years.
Vendor incentives in the form of rebates (i.e., vendors provide inventory
purchase rebates to distributors at specified volume-purchasing levels), while
still important, represented a smaller percentage of operating profits than it
has in recent years because of the increase in sales.
This
segment is the third largest North American industrial distributor servicing the
bearings, electrical/mechanical power transmission, fluid power, motion control
and materials handling markets. Products and value-added services are offered to
a customer base of more than 50,000 companies representing a highly diversified
cross section of North American industry. Because of its diversified customer
base, segment performance tends to track the U.S. Industrial Production Index
and is affected to a large extent by the overall business climate for its
customer industries, including plant capacity utilization levels and the effect
of pricing spikes and/or interruptions for basic commodities such as steel and
oil. A weaker U.S. dollar is currently stimulating customers' export sales and
the demand from China for raw materials continues to benefit the segment's
locations that participate in mining, steel and cement production markets.
Success
in the segment's markets requires a combination of competitive pricing (with
pricing pressures more pronounced with respect to larger customers) and
value-added services that save customers money while helping them become more
efficient and productive. Management believes that this segment has the
appropriate platforms, including technology, systems management and customer and
supplier relationships to compete effectively in the evolving and highly
fragmented industrial distribution industry. The segment's size and scale of
operations allow it to attract highly skilled personnel and realize internal
operating efficiencies, and also to take advantage of vendor incentives, which
tend to favor the larger distributors. Management believes that the segment's
resources and product knowledge enable it to offer a comprehensive product line
and invest in sophisticated inventory management and control systems while its
position in the industry enhances its ability to rebound during economic
recoveries and grow through acquisitions.
Over the
past several years, large companies have increasingly centralized their
purchasing, focusing on suppliers that can service all of their plant locations
across a wide geographic area. To meet these requirements, the segment has
expanded its geographic presence through the selective opening of new branches
and acquisitions in key markets of the upper midwest, the south, and Mexico. The
segment's footprint of nearly 200 locations now covers 70 of the top 100
industrial markets in the United States. Management's goal is to grow the
Industrial Distribution segment by expanding into additional areas that enhance
its ability to compete for large regional and national customer accounts. In the
third quarter of 2004, the company acquired Brivsa de Mexico, a small
distributor located in Monterrey, thus expanding the company's ability to serve
its national account customers with operations in this important Mexican
industrial center.
In
addition to providing timely access to power transmission, motion control,
material handling electrical components, bearings, accessories and services, the
segment seeks to assist customers in identifying opportunities to utilize these
maintenance and production items in ways that help them increase efficiency,
reduce downtime, and lower production costs. In part, this explains the
segment's approach to competing for large regional and national multi-location
accounts, which now constitute about 20 percent of annual sales. During 2004,
the segment implemented new national account business with Tyco International
(US), Inc. Phelps Dodge, James Hardie and Quad Graphics. In addition, the
segment was named a national distributor for IMI Norgren, Inc., providing an
additional major line to sell through the segment's entire U.S. branch network.
In the fourth quarter of the year, Procter & Gamble, already a customer of
the segment, selected the segment as its bearings and power transmission
supplier in Canada, complementing the segment's U.S. business with this large
national account customer. A new location in Toronto was opened to serve that
account while providing a platform for expansion in the area.
From 1997
to the present, a total of forty-three legal proceedings (relating to
approximately eighty-five individuals) involving alleged asbestos-containing
products have been instituted against the corporation, virtually all of which
have involved this segment. In all proceedings, the corporation was one of many
unrelated defendants. The proceedings involving this segment relate primarily to
products allegedly supplied to the U.S. Navy by a company from which the segment
acquired assets, more than twenty-five years ago. Management believes that it
has good defenses to these claims. Nine of the proceedings were resolved with no
payments being made. Six proceedings are outstanding at this time. The
remainder of the proceedings have been settled for an aggregate amount that is
immaterial, with contribution from insurance carriers (who address these matters
on a case-by-case basis with no assurance of contribution in any potential
future case). Because of the immaterial nature of these settlements in each
instance and in the aggregate, no reserve has so far been required. At this
time, management continues to believe that its overall exposure to liability in
these matters is de minimis in nature.
MUSIC
SEGMENT
The
segment is the largest independent distributor of musical instruments and
accessories in the United States, offering more than 15,000 products from
several facilities in the United States and Canada to retailers of all sizes
worldwide for professional and amateur musicians.
The
segment experienced increased sales and operating profits for the year ended
December 31, 2004. There was good demand for the segment's lines of branded
musical instruments and accessories and a reasonably good Christmas season for
the retail sector. Sales for both the guitar and percussion lines were up for
the year along with continued growth in sales to both large and small retailers
with such products as Gretsch® drums
and Sabian® cymbals.
The Ovation LX series premier guitar was also introduced in 2004 and has
received high acceptance ratings from players and positive reviews in the
national music trade press.
The segment's
array of fretted instruments includes premier and proprietary products, such as
the Ovation® and Hamer® guitars, and Takamine®
guitars under an exclusive distribution agreement. The segment has also
significantly extended its line of percussion products and accessories over the
past few years, augmenting its CB®, Toca® and
Gibraltar® lines to include an exclusive distribution agreement with
Gretsch® drums and acquiring Latin Percussion and Genz Benz (an
amplification equipment manufacturer).
The
business is affected by consumer sentiment as retailers gauge how aggressively
to stock for the holiday selling season, and by actual consumer spending levels.
It is also affected by changes in consumers' musical tastes and interests.
Consequently, a principal strategy of the segment over the past several years
has been to add popular premier branded products that can be brought to market
exclusively by the segment.
An
important industry trend of the past several years has been consolidation in the
retail market with the growth in the very large retail chains. The concentration
of sales to these large customers is increasing and along with this is an
increase in pricing pressures. Management believes that it has built upon its
competitive advantages by creating and maintaining industry-leading distribution
systems and the computerized business-to-business capabilities that large
national retailers increasingly require, while continuing to support its
traditional base of small retailers.
Technology
is an important part of the segment's business. The segment's customers have
access to kmconline.com, an industry-leading e-commerce site for expedited
direct ordering of merchandise that helps customers cut costs and improve
efficiencies through electronic exchange of information. Approximately 25% of
sales orders were received and transmitted to the warehouse for shipment with
little or no manual intervention in 2004, more than double the number of the
prior year.
While the
vast majority of the segment's sales are to North American customers, the
segment has been building its presence in European, Asian and Australian markets
as well. In addition, to ensure high quality while offering value at different
price points, the segment's products are manufactured both in the United States
and abroad.
*Sabian
and Gretsch are registered trademarks of other organizations.
AVAILABLE
INFORMATION
The
corporation's website address is www.kaman.com. The corporation's Annual Report
on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K as
well as amendments to those reports filed or furnished pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, together with Section 16 insider
beneficial stock ownership reports, are available free of charge through the
website as soon as reasonably practicable after they are electronically filed or
furnished to the Securities and Exchange Commission. The information contained
in the corporation's website is not intended to be incorporated into this Annual
Report on Form 10-K.
The
Corporation's Governance Principles and all Board of Directors' standing
Committee Charters (including Audit, Corporate Governance, Personnel &
Compensation and Finance) are also located on the corporation's
website.
FINANCIAL
INFORMATION
Information
concerning each segment's performance for the last three fiscal years is
included in the Segment Information section of the corporation's 2004 Annual
Report to Shareholders (Exhibit 13 to this Form 10-K) and such section is
incorporated herein by reference.
PRINCIPAL
PRODUCTS AND SERVICES
Following
is information for the three preceding fiscal years concerning the percentage
contribution of each business segment's products and services to the
corporation's consolidated net sales:
| |
Years
Ended December 31 |
| |
2002 |
|
2003 |
|
2004 |
|
Aerospace |
31.3% |
|
28.1% |
|
25.4% |
|
Industrial
Distribution |
54.2% |
|
55.7% |
|
58.5% |
|
Music |
14.5% |
|
16.2% |
|
16.1% |
|
Total |
100.0% |
|
100.0% |
|
100.0% |
RESEARCH
AND DEVELOPMENT EXPENDITURES
Aerospace
segment government sponsored research expenditures, included in cost of sales,
were $5.9 million in 2004; $4.9 million in 2003, and $9.8 million in 2002.
Independent research and development expenditures, included in selling, general
and administrative expenses, were $4.0 million in 2004, $4.3 million in 2003 and
$5.4 million in 2002.
BACKLOG
Program
backlog of the Aerospace segment was approximately $309.6 million at December
31, 2004, $322.4 million at December 31, 2003 and $370.0 million at December 31,
2002.
The
corporation anticipates that approximately 73% of its backlog at the end of 2004
will be performed in 2005. Approximately 46.9% of the backlog at the end of 2004
is related to U.S. government contracts or subcontracts which are included in
backlog to the extent that funding has been appropriated by Congress and
allocated to the particular contract by the relevant procurement agency.
Virtually all of these funded government contracts have been
signed.
GOVERNMENT
CONTRACTS
During
2004, approximately 93.3% of the work performed by the corporation directly or
indirectly for the U.S. government was performed on a fixed-price basis and the
balance was performed on a cost-reimbursement basis. Under a fixed-price
contract, the price paid to the contractor is negotiated at the outset of the
contract and is not generally subject to adjustment to reflect the actual costs
incurred by the contractor in the performance of the contract. Cost
reimbursement contracts provide for the reimbursement of allowable costs and an
additional negotiated fee.
The
corporation's U.S. government contracts and subcontracts contain the usual
required provisions permitting termination at any time for the convenience of
the government with payment for work completed and associated profit at the time
of termination.
COMPETITION
The
Aerospace segment operates in a highly competitive environment with many other
organizations, some of which are substantially larger and have greater financial
and other resources.
The
corporation competes for its aircraft structures and components business on the
basis of price, product quality, and the reputation of the corporation.
Competitors for this business include small machine shops and offshore
manufacturing facilities. The corporation competes for its specialty aircraft
bearing business based on quality and proprietary knowledge; product endurance;
and special performance characteristics. The corporation competes for its
advanced technology fuzing business primarily on the basis of technical
competence, product quality, and to some extent, price; and also on the basis of
its experience as a developer and manufacturer of such products for particular
applications and the availability of facilities, equipment and personnel. The
corporation competes for its helicopter programs business with other helicopter
manufacturers on the basis of price, performance, and mission capabilities; and
also on the basis of its experience as a manufacturer of helicopters, the
quality of its products and services, and the availability of facilities and
equipment to perform contracts. The corporation's K-MAX helicopter competes with
military surplus helicopters and other used commercial helicopters employed for
lifting, as well as with alternative methods of meeting lifting requirements.
Consolidation in the industry has increased the level of international
competition for helicopter programs. The corporation is also affected by the
political and economic circumstances of its potential foreign
customers.
Industrial
distribution operations are subject to a high degree of competition from several
other national distributors, two of which are substantially larger than the
corporation; and from many regional and local firms. In addition, the
corporation faces competition from low-cost industrial products manufactured off
shore and introduced into the U.S. market from a number of sources. Competitive
forces have intensified due to the increasing importance of large national and
North American accounts and the increasing use of independent purchasing
consultants retained by such national accounts. In addition, competitive forces
have increased due to the increased use of supplier “partnering” agreements or
other contractual arrangements providing the customer with a variety of cost
savings opportunities.
Music
operations compete with domestic and foreign distributors. Certain musical
instrument products manufactured by the corporation are subject to competition
from U.S. and foreign manufacturers as well. The corporation competes in these
markets on the basis of service, price, performance, and inventory variety and
availability. The corporation also competes on the basis of quality and market
recognition of its music products and has established trademarks and trade names
under which certain of its music products are produced, as well as under private
label manufacturing in a number of foreign countries and exclusive distribution
agreements with other manufacturers of recognized trademarked
products.
FORWARD-LOOKING
STATEMENTS
This
report may contain forward-looking information relating to the corporation's
business and prospects, including aerostructures and helicopter subcontract
programs and components, advanced technology products, the SH-2G and K-MAX
helicopter programs, the industrial distribution and music businesses, operating
cash flow, and other matters that involve a number of uncertainties that may
cause actual results to differ materially from expectations. Those uncertainties
include, but are not limited to: 1) the successful conclusion of competitions
for government programs and thereafter contract negotiations with government
authorities, both foreign and domestic; 2) political conditions in countries
where the corporation does, or intends to do, business; 3) standard government
contract provisions permitting renegotiation of terms and termination for the
convenience of the government; 4) economic and competitive conditions in markets
served by the corporation, particularly defense, commercial aviation, industrial
production and consumer market for music products, as well as global economic
conditions; 5) satisfactory completion of the Australian SH-2G(A)program,
including successful completion and integration of the full ITAS software; 6)
receipt and successful execution of production orders for the JPF U.S.
government contract (including the exercise of all contract options as such
exercise has been assumed in connection with goodwill impairment evaluations)
and receipt of orders from allied militaries; 7) satisfactory resolution of the
EODC/University of Arizona litigation; 8) achievement of enhanced business base
in the Aerospace segment in order to better absorb overhead and general and
administrative expenses; 9) satisfactory results of negotiations with NAVAIR
concerning the corporation's leased facility in Bloomfield, Conn.; 10)
profitable integration of acquired businesses into the corporation's operations;
11) changes in supplier sales or vendor incentive policies; 12) the effect of
price increases or decreases; 13) pension plan assumptions and future
contributions; 14) continued availability of raw materials in adequate supplies;
15) satisfactory resolution of the supplier switch and incorrect part issues
attributable to Dayron suppliers and others; 16) cost
growth in connection with potential environmental remediation activities related
to the Bloomfield and Moosup facilities; and 17) successful
replacement of the corporation's revolving credit facility upon its expiration;
and 18) currency
exchange rates, taxes, changes in laws and regulations, interest rates,
inflation rates, general business conditions and other factors. Any
forward-looking information provided in this report should be considered with
these factors in mind. The corporation assumes no obligation to update any
forward-looking statements contained in this report.
EMPLOYEES
As of
December 31, 2004, the Corporation employed 3,581 individuals throughout its
business segments and corporate headquarters as follows:
|
Aerospace |
|
1,597 |
|
Industrial
Distribution |
|
1,483 |
|
Music |
|
411 |
|
Corporate
Headquarters |
|
90 |
PATENTS
AND TRADEMARKS
The
corporation holds patents and trademarks reflecting functional, design and
technical accomplishments in a wide range of areas covering both basic
production of certain products, including aerospace products and music
instruments, as well as highly specialized devices and advanced technology
products in defense related and commercial fields.
Although
the corporation's patents and trademarks enhance its competitive position,
management believes that none of such patents or trademarks is singularly or as
a group essential to its business as a whole. The corporation holds or has
applied for U.S. and foreign patents with expiration dates that range through
the year 2023.
These
patents are allocated among the corporation's business segments as follows:
| |
U.S.
PATENTS |
|
FOREIGN
PATENTS |
|
Segment |
Issued |
|
Pending |
|
Issued |
|
Pending |
| |
|
|
|
|
|
|
|
|
Aerospace |
41 |
|
3 |
|
7 |
|
7 |
|
Industrial
Distribution |
0 |
|
0 |
|
0 |
|
0 |
|
Music |
30 |
|
1 |
|
29 |
|
21 |
|
Total |
71 |
|
4 |
|
36 |
|
28 |
Registered
trademarks of Kaman Corporation include Adamas, Applause, Hamer, KAflex, KAron,
K-MAX, Magic Lantern, Ovation, LP, Genz Benz, Takamine and Latin Percussion. In
all, the corporation maintains 348 U.S. and foreign trademarks with 62
applications pending, most of which relate to music products in the Music
segment.
COMPLIANCE
WITH ENVIRONMENTAL PROTECTION LAWS
The
corporation is subject to the usual reviews, inspections and enforcement actions
by various federal and state environmental and enforcement agencies and has
entered into agreements and consent decrees at various times in connection with
such reviews. One such matter, Rocque vs. Kaman, was previously reported by the
corporation in its Form 10-K for the year ended December 31, 2003, Document No.
0000054381-04-000032 filed with the Securities and Exchange Commission on March
5, 2004. In addition, the Corporation engages in various environmental studies
and investigations and, where legally required to do so, undertakes appropriate
remedial actions at facilities owned or controlled by it, either voluntarily or
in connection with the acquisition, disposal or operation of such facilities.
Such studies and investigations are ongoing at the Corporation's Bloomfield, and
Moosup, Conn. facilities with voluntary remediation activities also being
undertaken at the Moosup facility. The corporation is cooperating with the U.S.
Government in the environmental studies required to be undertaken by the
Government in connection with the Government’s proposed sale of the Bloomfield
facility to the corporation discussed in Item 2 (Properties). In connection with
such studies various testing of air, soil and water on or in the vicinity of the
Corporation’s facilities have been conducted in 2004 and are continuing. Also on
occasion the corporation has been identified as a potentially responsible party
("PRP") by the U.S. Environmental Protection Agency ("EPA") in connection with
the EPA's investigation of certain third party facilities. In each instance, the
corporation has provided appropriate responses to all requests for information
that it has received, and the matters have been resolved either through de
minimis settlements, consent agreements, or through no further action being
taken by the EPA or the applicable state agency with respect to the corporation.
One such matter involved the Barkhamsted Landfill site located in New Hartford,
Connecticut (the "Barkhamsted site") which the corporation has previously
reported in its report on Form 10-Q for the quarter ended June 30, 2002,
Document No. 0000054381-02-000022 filed with the Securities and Exchange
Commission on August 14, 2002, and on Form 10-K for the year-ended December 31,
2003, Document No. 0000054381-04-000032, filed with the Securities and Exchange
Commission on March 5, 2004.
With
respect to all such matters which may currently be pending and which relate to
its Bloomfield and Moosup, Conn. facilities, the corporation has been unable to
determine, based on its current knowledge, the ultimate effect resolution of
such matters may have on the future financial condition of the corporation. With
respect to all other matters which may currently be pending, in the opinion of
management, based on the corporation’s analysis of relevant facts and
circumstances, compliance with relevant environmental protection laws is not
likely to have a material adverse effect upon the capital expenditures, earnings
or competitive position of the corporation.
In
arriving at this conclusion, the corporation has taken into consideration
site-specific information available regarding total costs of any work to be
performed, and the extent of work previously performed. Where the corporation
has been identified as a PRP at a particular site, the corporation, using
information available to it, also has reviewed and considered a number of other
factors, including: (i) the financial resources of other PRPs involved in each
site, and their proportionate share of the total volume of waste at the site;
(ii) the existence of insurance, if any, and the financial viability of the
insurers; and (iii) the success others have had in receiving reimbursement for
similar costs under similar insurance policies issued during the periods
applicable to each site.
FOREIGN
SALES
Thirteen
and six-tenths percent (13.6%) of the sales of the corporation made in 2004 were
to customers located outside the United States. In 2004, the corporation
continued its efforts to develop international markets for its products and
foreign sales (including sales for export). The corporation also continued to
perform work under contracts with the Commonwealth of Australia for the supply
of retrofit SH-2G helicopters. Additional information required by this item is
included in the Segment Information section of the corporation's 2004 Annual
Report to Shareholders (Exhibit 13 to this Form 10-K) which section is
incorporated herein by reference.
The
corporation occupies approximately 3,574 thousand square feet of space
throughout the United States and in Australia, Canada, Germany and Mexico,
distributed as follows:
|
SEGMENT |
SQUARE
FEET |
| |
(in
thousands as of 12/31/04) |
|
Aerospace |
1,810 |
|
Industrial
Distribution |
1,233 |
|
Music |
491 |
|
Corporate
Headquarters |
40 |
|
Total |
3,574 |
The
Aerospace segment's principal facilities are located in Connecticut, Florida,
and Kansas; other facilities, including offices and smaller manufacturing and
assembly operations are located in Arizona, and in Dachsbach, Germany. These
facilities are used for manufacturing, research and development, engineering and
office purposes. The U.S. Government owns 154 thousand square feet of the space
occupied by Kaman Aerospace Corporation in Bloomfield, Connecticut in accordance
with a Facilities Lease Agreement with an initial five (5) year term which is
presently scheduled to expire in March 2005. The corporation has entered into
discussions with the Government for the purchase of the facility. The Government
has indicated its intention to renew the lease for an additional one year term,
pending such purchase discussions. The corporation occupies 133,000 square feet
of space in Wichita, Kansas under a lease agreement with a current term
scheduled to expire in March, 2005. The corporation is engaged in discussions to
extend the term of such lease. The corporation also occupies a facility in
Nowra, New South Wales, Australia under a contract expiring September 30, 2012.
Approximately 500,000 square feet of space listed above is attributable to the
Aerospace segment facility located in Moosup (the "Moosup facility") which was
closed in 2003.
The
Industrial Distribution segment's facilities are located throughout the United
States with principal facilities located in Alabama, California, Connecticut,
New York, Indiana, Kentucky and Utah. Additional Industrial Distribution segment
facilities are located in Mexico, Ontario and British Columbia, Canada. These
facilities consist principally of regional distribution centers, branches and
office space.
The Music
segment's facilities in the United States are located in Arizona, Connecticut,
California, New Jersey and Tennessee. An additional Music facility is located in
Ontario, Canada. These facilities consist principally of regional distribution
centers and office space. Also included are facilities used for manufacturing
music instruments.
The
corporation occupies a 40 thousand square foot Corporate headquarters building
in Bloomfield, Connecticut.
The
corporation's facilities are generally suitable and adequate to serve its
purposes. Substantially all of its facilities are currently fully utilized with
the exception of certain properties in the Aerospace segment. Within the
Aerospace segment, the Moosup manufacturing facility is now closed for operation
and awaiting disposition, while the expanded Jacksonville facility and the
helicopter program-related space at the Bloomfield facility are currently
underutilized due to the factors discussed in Item 1 of this report.
The
corporation is a lessee of many of its facilities, particularly in the
Industrial Distribution segment.
Certain
legal proceedings which relate to specific segments of the corporation are
discussed in Item 1 (Business) in the narrative for such segments. The
corporation believes that none of the foregoing legal proceedings, either
individually or in the aggregate is, or will be, material to the business of the
corporation. Other legal proceedings or enforcement actions relating to
environmental matters are discussed in the section entitled Compliance with
Environmental Protection Laws.
There
were no matters submitted to a vote of security holders during the fourth
quarter of 2004.
PART
II
MARKET
FOR CLASS A COMMON STOCK
The Class
A Common Stock of the corporation is traded on the NASDAQ Stock Market under the
symbol "KAMNA". The corporation's Class B Common Stock is not actively traded.
HOLDERS
OF COMMON STOCK
As of
February 2, 2005, there were approximately 5,091 holders of record of the
corporation's Class A Common Stock and 72 holders of record of the corporation's
Class B Common Stock.
INVESTOR
SERVICES PROGRAM
Shareholders
of Kaman Class A common stock are eligible to participate in the Mellon Investor
Services Program administered by Mellon Bank, N.A. which offers a variety of
services including dividend reinvestment. A booklet describing the program may
be obtained by writing to the program's Administrator, Mellon Bank, N.A., c/o
Mellon Investor Services, P.O. Box 3338, South Hackensack, NJ
07606-1938.
|
QUARTERLY
CLASS A COMMON STOCK INFORMATION |
|
|
|
|
High |
|
|
Low |
|
|
Close |
|
|
Dividend |
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First |
|
$ |
15.23 |
|
$ |
12.57 |
|
$ |
14.88 |
|
$ |
.11 |
|
|
Second |
|
|
15.49 |
|
|
10.91 |
|
|
13.99 |
|
|
.11 |
|
|
Third |
|
|
13.96 |
|
|
10.92 |
|
|
11.94 |
|
|
.11 |
|
|
Fourth |
|
|
12.93 |
|
|
10.71 |
|
|
12.65 |
|
|
.11 |
|
|
2003 |
|
|
|
|
|
|
|
|
|
|
$ |
.11 |
|
|
First |
|
$ |
13.24 |
|
$ |
9.40 |
|
$ |
9.78 |
|
|
.11 |
|
|
Second |
|
|
11.80 |
|
|
9.42 |
|
|
11.49 |
|
|
.11 |
|
|
Third |
|
|
14.91 |
|
|
10.72 |
|
|
12.96 |
|
|
.11 |
|
|
Fourth |
|
|
14.29 |
|
|
11.67 |
|
|
12.73 |
|
|
.11 |
|
|
QUARTERLY
DEBENTURE INFORMATION (6% Conv. Subordinated) |
|
|
|
|
High |
|
|
Low |
|
|
Close |
|
2003 |
|
|
|
|
|
|
|
|
|
|
|
First |
|
$ |
92.00 |
|
$ |
92.00 |
|
$ |
92.00 |
|
|
Second |
|
|
95.00 |
|
|
94.75 |
|
|
94.75 |
|
|
Third |
|
|
99.00 |
|
|
99.00 |
|
|
99.00 |
|
|
Fourth |
|
|
- -
- - - - - |
|
|
No
Trades* |
|
|
- -
- - - - - |
|
*Effective
January 29, 2004, this security was delisted from the NASDAQ Small Cap
Market.
NASDAQ
market quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commission and may not necessarily represent actual
transactions.
ISSUER
PURCHASES OF EQUITY SECURITIES
In
November 2000, the corporation's board of directors approved a replenishment of
the corporation's stock repurchase program providing for repurchase of an
aggregate of 1.4 million Class A common shares for use in administration of the
corporation's stock plans and for general corporate purposes.
The
following table provides information about purchases of Class A common shares by
the corporation during the three months ended December 31, 2004:
| |
|
|
|
|
|
Total
Number |
|
|
| |
|
|
|
|
|
of
Shares |
|
Maximum |
| |
|
|
|
|
|
Purchased
as |
|
Number
of |
| |
|
Total |
|
|
|
Part
of |
|
Shares
That |
| |
|
Number |
|
Average |
|
Publicly |
|
May
Yet Be |
| |
|
of
Shares |
|
Price
Paid |
|
Announced |
|
Purchased
Under |
|
Period |
|
Purchased |
|
per
Share |
|
Plan |
|
the
Plan |
| |
|
|
|
|
|
|
|
|
|
10/01/04- |
|
|
|
|
|
|
|
|
|
10/31/04 |
|
- |
|
- |
|
269,607 |
|
1,130,393 |
| |
|
|
|
|
|
|
|
|
|
11/01/04- |
|
|
|
|
|
|
|
|
|
11/30/04 |
|
- |
|
- |
|
269,607 |
|
1,130,393 |
| |
|
|
|
|
|
|
|
|
|
12/01/04- |
|
|
|
|
|
|
|
|
|
12/31/04
|
|
- |
|
- |
|
269,607 |
|
1,130,393 |
Information
required by this item is included in the Five-Year Selected Financial Data
section of the corporation's 2004 Annual Report to Shareholders (Exhibit 13 to
this Form 10-K) and that section is incorporated herein by
reference.
Information
required by this item is included in the Management's Discussion and Analysis
section of the corporation's 2004 Annual Report to Shareholders (Exhibit 13 to
this Form 10-K) and that section is incorporated herein by
reference.
The
corporation has various market risk exposures that arise from its normal
business operations, including interest rates, currency exchange rates, and
supplier price changes as well as other factors described in the Forward-Looking
Statements section of this report.
The
corporation's exposure to interest rate risk relates primarily to its financial
instruments, and is managed principally
through the use of long-term debt obligations with fixed interest rates and
revolving credit facilities with interest at current market rates. Fees and
interest rates charged on revolving credit commitments and borrowings are based
upon borrowing levels, market interest rates, and the corporation's credit
rating. Letters of credit are generally considered borrowings for purposes of
the corporation's revolving credit agreement.
The
corporation's primary interest rate risk is derived from its outstanding
variable-rate revolving credit facilities. Changes in market interest rates or
the corporation's credit rating would impact the interest rates on these
facilities. There was some increase in the corporation's exposure to this market
risk factor during 2004, as average bank borrowings increased principally for
working capital purposes and acquisitions during the past few years. For the
year ended December 31, 2004, the result of a hypothetical 1% increase in the
average cost of the corporation's revolving credit facilities would have reduced
earnings before income taxes by approximately $500,000.
The
corporation has manufacturing, sales, and distribution facilities in certain
locations throughout the world and makes investments and conducts business
transactions denominated in various currencies, including the U.S. dollar, the
European Euro, the Japanese yen, the Canadian dollar, the Mexican peso, and the
Australian dollar. The corporation's exposure to currency exchange rates is
managed at the corporate and subsidiary operations levels as an integral part of
the business. Management believes that any near-term changes in currency
exchange rates would not materially affect the consolidated financial position,
results of operations or cash flows of the corporation.
The
corporation's exposure to supplier sales policies and price changes relates
primarily to its distribution businesses and the corporation seeks to manage
this risk through its procurement policies and maintenance of favorable
relationships with suppliers. Except for vendor incentives, management believes
that any near-term changes in supplier sales policies and price changes would
not materially affect the consolidated financial position, results of operations
or cash flows of the corporation. Vendor incentives have been an important
contributor to the Industrial Distribution segment's operating profits. While
management believes that vendors will continue to offer incentives, there can be
no assurance that the segment will continue to receive comparable amounts in the
future.
Information
required by this item is included in the Consolidated Financial Statements,
Notes to Consolidated Financial Statements and Selected Quarterly Financial Data
sections of the corporation's 2004 Annual Report to Shareholders (Exhibit 13 to
this Form 10-K) and such sections are incorporated herein by reference.
None.
ITEM
9A. CONTROLS
AND PROCEDURES
(a)
Disclosure Controls and Procedures. Under the supervision and with the
participation of the corporation’s management, including the Chief Executive
Officer and the Chief Financial Officer, the corporation has carried out an
evaluation of the effectiveness of the design and operation of the corporation’s
disclosure controls and procedures. The evaluation was undertaken acknowledging
that there are inherent limitations to the effectiveness of any system of
disclosure controls and procedures, including the possibility of human error and
the circumvention or overriding of the controls and procedures. Accordingly,
even effective disclosure controls and procedures can only provide reasonable
assurance of achieving their control objectives. Based upon that evaluation, the
Chief Executive Officer and the Chief Financial Officer have concluded that, as
of December 31, 2004, the disclosure controls and procedures were effective to
provide reasonable assurance that information required to be disclosed in the
reports the corporation files and submits under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported as and when required.
(b)
Internal Control Over Financial Reporting. The corporation’s management is
responsible for establishing and maintaining an adequate system of internal
control over financial reporting. Internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
reporting purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Management has assessed the
effectiveness of the corporation’s internal control over financial reporting as
of December 31, 2004. In making its assessment, management has utilized the
criteria set forth by the Committee of Sponsoring Organizations (COSO) of the
Treadway Commission in Internal
Control—Integrated Framework. Management
concluded that based on its assessment, the corporation’s internal control over
financial reporting was effective as of December 31, 2004. Management’s
assessment of the effectiveness of internal control over financial reporting as
of December 31, 2004 has been audited by KPMG LLP, an independent registered
public accounting firm, as stated in their report, which is included in Exhibit
13 to this report.
(c)
Changes
in Internal Control Over Financial Reporting. Management of the corporation has
evaluated, with the participation of the corporation’s Chief Executive Officer
and Chief Financial Officer, changes in the corporation's internal controls over
financial reporting during the fourth quarter of 2004. During the fourth
quarter, the corporation corrected its method of accounting for certain leases,
specifically the accounting for escalating rent, rent holidays and upfront
payments for tenant allowances and implemented additional policies and
procedures to strengthen its controls over proper accounting for leases. The
corporation also re-evaluated its Aerospace subsidiary’s percentage of
completion revenue recognition policy, specifically over accounting for claims.
For one of its long-term contracts, the corporation corrected the way it
accounts for contract claims and implemented additional policies, during the
fourth quarter, which provided guidance regarding the proper treatment for
accounting for claims in the contract’s estimate to complete. In addition, the
corporation also corrected its accounting for certain adjustments to group
insurance, and during the fourth quarter has implemented additional
reconciliation and review procedures to strengthen its controls over accounting
for a product liability reserve relating to the Industrial Distribution segment
and its accounting for sales allowances in its Music segment.
During the
fourth quarter of 2004 management made other improvements to the corporation’s
internal control over financial reporting. These changes did not materially
affect the corporation’s internal control over financial reporting.
ITEM
9B. OTHER
INFORMATION
None.
PART
III
Following
is information concerning each Director and executive officer of Kaman
Corporation including name, age, position with the corporation, and business
experience during the last five years:
|
Brian
E. Barents |
Mr.
Barents, 61, has been a Director since 1996. He is the retired President
and Chief Executive Officer of Galaxy Aerospace Corp. Prior to that he was
President and Chief Executive Officer of Learjet, Inc. He is also a
director of Eclipse Aviation Corp., The Nordam Group, CAE, Inc. and the
Aerion Corp. |
| |
|
|
T.
Jack Cahill |
Mr.
Cahill, 56, has been President of Kaman Industrial Technologies
Corporation, a subsidiary of the corporation, since 1993. He has held
various positions with the corporation since 1975. |
| |
|
|
E.
Reeves Callaway III |
Mr.
Callaway, 57, has been a Director since 1995. He is the Founder and Chief
Executive Officer of The Callaway Companies, an engineering services
firm. |
| |
|
|
Candace
A. Clark |
Ms.
Clark, 50, has been Senior Vice President, Chief Legal Officer and
Secretary since 1996. Prior to that she served as Vice President and
Counsel. Ms. Clark has held various positions with the corporation since
1985. |
| |
|
|
John
A. DiBiaggio |
Dr.
DiBiaggio, 72, has been a Director since 1984. He is now President
Emeritus of Tufts University, having served as President until the fall of
2001. Prior to that he was President and Chief Executive Officer of
Michigan State University. |
| |
|
|
Ronald
M. Galla |
Mr.
Galla, 53, has been Senior Vice President and Chief Information Officer
since 1995. Prior to that he served as Vice President and director of the
corporation's Management Information Systems, a position which he held
since 1990. Mr. Galla has been director of the corporation's Management
Information Systems since 1984. |
| |
|
|
Robert
M. Garneau |
Mr.
Garneau, 60, has been Executive Vice President and Chief Financial Officer
since 1995. Previously he served as Senior Vice President, Chief Financial
Officer and Controller. Mr. Garneau has held various positions with the
corporation since 1981. |
| |
|
|
Edwin
A. Huston |
Mr.
Huston, 66, has been a director since 2002. Mr. Huston is the retired Vice
Chairman of Ryder System, Incorporated, an international logistics and
transportation solutions company. He served as Senior Executive Vice
President-Finance and Chief Financial Officer of that company from 1986 to
1999. Mr. Huston is a director of Unisys Corporation, Answerthink, Inc.
and Enterasys Networks, Inc. |
| |
|
|
Russell
H. Jones |
Mr.
Jones, 60, has been Senior Vice President, Chief Investment Officer, and
Treasurer since 2003. Prior to that he served as Vice President and
Treasurer. He has held various positions with the Corporation since
1973. |
| |
|
|
C.
William Kaman II |
Mr.
Kaman, 53, has been a Director since 1992 and is Vice Chairman of the
board of directors of the corporation. He is the retired Chairman and CEO
of AirKaman of Jacksonville, Inc., an entity no longer affiliated with the
corporation. Previously he was Executive Vice President of the corporation
and President of Kaman Music Corporation, a subsidiary of the corporation.
|
| |
|
|
John
C. Kornegay |
Mr.
Kornegay, 55, has been President of Kamatics Corporation, a subsidiary of
the corporation, since 1999. He has held various positions with Kamatics
Corporation since 1988. |
| |
|
|
Eileen
S. Kraus |
Ms.
Kraus, 66, has been a Director since 1995. As the current Chairman of the
Corporate Governance Committee, she also serves as the Board's Lead
Director. She is the retired Chairman of Fleet Bank Connecticut. She is a
director of The Stanley Works and Rogers Corporation. |
| |
|
|
Paul
R. Kuhn |
Mr.
Kuhn, 63, has been a Director since 1999. He has been President and Chief
Executive Officer of the corporation since August 1999 and was appointed
to the additional position of Chairman in 2001. |
| |
|
|
Walter
H. Monteith, Jr. |
Mr.
Monteith, 74, has been a Director since 1987. He is the retired Chairman
of Southern New England Telecommunications Corporation. |
| |
|
|
Wanda
L. Rogers |
Mrs.
Rogers, 72, has been a Director since 1991. She is President and Chief
Executive Officer of Rogers Helicopters, Inc., President of Sco-Matt,
Inc., Vice President of Heavy Lift Helicopters and President of Whirlwide,
Inc. d/b/a TGR Helicopters. She is also a director of both Central Valley
Community Bancorp and its subsidiary, Central Valley Community
Bank. |
| |
|
|
Robert
H. Saunders, Jr. |
Mr.
Saunders, 63, has been President of Kaman Music Corporation, a subsidiary
of the corporation, since 1998. He has held various positions with the
corporation since 1995. |
| |
|
|
Richard
J. Swift |
Mr.
Swift, 60, has been a director since 2002. Mr. Swift is currently Chairman
of the Financial Accounting Standards Advisory Council. In 2001, he
retired as Chairman, President and Chief Executive Officer of Foster
Wheeler Ltd., a provider of design, engineering, construction, and other
services, a position he held since 1994. Mr. Swift is a director of
Ingersoll-Rand Company Ltd., Public Service Enterprise Group Incorporated
and Hubbell Incorporated. |
Each
Director and executive officer has been elected for a term of one year and until
his or her successor is elected. The terms of all Directors and executive
officers are expected to expire as of the 2005 Annual Meeting of the
Shareholders and Directors of the corporation.
Section
16(a) Beneficial Ownership Reporting Compliance
Based
upon information provided to the corporation by persons required to file reports
under Section 16(a) of the Securities Exchange Act of 1934, no Section 16(a)
reporting delinquencies occurred in 2004.
Board
Independence
A
majority of the corporation's Board of Directors are "independent" directors as
required and defined by NASDAQ Stock Market, Inc. Rule 4350(c)(1) and Rule
4200(a)(15). The Board of Directors has determined that the following persons
are independent: Brian E. Barents, E. Reeves Callaway III, John A. DiBiaggio,
Edwin A. Huston, C. William
Kaman II, Eileen S. Kraus, Walter H. Monteith, Jr., Richard J. Swift, and Wanda
Lee Rogers.
Audit
Committee Financial Expert(s)
The
Corporation's Board of Directors has for many years maintained an Audit
Committee which is currently composed of the following directors: Walter H.
Monteith, Jr., Chairman, E. Reeves Callaway III, Eileen S. Kraus, and Richard J.
Swift.
The
corporation's Board of Directors has determined that the Chairman of the Audit
Committee, Walter H. Monteith, Jr., and Richard J. Swift are "audit committee
financial experts" within the meaning of Item 401(h) of Regulation S-K. In
addition, each member of the Audit Committee is "independent" as that term is
used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.
Code
of Business Conduct
The
corporation has for several years maintained a Code of Business Conduct
applicable to all of its employees and the Board of Directors. This Code of
Business Conduct is also applicable to the corporation's principal executive
officer, principal financial officer, principal accounting officer or
controller, and persons performing similar functions. The Code of Business
Conduct was filed as Exhibit 14 to the corporation’s report on Form 10-K for
2003 filed with the Securities and Exchange Commission on March 5, 2004 as
Document No. 0000054381-04-000032.
A) GENERAL.
The following tables provide certain information relating to the compensation of
the corporation's Chief Executive Officer and its four other most highly
compensated executive officers.
B) SUMMARY
COMPENSATION TABLE.
| |
Annual
Compensation |
|
Long
Term Compensation |
|
|
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
| |
|
|
|
|
AWARDS |
|
|
Name
and Principal Position |
Year |
Salary
($) |
Bonus
($) |
Other
Annual Comp.
($) |
RSA
($)
(1) |
Options/SARS
(#Shares) |
LTIP
Payouts
($) |
All
Other comp.
($)
(2) |
|
Paul
R. Kuhn |
2004 |
850,000 |
0 |
---- |
0 |
0 /
0 |
---- |
18,065 |
|
Chairman,
President |
2003 |
800,000 |
384,000 |
---- |
138,600 |
0 /
90,000 |
---- |
14,227 |
|
&
Chief Executive Officer |
2002 |
800,000 |
240,000 |
---- |
174,000 |
21,000
/ 52,000 |
---- |
13,496 |
| |
|
|
|
|
|
|
|
|
|
Robert
M. Garneau |
2004 |
500,000 |
0 |
---- |
0 |
0 /
0 |
---- |
12,124 |
|
Executive
Vice President |
2003 |
470,000 |
169,000 |
---- |
77,715 |
0 /
51,000 |
---- |
13,516 |
|
&
Chief Financial Officer |
2002 |
470,000 |
118,000 |
---- |
101,500 |
12,000
/ 29,000 |
---- |
23,655 |
| |
|
|
|
|
|
|
|
|
|
T.
Jack Cahill |
2004 |
310,000 |
310,000 |
---- |
0 |
0 /
0 |
---- |
17,047 |
|
President,
Kaman Industrial |
2003 |
295,000 |
74,000 |
---- |
44,550 |
0 /
29,200 |
---- |
16,431 |
|
Technologies
Corporation |
2002 |
280,000 |
56,000 |
---- |
58,000 |
7,000
/ 18,000 |
---- |
12,230 |
| |
|
|
|
|
|
|
|
|
|
Robert
H. Saunders, Jr. |
2004 |
270,000 |
270,000 |
---- |
0 |
0 /
0 |
---- |
22,196 |
|
President,
Kaman Music |
2003 |
255,000 |
198,000 |
---- |
58,410 |
0 /
38,300 |
---- |
18,083 |
|
Corporation |
2002 |
245,000 |
196,000 |
---- |
50,750 |
6,000
/ 15,000 |
---- |
18,383 |
| |
|
|
|
|
|
|
|
|
|
John
C. Kornegay |
2004 |
217,000 |
165,000 |
---- |
0 |
0 /
0 |
---- |
34,258 |
|
President,
Kamatics |
2003 |
209,000 |
154,000 |
---- |
31,680 |
0 /
20,700 |
---- |
20,305 |
|
Corporation |
2002 |
203,000 |
36,000 |
---- |
72,500 |
13,500
/ 0 |
---- |
20,529 |
1As of
December 31, 2004, aggregate restricted stock holdings and their year-end value
were: P.R. Kuhn, 27,800 shares valued at $351,670; R.M. Garneau, 15,980 shares
valued at $202,147; T.J. Cahill, 9,200 shares valued at $116,380; R.H. Saunders
Jr., 9,620 shares valued at $121,693; and J.C. Kornegay, 9,360 shares valued at
$118,404. Restrictions lapse at the rate of 20% per year for all awards,
beginning one year after the grant date provided recipient remains an employee
of the corporation or a subsidiary. Awards reported in this column are as
follows: P.R. Kuhn, 0 shares in 2004, 14,000 shares in 2003, and 12,000 shares
in 2002; R.M. Garneau, 0 shares in 2004, 7,850 shares in 2003, and 7,000 shares
in 2002; T.J. Cahill, 0 shares in 2004, 4,500 shares in 2003 and 4,000 shares in
2002; R.H. Saunders, Jr., 0 shares in 2004, 5,900 shares in 2003 and 3,500
shares in 2002; and J.C. Kornegay, 0 shares in 2004, 3,200 shares in 2003, and
5,000 shares in 2002. Dividends are paid on the restricted stock.
2Amounts
reported in this column consist of: P.R. Kuhn, $8,717 - Senior executive life
insurance program (“Executive Life”), $5,125 - employer matching contributions
to the Kaman Corporation Thrift and Retirement Plan (the “Thrift Plan employer
match”), $4,223 - medical expense reimbursement program (“MERP”); R.M. Garneau,
$8,071 - Executive Life, $851 - Officer 162 Insurance Program, $5,125 - Thrift
Plan employer match, $1,077 - MERP; T.J. Cahill, $3,776 - Executive Life, $5,125
- - Thrift Plan employer match, $2,721 - MERP, $5,425 - supplemental employer
contributions; R.H. Saunders, Jr., $8,021 - Executive Life, $5,125 - Thrift Plan
employer match, $5,000 - MERP, $4,050 - all supplemental employer contributions
under the Kaman Corporation Deferred Compensation Plan (“supplemental employer
contributions”); J.C. Kornegay, $3,035 - Executive Life, $5,125 - Thrift Plan
employer match, $4,766 - MERP, $21,332 - supplemental employer
contributions.
C) OPTION/SAR
GRANTS IN THE LAST FISCAL YEAR:
|
Individual
Grants |
Potential
Realizable Value at Assumed Annual Rates of Stock Price Appreciation for
Option Term* |
|
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
|
Name |
Options/
SARs**
Granted
(#) |
%
of Total Options/SARs** Granted to Employees in Fiscal
Year |
Exercise
or
Base
Price ($/share) |
Expiration
Date |
5%
($) |
10%
($) |
|
P.
R. Kuhn |
0 /
0 |
0.00%
/ 0.00% |
$
0 |
-- |
$
0.00 |
$
0.00 |
|
R.
M. Garneau |
0 /
0 |
0.00%
/ 0.00% |
$
0 |
-- |
$
0.00 |
$
0.00 |
|
T.
J. Cahill |
0 /
0 |
0.00%
/ 0.00% |
$
0 |
-- |
$
0.00 |
$
0.00 |
|
R.
H. Saunders, Jr. |
0 /
0 |
0.00%
/ 0.00% |
$
0 |
-- |
$
0.00 |
$
0.00 |
|
J.
C. Kornegay |
0 /
0 |
0.00%
/ 0.00% |
$
0 |
-- |
$
0.00 |
$
0.00 |
*The
information provided herein is required by Securities and Exchange Commission
rules and is not intended to be a projection of future common stock
prices.
**Outstanding
Stock Appreciation Rights ("SARs") are payable in cash only, not in shares of
common stock.
Options
and SARs relate to the corporation's Class A common stock and generally vest at
the rate of 20% per year, beginning one year after the grant date provided the
recipient remains an employee of the corporation or a subsidiary.
D) STOCK
OPTION EXERCISES IN THE LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION
VALUES.
|
Name |
Shares
acquired on
Exercise
(#) |
Value
realized |
Number
of Shares underlying Unexercised options at FY-end (#)
exercisable/unexercisable |
Value
of Unexercised
in-the-money
options* at FY-end ($) exercisable/unexercisable |
|
(a) |
(b) |
(c) |
(d) |
(e) |
|
P.
R. Kuhn |
none |
- |
139,400
/ 26,600 |
$37,400/
$9,350 |
|
R.
M. Garneau |
none |
- |
46,800
/ 14,200 |
$18,700/
$4,675 |
|
T.
J. Cahill |
none |
- |
53,500
/ 9,000 |
$41,258/
$2,805 |
|
R.
H. Saunders, Jr. |
none |
- |
26,000
/ 8,000 |
$11,220/
$2,805 |
|
J.
C. Kornegay |
1,000 |
$
2,122.50 |
21,000
/ 12,500 |
$10,488/
$2,338 |
*Difference
between the 12/31/04 Fair Market Value and the exercise price.
STOCK
APPRECIATION RIGHT ("SAR") EXERCISES IN THE LAST FISCAL YEAR AND YEAR-END SAR
VALUES.
|
Name |
SARs
acquired on Exercise (#) |
Value
realized |
Number
of Unexercised SARs at FY-end (#)
exercisable/unexercisable |
Value
of Unexercised
in-the-money
SARs* at FY-end ($) exercisable/unexercisable |
|
(a) |
(b) |
(c) |
(d) |
(e) |
|
P.
R. Kuhn |
none |
none |
297,800
/ 139,200 |
$143,000/
$221,375 |
|
R.
M. Garneau |
none |
none |
137,300
/ 80,200 |
$
84,150/ $126,225 |
|
T.
J. Cahill |
none |
none |
109,540
/ 45,160 |
$
44,110/ $ 71,253 |
|
R.
H. Saunders, Jr. |
none |
none |
35,660
/ 47,640 |
$
39,760/ $ 88,935 |
|
J.
C. Kornegay |
none |
none |
4,140
/ 16,560 |
$
11,385/ $ 45,540 |
*Difference
between the 12/31/04 Fair Market Value and the exercise price(s).
E) LONG TERM
INCENTIVE PLAN AWARDS:
| |
Estimated
future payouts under non-stock price-based plans (1) |
|
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
|
Name |
Number
of shares, Units or Other Rights (#) |
Performance
or other period until maturaton or payment |
Threshold
($) |
Target
($) |
Maximum
($) |
|
P.R.
Kuhn |
0 |
36
months |
0 |
935,000 |
1,870,000 |
|
R.M.
Garneau |
0 |
36
months |
0 |
420,000 |
840,000 |
|
T.J.Cahill |
0 |
36
months |
0 |
211,250 |
422,500 |
|
R.
H. Saunders,Jr |
0 |
36
months |
0 |
183,300 |
366,600 |
|
J.
C. Kornegay |
0 |
36
months |
0 |
136,200 |
272,460 |
(1) Payouts
will generally be made in cash, however, up to one-third of the payment may be
made in stock at the discretion of the Kaman Corporation Board of Directors’
Personnel and Compensation Committee. The executive may request the Committee to
approve a greater percentage of the payout to be made in stock.
The Long
Term Incentive Program (LTIP) was added to the corporation’s Stock Incentive
Plan features effective with calendar year 2003. A new three-year performance
cycle was approved at the November 2004 meeting of the Personnel and
Compensation Committee and each of the executive officers shown in the above
chart was identified as a participant in that performance cycle. Each
participant is assigned a target award expressed as a percent of base salary in
effect at the start of the performance period. These target percentages of base
salary will vary with organizational level. The LTIP awards are based on the
corporation’s relative performance against the Russell 2000 companies. The LTIP
compares Kaman performance on average return on total capital (40%), growth in
earnings per share (40%), and total return to shareholders (20%) over the
performance period, which is generally three years. The LTIP will pay target
awards if company performance is at the 50th
percentile of the Russell 2000. If relative performance is below the
25th
percentile of the Russell 2000, no award will be paid. Should the company’s
relative performance be at the 75th
percentile or higher, the maximum award of 200% of target will be
paid.
F)
PENSION AND OTHER DEFINED BENEFIT DISCLOSURE. The following table shows
estimated annual benefits payable at normal retirement age to participants in
the corporation's Pension Plan at various compensation and years of service
levels using the benefit formula applicable to Kaman Corporation. Pension
benefits are calculated based on 60 percent of the average of the highest five
consecutive years of "covered compensation" out of the final ten years of
employment less 50 percent of the primary social security benefit, reduced
proportionately for years of service less than 30 years:
| |
PENSION
PLAN TABLE
Years
of Credited Service |
|
Remuneration* |
15 |
20 |
25 |
30 |
35 |
|
125,000 |
32,148 |
43,078 |
53,366 |
64,296 |
64,296 |
|
150,000 |
39,648 |
53,128 |
65,816 |
79,296 |
79,296 |
|
175,000 |
47,148 |
63,178 |
78,266 |
94,296 |
94,296 |
|
200,000 |
54,648 |
73,228 |
90,716 |
109,296 |
109,296 |
|
225,000 |
62,148 |
83,278 |
103,166 |
124,296 |
124,296 |
|
250,000 |
69,648 |
93,328 |
115,616 |
139,296 |
139,296 |
|
300,000 |
84,648 |
113,428 |
140,516 |
169,296 |
169,296 |
|
350,000 |
99,648 |
133,528 |
165,416 |
199,296 |
199,296 |
|
400,000 |
114,648 |
153,628 |
190,316 |
229,296 |
229,296 |
|
450,000 |
129,648 |
173,728 |
215,216 |
259,296 |
259,296 |
|
500,000 |
144,648 |
193,828 |
240,116 |
289,296 |
289,296 |
|
750,000 |
219,648 |
294,328 |
364,616 |
439,296 |
439,296 |
|
1,000,000 |
294,648 |
394,828 |
489,116 |
589,296 |
589,296 |
|
1,250,000 |
369,648 |
495,328 |
613,616 |
739,296 |
739,296 |
|
1,500,000 |
444,648 |
595,828 |
738,116 |
889,296 |
889,296 |
|
1,750,000 |
519,648 |
696,328 |
862,616 |
1,039,296 |
1,039,296 |
|
2,000,000 |
594,648 |
796,828 |
987,116 |
1,189,296 |
1,189,296 |
*Remuneration:
Average of the highest five consecutive years of "Covered Compensation" out of
the final ten years of service.
“Covered
Compensation” means “W-2 earnings" or “base earnings”, if greater, as defined in
the Pension Plan. W-2 earnings for pension purposes includes salary (including
401(k) and Section 125/129 Plan contributions but not deferrals under a
non-qualified deferred compensation plan), bonus and taxable income attributable
to restricted stock awards, stock appreciation rights, and the cash out of
employee stock options. Salary and bonus amounts for the named executive
officers for 2004 are as shown on the Summary Compensation Table. Compensation
deferred under the corporation's non-qualified deferred compensation plan is
included in Covered Compensation here because it is covered by the corporation's
unfunded supplemental employees' retirement plan for the participants in that
plan.
Current
Compensation covered by the Pension Plan for any named executive whose Covered
Compensation differs by more than 10% from the compensation disclosed for that
executive in the Summary Compensation Table: Mr. Kuhn: $1,543,996; Mr. Garneau:
$775,673; Mr. Cahill: $447,152.
Federal
law imposes certain limitations on annual pension benefits under the Pension
Plan. For the named executive officers who are participants, the excess will be
paid under the Corporation's unfunded supplemental employees' retirement
plan.
The
executive officers named in Item 11(b) are participants in the Pension Plan and
as of December 31, 2004, had the number of years of credited service indicated:
Mr. Kuhn - 13.0; Mr. Garneau - 23.5 years; Mr. Cahill - 29.7 years; Mr. Kornegay
- - 16.7 years; Mr. Saunders - 9.0 years.
Benefits
are computed generally in accordance with the benefit formula described
above.
G) COMPENSATION
OF DIRECTORS. Effective January 1, 2004, non-employee members of the Board of
Directors of the corporation receive an annual retainer of $35,000, a fee of
$1,500 for attending each meeting of the Board and a fee of $1,200 for
attendance at each meeting of a standing Committee of the Board. From time to
time, the Board of Directors may establish a special committee for a limited
time and purpose. Fees paid for service of special committees are generally
consistent with fees paid for service on standing committees, except that
special committee members may also receive compensation for service beyond
attendance at meetings, most recently at the rate of $1,000 per day up to a
maximum equal to the current annual retainer applicable to the Board of
Directors. The Chairman of each committee receives a fee of $1,600 for attending
each meeting of that Committee and an annual retainer as follows: Audit, $7,500;
Personnel and Compensation, $5,000; Finance and Governance, each $3,000. The
Vice Chairman is entitled to a fee of $3,000 per meeting when serving as the
Chairman. Such fees may be received on a deferred basis. The Lead Director
receives an annual retainer equal to $5,000. In addition, each non-employee
director will receive a Restricted Stock Award for 1,000 shares (issued pursuant
to the corporation's 2003 Stock Incentive Plan), providing for immediate vesting
upon election as a director at the corporation's 2005 Annual Meeting of
Shareholders.
H) EMPLOYMENT
CONTRACTS AND TERMINATION, SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS. The
corporation has entered into Employment Agreements and Change in Control
Agreements with certain executive officers, amendments to which were filed as
exhibits to the corporation’s Form 10-K for 2003, Document No.
0000054381-04-000032 filed with the Securities and Exchange Commission on March
5, 2004. These agreements were filed as exhibits to the following filings made
by the corporation with the Securities and Exchange Commission: Form 10-Q
(Document 54381-99-14) filed on November 12, 1999; Form 10-K (Document No.
54381-00-03 filed on March 21, 2000; and Form 10-Q (Document 54381-00-500006)
filed on November 14, 2000. Form 10-Q filed August 14, 2001 (Document No.
0000054381-01-500011 and Form 10-Q filed November 14, 2001 (Document No.
0000054381-01-500016. The employment agreements do not have a fixed term and
generally provide for a severance payment to be made to any such officer if he
or she is terminated from employment (other than for willful failure to perform
proper job responsibilities or violations of law) or if he or she leaves
employment for good reason (e.g., due to a diminution in job responsibilities).
The change in control agreements generally provide that, for a three year period
following a change in control of Kaman Corporation or, in certain cases, a
subsidiary thereof, a severance payment will be made to any such officer if his
or her employment ends following the change in control (unless the termination
was for cause, the officer dies or becomes disabled or if he or she leaves
employment without good reason). The change in control agreements do not have a
fixed term.
Except as
disclosed in Item 13, and except as described above or in connection with the
corporation's Pension Plan, Supplemental Employees' Retirement Plan, 2003 Stock
Incentive Plan, non-qualified Deferred Compensation Plan, and the senior
executive life insurance program, the corporation has no other employment
contract, plan or arrangement with respect to any named executive officer which
relates to employment termination for any reason, including resignation,
retirement or otherwise, or a change in control of the corporation or a change
in any such executive officer's responsibilities following a change of control,
which exceeds or could exceed $100,000.
I) Not
Applicable.
J) COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS.
1) The
following persons served as members of the Personnel and Compensation Committee
of the Corporation's Board of Directors during the last fiscal year: Brian E.
Barents, E. Reeves Callaway III, Edwin A. Huston, Wanda L. Rogers, and Richard
J. Swift.
None of
these individuals was an officer or employee of the corporation or any of its
subsidiaries during either the last fiscal year or any portion thereof in which
he or she served as a member of the Personnel and Compensation
Committee.
2) During
the last fiscal year no executive officer of the corporation served as a
director of or as a member of the compensation committee (or other board
committee performing equivalent functions) of another entity, one of whose
executive officers served as a director of, or on the Personnel and Compensation
Committee of the corporation.
K) Not
Applicable.
L) Not
Applicable.
(a)
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
Following
is information about persons known to the corporation to be beneficial owners of
more than five percent (5%) of the Corporation's voting securities. Ownership is
direct unless otherwise noted.
|
Class
of Common Stock |
Name
and Address
Beneficial
Owner |
Number
of Shares
Beneficially
Owned
as
of February 1, 2005 |
Percentage
of Class |
|
Class
B |
Charles
H. Kaman
Kaman
Corporation
1332
Blue Hills Avenue
Bloomfield,
CT 06002 |
354,976
(1), (2), (3) |
53.15% |
| |
|
|
|
| |
Holders
of Mr. Kaman's (2)
Power
of Attorney
c/o
John C. Yavis, Jr.
Murtha
Cullina LLP
CityPlace
I
185
Asylum Street
Hartford,
CT 06105 |
|
|
| |
|
|
|
|
Class
B |
Newgate
Associates
Limited
Partnership
c/o
Murtha Cullina, LLP
CityPlace
I
185
Asylum Street
Hartford,
CT 06105 |
103,201
(3), (4) |
15.45% |
| |
|
|
|
| |
Voting
Trustees pursuant (4)
to
a Voting Trust
Agreement,
dated as of
August
14, 2000
c/o
John C. Yavis, Jr.
Murtha
Cullina LLP
CityPlace
I
185
Asylum Street
Hartford,
CT 06105 |
|
|
| |
|
|
|
|
Class
B |
C.
William Kaman II
5367
Florence Point Drive
Fernandina
Beach, FL 32034 |
64,446
(5) |
9.65% |
| |
|
|
|
|
Class
B |
Robert
D. Moses
Farmington
Woods
Avon,
CT 06001 |
51,177
(6) |
7.66% |
|
(1) |
Excludes
1,471 shares held by Mrs. Kaman. Mr. Kaman shares beneficial ownership of
these shares with the holders of a Power of Attorney, as described in note
(2) below. |
|
(2) |
The
power to vote Mr. Kaman's shares of Class B common stock is shared through
a durable power of attorney (the "Power of Attorney") with certain
individuals who have the authority to vote Mr. Kaman's shares by majority
vote. These individuals are: John S. Murtha, a director emeritus of the
corporation and of counsel to the Hartford, Connecticut law firm, Murtha
Cullina LLP, counsel to the corporation, Robert M. Garneau, Executive Vice
President and Chief Financial Officer of the corporation, Roberta C.
Kaman, Mr. Kaman's wife, C. William Kaman II, Mr. Kaman's son and a
director and Vice Chairman of the Board of the corporation, Steven W.
Kaman, Mr. Kaman's son, and Cathleen H. Kaman-Wood, Mr. Kaman's
daughter. |
|
(3) |
All
shares of Class B common stock beneficially owned by Newgate Associates
and 96,601 shares of Class B common stock beneficially owned by Mr. Kaman
are subject to a voting trust agreement dated August 14, 2000 (the "Voting
Trust"), as described in note (4) below. Newgate and Mr. Kaman share
beneficial ownership of such shares with the voting trustees of such
trust, as described in note (4) below. |
|
(4) |
The
power to vote the shares of Class B common stock referred to in the
preceding note (3) is currently vested in ten voting trustees (the "Voting
Trustees") under the Voting Trust, which has a term of ten (10) years,
subject to renewal. The Voting Trustees consist of the six (6) individuals
identified in footnote (2) above and the following four (4) individuals:
T. Jack Cahill, President of Kaman Industrial Technologies
Corporation, a subsidiary of the corporation, Paul R. Kuhn, Chairman,
President, and Chief Executive Officer of the corporation, Wanda L.
Rogers, director of the corporation, and John C. Yavis, Jr., of counsel to
Murtha Cullina LLP, counsel to the
corporation. |
| (5)
|
Excludes
4,800 shares held as trustee for the benefit of certain family
members. |
|
(6) |
Includes
39,696 shares held by a partnership controlled by Mr.
Moses. |
(b)
SECURITY OWNERSHIP OF MANAGEMENT. The following is information concerning
beneficial ownership of the corporation's stock by each Director of the
corporation, each executive officer of the corporation named in the Summary
Compensation Table, and all Directors and executive officers of the corporation
as a group. Ownership is direct unless otherwise noted.
|
Name |
Class
of Common Stock |
Number
of Shares Beneficially Owned as of February 1, 2005 |
Percentage
of Class |
|
Brian
E. Barents |
Class
A |
4,500 |
* |
|
T.
Jack Cahill |
Class
A |
114,156
(1) |
* |
|
E.
Reeves Callaway III |
Class
A |
4,500 |
* |
|
John
A. DiBiaggio |
Class
A |
4,500 |
* |
|
Robert
M. Garneau |
Class
A |
130,005
(2) |
* |
| |
Class
B |
24,404 |
3.48% |
|
Edwin
A. Huston |
Class
A |
2,500 |
* |
|
C.
William Kaman II |
Class
A |
61,888
(3) |
* |
| |
Class
B |
64,446
(4) |
9.65% |
|
John
C. Kornegay |
Class
A |
76,588
(5) |
* |
|
Paul
R. Kuhn |
Class
A |
293,883
(6) |
1.3% |
| |
Class
B |
3,288 |
* |
|
Eileen
S. Kraus |
Class
A |
5,769 |
* |
|
Walter
H. Monteith, Jr. |
Class
A |
4,700 |
* |
|
Wanda
L. Rogers |
Class
A |
4,500 |
* |
|
Robert
H. Saunders, Jr. |
Class
A |
59,851
(7) |
* |
| |
Class
B |
720 |
* |
|
Richard
J. Swift |
Class
A |
2,500 |
* |
|
All
Directors and Executive |
|
|
|
|
Officers
as a group ** |
Class
A |
841,765
(8) |
3.79% |
| |
Class
B |
94,020 |
14.08% |
* Less than
one percent.
** Excludes
20,691 Class A shares held by spouses of certain Directors and executive
officers.
|
(1) |
Includes
57,900 shares subject to stock options exercisable or which will become
exercisable within 60 days. Includes 1,225 shares held jointly with
spouse. |
|
(2) |
Includes
53,700 shares subject to stock options exercisable or which will become
exercisable within 60 days. |
|
(3) |
Excludes
89,891 shares held by Mr. Kaman as Trustee, in which shares Mr. Kaman
disclaims any beneficial ownership. |
|
(4) |
Excludes
4,800 shares held by Mr. Kaman as Trustee in which shares Mr. Kaman
disclaims any beneficial ownership. |
|
(5) |
Includes
26,400 shares subject to stock options exercisable or which will become
exercisable within 60 days. Includes 1,800 shares held in
IRA. |
|
(6) |
Includes
152,600 shares subject to stock options exercisable or which will become
exercisable within 60 days. Includes 19,466 shares held jointly with
spouse. |
|
(7) |
Includes
29,000 shares subject to stock options exercisable or which will become
exercisable within 60 days. |
|
(8) |
Includes
419,800 shares subject to stock options exercisable or which will become
exercisable within 60 days. |
SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS:
|
Plan
Category |
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights |
Weighted-average
exercise price of outstanding options, warrants and rights |
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a)) |
| |
(a) |
(b) |
(c) |
|
Equity
compensation plans approved by
security
holders: |
|
|
|
| |
|
|
|
|
2003
Stock Incentive Plan* |
1,327,805 |
$
13.82 |
2,070,509 |
| |
|
|
|
|
Employees
Stock Purchase Plan |
---- |
---- |
623,818 |
| |
|
|
|
|
Equity
compensation plans not approved
by
security holders |
---- |
---- |
---- |
|
Total |
1,327,805 |
$
13.82 |
2,694,327 |
*Includes
securities to be issued upon exercise of outstanding options granted under a
predecessor plan.
During
2004, the corporation obtained legal services in the amount of approximately
$365,000 from the Hartford, Connecticut law firm of Murtha Cullina LLP of which
Mr. John S. Murtha and Mr. John C. Yavis, Jr. are of counsel. Mr. Murtha, a
director emeritus of the corporation, is currently one of six holders of a power
of attorney described in footnote (2) to the table entitled "Security Ownership
of Certain Beneficial Owners", and a voting trustee of the Voting Trust
described in footnote (4) of such table. Mr. Yavis currently serves as a voting
trustee of the Voting Trust.
Following
is a summary of KPMG LLP fees for professional services in fiscal years ended
December 31, 2004 and 2003:
|
Fee
Category |
|
|
2004
Fees |
|
|
2003
Fees |
|
|
Audit
Fees |
|
$ |
979.6 |
|
$ |
562.8 |
|
|
Audit-Related
Fees |
|
|
41.0 |
|
|
21.0 |
|
|
Tax
Fees |
|
|
288.5 |
|
|
218.2 |
|
|
All
Other Fees |
|
|
201.7 |
|
|
9.8 |
|
|
Total
Fee |
|
$ |
1,510.8 |
|
$ |
811.8 |
|
Audit
Fees relate to services rendered for the audit of the corporation's consolidated
financial statements and audit of management’s assessment regarding internal
controls and financial reporting and the effectiveness of internal controls and
financial reporting as of December 31, 2004 and review of the interim
consolidated financial statements included in quarterly reports and services
normally provided by KPMG in connection with statutory and regulatory filings or
engagements.
Audit-Related
Fees relate to assurance and related services that are reasonably related to
performance of the audit or review of the corporation's consolidated financial
statements and which are not reported under "Audit Fees". These services have
included employee benefit plan audits and consultations in connection with
acquisitions.
Tax Fees
relate to tax compliance, tax advice, and tax planning services, including
assistance with federal, state and international tax compliance, tax audit
defense, acquisitions and international tax planning.
All Other
Fees relate to products and services other than those described above. For 2004,
these amounts represent Sarbanes-Oxley Act Section 404 consulting and software
fees.
The Audit
Committee's policy is to pre-approve all audit, non-audit, tax and other fees to
be paid to its independent auditor. The Chairman of the Committee has been
authorized by the Committee to pre-approve KPMG proposals up to twenty thousand
dollars per service item, subject to the full Committee's approval at a
subsequent meeting. Pre-approvals are specific as to the particular service that
is proposed and each service is generally subject to a budget.
PART
IV
(a)(1) FINANCIAL
STATEMENTS.
See Item
8 concerning financial statements appearing as Exhibit 13 to this
report.
(a)(2) FINANCIAL
STATEMENT SCHEDULES.
An index
to the financial statement schedules immediately precedes such
schedules.
(a)(3) EXHIBITS.
An index
to the exhibits filed or incorporated by reference immediately precedes such
exhibits.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, in the Town of Bloomfield, State of
Connecticut, on this 16th day of March, 2005.
|
|
|
KAMAN
CORPORATION
(Registrant) |
|
|
By: |
/s/ Paul
R. Kuhn |
|
|
Paul
R. Kuhn |
|
|
Chairman,
President and |
|
|
Chief
Executive Officer |
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
|
Signature |
Title: |
Date: |
|
/s/ Paul
R. Kuhn |
|
|
|
|
Chairman,
President and
Chief
Executive Officer |
March
16, 2005 |
| |
|
|
| |
|
|
|
/s/ Robert
M. Garneau |
|
|
|
Robert
M. Garneau |
Executive
Vice President
and
Chief Financial Officer
(Principal
Financial and Accounting
Officer) |
March
16, 2005 |
| |
|
|
| |
|
|
|
/s/ Paul
R. Kuhn |
|
|
|
Paul
R. Kuhn |
|
March
16, 2005 |
|
Attorney-in-Fact
for: |
|
|
| |
|
|
|
Brian
E. Barents |
Director |
|
|
E.
Reeves Callaway III |
Director |
|
|
John
A. DiBiaggio |
Director |
|
|
Edwin
A. Huston |
Director |
|
|
C.
William Kaman II |
Director |
|
|
Eileen
S. Kraus |
Director |
|
|
Walter
H. Monteith, Jr. |
Director |
|
|
Wanda
L. Rogers |
Director |
|
|
Richard
J. Swift |
Director |
|
KAMAN
CORPORATION AND SUBSIDIARIES
Index to
Financial Statement Schedules
Report of
Independent Registered Public Accounting Firm
Financial
Statement Schedules:
Schedule
V - Valuation and Qualifying Accounts
REPORT OF
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Board
of Directors and Shareholders
Kaman
Corporation:
Under
date of March 15, 2005, we reported on the consolidated balance sheets of Kaman
Corporation and subsidiaries as of December 31, 2004 and 2003, and the related
consolidated statements of operations, changes in shareholders' equity and cash
flows for each of the years in the three-year period ended December 31, 2004, as
contained in the 2004 annual report on Form 10-K. In connection with our audits
of the aforementioned consolidated financial statements, we also
audited the related consolidated financial statement schedules as listed in the
accompanying index. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statement schedules based on our audits.
In our
opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth
therein.
/s/
KPMG LLP
Hartford,
Connecticut
March 15,
2005
KAMAN
CORPORATION AND SUBSIDIARIES
SCHEDULE
V - VALUATION AND QUALIFYING ACCOUNTS
(Dollars
in Thousands)
|
YEAR
ENDED DECEMBER 31, 2004 |
|
Additions |
|
DESCRIPTION |
BALANCE
JANUARY
1, 2004 |
|
CHARGED
TO COSTS AND EXPENSES |
|
OTHERS |
|
DEDUCTIONS |
|
BALANCE
DECEMBER
31, 2004 |
|
Allowance
for doubtful accounts |
$
3,340 |
|
$
3,768 |
|
- |
|
$
1,588 (A) |
|
$
5,520 |
|
YEAR
ENDED DECEMBER 31, 2003 |
|
Additions |
|
DESCRIPTION |
BALANCE
JANUARY
1, 2003 |
|
CHARGED
TO COSTS AND EXPENSES |
|
OTHERS |
|
DEDUCTIONS |
|
BALANCE
DECEMBER
31, 2003 |
|
Allowance
for doubtful accounts |
$
2,853 |
|
$
1,507 |
|
$
150 (B) |
|
$
1,170 (A) |
|
$
3,340 |
|
YEAR
ENDED DECEMBER 31, 2002 |
|
Additions |
|
DESCRIPTION |
BALANCE
JANUARY
1, 2002 |
|
CHARGED
TO COSTS AND EXPENSES |
|
OTHERS |
|
DEDUCTIONS |
|
BALANCE
DECEMBER
31, 2002 |
|
Allowance
for doubtful accounts |
$
3,939 |
|
$
1,024 |
|
$
110 (B) |
|
$
2,220 (A) |
|
$
2,853 |
(A) Write-off
of bad debts, net of recoveries.
(B) Additions
to allowance for doubtful accounts attributable to
acquisitions.
KAMAN
CORPORATION AND SUBSIDIARIES
SCHEDULE
V - VALUATION AND QUALIFYING ACCOUNTS (CONTINUED)
(Dollars
in Thousands)
|
YEAR
ENDED DECEMBER 31, 2004 |
|
Additions |
|
DESCRIPTION |
BALANCE
JANUARY
1, 2004 |
|
CURRENT
YEAR PROVISION (BENEFIT) |
|
OTHERS |
|
BALANCE
DECEMBER
31, 2004 |
|
Valuation
allowance on deferred tax assets |
$
2,005 |
|
$
109 |
|
$49 |
|
$
2,163 |
|
YEAR
ENDED DECEMBER 31, 2003 |
|
Additions |
|
DESCRIPTION |
BALANCE
JANUARY
1, 2003 |
|
CURRENT
YEAR PROVISION (BENEFIT) |
|
OTHERS |
|
BALANCE
DECEMBER
31, 2003 |
|
Valuation
allowance on deferred tax assets |
$
1,082 |
|
$
799 |
|
$
124 |
|
$
2,005 |
|
YEAR
ENDED DECEMBER 31, 2002 |
|
Additions |
|
DESCRIPTION |
BALANCE
JANUARY
1, 2002 |
|
CURRENT
YEAR PROVISION (BENEFIT) |
|
OTHERS |
|
BALANCE
DECEMBER
31, 2002 |
|
Valuation
allowance on deferred tax assets |
$
637 |
|
$
445 |
|
$
- |
|
$
1,082 |
KAMAN
CORPORATION
INDEX TO
EXHIBITS
|
Exhibit
3a |
The
Amended and Restated Certificate of Incorporation of the corporation, as
amended, was filed with the Securities and Exchange Commission on form
S-8POS on May 11, 1994, as Document No. 94-20. |
by
reference |
| |
|
|
|
Exhibit
3b |
The
Bylaws of the Corporation as amended on November 9, 2004 were filed as
Exhibit 99.1 to the Corporation’s Form 8-K filed with the Securities and
Exchange Commission on November 10, 2004, Document No. 0000054381-04-000081. |
by
reference |
| |
|
|
|
Exhibit
4a |
Indenture
between the corporation and Manufacturers Hanover Trust Company, as
Indenture Trustee, with respect to the Corporation's 6% Convertible
Subordinated Debentures was filed as Exhibit 4.1 to Registration Statement
No. 33 11599 on Form S-2 of the Corporation filed with the Securities and
Exchange Commission on January 29, 1987. |
by
reference |
| |
|
|
|
Exhibit
4b |
Revolving
Credit Agreement between the corporation and The Bank of Nova Scotia and
Fleet National Bank as Co-Administrative Agents and Bank One, N.A. as the
Documentation Agent and The Bank of Nova Scotia and Fleet Securities, Inc.
as the Co-Lead Arrangers and Various Financial Institutions dated as of
November 13, 2000 filed as Exhibit 4 to Form 10-Q filed with the
Securities and Exchange Commission on November 14, 2000, Document No. 0000054381-00-500006.
Amendments to the Agreement were filed as Exhibit 10 to Form 10-Q,
Document No. 0000054381-02-000022
filed on August 14, 2002, Exhibit 4.1 to Form 10-Q, Document No. 0000054381-03-000124,
filed on November 5, 2003, and Exhibit 4a to Form 8-K, Document No. 0000054381-04-000070
filed on October 21, 2004. |
by
reference |
| |
|
|
|
Exhibit
4c |
Credit
Agreement between the corporation, RWG Frankenjura-Industrie Flugwerklager
GmbH, and Wachovia Bank, N.A., dated July 29, 2002 was filed as Exhibit 4c
to Form 10-K filed with the Securities and Exchange Commission on March
26, 2003, Document No. 0000054381-03-000079.
Amendments to the Agreement were filed as Exhibit 4.2 to Form 10-Q,
Document No. 0000054381-03-000124,
filed on November 5, 2003, Exhibit 4b to Form 8-K, Document No. 0000054381-04-000070,
filed on October 21, 2004. Schedules and Exhibits to the Credit Agreement,
which are listed in its Table of Contents, are omitted but will be
provided to the Commission upon request. |
by
reference |
| |
|
|
|
Exhibit
10a |
The
Kaman Corporation 2003 Stock Incentive Plan effective November 1, 2003, as
amended effective February 17, 2004, was filed as Exhibit 10a to the
Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
10b |
The
Kaman Corporation Employees Stock Purchase Plan as amended effective
November 18, 1997 was filed as a Exhibit 10b to the Corporation's Form
10-K Document No. 0000054381-98-09
filed with the Securities and Exchange Commission on March 16,
1998. |
by
reference |
| |
|
|
|
Exhibit
10c |
The
Kaman Corporation Supplemental Employees' Retirement Plan was filed as a
Exhibit 10c to the Corporation's Form 10-K, Document No. 0000054381-02-000005
filed with the Securities and Exchange Commission on March 14, 2002, and
the Plan as amended was filed as Exhibit 10c to the Corporation’s Form
10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
10d |
The
Kaman Corporation Amended and Restated Deferred Compensation Plan
(Effective as of November 12, 2002, except where otherwise indicated) was
filed as a Exhibit 10d to the Corporation's Form 10-K Document No. 0000054381-03-000079
filed with the Securities and Exchange Commission on March 26, 2003.
Amendments to the Plan were filed as Exhibit 10d to the Corporation’s Form
10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004, and
Exhibit 10d to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004, and
Exhibit 10(a) on the Corporation’s Form 10-Q, Document No. 0000054381-04-000059
filed with the Securities and Exchange Commission on August 3,
2004. |
by
reference |
| |
|
|
|
Exhibit
10e(i) |
Kaman
Corporation Cash Bonus Plan (Amended and Restated Effective as of January
1, 2002) and First Amendment thereto were filed as Exhibit 10e to the
Corporation's Form 10-K Document No. 0000054381-02-000005,
filed with the Securities and Exchange Commission on March 14, 2002.
Amendments to the Plan were filed as Exhibit 10e(ii) to the corporation's
Form 10-K Document No. 0000054381-03-000079
filed with the Securities and Exchange Commission on March 26, 2003
and Exhibit 10(b) on the Corporation’s Form 10-Q, Document No. 0000054381-04-000059
filed with the Securities and Exchange Commission on August 3,
2004. |
by
reference |
| |
|
|
|
Exhibit
10g |
Employment
Agreements and Change in Control Agreements with certain executive
officers have been filed as exhibits to the following filings by the
corporation with the Securities and Exchange Commission: Form 10-Q
(Document No. 54381-99-14)
filed November 12, 1999; Form 10-K (Document No. 54381-00-03)
filed March 21, 2000; Form 10-Q (Document No. 54381-00-500006)
Filed November 14, 2000; and Form 10-Q (Document No. 54381-01-500016)
filed November 14, 2001. |
by
reference |
| |
|
|
|
Exhibit
10g (i) |
Amendment
No. 1 to Amended and Restated Employment Agreement between Paul R. Kuhn
and Kaman Corporation, dated as of September 11, 2001, was filed as an
exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004.
|
by
reference |
| |
|
|
|
Exhibit
10g(ii) |
Amendment
No. 2 to Amended and Restated Employment Agreement between Paul R. Kuhn
and Kaman Corporation, dated as of February 17, 2004, was filed as an
exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
10g(iii) |
Second
Amended and Restated Change in Control Agreement between Paul R. Kuhn and
Kaman Corporation, dated as of November 11, 2003, was filed as an exhibit
to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
10g(iv) |
Amendment
No. 1 to Amended and Restated Employment Agreement between Candace A.
Clark and Kaman Corporation, dated as of February 17, 2004, was filed as
an exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004.
|
by
reference |
| |
|
|
|
Exhibit
10g (v) |
Amendment
No. 1 to Amended and Restated Employment Agreement between Ronald M. Galla
and Kaman Corporation, dated as of February 17, 2004, was filed as an
exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
10g (vi) |
Amendment
No. 1 to Amended and Restated Employment Agreement between Robert M.
Garneau and Kaman Corporation, dated as of February 17, 2004, was filed as
an exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004.
|
by
reference |
| |
|
|
|
Exhibit
10g (vii) |
Amendment
No. 1 to Amended and Restated Employment Agreement between T. Jack Cahill
and Kaman Industrial Technologies Corporation, dated as of February 17,
2004, was filed as an exhibit to the Corporation’s Form 10-K, Document No.
0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
10g (viii) |
Amendment
No. 2 to Amended and Restated Employment Agreement between Joseph H.
Lubenstein and Kaman Aerospace Corporation, dated as of February 17, 2004,
was filed as an exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
10g (ix) |
Amendment
No. 1 to Amended and Restated Employment Agreement between Robert H.
Saunders, Jr. and Kaman Music Corporation, dated as of February 17, 2004,
was filed as an exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
10g (x) |
Second
Addendum to Change in Control Agreement between Candace A. Clark and Kaman
Corporation, dated as of November 11, 2003, was filed as an exhibit to the
Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004.
|
by
reference |
| |
|
|
|
Exhibit
10g (xi) |
Second
Addendum to Change in Control Agreement between Ronald M. Galla and Kaman
Corporation, dated as of November 11, 2003, was filed as an exhibit to the
Corporation’s Form 10-K, Document No. 0000054381-04-000032 filed with the
Securities and Exchange Commission on March 5, 2004. |
by
reference |
| |
|
|
|
Exhibit
10g (xii) |
Second
Addendum to Change in Control Agreement between Robert M. Garneau and
Kaman Corporation, dated as of November 11, 2003, was filed as an exhibit
to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004.
|
by
reference |
| |
|
|
|
Exhibit
10g (xiii) |
Second
Addendum to Change in Control Agreement between T. Jack Cahill and Kaman
Industrial Technologies Corporation, dated as of November 11, 2003, was
filed as an exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004.
|
by
reference |
| |
|
|
|
Exhibit
10g (xiv) |
Second
Addendum to Change in Control Agreement between Joseph H. Lubenstein and
Kaman Aerospace Corporation, dated as of November 11, 2003, was filed as
an exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004.
|
by
reference |
| |
|
|
|
Exhibit
10g (xv) |
Second
Addendum to Change in Control Agreement between Robert H. Saunders, Jr.
and Kaman Music Corporation, dated as of November 11, 2003, was filed as
an exhibit to the Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004.
|
by
reference |
| |
|
|
|
Exhibit
10g (xvi) |
Employment
Agreement between Russell H. Jones and Kaman Corporation, dated as of
February 17, 2004, was filed as an exhibit to the Corporation’s Form 10-K,
Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
10g (xvii) |
Change
in Control Agreement between Russell H. Jones and Kaman Corporation, dated
as of November 11, 2003, was filed as an exhibit to the Corporation’s Form
10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5, 2004.
|
by
reference |
| |
|
|
|
Exhibit
10h (i) |
Form
of Incentive Stock Option Agreement under the Kaman Corporation 2003 Stock
Incentive Plan |
attached |
| |
|
|
|
Exhibit
10h (ii) |
Form
of Non-Statutory Stock Option Agreement under the Kaman Corporation 2003
Stock Incentive Plan |
attached |
| |
|
|
|
Exhibit
10h (iii) |
Form
of Stock Appreciation Right Agreement under the Kaman Corporation 2003
Stock Incentive Plan |
attached |
| |
|
|
|
Exhibit
10h (iv) |
Form
of Restricted Stock Agreement under the Kaman Corporation 2003 Stock
Incentive Plan |
attached |
| |
|
|
|
Exhibit
11 |
Statement
regarding computation of per share earnings. |
attached |
| |
|
|
|
Exhibit
13 |
Portions
of the Corporation's 2004 Annual Report to Shareholders as required by
Item 8. |
attached |
| |
|
|
|
Exhibit
14 |
Kaman
Corporation Code of Business Conduct was filed as Exhibit 14 to the
Corporation’s Form 10-K, Document No. 0000054381-04-000032
filed with the Securities and Exchange Commission on March 5,
2004. |
by
reference |
| |
|
|
|
Exhibit
21 |
Subsidiaries |
attached |
| |
|
|
|
Exhibit
23 |
Consent
of Independent Registered Public Accounting Firm |
attached |
| |
|
|
|
Exhibit
24 |
Power
of attorney under which this report was signed on behalf of certain
directors. |
attached |
| |
|
|
|
Exhibit
31.1 |
Certification
of Chief Executive Officer Pursuant to Rule 13a-14 under the Securities
and Exchange Act of 1934. |
attached |
| |
|
|
|
Exhibit
31.2 |
Certification
of Chief Financial Officer Pursuant to Rule 13a-14 under the Securities
and Exchange Act of 1934. |
attached |
| |
|
|
|
Exhibit
32.1 |
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
attached |
| |
|
|
|
Exhibit
32.2 |
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
attached |