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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, 1993
OR
( ) 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)
Connecticut 06-0613548
(State of Incorporation) (I.R.S. Employer Identification No.)
Blue Hills Avenue, Bloomfield, Connecticut 06002
(Address of principal executive offices)
Registrant's telephone number, including area code - (203) 243-7100
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
-Series 2 Preferred Stock, Par Value $1.00
-Depositary Shares, each representing one quarter of a
share of Series 2 Preferred Stock
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 ( )
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 by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ X ].
State the aggregate market value of the voting stock held by non-
affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of a specified
date within 60 days prior to the date of filing. $1,830,068 as of
February 1, 1994.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of February 1, 1994.
Class A Common 17,450,734 shares
Class B Common 667,814 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Corporation's 1993 Annual Report to Shareholders
are incorporated by reference and filed as Exhibit 13 to this
Report. No other documents except those previously filed with the
Commission are incorporated herein by reference.
PART I
Item 1. Business
- -----------------
Kaman Corporation, incorporated in 1945, and its subsidiaries
(collectively, the "Corporation") serve government, industrial and
commercial markets through two industry segments: Diversified
Technologies and Distribution. The Diversified Technologies group
provides design and manufacture of advanced technology products and
systems, advanced technology services and aircraft manufacturing. The
Distribution segment distributes industrial products, distributes and
manufactures music products and provides support services to its
customers and provides aviation services.
Diversified Technologies
- ------------------------
The Diversified Technologies segment consists of several
wholly-owned subsidiaries, including Kaman Diversified Technologies
Corporation, Kaman Aerospace Corporation, Kaman Sciences
Corporation, Raymond Engineering Inc., Kamatics Corporation, Kaman
Electromagnetics Corporation, and Kaman Instrumentation
Corporation, as well as a 50% interest in two additional
subsidiaries, Advanced Energetic Materials Corporation of America
and Advanced Energetic Materials Corporation of Europe.
The Diversified Technologies segment develops and manufactures
various advanced technology products and systems which are used in
markets that the Corporation serves. Among the products
manufactured are ruggedized tape and disk memory systems used
primarily in aircraft and missile systems, safing and fuzing
systems for use in missiles, a severe environment flash memory
system, self lubricating bearings used on aircraft and in other
systems, flexible couplings for helicopters, specialty wrenches and
equipment for precision bolting requirements, precision measuring
instruments, composite flyer bows, RF transmission and delay lines,
telecommunication products, and photonic and optical systems. The
Corporation also develops and produces various motors, generators,
alternators, launchers and electric drive systems using
electromagnetic technology, and a high speed multi-channel data
recording system used extensively by a Government agency for
acquisition of very large amounts of data during testing
operations. In addition, the Corporation has contracts with
the U.S. government for a number of advanced technology programs
relating to some of the systems described above and to other
proprietary systems developed by the Corporation.
The Diversified Technologies segment also provides advanced
technology services to a number of customers, including all
Page 1
branches of the armed forces, various Government agencies, the
Department of Energy, Department of Transportation, various defense
contractors, utilities and industrial organizations. The services
offered include software engineering and maintenance, operation of
Government information analysis centers, field and laboratory
testing services, communication system design and analysis, signal
intelligence, electromagnetic interference and compatibility
evaluations, analysis and simulation of electronic signals, various
types of artificial intelligence systems and weapon system
evaluation.
A third category of this segment's business is aircraft
manufacturing, including the development and manufacture of
helicopters and the integration of systems related to helicopters.
The Corporation is the prime contractor for the SH-2 series
helicopter, a multi-mission aircraft serving the U.S. Navy around
the world, however reductions in defense spending and realignment
of defense priorities have resulted in a de-emphasis on the Navy's
requirements for this helicopter. The Corporation's present
contract with the Navy is for retrofitting of certain model SH-2F
helicopters to the SH-2G configuration and this contract is
scheduled to be completed in 1994. The Corporation is proceeding
with production of its new commercial helicopter, known as the
K-MAX "aerial truck" incorporating intermeshing rotor technology
developed by the Corporation and previously embodied in a test
demonstrator produced by the Corporation identified as a
multi-mission intermeshing rotor aircraft (MMIRA). The K-MAX is
designed to provide superior lift and operational capabilities. A
substantial portion of the Corporation's research and development
activities have been devoted to this product and commercial
certification by the Federal Aviation Administration (FAA) is
expected by mid-1994. The production phase for the first five
helicopters has begun and units are expected to be delivered to
initial customers shortly after certification is received. The
Corporation will lease the first group under a special program in
order to maintain active involvement in the product's introduction
to the marketplace.
Kaman manufactures subcontract aircraft products for government
and commercial customers on programs such as the McDonnell Douglas
C-17 and the Boeing 767 and 777, manufactures composite rotor
blades for helicopters, and manufactures airborne systems for use
in detecting and imaging. Such systems include imaging LIDAR
systems and the Corporation's proprietary Magic Lantern (registered
trademark) system which allows underwater objects to be detected
from an airborne platform.
Page 2
Distribution
- ------------
The Distribution segment consists of several wholly-owned
subsidiaries including the following: Kaman Industrial
Technologies Corporation, Kaman Music Corporation, and AirKaman of
Jacksonville, Inc. This segment distributes industrial products,
manufactures and distributes music products, and provides aviation
services.
Kaman Industrial Technologies Corporation is a national
distributor of industrial products operating through more than 150
service centers located in 28 states and British Columbia, Canada.
The Corporation supplies a broad range of industries with original
equipment, repair and replacement products needed to maintain
traditional manufacturing processes and, increasingly, with
products of higher technological content that are required to
support automated production processes. The Corporation serves
nearly every sector of heavy and light industry, including
automobile manufacturing, agriculture, food processing, pulp and
paper manufacturing, mining, chemicals, electronics and general
manufacturing. Products available include various types of
standard and precision mounted and unmounted bearings; mechanical
power transmission equipment such as V-belts, couplings, and gear
reducers; electrical power transmission products, motors, AC/DC
controls, sensors and motion control devices; materials handling
equipment, belts, conveyor idlers and pulleys; hydraulic drive
systems and parts; and accessory products such as lubricants and
seals. Although the vast majority of the company's business
consists of resale of products, operations include some design,
fabrication, and assembly work in connection with products sold.
The Corporation continues to develop certain support service
capabilities in order to meet the maintenance needs of its
customers' manufacturing operations. These services include
electrical panel and systems fabrication centers capabilities and
similar capabilities for hydraulic and pneumatic control panels and
material handling systems. In 1993 the Corporation, on a limited
basis, continued to act as a supplier of capital equipment to
various systems engineering and manufacturing customers by acting
as a sales agent for certain equipment manufacturers. As the
Corporation has entered new market areas, it has invested in new
product inventory and in some instances it has established
inventory on consignment in customer locations. The Corporation
maintains a management information system, consisting of an on-line
computer network linking all of its mainland U.S. and Canadian
industrial distribution facilities, which enhances its ability to
provide more efficient nationwide service and to improve inventory
management.
Page 3
Kaman Music Corporation distributes more than 13,000 different
music instruments and accessories to independent retailers in the
United States and Great Britain and to international distributors
throughout the world. Products include acoustic, acoustic-electric
and electric guitars and basses, music strings for all fretted
instruments, drums, percussion products and related accessories,
instrument and P.A. amplification systems, electronic tuners and
metronomes, educational percussion and brass instruments and a full
range of accessories for all musical instruments. The Corporation
manufactures and distributes certain guitars under the
Corporation's various brand names including Ovation and Hamer
guitars, fretted musical instrument strings of various brands, and
the Trace Elliot range of stringed instrument amplification
equipment. Operations are conducted through three (3)
manufacturing facilities and six (6) distribution centers, an
international sales division based in the United States and a
manufacturing and distribution facility in Great Britain.
The segment also distributes aviation fuel and provides
aviation services at Jacksonville International Airport,
Jacksonville, Florida where the Corporation conducts fixed base
operations for general and commercial aviation under a contract
with the Port Authority of the City of Jacksonville which extends
through the year 2008.
FINANCIAL INFORMATION
- ---------------------
Information concerning each segment's performance for the last
three fiscal years appears in the Corporation's 1993 Annual Report
to Shareholders and is included in Exhibit 13 to this Form 10-K,
and is incorporated by reference.
Principal Products and Services
- -------------------------------
Following is information for the three preceding fiscal years
concerning the percentage contribution of the Corporation's classes
of products and services to the Corporation's consolidated net
sales:
Page 4
Years Ended December 31
1991 1992 1993
------ ------ ------
Diversified Technologies:
Advanced Technology Products
and Systems 15.0% 12.6% 13.5%
Advanced Technology Services 13.2 13.6 14.1
Aircraft Manufacturing 20.3 19.7 15.5
---- ---- ----
Segment Total 48.5 45.9 43.1
Distribution:
Industrial products 40.1 41.9 42.9
Music products and other services 11.4 12.2 14.0
---- ---- ----
Segment Total 51.5 54.1 56.9
Total 100.0% 100.0% 100.0%
===== ===== =====
Research and Development Expenditures
- -------------------------------------
Government sponsored research expenditures by the Diversified
Technologies segment were $142.3 million in 1993, $124.5 million in
1992, and $127.0 million in 1991. Independent research and
development expenditures were $18.4 million in 1993, $17.8 million
in 1992, and $14.0 million in 1991.
Backlog
- -------
Program backlog of the Diversified Technologies segment was
approximately $240.8 million at December 31, 1993, $361.4 million
at December 31, 1992, and $408.8 million at December 31, 1991. The
Corporation anticipates that approximately 84.6% of its backlog at
the end of 1993 will be performed in 1994. Approximately 71.6% of
the backlog at the end of 1993 is related to 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. Certain of
these government contracts, less than 1% of the backlog, have been
funded but not signed.
Page 5
Government Contracts
- --------------------
During 1993, approximately 53% of the work performed by the
Corporation directly or indirectly for the United States 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 United States 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 Diversified Technologies segment operates in a highly
competitive environment with many other organizations which are
substantially larger and have greater financial and other
resources. For sales of advanced technology products and systems,
the Corporation competes with a wide range of manufacturers
primarily on the basis of price and the quality, endurance,
reliability and special performance characteristics of those
products. Operations also depend in part on the ability to develop
new technologies which have effective commercial and military
applications. Examples of proprietary or patented products
developed by the Corporation include the Magic Lantern (Registered
Trademark) system for detecting underwater objects from a
helicopter, the Kamatics line of specialty bearings and the
Corporation's line of electromagnetic motors and drives, among
others. In providing scientific services and systems development,
the Corporation competes primarily on the basis of the technical
capabilities and experience of its personnel in specific fields.
When bidding for aerospace contracts and subcontracts, the
Corporation competes on the basis of price and quality of its
products and services as well as the availability of its
facilities, equipment and personnel to perform the contract.
Defense market conditions have been significantly affected by an
ongoing slowdown in defense spending; continued decreases in
federal government expenditures are anticipated in future periods
as well. The change in defense program emphasis and greater
constraints in the federal budget have increased the level of
competition for such programs. The Corporation's contract to
Page 6
retrofit certain of its SH-2 series helicopters to the SH-2G
configuration for the U.S. Navy is scheduled to be completed in
1994 as a result of such reductions in military spending and the
change in defense budget priorities. As the U.S. Navy reduces the
size of its fleet, the number of SH-2 series helicopters remaining
in active service will also be reduced with a corresponding
reduction in the level of logistics and spare parts provided by the
Corporation for the SH-2G. In providing spare parts, the
Corporation competes with other helicopter manufacturers on the
basis of price, performance and product capabilities and also on
the basis of its experience as a manufacturer of helicopters.
The Corporation's K-MAX helicopters will compete with other
helicopters suitable for lifting and with alternative methods
of meeting lifting requirements.
Distribution operations are subject to a high degree of
competition from several other national distributors and many
regional and local firms both in the U.S. and elsewhere in the
world. Certain musical instrument products of the Corporation are
subject to competition from U.S. and foreign manufacturers also.
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 certain
trademarks and trade names under which certain of its music
products are produced both in the United States and under private
label manufacturing in foreign countries.
Employees
- ---------
As of December 31, 1993, the Corporation employed 5,363
individuals throughout its industry segments as follows:
Diversified Technologies 3,252
Distribution 2,056
Corporate Headquarters 55
Patents and Trademarks
- ----------------------
The Corporation holds patents reflecting scientific and technical
accomplishments in a wide range of areas covering both basic
production of certain products, including aerospace products and
musical instruments, as well as highly specialized devices and
advanced technology products in such areas as nuclear sciences,
strategic defense and other commercial, scientific and defense
related fields.
Page 7
Although the Corporation's patents enhance its competitive
position, management believes that none of such patents or patent
applications 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
2010.
These patents are allocated among the Corporation's industry
segments as follows:
U.S. Patents Foreign Patents
Segment Issued Pending Issued Pending
------ ------- ------ -------
Diversified Technologies 109 27 56 79
Distribution 32 0 15 0
Trademarks of Kaman Corporation include Adamas, Applause, Hamer,
KAflex, KAron, K-Max, K-ramic, Magic Lantern, and Ovation. In all,
the Corporation maintains 186 U.S. and foreign trademarks with 57
applications pending, most of which relate to music products in the
Distribution segment.
Compliance with Environmental Protection Laws
- ---------------------------------------------
In the opinion of management, based on the Corporation's
knowledge and analysis of relevant facts and circumstances, there
will be no material adverse effect upon the capital expenditures,
earnings or competitive position of the Corporation or any of its
subsidiaries occasioned by compliance with any environmental
protection laws.
The Corporation is subject to the usual reviews and inspections
by environmental agencies of the various states in which the
Corporation has facilities, and the Corporation has entered into
agreements and consent decrees at various times in connection with
such reviews. On occasion the Corporation also has been identified
as a potentially responsible party ("PRP") by the U.S.
Environmental Protection Agency in connection with its
investigation of certain waste disposal sites. In each such
instance to date, the Corporation's involvement, if any, has been
either of a de minimis nature or the Corporation has been able to
determine, based on its current knowledge, that resolution of such
matters is not likely to have a material adverse effect on the
future financial condition 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
Page 8
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 (i) the financial
resources of other PRP's 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
policies issued during the periods applicable to each site.
Foreign Sales
- -------------
Substantially all (94%) of the sales of the Corporation
are made to customers located in the United States. In 1993, the
Corporation continued its efforts to develop international markets
for its products and foreign sales (including sales for export).
Item 2. Properties
- -------------------
The Corporation occupies approximately 4.3 million square feet of
space throughout the United States, Canada, and Great Britain,
distributed as follows:
Segment Square Feet (in thousands)
------- -------------------------
Diversified Technologies 2,083
Distribution 2,131
Corporate Headquarters 40
Diversified Technologies principal facilities are located in
Arizona, Colorado, Connecticut, Florida, Massachusetts,
Pennsylvania and Virginia; other facilities including offices and
smaller manufacturing and assembly operations are located in
several other states. These facilities are used for manufacturing,
scientific 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 facility contract. In 1993 the
Corporation constructed a 14,000 square foot hangar building in
Bloomfield, Connecticut, on land owned by the Corporation for use
in connection with the development and manufacture of the
Corporation's new K-Max helicopter, and purchased a 75 thousand
square foot office building which it had occupied in Colorado
Springs, Colorado, for continued use by its subsidiary, Kaman
Sciences Corporation.
Page 9
The Distribution segment occupies approximately two million
square feet of space throughout the United States with principal
facilities located in California, Colorado, Connecticut,
New York and Utah; approximately 100 thousand square feet
of space in British Columbia, Canada; and approximately
30 thousand square feet of space in Essex, England. These
facilities consist principally of regional distribution
centers, service centers and office space with a portion used for
fabrication and assembly work. Also included are facilities used
for manufacturing musical instruments and facilities leased
in Florida for aviation services operations. In 1993 the
Corporation constructed a 15 thousand square foot warehouse
addition and a 28 thousand square foot office building in
Bloomfield, Connecticut, as a corporate headquarters for its
subsidiary, Kaman Music Corporation.
Kaman Corporation occupies a 40 thousand square foot Corporate
headquarters building in Bloomfield, Connecticut.
The Corporation's facilities are suitable and adequate to serve
its purposes. While substantially all of such properties are
currently fully utilized, the Corporation expects some
consolidation of its properties in the Diversified Technologies
segment during the next few years. Many of the properties,
especially within the Distribution segment, are leased and
certain of the Corporation's properties are subject to mortgages.
Item 3. Legal Proceedings
- --------------------------
There are no material pending legal proceedings to which the
Corporation or any of its subsidiaries is a party or to which any
of their property is subject.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
There were no matters submitted to a vote of security holders
during the fourth quarter of 1993.
Page 10
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters
- ----------------------------------------------------------
CAPITAL STOCK AND PAID-IN CAPITAL
Information required by this item appears in the Corporation's
1993 Annual Report to Shareholders and is included in Exhibit 13 to
this Form 10-K, and is incorporated herein by reference.
DIVIDEND REINVESTMENT PLAN
Registered shareholders of Kaman Class A common stock are eligible
to participate in the Automatic Dividend Reinvestment Program. A
booklet describing the plan may be obtained by writing to the
Corporation's transfer agent, Chemical Bank, Securityholder Relations,
J.A.F. Building, P. O. Box 3068, New York, NY 10116-3068.
QUARTERLY CLASS A COMMON STOCK INFORMATION
- -----------------------------------------------------------------
High Low Close Dividend
- -----------------------------------------------------------------
1993
First $12 1/8 $9 1/2 $11 1/4 $.11
Second 11 3/4 9 7/8 10 3/4 $.11
Third 11 1/2 9 1/2 10 $.11
Fourth 10 1/8 8 5/8 10 1/8 $.11
- -----------------------------------------------------------------
1992
First $10 3/4 $7 7/8 $ 9 3/4 $.11
Second 10 3/4 8 7/8 10 1/8 $.11
Third 10 3/4 9 1/2 10 3/8 $.11
Fourth 10 1/2 9 5/8 10 $.11
- -----------------------------------------------------------------
QUARTERLY DEBENTURE INFORMATION (6% Conv. Subordinated)(Bid)
- -----------------------------------------------------------------
High Low Close
- -----------------------------------------------------------------
1993
First $88 1/2 $77 $88 1/2
Second 88 1/2 85 85
Third 89 1/2 83 1/2 89 1/4
Fourth 89 3/4 84 3/4 85
- -----------------------------------------------------------------
1992
First $73 1/2 $69 $72
Second 72 1/2 70 72 1/2
Third 76 1/2 72 1/2 76 1/2
Fourth 78 76 1/2 77
- -----------------------------------------------------------------
Page 11
Kaman's Depositary shares (each representing a one-quarter
interest in a share of its Preferred Stock), issued in October
1993, traded in a range between 48 and 51 1/2, closing the year
at 51 1/2.
NASDAQ market quotations reflect inter-dealer prices, without
retail mark-up, mark-down, or commission and may not necessarily
represent actual transactions.
ANNUAL MEETING
The Annual Meeting of Shareholders will be held on Monday,
April 18, 1994 at 11:00 a.m. in the offices of the Corporation,
1332 Blue Hills Avenue, Bloomfield, Connecticut 06002.
Item 6. Selected Financial Data
- --------------------------------
Information required by this item appears in the Corporation's
1993 Annual Report to Shareholders and is included in Exhibit 13 to
this Form 10-K, and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
- ----------------------------------------------------------
Information required by this item appears in the Corporation's
1993 Annual Report to Shareholders and is included in Exhibit 13 to
this Form 10-K, and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
Information required by this item appears in the Corporation's
1993 Annual Report to Shareholders and is included in Exhibit 13 to
this Form 10-K, and is incorporated herein by reference.
Item 9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
- ---------------------------------------------------------
There has been no change in the Corporation's independent
accountants within 24 months prior to, or in any period subsequent
to, the date of the Corporation's most recent financial statements.
Page 12
PART III
Item 10. Directors and Executive Officers of the Registrant
- ------------------------------------------------------------
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:
T. Jack Cahill Mr. Cahill, 45, has held various positions
with Kaman Industrial Technologies
Corporation, a subsidiary of the
Corporation, since 1975. He was
appointed President of Kaman Industrial
Technologies in 1993.
Frank C. Carlucci Mr. Carlucci, 63, has been a Director
since 1989. He is Chairman of The Carlyle
Group, merchant bankers, having formerly
served as Vice Chairman since 1989. Prior
to that he served as U.S. Secretary of
Defense. Mr. Carlucci is also a Director
of Westinghouse Electric Corporation,
Ashland Oil, Inc., Bell Atlantic
Corporation, General Dynamics
Corporation, Neurogen Corporation,
Northern Telecom Limited, Quaker Oats
Company, The Upjohn Company and Sun
Resorts, Inc.
William P. Desautelle Mr. Desautelle, 54, has been Senior Vice
President and Treasurer since 1990 and was
also designated Chief Investment Officer
in April 1992. Prior to that he had
served as Vice President and Treasurer.
John A. DiBiaggio Dr. DiBiaggio, 61, has been a Director
since 1984. He is President and Chief
Executive Officer of Tufts University.
Prior to that he was President and Chief
Executive Officer of Michigan State
University.
Edythe J. Gaines Dr. Gaines, 71, has been a Director since
1982. She is a retired Commissioner of
the Public Utility Control Authority of
the State of Connecticut.
Page 13
Robert M. Garneau Mr. Garneau, 49, has been Senior Vice
President and Controller since 1990 and
was also designated Chief Financial
Officer in April, 1992. Prior to that he
had served as Vice President and
Controller.
Huntington Hardisty Admiral Hardisty (USN-Ret.), 64, has been
a Director since 1991. He retired from
the U.S. Navy in 1991 having served as
Commander-in-Chief for the U.S. Navy
Pacific Command since 1988.
Charles H. Kaman Mr. Kaman, 74, has been Chief Executive
Officer and Chairman of the Board of
Directors since 1945. He was also
President from 1945 to 1990.
C. William Kaman II Mr. Kaman, 42, has been a Director since
1992. He has held various positions with
Kaman Music Corporation, a subsidiary of
the Corporation, since 1974, serving as
President of Kaman Music since 1986.
Mr. Kaman is the son of Charles H.
Kaman, Chairman and Chief Executive
Officer of the Corporation.
Walter R. Kozlow Mr. Kozlow, 58, has held various positions
with Kaman Aerospace Corporation, a
subsidiary of the Corporation, since 1960.
He has been President of Kaman Aerospace
since 1986.
Hartzel Z. Lebed Mr. Lebed, 66, has been a Director since
1982. He is the retired President of
CIGNA Corporation.
Harvey S. Levenson Mr. Levenson, 53, has been a Director
since 1989. He has been President
and Chief Operating Officer since April,
1990. Prior to that he had served as
Senior Vice President and Chief Financial
Officer. He is also a director of
Connecticut Natural Gas Corporation
and Security-Connecticut Corporation.
Walter H. Monteith, Jr. Mr. Monteith, 63, has been a Director
since 1987. He is Chairman of Southern
New England Telecommunications
Corporation. Mr. Monteith is also a
director of Shawmut Bank.
Page 14
John S. Murtha Mr. Murtha, 80, has been a Director since
1948. He is counsel to and a former
senior partner of the law firm of Murtha,
Cullina, Richter and Pinney.
Robert L. Newell Mr. Newell, 71, has been a Director since
1976. He is the retired Chairman of
Hartford National Corporation.
Patrick L. Renehan Mr. Renehan, 60, has been a Vice
President of Kaman Diversified
Technologies Corporation, a subsidiary of
the Corporation, since 1987. Prior to that
he served as a Vice President of Kaman
Aerospace Corporation.
Wanda L. Rogers Mrs. Rogers, 61, has been a Director since
1991. She is Chief Executive
Officer of Rogers Helicopters, Inc.
She is also Chairman of the Board of
Clovis Community Bank.
Richard E.W. Smith Mr. Smith, 59, was appointed a Vice
President of the Corporation in 1989.
He has been President of Kaman Diversified
Technologies Corporation, a subsidiary of
the Corporation, since 1990 and prior to
that he served as Vice President of Kaman
Sciences Corporation, a subsidiary of the
Corporation.
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 such Directors and Executive Officers are expected to expire
as of the Annual Meeting of the Shareholders and Directors of the
Corporation to be held on April 18, 1994.
Item 11. Executive Compensation
- --------------------------------
A) General. The following tables provide certain information
relating to the compensation of the Corporation's Chief Executive
Officer, its four other most highly compensated executive officers
and its directors.
Page 15
B) Summary Compensation Table.
Annual Compensation Long Term Compensation
------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
All
Name and Other AWARDS Other
Principal Salary Bonus Annual RSA Options LTIP Comp.
Position Year ($) ($) Comp. ($)(1)(#Shares) Payments ($)(2)
- -----------------------------------------------------------------------------
C. H. Kaman 1993 660,000 218,000 73,004(3) ------ ------ --- 69,768
Chairman and 1992 660,000 290,000 ------ ------ ------ --- 57,956
Chief 1991 660,000 330,000 ------ 80,000 10,000 --- *
Executive
Officer
H.S.Levenson 1993 400,000 108,000 ------ 38,000 12,000 --- 18,603
President 1992 400,000 144,000 ------ 49,375 ------ --- 10,664
and Chief 1991 400,000 150,000 ------ 40,000 5,000 --- *
Operating
Officer
W.R.Kozlow 1993 216,000 50,000 ------ 28,500 9,000 --- 10,446
President, 1992 210,000 60,000 ------ 29,625 ------ --- 6,271
Kaman 1991 204,000 65,000 ------ 24,000 3,000 --- *
Aerospace
Corporation
R.E.W.Smith 1993 210,000 50,000 ------ 28,500 9,000 --- 9,212
Vice 1992 200,000 55,000 ------ 29,625 ------ --- 6,244
President 1991 180,000 50,000 ------ 24,000 3,000 --- *
P.L.Renehan 1993 205,000 40,000 ------ 28,500 9,000 --- 8,799
Vice 1992 198,000 50,000 ------ 24,688 ------ --- 6,479
President 1991 192,000 50,000 ------ 20,000 2,500 --- *
Kaman
Diversified
Technologies
Corporation
*Information for years ending prior to December 15, 1992 is not
required to be disclosed.
1. As of December 31, 1993, aggregate restricted stock holdings
and their year end value were: C.H. Kaman, none; H.S. Levenson,
32,200 shares valued at $326,025; W.R. Kozlow, 9,000 shares valued
at $91,125; R.E.W. Smith, 8,900 shares valued at $90,113; P.L.
Renehan, 7,900 shares valued at $79,988. Restrictions lapse at the
rate of 50% per year on Mr. Kaman's awards and 20% per year for all
Page 16
other awards, beginning one year after the grant date. Awards
reported in this column are as follows: C. H. Kaman, 10,000 shares
in 1991; H.S. Levenson, 4,000 shares in 1993 and 5,000 shares each
in 1992 and 1991; W.R. Kozlow, 3,000 shares each in 1993, 1992 and
1991; R. E. W. Smith, 3,000 shares each in 1993, 1992, and 1991; P.
L. Renehan, 3,000 shares in 1993, and 2,500 shares each in 1992 and
1991. Dividends are paid on the restricted stock.
2. Amounts reported in this column consist of: C. H. Kaman,
$53,000 - Officer 162 Insurance Program, $16,768 - medical expense
reimbursement program ("MERP"); H.S. Levenson, $2,729 - Senior
executive life insurance program ("Executive Life"), $4,524 -
Officer 162 Insurance Program, $2,249 - employer matching
contributions to the Kaman Corporation Thrift and Retirement Plan
(the "Thrift Plan employer match"), $4,101 - supplemental employer
contributions under the Deferred Compensation Plan ("supplemental
matching contributions"), $5,000 - MERP; W. R. Kozlow, $3,767 -
Executive Life, $2,249 - Thrift Plan employer match, $1,077 -
supplemental matching contributions, $3,353 - MERP; R. E. W. Smith,
$4,148 - Executive Life, $2,068 - Thrift Plan employer match,
$1,182 - supplemental matching contributions, $1,814 - MERP; P. L.
Renehan, $4,606 - Executive Life, $2,249 - Thrift Plan employer
match, $814 - supplemental matching contributions, $1,130 - MERP.
3. Amounts reported in this column include $62,164 for tax and
estate planning services provided to Mr. Kaman by third parties,
for which the Corporation provides reimbursement under a program
for the benefit of executive officers.
Page 17
C) Option/SAR Grants in the last fiscal year:
- ----------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
- ----------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options/
SARs
Options/ Granted to
SARs Employees Exercise or
Granted in Fiscal Base Price Expiration
Name (#) Year ($/Sh) Date 5%($) 10%($)
- -----------------------------------------------------------------------------
C. H. Kaman --- --- --- --- --- ---
H.S. Levenson 12,000 6.8% 9.50 11/30/03 71,640 181,680
W. R. Kozlow 9,000 5.1% 9.50 11/30/03 53,730 136,260
P. L. Renehan 9,000 5.1% 9.50 11/30/03 53,730 136,260
R. E. W. Smith 9,000 5.1% 9.50 11/30/03 53,730 136,260
D) Aggregated Option/SAR Exercises in the Last Fiscal Year, and
Fiscal Year-End Option/SAR Values.
- -------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised in-the-money
options/SARs options/SARs
Shares at FY-end (#) at FY-end ($)
acquired on Value exercisable/ exercisable/
Name Exercise(#) realized unexercisable unexercisable
(a) (b) (c) (d) (e)
- -------------------------------------------------------------------
C. H. Kaman None --- 45,000/-0- 103,750/0
H. S. Levenson 16,080 32,287 23,600/18,600 54,200/22,875
W. R. Kozlow None --- 14,800/12,600 30,725/13,950
P. L. Renehan None --- 10,300/11,900 20,913/12,338
R. E. W. Smith None --- 7,300/12,200 15,400/13,050
Page 18
E) Long Term Incentive Plan Awards: No long term incentive plan
awards were made to any named executive officer in the last
fiscal year.
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 Service
Remuneration* 15 20 25 30 35
- -----------------------------------------------------------------
125,000 34,116 45,715 56,632 68,232 68,232
150,000 41,616 55,765 69,082 83,232 83,232
175,000 49,116 65,815 81,532 98,232 98,232
200,000 56,616 75,865 93,982 113,232 113,232
225,000 64,116 85,915 106,432 128,232 128,232
250,000 71,616 95,965 118,882 143,232 143,232
300,000 86,616 116,065 143,782 173,232 173,232
350,000 101,616 136,165 168,682 203,232 203,232
400,000 116,616 156,265 193,582 233,232 233,232
450,000 131,616 176,365 218,482 263,232 263,232
500,000 146,616 196,465 243,382 293,232 293,232
750,000 221,616 296,965 367,882 443,232 443,232
1,000,000 296,616 397,465 492,382 593,232 593,232
1,250,000 371,616 497,965 616,882 743,232 743,232
1,500,000 446,616 598,465 741,382 893,232 893,232
*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 consist of salary (including 401(k)
and Section 125 Plan contributions but not deferrals under a non-
qualified Deferred Compensation Plan), bonus and taxable income
attributable to restricted stock awards. Salary and bonus amounts
for the named Executive Officers for 1993 are as shown on the
Page 19
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. Kaman, $927,075; Mr. Levenson,
$679,669.
Federal law imposes certain limitations on annual pension
benefits under the Pension Plan. For the named executive officers,
the excess will be paid under the Corporation's unfunded
supplemental retirement plan.
The Executive Officers named in Item 11(b) are participants
in the plan and as of January 1, 1994, had the number of years of
credited service indicated: Mr. Kaman - 48 years; Mr. Levenson -
11 years; Mr. Kozlow - 34 years; Mr. Renehan - 10 years; and Mr.
Smith - 34 years.
Benefits are computed generally in accordance with the
benefit formula described above.
G) Compensation of Directors. Non-officer members of the Board
of Directors of the Corporation receive an annual retainer of
$14,000 and a fee of $750 for attending each meeting of the Board
and each meeting of a Committee of the Board, except that the
Chairman of the Audit Committee receives $850 for attending each
meeting of that Committee. These fees may be received on a
deferred basis.
H) Employment Contracts and Termination, Severance and Change of
Control Arrangements. The Corporation has no employment
contract, plan or arrangement with respect to any named executive
which relates to employment termination for any reason, including
resignation, retirement or otherwise (except as described in
connection with the Corporation's Pension Plan and the Corporation's
non-qualified Deferred Compensation Plan), 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.
Page 20
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: Dr. Gaines, Mr. Carlucci,
Mr. Murtha, Mr. Newell and Mr. Monteith. None of these
individuals was an officer or employee of the Corporation or any
of its subsidiaries during the last fiscal year. Mr. Murtha was
Secretary of the Corporation in years prior to April 1989 and his
relationship with the Corporation is further disclosed in Item 13
of this report.
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.
Page 21
Item 12. Security Ownership of Certain Beneficial Owners and
Management
- -----------------------------------------------------------------
(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 Number of Shares
Common Name and Address Owned as of Percentage
Stock Beneficial Owner February 1, 1994 of Class
- ------------------------------------------------------------------
Class B Charles H. Kaman 258,375(1) 38.69%
Kaman Corporation
Blue Hills Avenue
Bloomfield, CT 06002
Class B Newgate Associates, Ltd. 199,802 29.91%
c/o John T. Del Negro
CityPlace I
185 Asylum Street
Hartford, CT 06103
Class B Robert D. Moses 48,729(2) 7.30%
Farmington Woods
Avon, CT 06001
Class B Glenn M. Messemer 33,500 5.02%
Kaman Corporation
Blue Hills Avenue
Bloomfield, CT 06002
(1) Excludes 1,471 shares held by Mrs. Kaman. Excludes
199,802 shares reported separately above and held by
Newgate Associates Limited Partnership, a limited
partnership in which Mr. Kaman serves as general partner.
(2) Includes 15,192 shares held by Mr. Moses as Trustee, and
33,537 shares held by Paulson and Company as follows:
11,481 shares for the benefit of Mr. Moses, and
22,056 shares held for a partnership controlled by Mr.
Moses.
Page 22
(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.
Class of Number of Shares Owned Percentage
Name Common Stock as of February 1, 1994 of Class
- --------------------------------------------------------------------
Frank C. Carlucci Class A 3,000(1) *
John A. DiBiaggio -- -- --
Edythe J. Gaines Class A 1,816 *
Huntington Hardisty -- -- --
Charles H. Kaman Class A 469,620(2) 2.46%
Class B 258,375(3) 38.69%
C. William Kaman, II Class A 100,864(4) *
Class B 7,567(5) 1.13%
Walter R. Kozlow Class A 47,233(6) *
Class B 296 *
Hartzel Z. Lebed Class A 7,221(7) *
Harvey S. Levenson Class A 94,984(8) *
Class B 19,500(9) 2.91%
Walter H. Monteith, Jr. Class A 200 *
John S. Murtha Class A 48,618(10) *
Class B 432 *
Robert L. Newell Class A 2,880 *
Patrick L. Renehan Class A 31,133(11) *
Wanda L. Rogers -- -- --
Richard E. W. Smith Class A 35,545(12) *
All Directors and Class A 805,153(13) 4.61%
Executive Officers
as a group ** Class B 300,273 44.96%
Page 23
(1) Held jointly with Mrs. Carlucci.
(2) Excludes the following: 24,132 shares held by Mrs. Kaman;
6,685 shares held by Fidelco Guide Dog Foundation, Inc., a
charitable foundation of which Mr. Kaman is President and
Director, in which shares Mr. Kaman disclaims beneficial
ownership; and 184,434 shares held by Newgate Associates
Limited Partnership, a limited partnership of which Mr.
Kaman is the general partner. Included are 45,000 shares
subject to exercisable portion of stock options.
(3) Excludes the following: 1,471 shares held by Mrs. Kaman and
199,802 shares held by Newgate Associates Limited
Partnership, a limited partnership of which Mr. Kaman is the
general partner.
(4) Includes 10,400 shares subject to exercisable portion of
stock options; and excludes 69,290 shares held by Mr. Kaman
as Trustee, in which shares Mr. Kaman disclaims any
beneficial ownership.
(5) Includes 4,800 shares held by Mr. Kaman as Trustee in which
shares Mr. Kaman disclaims any beneficial ownership.
(6) Includes 15,400 shares subject to exercisable portion of
stock options.
(7) Includes 7,121 shares held jointly with Mrs. Lebed, excludes
480 shares held by Mrs. Lebed.
(8) Includes 24,800 shares subject to exercisable portion of
stock options.
(9) Excludes 500 shares held by Mrs. Levenson.
(10)Held by Fleet National Bank pursuant to a revocable trust.
Excludes 7,980 shares held by Fleet National Bank pursuant
to a revocable trust for the benefit of Mrs. Murtha.
(11)Includes 10,700 shares subject to exercisable portion of
stock options; and includes 1,275 shares held jointly with
Mrs. Renehan.
(12)Includes 7,500 shares subject to exercisable portion of
stock options; and includes 7,478 shares held jointly with
Mrs. Smith.
(13)Includes 126,776 shares subject to exercisable portion of
stock options.
* Less than one percent.
** Excludes 24,612 Class A shares and 1,971 Class B shares held
by wives of certain Directors and Executive Officers.
Item 13. Certain Relationships and Related Transactions
- --------------------------------------------------------
During 1993, the Corporation obtained legal services
from the Hartford, Connecticut law firm of Murtha,
Cullina, Richter and Pinney of which Mr. Murtha, a Director of
the Corporation, is counsel.
Page 24
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
- -----------------------------------------------------------------
(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.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last
quarter of the year ended December 31, 1993, which
year is covered by this report.
Page 25
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 11th day of March, 1994.
KAMAN CORPORATION
(Registrant)
By /s/ Charles H. Kaman
-----------------------
Charles H. Kaman, Chairman
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/ Charles H. Kaman Chairman, Chief Executive March 11,1994
- ---------------------- Officer and Director
Charles H. Kaman (Chief Executive Officer)
/s/ Harvey S. Levenson President and Director March 11, 1994
- ---------------------- (Chief Operating Officer)
Harvey S. Levenson
/s/ Robert M. Garneau Senior Vice President March 11, 1994
- ---------------------- and Chief Financial Officer
Robert M. Garneau (Principal Financial and
Accounting Officer)
/s/ Harvey S. Levenson March 11, 1994
- ----------------------
Harvey S. Levenson
Attorney-in-Fact for:
Frank C. Carlucci Director
John A. DiBiaggio Director
Edythe J. Gaines Director
Huntington Hardisty Director
C. William Kaman, II Director
Hartzel Z. Lebed Director
Walter H. Monteith, Jr. Director
John S. Murtha Director
Robert L. Newell Director
Wanda L. Rogers Director
Page 26
KAMAN CORPORATION AND SUBSIDIARIES
Index to Financial Statement Schedules
Report of Independent Auditors
Financial Statement Schedules:
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-Term Borrowings
Schedule X - Supplemental Income Statement Information
Page 27
KAMAN CORPORATION AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Thousands)
YEAR ENDED DECEMBER 31, 1991
Additions
---------
Balance Charged to Balance
January 1, costs and December 31,
Description 1991 expenses Others Deductions 1991
- ----------- ---------- ---------- ------ ---------- ------------
Allowance for
doubtful
accounts $1,306 $1,267 $----- $1,375(A) $1,198
====== ====== ====== ====== ======
Accumulated
amortization
of goodwill $6,204 $1,261 $----- $----- $7,465
====== ====== ====== ====== ======
YEAR ENDED DECEMBER 31, 1992
Additions
---------
Balance Charged to Balance
January 1, costs and December 31,
Description 1992 expenses Others Deductions 1992
- ----------- ---------- ---------- ------ ---------- ------------
Allowance for
doubtful
accounts $1,198 $1,076 $----- $1,040(A) $1,234
====== ====== ====== ====== ======
Accumulated
amortization
of goodwill $7,465 $1,265 $----- $----- $8,730
====== ====== ====== ====== ======
YEAR ENDED DECEMBER 31, 1993
Additions
---------
Balance Charged to Balance
January 1, costs and December 31,
Description 1993 expenses Others Deductions 1993
- ----------- ---------- ---------- ------ ---------- ------------
Allowance for
doubtful
accounts $1,234 $1,141 $----- $ 799(A) $1,576
====== ====== ====== ====== ======
Accumulated
amortization
of goodwill $8,730 $1,268 $----- $----- $9,998
====== ====== ====== ====== ======
(A) Write-off of bad debts, net of recoveries
Page 28
KAMAN CORPORATION AND SUBSIDIARIES
SCHEDULE IX -- SHORT-TERM BORROWINGS
(Dollars in Thousands)
YEAR ENDED DECEMBER 31, 1991
Maximum Average Weighted
Amount Amount Average
Category of Weighted Out- Out- Interest
Aggregate Balance Average standing standing Rate
Short-Term Dec. 31, Interest During the During the During
Borrowings 1991 Rate Year Year the Year
- ---------- -------- -------- ---------- ---------- --------
Notes Payable
- -- Bank $ 337 8.75% $38,860 $10,958 6.8%
======== ======== ======= ======= ====
YEAR ENDED DECEMBER 31, 1992
Maximum Average Weighted
Amount Amount Average
Category of Weighted Out- Out- Interest
Aggregate Balance Average standing standing Rate
Short-Term Dec. 31, Interest During the During the During
Borrowings 1992 Rate Year Year the Year
- ---------- -------- -------- ---------- ---------- --------
Notes Payable
- -- Bank $7,668 5.0% $34,857 $16,734 4.4%
======== ======== ======= ======= ====
YEAR ENDED DECEMBER 31, 1993
Maximum Average Weighted
Amount Amount Average
Category of Weighted Out- Out- Interest
Aggregate Balance Average standing standing Rate
Short-Term Dec. 31, Interest During the During the During
Borrowings 1993 Rate Year Year the Year
- ---------- -------- -------- ---------- ---------- --------
Notes Payable
- -- Bank $31,161 3.6% $62,880 $43,158 3.5%
======== ======== ======= ======= ====
Page 29
KAMAN CORPORATION AND SUBSIDIARIES
Schedule X -- Supplemental Income Statement Information
(Dollars in Thousands)
Charged to Costs
Item and Expenses
- ---- ----------------
Year Ended December 31, 1991
Maintenance and repairs $ 7,923
=======
Year Ended December 31, 1992
Maintenance and repairs $ 9,041
=======
Year Ended December 31, 1993
Maintenance and repairs $ 8,650
=======
Depreciation and amortization of intangible assets, preoperating
costs and similar deferrals; taxes, other than payroll and income
taxes; royalties and advertising costs were not included above
since they were not of a significant amount.
Page 30
KAMAN CORPORATION
INDEX TO EXHIBITS
Exhibit 3a The Amended and Restated by reference
Certificate of Incorporation
of the Corporation, as amended,
including the form of amendment
designating the Corporation's
Series 2 Preferred Stock has been
filed as Exhibits 2.1 and 2.2 to the
Corporation's Form 8-A (Document
No. 0-1093 filed on September 27, 1993),
and is incorporated in this report
by reference.
Exhibit 3b The By-Laws of the Corporation by reference
were filed as Exhibit 3(b) to
the Corporation's Annual Report
on Form 10-K for 1990 (Document
No. 0-1093, filed with the
Securities and Exchange Commission
on March 14, 1991).
Exhibit 4a Indenture between the Corporation by reference
and Manufacturers Hanover Trust
Company, as Indenture Trustee,
with respect to the
Corporation's 6% Convertible
Subordinated Debentures, has
been 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
and is incorporated in this
report by reference.
Exhibit 4b The Revolving Credit Agreement by reference
between the Corporation and The
Connecticut National Bank, as
agent, dated December 31, 1991,
was previously filed as Exhibit
4a to the Corporation's Annual
Report on Form 10K for 1991
(Document No. 0-1093 filed with
the Securities and Exchange
Commission on March 16, 1992)
and is incorporated in this
report by reference.
Page 31
Exhibit 4c The Revolving Credit Agreement by reference
between the Corporation and The
Bank of Nova Scotia, as agent,
dated as of September 5, 1991,
has been filed as Exhibit
(a)(4)(a) to Form 10-Q filed for
the quarter ended September 30,
1991 (Document No. 0-1093 filed
with the Securities and Exchange
Commission on November 12, 1991)
and is incorporated in this
report by reference.
Exhibit 4d The First Amendment to the by reference
Revolving Credit Agreement
between the Corporation and the
Bank of Nova Scotia, as agent,
dated November 16, 1992, has
been filed as Exhibit 4e to the
Corporation's Annual Report on
Form 10-K for 1992 (Document No.
0-1093 filed with the Securities
and Exchange Commission on
March 13, 1993) and is
incorporated in this report by
reference.
Exhibit 4e Deposit Agreement dated as of by reference
October 15, 1993 between the
Corporation and Chemical Bank as
Depositary and Holder of Depositary
Shares has been filed as
Exhibit (c)(1) to Schedule 13E-4
(Document No. 5-34114 filed with the
Securities and Exchange Commission
on September 15, 1993) and is
incorporated in this report by
reference.
Exhibit 4f The Corporation is party to certain by reference
long-term debt obligations, such
as real estate mortgages, copies
of which it agrees to furnish to
the Commission upon request.
Page 32
Exhibit 10a The 1983 Stock Incentive Plan by reference
(formerly known as the 1983
Stock Option Plan) has been
filed as Exhibit 10b(iii) to the
Corporation's Annual Report on
Form 10-K for 1988 (Document No.
0-1093 filed with the Securities
and Exchange Commission on
March 22, 1989) and is incorporated
in this report by reference.
Exhibit 10b The Kaman Corporation 1993 Stock Page 34
Incentive Plan.
Exhibit 10c The Kaman Corporation Employees Page 49
Stock Purchase Plan as amended.
Exhibit 11 Statement regarding computation Page 56
of per share earnings.
Exhibit 13 Portions of the Corporation's Page 57
1993 Annual Report to
Shareholders as required by
Item 8.
Exhibit 21 Subsidiaries. Page 89
Exhibit 23 Consent of Independent Auditors. Page 90
Exhibit 24 Power of attorney under which Page 91
this report has been signed on
behalf of certain directors.
Page 33
EXHIBIT 10b
KAMAN CORPORATION
1993 STOCK INCENTIVE PLAN
1. PURPOSE. This Plan includes a continuation and extension of
the incentive stock program of the Corporation set forth in the
Predecessor Plan and is designed to give directors, officers and
key employees of the Corporation and other persons an expanded
opportunity to acquire stock in the Corporation or receive other
long-term incentive remuneration in order that they may better
participate in the Corporation's growth and be motivated to remain
with the Corporation and promote its further development and
success.
2. DEFINITIONS. The following terms shall have the meanings
given below unless the context otherwise requires:
(a) "Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Award" or "Awards" except where referring to a
particular category of grant under the Plan shall include Incentive
Stock Options, Non-Statutory Stock Options, Stock Appreciation
Rights and Restricted Stock Awards.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Code" means the Internal Revenue Code of 1986, as
amended, and any successor Code, and related rules, regulations and
interpretations.
(e) "Committee" means the committee of the Board established
under Section 9 hereof.
(f) "Corporation" means Kaman Corporation.
(g) "Disability" or "disabled" means disability or disabled
as defined by the Code.
(h) "Disinterested Person" shall have the meaning set forth
in Rule 16b-3(c)(2)(i) promulgated under the Act, and any successor
to such rule.
(i) "Eligible Person" means any person, including a person
who is not an employee of the Corporation or a Subsidiary, or
entity who satisfies all the eligibility requirements set forth in
either Section 3(a) or 3(b) hereof, excluding, however, any member
of the Committee and any alternate member of the Committee.
Page 34
(j) "Fair Market Value" of the Stock on any given date shall
be the closing price of the Stock in the NASDAQ National Market
System on such date, or, if no sales of the Stock occurred on that
day, the then most recent prior day on which sales were reported.
(k) "Incentive Stock Option" means a stock option qualifying
under the provisions of Section 422 of the Code.
(l) "Non-Employee Director Participant" means an Eligible
Person, who at the time of grant of an Award is a director of the
Corporation but not an employee of the Corporation or a Subsidiary.
(m) "Non-Statutory Option" means a stock option not
qualifying for incentive stock option treatment under the pro-
visions of Section 422 of the Code.
(n) "Optionee" means the holder of any option granted under
the Plan.
(o) "Participant" means the holder of any Award granted under
the Plan.
(p) "Plan" means the Kaman Corporation 1993 Stock Incentive
Plan.
(q) "Predecessor Plan" means the Kaman Corporation 1983 Stock
Incentive Plan.
(r) "Principal Shareholder" means any individual owning stock
possessing more than ten percent (10%) of the total combined voting
power of all classes of capital stock of the Corporation.
(s) "Restricted Stock" means Stock received pursuant to a
Restricted Stock Award.
(t) "Restricted Stock Award" is defined in Section 8(a).
(u) "Stock" or "shares" means shares of Class A Common Stock
of the Corporation.
(v) "Stock Appreciation Right" or "Right" means a right
described in Section 7.
(w) "Subsidiary" means any corporation in which the
Corporation owns, directly or indirectly, a majority of the out-
standing voting stock.
Page 35
3. ELIGIBILITY.
(a) Incentive Stock Options. Incentive Stock Options may be
granted to any Eligible Persons who are full-time, salaried
employees of the Corporation or a Subsidiary and who in the sole
opinion of the Committee are, from time to time, responsible for
the management and/or growth of all or part of the business of the
Corporation.
(b) Awards Other than Incentive Stock Options. Awards, other
than Incentive Stock Options, may be granted to any Eligible
Persons who in the sole opinion of the Committee are, from time to
time, responsible for the growth and/or the management of all or a
part of the business of the Corporation.
(c) Substitute Awards. The Committee, in its discretion, may
also grant Awards in substitution for any stock incentive awards
previously granted by companies acquired by the Corporation or one
of its Subsidiaries. Such substitute awards may be granted on such
terms and conditions as the Committee deems appropriate in the
circumstances, provided, however, that substitute Incentive Stock
Options shall be granted only in accordance with the Code.
4. TERM OF PLAN. The Plan shall take effect on November 1, 1993
and shall remain effective for ten (10) years thereafter, expiring
on October 31, 2003.
5. STOCK SUBJECT TO THE PLAN. The aggregate number of shares of
Stock which may be issued pursuant to all Awards granted under the
Plan shall not exceed 960,000 shares of Stock, subject to
adjustment as hereinafter provided in Section 10, which shall be in
addition to all shares of Stock reserved for issuance the under
Predecessor Plan but remaining unissued on the effective date of
the Plan, and which may be treasury shares or authorized but
unissued shares. In the event that any Award under the Plan for
any reason expires, is terminated, forfeited, reacquired by the
Corporation, or satisfied without the issuance of Stock (except in
the cases of (i) a Stock Appreciation Right to the extent settled
in cash; (ii) the Stock otherwise issuable under an Award but
retained by the Corporation for payment of the exercise price of an
option under Section 6(e)(iv)(C) for the payment of withholding
taxes under Section 14(b) hereof; and (iii) stock otherwise
issuable under a stock option but for which the Corporation has made a
discretionary payment under Section 7(d) hereof) the shares
allocable to the unexercised or forfeited portion of such Award may
again be made subject to an Award under the Plan.
Page 36
6. STOCK OPTIONS. The following terms and conditions shall apply
to each option granted under the Plan and shall be set forth in a
stock option agreement between the Corporation and the Optionee
together with such other terms and conditions not inconsistent
herewith as the Committee may deem appropriate in the case of each
Optionee:
(a) OPTION PRICE. The purchase price under each Incentive
Stock Option shall be as determined by the Committee but not less
than 100% of the Fair Market Value of the shares subject to such
option on the date of grant, provided that such option price shall
not be less than 110% of such Fair Market Value in the case of any
Incentive Stock Option granted to a Principal Shareholder. The
purchase price per share of Stock deliverable upon the exercise of
a Non-Statutory Option shall be determined by the Committee, but
shall not be less than 85% of the Fair Market Value of such Stock
on the date of grant and in no event less than the par value per
share of such Stock.
(b) TYPE OF OPTION. All options granted under the Plan shall
be either Incentive Stock Options or Non-Statutory Options. All
provisions of the Plan applicable to Incentive Stock Options shall
be interpreted in a manner consistent with the provisions of, and
regulations under, Section 422 of the Code.
(c) PERIOD OF INCENTIVE STOCK OPTION. Each Incentive Stock
Option shall have a term not in excess of ten (10) years from the
date on which it is granted, except in the case of any Incentive
Stock Option granted to a Principal Shareholder which shall have a
term not in excess of five (5) years from the date on which it is
granted; provided that any Incentive Stock Option granted or the
unexercised portion thereof, to the extent exercisable at the time
of termination of employment, shall terminate at the close of
business on the day three (3) months following the date on which
the Optionee ceases to be employed by the Corporation or a
Subsidiary unless sooner expired or unless a longer period is
provided under Subsection (g) of this Section in the event of the
death or disability of such an Optionee.
(d) PERIOD OF NON-STATUTORY OPTION. Each Non-Statutory
Option granted under the Plan shall have a term not in excess of
ten (10) years and one (1) day from the date on which it is
granted; provided that any Non-Statutory Option granted to an
employee of the Corporation or a Subsidiary or to a Non-Employee
Director Participant, or the unexercised portion thereof shall
terminate not later than the close of business on the day three (3)
months following the date on which such employee ceases to be
employed by the Corporation or a Subsidiary or the date on which
such Non-Employee Director ceases to be a director of the
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Corporation, as the case may be, unless a longer period is provided
under Subsection (g) of this Section in the event of the death or
disability of such an Optionee. Such an Optionee's Non-Statutory
Option shall be exercisable, if at all, during such three (3) month
period only to the extent exercisable on the date such Optionee's
employment terminates or the date on which such Optionee ceases to
be a director, as the case may be.
(e) EXERCISE OF OPTION.
(i) Each option granted under the Plan shall become
exercisable on such date or dates and in such amount or amounts
as the Committee shall determine. In the absence of any other
provision by the Committee, each option granted under the Plan
shall be exercisable with respect to not more than twenty percent
(20%) of such shares subject thereto after the expiration of one
(1) year following the date of its grant, and shall be
exercisable as to an additional twenty percent (20%) of such
shares after the expiration of each of the succeeding four (4)
years, on a cumulative basis, so that such option, or any
unexercised portion thereof, shall be fully exercisable after a
period of five (5) years following the date of its grant;
provided, however, that in the absence of any other provision by
the Committee, each Incentive Stock Option granted to a Principal
Shareholder shall be exercisable with respect to not more than
twenty-five percent (25%) of the shares subject thereto after the
expiration of one (1) year following the date of its grant, and
shall be exercisable as to an additional twenty-five percent
(25%) after the expiration of each of the succeeding three (3)
years, on a cumulative basis, so that such option, or any
unexercised portion thereof, shall be fully exercisable after a
period of four (4) years following the date of its grant.
(ii) The Committee, in its sole discretion, may, from
time to time and at any time, accelerate the vesting provisions
of any outstanding option, subject, in the case of Incentive
Stock Options, to the provisions of Subsection (6)(i) relating to
"Limit on Incentive Options".
(iii) Notwithstanding anything herein to the contrary,
except as provided in subsection (g) of this Section, no Optionee
who was, at the time of the grant of an option, an employee of
the Corporation or a Subsidiary, may exercise such option or any
part thereof unless at the time of such exercise he shall be
employed by the Corporation or a Subsidiary and shall have been
so employed continuously since the date of grant of such option,
excepting leaves of absence approved by the Committee; provided
that the option agreement may provide that such an Optionee may
exercise his option, to the extent exercisable on the date of
termination of such continuous employment, during the three (3)
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month period, ending at the close of business on the day three
(3) months following the termination of such continuous
employment unless such option shall have already expired
by its term.
(iv) An option shall be exercised in accordance with the
related stock option agreement by serving written notice of
exercise on the Corporation accompanied by full payment of the
purchase price in cash. As determined by the Committee, in its
discretion, at (or, in the case of Non-Statutory Options, at or
after) the time of grant, payment in full or in part may also be
made by delivery of (A) irrevocable instructions to a broker to
deliver promptly to the Corporation the amount of sale or loan
proceeds to pay the exercise price, or (B) previously owned
shares of Stock not then subject to restrictions under any
Corporation plan (but which may include shares the disposition of
which constitutes a disqualifying disposition for purposes of
obtaining incentive stock option treatment for federal tax
purposes), or (C) shares of Stock otherwise receivable upon the
exercise of such option; provided, however, that in the event the
Committee shall determine in any given instance that the exercise
of such option by withholding shares otherwise receivable would
be unlawful, unduly burdensome or otherwise inappropriate, the
Committee may require that such exercise be accomplished in
another acceptable manner. For purposes of subsections (B) and
(C) above, such surrendered shares shall be valued at Fair Market
Value on the date of exercise.
(f) NONTRANSFERABILITY. No option granted under the Plan
shall be transferable by the Optionee otherwise than by will or by
the laws of descent and distribution, and such option shall be
exercisable, during his lifetime, only by him.
(g) DEATH OR DISABILITY OF OPTIONEE. In the event of the
death or disability of an Optionee while in the employ of the
Corporation or a Subsidiary or while serving as a director of the
Corporation, his stock option or the unexercised portion thereof
may be exercised within the period of one (1) year succeeding his
death or disability, but in no event later than (i) ten (10) years
(five (5) years in the case of a Principal Shareholder) from the
date the option was granted in the case of an Incentive Stock
Option, and (ii) ten (10) years and one (1) day in the case of a
Non-Statutory Option, by the person or persons designated in the
Optionee's will for that purpose or in the absence of any such
designation, by the legal representative of his estate, or by the
legal representative of the Optionee, as the case may be.
Notwithstanding anything herein to the contrary and in the absence
of any contrary provision by the Committee, during the one-year
period following termination of employment or cessation as a
director by reason of death or disability, an Optionee's stock
Page 39
option shall continue to vest in accordance with its terms and be
and become exercisable as if employment or service as a director
had not ceased.
(h) SHAREHOLDER RIGHTS. No Optionee shall be entitled to any
rights as a shareholder with respect to any shares subject to his
option prior to the date of issuance to him of a stock certificate
representing such shares.
(i) LIMIT ON INCENTIVE STOCK OPTIONS. The aggregate Fair
Market Value (determined at the time an option is granted) of
shares with respect to which Incentive Stock Options granted to an
employee are exercisable for the first time by such employee during
any calendar year (under all incentive stock option plans of the
Corporation and its Subsidiaries to the extent required under the
Code) shall not exceed $100,000.
(j) NOTIFICATION OF DISQUALIFYING DISPOSITION. Participants
granted Incentive Stock Options shall undertake, in the Incentive
Stock Option agreements, as a precondition to the granting of such
option by the Corporation, to promptly notify the Corporation in
the event of a disqualifying disposition (within the meaning of the
Code) of any shares acquired pursuant to such Incentive Stock
Option agreement and provide the Corporation with all relevant
information related thereto.
7. STOCK APPRECIATION RIGHTS; DISCRETIONARY PAYMENTS.
(a) NATURE OF STOCK APPRECIATION RIGHT. A Stock Appreciation
Right is an Award entitling the Participant to receive an amount in
cash or shares of Stock (or forms of payment permitted under
Section 7(d) hereof) or a combination thereof, as determined by the
Committee at the time of grant, having a value equal to (or if the
Committee shall so determine at time of grant, less than) the
excess of the Fair Market Value of a share of Stock on the date of
exercise over the Fair Market Value of a share of Stock on the date
of grant (or over the option exercise price, if the Stock
Appreciation Right was granted in tandem with a stock option)
multiplied by the number of shares with respect to which the Stock
Appreciation Right shall have been exercised.
(b) GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS.
(i) Stock Appreciation Rights may be granted in tandem
with, or independently of, any stock option granted under the
Plan. In the case of a Stock Appreciation Right granted in
tandem with a Non-Statutory Option, such Right may be granted
either at or after the time of grant of such option. In the case
of a Stock Appreciation Right granted in tandem with an Incentive
Stock Option such Right may be granted only at the time of the
grant of such option. A Stock Appreciation Right or applicable
Page 40
portion thereof granted in tandem with a given stock option shall
terminate and no longer be exercisable upon the termination or
exercise of the related stock option, except that a Stock
Appreciation Right granted with respect to less than the full
number of shares covered by a related stock option shall not be
reduced until the exercise or termination of the related stock
option exceeds the number of shares not covered by the Stock
Appreciation Right.
(ii) Each Stock Appreciation Right granted under the
Plan shall become exercisable on such date or dates and in such
amount or amounts as the Committee shall determine; provided,
however, that any Stock Appreciation Right granted in tandem with
a stock option shall be exercisable in relative proportion to and
to the extent that such related stock option is exercisable;
provided further, however, that, notwithstanding anything herein
to the contrary, any Stock Appreciation Right granted in tandem
with a Non-Statutory Option which has a purchase price at the
date of grant of less than Fair Market Value shall not be
exercisable at all until at least one (1) year after the date of
grant of such option. Except as provided in the immediately
preceding sentence, in the absence of any other provision by the
Committee, each Stock Appreciation Right granted under the Plan
shall be exercisable with respect to not more than twenty percent
(20%) of such shares subject thereto after the expiration of one
(1) year following the date of its grant, and shall be
exercisable as to an additional twenty percent (20%) of such
shares after the expiration of each of the succeeding four (4)
years, on a cumulative basis, so that such Right, or any
unexercised portion thereof, shall be fully exercisable after a
period of five (5) years following the date of its grant. The
Committee, in its sole discretion, may, from time to time and at
any time, accelerate the vesting provisions of any outstanding
Stock Appreciation Right.
(iii) Notwithstanding anything herein to the contrary,
except as provided in subsections (c)(v) and (c)(vi) of this
Section, no Participant who was, at the time of the grant of a
Stock Appreciation Right, an employee of the Corporation or a
Subsidiary, may exercise such Right or any part thereof unless at
the time of such exercise, he shall be employed by the
Corporation or a Subsidiary and shall have been so employed
continuously since the date of grant of such Right, excepting
leaves of absence approved by the Committee; provided that the
Stock Appreciation Right agreement may provide that such a
Participant may exercise his Stock Appreciation Right, to the
extent exercisable on the date of termination of such continuous
employment unless such Right shall have already expired by its
terms.
(iv) Notwithstanding anything herein to the contrary,
except as provided in subsections (c)(v) and (c)(vi) of this
Page 41
Section, no Non-Employee Director Participant may exercise a
Stock Appreciation Right or part thereof unless at the time of
such exercise he shall be a director of the Corporation and shall
have been a director of the Corporation continuously since the
date of grant of such Right excepting leaves of absence approved
by the Committee; provided that the Stock Appreciation Right
agreement may provide that such Participant may exercise his
Stock Appreciation Right, to the extent exercisable on the date
he ceased to be a director of the Corporation, during the three
(3) month period ending at the close of business on the day three
(3) months following the cessation of such continuous service as
a director unless such Right shall already have expired by its
terms.
(v) A Stock Appreciation Right shall be exercised in
accordance with the related Stock Appreciation Right Agreement by
serving written notice of exercise on the Corporation.
(c) TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock
Appreciation Rights shall be subject to such terms and conditions
as shall be determined from time to time by the Committee, subject
to the following:
(i) Stock Appreciation Rights granted in tandem with
stock options shall be exercisable only at such time or times and
to the extent that the related stock options shall be
exercisable;
(ii) Upon the exercise of a Stock Appreciation Right,
the applicable portion of any related stock option shall be
surrendered.
(iii) Stock Appreciation Rights granted in tandem with a
stock option shall be transferable only with such option. Stock
Appreciation Rights shall not be transferable otherwise than by
will or the laws of descent and distribution. All Stock
Appreciation Rights shall be exercisable during the Participant's
lifetime only by the Participant or the Participant's legal
representative.
(iv) A Stock Appreciation Right granted in tandem with a
stock option may be exercised only when the then Fair Market
Value of the Stock subject to the stock option exceeds the
exercise price of such option. A Stock Appreciation Right not
granted in tandem with a stock option may be exercised only when
the then Fair Market Value of the Stock exceeds the Fair Market
Value of the Stock on the date of grant of such Right.
(v) Each Stock Appreciation Right shall have a term not
in excess of ten (10) years from the date on which it is granted
(ten (10) years and one (1) day in the case of a Stock
Page 42
Appreciation Right granted in tandem with a Non-Statutory
Option); provided that any Stock Appreciation Right granted to
(aa) an employee of the Corporation or a Subsidiary shall
terminate not later than the close of business on the day three
(3) months following the date such Participant ceases to be
employed by the Corporation or a Subsidiary, excepting leaves of
absences approved by the Committee, and (bb) a Non-Employee
Director Participant shall terminate not later than the close of
business on the day three (3) months following the date such
Participant ceases to be a director of the Corporation, unless a
longer period is provided under subsection (c)(vi) below in the
event of death or disability of a Participant. Such a
Participant's Stock Appreciation Right shall be exercisable, if
at all, during such three (3) month period only to the extent
exercisable on the date his employment terminates or the date he
ceases to be a director, as the case may be.
(vi) In the event of the death or disability of a
Participant while in the employ of the Corporation or a
Subsidiary or while serving as a director of the Corporation, his
Stock Appreciation Right or the unexercised portion thereof may
be exercised within the period of one (1) year succeeding his
death or disability, but in no event later than (i) ten (10)
years from the date on which it was granted (ten (10) years and
one (1) day in the case of a Non-Statutory Option), by the person
or persons designated in the Participant's will for that purpose
or in the absence of any such designation, by the legal
representative of his estate, or by the legal representative of
the Participant, as the case may be. Notwithstanding anything
herein to the contrary and in the absence of any contrary
provision by the Committee, during the one-year period following
termination of employment or cessation as a director by reason of
death or disability, a Participant's Stock Appreciation Right
shall continue to vest in accordance with its terms and be and
become exercisable as if employment or service as a director had
not ceased.
(d) DISCRETIONARY PAYMENTS. Upon the written request of an
Optionee whose stock option is not accompanied by a Stock
Appreciation Right, the Committee may, in its discretion, cancel
such option if the Fair Market Value of the shares subject to the
option at the exercise date exceeds the exercise price thereof; in
that event, the Corporation shall pay to the Optionee an amount
equal to the difference between the Fair Market Value of the shares
subject to the cancelled option (determined as of the date the
option is cancelled) and the exercise price. Such payment shall be
by check or in Stock having a Fair Market Value (determined on the
date the payment is to be made) equal to the amount of such
payments or any combination thereof, as determined by the
Committee.
Page 43
(e) RULES RELATING TO EXERCISE. In the case of a Participant
subject to the restrictions of Section 16(b) of the Act, no stock
appreciation right (as referred to in Rule 16b-3(e) or any
successor Rule under the Act), including a Stock Appreciation Right
granted hereunder, shall be settled in cash (and no request for
payment under paragraph (d) above shall be honored by the
Corporation or made by such a Participant) except in compliance
with any applicable requirements of Rule 16b-3(e) or any successor
rule.
8. RESTRICTED STOCK.
(a) Nature of Restricted Stock Award. A Restricted Stock
Award is an Award entitling the Participant to receive shares of
Stock, subject to such conditions, including a Corporation right
during a specified period or periods to require forfeiture of such
shares upon the Participant's termination of employment with the
Corporation or a Subsidiary or cessation as a director of the
Corporation, as the case may be, as the Committee may determine at
the time of grant. The Committee, in its sole discretion, may,
from time to time and at any time, waive any or all restrictions
and/or conditions contained in the Restricted Stock Award
agreement. Notwithstanding anything herein to the contrary, the
Committee, in its discretion, may grant Restricted Stock without
any restrictions or conditions whatsoever. Restricted Stock shall
be granted in respect of past services or other valid
consideration.
(b) AWARD AGREEMENT. A Participant who is granted a
Restricted Stock Award shall have no rights with respect to such
Award unless the Participant shall have accepted the Award within
60 days (or such shorter date as the Committee may specify)
following the Award date by executing and delivering to the
Corporation a Restricted Stock Award Agreement in such form as the
Committee shall determine.
(c) RIGHTS AS A SHAREHOLDER. Upon complying with paragraph
(b) above, a Participant shall have all the rights of a shareholder
with respect to the Restricted Stock including voting and dividend
rights, subject to nontransferability and Corporation forfeiture
rights described in this Section 8 and subject to any other
conditions contained in the Award agreement. Unless the Committee
shall otherwise determine, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Corporation
until such shares are free of any restrictions under the Plan. The
Committee in its discretion may, as a precondition of the
Corporation's obligation to issue a Restricted Stock Award, require
the Participant to execute a stock power or powers or other
agreement or instruments necessary or advisable in connection with
the Corporation's forfeiture rights with respect to such shares.
Page 44
(d) RESTRICTIONS. Shares of Restricted Stock may not be
sold, assigned, transferred or otherwise disposed of or pledged or
otherwise encumbered. In the event of termination of employment of
the Participant with the Corporation or a Subsidiary for any
reason, or cessation as a director of the Corporation in the case
of a Non-Employee Director Participant, such shares shall be
forfeited to the Corporation, except as set forth below:
(i) The Committee at the time of grant shall specify the
date or dates (which may depend upon or be related to the
attainment of performance goals and other conditions) on which
the nontransferability of the Restricted Stock and the
Corporation's forfeiture rights with respect thereto shall lapse.
The Committee at any time may accelerate such date or dates and
otherwise waive or, subject to Section 13, amend any conditions
of the Award.
(ii) Except as may otherwise be provided in the Award
agreement, in the event of termination of a Participant with the
Corporation or a Subsidiary for any reason or cessation as a
director of the Corporation for any reason, all of the
Participant's Restricted Stock shall be forfeited to the
Corporation without the necessity of any further act by the
Corporation, the Participant or the Participant's legal
representative; provided, however, that in the event of
termination of employment or cessation of service as a director
of the Corporation by reason of death or disability, all
conditions and restrictions relating to a Restricted Stock Award
held by such a Participant shall thereupon be waived and shall
lapse.
(iii) In the absence of any other provision by the
Committee, each Restricted Stock Award granted to (A) an employee
of the Corporation or a Subsidiary shall be subject to forfeiture
to the Corporation conditioned on the Participant's continued
employment and (B) Non-Employee Director Participants shall be
subject to forfeiture to the Corporation conditioned on the
Participant's continued service as a director of the Corporation,
and in the case of clause (A) or (B), such forfeiture rights
shall lapse as follows: with respect to twenty percent (20%) of
the shares subject to the Restricted Stock Award on the date one
year following the date of grant, and with respect to an
additional twenty percent (20%) of such shares after the
expiration of each of the succeeding four (4) years thereafter,
on a cumulative basis, so that such Restricted Stock shall be
free of such risk of forfeiture on the date five (5) years
following the date of its grant.
(e) WAIVER, DEFERRAL, AND INVESTMENT OF DIVIDENDS. The
Restricted Stock Award agreement may require or permit the
immediate payment, waiver, deferral or investment of dividends paid
with respect to the Restricted Stock.
Page 45
9. THE COMMITTEE.
(a) ADMINISTRATION. The Committee shall be a committee of
not less than three (3) members of the Board who are Disinterested
Persons, appointed by the Board. Vacancies occurring in membership
of the Committee shall be filled by the Board. The Committee shall
keep minutes of its meetings. One or more members of the Committee
may participate in a meeting of the Committee by means of
conference telephone or similar communications equipment provided
all persons participating in the meeting can hear one another. A
majority of the entire Committee shall constitute a quorum, and the
acts of a majority of the members present at or so participating in
any meeting at which a quorum is constituted shall be the acts of
the Committee. The Committee may act without meeting by unanimous
written consent. Absent some other provision by the Board, the
power and responsibilities of the Committee shall be vested in and
assumed by the Personnel and Compensation Committee of the Board.
(b) AUTHORITY OF COMMITTEE. Subject to the provisions of the
Plan, the Committee shall have full and final authority to
determine the persons to whom Awards shall be granted, the number
of shares to be subject to each Award, the term of the Award, the
vesting provisions of the Award, if any, restrictions on the Award,
if any, and the price at which the shares subject thereto may be
purchased. The Committee is empowered, in its discretion, to
modify, extend or renew any Award theretofore granted and adopt
such rules and regulations and take such other action as it shall
deem necessary or proper for the administration of the Plan. The
Committee shall have full power and authority to construe, interpret
and administer the Plan, and the decisions of the Committee
shall be final and binding upon all interested parties.
10. ADJUSTMENTS. Any limitations, restrictions or other
provisions of this Plan to the contrary notwithstanding, each Award
agreement shall make such provision, if any, as the Committee may
deem appropriate for the adjustment of the terms and provisions
thereof (including, without limitation, terms and provisions
relating to the exercise price and the number and class of shares
subject to the Award) in the event of any merger, consolidation,
reorganization, recapitalization, stock dividend, divisive
reorganization, issuance of rights, combination or split-up or
exchange of shares, or the like. In the event of any merger
consolidation, reorganization, recapitalization, stock dividend,
divisive reorganization, issuance of rights, combination or split-
up or exchange of shares, or the like, the Committee shall make an
appropriate adjustment in the number of shares authorized to be
issued pursuant to the Plan.
11. OPTIONS UNDER PREDECESSOR PLAN . Options presently
outstanding which have been granted under the Predecessor Plan
shall continue to be governed and interpreted under the terms of
such plan and not by the terms hereof.
Page 46
12. AMENDMENT TO AND TERMINATION OF THE PLAN. The Board may from
time to time amend the Plan in such way as it shall deem advisable
provided the Board may not extend the expiration date of the Plan,
change the class of Eligible Persons, increase the maximum Award
term, decrease the minimum exercise price or increase the total
number of authorized shares (except in accordance with Section 10
hereof) for which Awards may be granted. The Board, in its
discretion, may at any time terminate the Plan prior to its
expiration in accordance with Section 4 hereof. No amendment to or
termination of the Plan shall in any way adversely affect Awards
then outstanding hereunder.
13. STATUS OF PLAN. Until shares pursuant to an Award or exercise
thereof are actually delivered to a Participant, a Participant
shall have no rights to or with respect to such shares greater than
those of a general creditor of the Corporation unless the Committee
shall otherwise expressly determine in connection with any Award or
Awards.
14. GENERAL PROVISIONS.
(a) OTHER COMPENSATION ARRANGEMENTS; NO RIGHT TO RECEIVE
AWARDS; NO EMPLOYMENT OR OTHER RIGHTS. Nothing contained in this
Plan shall prevent the Board from adopting other or additional
capital stock based compensation arrangements, subject to
stockholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only
in specific cases. No Eligible Person shall have any right to
receive Awards except as the Committee may determine. The Plan
does not confer upon any employee any right to continued employment
with the Corporation or a Subsidiary or upon any director or
officer of the Corporation any right to continued service as a
director or officer of the Corporation, nor does it interfere in
any way with the right of the Corporation or a Subsidiary to
terminate the employment of any of its employees or for the
Corporation to remove a director or officer with or without cause
at any time.
(b) TAX WITHHOLDING, ETC. Any obligation of the Corporation
to issue shares pursuant to the grant or exercise of any Award
shall be conditioned on the Participant having paid or made
provision for payment of all applicable tax withholding
obligations, if any, satisfactory to the Committee. The Corporation
and its Subsidiaries shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any kind
otherwise due to the Participant. In the case of Non-Statutory
Options, and Stock Appreciation Rights exercisable only for Stock,
the Participant exercising such an award shall satisfy federal
income tax withholding requirements occasioned by the exercise
thereof by the surrender of shares otherwise to be received on the
Page 47
exercise of such award, such shares to be valued at the Fair Market
Value thereof on the date of exercise; provided, however, that in
the event the Committee shall determine in any given instance that
the satisfaction of federal income tax withholding requirements by
the surrender of shares would be unlawful, unduly burdensome or
otherwise inappropriate, the Committee may require that such income
tax withholding requirements be satisfied in another acceptable
manner.
(c) SECTION 83(B) OF THE CODE. Participants may not make,
and each Award agreement shall prohibit, an election under Section
83(b) of the Code, with respect to any Award.
(d) RESTRICTIONS ON TRANSFERS OF SHARES. Although the
Corporation presently intends to register under applicable
securities laws all shares acquired or received by Participants
under the Plan, the Corporation is not required to cause such
shares to be registered under the Securities Act of 1933 or
the securities laws of any State. Accordingly, the shares
acquired or received may be "restricted securities" as defined
in Rule 144 under said Securities Act of 1933 or other rule or
regulation of the Securities and Exchange Commission. Any
certificate evidencing any such shares may bear a legend
restricting the transfer of such shares, and the recipient may
be required to assert that the shares are being acquired for
his own account and not with a view to the distribution thereof
as a condition to the granting or exercise of an Award.
(e) ISSUANCE OF SHARES. Any obligation of the Corporation to
issue shares pursuant to the grant or exercise of any Award shall
be conditioned on the Corporation's ability at nominal expense to
issue such shares in compliance with all applicable statutes, rules
or regulations of any governmental authority. The Participant
shall provide the Corporation with any assurances or agreements
which the Committee, in its sole discretion, shall deem necessary
or advisable in order that the issuance of such shares shall comply
with any such statutes, rules or regulations.
(f) DATE OF GRANT. The date on which each Award under the
Plan shall be considered as having been granted shall be the date
on which the award is authorized by the Committee, unless a later
date is specified by the Committee; provided, however, in the case
of options intended to qualify as Incentive Stock Options, the date
of grant shall be determined in accordance with the Code.
Page 48
EXHIBIT 10c
KAMAN CORPORATION
EMPLOYEES STOCK PURCHASE PLAN
As Amended effective February 18, 1992
1. PURPOSE; AUTHORIZED SHARES. The Kaman Corporation Employees
Stock Purchase Plan (the "Plan") was adopted by the Board of
Directors (the "Board") of Kaman Corporation (the "Corporation") on
February 28, 1989 for the purpose of providing employees of the
Corporation and its subsidiaries an opportunity to purchase Kaman
Corporation Class A common stock through payroll deductions during
consecutive offerings commencing July 1, 1989. One Million Five
Hundred Thousand (1,500,000) shares of the Corporation's Class A
common stock in the aggregate have been approved for purposes of
the Plan by the Board.
2. OFFERING PERIODS. Each offering shall be made over a period
of one or more whole or partial Plan Years as determined by the
Committee (as defined in paragraph 3), provided that in no event
shall an offering period be greater than five (5) Plan Years.
3. ADMINISTRATION. The Plan will be administered by a committee
(the "Committee") appointed by the Board, consisting of at least
three of its members. Members of the Committee shall not be
eligible to participate in the Plan. The Committee will have
authority to make rules and regulations for the administration of
the Plan, and its interpretations and decisions with respect to the
Plan shall be final and conclusive. Absent some other provision by
the Board, the power and responsibilities of the Committee shall be
vested in and assumed by the Personnel and Compensation Committee
of the Board.
4. ELIGIBILITY. All full-time regular employees of the
Corporation and its subsidiaries, with at least three (3) months of
service as of the effective date of each offering hereunder, will
be eligible to participate in the Plan, subject to such rules as
may be prescribed from time to time by the Committee. Such rules,
however, shall neither permit nor deny participation in the Plan
contrary to the requirements of the Internal Revenue Code of 1986,
as amended (the "Code"), including, but not limited to, Section 423
thereof, and regulations promulgated thereunder. To the extent
consistent with Code Section 423, and regulations promulgated
thereunder, the Committee may permit persons who are not full-time
regular employees of the Corporation or one of its subsidiaries at
the commencement of an offering period, or who have not satisfied
the aforementioned three (3) month service requirement at the
commencement of an offering period, to participate in such offering
Page 49
beginning on the date or at a specified date after such person has
been a full-time, regular employee of the Corporation or one of its
subsidiaries for at least three (3) months. No employee may be
granted a right under the Plan if such employee, immediately after
the right is granted, would own five percent (5%) or more of the
total combined voting power or value of the stock of the
Corporation or any subsidiary. For purposes of the preceding
sentence, the rules of Section 425(d) of the Code shall apply in
determining stock ownership of an employee, and stock which the
employee may purchase under outstanding rights shall be treated as
stock owned by the employee.
5. PARTICIPATION. An eligible employee may begin participation
in an offering at any time by completing and forwarding a payroll
deduction authorization form to the employee's appropriate payroll
location. The form will authorize a regular payroll deduction from
the employee's compensation, and must specify the date on which
such deduction is to commence. The authorization may not be
retroactive.
6. DEDUCTIONS. Payroll deduction accounts will be maintained for
all participating employees. An employee may authorize a payroll
deduction in terms of dollars and cents per payroll period of not
less than $1.00 or more than ten (10%) percent of the compensation
of the employee during any such payroll period.
7. DEDUCTION CHANGES. An employee may at any time increase or
decrease the employee's payroll deduction by filing a new payroll
deduction authorization form. The change may not become effective
sooner than the next pay period after receipt of the form. A
payroll deduction may be increased only twice and may be reduced
only twice during any Plan Year of an offering period, unless any
such additional change is required to permit the purchase of the
whole number of shares for which rights have been granted to the
employee under the provisions of paragraph 10.
8. INTEREST. Since the amount of time that the Corporation will
be holding funds withheld from employees' compensation is minimal,
no interest will be credited to employees' accounts.
9. WITHDRAWAL OF FUNDS. An employee may at any time and for any
reason permanently withdraw the balance of funds accumulated in the
employee's payroll deduction account, and thereby withdraw from
participation in an offering. Upon any such withdrawal, the
employee shall be entitled to receive in cash the value of any
fractional share (rounded to four decimal places) allocated to such
employee's account determined on the basis of the market value
thereof as of the date of withdrawal. The employee may thereafter
begin participation again only once during each Plan Year of an
offering period. Partial withdrawals will not be permitted.
Page 50
10. PURCHASE OF SHARES. Subject to the payroll deduction
limitation set forth in paragraph 6 and the limitation below, each
employee participating in an offering under this Plan will be
granted a right to purchase shares of the Corporation's Class
common stock which have an aggregate purchase price (determined
under paragraph 11) equal to the sum of (a) up to ten percent (10%)
of his or her compensation during each pay period of each offering
period in which he or she participates and (b) any cash dividends
reinvested in accordance with paragraph 12. In no event may an
employee be granted a right which permits such employee's rights to
purchase stock under this Plan, and any other stock purchase plan
of the Corporation and its subsidiaries, to accrue at a rate which
exceeds $25,000 of fair market value of stock (determined at the
date of grant of the right) for each calendar year in which the
right is outstanding at any time. No right may be exercised in any
manner other than by payroll deduction as specified in paragraph 6
or dividend reinvestment as specified in paragraph 12.
11. PURCHASE PRICE AND PAYMENT. The purchase price to
participating employees for each share of Class A common stock
purchased under the Plan will be 85% of its market value at the
time of purchase. Purchases of shares pursuant to the Plan shall
be made on the fifteenth (15th) day of each month. The number of
whole and fractional shares allocated to each employee's account as
of each date of purchase shall be based upon the balance of funds
in an employee's account available for the purchase of shares as of
the close of the immediately preceding month. A participating
employee's payroll deduction account shall be charged with the
purchase price of each whole and fractional share allocated to the
employee as of the date of purchase and the employee shall be
deemed to have exercised a right to acquire such whole and
fractional share as of such date. Additional shares covered by the
participating employee's rights under the Plan will be purchased in
the same manner, provided funds have again accrued in his account.
12. DIVIDENDS. Any cash dividends paid with respect to the shares
held under the Plan shall be paid in cash to the participating
employees for whom shares are so held on the basis of the number of
whole and fractional shares so held or, if a participating employee
so elects, such dividends shall be combined with payroll
deductions, added to the funds held under the Plan, and applied to
the purchase of additional shares of stock purchased pursuant to
the Plan. A participating employee choosing to have dividends
reinvested under this paragraph may terminate such election during
an offering period by filing a written form at the appropriate
payroll location, but may thereafter resume his election to
reinvest such cash dividends only once during each Plan Year of an
offering period. An election to either stop or resume dividend
reinvestment will be effective with respect to the dividend payment
Page 51
next following receipt of the form; provided that if the form is
filed within thirty (30) days before a dividend record date
declared by the Board, then such election will not be effective
with respect to that particular dividend declaration.
13. STOCK CERTIFICATES. Stock certificates will only be issued to
participating employees promptly after their request or promptly
after the participating employee's withdrawal from the Plan for any
reason.
14. REGISTRATION OF CERTIFICATES. Certificates may be registered
only in the name of the employee, or if the employee so indicates
on the employee's payroll deduction authorization form, in the
employee's name jointly with a member of the employee's family,
with right of survivorship. An employee who is a resident of a
jurisdiction which does not recognize such a joint tenancy may have
certificates registered in the employee's name as tenant in common
with a member of the employee's family, without right of
survivorship.
15. DEFINITIONS. The following terms when used herein shall have
the meanings set forth below:
(a) The phrase "market value" or "fair market value" means the
closing price of the Corporation's Class A common stock in the
Over-the-Counter NASDAQ National Market System, as reported in
the Hartford, Connecticut local issue of The Wall Street
Journal, on the business day immediately preceding the day of
purchase or the effective date of the offering as the context
requires.
(b) The term "subsidiary" means a subsidiary of the Corporation
within the meaning of Section 425(f) of the Internal Revenue
Code and the regulations thereunder, provided, however, that
each consecutive offering under this Plan shall not be deemed to
cover the employees of any subsidiary acquired or established
after the effective date of such offering, unless so authorized
by the Committee.
(c) a "Plan Year" means the calendar year.
16. RIGHTS AS A SHAREHOLDER. None of the rights or privileges of
a shareholder of the Corporation shall exist with respect to (a)
rights granted to a participating employee under the Plan or, (b)
except as provided in paragraph 12, any fractional shares credited
to the participating employee's account.
17. RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF EMPLOYMENT. In
the event of a participating employee's retirement, death or
termination of employment, no payroll deduction shall be taken from
Page 52
any pay due and owing to an employee at such time, and the balance
in the employee's account (including the value of any fractional
shares calculated in the manner described in paragraph 9) shall be
paid to the employee or, in the event of the employee's death, to
the employee's estate; provided, however, that in the event shares
credited to the account of a deceased employee would have been
issued to the employee and a joint tenant with right of
survivorship as permitted in paragraph 14 if issued immediately
prior to such employee's death, then such shares shall be issued to
such joint tenant, if living at the time such shares are issued.
18. OBLIGATION OF CORPORATION TO PURCHASE. In the event of
personal or family circumstances of an emergency nature, for a
period of one year after the exercise of a right to purchase a
share or shares as described in paragraphs 10 and 11, a
participating employee shall have the right to offer such shares
back to the Corporation at the price at which such shares were
purchased, and the Corporation shall have the obligation to make such
repurchase.
19. RIGHTS NOT TRANSFERABLE. Rights under this Plan are not
transferable by a participating employee and are exercisable during
an employee's lifetime only by the employee.
20. APPLICATION OF FUNDS. All funds received or held by the
Corporation under this Plan may be used for any corporate purpose.
21. ADJUSTMENT IN CASES OF CHANGES AFFECTING CLASS A STOCK. In
the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, combination, issuance of rights,
split-up or spin-off of the Corporation, or the like, the number of
shares approved for this Plan shall be increased appropriately and
such other adjustments to the terms of this Plan shall be made as
may be deemed equitable by the Board. In the event of any other
change affecting such stock, such adjustments shall be made as may
be deemed equitable by the Board to give proper effect to such
event.
22. AMENDMENT OF THE PLAN. The Board may at any time, or from
time to time, amend this Plan in any respect, except that, without
the approval of each class of stock of the Corporation then issued
and outstanding and entitled to vote on the matter by applicable
law, no amendment shall be made (i) increasing the number of shares
approved for this Plan (other than as provided in paragraph 21);
(ii) decreasing the purchase price per share; (iii) withdrawing the
administration of this Plan from the Committee; or (iv) changing
the designation of subsidiaries eligible to participate in the
Plan, except adding a subsidiary as provided in paragraph 15(b).
23. TERMINATION OF PLAN. This Plan and all rights of employees
under an offering hereunder shall terminate:
Page 53
(a) on the date that participating employees' accumulated
payroll deductions pursuant to paragraph 6 and amounts
reinvested pursuant to paragraph 12 are sufficient to purchase a
number of shares equal to or greater than the number of shares
remaining available for purchase. If the number of shares so
purchasable is greater than the shares remaining available, the
available shares shall be allocated by the Committee among such
participating employees in such manner as it deems equitable, or
(b) at any time at the discretion of the Board.
Upon termination of the Plan all amounts in the accounts of
participating employees not applied to the purchase of shares
hereunder, together with the value of any fractional shares
calculated in the manner described in paragraph 9, shall be
promptly refunded.
24. GOVERNMENT REGULATIONS. The Corporation's obligation to sell
and deliver shares of its Class A common stock under this Plan is
subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such stock.
25. SHARES USED TO FUND PLAN. The Corporation may utilize
unissued or treasury shares to fund the Plan. Purchases of
outstanding shares may also be made pursuant to and on behalf of
the Plan, upon such terms as the Corporation may approve, for
delivery under the Plan.
26. QUALIFIED PLAN. This Plan is intended to qualify as an
Employee Stock Purchase Plan as defined in Section 423 of the Code.
The term "right" as used herein shall mean "option" as used in
Section 423, and is used herein only to avoid confusion with
"options" granted under the Kaman Corporation 1983 Stock Incentive
Plan.
27. SUCCESSOR CORPORATION. The rights and obligations of the
Corporation under this Plan shall inure to and be binding upon any
successor to all or substantially all of the Corporation's assets
and business.
28. BUSINESS DAYS. If any event provided for in this Plan is
scheduled to take place on a day which is not a business day then
such event shall take place on the immediately preceding business
day.
Page 54
29. SPECIAL RULE APPLICABLE TO EXECUTIVE OFFICERS AND DIRECTORS OF
THE CORPORATION. Notwithstanding any other provision of the Plan,
participants who are Executive Officers or Directors and who cease
to participate in the Plan shall be thereafter prohibited, for a
period of six (6) months following the date of such cessation from
again electing to participate in the Plan. For purposes of this
section, the term "Executive Officer" means an "Executive Officer"
as defined in Section 3b-7 of the Securities Exchange Act of 1934.
Page 55
EXHIBIT 11
KAMAN CORPORATION AND SUBSIDIARIES
EARNINGS PER SHARE COMPUTATION(In Thousands Except Per Share Amounts)
1993 1992 1991
---- ---- ----
Primary:
Net earnings (loss) $(28,795) $17,376 $16,967
======= ======= =======
Preferred stock dividend requirement $ (702) $ --- $ ---
======= ======= =======
Net earnings (loss) applicable
to common stock $(29,497) $17,376 $16,967
======== ======= =======
Weighted average number of common
shares outstanding 18,133 18,172 18,231
Weighted average shares issuable on
exercise of dilutive stock options * 111 51
------- ------- -------
Total 18,133 18,283 18,282
======= ======= =======
Net earnings (loss) per
common share-primary $ (1.63) $ .95 $ .93
======= ======= =======
Fully diluted:
Net earnings(loss)applicable
to common stock $(29,497) $17,376 $16,967
Elimination of interest expense on
6% subordinated convertible
debentures (net after taxes) * 3,414 3,412
Elimination of preferred stock
dividend requirement * --- ---
------- ------- ------
Net earnings(loss)(as adjusted) $(29,497) $20,790 $20,379
======= ======= =======
Weighted average number of shares
outstanding including shares
issuable on stock option exercises 18,133 18,283 18,282
Additional shares using ending market
price instead of average market on
treasury method use of stock
option proceeds * 16 8
Shares issuable on conversion of
Series 2 preferred stock * - -
Shares issuable on conversion of 6%
subordinated convertible debentures * 4,067 4,067
------- ------- -------
Total 18,133 22,366 22,357
======= ======= =======
Net earnings (loss) per
common share-fully diluted $ (1.63) $ .93 $ .91
======= ======= =======
*Anti-dilutive and accordingly not included in the computation.
Page 56
EXHIBIT 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenues for 1993 were $794.1 million compared to $784.7 million
in 1992 and $780.4 million in 1991. The corporation's performance
in 1993 was affected by reductions in defense expenditures, a
slowdown in the commercial aircraft industry, and continued
weakness in domestic economic growth. Results were also affected
by the recording of a pre-tax restructuring charge in the amount
of $69.5 million to reflect costs associated with downsizing the
corporation's defense and commercial aircraft manufacturing
businesses and development of defense conversion initiatives.
Diversified Technologies segment revenues were down 5% in both
1993 and 1992, and down 7% in 1991. Segment performance continues
to be affected by conditions in defense markets and in the
commercial aircraft industry. The defense portion of Diversified
Technologies business (82% in 1993) has been influenced for some
time now by the changing nature of U.S. defense planning and
spending priorities and by federal budget constraints which
continue to result in reductions in defense expenditures. As the
federal government attempts to address the ongoing issues of the
budget deficit, weak economic growth, and basic reform to the
U.S. healthcare system, it appears likely that defense spending
will be even further reduced in future periods.
Management believes that certain types of programs are likely to
fare better than others in this environment. As the defense
establishment responds to the fact that the form of military
threat throughout the world has changed and that the public has
grown more intolerant of the loss of lives in military conflict,
it is moving toward greater emphasis on more cost effective
advanced technology "smart" weapons which are intended to limit
loss of life and unnecessary destruction of property. The
corporation has significant expertise in this area, having
performed a multitude of government contracts for advanced
technology programs over the years. Management believes that the
corporation is particularly well positioned to compete in a
defense environment that emphasizes advanced technology products
and systems, and advanced technology services such as computer
software development, intelligence analysis, and scientific and
research and development services.
Page 57
This change in defense program emphasis along with the federal
government's fiscal condition have created an environment in
which military hardware programs are increasingly subject to
risks of one form or another, whether it be lack of funding,
contract cancellation, or simply the ending of an entire program.
The corporation is feeling the effects of these risks,
principally with respect to its SH-2 helicopter. The corporation
expects to finish its contract to retrofit certain SH-2F's to the
SH-2G configuration sometime in 1994. Given the fact that the
U.S. Navy is beginning to reduce the size of its fleet,
management does not believe that the Navy will require further
retrofits of this helicopter. Moreover, as fleet size decreases,
so will the number of these helicopters remaining in active
service. The corporation will continue to provide logistics and
spare parts support for the SH-2 at somewhat lower levels than in
the past. The corporation's other military hardware programs have
shrunk further during 1993 as a result of the cancellation of a
contract relating to the rewinging of the A-6.
Within the Diversified Technologies segment, management has been
successful in the development of a variety of commercial markets.
The corporation performs work on a number of commercial airframe
manufacturing programs, although reductions in commercial air
travel and consolidation in the domestic aircraft industry have
caused a slowdown in aircraft production rates which adversely
affected several of our programs in 1993. Late in 1993 the
corporation received a stop work order with respect to its
manufacture of thrust reverser fixed structures for the GE CF6
engines which will cause further reductions in 1994.
One important facet of the segment's commercial diversification
is the new K-MAX helicopter, a medium to heavy lift "aerial
truck" with unique operating characteristics that distinguish it
from other helicopters used for logging, fire fighting, and other
utility applications. A substantial portion of the corporation's
research and development expenditures during the last few years
have been devoted to this product and FAA certification is
expected by mid 1994. The production phase for the first five
helicopters has begun and units are expected to be delivered to
initial customers shortly after certification is received. The
corporation will lease the first group under a special program in
order to maintain active involvement in the product's
introduction to the marketplace. Although management believes
that this program is an important part of the corporation's
defense conversion effort, in the shorter term the program is not
expected to materially offset the effects of reduced defense
spending.
Page 58
Distribution segment revenues increased by almost 7% in 1993, and
6% in 1992 compared to a decrease of 4% in 1991. Industrial
technologies sales (about 75% of this segment's business in 1993)
are made to nearly every sector of U.S. industry so demand for
products tends to be influenced by industrial production levels.
While industrial technologies sales increased during 1993 in a
very competitive market environment, relatively slow growth in
industrial output during the last few years has continued to
affect segment sales. The increased sales reflect ongoing
programs designed to further enhance the technological content of
the products distributed and the services provided. Music
Distribution sales increased significantly during 1993, largely
as a result of further development of international markets for
the company's products.
As a result of the third quarter pre-tax restructuring charge,
the corporation had an operating loss of $37.2 million and a net
loss of $28.8 million for 1993. In 1992, the corporation had
operating income of $36.5 million and net earnings of $17.4
million. The Diversified Technologies segment had an operating
loss of $41.3 million for 1993 compared to an operating profit of
$31.0 million for the previous year, with the loss being
attributable to the restructuring charge. The Distribution
segment had operating profits of $16.5 million for 1993 compared
to $15.2 million for 1992, with the increase being attributable
to increased sales in the Music Distribution business. These
results also reflect the fact that the overall mix of the
corporation's activities is in the process of shifting to
businesses with somewhat lower profit margins.
The third quarter charge reflects restructuring and other non-
recurring costs which the corporation has incurred or expects to
incur in the next two years as it reduces the size of its defense
and commercial aircraft manufacturing programs and develops
defense conversion initiatives. Personnel and facility
reductions, contract close out and related expenses associated
with downsizing account for about half of the charge; the balance
relates to the write-off of costs incurred for development,
retooling and start-up for defense conversion initiatives,
notably the K-MAX commercial helicopter. During future periods,
the corporation will work to successfully implement the elements
of this restructuring.
The corporation's operating income was relatively even and net
earnings were up 2.4% for the year ended December 31, 1992
compared to 1991. Diversified Technologies operating profits for
1992 were down by 6.9% and Distribution segment operating profits
were up by 19%. The Diversified Technologies segment results were
primarily attributable to reductions in defense spending,
Page 59
research and development expenditures which increased by 27% in
1992 and by 42% in 1991, the ongoing shift in its business mix to
products and services with somewhat lower profit margins and
continued program costs associated with qualification of the SH-
2G helicopter. The Distribution segment's performance was
primarily the result of increased sales and internal initiatives
to increase the efficiency of operations.
The fully diluted loss per share figure for 1993 does not reflect
the potential conversion of the 6% convertible subordinated
debentures, potential conversion of the corporation's new Series
2 Preferred Stock (issued in the fourth quarter) or the exercise
of stock options, since their effect was anti-dilutive.
Fully diluted earnings per share figures for 1992 and 1991
include the potential conversion of the debentures and exercise
of stock options since they were dilutive.
Interest expense was relatively flat for 1993 compared to a
decrease of 13.5% in 1992. The corporation had higher average
bank borrowings during 1993, however, interest expense was offset
somewhat as a result of the exchange of the majority of the
outstanding 6% convertible subordinated debentures during the
fourth quarter. The reduction in 1992 was due to lower interest
rates and lower average bank borrowings.
The corporation had other income in 1993 principally due to the
net gain realized upon the exchange of the debentures.
The corporation recorded an income tax benefit at an overall rate
of 28.9% for 1993. This benefit is principally represented by the
recording of a deferred tax asset resulting from the charge for
the restructuring and other costs. The income tax benefit for
1993 is lower than it otherwise would have been due to the
unavailability of certain state income tax benefits on the net
operating loss and provisions made for prior years tax
examinations. The corporation's consolidated effective income tax
rate was 40.1% for 1992 and 1991.
Effective January 1, 1993, the corporation adopted Statement of
Financial Accounting Standards No. 109, Accounting for Income
Taxes. The cumulative effect of this change in accounting for
income taxes determined as of January 1, 1993 was immaterial to
the consolidated statements of earnings. Effective January 1,
1993, the corporation adopted Statement of Financial Accounting
Standards No. 106 concerning rules for certain post-retirement
benefits. Retirees are generally responsible for the cost of
their post-retirement benefits, therefore, adoption of this
statement did not result in any material adjustment to or
Page 60
disclosure in the consolidated financial statements. Effective
January 1, 1993, the corporation also adopted Statement of
Financial Accounting Standards No. 112 concerning accounting
for certain post-employment benefits. Adoption of this
statement did not result in any material adjustment to or
disclosure in the consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES
The corporation's cash flow from operations has generally been
sufficient to finance a significant portion of its working
capital and other capital requirements. During 1993, however,
investments of cash from operations into the corporation's
developing programs resulted in the need to supplement cash flow
from operations with increased average bank borrowings.
During the third quarter of 1993, the corporation made an offer
pursuant to which holders of its 6% convertible subordinated
debentures might exchange them for the corporation's newly
created Series 2 Preferred Stock. The purpose of the offer was to
increase the corporation's equity capital while reducing its
indebtedness. On October 22, 1993 the corporation exchanged $61.8
million of debentures (66.73% of the amount actually tendered)
for $57.2 million of preferred stock (285,837 shares of preferred
stock represented by 1,143,348 depositary shares). The preferred
stock is convertible to Class A common stock at a price of $12.56
per share and has a 6.5% cumulative dividend rate. The
corporation recorded a net gain of $3 million as a result of the
exchange. While the transaction was favorable to the corporation
from a debt to equity standpoint, it resulted in further dilution
of outstanding common stock in the event of conversion of the
preferred stock and some dilution of the earnings that would
otherwise be available for common shareholders.
For general borrowing purposes, the corporation has revolving
credit agreements involving several banks located in the U.S.,
Canada and Europe. These agreements currently provide unsecured
lines of credit totaling $145 million and contain various
covenants, including working capital and tangible net worth
requirements. Eighty million dollars of the total revolving
credit commitment is scheduled to end in January, 1996 with the
balance expiring in September, 1996, at which time borrowings may
be converted to term loans. There were no borrowings under these
agreements during 1993 or 1992.
The corporation also maintains other short-term credit
arrangements with various banks. As of December 31, 1993, these
bank borrowings were at $31.2 million. Average bank borrowings
against these short-term arrangements were approximately $43.2
million in 1993 compared to $16.7 million for 1992.
Page 61
The corporation began a stock repurchase program in 1987,
predominantly for the purpose of meeting the needs of its
Employees Stock Purchase Plan and Stock Incentive Plan; the
program was renewed in early 1992 authorizing the purchase of up
to 700,000 of the company's Class A shares. Through December 31,
1993, 653,000 shares had been repurchased under the renewed
program.
The corporation believes that its cash flow from operations and
available unused bank lines of credit under its revolving credit
agreements will be sufficient to finance its working capital and
other capital requirements for the foreseeable future.
Page 62
SELECTED QUARTERLY FINANCIAL DATA
- ---------------------------------
(In thousands except per share amounts)
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
- ------------------------------------------------------------------
Net sales:
1993 $197,598 $194,553 $202,488 $197,871 $792,510
1992 205,049 187,882 189,266 200,653 782,850
Gross profit:
1993 $ 53,301 $ 52,128 $ 48,845 $ 49,999 $204,273
1992 50,346 49,903 50,370 48,593 199,212
Net earnings(loss):
1993 $ 4,012 $ 4,779 $(42,499) $ 4,913 $(28,795)
1992 3,904 4,761 4,527 4,184 17,376
Per common share
- primary:
1993 $.22 $.26 $(2.36) $.23 $(1.63)
1992 .21 .26 .25 .23 .95
Per common share
- fully diluted:
1993 $.22 $.25 $(2.36) $.23 $(1.63)
1992 .21 .25 .24 .23 .93
==================================================================
Gross profit for 1993 excludes the effect of restructuring and
other costs.
The conversion of the convertible subordinated debentures (and to
the extent applicable the Series 2 preferred stock) along with
the exercise of the stock options were not assumed in the net
loss per common share - primary and fully diluted calculations
for the third quarter of and year 1993 because they had an anti-
dilutive effect. As a result, the quarterly per common share
amounts when added together do not equal the total for the year
1993.
Page 63
CONSOLIDATED BALANCE SHEETS
Kaman Corporation and Subsidiaries
December 31, 1993 and 1992
(In thousands except share and per share amounts)
1993 1992
- -------------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,845 $ 2,455
Accounts receivable 165,615 178,673
Inventories 130,451 140,796
Other current assets 16,690 12,657
- --------------------------------------------------------------------------
Total current assets 316,601 334,581
- --------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, NET 81,711 73,262
GOODWILL, NET 29,438 30,706
OTHER ASSETS 12,446 4,896
- --------------------------------------------------------------------------
$440,196 $443,445
==========================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 31,161 $ 7,668
Current portion of long-term debt 704 763
Accounts payable-trade 51,246 59,309
Accrued salaries and wages 6,338 6,254
Accrued vacations 6,454 6,297
Accrued restructuring and other costs 32,500 ---
Other accruals and payables 35,023 38,137
Income taxes payable 3,339 3,587
- --------------------------------------------------------------------------
Total current liabilities 166,765 122,015
- --------------------------------------------------------------------------
Page 64
DEFERRED CREDITS 7,141 11,006
LONG-TERM DEBT, EXCLUDING CURRENT PORTION 37,977 100,889
SHAREHOLDERS EQUITY:
Capital stock, $1 par value per share:
Preferred stock, authorized 700,000 shares:
Series 2 preferred stock, 6 1/2% cumulative
convertible
(stated at liquidation preference
of $200 per share)
authorized 500,000 shares, issued
285,837 shares in 1993 57,167 ---
Common stock:
Class A, authorized 48,500,000 shares,
nonvoting; $.10 per common share
dividend preference; issued 17,600,381
shares in 1993 and 1992 17,600 17,600
Class B, authorized 1,500,000 shares, voting;
issued 667,814 shares in 1993 and 1992 668 668
Additional paid-in capital 18,459 19,343
Retained earnings 137,490 174,607
Unamortized restricted stock awards (968) (1,008)
Equity adjustment from foreign currency translation (158) 52
- --------------------------------------------------------------------------
230,258 211,262
Less 174,407 shares and 171,883 shares of
Class A common stock in 1993 and 1992,
respectively, held in treasury, at cost (1,945) (1,727)
- --------------------------------------------------------------------------
Total shareholders' equity 228,313 209,535
- --------------------------------------------------------------------------
$440,196 $443,445
==========================================================================
See accompanying notes to consolidated financial statements.
Page 65
CONSOLIDATED STATEMENTS OF EARNINGS
Kaman Corporation and Subsidiaries
Years ended December 31, 1993, 1992 and 1991
(In thousands except per share amounts)
1993 1992 1991
- --------------------------------------------------------------------------
REVENUES:
Net sales $792,510 $782,850 $778,469
Other 1,582 1,882 1,888
- --------------------------------------------------------------------------
794,092 784,732 780,357
- --------------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of sales 588,237 583,638 582,641
Selling, general and administrative expense 173,581 164,603 160,824
Interest expense 6,976 7,086 8,191
Restructuring and other costs 69,500 --- ---
Other expense (income) (3,728) 401 359
- --------------------------------------------------------------------------
834,566 755,728 752,015
- --------------------------------------------------------------------------
EARNINGS (LOSS) BEFORE INCOME TAXES (40,474) 29,004 28,342
INCOME TAXES (BENEFIT) (11,679) 11,628 11,375
- --------------------------------------------------------------------------
NET EARNINGS (LOSS) $(28,795) $ 17,376 $ 16,967
==========================================================================
PREFERRED STOCK DIVIDEND REQUIREMENT $ (702) $ --- $ ---
==========================================================================
EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $(29,497) $ 17,376 $ 16,967
==========================================================================
PER SHARE:
Net earnings (loss) per common share:
Primary $ (1.63) $ .95 $ .93
Fully diluted (1.63) .93 .91
Dividends declared:
Series 2 preferred stock 1.37 -- --
Common stock .44 .44 .44
==========================================================================
See accompanying notes to consolidated financial statements.
Page 66
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Kaman Corporation and Subsidiaries
Years ended December 31, 1993, 1992 and 1991
(In thousands except share amounts)
1993 1992 1991
- --------------------------------------------------------------------------
SERIES 2 PREFERRED STOCK:
Balance beginning of year $ --- $ --- $ ---
Shares issued 57,167 --- ---
- --------------------------------------------------------------------------
Balance end of year 57,167 --- ---
- --------------------------------------------------------------------------
CLASS A COMMON STOCK:
Balance beginning of year 17,600 17,600 17,581
Shares (19,353) issued under
acquisition agreement --- --- 19
- --------------------------------------------------------------------------
Balance end of year 17,600 17,600 17,600
- --------------------------------------------------------------------------
CLASS B COMMON STOCK 668 668 668
- --------------------------------------------------------------------------
ADDITIONAL PAID-IN CAPITAL:
Balance beginning of year 19,343 19,686 19,846
Employee stock plans (409) (329) (298)
Restricted stock awards (75) (14) (16)
Expenses relating to issuance
of preferred stock (400) --- ---
Shares issued under acquisition agreement --- --- 154
- --------------------------------------------------------------------------
Balance end of year 18,459 19,343 19,686
- --------------------------------------------------------------------------
RETAINED EARNINGS:
Balance beginning of year 174,607 165,218 156,278
Net earnings (loss) (28,795) 17,376 16,967
Dividends declared:
Preferred stock (392) --- ---
Common stock (7,930) (7,987) (8,027)
- --------------------------------------------------------------------------
Balance end of year 137,490 174,607 165,218
- --------------------------------------------------------------------------
UNAMORTIZED RESTRICTED STOCK AWARDS:
Balance beginning of year (1,008) (1,003) (996)
Stock awards issued (323) (356) (316)
Amortization of stock awards 363 351 309
- --------------------------------------------------------------------------
Balance end of year (968) (1,008) (1,003)
- --------------------------------------------------------------------------
Page 67
EQUITY ADJUSTMENT FROM FOREIGN
CURRENCY TRANSLATION:
Balance beginning of year 52 33 18
Translation adjustment (210) 19 15
- --------------------------------------------------------------------------
Balance end of year (158) 52 33
- --------------------------------------------------------------------------
TREASURY STOCK:
Balance beginning of year (1,727) (52) (291)
Shares acquired in 1993 315,961;
1992 444,280; 1991 266,258 (3,520) (4,382) (2,329)
Shares reissued under various stock plans 3,302 2,707 2,568
- --------------------------------------------------------------------------
Balance end of year (1,945) (1,727) (52)
- --------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY $228,313 $209,535 $202,150
==========================================================================
See accompanying notes to consolidated financial statements.
Page 68
CONSOLIDATED STATEMENTS OF CASH FLOWS
Kaman Corporation and Subsidiaries
Years ended December 31, 1993, 1992 and 1991
(In thousands)
1993 1992 1991
- --------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $(28,795) $ 17,376 $ 16,967
Adjustments to reconcile net earnings
(loss) to cash provided by (used in)
operating activities:
Depreciation and amortization 13,456 13,373 13,603
Net gain on exchange of debentures (3,037) --- ---
Restructuring and other costs 69,500 --- ---
Deferred income taxes (19,679) (4,500) (3,535)
Other, net 937 1,009 (85)
Changes in current assets and
liabilities:
Accounts receivable 13,058 (8,304) 19,361
Inventories (22,155) (8,388) (2,249)
Other current assets (229) (638) 4
Accounts payable trade (8,063) 7,934 2,498
Accrued expenses and payables (7,614) (4,398) 4,905
Income taxes payable (248) 622 (464)
- --------------------------------------------------------------------------
Cash provided by (used in)
operating activities 7,131 14,086 51,005
- --------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property,
plant and equipment and other assets 1,014 515 242
Expenditures for property, plant
and equipment (20,428) (10,562) (8,577)
Other, net 689 (299) (468)
- --------------------------------------------------------------------------
Cash provided by (used in)
investing activities (18,725) (10,346) (8,803)
- --------------------------------------------------------------------------
Page 69
CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in notes payable 23,493 7,331 (12,982)
Changes in current portion of
long-term debt (59) (390) 249
Reduction of long-term debt (1,108) (1,164) (21,154)
Proceeds from exercise of employee
stock plans 2,500 2,008 1,938
Purchases of treasury stock (3,520) (4,382) (2,329)
Dividends paid Series 2 preferred stock (392) --- ---
Dividends paid common stock (7,930) (7,987) (8,027)
Other, net --- --- 159
- --------------------------------------------------------------------------
Cash provided by (used in)
financing activities 12,984 (4,584) (42,146)
- --------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 1,390 (844) 56
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 2,455 3,299 3,243
- --------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 3,845 $ 2,455 $ 3,299
==========================================================================
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
On October 22, 1993, the corporation exchanged $61,804 of its 6%
convertible subordinated debentures for $57,167 of its new Series 2
preferred stock.
See accompanying notes to consolidated financial statements.
Page 70
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Kaman Corporation and Subsidiaries
December 31, 1993, 1992 and 1991
(In thousands except share and per share amounts)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the
accounts of the parent corporation and its subsidiaries. All
significant intercompany balances and transactions have been
eliminated in consolidation.
CASH AND CASH EQUIVALENTS
Excess funds are invested in cash equivalents which consist of
highly liquid investments with original maturities of three
months or less.
LONG-TERM CONTRACTS-REVENUE RECOGNITION
Certain sales are made under fixed price and cost reimbursement
type contracts. Estimated profits under such contracts are
recorded concurrently with costs incurred thereon on the basis of
percentage of completion. Any anticipated total contract losses
are charged to operations during the period the loss is first
indicated. Profits and losses accrued include the cumulative
effect of changes in prior periods' price and cost estimates.
INVENTORIES
Inventory of merchandise for resale and parts are stated at cost
(using the average costing method) or
market, whichever is lower. Contracts and work in process are
valued at production cost represented by material, labor
and overhead, including general and administrative expenses where
applicable. Contracts and work in process are not recorded in
excess of net realizable values.
PROPERTY, PLANT AND EQUIPMENT
Depreciation of property, plant and equipment is computed
primarily on a straight-line basis over the estimated useful
lives of the assets. At the time of retirement or disposal, the
acquisition cost of the asset and related accumulated
depreciation are eliminated and any gain or loss is credited or
charged against income.
Maintenance and repair items are charged against income as
incurred, whereas renewals and betterments are capitalized and
depreciated.
Page 71
GOODWILL
Amortization of goodwill is calculated on a straight-line method
over its estimated useful life but not in excess of forty years.
Such amortization amounted to $1,268 in 1993, $1,265 in 1992 and
$1,261 in 1991. Accumulated amortization amounted to $9,998 at
December 31, 1993.
RESEARCH AND DEVELOPMENT
Research and development costs not specifically covered by
contracts are charged against income as incurred. Such costs
amounted to $18,350 in 1993, $17,778 in 1992 and $13,995 in 1991.
INCOME TAXES
The corporation adopted Statement of Financial Accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes,
effective January 1, 1993. Under the asset and liability method
prescribed by SFAS 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
temporary differences between the financial statement carrying
amounts of assets and liabilities and their respective tax bases
using enacted tax rates expected to apply in the years in which
temporary differences are expected to be recovered or settled.
Prior to adopting SFAS 109, deferred income taxes were recorded
for differences in the recognition of items of income and expense
for financial and tax reporting purposes using the tax rates
applicable in the year of the calculation.
RESTRUCTURING AND OTHER COSTS
The corporation recorded a pre-tax charge of $69,500 in the
third quarter of 1993 which resulted in a net loss of $28,800
for the year.
The third quarter charge reflects restructuring and other non-
recurring costs which the corporation has incurred or expects to
incur in the next 24 months as it develops defense conversion
initiatives and downsizes the defense and commercial aircraft
manufacturing business of the Diversified Technologies segment.
About half of the charge is attributable to personnel and
facility reductions, contract close out and related expenses
associated with downsizing; the balance relates to the write-off
of costs incurred for development, retooling and start-up for
defense conversion initiatives, notably the K-MAX "aerial truck"
commercial helicopter.
Page 72
EXCHANGE OF CONVERTIBLE SUBORDINATED DEBENTURES
On October 22, 1993, pursuant to an exchange offer to all
debentureholders, the corporation exchanged $61,804 of its 6%
convertible subordinated debentures for $57,167 of its new 6 1/2%
cumulative convertible Series 2 preferred stock (convertible into
Class A common stock at $12.56 per share). The pre-tax gain on
the exchange of the debentures was $3,037 net of expenses of
approximately $1,600. Additional issuance expenses of $400 were
charged directly to additional paid-in capital.
Page 73
ACCOUNTS RECEIVABLE
Accounts receivable consist of the following:
December 31,
1993 1992
- ------------------------------------------------------------------
Trade receivables, net of allowance
for doubtful accounts of $1,576 in
1993, $1,234 in 1992 $ 57,568 $ 51,107
U.S. Government contracts:
Billed 42,235 45,108
Recoverable costs and accrued
profit-not billed 34,072 35,805
Commercial contracts:
Billed 11,781 10,924
Recoverable costs and accrued
profit-not billed 19,959 35,729
- ------------------------------------------------------------------
Total $165,615 $178,673
==================================================================
Recoverable costs and accrued profit-not billed represent costs
incurred on contracts, including contract retentions, which will
become billable upon future deliveries or completion of
engineering and service type contracts. Management estimates that
approximately $6,500 of such costs and accrued profits at
December 31, 1993 will be collected after one year.
INVENTORIES
Inventories are comprised as follows:
December 31,
1993 1992
- --------------------------------------------------------------------
Merchandise for resale $ 91,495 $ 87,916
Contracts in process:
U.S. Government 9,122 15,890
Commercial 5,356 19,365
Other work in process (including
certain general stock material
and parts) 24,478 17,625
- --------------------------------------------------------------------
Total $130,451 $140,796
====================================================================
Progress payments of approximately $7,100 and $8,500 were netted
against contracts in process at December 31, 1993 and 1992,
respectively.
Page 74
The aggregate amounts of general and administrative costs
allocated to inventories during 1993, 1992 and 1991 were $57,654,
$54,277 and $56,044, respectively. The estimated amounts of
general and administrative costs remaining in inventories at
December 31, 1993 and 1992 amount to $5,141 and $8,915,
respectively, and are based on the ratio of such allocated costs
to total costs incurred.
PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment are recorded at cost and
summarized as follows:
December 31,
1993 1992
- ---------------------------------------------------------------
Land $ 8,744 $ 8,634
Buildings 55,047 46,617
Leasehold improvements 13,214 13,962
Machinery, office furniture and
equipment 98,765 87,884
- ---------------------------------------------------------------
Total 175,770 157,097
Less accumulated depreciation
and amortization 94,059 83,835
- ---------------------------------------------------------------
Property, plant and equipment, net $ 81,711 $ 73,262
===============================================================
CREDIT ARRANGEMENTS -
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
SHORT-TERM BORROWINGS
The corporation has arrangements with several banks to borrow
funds on a short-term basis with interest at current market
rates. There were borrowings of $31,161 outstanding under these
arrangements at December 31, 1993.
Page 75
LONG-TERM DEBT
The corporation has long-term debt as follows:
December 31,
1993 1992
- ------------------------------------------------------------------
Unsecured notes:
Revolving credit/term loan
agreements $ --- $ ---
Convertible subordinated
debentures 33,191 94,995
Other obligations 5,490 6,657
- ------------------------------------------------------------------
Total 38,681 101,652
Less current portion 704 763
- ------------------------------------------------------------------
Total excluding current portion $37,977 $100,889
==================================================================
REVOLVING CREDIT/TERM LOAN AGREEMENTS
The corporation has two revolving credit/term loan agreements
involving several domestic and foreign lenders, with an aggregate
maximum commitment of $145,000. Interest under both agreements is
payable at various market rates. With respect to $80,000 of the
total commitment, the revolving credit period ends on January 2,
1996 whereupon outstanding borrowings may be converted to a term
loan, payable in twelve equal quarterly installments. As to the
balance of the commitment, the revolving credit period ends on
September 30, 1996 at which time outstanding borrowings may be
converted to a term loan payable in sixteen equal quarterly
installments.
CONVERTIBLE SUBORDINATED DEBENTURES
The corporation issued $95,000 of its 6% convertible subordinated
debentures during 1987. The debentures are convertible into
shares of the Class A common stock of Kaman Corporation at any
time on or before March 15, 2012 at a conversion price of $23.36
per share at the option of the holder unless previously redeemed
by the corporation. Pursuant to a sinking fund requirement
beginning March 15, 1997, the corporation will redeem 5% of the
outstanding principal amount of the debentures annually. The
debentures are subordinated to the claims of senior debt holders
and general creditors. The corporation exchanged $61,804 of these
debentures for its new Series 2 preferred stock on October 22,
1993. The remaining debentures have a fair value of $28,200 at
December 31, 1993 based upon current market prices.
Page 76
OTHER OBLIGATIONS
These obligations consist primarily of notes issued by the
corporation to industrial and economic development authorities in
connection with the issuance of their bonds in similar amounts.
The proceeds were used by the corporation to finance certain of
its building construction within the regions of the authorities.
These obligations are secured by mortgages and generally have
interest rates and payment terms more favorable than conventional
financing.
LONG-TERM DEBT ANNUAL MATURITIES
The aggregate amounts of annual maturities of long-term debt for
each of the next five years are approximately as follows:
1994 $ 704
1995 682
1996 686
1997 2,350
1998 2,329
RESTRICTIVE COVENANTS
The most restrictive of the covenants contained in the loan
agreements require the corporation to have operating income, as
defined, at least equal to 250% of interest expense, consolidated
current assets at least equal to 160% of consolidated current
liabilities and consolidated net worth at least equal to $175,600
at December 31, 1993.
INTEREST PAYMENTS
Cash payments for interest were $8,092, $7,103 and $8,607 for
1993, 1992 and 1991, respectively.
INCOME TAXES
The corporation adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes, effective
January 1, 1993. The cumulative effect of this change in
accounting for income taxes determined as of January 1, 1993 was
immaterial to the consolidated statements of earnings.
Page 77
The components of income taxes are as follows:
1993 1992 1991
- -----------------------------------------------------------
Current:
Federal $ 6,250 $12,401 $11,290
State 1,750 3,727 3,620
- -----------------------------------------------------------
8,000 16,128 14,910
- -----------------------------------------------------------
Deferred:
Federal (17,929) (3,500) (2,665)
State (1,750) (1,000) (870)
- -----------------------------------------------------------
(19,679) (4,500) (3,535)
- -----------------------------------------------------------
Total $(11,679) $11,628 $11,375
===========================================================
Deferred income taxes are recorded for differences in the
recognition of certain items of income and expense for
financial and tax reporting purposes. The sources of these
differences and the tax effect of each are as follows:
1993 1992 1991
- -----------------------------------------------------------
Depreciation and
amortization $ (1,402) $(1,328) $ 530
Long-term contracts 2,619 (2,742) (4,122)
Restructuring and other
costs (20,650) --- ---
Inventory 1,304 250 1,295
Deferred employee
benefits (1,698) (169) (578)
Other items 148 (511) (660)
- -----------------------------------------------------------
Total $(19,679) $(4,500) $(3,535)
===========================================================
Page 78
The components of the deferred tax assets and deferred tax
liabilities as of December 31, 1993 are presented below:
Deferred tax assets:
Long-term contracts $ 1,739
Deferred employee benefits 6,258
Restructuring and other costs 20,650
Accrued liabilities and other items 5,378
- ----------------------------------------------------------
Total deferred tax assets 34,025
- ----------------------------------------------------------
Deferred tax liabilities:
Depreciation and amortization (8,638)
Inventory (1,297)
Other items (2,661)
- ----------------------------------------------------------
Total deferred tax liabilities (12,596)
- ----------------------------------------------------------
Net deferred tax asset $ 21,429
==========================================================
No valuation allowance has been recorded because the corporation
believes that these deferred tax assets will, more likely than
not, be realized. This determination is based largely upon the
corporation's historical earnings trend as well as its ability to
carry back reversing items within three years to offset taxes
paid. In addition, the corporation has the ability to offset
deferred tax assets against deferred tax liabilities created for
such items as depreciation and amortization.
The provisions for federal income taxes approximate the amounts
computed by applying the U.S. federal income tax rate to earnings
(loss) before income taxes after giving effect to state income
taxes. The federal tax benefit in 1993 has been reduced $1,800 to
provide for prior years' tax examinations. Cash payments for
income taxes were $7,988, $15,708 and $15,580 in 1993, 1992 and
1991, respectively.
PENSION PLAN
The corporation has a non-contributory defined benefit pension
plan covering all of its full-time employees. Benefits under this
plan are based upon an employee's years of service and
compensation levels during employment and there is an offset
provision for social security benefits. It is the corporation's
policy to fund pension costs accrued. Plan assets are invested in
a diversified portfolio consisting of equity and fixed income
securities (including $7,721 of Class A common stock of Kaman
Corporation at December 31, 1993).
Page 79
The pension plan costs were computed using the projected unit
credit actuarial cost method and include the following
components:
1993 1992 1991
- --------------------------------------------------------------
Service cost for
benefits earned
during the year $ 8,661 $ 8,249 $ 8,318
Interest cost on
projected benefit
obligation 15,900 14,747 13,235
Actual return on plan
assets (21,498) (13,991) (35,990)
Net amortization and
deferral 2,200 (3,929) 19,262
- --------------------------------------------------------------
Net pension cost $ 5,263 $ 5,076 $ 4,825
==============================================================
The funded status of the pension plan is as follows:
December 31,
1993 1992
- --------------------------------------------------------------------
Actuarial present value of
accumulated benefit obligation:
Vested benefits $192,753 $163,844
Non-vested benefits 2,572 2,653
- --------------------------------------------------------------------
Total $195,325 $166,497
====================================================================
Actuarial present value of projected
benefit obligation $224,870 $193,008
Plan assets at fair value 228,439 210,596
- --------------------------------------------------------------------
Excess of assets over projected
benefit obligation 3,569 17,588
Unrecognized prior service cost 350 399
Unrecognized net loss (gain) 9,466 (2,589)
Unrecognized net transition asset (14,829) (16,683)
- --------------------------------------------------------------------
Accrued pension cost $ 1,444 $ 1,285
====================================================================
Page 80
The actuarial assumptions used in determining the funded status of the
pension plan are as follows:
December 31,
1993 1992
- ------------------------------------------------------------------
Discount rate 7 1/2% 8 1/2%
Average rate of increase in
compensation levels 4 1/2% 5 1/2%
==================================================================
The expected long-term rates of return on plan assets used to
compute the net periodic pension costs were 9 1/4% for 1993 and
9 1/2% for 1992.
COMMITMENTS AND CONTINGENCIES
Rent commitments under various leases for office space,
warehouse, land and buildings expire at varying dates from
January 1994 to December 2012. Certain annual rentals are
subject to renegotiation, with certain leases renewable for
varying periods. Lease periods for machinery and equipment vary
from 1 to 7 years.
Substantially all real estate taxes, insurance and maintenance
expenses are obligations of the corporation. It is expected that
in the normal course of business, leases that expire will be
renewed or replaced by leases on other properties.
The following future minimum rental payments are required under
operating leases that have initial or remaining noncancellable
lease terms in excess of one year as of December 31, 1993:
1994 $10,142
1995 6,225
1996 3,987
1997 2,780
1998 1,787
Later years 4,446
- ---------------------------------------
Total $29,367
=======================================
Lease expense for all operating leases, including leases with
terms of less than one year, amounted to $15,172, $15,221 and
$15,650 for 1993, 1992 and 1991, respectively.
Page 81
From time to time, the corporation is subject to various claims
and suits arising out of the ordinary course of business,
including commercial, employment and environmental matters. While
the ultimate result of all such matters is not presently
determinable, based upon its current knowledge, management does
not expect that their resolution will have a material adverse
effect on the corporation's consolidated financial position.
COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
The primary earnings (loss) per common share computation is based
on the weighted average number of shares of common stock
outstanding in 1993, 1992 and 1991 and includes the common stock
equivalency of options granted to employees under the stock
incentive plan. The fully diluted earnings per share computation
also assumes that the 6% convertible subordinated debentures were
converted at their date of issuance with the resultant reduction
in interest costs net of tax and the additional dilutive effect
of the stock options.
Subsequent to the exchange of debentures for Series 2 preferred
stock on October 22, 1993, the corporation added the preferred
stock dividend requirement of $702 for the balance of 1993 to its
net loss to arrive at net loss applicable to common stock to
calculate its loss per common share-primary for 1993. In
addition, in order to determine the fully diluted loss per common
share, it is assumed that the Series 2 preferred stock would be
converted into Class A common stock from its date of issuance and
the preferred stock dividend requirement eliminated.
Due to the net loss during 1993, however, the dilutive effect
from conversion of the outstanding 6% convertible subordinated
debentures and the Series 2 preferred stock is anti-
dilutive and accordingly not included in the computation.
EMPLOYEES STOCK PURCHASE PLAN
The Kaman Corporation Employees Stock Purchase Plan allows
employees to purchase Class A common stock of the corporation,
through payroll deductions, at 85% of the market value of shares
at the time of purchase. The plan provides for the grant of
rights to employees to purchase a maximum of 1,500,000 shares of
Class A common stock of the corporation commencing July 1, 1989.
There are no charges or credits to income in connection with the
plan. During 1993, 241,808 shares were issued to employees at
prices ranging from $7.86 to $9.78 per share. During 1992,
226,296 shares were issued to employees at prices ranging from
$7.33 to $8.82 per share. During 1991, 252,837 shares were issued
to employees at prices ranging from $6.59 to $8.08 per share.
Page 82
Effective November 1, 1993, the maximum number of shares
available for issuance under the Plan was replenished to
1,500,000 shares, subject to shareholder approval at the 1994
annual meeting of shareholders. At December 31, 1993, there were
approximately 1,457,000 shares available for offering under the
plan.
STOCK INCENTIVE PLAN
On September 20, 1993, the corporation adopted the 1993 Stock
Incentive Plan--to be effective November 1, 1993 and subject to
shareholder approval at the 1994 annual meeting of shareholders.
The 1993 Plan includes a continuation and extension of the stock
incentive program of the corporation set forth in the 1983 Stock
Incentive Plan which terminated on October 31, 1993.
The 1993 Plan provides for the grant of non-statutory stock
options, incentive stock options, restricted stock awards and
stock appreciation rights primarily to officers and other key
employees. The corporation has designated 962,199 shares of its
Class A common stock for this plan, including 2,199 shares
previously reserved under the 1983 plan.
Stock options are generally granted at prices not less than the
fair market value at the date of grant. Options granted under the
plan generally expire ten years from the date of grant and are
exercisable on a cumulative basis with respect to 20% of the
optioned shares on each of the five anniversaries from the date
of grant. Restricted stock awards are generally granted with
restrictions that lapse at the rate of 20% per year and are
amortized accordingly. These awards are subject to forfeiture if
a recipient separates from service with the corporation. Stock
appreciation rights generally expire ten years from the date of
grant and are exercisable on a cumulative basis with respect to
20% of the rights on each of the five anniversaries from the date
of grant.
At December 31, 1993, there were outstanding options issued under
the plan for the purchase of 807,893 shares at prices ranging
from $7.50 to $13.83 per share. As of that date options covering
463,363 shares were exercisable at $7.50 to $13.83 per share.
Options for 37,929, 16,550 and 11,960 shares were exercised
during 1993, 1992 and 1991, respectively, at prices ranging from
$3.98 to $9.48 per share. Restricted stock awards were made for
34,000 shares at $9.50 per share in 1993, 36,000 shares at $9.88
per share in 1992 and 39,500 shares at $8.00 per share in 1991.
At December 31, 1993, there were 115,900 shares remaining subject
to restrictions pursuant to these awards. No stock appreciation
rights have been issued under the plan.
Page 83
SEGMENT INFORMATION
The corporation serves government, industrial and commercial
markets through two industry segments Diversified Technologies
and Distribution.
Through its diversified technologies operations, the corporation
provides a range of technical professional services involving
either advanced information technologies or high technology
science and engineering to government and industrial customers;
advanced technology products such as electromagnetic motors,
safety and fusing systems; memory systems, sliding bearings, and
non-contact measuring systems for military and industrial
customers; commercial airframe subcontracting programs, and
manufacturing work along with spare parts and logistics for the
SH-2 helicopter for the U.S. Navy. Additionally, the development
of the K-MAX helicopter, which represents a significant new
commercial effort for the corporation, is included in the
Diversified Technologies segment. The Diversified Technologies'
segment operating loss for 1993 includes the impact of the
$69,500 charge for restructuring and other costs accrued in the
third quarter to address various downsizing and product
conversion efforts.
Through its distribution operations, the corporation supplies
nearly every sector of industry with industrial replacement parts
(including bearings, power transmission equipment, fluid power,
linear motion, and materials handling items) as well as
industrial engineering and systems services. Operations are
conducted from approximately 150 service centers located in 28
states and British Columbia, Canada. Our music operations
manufacture and distribute musical instruments and accessories in
the United States and abroad through both domestic and U.K. based
offices.
Page 84
Summarized financial information by business segment is as
follows:
1993 1992 1991
- --------------------------------------------------------------
Net sales:
Diversified Technologies $341,621 $359,432 $377,738
Distribution 450,889 423,418 400,731
- --------------------------------------------------------------
$792,510 $782,850 $778,469
==============================================================
Operating profit (loss):
Diversified Technologies $(41,346) $ 31,009 $ 33,320
Distribution 16,521 15,205 12,770
- --------------------------------------------------------------
(24,825) 46,214 46,090
Interest, corporate and
other income/expense, net 15,649 17,210 17,748
- --------------------------------------------------------------
Earnings (loss) before
income taxes $(40,474) $ 29,004 $ 28,342
==============================================================
Identifiable assets:
Diversified Technologies $252,450 $268,353 $257,216
Distribution 177,608 165,623 153,040
Corporate 10,138 9,469 11,610
- --------------------------------------------------------------
$440,196 $443,445 $421,866
==============================================================
Capital expenditures:
Diversified Technologies $ 13,678 $ 6,698 $ 6,717
Distribution 6,207 3,578 1,667
Corporate 543 286 193
- --------------------------------------------------------------
$20,428 $ 10,562 $ 8,577
==============================================================
Depreciation and amortization:
Diversified Technologies $ 9,439 $ 8,998 $ 9,234
Distribution 3,197 3,616 3,641
Corporate 820 759 728
- --------------------------------------------------------------
$13,456 $ 13,373 $ 13,603
==============================================================
Operating profit (loss) is total revenues less cost of sales and
selling, general and administrative expense (including
restructuring and other costs in 1993) other than general
corporate expense.
Page 85
Identifiable assets are year-end assets at their respective net
carrying value segregated as to industry segment and corporate
use. Corporate assets are principally cash and cash equivalents
and net property, plant and equipment.
Net sales by the Diversified Technologies segment made under
contracts with U.S. Government agencies account for $279,530 in
1993, $260,823 in 1992 and $298,482 in 1991.
Page 86
REPORT OF INDEPENDENT AUDITORS
KPMG Peat Marwick
Certified Public Accountants
CityPlace II
Hartford, Connecticut 06103
The Board of Directors and Shareholders
Kaman Corporation:
Under date of January 27, 1994, we reported on the consolidated balance
sheets of Kaman Corporation and subsidiaries as of December 31, 1993 and 1992
and the related consolidated statements of earnings, changes in shareholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1993, as contained in the 1993 annual report to shareholders.
These consolidated financial statements and our report thereon are
incorporated by reference in the annual report on Form 10-K for 1993. In
connection with our audits of the aforementioned consolidated financial
statements, we also audited the related 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 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 Peat Marwick
Hartford, Connecticut
January 27, 1994
Page 87
SELECTED FINANCIAL DATA
- -----------------------
Kaman Corporation and Subsidiaries
(In thousands except per share amounts, shareholders and employees)
1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------
OPERATIONS:
Revenues $794,092 $784,732 $780,357 $826,583 $801,830
Cost of sales 588,237 583,638 582,641 623,042 624,323
Selling, general and
administrative expense 173,581 164,603 160,824 159,775 148,214
Restructuring and other
costs 69,500 --- --- --- ---
Operating income (loss) (37,226) 36,491 36,892 43,766 29,293
Interest expense 6,976 7,086 8,191 11,268 12,101
Other expense (income) (3,728) 401 359 (280) 585
Earnings (loss) before
income taxes (40,474) 29,004 28,342 32,778 16,607
Income taxes (benefit) (11,679) 11,628 11,375 13,553 7,885
Net earnings (loss) (28,795) 17,376 16,967 19,225 8,722
FINANCIAL POSITION:
Current assets $316,601 $334,581 $309,970 $327,030 $319,473
Current liabilities 166,765 122,015 110,916 116,710 118,605
Working capital 149,836 212,566 199,054 210,320 200,868
Property, plant and
equipment, net 81,711 73,262 75,233 79,128 82,925
Total assets 440,196 443,445 421,866 443,739 441,120
Long-term debt 37,977 100,889 102,053 123,207 130,647
Shareholders' equity 228,313 209,535 202,150 193,104 182,496
PER SHARE AMOUNTS:
Net earnings (loss) per
common share - primary $(1.63) $.95 $.93 $1.06 $.48
Net earnings (loss) per
common share - fully
diluted (1.63) .93 .91 1.01 .48
Dividends declared - Series 2
preferred stock 1.37 --- --- ---- ---
Dividends declared - common
stock .440 .440 .440 .440 .440
Shareholders' equity -
common stock 9.46 11.58 11.07 10.61 10.03
Market price range 12 1/8 10 3/4 9 5/8 9 1/2 14 7/8
8 5/8 7 7/8 7 3/8 6 1/4 7 5/8
GENERAL STATISTICS:
Shareholders 6,920 6,994 7,139 6,809 6,439
Employees 5,363 5,424 5,544 6,085 6,424
Page 88
EXHIBIT 21
KAMAN CORPORATION
SUBSIDIARIES
Following is a list of the Corporation's subsidiaries, each of
which is wholly owned by the Corporation either directly or through
another subsidiary. Second-tier subsidiaries are listed under the
name of the parent subsidiary.
Name State of Incorporation
- -------------------------------------------------------------------
Registrant: KAMAN CORPORATION Connecticut
Subsidiaries:
Kaman Diversified Technologies Corporation Connecticut
Kaman Aerospace Corporation Delaware
Kamatics Corporation Connecticut
Kaman Aerospace International Corporation Connecticut
Kaman X Corporation Connecticut
Kaman Sciences Corporation Delaware
Kaman Instrumentation Corporation Connecticut
Kaman Electromagnetics Corporation Massachusetts
Raymond Engineering Inc. Connecticut
AirKaman of Jacksonville, Inc. Connecticut
Kaman Industrial Technologies Corporation Connecticut
Kaman Industrial Technologies, Ltd. Canada
Kaman Music Corporation Connecticut
KMI Europe, Inc. Delaware
Kaman U.K. Limited Great Britain
Trace Elliot Limited Great Britain
Advanced Energetic Materials Corporation of America* Delaware
Advanced Energetic Materials Corporation of Europe* France
* Fifty percent (50%) of voting stock owned by Kaman Corporation
Page 89
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
KPMG Peat Marwick
Certified Public Accountants
CityPlace II
Hartford, Connecticut 06103
The Board of Directors and Shareholders
Kaman Corporation:
We consent to incorporation by reference in the Registration Statements (Nos.
33-51483 and 33-51485) on Form S-8 of Kaman Corporation of our reports dated
January 27, 1994, relating to the consolidated balance sheets of Kaman
Corporation and subsidiaries as of December 31, 1993 and 1992 and the related
consolidated statements of earnings, changes in shareholders' equity and cash
flows and related schedules for each of the years in the three-year period
ended December 31, 1993 which reports appear or are incorporated by reference
in the December 31, 1993 annual report on Form 10-K of Kaman Corporation.
/s/ KPMG Peat Marwick
Hartford, Connecticut
March 11, 1994
Page 90
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned does
hereby appoint and constitute Charles H. Kaman and Harvey S.
Levenson and each of them as his or her agent and attorney-in-fact
to execute in his or her name, place and stead (whether on behalf
of the undersigned individually or as an officer or director of
Kaman Corporation or otherwise) the Annual Report on Form 10-K of
Kaman Corporation respecting its fiscal year ended December 31,
1993 and any and all amendments thereto and to file such Form 10-K
and any such amendment thereto with the Securities and Exchange
Commission. Each of the said attorneys shall have the power to act
hereunder with or without the other.
IN WITNESS WHEREOF, the undersigned have executed this instrument
this 11th day of March, 1994.
/s/Frank C. Carlucci /s/Hartzel Z. Lebed
/s/John A. DiBiaggio /s/Harvey S. Levenson
/s/Edythe J. Gaines /s/Walter H. Monteith, Jr.
/s/Huntington Hardisty /s/John S. Murtha
/s/Charles H. Kaman /s/Robert L. Newell
/s/C. William Kaman, II /s/Wanda L. Rogers
Page 91