Executive Employment Agreement, dated as of August 20, 2020, by and between Ian K. Walsh and the Company

EX-10.1 2 d240968dex101.htm EX-10.1 EX-10.1

Exhibit 10.1

EXECUTION VERSION

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is made as of August 20, 2020 between KAMAN CORPORATION, a Connecticut corporation (the “Company”), and Ian K. Walsh (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Company has offered employment to the Executive on the terms set forth below; and

WHEREAS, the Executive is prepared to accept such employment, subject to such terms;

NOW THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. EMPLOYMENT TERM; NO CONFLICTING CONTRACTUAL OBLIGATIONS.

(a) The Executive’s term of employment under this Agreement shall be for a term commencing on September 8, 2020 (the “Effective Date”) and shall end on the third anniversary of the Effective Date (the “Employment Term”). In all events hereunder, Executive’s employment is subject to earlier termination pursuant to Section 7 hereof, and upon such earlier termination the Employment Term shall be deemed to have ended.

(b) Executive represents and warrants to the Company that that:

(i) Executive has the legal right to enter into this Agreement and to perform all of the obligations on the Executive’s part to be performed hereunder in accordance with its terms;

(ii) Executive is not a party to any contract, agreement or understanding, written or oral, which could prevent the Executive from entering into this Agreement or performing all of the Executives obligations hereunder or his duties as an employee of the Company, nor will the execution of this Agreement and the performance of such obligations or duties result in a conflict of interest between him and any other party;

(iii) Executive’s acceptance of employment with the Company and the performance of Executive’s duties hereunder will not violate any non-solicitation, non-competition, or other similar covenant or agreement of a prior employer; and

(iv) Executive has not engaged in, or been the subject of any allegations relating to, workplace misconduct or impropriety, including sexual, racial or other types of harassment, discrimination or abusive behavior.

2. POSITION & DUTIES.

(a) The Executive shall serve as the Company’s President and Chief Executive Officer under this Agreement, commencing on the Effective Date and continuing throughout the Employment Term. As President and Chief Executive Officer, the Executive shall have such duties, authorities and responsibilities commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies and such other duties and responsibilities as the Company’s Board of Directors (the “Board”) shall designate that are consistent with the Executive’s position as President and Chief Executive Officer.

(b) During the Employment Term, the Executive shall use the Executive’s best reasonable efforts to perform faithfully and efficiently the duties and responsibilities assigned to the Executive hereunder (including applicable obligations under state and federal laws) and devote substantially all of the Executive’s business time (excluding periods of vacation and other approved leaves of absence) to the performance of the Executive’s duties with the Company, provided the foregoing shall not prevent the Executive from (i) participating in charitable, civic, educational, professional, community or industry affairs or, with prior written approval of the Board, serving on the board of directors or advisory boards of other companies; and (ii) managing the Executive’s and the Executive’s family’s personal investments, in each case so long as such activities do not materially interfere with the performance of the Executive’s duties hereunder or create a potential business conflict or the appearance thereof. If at any time service on any board of directors or advisory board would, in the good faith judgment of the Board, conflict with the Executive’s fiduciary duty to the Company or create any appearance thereof, the Executive shall promptly resign from such other board of directors or advisory board after written notice of the conflict is received from the Board.

(c) During the Employment Term, the Executive further agrees to serve without additional compensation as an officer and director of any of the Company’s subsidiaries and agrees that any amounts received from any such corporation may be offset against the amounts due hereunder.

(d) The principal place of the Executive’s employment shall be the Company’s principal executive office currently located in Bloomfield, Connecticut; provided that the Executive may be required to travel on Company business during the Employment Term.

3. BASE SALARY. The Company agrees to pay the Executive a base salary (the “Base Salary”) during the Employment Term at an annual rate of $650,000 (subject to possible increase if the Board, in its sole discretion, so determines), payable in accordance with the regular payroll practices of the Company, but not less frequently than monthly.

4. BONUSES.

(a) The Executive shall be eligible to participate in the Company’s bonus and other short and long term incentive compensation plans and programs for the Company’s senior executives at a level commensurate with the Executive’s position during the Employment Term. Except as set forth in Section 4(b), the Executive shall have the opportunity to earn an annual target bonus measured against performance criteria to be determined by the Board (or a

committee thereof) of at least 100% of Base Salary as an initial target bonus opportunity as described in the terms of the Company’s annual bonus plan as then in effect. Except as provided under Section 8 of the Agreement, the Executive shall receive payments with respect to the plans and programs described in this Section 4 in accordance with the terms of such plans and programs.

(b) For the period beginning on the Effective Date and ending on December 31, 2020 (subject to continued employment through such date), the Executive shall be eligible to receive a prorated annual bonus (calculated as the annual bonus that would have been paid for the entire 2020 calendar year based upon the full year target bonus opportunity described in Section 4(a) multiplied by a fraction, the numerator of which is the number of days during the 2020 performance year that the Executive is employed by the Company and the denominator of which is 365); provided, that in no event shall such prorated annual bonus be less than $125,000. Except as provided under Section 8 of the Agreement, the Executive shall receive such prorated annual bonus payment at the time that annual bonuses are paid to other senior executives and with respect to the plans and programs described in this Section 4 in accordance with the terms of such plans and programs.

(c) In consideration of the Executive entering into this Agreement and as an inducement to join the Company, the Company shall pay the Executive a one-time lump sum cash payment of $200,000 (the “Cash Payment”) no later than December 31, 2020; provided that, the Executive shall repay the gross amount of the Cash Payment if, prior to December 31, 2021, the Executive terminates the Executive’s employment without Good Reason (as defined below) or the Company terminates the Executive’s employment for Cause (as defined below).

5. EQUITY AND LONG-TERM INCENTIVE AWARDS.

(a) In consideration of the Executive entering into this Agreement and as an inducement to join the Company, on the Effective Date, the Company will grant the following equity awards to the Executive pursuant to the Kaman Corporation Amended and Restated 2013 Management Incentive Plan (the “Management Inventive Plan”) or similar arrangement: restricted stock units with respect to a number of shares of Company common stock with a fair market value at the time of grant of $1,250,000, which shall fully vest (subject to continued employment) on the three-year anniversary of the Effective Date (the “RSU Award”). If Executive’s employment terminates prior to such three-year anniversary of the Effective Date, then no portion of the RSU Award shall vest, except in the case of the Executive’s termination of the Executive’s employment with Good Reason (as defined below) or the Company’s termination of the Executive’s employment without Cause (as defined below), in which case the RSU Award will immediately vest. All terms and conditions of such RSU Award shall be governed by the terms and conditions of the Management Incentive Plan and the applicable award agreement.

(b) The Executive shall be eligible to receive additional grants of stock options, stock appreciation rights, restricted stock and other equity awards at the sole discretion of the Board or the Compensation Committee of the Board (the “Compensation Committee”).

(c) The Executive shall be eligible to participate in the long-term incentive program feature of the Management Incentive Plan (including any substitute or successor plan, the “LTIP”) annually beginning with the performance period commencing on January 1, 2021. Except as set forth below, the Executive shall have the opportunity to earn an LTIP award for each LTIP performance period measured against performance criteria to be determined by the Board (or a committee thereof) of at least 300% of Base Salary as a target LTIP opportunity as described in the terms of the Management Incentive Plan. As a one-time inducement for the Executive to achieve the performance goals to be determined by the Board (or a committee thereof) for the LTIP performance period of January 1, 2021 – December 31, 2023 (the “2021-2023 Performance Period”), the target value of the Executive’s LTIP opportunity for the 2021-2023 Performance Period shall be $2,550,000, notwithstanding the otherwise applicable target described above. For the sake of clarity, the parties understand and agree that the value of such $2,550,000 target opportunity reflects 300% of Base Salary plus $600,000.

(d) The Executive shall be subject to, and shall comply with, the Company’s stock ownership guidelines during the Employment Term.

5A. RECOVERY OF AMOUNTS RELATED TO MANDATORY RESTATEMENTS.

(a) RIGHT OF RECAPTURE. Subject to the terms of this Section 5A, but otherwise notwithstanding any other provision of this Agreement or the terms of any compensation arrangement, plan or program, the Executive shall pay the Company a sum equal to the Recapture Amount if, and to the extent that, (i) payment of Incentive Compensation is or was contingent upon the achievement of one or more specified financial performance targets and (ii) the amount of such Incentive Compensation is, or would have been, affected by a Mandatory Restatement that the Company is required to implement that results directly from Executive’s fraudulent or knowing, intentional misconduct.

(b) DEFINITIONS. For purposes of this Section 5A:

“Recapture Amount” means (i) the difference between (a) the amount of Incentive Compensation paid or received, or to be paid or received by the Executive pursuant to an award made, within the twelve-month period following first issuance of financial statements that are subsequently determined to be subject to a Mandatory Restatement, and (b) the amount that would have been paid or received by the Executive based on the financial results reported in the Mandatory Restatement, in each case as determined in good faith by the Compensation Committee that exists at the time of determination; provided that, (ii) the amount that the Executive shall be required to reimburse the Company from previously received Incentive Compensation shall be reduced by the Net Tax Cost of such compensation to the Executive, and (iii) to the extent that the price of the Company’s Common Stock is or was a component of the performance objectives upon which the Incentive Compensation was payable, the value of the stock taken into account for purposes of re-determining the level of achievement based on the Mandatory Restatement will be equitably adjusted by the Compensation Committee, utilizing a third-party consultant with expertise in equity valuations.

“Incentive Compensation” means amounts paid or received, or to be paid or received, under awards made on or after the Effective Date, pursuant to: (i) annual cash incentive awards under the Management Incentive Plan; (ii) long term performance awards under the Management Incentive Plan; (iii) other equity-based awards under the Management Incentive Plan if vesting or lapse of restrictions is dependent upon achievement of financial performance objectives, and (iv) like compensation under other or successor plans when entitlement to payments is dependent upon achievement of financial performance objectives. For the avoidance of doubt, Incentive Compensation does not include the proceeds of any stock option grant, restricted stock or restricted stock unit award, long-term performance award or any other variety of equity-based award that has a vesting schedule based on the passage of time and the continued performance of services rather than the achievement of financial performance objectives.