UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 7, 2005 (June 7, 2005)
Kaman Corporation
(Exact name of registrant as specified in its charter)
Connecticut
(State or other jurisdiction of incorporation)
0-1093 06-0613548
(Commission File Number) (IRS Employer
Identification No.)
1332 Blue Hills Avenue,
Bloomfield, Connecticut 06002
(Address of principal executive offices) (Zip Code)
(860) 243-7100
Registrant's telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[x] Written communication pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1.01. Entry Into A Material Definitive Agreement.
On June 7, 2005, Kaman Corporation ("Kaman" or the "Company")
entered into an Agreement (the "Agreement") with certain members of the Kaman
family (the "Shareholders") that contemplates a proposed recapitalization which
would simplify the Company's capital structure and enhance its corporate
governance by eliminating the existing two-class structure of common stock.
In the proposed recapitalization, a single class of voting common
stock will replace the existing non-voting Class A common stock and voting
Class B common stock. Specifically, the approximately 22.1 million shares of
Class A common stock would each remain outstanding as one share of voting
common stock and the approximately 668,000 shares of Class B common stock would
each be converted into 1.95 shares of voting common stock. Alternatively, the
Class B common stockholders would be able to elect instead to convert each of
their Class B shares into one share of the new voting common stock and $14.76
(which represents .95 times the average closing price of one share of Class A
common stock over the last ten trading days).
At the closing of the proposed recapitalization, the holders of the
existing Class A non-voting common stock will own approximately 94.5% to 97.1%
of the then outstanding voting common stock of Kaman, depending on the extent
to which holders of the Class B common stock make the part stock/part cash
election. The proposed recapitalization is anticipated to be completed by the
end of the third quarter of 2005.
The proposed recapitalization is subject to customary closing
conditions, including the vote of more shares of Class A common stock in favor
than against the recapitalization and the vote of more shares of Class B common
stock in favor than against the recapitalization, each such class voting
separately. The Shareholders have agreed to vote all of their shares of Kaman
stock, representing approximately 81.5% of the outstanding shares of Class B
common stock and approximately 2.7% of the outstanding shares of Class A common
stock, in favor of the transaction. They have also agreed to vote their Class B
common stock in favor of certain amendments to the Company's certificate of
incorporation that would become effective only if the recapitalization were to
be completed and as to which only Class B shareholder approval would be
required, and the Kaman family's approval would be sufficient to assure
approval.
Until Kaman distributes the proxy statement/prospectus for the
proposed recapitalization to shareholders (but in any event for a period of
not less than 35 days), and subject to certain conditions, the Shareholders
would be permitted under the Agreement to withdraw their support of the
proposed recapitalization in order to accept a qualifying alternative
transaction that provides, among other things, a minimum value in cash or
marketable publicly traded securities of not less than $46.62 per Class B
common share. Prior to being permitted to do so, however, the Company's
Board of Directors would be given the opportunity to approve a substitute
recapitalization proposal with a minimum value per Class B common share of
at least the value per share of the qualifying alternative transaction plus
$0.65, with both all stock and part cash/part stock alternatives and
subject to the same shareholder class votes as noted above. The
Shareholders have agreed to support any substitute recapitalization
proposal approved by the Company's Board of Directors.
The Company has agreed to indemnify the Shareholders for any
out-of-pocket attorneys' fees and related expenses incurred by them in
defending any third party claim alleging any wrongful action or inaction by any
Shareholder in his or her capacity as a shareholder of Kaman in connection with
the execution, delivery and performance of the Agreement. In the event that the
Shareholders decide to pursue an alternative transaction, the Company will no
longer be obligated to provide such indemnification unless the Company
announces a substitute recapitalization proposal or such termination is
rescinded pursuant to the Agreement. However, C. William Kaman II, a member of
the Company's Board of Directors and a Shareholder, will retain his right to
indemnification by the Company for actions taken in his capacity as a director
of the Company.
The Company also has agreed to provide registration rights for one
year following the recapitalization with respect to the shares of new voting
common stock issued to members of the Kaman family pursuant to the proposed
recapitalization.
The Company may terminate the Agreement if the Company's Board of
Directors determines in good faith that termination is appropriate in the
exercise of its fiduciary duties because of a material change occurring after
the Board of Directors approves the proposed recapitalization. In the event the
Company terminates the Agreement prior to seeking the required stockholder
vote, the Company has agreed to reimburse the Shareholders for certain of their
out-of-pocket expenses incurred in connection with the negotiation of the
Agreement and pursuit of any alternative transaction. These reimbursable
expenses would be limited to $750,000 unless the Board subsequently approves a
"substitute recapitalization proposal", in which case they would be limited to
$1,250,000. However, the Kaman family would be required to repay to the Company
these reimbursed expenses to the extent of the amount received by the Kaman
family from selling some or all of their shares of Class B common stock within
six months following termination of the recapitalization agreement at prices
exceeding then prevailing trading prices for the Class A common stock.
The Agreement will automatically terminate (i) in the event that
the holders of the shares of Class A common stock do not approve the proposed
recapitalization or "substitute recapitalization proposal", if appropriate, at
the shareholders' meeting called for that purpose or (ii) on the day that is
six months after the date of the Agreement (subject to a possible extension
under specified circumstances in the event that there is an arbitration under
the Agreement).
In connection with the recapitalization, the Company has agreed to
enter into Indemnification Agreements (each, an "Indemnification Agreement"),
the forms of which are attached hereto as Exhibits 10.1 and 10.2, for the
benefit of those officers and directors or former officers and directors of the
Company (other than officers and directors who are members of the Kaman family)
who currently serve at the request of the Company as voting trustees under a
Voting Trust Agreement, dated August 14, 2000, and/or attorneys-in-fact under a
Durable Power of Attorney, dated May 7, 1996, in each case which governs the
voting of a portion of the Class B common stock owned by Charles H. Kaman. The
covered individuals are Paul Kuhn, Robert Garneau, Jack Cahill, Wanda Rogers
and John Murtha.
Pursuant to the Indemnification Agreements and subject to certain
conditions, the Company will indemnify such officers and directors for any and
all expenses and damages, including attorney's fees, settlements and judgments,
incurred in connection with a claim arising from any action or inaction taken
in their capacity as an attorney-in-fact or voting trustee.
The foregoing description of the Agreement, the proposed
recapitalization and the Indemnification Agreements does not purport to be
complete and is qualified in its entirety by reference to the Agreement and
forms of Indemnification Agreements, which are filed as Exhibits 2.01, 10.1 and
10.2 and incorporated herein by reference.
Item 8.01. Other Events
On June 7, 2005, Kaman's Board of Directors announced an increase
in its expected annual dividend from $.44 to $.50 per share and declared a
$.125 per share dividend, which is scheduled to be paid on July 11, 2005 to
holders of record on June 27, 2005. The dividend increase is not contingent on
the completion of the proposed recapitalization. The Company expects that the
annual dividend will be declared and paid in quarterly dividends of equal
amounts, subject to the Board of Director's periodic review of its dividend
policy and consistent with Kaman's recent dividend payment schedule.
On June 7, 2005, Kaman issued a press release announcing that its
Board of Directors had approved the Agreement and declared a quarterly dividend
at the increased rate. A copy of the press release is being filed as Exhibit
99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 2.1 Agreement, dated as of June 7, 2005, by and among Kaman
Corporation, Newgate Associates Limited Partnership, Oldgate
Limited Partnership, Charles H. Kaman, C. William Kaman II,
Roberta C. Kaman, Steven W. Kaman and Cathleen H. Kaman.
Exhibit 10.1 Form of individual Indemnification Agreements, dated
as of June 7, 2005, entered into with Paul Kuhn, Jack
Cahill and Wanda Rogers.
Exhibit 10.2 Form of individual Indemnification Agreement, dated as
of June 7, 2005, entered into with Robert Garneau and
John Murtha.
Exhibit 99.1 Press Release, dated June 7, 2005, relating to the proposed
recapitalization.
Exhibit 99.2 Kaman Employee Communication, dated June 7, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, hereunto duly authorized.
KAMAN CORPORATION
By: /s/ Robert M. Garneau
-------------------------------
Robert M. Garneau
Executive Vice President and
Chief Financial Officer
Dated: June 7, 2005
INDEX TO EXHIBITS
Exhibit 2.1 Agreement, dated as of June 7, 2005, by and among Kaman
Corporation, Newgate Associates Limited Partnership, Oldgate
Limited Partnership, Charles H. Kaman, C. William Kaman II,
Roberta C. Kaman, Steven W. Kaman and Cathleen H. Kaman.
Exhibit 10.1 Form of individual Indemnification Agreements, dated
as of June 7, 2005, entered into with Paul Kuhn, Jack
Cahill and Wanda Rogers.
Exhibit 10.2 Form of individual Indemnification Agreement, dated as
of June 7, 2005, entered into with Robert Garneau and
John Murtha.
Exhibit 99.1 Press Release, dated June 7, 2005, relating to the proposed
recapitalization.
Exhibit 99.2 Kaman Employee Communication, dated June 7, 2005.