KAMAN CORPORATION

COMMITTEES OF THE BOARD OF DIRECTORS

 

I. Corporate Governance Committee


CHARTER RESTATEMENT
(Adopted February 21, 2006)

Organization: There shall be a Corporate Governance Committee (the "Committee") whose members shall consist of the chairpersons of the standing committees of the Board and the Lead Director (if not already a standing committee chairman), each of whom shall satisfy the independence requirements of the Nasdaq Stock Market, Inc., as such requirements may be amended from time to time; and shall be free from any relationship which, in the opinion of the Board, would interfere with the exercise of his or her independent judgment. The chairperson of the Committee shall be appointed by the Board and shall be responsible, in conjunction with the appropriate members of management, for preparing the agenda for meetings of the Committee. The Secretary of the Corporation shall be responsible for recording the minutes of its meetings. All members shall have terms of one year. The Committee shall meet at such times as are deemed advisable by the Chairman, but not less than three times per year

The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities and to retain special legal, accounting or other consultants or experts it deems necessary in the performance of its duties, at the Corporation's expense.

Responsibilities:

The Committee shall assist the Board in fulfilling the Board's responsibilities, particularly with regard to: a) matters of corporate governance; b) board and committee organization, membership, compensation, function and performance; c) evaluation of the performance of the Chief Executive Officer; and d) succession planning for executive management.

Without limiting the generality of the foregoing, the Committee shall have the following specific responsibilities:

A.   Corporate Governance Matters

  1. Review and recommend to the Board adoption of governance policies and principles for the Corporation, periodically review such governance policies and procedures, and submit any recommended changes for approval by the Board.
  2. Periodically review and reassess the Charter of the Committee and submit any recommended changes for approval by the Board.
  3. Conduct ongoing review of the functioning of the Board and the fulfillment of its legal responsibilities in a manner that effectively serves the interests of the shareholders of the Corporation, and make recommendations regarding such matters to the full Board.

B.   Board Organization, Etc.

  1. Review and recommend policies and practices of the Board, which may include policies on the size of the Board; the desired skills, characteristics and other qualifications of Directors; Board retention, retirement and resignation; and the types, size, membership and function of the committees of the Board.
  2. Establish selection criteria for new Board members; identify and review the skills, characteristics and other qualifications of potential candidates for election to the Board.
  3. Recommend individuals for selection by the Board as nominees for election to the Board by the shareholders, after consultation with the Chief Executive Officer.
  4. Recommend to the Board annually candidates for membership on the Board's committees and for the chairperson of each standing committee. Assure that the charters of the other standing committees of the Board are periodically reviewed and that recommended changes, if any, to properly reflect committee functions and responsibilities be submitted for approval by the Board. Assure that each standing Committee conducts an evaluation of its performance on an annual basis.
  5. Review and recommend to the Board guidelines and procedures to be used by Directors and this Committee in evaluating Board performance and manage the performance evaluation process, to be conducted on an annual basis.
  6. Review and recommend to the Board for its approval the amount and form of compensation to be paid to Directors.

C.   Performance of the Chief Executive Officer

Establish performance goals for the Chief Executive Officer, evaluate the performance of the Chief Executive Officer against such goals on an annual basis; and discuss the findings of its evaluation with the Personnel & Compensation Committee.

D.   Succession Planning

  1. Review and recommend to the Board candidates for successor to the Chief Executive Officer of the Corporation.
  2. Assure that management has established and maintains a process for filling senior executive positions other than the Chief Executive Officer.

E.   Other

The Committee shall undertake such additional activities within the scope of its primary function as the Committee may determine or any activities requested by the Board.

A report of the Committee regarding each meeting, with recommendations for action, when appropriate, shall be presented at the Board meeting next following each Committee meeting.

II. Audit Committee

CHARTER RESTATEMENT
November 11, 2003

This charter (the "Charter") governs the operations of the audit committee (the "Committee") of the board of directors (the "Board") of Kaman Corporation (the "Corporation").

Composition and Organization:

The Committee shall be comprised of not less than three (3) directors who shall be elected annually by, and serve at the discretion of, the Board. The Chairman of the Committee shall be designated annually by the Board and the Secretary of the Corporation shall be responsible for preparing the meeting agenda and recording the minutes of its meetings.

Each member of the Committee shall: (a) satisfy the independence requirements of the Nasdaq Stock Market, Inc., the Securities Exchange Act of 1934 ("Exchange Act"), and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"), as such requirements, rules and regulations may be amended from time to time; and (b) be free from any relationship which, in the opinion of the Board, would interfere with the exercise of his or her independent judgment in carrying out his or her responsibilities as a director and as a member of the Committee.

Each member of the Committee must be able to read and understand the Corporation's fundamental financial statements, including its balance sheet, income statement, and cash flow statement at the time of his or her appointment to the Committee. At least one member of the Committee shall have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication. To the extent reasonably feasible, at least one member of the Committee shall qualify as an "audit committee financial expert" as defined under the rules and regulations of the SEC, as determined by the Board.

The Committee shall have the authority to conduct any investigation appropriate to fulfilling its responsibilities. The Committee shall also have the authority, to the extent it deems necessary or appropriate, to retain special legal, accounting or other consultants or experts (including the fees and terms of such retention) to assist the members of the Committee in the performance of its duties. The Corporation shall provide appropriate funding, as determined by the Committee, for payment of compensation to the independent auditors for the purpose of rendering or issuing an audit report or related work and to any special advisors employed by the Committee.

Statement of Committee Policy

The Committee shall be responsible for assisting the Board in fulfilling the Board's responsibility to oversee the financial reporting and accounting policies and procedures of the Corporation, and the annual independent audit of the Corporation's financial statements. The Committee shall maintain direct communications with the Corporation's independent auditor, and the Corporation's management and internal audit manager. The Committee shall review the results of audits by the independent auditor and meet with such auditor periodically and report to the Board on its findings, including any recommendations that the Committee may have, based upon the advice of the independent auditor, with respect to financial reporting and accounting policies and procedures of the Corporation and related financial and accounting controls and safeguards.

Responsibilities and Processes

Without limiting the foregoing, the Committee shall have the following specific responsibilities in executing its oversight function:

  • The sole authority and responsibility to select, evaluate and, where appropriate, replace the independent auditors. The independent auditors shall report directly to the Committee. The Committee shall be directly responsible for approving the level of compensation of the independent auditors and the oversight of the work of the independent auditors (including resolution of disagreements between management and the independent auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or related work.
  • Annually monitor and evaluate the qualifications, performance, effectiveness and independence of the Corporation's independent auditor, and assure regular rotation of the lead partner and reviewing partner of the audit engagement team as required by law.
  • Review and discuss with the auditors their independence from management and the Corporation and the matters included in the written disclosures required by the Independence Standards Board, in order to confirm the continuing independence of the independent auditor. If so determined by the Committee, the Committee shall take appropriate action to ensure the independence of the auditors.
  • Preapprove all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Corporation by its independent auditors, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Committee prior to the completion of the audit. The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant preapprovals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant preapprovals shall be presented to the Committee at its next scheduled meeting.
  • With the assistance of the Corporation's independent auditor, the internal audit manager, and management, review any significant issues related to the Corporation's internal controls over financial reporting; and ascertain whether the independent auditor has any significant recommendations with respect to the Corporation's internal controls over financial reporting; and if so, whether they should be recommended to the Board for implementation.
  • Review, with management and the independent auditor, the Corporation's quarterly interim financial statements in such manner as it deems practicable, ensure that the quarterly financial statements have been reviewed by the independent auditor, and discuss with the independent auditor any other matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards.
  • Review and discuss with management and the independent auditor the Corporation's annual financial statements to be included in the Corporation's annual report on Form 10-K, as audited by the independent auditor, prior to their publication, The Committee shall ascertain whether the independent auditor has any recommendations for management with respect to the preparation of the Corporation's annual financial statements or any policies and procedures relevant thereto, and if so, whether management has addressed adjustments, concerns or recommendations proposed or expressed by the independent auditor.
  • Meet periodically during each year with management, the internal audit manager, and the independent auditor regarding matters related to the Committee's responsibilities, including the annual and interim financial statements and internal controls over financial reporting; and meet independently with such management, the internal audit manager, and the independent auditor, as the Committee deems appropriate, but at least annually to discuss items which any of them believe should be brought to the attention of the Committee.
  • Based upon the reviews and discussions referred to in this Charter, determine whether to recommend to the Board that the audited financial statements of the Corporation for the preceding fiscal year be included in the Corporation's Annual Report on Form 10-K for the preceding fiscal year for filing with the SEC.
  • Review disclosures, if any, made to the Committee by the Corporation's Chief Executive Officer and Chief Financial Officer during their certification process for the Corporation's periodic reports under the Exchange Act regarding: (a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Corporation's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls over financial reporting.
  • Prepare and publish a Committee report for inclusion in the Company's annual proxy statement (if any) and provide any additional disclosures in the proxy statement or the Company's Annual Report on Form 10-K required to be made under SEC rules and regulations.
  • Monitor the qualifications and effectiveness of the Corporation's internal audit manager, including plans, activities and organizational structure; review significant reports, if any, prepared by the internal audit manager together with management's response; and recommend the appointment or discharge of the internal audit manager, from time to time, as the Committee deems appropriate.
  • Report to and perform such additional oversight functions as may be requested by the Board, including but not limited to, monitoring the Corporation's efforts to audit compliance with the Corporation's Code of Business Conduct.
  • Periodically, but not less than annually, review and reassess the adequacy of the Charter of the Committee and submit any recommended changes for approval by the Board.
  • On at least an annual basis, review with the Corporation's counsel any legal matters that could have a significant impact on the organization's financial statements or the Corporation's compliance with applicable laws and regulations, and inquiries received from regulators or government agencies.

Receipt and Treatment of Complaints

The Committee shall establish procedures for: the receipt, retention, and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, auditing, or other matters; and the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting, auditing, or other matters.

Limitation of Audit Committee's Role

While the Committee has the responsibilities and powers set forth in this charter, the Committee does not have the responsibility to plan or conduct audits or to determine that the Corporation's financial statements are complete, accurate and in accordance with generally accepted accounting principles and applicable rules and regulations. Management is responsible for the financial reporting process, including the system of internal controls over financial reporting, and for the preparation of consolidated financial statements in accordance with generally accepted accounting principles. The Corporation's independent auditors are responsible for auditing those financial statements and expressing an opinion as to their conformity with generally accepted accounting principles. The Committee's responsibility is to oversee and review these processes. The members of the Committee are not, however, professionally engaged in the practice of accounting or auditing and do not provide any expert or other special assurance as to such financial statements concerning compliance with laws, regulations or generally accepted accounting principles or as to auditor independence. The members of the Committee may rely, without independent verification, on the information provided to the Committee and on the representations made by management and the independent auditors.

III. Personnel & Compensation Committee

(Adopted February 25, 2003)

Organization: There shall be a Personnel & Compensation Committee (the "Committee") which shall consist of at least three directors who:

  • Meet the definitions of a "non-employee director" within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and "outside director" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.1
  • Are otherwise free of any relationship which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment.

The chairperson of the Committee shall be appointed by the Board and the Secretary of the Corporation shall be responsible for preparing the meeting agenda and recording the minutes of its meetings. All members shall have terms of one year. The Committee shall meet at such times as are deemed advisable by the Chairman, but not less than twice per year.

The Committee shall have the authority to conduct such studies or investigations as are appropriate to fulfilling its responsibilities and to retain such consultants or other experts as it deems necessary in the performance of its duties, at the Corporation's expense.

Responsibilities: The Committee shall assist the Board in fulfilling the Board's responsibilities regarding executive compensation matters. In general, the Committee shall assure that compensation for senior executives enables the Corporation to attract and retain strong leadership in a manner consistent with the Corporation's business objectives and shareholder interests consistent with internal equity considerations, competitive practice, and all legal requirements.

Without limiting the generality of the foregoing, the Committee shall have the following specific responsibilities:

  • Review from time to time and approve the Corporation's executive compensation strategy to determine that it supports the Corporation's business objectives and shareholder interests and is consistent with internal equity considerations, competitive practice, and all legal requirements. Direct management to assure that such strategies are properly reflected in the Corporation's compensation plans, including but not limited to, its Compensation Administration Plan, Cash Bonus Plan, and Stock Incentive Plan.
  • Review, approve, and revise as appropriate the Corporation's executive salary grade structure and approve annual merit increase guidelines for officers of Kaman Corporation and senior management of the Corporation's subsidiaries.
  • Review annually and determine the individual elements of total compensation (including salary, cash bonus, stock incentive awards, and other long term incentives) for the Chief Executive Officer after consultation with the Corporate Governance Committee.
  • Review annually and determine the individual elements of total compensation (including salary, cash bonus, stock incentive awards, and other long term incentives) for the officers of Kaman Corporation and senior management of the Corporation's subsidiaries.
  • Review from time to time and make recommendations regarding executive compensation and equity-related plans, including but not limited to, the Compensation Administration Plan, Cash Bonus Plan, Stock Incentive Plan, Deferred Compensation Plan and Supplemental Employees' Retirement Plan and assure that such plans are administered in a manner consistent with the Corporation's executive compensation strategy and plan provisions. In addition, review, approve and recommend to the Board all new executive compensation and equity-related plans for senior management.
  • Serve as administrative committee for the Corporation's Employees Stock Purchase Plan.
  • Review and approve such reports to shareholders as are required by SEC regulations and any other legal requirements.

Other: The Committee shall undertake such additional activities within the scope of its primary function as the Committee may determine or any activities requested by the Board.

A report of the Committee regarding each meeting, with recommendations for action, when appropriate, shall be presented at the Board meeting next following each Committee meeting.

IV. Finance Committee

(Adopted August 13, 2002)

Organization: There shall be a Finance Committee (the "Committee") which shall consist of at least three directors who are not currently employed by the corporation and are free of any relationship which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment. The chairperson of the Committee shall be appointed by the Board and the Secretary of the Corporation shall be responsible for preparing the meeting agenda and recording the minutes of its meetings. All members shall have terms of one year. The Committee shall meet at such times as are deemed advisable by the Chairman, but not less than twice per year.

The Committee shall have the authority to conduct any investigation appropriate to fulfilling its responsibilities and to retain special legal, accounting or other consultants or experts it deems necessary in the performance of its duties, at the Corporation's expense.

Responsibilities: The Committee shall assist the Board in fulfilling the Board's responsibilities regarding matters of a material financial nature, including strategy, policies and condition of the corporation.

Without limiting the generality of the foregoing, the Committee shall have the following specific responsibilities:

  • Annual review of the corporation's business plan from the perspective of funds flow, capital spending and financing requirements. From time to time, the Committee shall also review the corporation's long range planning strategies with management.
  • Annual review of the corporation's capital expenditure plan (with such plan to be updated by management should major changes occur) and the corporation's financial plan to fund such expenditures.
  • Meet regularly with the Pension Administrative Committee to review the performance of the Kaman Corporation Thrift and Retirement Plan and the Kaman Corporation Employees' Pension Plan, including specifically the financial performance of each plan's investment managers and, in the case of the pension plan, compliance with the investment policy as approved by the Board. The Committee shall have the authority to approve the appointment or termination of the service of the trustees and/or investment managers; review and approve actuarial assumptions and methods to be employed by the actuaries for the pension plan; recommend to the Board of Directors additions or terminations of subsidiaries to the plan; and ascertain compliance with the requirements of applicable laws and regulations, including ERISA, all with the advice and recommendation of the Pension Administrative Committee.
  • Review all forms of major financing, including the issuance of securities or corporate borrowings.
  • Review the financial aspects of proposed acquisitions or divestitures that exceed transaction levels for which the Board has delegated authority to management, including consideration of any substantial diversification of the corporation's business and methods of financing. In the case of an acquisition, the Committee shall also review and report to the Board on the financial performance of any such acquisition as of its one-year anniversary.
  • Periodically advise and consult with management regarding the Corporation's:
    • relationship with its lenders, compliance with financing agreements, including debt covenants;
    • dividend planning;
    • stock repurchase program;
    • charitable contributions budget.

Other: The Committee shall undertake such additional activities within the scope of its primary function as the Committee may determine or any activities requested by the Board.

A report of the Committee regarding each meeting, with recommendations for action, when appropriate, shall be presented at the Board meeting next following each Committee meeting.

1 Section 162(m) of the IRC defines a director as an "outside director" if the director is not a current or former employee of the Corporation and if the director does not receive significant direct or indirect compensation in any capacity other than as a director. SEC Rule 16b-3 defines a "non-employee" director as a person who: is not currently an officer of the Corporation (or a parent or subsidiary thereof); does not receive significant direct or indirect compensation from the Corporation for any services performed other than services as a director; and has no interest in any significant transactions or business relationships with the Corporation.

 

To print this page, go to the File menu and select Print. You may also select the "Ctrl" and "P" keys simultaneously on your keyboard.