Here's a timeline, as compiled by MDM, on the events and details concerning the June 2005 recapitalization plan undertaken by the company, as well as the subsequent offer by an outside investor, Mason Capital.

June 7: Kaman Corporation announced it was entering into a deal with Kaman family members, who hold 100% voting power in the company through possession of more than 80% of Class B shares. Class B share holders, while holding 100 percent of voting power, hold only 2.9 percent of the economic value of the company. 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. The move was an effort to adjust the disparity between the two classes of stock, giving Kaman family members an effective exit strategy while providing all shareholders with voting control proportionate to their economic interest in the company.

The mechanics of the recapitalization deal work like this: 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 voting common stock and receive $14.76 (which represents .95 times the average closing price of one share of Class A common stock over the prior ten trading days).

But an outside investor clearly saw an opportunity in this somewhat unique equity situation. He made an offer to Kaman family members to purchase their shares at a face value more than 80 percent higher than the recap deal on the table.

The Deal: Part 2, 3, 4…
June 23: Without providing detail, members of the Kaman family notified Kaman Corporation that the family expected to reach an alternative transaction to the company's recapitalization plan. On Jun. 28, Kaman family members sent a letter to the company detailing the Securities Purchase Agreement reached with MK Investments LLC, and Mason Capital Management LLC. That agreement was for $55 per share in cash for the family's 551,711 shares, or $30.3 million.

The Kaman board of directors has the option of approving a substitute recapitalization plan, which under the original agreement increases the number of voting common shares into which each share of Class B stock would be converted and provide a minimum deemed value per Class B common share of at least $0.65 greater than the $55 per share alternative offer. That translates into an exchange ratio of 3.58 voting common shares for each share of Class B stock and a part stock/part cash option under which holders would have the right to elect to receive instead 1.84 voting common shares plus $27.10 in cash for each of their Class B shares.

June 29: Kaman Corporation received a letter from Mason Capital, a party to the alternate deal, in which Mason represented that it owned 55,642 shares of Class B common stock, or 44% of the non-family Class B shares. Mason requested that it be permitted to review a list of the holders of all Class B common stock in connection with its intention to purchase all outstanding shares. The company refused that request, saying it "believes that Mason has not met the statutory requirements necessary to obtain such a stockholder list."

July 22: An arbiter confirmed that Mason Capital’s proposed alternative transaction was a "qualifying alternative transaction". Under the recapitalization agreement, the company had a period of five business days within which 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 $.65, with both all stock and part stock/part cash alternatives and 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 Kaman family agreed to support any "substitute recapitalization proposal" approved by the Board of Directors.

The board approved a "substitute recapitalization proposal" with the equivalent value of $55.65 per share that increases the number of voting common shares into which each share of Class B common stock would be converted. For this purpose, one share of the voting stock would be valued at $15.54, which was the average closing price for the Class A common stock over the ten trading day period prior to the recapitalization agreement being signed. Accordingly, the "substitute recapitalization proposal" has an exchange ratio of 3.58 voting common shares for each share of Class B common stock and a part stock/part cash alternative under which holders would have the right to elect instead to receive for each of their shares of Class B common stock 1.84 voting common shares and $27.10 in cash. The value of this deal for family members increased by roughly $360,000 collectively.

The Kaman family agreed to make the part stock/part cash election in an amount directed by the company to avoid application of the higher voting requirement of Section 33-841 of the Connecticut Business Corporation Act. In that regard, the company advised the Kaman family that the minimum part stock/part cash election for them collectively is 516,735 shares, which means that the Kaman family is free to make either election for their remaining 34,976 shares.

Sept 20: Kaman Corporation reported that a lawsuit has been brought in federal district court in Hartford, Connecticut by Mason Capital, Ltd. against the company and members of the Kaman family seeking, among other relief, to enjoin the proposed recapitalization unless and until the proposed recapitalization is approved by a "supermajority" vote by the holders of two-thirds of the company's Class B common stock not owned by the parties to the recapitalization agreement. Mason Capital has stated in the lawsuit that it owns 4.76% of the outstanding Class B common stock.

The company believes that, as structured, the proposed recapitalization does not require the "supermajority" vote that Mason Capital claims and the company intends to vigorously pursue denial of all of the relief requested by Mason Capital. The Company says it plans to hold the special meetings of shareholders to approve the proposed recapitalization as scheduled on October 11, 2005.

As previously reported, affiliates of Mason Capital are party to a share purchase agreement with members of the Kaman family, pursuant to which, in the event that the holders of the Class A common stock fail to approve the proposed recapitalization or the proposed recapitalization is otherwise not completed other than by reason of a breach of the recapitalization agreement by the Kaman family, the Kaman family can cause an affiliate of Mason Capital to purchase the Kaman family's shares of Class B common stock at $55.00 per share in cash and, upon the closing of the purchase from the Kaman family, offer to purchase all remaining shares of Class B common stock at $55.00 per share in cash.

Sept 26: The company announced that the court set a trial date of Oct. 7, 2005 in connection with the litigation brought by Mason Capital, Ltd. concerning whether the company's proposed recapitalization requires the approval by a "supermajority" vote of the holders of two thirds of the company's Class B common stock not owned by parties to the recapitalization agreement. The company will hold the special meetings of its Class A and Class B shareholders as scheduled on October 11, 2005. However, in order to allow for a judicial determination without undue consideration to the timing of the meetings, the company will delay closing of the proposed recapitalization transaction until the Court issues a decision in the case.

Oct. 7: A hearing on the issues was held and further submissions to the Court are due by October 17, 2005. The company agreed to wait to close the recapitalization until the Court issues a decision in the matter and the other certificate of incorporation amendment proposal will not be implemented unless and until the recapitalization is effected.

Oct. 11: The company announced that its proposed recapitalization has been approved by holders of its Class A and Class B common stock, each voting separately as a class. The company also announced that holders of its Class B common stock have approved an amendment to the company's certificate of incorporation that is intended to enhance the ability of the board of directors to take actions in the longer term interests of the company and its shareholders. 

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