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Kaman Corporation, Bloomfield, CT, has entered into an agreement with certain members of the Kaman family that contemplates a proposed recapitalization which would simplify the corporation'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 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).
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 corporation's Board of Directors also approved an increase in its expected annual dividend from $.44 to $.50 per share. The dividend increase is effective immediately and is not contingent on the completion of the proposed recapitalization. The corporation expects that the annual dividend will be declared and paid in quarterly dividends of equal amounts, subject to the Board's periodic review of its dividend policy and consistent with Kaman's recent dividend payment schedule. Accordingly, the board today declared a regular quarterly dividend of 12.5 cents per share on shares of Kaman common stock. The dividend will be paid on July 11, 2005 to shareholders of record on June 27, 2005.
"We are very pleased to come to this agreement with the Kaman family to simplify Kaman's capital structure," stated Paul R. Kuhn, Kaman's chairman, president and CEO. Kuhn added, "The proposed recapitalization will provide Kaman with a more traditional capital structure with a minimal impact on current Class A shareholders, and will provide equal voting rights to all shareholders.
Mr. Kuhn added, "For the past few years, we have taken the actions necessary to position Kaman for the future. Our strong operational and financial performance in the first quarter of 2005 reflects the benefits of these efforts, and we believe the proposed recapitalization will better enable this performance to be reflected in the price of the company's shares."
Kuhn also noted, "Kaman has paid a cash dividend to its shareholders each quarter since 1971 and has maintained the current dividend rate for the past sixteen years. The increase we are announcing today is a reflection of the progress the Board and management believe has been made over the past several years and our confidence in the company's competitive position in the principal markets we serve."
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 members of the Kaman family that are party to the recapitalization agreement 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