Karman Holdings Inc.

Summary Compensation Table

The following disclosure describes the material elements of the compensation of our named executive officers for the years ended December 31, 2024 and 2023 and is presented based on the reduced disclosure rules applicable to us for so long as we are treated as an “emerging growth company” within the meaning of the Securities Act, which requires compensation disclosure for our principal executive officer and our two other most highly compensated executive officers (referred to throughout this report as our “named executive officers”). For the year ended December 31, 2024, our named executive officers were:

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Tony Koblinski, Chief Executive Officer;

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Michael Willis, Chief Financial Officer; and

•

Jonathan Beaudoin, Chief Operating Officer.

The compensation reported in the Summary Compensation Table below is not necessarily indicative of how we will compensate our named executive officers in the future. We expect that we will continue to review, evaluate and modify our compensation framework as a result of our becoming a publicly traded company and the compensation program could vary significantly from our historical practices.

(1)

The amount reported for Mr. Willis in this column represents the last installment of his sign-on bonus of $50,000 that was paid to him in April 2023. For a discussion of Mr. Willis’ sign-on bonus, please see “—Narrative to Summary Compensation Table—Executive Offer Letters” below.

(2)

The amounts reported in this column represent the aggregate grant date fair market values of the Units of Spaceco Management Equity LLC (the “Incentive Units”) granted in July 2023 to each of our named executive officers in connection with their service to us in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions. These amounts reflect the grant date fair market value for accounting purposes and do not represent the actual economic value that may be realized by each of our named executive officers and there can be no assurance that these amounts will ever be realized. For additional information, please see “—Narrative to Summary Compensation Table—Long-Term Incentives” below and Note 11 to our consolidated financial statements and related notes thereto and other financial information included in this report. All of the unvested Incentive Units held by our named executive officers accelerated and vested in full immediately prior to the consummation of the IPO. For additional information, please see “—Incentive Units” below. In connection with the Corporate Conversion, as described above, vested Incentive Units were exchanged for shares of our common stock. Messrs. Koblinski, Willis and Beaudoin each received 2,868,590, 1,147,436 and 573,718 shares of our common stock in respect of his vested Incentive Units, respectively. For additional information, please see “—Exchange of Incentive Units” below.

(3)

The amount reported in this column represents the aggregate grant date fair market value of the phantom units of Karman LLC (the “Phantom Units”) granted to Mr. Koblinski pursuant to a transaction bonus agreement with Karman LLC in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions. For additional information, please see “—Narrative to Summary Compensation Table—Phantom Units” below and Note 11 to our consolidated financial statements and related notes thereto and other financial information included in this report.

(4)

The amounts reported in this column represent the bonuses earned with respect to the year ended December 31, 2024 by each named executive officer pursuant to our annual bonus program for executives. These amounts were paid in February 2025. For additional information, please see “—Narrative to Summary Compensation Table—Annual Bonus Program” below.

(5)

The amounts reported in this column represent the employer matching contributions made to our 401(k) plans in 2024. The amount reported for Mr. Koblinski in this column also includes a home rental stipend of $5,400 per month (or $64,800 in the aggregate for 2024).

(6)

Mr. Beaudoin was promoted to the position of Chief Operating Officer effective as of July 22, 2024. In connection with his promotion, Mr. Beaudoin’s annual base salary increased from $300,000 to $361,000.

Narrative to Summary Compensation Table

Executive Offer Letters

Certain of the compensation paid to our named executive officers reflected in the Summary Compensation Table was provided pursuant to offer letters with us or one of our subsidiaries, which are summarized below. For a discussion of the severance pay and other benefits to be provided to our named executive officers in connection with a termination of employment and/or a change in control under arrangements with each of our named executive officers, please see “—Potential Payments Upon Termination or Change in Control” below.

Each of Messrs. Koblinski and Willis is party to an offer letter with us memorializing the terms of his respective employment with the Company. Pursuant to their offer letters, Mr. Koblinski is entitled to an annual base salary of $400,000 and Mr. Willis is entitled to an annual salary of $320,000 (which was increased to $350,000 effective as of January 1, 2024). Each of Messrs. Koblinski and Willis are eligible to earn performance-based bonuses based on their individual performance as well as our achievement of certain metrics set forth in the annual budget, subject to their continued employment through the date such bonuses are paid. Mr. Koblinski’s offer letter provides for a target performance-based bonus equal to 100% of his annual base salary and Mr. Willis’ offer letter provides for a target performance-based bonus equal to 50% of his annual base salary. For a discussion of our annual bonus program, please see “—Annual Bonus Program” below. Mr. Willis also received a sign-on bonus of $150,000 in connection with the commencement of his employment in November 2022, $100,000 of which was paid in 2022 and $50,000 of which was paid in April 2023.

Mr. Beaudoin is party to an offer letter with Systima Technologies, Inc. memorializing the terms of his initial employment in 2008. For 2023, Mr. Beaudoin received a base salary of $300,000 (which was increased to $325,000 effective as of January 1, 2024 and then, in connection with his promotion to Chief Operating Officer, to $361,000 effective as of July 22, 2024) and was eligible to earn a performance-based bonus equal to 50% of his annual base salary based on his individual performance as well as our achievement of certain metrics set forth in the annual budget, subject to his continued employment through the day such bonuses are paid.

Each of Messrs. Koblinski and Willis’ offer letters provides that during the term of employment, the executive will not engage or participate in any business that competes in any manner with the business of the Company or attempt to call on, solicit, or take away from the Company any of the Company’s employees or customers. Mr. Beaudoin is party to a Confidentiality Agreement with Systima Technologies, Inc., which includes an intellectual property assignment provision and provides that the executive may not use, publish or disclose intellectual property during the term of employment or for a period of 12 months thereafter, or copy, disclose, disseminate, transfer or otherwise convey confidential information during the term of employment or for a period of 24 months thereafter.

The named executive officers are also entitled to participate in our employee benefit plans and fringe benefit and welfare benefit programs that are generally available to other employees.

Annual Bonus Program

Our named executive officers are eligible to earn annual bonuses based on their individual performance as well as our achievement of certain metrics set forth in the annual budget approved by our Board. Each year the Company establishes a bonus pool for our leadership team which, for 2024, was funded based on our achieving earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of $104,700,000. If the EBITDA target is achieved, a bonus pool is funded with an amount equal to the aggregate target bonuses for the leadership team eligible to earn annual bonuses under the annual bonus program plus an additional 20% of actual EBITDA achieved over the target EBITDA. Failure to meet the operating objective would have reduced the funding of the executive bonus pool. If our EBITDA does not reach at least a threshold level, then the bonus pool will not be funded, and the named executive officers would not be entitled to any payout, regardless of his or her individual performance. Bonus payments earned under our annual bonus program for 2024 were paid in February 2025 based on our Board’s assessment of performance. For 2024 and 2023, Messrs. Koblinski, Willis and Beaudoin were eligible to earn a performance-based bonus equal to 100%, 50% and 50% of base salary, respectively, subject to their continued employment through the day such bonuses are paid.

Long-Term Incentives

We have granted each of our named executive officers Incentive Units intended to constitute “profits interests” for federal income tax purposes pursuant to the Amended and Restated Limited Liability Company Agreement of Spaceco Management Equity LLC, dated as of July 29, 2022, as may be amended, restated, and/ other otherwise modified and in effect from time to time (the “Spaceco Management Operating Agreement”) and the individual award agreements between Spaceco Management Equity LLC and each of the named executive officers evidencing such grants. The Incentive Units track the value of a corresponding number of Class P Units of the Company simultaneously granted from the Company to Spaceco Management Equity LLC and held by Spaceco Management Equity LLC pursuant to the Third Amendment and Restated Limited Liability Company Agreement of Karman LLC, dated June 25, 2021, (the “LLC Agreement”) and the individual award agreements between the Company and Spaceco Management Equity LLC. As a result of his grant of Incentive Units, each named executive officer became members of Spaceco Management Equity LLC and the Company and are bound by all of the terms and conditions set forth in the Spaceco Management Operating Agreement. Pursuant to his grant award agreement, as a condition to and in consideration of the grant of Incentive Units, each named executive officer agreed to be bound by restrictive covenants set forth in the Spaceco Management Operating Agreement pursuant to which the named executive officer may not engage in competitive activities, solicit employees or current or prospective customers or disparage Spaceco Management Equity LLC or its members, managers or affiliates for so long as such named executive officer retains his membership interest in Spaceco Management Equity LLC.

The Incentive Units granted to our named executive officers generally vest in substantially equal annual installments over five years starting on a date specified by our Board in the individual award agreement; provided, that in the event of a “change in control” (as such term is defined in the applicable award agreement), all then-unvested Incentive Units will accelerate and vest in full immediately prior to the consummation of such change in control, subject to the named executive officer’s continued employment through such change in control. Any portion of the Incentive Units that have not previously vested are forfeited without consideration upon (i) the named executive officer’s termination of employment or other service relationship for any reason, ii) the named executive officer’s death, (iii) the named executive officer’s “disability” (as such term is defined in the Spaceco Management Operating Agreement), (iv) the named executive officer’s “bankruptcy” (as such term is defined in the LLC Agreement), or (v) the named executive officer’s breach of the Spaceco Management Operating Agreement or any other agreement between the named executive officer and a group company; provided, that all Incentive Units, whether vested or unvested, are forfeited without consideration in the event that the named executive officer’s employment is terminated by us for “cause” (as such term is defined in the Spaceco Management Operating Agreement). See “—Potential Payments Upon Termination or Change in Control” below for information on the treatment of the Incentive Units in connection with the IPO and Note 11 to our consolidated financial statements and related notes thereto and other financial information included in this Annual Report on Form 10-K for additional information regarding the Incentive Units.

Retirement Plans

We sponsor retirement plans intended to qualify for favorable tax treatment under Section 401(k) of the Internal Revenue Code of 1986, as amended, or the Code, containing a cash or deferred feature that is intended to meet the requirements of Section 401(k) of the Code, for the benefit of its employees, including our named executive officers. Participants may make pre-tax contributions to the plan from their eligible earnings up to the statutorily prescribed annual limit on pre-tax contributions under the Code. Participants who are 50 years of age or older may contribute additional amounts based on the statutory limits for catch-up contributions. All employee contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participant’s directions. Pre-tax contributions by participants to the plan and the income earned on those contributions are generally not taxable to participants until withdrawn, and, participant contributions are held in trust as required by law. No minimum benefit is provided under the plan. During 2024 and 2023, we made fully vested “safe harbor” employer matching contributions on behalf of all eligible participating employees equal to 100% of salary deferrals up to 4% of compensation.

Clawback Policy

We have adopted a clawback policy as of February 12, 2025, designed to recoup any erroneously awarded compensation resulting from certain accounting restatements. If the Company is required to prepare an accounting restatement because of either (i) the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial restatements that is material to the previously issued financial statements, or (ii) an error that is not material to previously issued financial statements, but would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, then all incentive compensation paid or credited to each current or former executive officer for the restated period (up to three years) will be recalculated based on the restated results. To the extent the recalculated incentive compensation is less than the incentive compensation actually paid or credited to such executive officer for that period, the excess amount must be forfeited or returned to the Company.

In the event of an executive officer’s failure to repay any erroneously awarded compensation due under the clawback policy, the Company would enforce the clawback policy and pursue other remedies to the fullest extent permitted by law, unless certain conditions are met and the compensation committee determines that recovery would be impracticable.

Policies and Practices Related to the Grant of Certain Equity Awards

We were not a public company as of December 31,2024 and have not granted any equity or equity-based awards under our 2025 Plan or otherwise since our IPO on February 13, 2025. Although we do not currently have a formal policy, program or plan regarding the timing of equity or equity-based awards, if our Board or our compensation committee determines that it is in the best interests of the Company and its shareholders to grant stock options, stock appreciation rights or similar instruments with option-like features to our employees, including our named executive officers, in the future, the Company would generally aim to avoid granting such stock options, stock appreciation rights or similar instruments with option-like features within four business days before or one business day after the release of material nonpublic information for the purpose of affecting the value of executive compensation and will evaluate the appropriate steps to take in relation to the foregoing.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth the outstanding equity awards held by each of our named executive officers as of December 31, 2024.

(1)

All of the unvested Incentive Units held by our named executive officers accelerated and vested in full immediately prior to the consummation of our IPO.

(2)

With respect to: (i) Mr. Koblinski, represents Incentive Units that vest in equal installments on each anniversary of January 1, 2020 through January 1, 2025, subject to continued employment through the applicable vesting date, (ii) Mr. Willis, represents Incentive Units that vest in equal installments on each anniversary of November 28, 2022 through November 28, 2027, subject to continued employment through the applicable vesting date, and (iii) Mr. Beaudoin, represents Incentive Units that vest in equal installments on each anniversary of September 14, 2021 through September 14, 2026.

(3)

In connection with the Corporate Conversion, as described above, vested Incentive Units were exchanged for shares of our common stock. Each of Messrs. Koblinski, Willis and Beaudoin received 2,868,590, 1,147,436 and 573,718 shares of our common stock in respect of his vested Incentive Units, respectively. For additional information, please see “—Exchange of Incentive Units” below.

(4)

Amounts disclosed in this column reflect the market value of the unvested Class P Units using the weighted average of the equity fair value per share as of December 31, 2024, $8.34, multiplied by the number of unvested units underlying each award. The actual market value of the shares of our common stock received by Messrs. Koblinski, Willis and Beaudoin, as described in the preceding footnote, was $63,108,980, $25,243,592 and $12,621,796 respectively.

Potential Payments Upon Termination or Change in Control

Severance Benefits

As of December 31, 2024, pursuant to his offer letter, if Mr. Koblinski’s employment is terminated by us without “cause” (as such term is defined in his offer letter), or if Mr. Koblinski leaves his employment with us as a result of our material breach of his offer letter (provided that Mr. Koblinski has provided 30 days’ written notice of such breach and we have had the opportunity, but failed, to cure such breach), we will provide Mr. Koblinski with severance pay equivalent to six months of his base salary and benefits, either, at our election, (i) in a single lump sum within ten business days after his release of claims becomes effective or (ii) over a six-month period on our regular payroll dates. Payment of severance is conditioned on Mr. Koblinski’s execution, delivery and non-revocation of a release of claims against us in a form reasonably satisfactory to us.

Other than as set forth above, we did not offer or have in place with our other named executive officers any formal retirement or similar compensation arrangements providing for additional benefits or payments in connection with a termination of employment, change in job responsibility or change in control as of December 31, 2024. The Company maintains an informal practice of paying severance to executives based on their tenure at the time of termination.

Incentive Units

Upon our IPO, all then-unvested Incentive Units held by our named executive officers accelerated and vested in full.

Phantom Units

Prior to our IPO, Mr. Koblinski was party to a transaction bonus agreement with Karman LLC, dated as of September 23, 2024, pursuant to which Karman LLC granted Phantom Units to Mr. Koblinski. The Phantom Units represented the right to receive a cash payment upon the occurrence of an event that would result in a distribution (other than a tax distribution) to a holder of vested Class P Units in respect of such units under the LLC Agreement, which would include our IPO. The cash payment payable to Mr. Koblinski would be equal to the amount that would have been distributed to Mr. Koblinski as if he held 370,530 Class P Units with a hurdle amount of $470,186,054.81, subject to Mr. Koblinski’s continuous provision of services on a full-time basis in good standing through such distribution event and execution, delivery and non-revocation of a release of claims against us in a form reasonably satisfactory to us. Mr. Koblinski received a cash bonus equal to $5,257,462 upon the closing of our IPO in respect of his Phantom Units and, upon receipt of such payment, the Phantom Units automatically terminated. For additional information, please see Note 11 to our consolidated financial statements and related notes thereto and other financial information included in this report.

Compensation of Directors

For the year ended December 31, 2024, members of our board of directors received no cash compensation for services rendered as such members. On February 4, 2025, our board of directors approved a new compensation policy that became effective upon our IPO and is applicable to all of our non-employee directors. This compensation policy provides that non-employee directors will receive the following compensation for service on our board of directors:

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Annual cash retainerof $50,000 for each non-employee director (other than any non-employee director who is a representative of Trive Capital);

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Annual equity award of restricted stock units granted on the date of the Company’s annual meeting of stockholders with a value of $25,000 for each non-employee director (other than any non-employee director who is a representative of Trive Capital), with all of the shares of our common stock subject to the award vesting on the earlier of either the date of the Company’s next annual meeting of stockholders or the one-year anniversary of the date of the grant, subject to the director’s continued service with us.

For awards of restricted stock units, the number of restricted stock units will be determined by dividing the value of the annual equity award by the closing price of a share of our common stock on the date of grant.

Restricted stock units will be valued at 100% of the closing price of our common stock on the date of grant.

We also reimburse our directors for reasonable and necessary out-of-pocket expenses incurred in attending board and committee meetings or performing other services for us in their capacities as directors.

Exchange of Incentive Units

In connection with the Corporate Conversion, as described above, vested Incentive Units were exchanged for shares of our common stock.

The number of shares of our common stock received upon the exchange described above was based on the value that the holder of such Incentive Units would have received under the distribution provisions of the limited liability company agreement of the Company valued by reference to the initial offering price of shares of common stock in our recent IPO. Our named executive officers received the following shares of our common stock in respect of his Incentive Units:

(1)

The values in this column are based on the initial public offering price of $22.00 per unit and include the value of vested shares of our common stock received upon the exchange of Incentive Units for shares of our common stock.

2025 Stock Incentive Plan

The 2025 Stock Incentive Plan, or the 2025 Plan, was adopted by our board of directors on February 12, 2025 and approved by our shareholders on February 12, 2025. The 2025 Plan became effective immediately upon adoption although no awards were made before the effective date of Prospectus. The 2025 Plan has the features described below.

The total number of shares of our common stock available for issuance pursuant to awards under the 2025 Plan is 11,493,500. The total number of shares of our common stock that may be issued in respect of incentive share options is 34,480,500 shares. The number of shares of common stock available for issuance under the 2025 Plan is subject to adjustment as provided therein. Any of our employees, directors or consultants or any of our subsidiaries or affiliates are eligible to receive an award under the 2025 Plan, to the extent that an offer of such award is permitted by applicable law, stock market or exchange rules, and regulations or accounting or tax rules and regulations.

The 2025 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, other stock-based awards, or any combination thereof. No determination has been made as to the types or amounts of awards that will be granted to specific individuals under the 2025 Plan. Each award will be set forth in a separate grant notice or agreement and will indicate the type and terms and conditions of the award.