Document:

Exhibit 10.48

 

July 28, 2008

 

Conrado Hinojosa

5435 Lamplight Pass

Brownsville,  TX 
78526

 

Re:  Change in Control Severance
Compensation Agreement

 

Dear Mr. Hinojosa:

 

The board of directors (the “Board”) of KEMET
Corporation (the “Company”) has determined that it is in the best interests of
the Company and its shareholders to assure the continued dedication to the
Company of senior management personnel, notwithstanding any possibility, threat
or occurrence of a Change in Control of the Company (as defined below).  Accordingly, in order to encourage your
continued attention and dedication to your assigned duties regardless of any
such possibility, threat or occurrence, the Board has authorized the Company to
enter into this “Change in Control Severance Compensation Agreement” (the “Agreement”)
in order to provide you with certain compensation and other benefits in the
event that your employment with the Company is terminated as a result of a
Change in Control of the Company.

 

The terms and
conditions of this Agreement are as follows:

 

1.        Term
of the Agreement.  (A)  The Term
of this Agreement shall commence on the date first set forth above and shall
end on July 27, 2011; provided, that if a Change in Control of the Company
shall have occurred prior to July 27, 2011, the Term of this Agreement
shall end on the date that is the two year anniversary of the Change in
Control.  In addition, the Term of this
Agreement shall automatically end upon the occurrence of any of the following:

 

(i)       Your death or receipt of a Notice of
Termination due to Disability;

 

(ii)      Your attainment of your Retirement Date;
or

 

(iii)     A
determination by the Board that you are no longer eligible to receive the
benefits set forth in this Agreement and your receipt of notice of any such determination;
provided, that such a determination shall have no effect if made after a
Change in Control of the Company or as a result of negotiations occurring in
connection with a Change in Control of the Company.

 

(B)     In the
event of a Change in Control of the Company, subject to Paragraph 1(A), the
Term of this Agreement shall be automatically extended to the earlier of:  (i) the date that is two (2) years
from the date such Change in Control of the Company occurred; or (ii) the
occurrence of an event described in Paragraph 1(A)(i) or 1(A)(ii) above.

 

 

2.        Change
in Control of the Company.  For
purposes of this Agreement, a “Change in Control of the Company” shall mean any
of the following events:

 

(A)     The
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty-five
percent (25%) or more of either (i) the then outstanding shares of
common stock of the Company (the “Outstanding Company Common Stock”), or (ii) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of
this subparagraph (A), the following acquisitions shall not constitute a Change
in Control of the Company:  (1) any
acquisition directly from the Company; (2) any acquisition by the Company;
(3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company; or (4) any acquisition by any corporation pursuant to a transaction
which complies with clauses (1), (2) and (3) of subparagraph (C) below;

 

(B)     Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding for this purpose any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

 

(C)     Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a “Business Combination”),
in each case, unless, following such Business Combination, (1) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, twenty-five percent (25%)
or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the 

 

2

 

combined voting power of
the then outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination, and (3) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination;

 

(D)     Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

 

3.        Termination of Employment Following
Change in Control of the Company.

 

(A)     Termination.  If a Change in Control of the Company occurs,
you shall be entitled, upon the subsequent termination of your employment with
the Company (“Termination”), to the benefits described in Paragraph 4 below,
unless such Termination is:  (i) by
you other than for Good Reason; (ii) by the Company for Cause or because
of your Disability; or (iii) because of your death or attainment of your
Retirement Date.  Any Termination (except
a Termination resulting from your death) shall be made by written Notice of
Termination from the party initiating such Termination to the other party to
this Agreement.

 

(B)     Notice
of Termination.  A Notice of
Termination shall mean a written document stating the specific provision in
this Agreement upon which a Termination is based and otherwise setting forth
the facts and circumstances which provide the basis for a Termination.

 

(C)     Date
of Termination.  The Date of
Termination shall mean:  (i) if the
Termination occurs as a result of Disability, thirty (30) days after a Notice
of Termination is given; (ii) if the Termination occurs for Good Reason,
the date specified in the Notice of Termination; and (iii) if the
Termination occurs for any other reason, the date on which the Notice of
Termination is given.

 

(D)     Good
Reason.  A Termination for Good
Reason shall mean a Termination as a result of:

 

(i)       The
assignment to you, without your express written consent, of any duties
inconsistent with your position, duties, responsibilities and status with the
Company immediately prior to a Change in Control of the Company, or a change in
your titles or offices (if any) in effect immediately prior to a Change in
Control of the Company, or any removal of you from, or any failure to reelect
you to, any of such positions, except in connection with your Termination for
Cause, death, Disability, or as a result of your attainment of your Retirement
Date.

 

(ii)      A
reduction by the Company in your base salary as in effect on the date hereof,
or as the same may be increased from time to time thereafter;

 

(iii)     The
failure of the Company to continue in effect any compensation, welfare or
benefit plan in which you are participating at the time of a Change in Control
of the Company, without substituting therefor plans providing you with
substantially similar benefits at 

 

3

 

substantially the same cost
to you; or the taking of any action by the Company which would adversely affect
your participation in or materially reduce your benefits or increase the cost
to you under any of such plans or deprive you of any material fringe benefit
enjoyed by you at the time of the Change in Control of the Company;

 

(iv)     Any
purported Termination for Cause or Disability without grounds therefor; or

 

(v)      The
relocation of your primary work location to a location that is more than 20
miles from your primary work location immediately prior to the Change in
Control of the Company.

 

(E)      Cause.  A Termination for Cause shall mean (i) a
Termination as a result of the willful and continued failure by you for a
significant period of time substantially to perform your duties with the
Company (other than any such failure resulting from your Disability), after a
demand for substantial performance is delivered to you in writing by the Board
or its designate which specifically identifies the manner in which the Board or
its designate believes that you have not substantially performed your duties,
or (ii) the willful engaging by you in gross misconduct materially and
demonstrably injurious to the Company. 
No act, or failure to act, on your part shall be considered “willful”
unless done, or omitted to be done, by you, not in good faith and without
reasonable belief that your action or omission was in the best interest of the
Company.  The burden for establishing the
validity of any termination for Cause shall rest upon the Company.  No Termination shall be deemed to be for
Cause unless and until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board called and held for such purpose (after
reasonable notice is provided to you and you are given an opportunity, together
with counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board, you are guilty of the conduct described in subclauses (i) or
(ii) above, and specifying the particulars thereof in detail.

 

(F)      Disability.  A Disability shall mean that, as a result of
your incapacity due to physical or mental illness, you shall have been unable
to perform your duties with the Company for a period of six (6) months,
and have no prospect of returning to employment with the Company within an
additional six (6) months; provided, that the Company shall have
made a reasonable accommodation of any such incapacity pursuant to, and shall
otherwise have complied in all respects with, the provisions of the Americans
with Disabilities Act of 1990.

 

(G)     Retirement
Date.  Your “Retirement Date” shall
mean the date on which you attain age 70-1/2, or the date you have informed the
Company of your intentions to retire after you attain the age of fifty-five
(55), but before the attainment of age 70-1/2.

 

4.        Benefits.  (A)  In the event of your Termination
for any reason except those set forth in Paragraphs 3(A)(i), 3(A)(ii) and
3(A)(iii) above, the Company shall pay to you the following amounts in a
lump sum payment on the Date of Termination:

 

4

 

(i)       An
amount that is thirty (30) times
the sum of (x) your monthly base salary at the rate in effect at the time
a Notice of Termination is given and (y) the monthly amount of your annual
target incentive bonus, determined by dividing the annual target incentive
bonus by 12 for the year in which the Change of Control occurs.

 

(ii)      The
Company shall maintain in full force and effect, for a period of thirty (30) months following your Date
of Termination, all life insurance and medical insurance plans and programs
(the “Company Programs”) in which you are entitled to participate immediately
prior to the Date of Termination, provided that your continued
participation is possible under the terms and provisions of such Company
Programs.  In the event that your
participation in any Company Program is not permitted under the terms and
provisions thereof, the Company will use its reasonable best efforts to provide
you with, or arrange coverage for you which is substantially similar to
(including comparable terms), the coverage that you would have received under
the applicable Company Program. 
Notwithstanding the foregoing, the Company’s obligations under this
Paragraph 4(A)(ii) shall terminate with respect to any Company Program on
the date that you first become eligible, after your Date of Termination, for
the same type of coverage under another employer’s plan.

 

(iii)     The
Company shall pay all reasonable legal fees and expenses incurred by you as a
result of your Termination (including all such reasonable fees and expenses, if
any, incurred in contesting or disputing your Termination or in seeking to
obtain or enforce any rights or benefits provided by this Agreement).

 

(iv)     The
Company shall pay the costs of reasonable outplacement services until you are
employed on a full-time basis, provided that payment by the Company of
such costs shall not exceed $15,000.

 

(B)     Accelerated
Vesting under 2004 Long Term Incentive Compensation Plan.  For any performance awards made after the
date hereof under the Company’s 2004 Long Term Incentive Compensation Plan, in
the event of a Change in Control of the Company, the vesting of such awards
shall be accelerated to the next whole year following the date of the Change in
Control, and shall be payable in an amount equal to the greater of (x) the
actual performance of the Company through the date of the Change in Control
compared to the Plan target, up to the maximum amount payable under the Plan
and (y) the target amount payable under the Plan for such period.

 

(C)    No Mitigation Required.  You shall not be required to mitigate the
amount of any payment provided for in this Paragraph 4 by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
this Paragraph 4 be reduced by any compensation earned by you as a result of
employment by another employer after the Date of Termination, or otherwise,
except as specifically provided in Paragraph 4(A)(ii).

 

(D)     Section 409A
Delay.  Notwithstanding the above and
unless exempt under Proposed Treasury Regulation §1.409A-1(b)(9), if you are a “specified
employee” within the meaning of Code §416(i) and Proposed Treasury
Regulation §1.409A-1(i), no payments may be 

 

5

 

made under this Agreement
before the date that is six months after the Termination (or, if earlier, the
date of death of the specified employee). 
In such case, all payments to which you are entitled during the first
six months shall be accumulated and paid on the first date of the seventh month
following Termination.

 

(E)      Section 280G  Payments. 
If it is determined that any payments hereunder, either separately or in
conjunction with any other payments, benefits and entitlements received by you
hereunder, would constitute an “excess parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”),
and thereby be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), then in such event, the Company shall be obligated to
pay to you promptly following such determination and upon notice thereof a “gross-up”
payment in an amount equal to the amount of such Excise Tax, plus all federal
and state income or other taxes with respect to the payment of the amount of
such Excise Tax, including all such taxes (including any additional Excise Tax)
with respect to any such gross-up payment.

 

5.        Miscellaneous.

 

(A)     Limitation
of Effect.  This Agreement shall have
no effect on any termination of your employment prior to a Change in Control of
the Company, or upon any termination of your employment at any time as a result
of your Disability, attainment of your Retirement Date, or death; and upon the
occurrence of any such events, you shall receive only those benefits to which
you would have been otherwise entitled prior to a Change in Control of the
Company.

 

(B)     Successors.  (i)  The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, to assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform this Agreement
if no such succession had taken place. 
Failure of the Company to obtain such assumption or agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement.

 

(ii)      This
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.  If
you should die while any amounts would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee or, if there be no such designee, to your estate.

 

(C)     Notice.  Notices provided for in the Agreement shall
be in writing and shall be deemed to have been duly given when delivered in
person or mailed by United States registered mail, return receipt requested,
postage prepaid, to the respective addresses set forth on the first page of
this Agreement, or to such other address as either party may have furnished to
the other in writing, except that notices of change of address shall be
effective only upon receipt 

 

6

 

by the other party.  All notices to the Company shall be directed
to the attention of Larry McAdams, Vice President of Human Resources.

 

(D)     Modifications.  No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver, or discharge
is agreed to in writing and is signed by you and the Company.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.

 

(E)      Interpretation.  The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
South Carolina.  The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

 

If you agree that the foregoing correctly sets forth
the agreement between us, please sign the enclosed copy of this Agreement in
the space indicated below and return it to the Company.

 

	
   

  	
  Very truly yours,

  
	
   

  	
  KEMET Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ LARRY C. MCADAMS

  
	
   

  	
  Name:

  	
  Larry McAdams

  
	
   

  	
  Title:

  	
  Vice President, Human
  Resources

  

 

Agreed to as of the day
and year first written above:

 

	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ CONRADO HINOJOSA 

  
	
   

  	
  Conrado Hinojosa

  	
   

  

 

Dated as of

July 28, 2008

 

7Exhibit 10.49

 

July 28, 2008

 

Marc Kotelon

289 Route de Cherrey

Saint Laurent,  France 
74800

 

Re:  Change in Control Severance
Compensation Agreement

 

Dear Mr. Kotelon:

 

The board of directors (the “Board”) of KEMET
Corporation (the “Company”) has determined that it is in the best interests of
the Company and its shareholders to assure the continued dedication to the
Company of senior management personnel, notwithstanding any possibility, threat
or occurrence of a Change in Control of the Company (as defined below).  Accordingly, in order to encourage your
continued attention and dedication to your assigned duties regardless of any
such possibility, threat or occurrence, the Board has authorized the Company to
enter into this “Change in Control Severance Compensation Agreement” (the “Agreement”)
in order to provide you with certain compensation and other benefits in the
event that your employment with the Company is terminated as a result of a
Change in Control of the Company.

 

The terms and
conditions of this Agreement are as follows:

 

1.        Term
of the Agreement.  (A)  The Term
of this Agreement shall commence on the date first set forth above and shall
end on July 27, 2011; provided, that if a Change in Control of the Company
shall have occurred prior to July 27, 2011, the Term of this Agreement
shall end on the date that is the two year anniversary of the Change in
Control.  In addition, the Term of this
Agreement shall automatically end upon the occurrence of any of the following:

 

(i)       Your death or receipt of a Notice of
Termination due to Disability;

 

(ii)      Your attainment of your Retirement Date;
or

 

(iii)     A
determination by the Board that you are no longer eligible to receive the
benefits set forth in this Agreement and your receipt of notice of any such determination;
provided, that such a determination shall have no effect if made after a
Change in Control of the Company or as a result of negotiations occurring in
connection with a Change in Control of the Company.

 

(B)     In the
event of a Change in Control of the Company, subject to Paragraph 1(A), the
Term of this Agreement shall be automatically extended to the earlier of:  (i) the date that is two (2) years
from the date such Change in Control of the Company occurred; or (ii) the
occurrence of an event described in Paragraph 1(A)(i) or 1(A)(ii) above.

 

 

2.        Change
in Control of the Company.  For
purposes of this Agreement, a “Change in Control of the Company” shall mean any
of the following events:

 

(A)     The
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty-five
percent (25%) or more of either (i) the then outstanding shares of
common stock of the Company (the “Outstanding Company Common Stock”), or (ii) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of
this subparagraph (A), the following acquisitions shall not constitute a Change
in Control of the Company:  (1) any
acquisition directly from the Company; (2) any acquisition by the Company;
(3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company; or (4) any acquisition by any corporation pursuant to a transaction
which complies with clauses (1), (2) and (3) of subparagraph (C) below;

 

(B)     Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding for this purpose any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

 

(C)     Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a “Business Combination”),
in each case, unless, following such Business Combination, (1) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, twenty-five percent (25%)
or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the 

 

2

 

combined voting power of
the then outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination, and (3) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination;

 

(D)     Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

 

3.        Termination of Employment Following
Change in Control of the Company.

 

(A)     Termination.  If a Change in Control of the Company occurs,
you shall be entitled, upon the subsequent termination of your employment with
the Company (“Termination”), to the benefits described in Paragraph 4 below,
unless such Termination is:  (i) by
you other than for Good Reason; (ii) by the Company for Cause or because
of your Disability; or (iii) because of your death or attainment of your
Retirement Date.  Any Termination (except
a Termination resulting from your death) shall be made by written Notice of
Termination from the party initiating such Termination to the other party to
this Agreement.

 

(B)     Notice
of Termination.  A Notice of
Termination shall mean a written document stating the specific provision in
this Agreement upon which a Termination is based and otherwise setting forth
the facts and circumstances which provide the basis for a Termination.

 

(C)     Date
of Termination.  The Date of
Termination shall mean:  (i) if the
Termination occurs as a result of Disability, thirty (30) days after a Notice
of Termination is given; (ii) if the Termination occurs for Good Reason,
the date specified in the Notice of Termination; and (iii) if the
Termination occurs for any other reason, the date on which the Notice of
Termination is given.

 

(D)     Good
Reason.  A Termination for Good
Reason shall mean a Termination as a result of:

 

(i)       The
assignment to you, without your express written consent, of any duties
inconsistent with your position, duties, responsibilities and status with the
Company immediately prior to a Change in Control of the Company, or a change in
your titles or offices (if any) in effect immediately prior to a Change in
Control of the Company, or any removal of you from, or any failure to reelect
you to, any of such positions, except in connection with your Termination for
Cause, death, Disability, or as a result of your attainment of your Retirement
Date.

 

(ii)      A
reduction by the Company in your base salary as in effect on the date hereof,
or as the same may be increased from time to time thereafter;

 

(iii)     The
failure of the Company to continue in effect any compensation, welfare or benefit
plan in which you are participating at the time of a Change in Control of the
Company, without substituting therefor plans providing you with substantially
similar benefits at 

 

3

 

substantially the same cost
to you; or the taking of any action by the Company which would adversely affect
your participation in or materially reduce your benefits or increase the cost
to you under any of such plans or deprive you of any material fringe benefit
enjoyed by you at the time of the Change in Control of the Company;

 

(iv)     Any
purported Termination for Cause or Disability without grounds therefor; or

 

(v)      The
relocation of your primary work location to a location that is more than 20
miles from your primary work location immediately prior to the Change in
Control of the Company.

 

(E)      Cause.  A Termination for Cause shall mean (i) a
Termination as a result of the willful and continued failure by you for a
significant period of time substantially to perform your duties with the
Company (other than any such failure resulting from your Disability), after a
demand for substantial performance is delivered to you in writing by the Board
or its designate which specifically identifies the manner in which the Board or
its designate believes that you have not substantially performed your duties,
or (ii) the willful engaging by you in gross misconduct materially and
demonstrably injurious to the Company. 
No act, or failure to act, on your part shall be considered “willful”
unless done, or omitted to be done, by you, not in good faith and without
reasonable belief that your action or omission was in the best interest of the
Company.  The burden for establishing the
validity of any termination for Cause shall rest upon the Company.  No Termination shall be deemed to be for
Cause unless and until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board called and held for such purpose (after
reasonable notice is provided to you and you are given an opportunity, together
with counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board, you are guilty of the conduct described in subclauses (i) or
(ii) above, and specifying the particulars thereof in detail.

 

(F)      Disability.  A Disability shall mean that, as a result of
your incapacity due to physical or mental illness, you shall have been unable
to perform your duties with the Company for a period of six (6) months,
and have no prospect of returning to employment with the Company within an
additional six (6) months; provided, that the Company shall have
made a reasonable accommodation of any such incapacity pursuant to, and shall
otherwise have complied in all respects with, the provisions of the Americans
with Disabilities Act of 1990.

 

(G)     Retirement
Date.  Your “Retirement Date” shall
mean the date on which you attain age 70-1/2, or the date you have informed the
Company of your intentions to retire after you attain the age of fifty-five
(55), but before the attainment of age 70-1/2.

 

4.        Benefits.  (A)  In the event of your Termination
for any reason except those set forth in Paragraphs 3(A)(i), 3(A)(ii) and
3(A)(iii) above, the Company shall pay to you the following amounts in a
lump sum payment on the Date of Termination:

 

4

 

(i)       An
amount that is twenty-four (24)
times the sum of (x) your monthly base salary at the rate in effect at the
time a Notice of Termination is given and (y) the monthly amount of your
annual target incentive bonus, determined by dividing the annual target
incentive bonus by 12 for the year in which the Change of Control occurs.

 

(ii)      The
Company shall maintain in full force and effect, for a period of twenty-four (24) months following your
Date of Termination, all life insurance and medical insurance plans and
programs (the “Company Programs”) in which you are entitled to participate
immediately prior to the Date of Termination, provided that your
continued participation is possible under the terms and provisions of such
Company Programs.  In the event that your
participation in any Company Program is not permitted under the terms and
provisions thereof, the Company will use its reasonable best efforts to provide
you with, or arrange coverage for you which is substantially similar to
(including comparable terms), the coverage that you would have received under
the applicable Company Program. 
Notwithstanding the foregoing, the Company’s obligations under this
Paragraph 4(A)(ii) shall terminate with respect to any Company Program on
the date that you first become eligible, after your Date of Termination, for
the same type of coverage under another employer’s plan.

 

(iii)     The
Company shall pay all reasonable legal fees and expenses incurred by you as a
result of your Termination (including all such reasonable fees and expenses, if
any, incurred in contesting or disputing your Termination or in seeking to
obtain or enforce any rights or benefits provided by this Agreement).

 

(iv)     The
Company shall pay the costs of reasonable outplacement services until you are
employed on a full-time basis, provided that payment by the Company of
such costs shall not exceed $15,000.

 

(B)     Accelerated
Vesting under 2004 Long Term Incentive Compensation Plan.  For any performance awards made after the
date hereof under the Company’s 2004 Long Term Incentive Compensation Plan, in
the event of a Change in Control of the Company, the vesting of such awards shall
be accelerated to the next whole year following the date of the Change in
Control, and shall be payable in an amount equal to the greater of (x) the
actual performance of the Company through the date of the Change in Control
compared to the Plan target, up to the maximum amount payable under the Plan
and (y) the target amount payable under the Plan for such period.

 

(C)    No Mitigation Required.  You shall not be required to mitigate the
amount of any payment provided for in this Paragraph 4 by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
this Paragraph 4 be reduced by any compensation earned by you as a result of
employment by another employer after the Date of Termination, or otherwise,
except as specifically provided in Paragraph 4(A)(ii).

 

(D)     Section 409A
Delay.  Notwithstanding the above and
unless exempt under Proposed Treasury Regulation §1.409A-1(b)(9), if you are a “specified
employee” within the meaning of Code §416(i) and Proposed Treasury
Regulation §1.409A-1(i), no payments may be 

 

5

 

made under this Agreement
before the date that is six months after the Termination (or, if earlier, the
date of death of the specified employee). 
In such case, all payments to which you are entitled during the first
six months shall be accumulated and paid on the first date of the seventh month
following Termination.

 

(E)      Section 280G  Payments. 
If it is determined that any payments hereunder, either separately or in
conjunction with any other payments, benefits and entitlements received by you
hereunder, would constitute an “excess parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”),
and thereby be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), then in such event, the Company shall be obligated to
pay to you promptly following such determination and upon notice thereof a “gross-up”
payment in an amount equal to the amount of such Excise Tax, plus all federal
and state income or other taxes with respect to the payment of the amount of
such Excise Tax, including all such taxes (including any additional Excise Tax)
with respect to any such gross-up payment.

 

5.        Miscellaneous.

 

(A)     Limitation
of Effect.  This Agreement shall have
no effect on any termination of your employment prior to a Change in Control of
the Company, or upon any termination of your employment at any time as a result
of your Disability, attainment of your Retirement Date, or death; and upon the
occurrence of any such events, you shall receive only those benefits to which
you would have been otherwise entitled prior to a Change in Control of the
Company.

 

(B)     Successors.  (i)  The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company, to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform this Agreement if no such
succession had taken place.  Failure of
the Company to obtain such assumption or agreement prior to the effectiveness
of any such succession shall be a breach of this Agreement.

 

(ii)      This
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.  If
you should die while any amounts would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee or, if there be no such designee, to your estate.

 

(C)     Notice.  Notices provided for in the Agreement shall
be in writing and shall be deemed to have been duly given when delivered in
person or mailed by United States registered mail, return receipt requested,
postage prepaid, to the respective addresses set forth on the first page of
this Agreement, or to such other address as either party may have furnished to
the other in writing, except that notices of change of address shall be
effective only upon receipt 

 

6

 

by the other party.  All notices to the Company shall be directed
to the attention of Larry McAdams, Vice President of Human Resources.

 

(D)     Modifications.  No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver, or discharge
is agreed to in writing and is signed by you and the Company.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.

 

(E)      Interpretation.  The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
South Carolina.  The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

 

If you agree that the foregoing correctly sets forth
the agreement between us, please sign the enclosed copy of this Agreement in
the space indicated below and return it to the Company.

 

	
   

  	
  Very truly yours,

  
	
   

  	
  KEMET Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ LARRY C. MCADAMS

  
	
   

  	
  Name:

  	
  Larry C. McAdams

  
	
   

  	
  Title:

  	
  Vice President, Human
  Resources

  

 

Agreed to as of the day
and year first written above:

 

	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ MARC KOTELON 

  
	
   

  	
  Marc Kotelon

  	
   

  

 

Dated as of

July 28, 2008

 

7

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