Document:

Exhibit 10.6

 

 

May 3, 2010

 

Daniel
E. LaMorte

5
Hemingford Circle

Simpsonville,  SC 
29681

 

Re:  Amendment No. 1 to  Change in Control Severance Compensation Agreement

 

Dear
Mr. LaMorte:

 

You
have previously entered into a Change in Control Severance Compensation
Agreement dated July 28, 2008 (the “Agreement”) with KEMET Corporation
(the “Company”) 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. 
You and the Company now wish to amend the Agreement as follows:

 

1.             Benefits.

 

(A)  Section 4(D) is hereby deleted and replaced in its
entirety as follows:

 

“(D) 
Code Section 409A Compliance.

 

(i) 
The intent of the parties is that payments and benefits under this Agreement
comply with Internal Revenue Code Section 409A and the regulations and
guidance promulgated thereunder (collectively “Code Section 409A”)
and, accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. 
To the extent that any provision hereof is modified in order to comply
with Code Section 409A, such modification shall be made in good faith and
shall, to the maximum extent reasonably possible, maintain the original intent
and economic benefit to you and the Company of the applicable provision without
violating the provisions of Code Section 409A.  In no event whatsoever shall the Company be
liable for any additional tax, interest or penalty that may be imposed on you
by Code Section 409A or damages for failing to comply with Code Section 409A.

 

(ii) 
A termination of employment shall not be deemed to have occurred for purposes
of any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination
is also a “separation from service” within the meaning of Code Section 409A
and, for purposes of any such provision of this Agreement, references to a “termination,”
“termination of employment” or like terms shall mean “separation from service.”  Notwithstanding anything to the contrary in
this Agreement, if you are deemed on the date of termination to be a “specified
employee” within the meaning of that term under Code Section 409A(a)(2)(B),
then with regard to any payment or the provision of any benefit that is
considered deferred compensation under Code 

 

P.O.
Box 5928, Greenville, South Carolina 29606 U.S.A.

Tel:
864.963.6300   Fax: 864.963.6521

 

 

Section 409A
payable on account of a “separation from service,” such payment or benefit
shall not be made or provided until the date which is the earlier of (I) the
expiration of the six (6)-month period measured from the date of your “separation
from service,” and (II) the date of your death, to the extent required
under Code Section 409A.  Upon the
expiration of the foregoing delay period, all payments and benefits delayed
pursuant to this paragraph (whether they would have otherwise been payable in a
single sum or in installments in the absence of such delay) shall be paid or
reimbursed to you in a lump sum, and all remaining payments and benefits due
under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein. 
For purposes of Code Section 409A, your right to receive
installment payments pursuant to this Agreement shall be treated as a right to
receive a series of separate and distinct payments.”

 

(B)  Section 4(E) is hereby removed in its entirety and
replaced in its entirety as follows:

 

“Section 4(E) Potential Payment Reduction.  Notwithstanding any other provision of this
Agreement to the contrary, in the event that any payment that is either
received by you or paid by the Company on your behalf or any property, or any
other benefit provided to you under this Agreement or under any other plan,
arrangement or agreement with the Company or any other person whose payments or
benefits are treated as contingent on a change of ownership or control of the
Company (or in the ownership of a substantial portion of the assets of the
Company) or any person affiliated with the Company or such person (but only if
such payment or other benefit is in connection with your employment by the
Company) (collectively the “Company Payments”), will be subject to the tax (the
“Excise Tax”) imposed by Internal Revenue Code Section 4999 (and any
similar tax that may hereafter be imposed by any taxing authority), then you
will be entitled to receive either (i) the full amount of the Company
Payments, or (ii) a portion of the Company Payments having a value equal
to $1 less than three (3) times your “base amount” (as such term is
defined in Internal Revenue Code Section 280G(b)(3)(A)), whichever of
clauses (i) and (ii), after taking into account applicable federal, state,
and local income taxes and the Excise Tax, results in the receipt by you on an
after-tax basis, of the greatest portion of the Company Payments.  Any determination required under this Section 4(E) shall
be made in writing by the independent public accountant of the Company (the “Accountants”),
whose determination shall be conclusive and binding for all purposes upon you
and the Company.  For purposes of making
any calculation required by this Section 4(E), the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good-faith interpretations concerning the application of
Internal Revenue Code Sections 280G and 4999. 
If there is a reduction of the Company Payments pursuant to this Section 4(E),
such reduction shall occur in the following order:  (A) any cash severance payable by
reference to your base salary or target incentive bonus, (B) any other
cash amount payable to you, (C) any employee benefit valued as a “parachute
payment,” and (D) acceleration of vesting of any outstanding equity award.”

 

2.             Miscellaneous.

 

(A) 
Interpretation.  The validity,
interpretation, construction and performance of this Amendment No. 1 to
the Agreement shall be governed by the laws of the State of South Carolina.

 

2

 

(B) 
Other than as expressly amended hereby, the rest of the terms and provisions of
the Agreement 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 Amendment No. 1 to the 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/Daniel
  E. LaMorte

  
	
   

  	
  Daniel
  E. LaMorte

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated
  as of

  	
   

  
	
  April 29,
  2010

  	
   

  

 

3Exhibit
10.7

 

 

May 3, 2010

 

Philip
M. Lessner

2109
Oak Street

Newberry,  SC 
29108

 

Re:  Amendment No. 1 to  Change in Control Severance Compensation Agreement

 

Dear
Mr. Lessner:

 

You
have previously entered into a Change in Control Severance Compensation
Agreement dated July 28, 2008 (the “Agreement”) with KEMET Corporation
(the “Company”) 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. 
You and the Company now wish to amend the Agreement as follows:

 

1.             Benefits.

 

(A)  Section 4(D) is hereby deleted and replaced in its
entirety as follows:

 

“(D) 
Code Section 409A Compliance.

 

(i) 
The intent of the parties is that payments and benefits under this Agreement
comply with Internal Revenue Code Section 409A and the regulations and
guidance promulgated thereunder (collectively “Code Section 409A”)
and, accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith. 
To the extent that any provision hereof is modified in order to comply
with Code Section 409A, such modification shall be made in good faith and
shall, to the maximum extent reasonably possible, maintain the original intent
and economic benefit to you and the Company of the applicable provision without
violating the provisions of Code Section 409A.  In no event whatsoever shall the Company be
liable for any additional tax, interest or penalty that may be imposed on you
by Code Section 409A or damages for failing to comply with Code Section 409A.

 

(ii) 
A termination of employment shall not be deemed to have occurred for purposes
of any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination
is also a “separation from service” within the meaning of Code Section 409A
and, for purposes of any such provision of this Agreement, references to a “termination,”
“termination of employment” or like terms shall mean “separation from service.”  Notwithstanding anything to the contrary in
this Agreement, if you are deemed on the date of termination to be a “specified
employee” within the meaning of that term under Code Section 409A(a)(2)(B),
then with regard to any payment or the provision of any benefit that is
considered deferred compensation under Code 

 

P.O.
Box 5928, Greenville, South Carolina 29606 U.S.A.

Tel:
864.963.6300   Fax: 864.963.6521

 

 

Section 409A
payable on account of a “separation from service,” such payment or benefit
shall not be made or provided until the date which is the earlier of (I) the
expiration of the six (6)-month period measured from the date of your “separation
from service,” and (II) the date of your death, to the extent required
under Code Section 409A.  Upon the
expiration of the foregoing delay period, all payments and benefits delayed
pursuant to this paragraph (whether they would have otherwise been payable in a
single sum or in installments in the absence of such delay) shall be paid or
reimbursed to you in a lump sum, and all remaining payments and benefits due
under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein. 
For purposes of Code Section 409A, your right to receive
installment payments pursuant to this Agreement shall be treated as a right to
receive a series of separate and distinct payments.”

 

(B)  Section 4(E) is hereby removed in its entirety and
replaced in its entirety as follows:

 

“Section 4(E) Potential Payment Reduction.  Notwithstanding any other provision of this
Agreement to the contrary, in the event that any payment that is either
received by you or paid by the Company on your behalf or any property, or any
other benefit provided to you under this Agreement or under any other plan,
arrangement or agreement with the Company or any other person whose payments or
benefits are treated as contingent on a change of ownership or control of the
Company (or in the ownership of a substantial portion of the assets of the
Company) or any person affiliated with the Company or such person (but only if
such payment or other benefit is in connection with your employment by the
Company) (collectively the “Company Payments”), will be subject to the tax (the
“Excise Tax”) imposed by Internal Revenue Code Section 4999 (and any
similar tax that may hereafter be imposed by any taxing authority), then you
will be entitled to receive either (i) the full amount of the Company
Payments, or (ii) a portion of the Company Payments having a value equal
to $1 less than three (3) times your “base amount” (as such term is
defined in Internal Revenue Code Section 280G(b)(3)(A)), whichever of
clauses (i) and (ii), after taking into account applicable federal, state,
and local income taxes and the Excise Tax, results in the receipt by you on an
after-tax basis, of the greatest portion of the Company Payments.  Any determination required under this Section 4(E) shall
be made in writing by the independent public accountant of the Company (the “Accountants”),
whose determination shall be conclusive and binding for all purposes upon you
and the Company.  For purposes of making
any calculation required by this Section 4(E), the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good-faith interpretations concerning the application of
Internal Revenue Code Sections 280G and 4999. 
If there is a reduction of the Company Payments pursuant to this Section 4(E),
such reduction shall occur in the following order:  (A) any cash severance payable by
reference to your base salary or target incentive bonus, (B) any other
cash amount payable to you, (C) any employee benefit valued as a “parachute
payment,” and (D) acceleration of vesting of any outstanding equity award.”

 

2.             Miscellaneous.

 

(A) 
Interpretation.  The validity,
interpretation, construction and performance of this Amendment No. 1 to
the Agreement shall be governed by the laws of the State of South Carolina.

 

2

 

(B) 
Other than as expressly amended hereby, the rest of the terms and provisions of
the Agreement 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 Amendment No. 1 to the 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/Philip
  M. Lessner

  
	
   

  	
  Philip
  M. Lessner

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated
  as of

  	
   

  
	
  April 29,
  2010

  	
   

  

 

3

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