Document:

Exhibit 10.16

 

KEMET CORPORATION

 

1992 KEY EMPLOYEE STOCK OPTION PLAN

 

ARTICLE 1

 

Identification of the Plan

 

1.1     Title.     The plan described herein shall be know as
the KEMET Corporation (Delaware) 1992 Key Employee Stock Option Plan (the “Plan”).

 

1.2    Purpose.     The purpose of this Plan is (i) to
compensate Key Employees of KEMET Corporation (Delaware) (the “Company”)
and its Subsidiaries for services rendered by such persons after the date of
adoption of this Plan to the Company or any Subsidiary; (ii) to provide
Key Employees of the Company and its Subsidiaries with significant additional
incentive to promote the financial success of the Company; and (iii) to
provide an incentive which may be used to induce able persons to enter into or
remain in the employment of the Company or any Subsidiary.

 

1.3     Effective Date.     The Plan shall become effective on March 31,
1992, (the “Effective Date”).  The
Plan, however, is subject to approval by the stockholders of the Company.  If stockholder approval is not granted within
twelve (12) months from the date of its adoption by the Board, the Plan shall
thereupon terminate.  Grants of Options
may be made prior to stockholder approval, but any such Options granted shall
not be exercisable prior to stockholder approval and shall terminate if
stockholder approval is not given.

 

1.4     Defined Terms.     Certain capitalized terms used herein have
the meanings as set forth in Section 10.1 of the Plan.

 

ARTICLE 2

 

Administration of the Plan

 

2.1     Committee’s Powers.     This Plan shall be administered by a
committee (the “Committee”) composed of persons appointed by the Board
of Directors of the Company in accordance with the provisions of Section 2.2.  The Committee shall have full power and
authority to prescribe, amend and rescind rules and procedures governing
administration of this Plan.  The
Committee shall have full power and authority (i) to interpret the terms
of this Plan, the terms of the Options and the rules and procedures
established by the Committee and (ii) to determine the meaning of or
requirements imposed by or rights of any person under this Plan, any Option or
any rule or procedure established by the Committee.  Each action of the Committee which is within
the scope of the authority delegated to the Committee by this Plan or by the
Board shall be binding on all persons.

 

 

2.2     Committee Membership.     The Committee shall be composed of two or
more members of the Board, each of who is a “disinterested person,” as defined
in Securities and Exchange Commission Rule 16b-3, as amended, or any
successor rules or government pronouncements.  The Board shall have the power to determine
the number of members which the Committee shall have and to change the number
of membership positions on the Committee from time to time.  The Board shall appoint all members of the
Committee.  The Board may from time to
time appoint members to the Committee in substitution for, or in addition to,
members previously appointed and may fill vacancies, however caused, on the
Committee.  Any member of the Committee
may be removed from the Committee by the Board at any time with or without
cause.  If at any time no special
committee has been constituted by the Board especially for the purposes of this
Plan, then the entire Board shall have all powers and rights delegated to the “Committee”
under this Plan.  Notwithstanding
anything to the contrary in this Section 2.2, the Committee shall not
grant an Option to a Section 16 Holder unless the Committee is constituted
so as to comply with Securities and Exchange Commission Rule 16b-3, as
amended, or any successor rules or government pronouncements.

 

2.3     Committee Procedures.  The Committee shall hold its meetings at such
times and places as it may determine. 
The Committee may make such rules and regulations for the conduct
of its business as it shall deem advisable. 
Unless the Board or the Committee expressly decides to the contrary, a
majority of the members of the Committee shall constitute a quorum and any
action taken by a majority of the Committee members in attendance at a meeting
at which a quorum of Committee members are present shall be deemed an act of
the Committee.

 

2.4     Indemnification.  No member of the Committee shall be liable,
in the absence of bad faith, for any act or omission with respect to his or her
service on the Committee under this Plan. 
Service on the Committee shall constitute service as a director of the
Company so that the members of the Committee shall be entitled to
indemnification and reimbursements as directors of the Company for any action
or any failure to act in connection with service on the committee to the full
extent provided for at any time in the Company’s Certificate of Incorporation
and By-Laws, or in any insurance policy or other agreement intended for the
benefit of the Company’s directors.

 

ARTICLE 3

 

Employees Eligible to Receive
Options

 

A person shall be eligible to be granted an Option only if on the
proposed Granting Date for such Option such person is a full-time, salaried
employee of the Company or any Subsidiary, excluding non-management directors
of the Company.  A person eligible to be
granted an Option is herein called a “Key Employee.”

 

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ARTICLE 4

 

Grant of Options

 

4.1     Power to Grant Options.    The Committee shall have the right and the
power to grant at any time to any Key Employee an option entitling such person
to purchase Common Stock from the Company in such quantity, at such price, on
such terms and subject to such conditions consistent with the provisions of
this Plan as may be established by the Committee on or prior to the Granting
Date for such option.  Each option to
purchase Common Stock which shall be granted by the Committee pursuant to the
provisions of this Plan is herein called an “Option.”

 

4.2     Granting Date.     An Option shall be deemed to have been
granted under this Plan on the date (the “Granting Date”) which the
Committee designates as the Granting date at the time it approves such Option,
provided that the Committee may not designate a Granting Date with respect to
any Option which is earlier than the date on which the granting of such Option
is approved by the Committee.

 

4.3     Option Terms Which the
Committee May Determine.     The
Committee shall have the power to determine the Key Employees to whom Options
are granted, the number of Shares subject to each Option, the number of Options
awarded to each Key Employee and the time at which each Option is granted.  Except as otherwise expressly provided in
this Plan, the Committee shall also have the power to determine at the time of
the grant of each Option, all terms and conditions governing the rights and
obligations of the holder with respect to such Option, including but not
limited to: (a) the purchase price per Share of the method by which the
purchase price per Share will be determined; (b) the length of the period
during which the Option may be exercised and any limitations on the number of
Shares purchasable with the Option at any given time during such period; (c) the
times at which the Option may be exercised; (d) any conditions precedent
to be satisfied before the Option may be exercised; (e) any restrictions
on resale of any shares purchased upon exercise of the Option; and (f) whether
the Option will constitute an Incentive Stock Option.

 

4.4     Option Agreement.     No person shall have any rights under any
Option unless and until the Company and the person to whom such Option is
granted have executed and delivered an agreement expressly granting the Option
to such person and containing provisions setting forth the terms of the Option
(an “Option Agreement”).

 

ARTICLE 5

 

Option Terms

 

5.1     Plan Provisions
Control Option Terms.     The terms
of this Plan shall govern all the Options. 
In the event any provision of any Option Agreement conflicts with any
term in this Plan as constituted on the Granting Date of such Option, the term
in this Plan as constituted on the Granting Date of the Option shall
control.  Except as provided in Article 8,
the terms of any

 

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Option
may not be changed after the Granting Date of such Option without the express
approval of the Option Holder.

 

5.2     Price Limitation.     Subject to Article 8, the price at
which each Share may be purchased upon the exercise of any Option may not be
less than the Per Share Market Value on the Granting Date for an Option;
provided that if an Incentive Stock Option is granted to a person who owns, on
the Granting Date of such Incentive Stock Option, stock possessing more than
ten percent of the total combined voting power of all classes of stock of the
Company (or of any parent or Subsidiary of the Company in existence on the
Granting Date of such Option), the price at which each Share may be purchased
upon exercise of such Incentive Stock Option may not be less than 110% of the
Per Share Market Value on the Granting Date for such Option.

 

5.3     Term Limitation.     No Incentive Stock Option may be granted under
this Plan which is exercisable more than ten years after its Granting
Date.  This Section 5.3 shall not be
deemed to limit the term which the Committee may specify for any Options
granted under the Plan which are not intended to be Incentive Stock Options.

 

5.4     Transfer Limitations.     No Incentive Stock Option or other option
granted to any Section 16 Holder shall be transferable other than by will
or the laws of descent and distribution or exercisable during the lifetime of
the person to whom the Option is initially granted by anyone other than the
initial grantee.  Notwithstanding the
terms of the Option Agreement, if any Option (other than an Incentive Stock
Option) is issued to a Holder who is not a Section 16 Holder on the
Granting Date and such Holder becomes a Section 16 Holder before such
Holder has fully exercised such Option, then such Option shall not be
transferable other than by will or the laws of descent and distribution or
exercisable during the lifetime of the initial grantee by any one other than
the initial grantee.  Subject to the
preceding sentence, Options (other than Incentive Stock Options) which are not
granted to Section 16 Holders may be transferred to any members of the
initial grantee’s immediate family or to any inter vivos trust solely for
the benefit of any members of the initial grantee’s immediate family or as a
result of the death of the initial grantee, testate or intestate.  Nothing in the preceding three sentences
shall be construed as making an Option transferable if the Option Agreement
provides otherwise.  It shall be a
condition precedent to any transfer of any Option that the transferee executes
and delivers an agreement acknowledging such Option has been acquired for investment
and not for distribution and is and shall remain subject to this Plan and the
Option Agreement.  The “Holder” of
any Option shall mean (i) the initial grantee of such Option or (ii) the
person or trust, if any, to whom the Option is transferred by any Holder who is
not a Section 16 Holder.

 

5.5     $100,000 Per Year
Limit on Incentive Stock Options.    
No Key Employee may be granted Incentive Stock Options if the value of
the Shares subject to those options which first become exercisable in any given
calendar year (and the value of the Shares subject to any other Incentive Stock
Options issued to the Key Employee under the Plan or any other plan of the
Company or its Subsidiaries which first become exercisable in such year) exceed
$100,000.  For this purpose, the value of
Shares shall be determined on the Granting Date.  Any Incentive Stock Options issued in excess
of the $100,000 limit shall be treated as Options that are not Incentive Stock
Options.  Incentive Stock Options shall
be taken into account in the order in which they were granted.

 

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5.6     No Right to Employment
Conferred.     Nothing in this Plan
or (in the absence of an express provision to the contrary) in any Option
Agreement (i) confers any right or obligation on any person to continue in
the employ of the Company or any Subsidiary or (ii) affects or shall
affect in any way any person’s right or the right of the Company or any
Subsidiary to terminate such person’s employment with the Company or any
Subsidiary at any time, for any reason, with or without cause.

 

ATRICLE 6

 

Option Exercise

 

6.1     Normal Option Term.     Except as otherwise expressly provided in
Sections 6.3, 6.5 or 6.7 or in the Option Agreement, the right to exercise any
Option shall terminate at the earlier of the following dates: (i) the
Termination Date of the initial grantee of the Option or (ii) the
Expiration Date of the Option.

 

6.2     Exercise Time.     No Option granted to a Section 16
Holder shall become exercisable within six months of the applicable Granting
Date, except in the case of the death or disability of the Holder.  Notwithstanding the terms of the Option
Agreement, if any Option is issued to a Holder who is not a Section 16
Holder on the Granting Date and such Holder becomes a Section 16 Holder
before such Holder exercises such Option, then such Option shall not become
exercisable within six months of the applicable Granting Date, except in the
case of the death of disability of the Holder. 
Subject to the preceding two sentences, each Option shall become
exercisable at the time provided in the Option Agreement, provided that the
Committee in its sole discretion shall have the right (but shall not in any
case be obligated) to permit the exercise of such Option prior to such time.

 

6.3     Extension of Exercise
Time.     The Committee in its sole
discretion shall have the right (but shall not in any case be obligated) to
permit any Option to be exercised after the Termination Date of the Holder of
such Option.  Notwithstanding the preceding
sentence, but subject to Section 6.7, the Committee shall not have the
right to permit the exercise of any Option after its Expiration Date.

 

6.4     Exercise Procedures.     Each Option shall be exercised by written
notice to the Company.  Any Holder of any
Option shall be required, as a condition to such Holder’s right to purchase
securities with such Option, to supply the Committee at such person’s expense
with such evidence, representations, agreements or assurances (including, but
not limited to, opinions of counsel satisfactory to the Committee) as the
Committee may deem necessary or desirable in order to establish to the
satisfaction of the Committee the right of such person to exercise such Option
and of the propriety of the sale of securities by reason of such exercise under
the Securities Act and any other laws or requirements of any governmental
authority specified by the Committee. 
The Company shall not be obligated to sell any Shares subject to such Option
until all evidence, representations, agreements and assurances required by the
Committee have been supplied.  An Option
Holder shall not have any rights as a stockholder with respect to Shares
issuable under any Option until and unless such Shares are sold and delivered
to such Option 

 

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Holder.  The purchase price of Shares purchased upon
the exercise of an Option shall be paid in full in cash or by check by the
Option Holder at the time of the delivery of such Shares, provided that the
Committee may (but need not) permit payment to be made by (i) delivery to
the Company of outstanding Shares, (ii) retention by the Company of Shares
which would otherwise be transferred to the Option Holder upon exercise of the
Option or (iii) any combination of cash, check, the Holder’s delivery of
outstanding Shares and retention by the Company of Shares which would otherwise
be transferred to the Option Holder upon exercise of the Option, and provided
further that no portion of the purchase price of Shares purchased on the
exercise of an Incentive Stock Option may be paid by retention of Shares by the
Company.  In the event an Incentive Stock
Option is granted, the Committee may (but need not) permit payment to be made by
(i) cash or check or (ii) delivery to the Company of outstanding
Shares.  In the event any Common Stock is
delivered to or retained by the Company to satisfy all or any part of the
purchase price, the part of the purchase price deemed to have been satisfied by
such Common Stock shall be equal to the product derived by multiplying (i) the
Per Share Market Value as of the date of exercise by (ii) the number of
Shares delivered to or retained by the Company. 
The number of Shares delivered to or retained by the Company in
satisfaction of the purchase price shall not be a number which when multiplied
by the Per Share Market as of the date of exercise would result in a product
greater than the purchase price.  No
fractional Shares shall be delivered to or retained by the Company in
satisfaction of the purchase price.  To
the extent such fractional share would result, the Option Holder shall make up
such difference in cash.  Any part of the
purchase price paid in cash or by check upon the exercise of any Option shall
be added to the general funds of the Company and may be used for any proper
corporate purpose.  Notwithstanding Article 7,
unless the Board shall otherwise determine, for each Share delivered to or
retained by the Company as payment of all or part of the purchase price upon
the exercise of any Option, the aggregate number of Shares subject to this Plan
shall be increased by one Share.

 

6.5           Death, Permanent
Disability, Retirement or Termination Without Cause of Option Holder.

 

(a)           Except as otherwise
expressly provided in the Option Agreement, if the Holder of an Option
dies while such Option Holder is still employed by the Company or any
Subsidiary, then the right to exercise all unexpired installments of such
Option shall be accelerated and shall accrue as of the date of death.  Except as otherwise provided in the Option
Agreement and subject to Section 6.7, if the Holder of an Option dies and
such Option is exercisable at the date of death (for any reason including
acceleration pursuant to the preceding sentence), then the Holder’s estate or
the person or persons to whom the Holder’s rights under the Option shall pass
by reason of the Holder’s death shall have the right to exercise the Option for
90 days after the date of death, and the Option shall expire at the end of such
90 day period.

 

(b)           Except as otherwise
provided in the Option Agreement, if the Holders of an Option suffers a
Permanent Disability while such Holder is still employed by the Company or any
Subsidiary, then the right to exercise all unexpired installments of such
Option shall be accelerated and shall accrue as of the later of the date of
such Permanent Disability or the date of discovery of such Permanent Disability
(the “Permanent Disability Date”). 
Except as otherwise provided in the Option Agreement and subject to Section 6.7,
if the Holder of an Option suffers a

 

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Permanent
Disability and such Option is exercisable at the Permanent Disability Date (for
any reason including acceleration pursuant to the preceding sentence), then
such Holder shall have the right to exercise such Option for 90 days after the
Permanent Disability Date, and the Option shall expire at the end of such 90
day period.

 

(c)           Except as otherwise
provided in the Option Agreement, and subject to Section 7, if the Holder
of an Option is terminated without Cause and such Option is currently
exercisable at the time of such termination, then such Holder shall have the
right to exercise such Option for 30 days after the date of such termination,
and the Option shall expire at the end of such 30 day period.

 

6.6           Taxes.     The Company or any Subsidiary shall be
entitled, if the Committee deems it necessary or desirable, to withhold from an
Option Holder’s salary or other compensation (or to secure payment from the
Option Holder in lieu of withholding) all or any portion of any withholding or
other tax due from the Company or any Subsidiary with respect to any Shares
deliverable under such Holder’s Option or the Committee may (but need not)
permit payment of such withholding by the Company’s retention of Shares which
would otherwise be transferred to the Option Holder upon exercise of the
Option.  In the event any Common Stock is
retained by the Company to satisfy all or any part of the withholding, the part
of the withholding deemed to have been satisfied by such Common Stock shall be
equal to the product derived by multiplying the Per Share Market Value as of
the date of exercise by the number of Shares retained by the Company.  The number of Shares retained by the Company
in satisfaction of withholding shall not be a number which when multiplied by
the Per Share Market Value as of the date of exercise would result in a product
greater than the withholding amount.  No
fractional Shares shall be retained by the Company in satisfaction of
withholding.  Notwithstanding Article 7,
unless the Board shall otherwise determine, for each Share retained by the
Company in satisfaction of all or any part of the withholding amount, the
aggregate number of Shares subject to this Plan shall be increased by one
Share.  The Company may defer delivery
under a Holder’s Option until indemnified to its satisfaction with respect to
such withholding or other taxes.

 

6.7           Securities Law
Compliance.     Each Option shall be
subject to the condition that such Option may not be exercised if and to the
extent the Committee determines that the sale of securities upon exercise of
the Option may violate the Securities Act or any other law or requirement of
any governmental authority.  The Company
shall not be deemed by any reason of the granting of any Option to have any
obligation to register the Shares subject to such Option under the Securities
Act or to maintain in effect any registration of such Shares which may be made
at any time under the Securities Act.  An
Option shall not be exercisable if the Committee or the Board determines there
is non-public information material to the decision of the Holder to exercise
such Option which the Company cannot for any reason communicate to such Holder.
 Notwithstanding Sections 6.1, 6.3 and
6.5 and the terms of the Option Agreement, if (i) any Holder makes a bona
fide request to exercise any Option which complies with Section 6.4, (ii) the
Committee or the Board determines such Option cannot be exercised for period of
time pursuant to this Section 6.7 and (iii) such Option expires
during such period, then the term of such Option shall be extended until the
end of such period; provided, however, that the term of an Incentive Stock
Option cannot be extended beyond ten years after its Granting Date.

 

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ARTICLE 7

 

Shares Subject to the Plan

 

Except as provided in Sections 6.4 and 6.6 and Article 8, an
aggregate of 55,000 Shares of Common Stock shall be subject to this Plan.  Except as provided in Sections 6.4 and 6.6
and Article 8, the Options shall be limited so that the sum of the
following shall not as of any given time exceed 55,000 Shares: (i) all
Shares subject to Options outstanding under this Plan at the given time and (ii) all
Shares which shall have been sold by the Company by reason of the exercise at
or prior to the given time of any of the Options. The Common Stock issued under
the Plan may be either authorized and unissued shares, shares reacquired and
held in the treasury of the Corporation, or both, all as from time to time
determined by the Board.  In the event
any Option shall expire or be terminated before it is fully exercised, then all
Shares formerly subject to such Option as to which such Option was not
exercised shall be available for any Option subsequently granted in accordance
with the provisions of this Plan.

 

ARTICLE 8

 

Adjustments to Reflect Organic
Changes

 

The Board shall appropriately and proportionately adjust the number and
kind of Shares subject to outstanding Options, the price for which Shares may
be purchased upon the exercised of outstanding Options, and the number and kind
of Shares available for Options subsequently granted under this Plan to reflect
any stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in the capitalization of the Company which the
Board determines to be similar, in its substantive effect upon this Plan or the
Options, to any of the changes expressly indicated in this sentence.  The Board may (but shall not be required to)
make any appropriate adjustment to the number and kind of Shares subject to
outstanding Options, the price for which Shares may be purchased upon the
exercise of outstanding Options, and the number and kind of Shares available
for Options subsequently granted under this Plan to reflect any spin-off,
spin-out or other distribution of assets to stockholders or any acquisition of
the Company’s stock or assets or other change which the Board determines to be
similar, in its substantive effect upon this Plan or the Options, to any of the
changes expressly indicated in this sentence. 
The Committee shall have the power to determine the amount of the
adjustment to be made in each case described in the preceding two sentences,
but no adjustment approved by the Committee shall be effective until and unless
it is approved by the Board.  In the
event of any reorganization, reclassification, consolidation, merger or sale of
all or substantially all of the Company’s assets which is effected in such a
way that holders of Common Stock are entitled to received (either directly or
upon subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock, the Board may (but shall not be required to)
substitute the per share amount of such stock, securities or assets for Shares
upon any subsequent exercise of any Option. 
If any fractional Share becomes subject to any Option as a result of any
change made under this Article 8, then (i) such Option may not
be exercised with respect to such fractional Share until and unless such Option
is exercised as to all other Shares subject to such Option and (ii) if
such Option is exercised with 

 

8

 

respect
to such fractional Share, the Company shall have the right to deliver to the
Holder in lieu of such fractional Share cash in an amount equal to the product
derived by multiplying the fraction representing the portion of a full Share
represented by such fractional Share times the Per Share Market Value on the
exercise date of the Option with respect to such fractional Share established
as prescribed in this Plan.

 

ARTICLE 9

 

Amendment and Termination of the
Plan

 

9.1           Amendment.     Except as provided in the following two
sentences, the Board shall have complete power and authority to amend this Plan
at any time and no approval by the Company’s stockholders or by any other
person, committee or other entity of any kind shall be required to make any amendment
approved by the Board effective.  The
Board shall not, without the affirmative approval of the Company’s
stockholders, amend the Plan in any manner which would cause any outstanding
Incentive Stock Options to no longer qualify as Incentive Stock Options.  If any Section 16 Holder holds any
Option, the Board shall not, without the affirmative vote of the holders of a
majority of the securities of the Company present, or represented, and entitled
to vote at a meeting duly held in accordance with applicable law, make any
amendment to this Plan which materially (i) increases the benefits
accruing to participants under the Plan, (ii) increases the number of
shares of Common Stock which may be issued under the Plan or (iii) modifies
the requirements as to eligibility for participation in the Plan.  No termination or amendment of this Plan may,
without the consent of the Holder of any Option prior to terminations or the
adoption of such amendment, materially and adversely affect the rights of such
Holder under such Option.

 

9.2           Termination.     The Board shall have the right and the
power to terminate this Plan at any time, provided that no Incentive Stock
Options may be granted after the tenth anniversary of the adoption of this
Plan.  No Option shall be granted under
this Plan after the termination of this Plan, but the termination of this Plan
shall not have any other effect.  Any
Option outstanding at the time of the termination of this Plan may be exercised
after termination of this Plan at any time prior to the Expiration Date of such
Option to the same extent such Option would have been exercisable had this Plan
not terminated.

 

ARTICLE 10

 

Interpretation of the Plan

 

10.1         Definitions.     Each term defined in this Section 10.1
has the meaning indicated in this Section 10.1 whenever such term is used
in this Plan:

 

“Board of Directors” and “Board” both mean the Board of
Directors of the Company as constituted at the time the term is applied.

 

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“Cause” means (i) the willful refusal to follow directions
given by the Board, (ii) commission of any act involving moral turpitude
or any act which brings or could bring the Company into disrepute or materially
damages its relations with its customers, suppliers, licensors or financing
sources, (iii) the violation of any statutory or common law duty of
loyalty to the Company or (iv) a good faith determination by a majority of
the Board that continued employment is not in the best interest of the Company.

 

“Common Stock” means the issued or issuable Class A Common
Stock, par value $.01 per share, of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Committee” has the meaning such term is given in Section 2.1
of this Plan.

 

“Company” as applied as of any given time shall mean KEMET Corporation
(Delaware), a Delaware corporation, except that if prior to the given time any
corporation or other entity has acquired all or a substantial part of the
assets of the Company (as herein defined) and has agreed to assume the
obligations of the Company under this Plan, or is the survivor in a merger or
consolidation to which the Company was a party, such corporation or other
entity shall be deemed to be the Company at the given time.

 

“Expiration Date” as applied to any Option means the date
specified in the Option Agreement between the Company and the holder as the
expiration date of such Option.  If no
expiration date is specified in the Option Agreement relating to any Option,
then the Expiration Date of such Option shall be the day prior to the seventh
anniversary of the Granting Date of such Option.  Notwithstanding the preceding sentences, if
the person to whom any Incentive Stock Option is granted owns, on the Granting
Date of such Option, stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company (or of any parent
or Subsidiary of the company in existence on the Granting Date of such Option),
and if no expiration date is specified in the Option Agreement relating to such
Option, then the Expiration Date of such Option shall be the day prior to the
fifth anniversary of the Granting Date of such Option.

 

“Granting Date” has the meaning such term is given in Section 4.2
of this Plan.

 

“Holder” has the meaning such term is given in Section 5.4
of this Plan.

 

“Incentive Stock Option” means an incentive stock option, as
defined in Code Section 422, which is granted pursuant to this Plan.

 

“Key Employee” has the meaning such term is given in Article 3
of this Plan.

 

“Option” has the meaning such term is given in Section 4.1
of this Plan.

 

“Option Agreement” has the meaning such term is given in Section 4.4
of this Plan.

 

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“Permanent Disability” shall mean a physical or mental
disability suffered by an initial grantee of an Option which the Committee
determines in its sole discretion will permanently prevent such initial grantee
from working for the Company in the same or a substantially similar position as
such initial grantee occupied prior to suffering such disability.

 

“Permanent Disability Date” has the meaning such term is given
in Section 6.5 of this Plan.

 

“Per Share Market Value” on any given date shall be the fair
market value of one Share on the given date determined in such manner as shall
be prescribed in good faith by the Committee.

 

“Plan”
has the meaning such term is given in Section 1.1 of this Plan.

 

“Section 16
Holder” refers to any person who, with respect to the Company, is subject
to Section 16 of the Securities Exchange Act of 1934, as amended, at any
time or any law or statute which succeeds Section 16.

 

“Securities
Act” at any given time shall consist of: (i) the Securities Act of
1933 as constituted at the given time; (ii) any other law or laws
promulgated prior to the given time by the United States Government which are
in effect at the given time and which regulate or govern any matters at any
time regulated or governed by the Securities Act of 1933; (iii) all
regulations, rules, registration forms and other governmental pronouncements
issued under the laws specified in clauses (i) and (ii) of this
sentence which are in effect at the given time; and (iv) all
interpretations by any governmental agency or authority of the things specified
in clause (i), (ii) or (iii) of this sentence which are in effect at
the given time.  Whenever any provision
of this Plan requires that any action be taken in compliance with any provision
of the Securities Act, such provision shall be deemed to require compliance
with the Securities Act as constituted at the time such action takes place.

 

“Share”
means a share of Common Stock.

 

“Subsidiary”
means any corporation in which the Company owns, directly or indirectly, 50% or
more of the total combined voting power of all classes of securities of such
corporation.

 

“Termination
Date” as applied to the initial grantee of any Option means, except as
otherwise provided in the Option Agreement, the first date on which such
initial grantee is not employed by either the Company or any Subsidiary for any
reason (including, but not limited to, voluntary termination or termination for
Cause) other than death, Permanent Disability, or termination without
Cause.  The Committee may specify in the
original terms of an Option (or if not so specified, shall determine) whether
an authorized leave of absence or absence on military or government service or
absence for any other reason shall constitute a termination of employment with
the Company or any Subsidiary for the purposes of this Plan.

 

11

 

10.2         Headings.    Section headings used in the Plan are
for convenience only, do not constitute a part of this Plan and shall not be
deemed to limit, characterize or affect in any way any provisions of this Plan.
 All provisions in this Plan shall be
construed as if no headings had been used in this Plan.

 

10.3         Severability.

 

(a)           General.     Whenever possible, each provision in this
Plan and in every Option at any time granted under this Plan shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Plan or any Option at any time granted under this
Plan is held to be prohibited by or invalid under applicable law, then (i) such
provision shall be deemed amended to accomplish the objectives of the provision
as originally written to the fullest extent permitted by law and (ii) all
other provisions of this Plan and every Option at any time granted under this
Plan shall remain in full force and effect.

 

(b)           Incentive Stock
Option.  Whenever possible, each
provision in this Plan and in every Option at any time granted under this Plan
which is evidenced by an Option Agreement which expressly states such Option is
intended to constitute an Incentive Stock Option under Code Section 422
(an “intended ISO”) shall be interpreted in such manner as to entitle
such intended ISO to the tax treatment afforded by the Code to Options which do
constitute Incentive Stock Options under Code Section 422, but if any provision
of this Plan or any intended ISO at any time granted under this Plan is held to
be contrary to the requirements necessary to entitle such intended ISO to the
tax treatment afforded by the Code to Options which do constitute Incentive
Stock Options under Code Section 422, then (i) such provision shall
be deemed to have contained from the outset such language as shall be necessary
to entitle such intended ISO to the tax treatment afforded by the Code to
Options which do constitute Incentive Stock Options under Code Section 422,
and (ii) all other provisions of this Plan and such intended ISO shall
remain in full force and effect.  If any
Option Agreement covering an intended ISO granted under this Plan does not
explicitly include any terms required to entitle such intended ISO to the tax
treatment afforded by the Code to Options which do constitute Incentive Stock
Options under Code Section 422, then all such terms shall be deemed
implicit in the intention to afford such treatment to such Option and such
Option shall be deemed to have been granted subject to all such terms.

 

10.4         No Strict
Construction.     No rule of
strict construction shall be applied against the Company, the Committee or any
other person in the interpretation of any of the terms of this Plan, any Option
or any rule or procedure established by the Committee.

 

10.5         Choice of Law.     This Plan and all documents contemplated
hereby, and all remedies in connection therewith and all questions or
transactions relating thereto, shall be construed in accordance with and
governed by the laws of the State of Delaware.

 

12Exhibit 10.29

 

[TRANSLATION FOR WORKING

PURPOSES ONLY]

 

Addendum
to the Loan 

Agreement

 

Between

 

UniCredit Corporate Banking
S.p.A.

As Lending Party

 

and

 

Kemet Corporation

As Beneficiary

 

relating to the

 

Kemet Loan Agreement

 

 

CERTIFIED
PRIVATE AGREEMENT

 

BETWEEN:

 

(1)                                UNICREDIT CORPORATE BANKING
S.P.A.,  with registered and administrative offices in
Verona (Italy), at Via Garibaldi no. 1, fully paid-up share capital: Euro 6,604,173,696.00
(six billion six hundred and four million one hundred seventy-three thousand
six hundred ninety-six/00), tax code, VAT number and number of registration in the
Verona Companies Register: 03656170960, ABI code 3226.8, enrolled in the
Register of Banks and a member of the UniCredit Bank Group, which is enrolled
in the Register of Bank Groups under no. 3135 (hereinafter also referred to as
“UniCredit”, “Lending
Party”, or “Agent Bank”),
represented by Mr. Daniele Di
Anselmo,
born in Terni on 11th June 1964,
and Mr. Claudio Chiosi, born in Bologna, on March 15, 1966, Italian
citizens, in their respective capacity as Manager in charge of the Bologna
Joint Management and Quadro Direttivo,
authorized to act for the purposes of this agreement by virtue of the powers
granted to him through a power of attorney granted by Mr. Mario Fertonani,
born in Mantua on 3rd September 1933
and domiciled for the purposes of his office in the place specified above, in
his capacity as Chairman of the Board of Directors of the aforesaid Bank,
authenticated and sealed by Notary Public Marco Cicogna of Verona on 2nd January 2003
(directory no. 87071/6486), registered in the Italian Inland Revenue Office of
Verona 1, on 7th January 2003 under no. 37, a
certified copy of which is attached as annex “A”
to my previous notarial deed dated 6th June 2003 — directory no. 95083/21990 -,
registered in Bologna 3 on 19th June 2003 under no. 2894/1T;

AND

 

(2)                                KEMET CORPORATION,  with registered office in Simpsonville, 2835 Kemet Way, South
Carolina, USA, Federal Tax
Identification no. 57-0923789 (hereinafter referred to as “Beneficiary” or “Kemet”),
represented by Mr. Marco Uberti, born in Bologna, on June 8,
1953, domiciled for the purposes of his office at the company’s registered office, authorised to
act for the purposes of this agreement by virtue of the powers granted to him through the
special power of attorney certified on April 3, 2009, together with the
translation into Italian language of the part of the text drafted in English
language whose original is attached hereto as annex “A”,

 

                                              (UniCredit and Kemet are hereinafter collectively
referred to also as “Parties”).

 

WHEREAS

 

(A)                            On 29th September 2008, the Beneficiary and UniCredit
executed a loan agreement by certified private agreement, with the parties’
signatures being authenticated by Notary Public Carlo Vico (directory no.
110199/29958), registered in Bologna on 7th October 2008
under No. 11054, Series 1T (hereinafter referred to as the “Loan Agreement”)
for a maximum aggregate amount equal to Euro 60,000,000.00 (sixty million/00) (hereinafter
referred to as the “Loan”);

 

(B)                              On 21st October 2008, as a guarantee of the
proper and timely fulfilment of the Beneficiary’s obligations arising from the
Loan Agreement, UniCredit, the companies controlled by the Beneficiary, namely Kemet
Electronics Corporation, Arcotronics Italia S.p.A., Arcotronics Industries
S.r.l., Arcotronics Hightech S.r.l., Arcotronics Technologies S.r.l. (hereinafter
collectively referred to as the “Assignors”),
and the Beneficiary entered into a deed of credit assignment by way of security,
with the parties’ signatures being authenticated by Notary Public Carlo Vico
(directory no. 110453/30091), registered in Bologna on 23rd October 2008
under no. 11789 Series 1T (hereinafter referred to as the “Deed of Credit Assignment”);

 

(C)                              Pursuant to the Deed of Credit Assignment, the Assignors undertook to
assign all the existing and future European credits, if actually assignable, and
the Beneficiary undertook to cause such 

 

2

 

credits to be assigned
(hereinafter referred to as the “Credit
Assignment” and the “Credits”,
respectively), claimed by the Assignors vis-à-vis their European debtors (hereinafter
referred to as the “Debtors”) and,
to the extent that such credits were not assignable, to channel said Credits, including
future credits, to ad hoc bank
accounts opened at UniCredit (hereinafter referred to as the “Channelling”);

 

(D)                             The Parties (with Kemet acting both on its own account and on behalf of
the Assignors) have agreed to take the following actions, by mutual consent,
pursuant to articles 4 and 2.5 of the Deed of Credit Assignment, as soon as
practicable from the date of execution of this deed and, in any case, by, and
no later than, 9th April 2009: (i) serving notice of
the Credit Assignment, with reference to the assignable Credits specifically
identified pursuant to art. 7.1(H) of the Deed of Credit Assignment, or (ii) requesting
the relevant Debtors to channel the flows relating to the non-assignable
Credits to the bank accounts identified as per the notice of
assignment/channelling, to be drafted in accordance with a text separately
agreed upon by the Parties, and issuing new invoices relating to the Credits,
specifying the aforesaid Credit Assignment/Channelling.

 

Now,
therefore, the Parties hereby agree as follows:

 

1.                                    Interpretation

 

1.1                               For the purposes
of this agreement, all capitalised terms that are not otherwise defined in
other sections of this agreement shall have the meanings ascribed to them in
the Loan Agreement.

 

1.2                               The recitals and the annexes form an
integral and substantial part of this agreement, shall be deemed as valid and
effective covenants, and shall therefore be fully binding upon the Parties,
their successors and/or assignees.

 

1.3                               The indexes of articles and the
headings of annexes to this Agreement have been included for convenience only,
and shall not be taken into consideration for the purpose of interpreting the
relevant articles and annexes.

 

2.                                    Additions to the Loan Agreement

 

2.1                               The Parties hereby agree that, effective from the date hereof, and
without either novating any of the obligations arising from the Loan Agreement or
amending the terms and conditions of the Loan Agreement, unless expressly
supplemented pursuant to this agreement, the Loan Agreement shall be
supplemented as follows:

 

(A)                              At the end of
paragraph (A)(5), point 1 (“Documents
and corporate compliance and other delivery obligations”), of Annex 14
(“Obligations”) to the Loan
Agreement, the following paragraph “(A)(6)” shall be
added:

 

“(i) by 9th April 2009, evidence,
reasonably satisfactory to the Agent Bank:

 

(a) that notices of the Credit Assignment have
been served upon the European Debtors, with reference to the Credits actually
assignable; or

 

(b) that notice of the Channelling of the flows
relating to the non-assignable Credits has  been given,

 

pursuant to the Credit Assignment referred to under
clause 15.4 of the Loan Agreement.

 

3

 

To this end, the Agent Bank hereby declares that either
(i) the receipt of the posting of the notice of Credit Assignment/Channelling
or (ii) the delivery by Kemet (acting both on its own account and on
behalf of the other Assignors) of the notice of Credit Assignment/Channelling,
duly signed by either Kemet or the relevant Assignors, shall be evidence of the
service of notice of the Credit Assignment or of the Channelling, as the case
may be;

 

(ii) on a monthly basis, starting from 9th April 2009:

 

(a) copies of the invoices issued by the
Assignors to the Assigned Debtors attesting the relevant indication of the credit
assignment/channelling to the applicable bank accounts with reference to the
credits referred to under paragraph (i) (a) and (b) above as
well as under the following paragraph (b); and

 

(b) evidence that notices of the Credit
Assignment have been served upon the European Debtors, with reference to future
credits arising from any new agreement, to the extent that such credits are
actually assignable, or that notice of the channelling of the flows relating to
the non-assignable future Credits arising from any new agreement has been given,

 

pursuant to the Credit Assignment referred to under
clause 15.4 of the Loan Agreement”.

 

3.                                    Effectiveness

 

3.1                               To the extent required, the Parties hereby acknowledge
that failure to fulfil the obligations provided for by Art. 2.1(A) above as
well as of the commitment undertaken under recital (D) above shall amount
to a Significant Event pursuant to the Loan Agreement.

 

3.2                               This addendum shall be considered a Financial Document
pursuant to the Loan Agreement.

 

4.                                    Miscellaneous

 

4.1                               With regard to
any matters which are not expressly regulated in this agreement, the Parties
hereby expressly declare that the provisions of the Loan Agreement shall apply mutatis mutandis.

 

4.2                               Except for that
which is expressly provided for hereunder, no other and further amendments
and/or additions to the Loan Agreement and/or to the Financial Documents have
been agreed upon by the Parties.

 

4.3                               This addendum,
as per the express will of the Parties, shall not produce and shall not be
construed and/or applied so as to produce any novative effects on the Loan
Agreement and/or on the Financial Documents.

 

4.4                               The
Representations and Warranties contained in art. 13 (REPRESENTATIONS AND WARRANTIES)
of the Loan Agreement shall be deemed repeated by the Beneficiary (with
reference to the facts and circumstances contained therein) on the date of
execution of this agreement.

 

4.5                               This addendum shall
be subject to registration, without the relevant registration tax being
applied, as the Loan Agreement is subject to the substitute tax, pursuant to
articles 15 et seq. of Presidential Decree no. 601 of 29th September 1973.

 

4

 

4.6                               The Beneficiary
hereby represents that it shall bear all costs and expenses, including notarial
expenses relating to, or otherwise connected with, the execution of this
addendum.

 

4.7                               The Parties
hereby agree that each party shall bear any attorney’s fees relating to the services
provided by its own legal advisors in relation to the preparation, negotiation,
and execution of this addendum, it being also understood that the execution of
this addendum shall not result in the Beneficiary being required to pay the
Waiver Fee provided for by the Loan Agreement

 

Bologna, 3rd April 2009

 

	
   

  	
  The Lending Party:

  	
  The Beneficiary:

  
	
   

  	
   

  	
   

  
	
   

  	
  UniCredit Corporate Banking S.p.A.

  	
  KEMET Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  DANIELE DI ANSELMO

  	
   

  	
  /s/ MARCO UBERTI

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/
  CLAUDIO CHIOSI

  	
   

  	
   

  

 

SIGNATURES’
CERTIFICATION

 

	
  Directory N. 111725

  	
   

  	
  File N. 30817

  
	
   

  	
   

  	
   

  
	
  In Bologna, Via Santo Stefano n. 42.

  	
   

  	
   

  

 

The undersigned Carlo Vico, Public Notary domiciled in Bologna, admitted
to the Notarial Bar of Bologna, hereby certifies that at 10:25 a.m. the
following persons have executed the above agreement and the intercalary sheets
in the margin before the undersigned, such agreement shall be kept by the
undersigned:

 

·                  DANIELE DI ANSELMO, born in Terni (TR), on 11 June 1964;

 

·                  CHIOSI CLAUDIO, born in Bologna, on 15 March 1966,

 

Both domiciled for their office in Verona (VR), Via Garibaldi n. 1, in
their capacity as Manager, the first, and Quadro Direttivo, the second, of “UNICREDIT CORPORATE BANKING
S.P.A.” with registered office in Verona (VR), Via Garibaldi n. 1, and therefore authorised to execute this agreement;

 

·                  MARCO UBERTI,
born in Bologna, on 8 June 1953,domicilied for his office in Simpsonville,
2835, Kemet Way, South Carolina, United States of America, in his capacity as
attorney of “KEMET CORPORATION”, with registered office in Simpsonville, 2835,
Kemet Way, South Carolina, United States of America, and therefore authorised to execute this agreement.

 

The undersigned Notary hereby declares to have previously ascertained
their personal identity and capacity.

 

Bologna, 31 (thirty-first) March 2009 (two thousand and nine).

 

	
  /s/ CARLO VICO

  	
   

  

 

5

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