Exhibit 10.46
July 28, 2008
William M. Lowe, Jr.
224 South Laurens Street, Unit 413
Greenville, SC 29601
Re: Change in Control
Severance Compensation Agreement
Dear Mr. Lowe:
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 G
