KEMET Corporation (NYSE:KEM) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April18, 2018, KEMET Corporation (the “Company”) and Per-Olof Loofentered into an Amended and Restated EmploymentAgreement (the “Agreement”) which amends and restates Mr.Loof’s prior employment agreement with the Company dated June29, 2015 (the “Prior Agreement”), and sets forth the revised terms and conditions of Mr.Loof’s employment as Chief Executive Officer (“CEO”) through March31, 2021. The term of the Agreement is effective as of April18, 2018, and, unless earlier terminated in accordance with its terms, terminates on March31, 2021. In addition to the items provided below, the Agreement restated certain elements of the Prior Agreement.
Under the terms of the Agreement, Mr.Loof’s annual base salary through March31, 2021 (the “Employment Period”) will be $920,000 (his current salary) or such higher or lower rate as the Board of Directors of the Company may determine from time to time in accordance with the terms of the Agreement.In addition, the Agreement provides that upon at least 30 days and not more than 60 days prior to the end of the term, upon the agreement of the Board and Mr.Loof,the agreement may be extended for additional one-year periods. Upon the signing of the Agreement, certain Restricted Stock Units (“RSUs”) previously granted to Mr.Loof on June29, 2015, totaling 175,000 shares, and on September6, 2017, totaling 100,000 shares, both of which were scheduled to vest over time, became fully vested. Mr.Loof will be eligible to participate in the Company’s health insurance coverage plan, existing short-term incentive compensation program, long-term incentive compensation program, and deferred compensation plan, in each case as such plans are generally available to other executive officers of the Company. As long as Mr.Loof is employed as CEO on April1, 2020, Mr.Loof shall be entitled to participate in a special 12-month long-term incentive compensation program (the “Special LTIP”) covering the period April1, 2020 through March31, 2021.
The Agreement will terminate (i)immediately upon Mr.Loof’s resignation, death or disability, or (ii)upon notice of termination by the Company at any time, with or without “cause” (as defined in the Agreement). Upon any termination by the Company of Mr.Loof’s employment without “cause” or upon Mr.Loof’s resignation with “good reason” (as defined in the Agreement) during the term of the Agreement, Mr.Loof will be entitled to receive severance payments upon specified conditions in the Agreement. Such severance payments will be equal to his base salary, target bonus and benefits for a period of twelve months from the date of termination.
In the event of Mr.Loof’s disability or death, Mr.Loof or his heirs, as applicable, will be entitled to receive his base salary through the date of such event. If Mr.Loof is terminated by the Company for “cause” or is terminated upon Mr.Loof’s resignation (other than for “good reason”), Mr.Loof will be entitled to receive only his base salary through the date of termination and will not be entitled to receive any other salary, compensation, or benefits from the Company or its subsidiaries, except as otherwise specifically provided for under the Company’s employee benefit plans or as otherwise expressly required by applicable law.
The Agreement contains a standard confidentiality provision as well as non-competition and non-solicitation agreements for the term of Mr.Loof’s employment and for a minimum of 24 months after any termination thereof. As partial consideration for the non-competition and non-solicitation agreements, if Mr.Loof is terminated by the Company without “cause” or voluntarily resigns with “good reason,” the vesting periods under any restricted stock grants, restricted stock units or any other equity-related grants then-held by Mr.Loof shall continue to run for up to two years following the date of such termination, subject to compliance by Mr.Loof with the non-competition provisions of the Agreement.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Agreement which is attached hereto as Exhibit10.1 and incorporated herein by reference.