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UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Filed by the Registrant
x
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Filed by a Party other than the
Registrant
o
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Check the appropriate box:
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o
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Preliminary Proxy Statement
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o
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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KEMET
CORPORATION
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the
appropriate box):
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x
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No fee required.
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o
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to
which transaction applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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o
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Fee paid previously with preliminary
materials.
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o
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Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Table of Contents
KEMET Corporation
P.O. Box 5928
Greenville, South Carolina 29606
SPECIAL MEETING OF STOCKHOLDERS
October 12, 2010
Dear
Stockholder:
You
are cordially invited to attend a special meeting of stockholders of KEMET
Corporation, to be held at our offices at Tower 101, Suite 1700, 101 N.E.
3rd Avenue, Fort Lauderdale, FL 33301, on November 3, 2010 at 10:00 a.m.,
Eastern time.
At
the special meeting, you will be asked to vote on an amendment to our Restated Certificate of Incorporation to effect a
reverse stock split. Stockholder
approval of the amendment to our Restated Certificate of Incorporation will
permit our board of directors to effect a reverse stock split at the boards
discretion within one year of the special meeting.
We
urge you to read the proxy statement materials in their entirety and to
consider them carefully including the effect that adopting or failing to adopt
the proposals will have on stockholders.
After
careful consideration, our board of directors has unanimously approved the reverse stock split and unanimously
recommends that you vote
FOR
both of the proposals set forth in the proxy statement. The approval and
adoption of the amendment to our Restated Certificate of Incorporation requires
the affirmative vote of holders of at least a majority of the outstanding
shares of our common stock as of the record date. Failure to vote may be the equivalent of a No
vote.
It
is important that your shares be represented at the special meeting, regardless
of the size of your holdings. Accordingly, whether or not you expect to attend
the special meeting, we urge you to vote promptly by returning the enclosed
proxy card. You may revoke your proxy at any time before it has been voted.
Voting
by proxy will not prevent you from voting your shares in person if you
subsequently choose to attend the special meeting.
Thank
you for your cooperation and continued support.
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Very
truly yours,
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Frank
G. Brandenberg
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Chairman
of the Board of Directors
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THIS PROXY STATEMENT IS DATED OCTOBER 12, 2010
AND IS FIRST BEING MAILED TO STOCKHOLDERS ON OR ABOUT OCTOBER 12, 2010.
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KEMET Corporation
P.O. Box 5928
Greenville, South Carolina 29606
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
October 12, 2010
TO THE STOCKHOLDERS OF KEMET CORPORATION
NOTICE
IS HEREBY GIVEN that a Special Meeting (the Special Meeting) of the holders
(the Stockholders) of common stock, par value $0.01 per share (the Common
Stock) of KEMET Corporation (the Corporation) will be held at our offices at
Tower 101, Suite 1700, 101 N.E. 3rd Avenue, Fort Lauderdale, FL 33301, on November 3,
2010 at 10:00 a.m., Eastern time, to consider the following proposals:
1.
To amend the
Corporations Restated Certificate of Incorporation to effect a reverse stock
split of the Common Stock at a ratio that will be determined by the Corporations
board of directors and that will be within a range of one-for-three (1:3) to
one-for-five (1:5) (the Reverse Stock Split); and
2.
To approve the
adjournment of the Special Meeting, if necessary, to solicit additional
proxies, if there are not sufficient votes at the time of the Special Meeting
to approve proposal No. 1.
The
board of directors unanimously recommends a FOR vote for proposals No. 1
and No. 2.
The
Corporations board of directors authorized the Reverse Stock Split with a view
to increasing the per share trading price of the Common Stock such that the
Corporation may achieve a price per share for its Common Stock that may
increase the marketability, trading volume and liquidity of the Common Stock
and would satisfy listing requirements of the New York Stock Exchange (the NYSE). However, even if the Reverse Stock Split is
implemented, there can be no assurance that the Reverse Stock Split will result
in an increase in the market price of the Common Stock or that the market price
of the Common Stock will not decrease at any time. Other factors, including (but not limited to)
the Corporations financial results, market conditions and the market
perception of the Corporations business, may adversely affect the market price
of the Common Stock.
The
accompanying Proxy Statement contains information regarding the matters that
you will be asked to consider and vote on at the Special Meeting.
The
board of directors has fixed the close of business on October 8, 2010 as
the record date for the determination of holders of record of the Common Stock
entitled to notice of, and to vote at, the Special Meeting or any reconvened
meeting after any adjournments of the Special Meeting.
Important Notice Regarding the Availability of Proxy Materials for the Special
Meeting to be held on November 3, 2010:
The Proxy Statement is available at
http://www.kemet.com/proxymaterials.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, THE
CORPORATION URGES YOU TO VOTE YOUR SHARES VIA THE TOLL-FREE TELEPHONE NUMBER OR
OVER THE INTERNET, AS PROVIDED IN THE ENCLOSED MATERIALS. IF YOU RECEIVED A PROXY CARD BY MAIL, YOU MAY SIGN,
DATE AND MAIL THE PROXY CARD IN THE ENVELOPE PROVIDED.
Simpsonville,
South Carolina
October 12, 2010
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By
Order of the Board of Directors,
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R.
James Assaf, Secretary
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Table of Contents
PROXY STATEMENT
November 3, 2010 Special Meeting of Stockholders
KEMET CORPORATION
P.O. Box 5928
Greenville, South Carolina 29606
INTRODUCTION
The
Corporation is furnishing this Proxy Statement to you in connection with the
solicitation by the Board of Directors (the Board) of KEMET Corporation (the Corporation)
of proxies for use at the Corporations Special Meeting (the Special Meeting)
of the holders (the Stockholders) of the Corporations common stock, par
value $0.01 per share (the Common Stock), to be held at our offices at Tower
101, Suite 1700, 101 N.E. 3rd Avenue, Fort Lauderdale, FL 33301, at 10:00 a.m.,
Eastern time, on November 3, 2010, and at any and all reconvened meetings
after any adjournments of the Special Meeting.
The Corporations telephone number is (864) 963-6300, and the
Corporations mailing address is P.O. Box 5928, Greenville, South Carolina
29606. The Corporations website is
located at
www.kemet.com
. Information on the website does not
constitute a part of this Proxy Statement.
The
notice, this Proxy Statement and the form of proxy enclosed are being first
sent to the Stockholders on or about October 12, 2010.
MATTERS TO BE CONSIDERED AT THE
SPECIAL MEETING
At
the Special Meeting, you will consider and vote upon the following:
1.
To amend the
Corporations Restated Certificate of Incorporation to effect a reverse stock
split of the Common Stock at a ratio that will be determined by the Board and
that will be within a range of one-for-three (1:3) to one-for-five (1:5) (the Reverse
Stock Split); and
2.
To approve the
adjournment of the Special Meeting, if necessary, to solicit additional
proxies, if there are not sufficient votes at the time of the Special Meeting
to approve proposal No. 1.
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QUESTIONS AND ANSWERS
Q:
Why am I
receiving this Proxy Statement?
A:
The Corporation
sent you this Proxy Statement and the enclosed proxy card because the Board is
soliciting proxies for a Special Meeting of the Stockholders. You are receiving this Proxy Statement
because you owned shares of the Common Stock entitled to vote on October 8,
2010, the record date for the Special Meeting, and as a result you are entitled
to vote those shares at the Special Meeting.
By use of a proxy, you can vote whether or not you attend the Special Meeting. This Proxy Statement describes the matters on
which the Corporation would like you to vote and provides information on those
matters so that you can make an informed decision.
Q.
Who is
entitled to vote at the Special Meeting?
A.
Stockholders of
record as of the close of business on October 8, 2010 will be entitled to
notice of, and to vote at, the Special Meeting or any reconvened meetings after
any adjournments of the Special Meeting.
Q.
How
many shares can vote?
A.
On the record
date, October 8, 2010, the Corporation had 81,275,009 outstanding shares
of Common Stock (exclusive of treasury shares), which constitute its only
outstanding voting securities. Each
stockholder is entitled to one vote for each share of Common Stock held as of
the record date.
Q.
What
matters am I voting on?
A.
The following
matters are scheduled for a vote:
·
Approval of an
amendment to the Corporations Restated Certificate of Incorporation to effect
a reverse stock split of the Corporations issued and outstanding shares of
Common Stock at a ratio that will be determined by the Board and that will be
within a range of one-for-three (1:3) to one-for-five (1:5); and
·
Approval to
adjourn the Special Meeting, if necessary, to solicit additional proxies, in
the event that there are not sufficient votes at the time of the Special
Meeting to approve proposal No. 1.
Q.
How
does the Board recommend I vote on the proposals?
A.
The Board
unanimously recommends that each stockholder vote
FOR
proposal No. 1 to amend the Corporations Restated Certificate of
Incorporation to effect the Reverse Stock Split and
FOR
proposal No. 2 to adjourn or postpone the Special
Meeting to a later date if necessary.
Q.
Why is
the Board recommending that I vote FOR proposal No. 1?
A.
The Board
desires to effect the Reverse Stock Split to attempt to achieve a price per
share for the Common Stock that may increase the marketability, trading volume
and liquidity of the Common Stock and would satisfy listing requirements of the
NYSE.
Q.
What
happens if the Stockholders do not approve proposal No. 1?
A.
Proposal
No. 1 would allow the Board to reduce the number of outstanding shares of
the Common Stock which could help to raise the price per share of the Common
Stock, and the Corporation may be able to gain compliance with the NYSEs
listing requirements. The Corporation
believes that a higher per share price and a listing with the NYSE would allow
a greater range of institutions to invest in the Common Stock. If the Stockholders do not approve the
Reverse Stock Split, we may not be able to achieve these
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benefits.
However, other factors, including (but not limited to) the Corporations
financial results, market conditions and the market perception of its business,
may adversely affect the market price of the Common Stock regardless of whether
the Reverse Stock Split is approved and/or implemented. Even if the Reverse Stock split is
implemented, there can be no assurance that the Reverse Stock split will result
in an increase in the market price of the Common Stock or that the market price
of the Common Stock will not decrease at any time.
Q.
Do I have
Dissenters Rights of Appraisal?
A.
The Delaware
General Corporate Law (the DGCL) does not provide dissenters rights of
appraisal to the Stockholders in connection with proposal No. 1.
Q.
What is
the difference between holding shares as a stockholder of record and as a
beneficial owner of shares held in street name?
A.
Stockholder of Record.
If the shares are
registered directly in your name with the Corporations transfer agent,
Computershare Trust Company, N.A., you are considered the stockholder of record
with respect to those shares, and the Proxy Statement was sent directly to you
by the Corporation.
Beneficial owner of Shares Held in Street Name.
If your shares
are held in an account at a brokerage firm, bank, broker-dealer, or other
similar organization, then you are the beneficial owner of shares held in street
name, and that organization forwarded the Proxy Statement to you. The organization holding your account is
considered the stockholder of record for purposes of voting at the Special
Meeting. As a beneficial owner, you have
the right to direct that organization on how to vote the shares held in your
account.
Q.
If I am
a stockholder of record of the Corporations shares, how do I vote?
A.
If you are a
stockholder of record, you can vote either in person at the Special Meeting or
by proxy without attending the Special Meeting. We urge you to vote by proxy
even if you plan to attend the Special Meeting so that we will know as soon as
possible that enough votes will be present for us to hold the Special Meeting.
If you attend the Special Meeting in person, you may vote at the Special
Meeting and your proxy will not be counted. You can vote by proxy by any of the
following methods.
Voting by Telephone or via the Internet
. If you are a stockholder
of record, you may vote by proxy or by using either the telephone or Internet
methods of voting. Proxies submitted by telephone or via the Internet must be
received by 11:59 p.m. Eastern time on November 2, 2010. Please see
the proxy card for instructions on how to access the telephone and Internet
voting systems.
Voting by Proxy Card
. Each Stockholder electing
to receive stockholder materials by mail may vote by proxy by using the
accompanying proxy card. When you return a proxy card that is properly signed
and completed, the shares of Common Stock represented by your proxy will be
voted as you specify on the proxy card.
Proxies submitted by mail must be received prior to the Special Meeting. Please allow sufficient time for mailing if
you decide to vote by mail.
Q.
If I am
a beneficial owner of shares held in street name, how do I vote?
A.
If you are a
beneficial owner of shares held in street name, you must either direct the
brokerage firm, bank, broker-dealer, or other record holder of your shares as
to how to vote your shares, or obtain a proxy from the brokerage firm, bank,
broker-dealer or other record holder to vote at the Special Meeting. Please
refer to the voter instruction cards used by your brokerage firm, bank,
broker-dealer or other record holder for specific instructions on methods of
voting, including by telephone or using the Internet.
Q.
What
happens if I do not give specific voting instructions?
A.
Stockholders of Record.
If you are a stockholder of
record and you:
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·
indicate when
voting on the Internet or by telephone that you wish to vote as recommended by
the Board; or
·
if you sign and
return a proxy card without giving specific voting instructions, then the proxy
holders will vote your shares in the manner recommended by the Board on all
matters presented in this Proxy Statement and as the proxy holders may
determine in their discretion with respect to any other matters properly
presented for a vote at the Special Meeting.
Beneficial Owners of Shares Held in Street Name.
If you are a
beneficial owner of shares held in street name and do not provide the
organization that holds your shares with specific voting instructions, the
organization may generally vote on routine matters but cannot vote on
non-routine matters. If the organization
that holds your shares does not receive instructions from you on how to vote
your shares on a non-routine matter, the organization does not have the
authority to vote your shares with respect to the non-routine matter. This is generally referred to as a broker
non-vote. When the Corporations
Inspector of Election tabulates the votes for any particular matter, broker
non-votes will be counted for purposes of determining whether a quorum is
present. For the purpose of determining
whether the Stockholders have approved proposal No. 1, broker non-votes
will have the same effect as a vote against the proposal, but for the purpose
of determining whether the Stockholders have approved proposal No. 2,
broker non-votes will not be treated as votes cast for or against the
proposal. The Corporation encourages you
to provide voting instructions to the organization that holds your shares by
carefully following the instructions provided in this Proxy Statement.
Q.
Is the
proposal considered routine or non-routine?
A.
Proposal No. 1
involves matters that the Corporation believes will be considered
non-routine. Proposal No. 2
involves matters that the Corporation believes will be considered routine.
Q.
What is
the quorum requirement for the Special Meeting?
A.
A majority of
the Corporations outstanding common shares (exclusive of treasury shares) on
the record date must be present at the Special Meeting to hold the Special
Meeting and conduct business. This is
called a quorum. Your shares will be
counted for purposes of determining if there is a quorum, whether representing
votes for, against, withheld or abstained, or broker non-votes, if you:
·
are present and
vote in person at the Special Meeting; or
·
have voted on
the Internet, by telephone or by properly submitting a proxy card or voting
instruction form by mail prior to the Special Meeting.
Q.
How are
abstentions treated?
A.
Abstentions are
counted as being present for purposes of determining whether a quorum is
present. For the purpose of determining
whether the Stockholders have approved proposal No. 1, abstentions will
have the same effect as a vote against the proposal, but for the purpose of
determining whether the Stockholders have approved proposal No. 2,
abstentions will not be treated as votes cast for or against the proposal.
Q.
What
are the voting requirements to approve each proposal?
A.
To be approved,
the proposals must receive the following votes:
·
Proposal No. 1,
approval of the amendment to the Corporations Restated Certificate of
Incorporation to effect the Reverse Stock Split, must receive a For vote,
either in person or by proxy, from a majority of the votes entitled to be cast
by the holders of the Corporations
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outstanding
Common Stock (with the holders of Common Stock entitled to one vote per share).
·
Proposal No. 2,
adjournment of the Special Meeting if there are not enough votes to approve
proposal No. 1, requires that more votes of the Corporations shares are
cast in favor of the proposal than votes of the Corporations shares that are
cast against the proposal.
Q.
Can I
change my vote after I have voted?
A.
You may revoke
your proxy and change your vote at any time before the polls are closed at the
Special Meeting. You may vote again on a later date on the Internet or by
telephone (only your latest Internet or telephone proxy submitted prior to the
Special Meeting will be counted), or by signing and returning a new proxy card
or voting instruction form with a later date, or by attending the Special
Meeting and voting in person. However,
your attendance at the Special Meeting will not automatically revoke your proxy
unless you vote again at the Special Meeting or specifically request in writing
that your prior proxy be revoked.
Q.
Is my
vote confidential?
A.
Proxy
instructions, ballots and voting tabulations that identify individual
Stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within
the Corporation or to third parties, except:
·
as necessary to
meet applicable legal requirements;
·
to allow for
the tabulation and certification of votes; and
·
to facilitate a
successful proxy solicitation.
Occasionally,
Stockholders provide written comments on their proxy cards, which may be forwarded
to management and the Board.
Q.
Where
can I find the voting results of the Special Meeting?
A.
The preliminary
voting results will be announced at the Special Meeting. The final voting results will be tallied by
the Inspector of Election and published in a Current Report on Form 8-K
filed as soon as practicable after the Inspector of Election tallies the final
voting results.
Q.
Who is
paying for the cost of this proxy solicitation?
A.
The Corporation
is paying the costs of the solicitation of proxies. The Corporation must pay brokerage firms and
other persons representing beneficial owners of shares held in street name
their reasonable out-of-pocket expenses incurred in connection with sending the
proxy materials to beneficial owners and obtaining beneficial owners voting
instructions.
In
addition to soliciting proxies by mail, the Board members, officers and
employees may solicit proxies on the Corporations behalf, without additional
compensation, personally or by telephone.
The Corporation may also solicit proxies by email from Stockholders who
are employees of the Corporation or who previously requested to receive proxy
materials electronically.
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PROPOSAL NO. 1
APPROVAL OF AN AMENDMENT TO THE CORPORATIONS RESTATED CERTIFICATE OF
INCORPORATION
TO EFFECT THE REVERSE STOCK SPLIT
General.
A
copy of the form of the Certificate of
Amendment to the Corporations Restated Certificate of Incorporation to effect
the amendments contemplated by proposal No. 1 is set forth on
Appendix A hereto. The Corporations
current Restated Certificate of Incorporation is incorporated herein by
reference to Exhibit 3.1 to the Corporations Quarterly Report on Form 10-Q
for the quarter ended December 31, 1992, Commission File No. 00020289. Upon the effectiveness of the filing of the
Certificate of Amendment to the Corporations Restated Certificate of
Incorporation, a reverse stock split of the Common Stock will be effected to
combine the shares of the Common Stock at a ratio that will be determined by
the Board and that will be within a range of one-for-three (1:3) to
one-for-five (1:5).
If
the Corporation receives the required stockholder approval of proposal No. 1,
the Board will have the sole authority to elect, at any time prior to the first
anniversary of the Special Meeting: (1) whether or not to amend the
Corporations Restated Certificate of Incorporation to effect the Reverse Stock
Split, and (2) if so, the number of whole shares of the Common Stock
between and including three and five which will be combined into one share of
the Common Stock.
The
Board reserves its right to abandon the Reverse Stock Split at any time prior
to its implementation if it determines, in its sole discretion, that the
Reverse Stock Split is no longer in the best interests of the Corporation and
its Stockholders.
If
the Reverse Stock Split is approved by the Stockholders and the Board
determines to implement it, the Reverse Stock Split will become effective upon
filing the Certificate of Amendment with the Secretary of State of the State of
Delaware. When filed, the Certificate of
Amendment will contain the number of shares determined by the Board within the
limits set forth in this proposal No. 1 to be combined into one share of
Common Stock.
The
par value of the Common Stock will remain unchanged at $0.01 per share
following the Reverse Stock Split.
Reasons for the Reverse Stock Split.
The Board
authorized the Reverse Stock Split with a view to increasing the per share
trading price of the Common Stock. Other
reasons include:
·
Increase
in Eligible Investors.
A
Reverse Stock Split could allow a broader range of institutions to invest in
the Corporations stock (namely, funds that are prohibited from buying stocks
with a price below a certain threshold), potentially increasing trading volume
and liquidity of the Common Stock.
·
Increased
Analyst and Broker Interest.
A Reverse Stock Split could increase analyst
and broker interest in the Corporations stock as their policies can discourage
or prohibit them from following or recommending companies with low stock
prices. Because of the trading
volatility often associated with low-priced stocks, many brokerage houses and
institutional investors have adopted internal policies and practices that
either prohibit or discourage them from investing in such stocks or
recommending them to their customers.
Some of those policies and practices may also function to make the
processing of trades in low-priced stocks economically unattractive to
brokers. Additionally, because brokers
commissions on transactions in low-priced stocks generally represent a higher
percentage of the stock price than commissions on higher-priced stocks, the
current average price per share of the Common Stock can result in individual
Stockholders paying transaction costs representing a higher percentage of their
total share value than would be the case if the share price were substantially
higher.
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·
Listing
on the NYSE.
By
potentially increasing the Corporations stock price, the Reverse Stock Split
may allow the Common Stock to be listed on the NYSE which requires, among other
things, that issuers have a $4.00 per share stock price at the time of listing
and maintain an average closing bid price of at least $1.00 per share over a 30
trading-day period. Moving the
Corporations listing to the NYSE could improve the liquidity of the Common
Stock and the Corporations ability to raise capital in the future through the
sale of Common Stock.
Effects of the Reverse Stock Split.
Reduction of Shares Held by Individual Stockholders.
After the effective date of the proposed
Reverse Stock Split, each stockholder will own fewer shares of Common
Stock. However, the proposed Reverse
Stock Split will affect all Stockholders uniformly and will not affect any
stockholders percentage ownership interest in the Corporation, except to the
extent that the reverse split results in any Stockholders receiving cash in
lieu of fractional shares as described below.
Proportionate voting rights and other rights of the Stockholders will
not be affected by the proposed Reverse Stock Split (other than as a result of
the payment of cash in lieu of fractional shares). For example, a holder of 2% of the voting
power of the outstanding shares of Common Stock immediately prior to the
Reverse Stock Split would continue to hold 2% of the voting power of the
outstanding shares of Common Stock immediately after the Reverse Stock
Split. The number of Stockholders of
record will not be affected by the Reverse Stock Split (except to the extent
that any stockholder holds only a fractional share interest and receives cash
for such interest after the Reverse Stock Split). However, if the Reverse Stock Split is
implemented, it will increase the number of Stockholders who own odd lots of
less than 100 shares of the Common Stock.
Brokerage commissions and other costs of transactions in odd lots may be
higher than the costs of transactions of more than 100 shares of Common Stock.
Reduction in Total Outstanding Shares.
The proposed Reverse Stock Split will reduce
the total number of outstanding shares of Common Stock by the exchange ratio
determined by the Board within the limits set forth in this proposal
No. 1.
Change in Number and Exercise Price of Employee and Director
Equity Awards and Outstanding Warrants.
The proposed Reverse Stock Split will reduce
the number of shares of Common Stock available for issuance under the
Corporations employee and director equity plans, including the 2004 Long-Term
Equity Incentive Plan, the 1995 Executive Stock Plan and the 1992 Key Employee
Stock Option Plan, in proportion to the exchange ratio determined by the Board
within the limits set forth in this proposal No. 1. Under the terms of the Corporations
outstanding equity awards, the Reverse Stock Split would cause a reduction in
the number of shares of Common Stock issuable upon exercise or vesting of such
awards in proportion to the exchange ratio of the Reverse Stock Split and would
cause a proportionate increase in the exercise price of such awards to the
extent they are stock options. The
number of shares authorized for future issuance under the Corporations equity
plans will also be proportionately reduced.
The number of shares of Common Stock issuable upon exercise or vesting
of outstanding equity awards will be rounded to the nearest whole share and no
cash payment will be made in respect of such rounding. The exercise price and
number of shares subject to all outstanding warrants to purchase Common Stock
will be similarly adjusted to reflect the Reverse Stock Split.
Regulatory Effects.
The Common Stock is currently registered
under Section 12(b) of the Exchange Act, and the Corporation is
subject to the periodic reporting and other requirements of the Exchange
Act. The proposed Reverse Stock Split
will not affect the registration of the Common Stock under the Exchange Act or
the Corporations obligation to publicly file financial and other information
with the Securities and Exchange Commission.
If the proposed Reverse Stock Split is implemented, the Common Stock
will continue to trade on the NYSE Amex under the symbol KEM (although NYSE
Amex would likely add the letter D to the end of the trading symbol for a
period of 20 trading days to indicate that the reverse stock split has
occurred).
No Going Private Transaction.
Notwithstanding the decrease in the number of
outstanding shares following the proposed Reverse Stock Split, the Board does
not intend for this transaction to be the first step in a series of plans or
proposals of a going private transaction within the meaning of Rule 13e-3
of the Exchange Act.
7
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The Proposed Reverse Stock Split May Not Increase the Corporations
Stock Price over the Long-Term, Which Would Prevent the Corporation From
Realizing Some of the Anticipated Benefits of the Reverse Stock Split.
The Board expects that a Reverse Stock Split
of the Common Stock will likely increase the market price of the Common Stock
immediately following the Reverse Stock Split.
However, the effect of a reverse stock split upon the market price of
the Common Stock cannot be predicted with any certainty, and the history of
similar stock split combinations for companies in like circumstances is
varied. It is possible that the per
share price of the Common Stock after the Reverse Stock Split will not rise in
proportion to the reduction in the number of shares of Common Stock outstanding
resulting from the Reverse Stock Split, and there can be no assurance that the
market price per share of the Common Stock after the Reverse Stock Split will
either exceed $4.00 per share to allow initial listing on the NYSE to occur or
maintain an average closing bid price of at least $1.00 per share stock price
to allow continued listing. The market
price of the Common Stock may be affected by other factors which may be
unrelated to the number of shares outstanding, including the Corporations
future performance. In addition, there
can be no assurance that once listed on the NYSE, the Corporation will not be
delisted due to a failure to meet other continued listing requirements, even if
the market price per share of the Common Stock after the Reverse Stock Split
remains in excess of $1.00.
The Proposed Reverse Stock Split May Decrease the
Liquidity of the Corporations Stock.
The liquidity of the Common Stock may be
harmed by the proposed Reverse Stock Split given the reduced number of shares
that would be outstanding after the Reverse Stock Split, particularly if the
stock price does not increase as a result of the Reverse Stock Split.
Board Discretion to Implement the Reverse Stock
Split.
If the
Reverse Stock Split is approved by the Stockholders, it will be effected, if at
all, only upon a determination by the Board that a Reverse Stock Split is in
the best interests of the Corporation and its Stockholders at the time of such
determination. Such determination will
be based upon factors the Board deems appropriate, including without limitation
the Corporations then current stock price, the existing and expected
marketability and liquidity of the Common Stock, prevailing market conditions,
the likely effect on the market price of the Common Stock and the desire to
meet the listing requirements for the NYSE.
Notwithstanding approval of the Reverse Stock Split by the Stockholders,
the Board may, in its sole discretion, abandon the proposed amendment to the
Restated Certificate of Incorporation and determine not to effect the Reverse
Stock Split as permitted under Section 242(c) of the Delaware General
Corporation Law. If the Board does not
implement the Reverse Stock Split prior to the one year anniversary of the
receipt of the requisite stockholder approval at the Special Meeting or any
adjournment thereof, stockholder approval would be required again prior to
implementing any reverse stock split.
Amendment Effective Time.
The effective date of the
Reverse Stock Split will be the date on which the Certificate of Amendment to
the Corporations Restated Certificate of Incorporation to effect the amendment
contemplated by proposal No. 1 is accepted and recorded by the Delaware
Secretary of State (subject to any specific future time of effectiveness stated
therein) in accordance with Section 103 of the DGCL. The exact timing of the filing of the
amendment will be determined by the Board based on its evaluation as to when
such action will be the most advantageous to the Corporation and its
Stockholders. Except as explained below
with respect to fractional shares, on the effective date of the amendment to
effect the Reverse Stock Split, shares of the Common Stock issued and
outstanding immediately prior thereto will be combined and converted,
automatically and without any action on the part of the Stockholders, into new
shares of the Common Stock in accordance with the reverse stock split ratio
determined by the Board within the limits set forth in this proposal
No. 1.
Required Vote.
Approval of proposal No. 1 requires the
affirmative vote, either in person or by proxy, of a majority of the votes
entitled to be cast by the holders of the Corporations outstanding Common
Stock (with the holders of Common Stock entitled to 1 vote per share). Abstentions
and broker non-votes will have the same effect as voting AGAINST the
adoption of proposal No. 1 because the required vote is based on the
number of shares outstanding rather than the number of votes cast.
The
Board urges you to vote FOR this proposal No. 1 to approve the amendment
to the Corporations Restated Certificate of Incorporation to effect the
Reverse Stock Split.
Stockholders Equity.
Following the effectiveness of the amendment
to the Corporations Restated Certificate of Incorporation, the stated capital
on the Corporations balance sheet and the additional paid-in capital
8
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account,
in each case, attributable to the Common Stock, will be adjusted to reflect the
Reverse Stock Split. The par value per
share of the Common Stock will remain unchanged at $0.01 per share after the
Reverse Stock Split. As a result, on the
effective date of the Reverse Stock Split, the stated capital on the
Corporations consolidated balance sheet attributable to Common Stock will be
reduced and the additional paid-in-capital account will be increased by the
amount by which the stated capital is reduced.
Per share net income or loss will be increased because there will be
fewer shares of the Common Stock outstanding.
The Corporation does not anticipate that any other accounting
consequences, including changes to the amount of stock-based compensation
expense to be recognized in any period, will arise as a result of the Reverse
Stock Split.
Interests of Certain Persons in the Proposal.
Certain of the Corporations officers and
directors have an interest in this proposal No. 1 as a result of their
ownership of shares of stock of the Corporation, as set forth in the section
entitled Security Ownership of
Certain Beneficial Owners and Management below. However, the Corporation does not believe
that its officers or directors have interests in the Reverse Stock Split that
are different from or greater than those of any other stockholder of the
Corporation.
Fractional Shares.
The Corporation does not currently intend to
issue fractional shares in connection with the Reverse Stock Split. Stockholders who own the Common Stock prior
to the effective date of the Reverse Stock Split and who otherwise would hold
fractional shares because the number of shares of the Common Stock they held
before the Reverse Stock Split would not be evenly divisible based on the Reverse
Stock Split ratio will be entitled to a cash payment (without interest or
deduction) in respect of such fractional shares. To avoid the existence of fractional shares
of the Common Stock, shares that would otherwise result in fractional shares
from the application of the Reverse Stock Split will be collected and pooled by
the Corporations transfer agent and sold in the open market and the proceeds
will be allocated to the Stockholders respective accounts pro rata in lieu of
fractional shares. The Corporation will
not receive any proceeds from any such sales.
The ownership of a fractional interest will not give the holder any
voting, dividend or other rights, except to receive the above-described cash
payment. The Corporation will be
responsible for any brokerage fees or commissions related to the transfer agents
selling in the open market shares that otherwise be entitled to fractional
shares.
Escheat Laws.
Stockholders should be aware that, under the
escheat laws of various jurisdictions, any amounts due for fractional interests
and shares resulting from the Reverse Stock Split that are not timely claimed
after the effective date of the Reverse Stock Split may be required to be paid
to the designated agent for each such jurisdiction, unless correspondence has
been received by the Corporation or Computershare Trust Company, N.A., the
Corporations transfer agent, concerning ownership of such funds within the
time permitted in such jurisdiction.
Thereafter, if applicable, Stockholders otherwise entitled to receive
such funds, but who do not receive them due to, for example, their failure to
timely comply with the transfer agents instructions (described below), will
have to seek to obtain such funds directly from the state to which they were
paid.
Exchange of Stock Certificates.
If the Reverse Stock Split is effected,
Stockholders holding certificated shares will be required to exchange their
stock certificates for the appropriate number of shares held electronically in
book entry form (Book Entry Shares) resulting from the Reverse Stock
Split. This means that, instead of
receiving a new stock certificate, Stockholders holding certificated shares
prior to the effective time of the Reverse Stock Split will receive a statement
of holding indicating the number of Book Entry Shares held by them after giving
effect to the Reverse Stock Split.
Stockholders of record on the effective date of the Reverse Stock Split
will be furnished the necessary materials and instructions for the surrender
and exchange of share certificates at the appropriate time by Computershare
Trust Company, N.A. Stockholders will not have to pay any transfer fee or other
fee in connection with such exchange. As
soon as practicable after the effective date of the Reverse Stock Split, the
transfer agent will send a letter of transmittal to each stockholder advising
such holder of the procedure for surrendering certificates representing the
number of shares of the Common Stock prior to the Reverse Stock Split (Old
Stock Certificates) in exchange for Book Entry Shares representing the number
of shares of the Common Stock resulting from the Reverse Stock Split.
You should not send your Old Stock Certificates now. You
should send them only after you receive the letter of transmittal from the
Corporations transfer agent.
As
soon as practicable after the surrender to the transfer agent of any Old Stock
Certificate, together with a duly executed letter of transmittal and any other
documents the transfer agent may specify, the transfer agent will
9
Table of Contents
deliver
to the person in whose name such Old Stock Certificate had been issued Book
Entry Shares registered in the name of such person. Any Old Stock Certificate bearing a
restrictive legend will be exchanged for a new physical stock certificate
bearing the same legend, if any, restricting the transfer of such shares that
were borne by the surrendered Old Stock Certificates held prior to the Reverse
Stock Split.
Until
surrendered as contemplated herein, each Old Stock Certificate shall be deemed
at and after the effective time of the Reverse Stock Split to represent the
number of full shares of the Common Stock resulting from the Reverse Stock
Split. Until they have surrendered their
Old Stock Certificates for exchange, Stockholders will not be entitled to
receive any dividends or other distributions, if any, that may be declared and
payable to holders of record.
Any
stockholder whose Old Stock Certificate has been lost, destroyed or stolen will
be entitled to Book Entry Shares only after complying with the requirements
that the Corporation and the transfer agent customarily apply in connection
with lost, stolen or destroyed certificates.
If
any Book Entry Shares are to be issued in a name other than that in which the
Old Stock Certificates are registered, it will be a condition of such issuance
that (1) the person requesting such issuance must pay to the Corporation
any applicable transfer taxes or establish to the Corporations satisfaction
that such taxes have been paid or are not payable, (2) the transfer
complies with all applicable federal and state securities laws, and
(3) the surrendered certificate is properly endorsed and otherwise in
proper form for transfer. In all other
cases, no service charges, brokerage commissions or transfer taxes shall be
payable by any holder of any Old Stock Certificate.
Stockholders
who hold only uncertificated shares, either as direct or beneficial owners,
will have their holdings electronically adjusted by the Corporations transfer
agent and, for beneficial owners, by their brokers or banks which hold in street
name for their benefit, as the case may be to give effect to the Reverse Stock
Split.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK
SPLIT.
The
following discussion is a summary of certain U.S. federal income tax
consequences of the Reverse Stock Split to the Corporation and to Stockholders
that hold such stock as a capital asset for U.S. federal income tax
purposes. This discussion is based on
laws, regulations, rulings and decisions in effect on the date hereof, all of
which are subject to change (possibly with retroactive effect) and to differing
interpretations. This discussion applies
only to holders that are U.S. persons and does not address all aspects of U.S.
federal income taxation that may be relevant to holders in light of their
particular circumstances or to holders who may be subject to special tax
treatment under the Internal Revenue Code of 1986, as amended (the Code),
including, without limitation, holders who are dealers in securities or foreign
currency, foreign persons, insurance companies, tax-exempt organizations,
banks, financial institutions, small business investment companies, regulated
investment companies, real estate investment trusts, retirement plans, holders
that are partnerships or other pass-through entities for U.S. federal income
tax purposes, holders whose functional currency is not the U.S. dollar, traders
that mark-to-market their securities, holders subject to the alternative
minimum tax, holders who hold the Common Stock as part of a hedge, straddle,
conversion or other risk reduction transaction, or who acquired the Common
Stock pursuant to the exercise of compensatory stock options, the vesting of
previously restricted shares of stock or otherwise as compensation.
The
Corporation has not sought, and will not seek, a ruling from the U.S. Internal
Revenue Service regarding the U.S. federal income tax consequences of the
Reverse Stock Split. The following
summary does not address the tax consequences of the Reverse Stock Split under
foreign, state, or local tax laws.
Accordingly, each holder of the Common Stock
should consult his, her or its tax advisor with respect to the particular tax
consequences of the Reverse Stock Split to such holder.
IRS Circular 230 Disclosure:
To ensure compliance with requirements imposed by the U.S. Internal
Revenue Service, we inform you that any tax advice contained in this proxy
statement was not intended or written to be used, and cannot be used, by any
taxpayer for the purpose of avoiding tax-related penalties under the Code. The tax
advice contained in this proxy statement was written to support the promotion
or marketing of the transactions and matters addressed by the proxy statement.
Each taxpayer should seek advice based on the taxpayers particular
circumstances from an independent tax advisor.
10
Table of Contents
The
U.S. federal income tax consequences for a holder of the Common Stock and for
the Corporation pursuant to the Reverse Stock Split will be as follows:
·
the holder
should not recognize any gain or loss for U.S. federal income tax purposes
(except with respect to cash, if any, received in lieu of a fractional share of
the Common Stock);
·
the holders
aggregate tax basis in the Common Stock received pursuant to the Reverse Stock
Split, including any fractional share of the Common Stock not actually
received, should be equal to the aggregate tax basis of such holders Common
Stock surrendered in exchange therefor;
·
the holders
holding period for the Common Stock received pursuant to the Reverse Stock
Split, including any fractional share of the Common Stock not actually
received, should include such holders holding period for the Common Stock
surrendered in exchange therefor;
·
cash payments
received by the holder for a fractional share of Common Stock generally should
be treated as if such fractional share had been issued pursuant to the Reverse
Stock Split and then sold by such holder, and such holder generally should
recognize capital gain or loss with respect to such payment, measured by the
difference between the amount of cash received and such holders tax basis in
such fractional share;
·
any such
capital gain or loss should be treated as a long-term or short-term capital
gain or loss based on such holders holding period in such fractional share;
and
·
the Corporation
should not recognize gain or loss solely as a result of the Reverse Stock
Split.
THE
BOARD RECOMMENDS A VOTE FOR THE AMENDMENT TO THE CORPORATIONS RESTATED
CERTIFICATE OF INCORPORATION TO EFFECTUATE THE REVERSE STOCK SPLIT.
11
Table
of Contents
PROPOSAL NO. 2
APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING
Adjournment.
If it becomes necessary to postpone the
Special Meeting in order to obtain additional votes necessary to approve proposal No. 1, a motion may be made to
adjourn the Special Meeting to a later time to permit further solicitation of
proxies. If such a motion to adjourn is
made, it will require that more votes of the Corporations shares are cast in
favor of the proposal than votes of its shares that are cast against the
proposal, even if a quorum is not present or represented at the Special
Meeting.
Vote Required.
Proposal No. 2 requires that more votes
of the Corporations shares are cast in favor of the proposal than votes of its
shares that are cast against the proposal.
Accordingly, abstentions and broker non-votes will have no effect on the
outcome of proposal No. 2.
The
Board unanimously recommends that you to vote FOR this proposal No. 2 to
adjourn the Special Meeting if it becomes necessary to postpone the Special
Meeting in order to solicit additional votes in favor of proposal No. 1.
12
Table of Contents
OTHER MATTERS
The
Board does not intend to bring any other business before the Special Meeting
and it is not aware that anyone else intends to do so. If any other business matters are properly brought
before the Special Meeting, it is the intention of the persons named in the
enclosed form of proxy to vote as proxies in accordance with their best
judgment.
CAUTIONARY NOTE REGARDING FORWARD
LOOKING STATEMENTS
This
Proxy Statement contains or incorporates by reference documents containing
certain statements that are, or may be deemed to be, forward-looking
statements within the meaning of the safe harbor provisions of Section 27A
of the Securities Act and Section 21E of the Exchange Act. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions that are
difficult to predict. Actual outcomes and results may differ materially from
those expressed in, or implied by, our forward-looking statements. Words such
as expects, anticipates, believes, estimates and other similar
expressions or future or conditional verbs such as will, should, would
and could are intended to identify such forward-looking statements. Readers
should not rely solely on the forward-looking statements and should consider
all uncertainties and factors discussed throughout this Proxy Statement. The
statements are representative only as of the date they are made, and we
undertake no obligation to update any forward-looking statement.
All
forward-looking statements, by their nature, are subject to risks and
uncertainties. Our actual future results may differ materially from those set
forth in our forward-looking statements. We face risks that are inherent in the
businesses and the market places in which we operate. While management believes
these forward-looking statements are accurate and reasonable, uncertainties,
risks and factors, including those described below, could cause actual results
to differ materially from those reflected in the forward-looking statements.
Factors
that may cause the actual outcome and results to differ materially from those
expressed in, or implied by, these forward-looking statements include, but are
not necessarily limited to the following:
·
continued
uncertainty of the economy could impact our ability to realize operating plans
if the demand for our products declines and could adversely affect our
liquidity and ability to continue to operate;
·
adverse
economic conditions could cause further reevaluation and the write down of
long-lived assets;
·
an increase in
the cost or a decrease in the availability of our principle raw materials;
·
changes
in our competitive environment;
·
uncertainty of
the timing of customer product qualifications in heavily regulated industries;
·
economic,
political, or regulatory changes in the countries in which we operate;
·
difficulties,
delays or unexpected costs in completing our restructuring plan;
·
the ability to
attract, train and retain effective employees and management;
·
the ability to
develop innovative products to maintain customer relationships;
·
the impact of
environmental issues, laws, and regulations;
·
volatility of
financial and credit markets which would affect our access to capital;
·
exposure to
foreign exchange gains and losses;
13
Table of Contents
·
need to reduce
costs to offset downward price trends;
·
potential
limitation on use of net operating losses to offset possible future taxable
income;
·
dilution as a
result of the warrant held by K Equity, LLC; and
·
exercise of the
warrant by K Equity, LLC may result in the existence of a controlling
stockholder.
Additional
risks and uncertainties not presently known to us or that we currently deem
immaterial also may impair our business operations and also could cause actual
results to differ materially from those included, contemplated or implied by
the forward-looking statements made, or incorporated by reference, in this
Proxy Statement, and the reader should not consider the above list of factors
to be a complete set of all potential risks or uncertainties.
14
Table of Contents
SECURITY OWNERSHIP
As
of September 30, 2010, the Corporations issued and outstanding Common Stock
consisted of 81,275,009 shares of Common Stock. The following information with
respect to the outstanding shares of Common Stock beneficially owned by each
director of the Corporation and each named executive officer, the directors
and executive officers as a group and all beneficial owners of more than 5% of
the Common Stock known to the Corporation is furnished as of September 30,
2010. Except as otherwise indicated below, each of the persons named in the
table has sole voting and investment power with respect to the securities
beneficially owned by it or him as set forth opposite its or his name.
Beneficial
ownership for the purposes of the following table is determined in accordance
with the rules and regulations of the SEC. These rules generally
provide that a person is the beneficial owner of securities if such person has
or shares the power to vote or direct the voting thereof, or to dispose or
direct the disposition thereof or has the right to acquire such powers within
60 days. Common stock subject to options that are currently exercisable or
exercisable within 60 days of September 30, 2010 are deemed to be
outstanding and beneficially owned by the person holding the options. These
shares, however, are not deemed outstanding for the purposes of computing the
percentage ownership of any other person. Except as disclosed in the footnotes
to this table and subject to applicable community property laws, we believe
that each stockholder identified in the table possesses sole voting and
investment power over all shares of common stock shown as beneficially owned by
the stockholder.
Directors, Named Executive Officers and 5% Stockholders(1)
|
|
Number of Shares
Beneficially Owned
|
|
Percent
of Class
|
|
|
|
|
|
|
|
Per-Olof Loof(2)(3)
|
|
752,618
|
|
*
|
|
|
|
|
|
|
|
William M. Lowe, Jr.(2)(4)
|
|
300,000
|
|
*
|
|
|
|
|
|
|
|
Conrado Hinojosa(2)(5)
|
|
96,511
|
|
*
|
|
|
|
|
|
|
|
Marc Kotelon(2)(6)
|
|
89,894
|
|
*
|
|
|
|
|
|
|
|
Charles Meeks, Jr.(2)(7)
|
|
96,511
|
|
*
|
|
|
|
|
|
|
|
Dr. Wilfried Backes(2)
|
|
25,000
|
|
*
|
|
|
|
|
|
|
|
Gurminder S. Bedi(2)
|
|
30,000
|
|
*
|
|
|
|
|
|
|
|
Joseph V. Borruso(2)
|
|
38,600
|
|
*
|
|
|
|
|
|
|
|
Frank G. Brandenberg(2)
|
|
57,575
|
|
*
|
|
|
|
|
|
|
|
E. Erwin Maddrey, II(2)
|
|
36,287
|
|
*
|
|
|
|
|
|
|
|
Robert G. Paul(2)
|
|
36,000
|
|
*
|
|
|
|
|
|
|
|
Joseph D. Swann(2)
|
|
132,287
|
|
*
|
|
|
|
|
|
|
|
All Directors and Executive Officers as a group (12
persons)(8)
|
|
2,194,931
|
|
2.7
|
%
|
|
|
|
|
|
|
Alonim Investments Inc.(9)
|
|
4,150,000
|
|
5.1
|
%
|
|
|
|
|
|
|
Berg & Berg Enterprises, LLC(10)
|
|
6,860,373
|
|
8.5
|
%
|
|
|
|
|
|
|
K Equity, LLC(1)
|
|
80,544,685
|
|
49.8
|
%
|
*Percentage
of shares beneficially owned does not exceed one percent of class.
15
Table of Contents
(1)
This reflects
the issuance of a warrant on June 30, 2009 to initially purchase
80,544,685 shares of the Corporations Common Stock (the Closing Warrant) to
K Financing, LLC, an affiliate of Platinum Equity Capital Partners
II, L.P., pursuant to the terms of the Amended and Restated Credit
Agreement among K Financing, LLC, the Corporation and certain of the
Corporations subsidiaries. The Closing Warrant was subsequently transferred to
K Equity, LLC. The Closing Warrant has not been exercised, however it is
exercisable. Pursuant to its terms, the exercise price and number of shares of
Common Stock subject to the Closing Warrant will be proportionately adjusted to
reflect the Reverse Stock Split.
(2)
The address of
these individuals is c/o KEMET Corporation, P.O. Box 5928,
Greenville, South Carolina 29606.
(3)
Includes a
grant of restricted stock of 50,000 shares with a net share settlement of
12,500 shares deducted by the Corporation to satisfy Federal withholding tax
obligations.
(4)
The amount
shown includes 100,000 shares subject to currently exercisable options.
(5)
The amount
shown includes 90,000 shares subject to currently exercisable options. Includes
a grant of restricted stock of 8,682 shares with a net share settlement of
2,171 shares deducted by the Corporation to satisfy Federal withholding tax
obligations.
(6)
The amount
shown includes 72,500 shares subject to currently exercisable options.
(7)
The amount
shown includes 82,500 shares subject to currently exercisable options. Includes
a grant of restricted stock of 8,682 shares with a net share settlement of
2,171 shares deducted by the Corporation to satisfy Federal withholding tax
obligations.
(8)
The amount
shown includes 723,750 shares subject to currently exercisable options.
(9)
According to a
Schedule 13G filed with the SEC on February 13, 2009 by Alonim
Investments Inc. (Alonim), as of March 31, 2008, Alonim is the
beneficial owner of 4,150,000 shares, as to which it has sole voting power for
4,150,000 shares and sole dispositive power for 4,150,000 shares. Alonims
address is 237 Hymus Blvd., City of Pointe Claire, Quebec, Canada H9R 5C7.
(10)
According to a
Schedule 13G/A filed with the SEC on February 10, 2010 by
Berg & Berg Enterprises, LLC (BBE), as of December 31,
2009, BBE is the beneficial owner of 6,860,373 shares, as to which it has sole
voting power for 6,860,373 shares and sole dispositive power for 6,860,373
shares. BBEs address is 10050 Bandley Drive, Cupertino, CA 94014.
As
mentioned above, on June 30, 2009, the Corporation issued a warrant to K
Financing, LLC (K Financing), an affiliate of Platinum Equity Capital
Partners, II, L.P. pursuant to the terms of our Amended and Restated
Credit Agreement to purchase up to 80,544,685 shares of our Common Stock. This
warrant was subsequently transferred to K Equity, LLC (K Equity), an
affiliate of K Financing. Upon exercise of the warrant, K Equity may own up to
approximately 49.9% of our Common Stock. As a result, K Equity would have
significant influence over our management and affairs, and would be able to
control virtually all matters requiring approval by the stockholders, including
the vote to approve members of our board of directors. For additional
information regarding the terms of the Closing Warrant (including potential
adjustments to the number of shares issuable under such warrant), please see the
Corporations Form 8-K filed with the SEC on June 30, 2009. Pursuant
to its terms, the exercise price and number of shares of Common Stock subject
to the warrant will be proportionately adjusted to reflect the Reverse Stock
Split.
16
Table of Contents
COST OF THIS PROXY STATEMENT
The
entire cost of furnishing this Proxy Statement will be borne by us. The Corporation must pay brokerage firms and
other persons representing beneficial owners of shares held in street name
their reasonable out-of-pocket expenses incurred in connection with sending the
proxy materials to beneficial owners and obtaining beneficial owners voting
instructions.
STOCKHOLDER PROPOSALS AND
COMMUNICATIONS WITH THE BOARD
From
time to time, Stockholders present proposals which may be proper subjects for
consideration at the Annual Meeting. To be considered for inclusion in the
proxy statement, proposals must be submitted on a timely basis. Proposals for
the 2011 Annual Meeting, which is expected to be held on July 27, 2011,
must be received by the Corporation no later than April 29, 2011 and must
otherwise comply with the SECs rules, to be considered for inclusion in our
proxy materials relating to the 2011 Annual Meeting.
In
addition, the Corporations Amended and Restated By-Laws establish advance
notice procedures as to (1) business to be brought before an annual
meeting of Stockholders other than by or at the direction of the Board of
Directors and (2) the nomination, other than by or at the direction of the
Board of Directors, of candidates for election as directors. Any stockholder
who wishes to submit a proposal to be acted upon at next years annual meeting
or who proposes to nominate a candidate for election as a director must submit
such notice in compliance with such procedures.
Any
such proposals, as well as any questions related thereto, should be timely
submitted in writing to the Secretary of the Corporation at the address below. If
the 2011 annual meeting is more than 30 days before or more than
60 days after July 27, 2011, such written notice must be received by
the Secretary not later than the close of business on the later of the 90th day
prior to the 2011 annual meeting or the tenth day following the date that
public disclosure of the date of the 2011 annual meeting is first made.
Notice
of a proposal must include:
(i)
as to any other
business that the stockholder proposes to bring before the meeting, a brief
description of such business, the reasons for conducting such business at the
meeting and any material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made; and
(ii)
(A) the
name and address of such stockholder, as they appear on the Corporations
books, and of such beneficial owner, (B) the class and number of shares of
the Corporation which are owned beneficially and of record by such stockholder
and such beneficial owner, and (C) whether either such stockholder or
beneficial owner intends to solicit or participate in the solicitation of
proxies in favor of such proposal or nominee or nominees.
Notice
of a nomination must include:
(i)
as to each
person whom the stockholder proposes to nominate for election or reelection as
a director, all information relating to such person as would be required to be
disclosed in solicitations of proxies for the election of such nominees as
directors pursuant to Regulation 14A under the Exchange Act and such
persons written consent to serving as a director if elected; and
(ii)
(A) the
name and address of such stockholder, as they appear on the Corporations
books, and of such beneficial owner, (B) the class and number of shares of
the Corporation which are owned beneficially and of record by such stockholder
and such beneficial owner, and (C) whether either such stockholder or
beneficial owner intends to solicit or participate in the solicitation of
proxies in favor of such proposal or nominee or nominees.
You
may contact our Secretary at our principal executive offices for a copy of the
relevant provisions of the Corporations Amended and Restated By-Laws regarding
the requirements for making stockholder proposals and nominating director
candidates.
17
Table of Contents
HOUSEHOLDING OF PROXY MATERIALS
Some
banks, brokers and other nominee record holders may be participating in the
practice of householding stockholder materials, such as proxy statements,
information statements and annual reports.
This means that only one copy of this Proxy Statement may have been sent
to multiple Stockholders in your household. To obtain a separate copy of this
Proxy Statement, contact the Corporations Secretary at (864) 963-6300 or by
mail at 2835 Kemet Way, Simpsonville, South Carolina 29681. If you want to receive separate copies of
stockholder materials in the future, or if you are receiving multiple copies
and would like to receive only one copy for your household, you should contact
your bank, broker, or other nominee record holder, or, if you are a record
holder, you may contact the Corporations transfer agent, Computershare Trust
Company, N.A., by telephone at 1-877-282-1169.
WHERE YOU CAN FIND MORE
INFORMATION
The
Corporation files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may
read or copy any document the Corporation files at the public reference room
maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation
of the SECs public reference room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet
site at
www.sec.gov
from which
you may obtain copies of reports, proxy statements, communications related to
the exchange offers and other information regarding registrants that file
electronically, including us. The
Corporation is not incorporating the contents of the SEC website into this
Proxy Statement.
The
Common Stock is traded on the NYSE Amex under the symbol KEM.
The
Corporations SEC filings are also available to the public on its website at
www.kemet.com
. Information contained on the Corporations
internet website is not a part of this Proxy Statement.
18
Table of Contents
APPENDIX A
Certificate of Amendment to Restated Certificate of
Incorporation for Proposal No. 1
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
KEMET CORPORATION
Pursuant to Section 242 of
the General Corporation Law of the
State of Delaware
KEMET
CORPORATION, a corporation organized and existing under and by virtue of the
provisions of the General Corporation Law of the State of Delaware (the Company),
does hereby certify as follows:
FIRST:
Each [3] [4] [5] shares of the Common Stock issued and outstanding on the
effective date of this Certificate of Amendment shall automatically be combined
into one (1) validly issued, fully paid and non-assessable share of Common
Stock, without any action by the holder thereof, subject to the treatment of
fractional interests as described below (the Reverse Stock Split). No certificates representing fractional
shares of Common Stock shall be issued in connection with the Reverse Stock
Split. Stockholders who otherwise would
be entitled to receive fractional share interests of Common Stock in connection
with the Reverse Stock Split shall, with respect to such fractional interest,
be entitled to receive cash, without interest, in lieu of fractional shares of
Common Stock. Each certificate that
prior to such combination represented shares of Common Stock (Old Certificates)
shall thereafter represent that number of shares of Common Stock into which the
shares of Common Stock represented by the Old Certificate shall have been
combined.
SECOND:
This Certificate of Amendment was adopted by the approval of the stockholders
of the Company at a special meeting of the stockholders held November 3,
2010 in accordance with the provisions of Sections 211 and 242 of the General
Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF, the Company has caused this Certificate of Amendment to be
duly executed this day of ,
20XX.
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KEMET
CORPORATION
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By:
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Name:
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Title:
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A-1
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Using a black
ink pen, mark your votes with an X as shown in this example. Please do not
write outside the designated areas. X 018R5C 1 U P X + Special Meeting Proxy
Card . Authorized Signatures This section must be completed for your vote
to be counted. Date and Sign Below C Please sign exactly as your name(s)
appear(s) hereon. If the securities are jointly owned, both owners should
sign. Full title of one signing in representative capacity should be clearly
designated after signature. Signature 1 Please keep signature within the
box. Signature 2 Please keep signature within the box. Date (mm/dd/yyyy)
Please print date below. + B Non-Voting Items Change of Address Please
print new address below. Comments Please print your comments below. For
Against Abstain 1. To amend the Corporations Restated Certificate of
Incorporation to effect a reverse stock split of the Common Stock at a ratio
that will be determined by the Board and that will be within a range of
one-for-three (1:3) to one-for-five (1:5) (the Reverse Stock Split); and A
Proposals The Board of Directors recommends a vote FOR Proposals 1 and 2.
For Against Abstain 2. To approve the adjournment of the Special Meeting, if
necessary, to solicit additional proxies, if there are not sufficient votes
at the time of the Special Meeting to approve proposal No. 1.
000000000.000000 ext 000000000.000000 ext 000000000.000000 ext
000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000004 MR A
SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 1 0 3 3 2 2 1
MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE
AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A
SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND C 1234567890 J N T C123456789 1234
5678 9012 345 IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG
THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE. Electronic Voting Instructions You can vote by Internet or
telephone! Available 24 hours a day, 7 days a week! Instead of mailing your
proxy, you may choose one of the two voting methods outlined below to vote
your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies
submitted by the Internet or telephone must be received by 11:59 pm, Eastern
Time, on November 2, 2010. Vote by Internet Log on to the Internet and go
to www.investorvote.com/KEM Follow the steps outlined on the secured
website. Vote by telephone Call toll free 1-800-652-VOTE (8683) within the
USA, US territories & Canada any time on a touch tone telephone. There is
NO CHARGE to you for the call. Follow the instructions provided by the
recorded message.
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P.O. Box 5928
Greenville, South Carolina 29606 2010 Special Meeting of Stockholders
Solicited on Behalf of the Board of Directors The undersigned hereby appoints
R. JAMES ASSAF, proxy, with full power of substitution, and revocation,
acting by a majority of those present and voting, to vote the common stock of
KEMET Corporation which the undersigned is entitled to vote, at the 2010
Special Meeting of Stockholders scheduled to be held November 3, 2010, and at
any adjournments or postponements thereof, with all the powers the
undersigned would possess if present, with respect, to the matters on the
reverse side. Your shares will be voted as directed herein. If the proxy is
signed and no direction is given for any item, it will be voted FOR Proposal
1 and FOR Proposal 2. PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE. Proxy KEMET Corporation IF YOU HAVE NOT
VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND
RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
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Kraneshares Dynamic Emer... (AMEX:KEM)
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