1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year end March 31, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transistion period from to Commission file no. 0-20289
A: Full title of the plan and the address of the plan, if different from
that of the issuer named below:
KEMET Employees' Savings Plan
B: Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
KEMET Corporation
Post Office Box 5928
Greenville, South Carolina 29606
2
REQUIRED INFORMATION
Financial Statements and Schedules. The financial statements and schedules
included herewith relating to the KEMET Employees' Savings Plan (the "Plan")
were prepared in accordance with the financial reporting requirements of ERISA
and are provided pursuant to Instruction 4 of Form 11-K.
Consent of the Independent Auditors.
3
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Act of 1934, the
Administrative Committee of the KEMET Employees' Savings Plan has duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
KEMET EMPLOYEES' SAVING PLAN
September 20, 1996 By /S/ J.J. Jerozal
-------------------------------------
James J. Jerozal
Chief Financial Officer and Treasurer
For the Administrative Committee
4
KEMET EMPLOYEES' SAVINGS PLAN
Financial Statements and Schedules
March 31, 1996 and 1995
(With Independent Auditors' Report Thereon)
5
KEMET EMPLOYEES' SAVINGS PLAN
Table of Contents
Independent Auditors' Report
Financial Statements:
Statements of Net Assets Available for
Benefits - March 31, 1996 and 1995
Statements of Changes in Net Assets Available for
Benefits - Years ended March 31, 1996 and 1995
Notes to Financial Statements - March 31, 1996 and 1995
Schedules
Item 27a - Schedule of Assets Held for Investment Purposes
at March 31, 1996 1
Item 27d - Schedule of Reportable Transactions for the Year ended
March 31, 1996 2
Schedules not filed herewith are omitted because of the absence of conditions
under which they are required.
6
Independent Auditors' Report
The Board of Directors
KEMET Electronics Corporation:
We have audited the accompanying statements of net assets available for benefits
of KEMET Employees' Savings Plan as of March 31, 1996 and 1995, and the related
statements of changes in net assets available for benefits for the years then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
March 31, 1996 and 1995, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedules 1 and 2 are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/S/ KPMG Peat Marwick LLP
September 6, 1996 KPMG Peat Marwick LLP
7
KEMET EMPLOYEES' SAVINGS PLAN
Statements of Net Assets Available for Benefits
March 31, 1996 and 1995
1996 1995
----- ------
Assets:
Investments(notes 2 and 7) $ 48,112,745 39,722,438
Receivables:
Employer contributions 1,654,488 1,526,867
Employee contributions 400,732 360,759
Accrued interest and dividends 5,532 4,833
Due from broker for securities sold 109,561
----------- -----------
Total receivables 2,060,752 2,002,020
Cash 95,002 407,432
----------- -----------
Total assets 50,268,499 42,131,890
Liabilities:
Due to broker for securities purchased 281,375
Excess contributions refundable to participants 240,000
Other 546
----------- -----------
Net assets available for benefits $ 50,267,953 41,610,515
=========== ===========
See accompanying notes to financial statements.
8
KEMET EMPLOYEES' SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended March 31, 1996 and 1995
1996 1995
---- ----
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of
investments $ 2,407,185 3,778,292
Interest and dividends 2,326,756 1,695,665
--------- ---------
4,733,941 5,473,957
--------- ---------
Contributions:
Participants' 4,766,022 4,111,197
Employer's 1,631,087 1,510,594
--------- ---------
6,397,109 5,621,791
--------- ---------
Total additions 11,131,050 11,095,748
---------- ----------
Deductions from net assets attributed to:
Benefits paid to participants 2,233,924 2,236,466
Administrative expenses 239,688 236,347
--------- ----------
Total deductions 2,473,612 2,472,813
--------- ----------
Net increase 8,657,438 8,622,935
Net assets available for benefits:
Beginning of year 41,610,515 32,987,580
---------- ----------
End of year $ 50,267,953 41,610,515
========== ==========
See accompanying notes to financial statements.
9
KEMET EMPLOYEES' SAVING PLAN
Notes to Financial Statements
March 31, 1996 and 1995
(1) Description of Plan
The following description of the KEMET Employees' Savings Plan (Plan) provides
only general information. Participants should refer to the Plan agreement for a
more complete description of the Plan's provisions.
(a) General
The Plan is a defined contribution plan sponsored by KEMET Electronics
Corporation (Company) covering all full-time employees of the Company, its
parent and its subsidiaries who have completed one year of service. The Plan
is subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
(b) Contributions
Participants may choose one or both of the two savings types available,
which are the 401(k), which provides for deferral of taxation, and the Personal
Investment Account (PIA). Participants are allowed to contribute between
2 1/2% and 7 1/2% of their annual compensation as their basic contribution to
the Plan. This may be on a pretax basis to the 401(k) or an after tax basis
to the PIA. The Company matches 50% of 401(k) and 30% of PIA contributions,
subject to the basic savings rate limit of 7 1/2%. Employer contributions are
reduced by forfeitures. Additional amounts may be contributed at the option of
the Company's Board of Directors.
In addition to their basic contribution, participants may contribute
between 0.5% and 10% to either the 401(k) on a pretax basis (up to the IRS
maximum) or to the PIA.
(c) Participant Accounts
Each participant's account is credited with (a) the participant's
contribution, (b) the Company's matching contribution, (c) allocations of the
Company's additional contribution, and (d) Plan earnings, and charged with an
allocation of administrative expenses. Allocations are based on participant
earnings or account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
(d) Vesting
Participants are immediately vested in their voluntary contributions and
the Company matching contributions plus actual earnings thereon.
10
(1) Description of Plan, Continued
(e) Investment Options
Upon enrollment in the Plan, participants may direct the investment of
their accounts, including the Company's contributions, into an equity index fund
(which invests in a diversified portfolio of common stocks), a stable value fund
(which invests in certificate of deposits, guaranteed investment contracts,
money market investments or other fixed principle investments), a balanced fund
(which invests in common stocks and bonds), and the KEMET stock fund (which
invests primarily in the common stock of KEMET Corporation.
(f) Payment of Benefits
On termination of service due to death, disability or retirement, a
participant may elect to receive either a lump-sum amount equal to the value of
the participant's vested interest in his or her account, or annual installments
over a ten year period. For termination of service due to other reasons, a
participant may receive the value of the vested interest in his or her account
as a lump-sum distribution.
(g) Forfeited Accounts
Forfeited accounts are used to reduce future employer contributions.
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting
The financial statements of the Plan are prepared under the accrual method
of accounting.
(b) Investment Valuation and Income Recognition
Under the terms of a trust agreement between Wachovia Bank of South
Carolina, N.A. (Wachovia) and the Plan, Wachovia manages a trust fund on behalf
of the Plan which includes all Plan investments. The investments and changes
therein of this trust fund have been reported to the Plan by Wachovia as having
been determined through the use of fair values for all assets of the trust fund.
The information on the investments and changes in investments of the Plan was
certified by Wachovia to be complete and accurate.
The Plan's investments are stated at fair value except for its investment
contract which is valued at contract value (note 3). Shares of registered
investment companies are valued at quoted market prices which represent the net
asset value of shares held by the Plan at year-end. The Company stock is valued
at its quoted market price.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
(c) Payment of Benefits
Benefits are recorded when paid.
(e) Use of Estimates
11
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These estimates and assumptions affect the reported amount of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements. In addition, they affect the reported
amounts of income and expenses during the reporting period. Actual results
could differ from these estimates and assumptions.
(3) Investment Contracts With Insurance Companies
The Plan's investment contracts with insurance companies included in the stable
value fund option are primarily invested in shares of a guaranteed investment
contract fund managed by Wachovia. The insurance companies maintain the
contributions in a pooled account. The account is credited with earnings on the
underlying investments and charges for Plan withdrawals and administrative
expenses charges by the insurance companies. The contracts are fully benefit
responsive and are included in the financial statements at contract value, which
approximates fair value, as reported to the Plan by the insurance companies.
Contract value represents contributions made under the contracts, plus earnings,
less Plan withdrawals and administrative expenses.
The average yields for the stable value fund for the years ended March 31, 1996
and 1995 were 6.0% and 5.8%, respectively.
(4) Related Party Transactions
Certain Plan investments are shares of mutual funds managed by Wachovia.
Wachovia is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest. Fees paid by the Plan for the
investment management and contract administration services and trustee's fees
amounted to $239,688 and $232,468 for the years ended March 31, 1996 and 1995,
respectively.
(5) Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to amend it from time to time, to discontinue its contributions
at any time, and to terminate the Plan subject to the provisions of ERISA. In
the event of Plan termination, participants will remain 100 percent vested in
their accounts.
(6) Tax Status
The Internal Revenue Service has determined and informed the Company by a letter
dated December 12, 1994, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The
Plan has been amended since receiving the determination letter. However, the
Plan administrator and the Plan's tax counsel believe that the Plan is designed
and is currently being operated in compliance with the applicable requirements
of the IRC.
12
(7) Investments
At March 31, investments of the Plan were as follows:
1996 1995
---- ----
Investments:
At fair value:
Registered investment companies:
Biltmore FDS Money Market Fund $ 2,750,262 3,604,097
Biltmore Balanced Fund 7,153,749 6,069,566
Biltmore Equity Index Fund 7,852,912 6,200,317
---------- ---------
17,756,923 15,873,980
Common stock of KEMET Corporation 12,230,917 6,798,461
---------- ---------
Total investments, at fair value 29,987,840 22,672,441
At contract value:
Investment contracts with insurance companies:
Wachovia Bank GIC Fund 17,255,055 15,960,557
Metropolitan Life Insurance Company 869,850 1,089,440
---------- ----------
Total investments, at contract value 18,124,905 17,049,997
---------- -----------
Total investments $ 48,112,745 39,722,438
========== ===========
13
(8) Net Assets and Changes in Net Assets Available for Benefits with Fund
Information
A summary of net assets available for benefits with fund information at March
31, 1996 follows:
Stable Equity KEMET
Value Index Balanced Stock
Control Fund Fund Fund Fund Total
------- --------- --------- --------- ----------- ---------
Registered investment companies $ 2,750,262 7,852,912 7,153,749 17,756,923
Investment contracts with
insurance companies 18,124,905 18,124,905
Common stock of KEMET Corporation 12,230,917 12,230,917
Employer's contributions receivable 20 749,217 340,643 288,695 275,913 1,654,488
Participants' contributions
receivable 16 178,533 80,898 65,529 75,756 400,732
Accrued interest and dividends 5,532 5,532
Cash 79,092 11,507 4,403 95,002
Other (546) (546)
------- --------- --------- --------- ----------- ---------
Net assets available for benefits $ 79,128 21,819,956 8,274,453 7,507,973 12,586,443 50,267,953
======== ========== ========== ========= =========== =========
14
A summary of the changes in net assets available for benefits with fund
information for the year ended March 31, 1996 follows:
Stable KEMET
Value Equity Balanced Stock
Control Fund Fund Fund Fund Total
------- --------- --------- --------- --------- ---------
Additions to net assets attributed to:
Investment income:
Net appreciation in fair
value of investments $ 101 1,356,684 933,845 116,555 2,407,185
Interest and dividends 1,299,679 593,772 433,305 2,326,756
------- --------- --------- --------- --------- ---------
1,299,780 1,950,456 1,367,150 116,555 4,733,941
------- --------- --------- --------- --------- ---------
Contributions 6,256,235 (33,026) 18,614 (22,071) 177,357 6,397,109
------- --------- --------- --------- --------- ---------
Total additions 6,256,235 1,266,754 1,969,070 1,345,079 293,912 11,131,050
Deductions from net assets attributed to:
Benefits paid to
participants 2,233,924 2,233,924
Administrative expenses 239,688 239,688
------- --------- --------- ---------- --------- ---------
Total deductions 2,473,612 2,473,612
------- --------- --------- ---------- --------- ---------
Net increase prior to
interfund transfers 3,782,623 1,266,754 1,969,070 1,345,079 293,312 8,657,438
------- --------- --------- --------- --------- ---------
Interfund transfers (3,584,270) (1,058,972) (302,138) (287,250) 5,232,630
------- --------- --------- --------- --------- ---------
Net increase (decrease) 198,353 207,782 1,666,932 1,057,829 5,526,542 8,657,438
Net assets available for benefits:
Beginning of year (119,225) 21,612,174 6,607,521 6,450,144 7,059,901 41,610,515
------- --------- --------- ---------- --------- ---------
End of year $ 79,128 21,819,956 8,274,453 7,507,973 12,586,443 50,267,953
========= ========== ========== ========== ========== ==========
15
A summary of net assets available for benefits with fund information March 31,
1995 follows:
Stable Stock KEMET
Value Index Balanced Stock
Control Fund Fund Fund Fund Total
--------- ---------- ---------- ----------- ------- ----------
Registered investment
companies $ 3,604,097 6,200,317 6,069,566 15,873,980
Investment contracts with
insurance companies 17,049,997 17,049,997
Common stock of KEMET
Corporation 6,798,461 6,798,461
Employer's contribution
receivable 34 756,243 325,708 308,017 136,865 1,526,867
Participants' contribution
receivable 31 177,780 77,220 68,279 37,449 360,759
Due from broker for
securities sold 4,276 4,282 101,003 109,561
Accrued interest and
dividends 4,833 4,833
Cash 120,710 19,224 267,498 407,432
Excess contributions refundable (240,000) (240,000)
Due to broker for
securities purchased (281,375) (281,375)
------- --------- --------- --------- --------- ---------
Net assets available
for benefits $ (119,225) 21,612,174 6,607,521 6,450,144 7,059,901 41,610,515
========= ========== ========== ========= ========= ==========
16
A summary of the changes in net assets available for benefits with fund
information for the year ended March 31, 1995 follows:
Stable Stock KEMET
Value Index Balanced Stock
Control Fund Fund Fund Fund Total
---------- --------- ------- -------- --------- -----------
Additions to net assets
attributed to:
Investment income:
Net appreciation
(depreciation) in fair
value of investments $ (21,660) 673,738 196,385 2,929,829 3,778,292
Interest and dividends 1,211,150 175,366 309,149 1,695,665
---------- --------- ------- -------- --------- -----------
1,189,490 849,104 505,534 2,929,829 5,473,957
Contributions 5,248,621 46,872 89,565 102,736 133,997 5,621,791
---------- --------- ------- -------- --------- -----------
Total additions 5,248,621 1,236,362 938,669 608,270 3,063,826 11,095,748
---------- --------- ------- -------- --------- -----------
Deductions from net
assets attributed to:
Benefits paid
to participants 2,236,466 2,236,466
Administrative expenses 234,402 1,945 236,347
---------- --------- ------- -------- --------- -----------
Total deductions 2,470,868 1,945 2,472,813
Net increase (decrease)
prior to interfund
transfers 2,777,753 1,234,417 938,669 608,270 3,063,836 8,622,935
---------- --------- ------- -------- --------- -----------
Interfund transfers
and allocations (2,993,442) 906,626 24,506 (145,495) 2,207,805
---------- --------- ------- -------- --------- -----------
Net increase(decrease) (215,689) 2,141,043 963,175 462,775 5,271,631 8,622,935
Net assets available
for benefits:
Beginning of year 96,464 19,471,131 5,644,346 5,987,369 1,788,270 32,987,580
---------- ---------- --------- --------- --------- -----------
End of year $ (119,225) 21,612,174 6,607,521 6,450,144 7,059,901 41,610,515
========== =========== ========== ========= ========= ==========
17
Schedule I
KEMET EMPLOYEES' SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
March 31, 1996
(c)
Description of investment
(a) (b) including maturity date,
Party- Identity of issue, rate of interest, (e)
in- borrower, lessor, collateral, par or (d) Current
interest or similar party maturity value Cost Value
* Wachovia Biltmore FDS Money Market Fund $ 2,750,262 2,750,262
* Wachovia Biltmore Balanced Fund 6,271,148 7,153,749
* Wachovia Biltmore Equity Index Fund 6,324,892 7,852,912
* KEMET Corp. Common Stock 10,766,403 12,230,917
* Wachovia GIC Fund 17,255,055 17,255,055
Metropolitan Life Investment Contract 869,851 869,850
----------- -----------
$ 44,237,611 48,112,745
=========== ============
* Party-in-interest
Note: Information in the above schedule was derived from schedules certified
by Wachovia.
See accompanying independent auditors' report.
18
Schedule II
KEMET EMPLOYEES' SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
March 31, 1996
(f) (h) (i)
(a) Expense (g) Current Value Net
Identity (b) (c) (d) (e) Incurred Cost of Asset on (Gain)
of Party Description Purchase Selling Lease with of Transaction or
Involved of Asset Price Price Rental Transaction Asset Date Loss
Series of transactions by security:
Wachovia Bank Biltmore FDS Fund $5,173,755 5,173,755 5,173,755
Wachovia Bank Biltmore Balanced Fund 2,486,795 2,486,795 2,486,795
Wachovia Bank Biltmore Equity Index Fund 2,625,021 - 2,625,021 2,625,021
KEMET Corporation Common stock 9,588,831 9,588,831 9,588,831
Wachovia Bank Biltmore FDS 6,027,590 6,027,590 6,027,590
Wachovia Bank Biltmore Balanced Fund 2,336,457 2,117,557 2,336,457 218,900
Wachovia Bank Biltmore EquityIndex Fund 2,329,110 1,917,762 2,329,110 411,348
KEMET Corporation Common stock 4,272,930 2,480,336 4,272,930 1,792,594
Note: Information in the above schedule was derived from schedules
certified by Wachovia Bank.
See accompanying independent auditors' report.