Exhibit 10.7

 

INTERNATIONAL RECTIFIER CORPORATION

2000 INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

Participant Name:

 

Oleg Khaykin

 

 

 

Number of Stock Units:

 

250,000(1)

 

 

 

Vesting Schedule:

 

One-fifth of the Stock Units subject to the Award will vest on each of the first
five anniversary dates of Award Date(1)

 

 

 

Award Date:

 

August 6, 2008

 

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(1) All share and unit numbers are subject to adjustment under the terms of the
Plan.  The Stock Units are subject to acceleration and termination prior to
vesting as provided herein.

 

THIS AGREEMENT is among INTERNATIONAL RECTIFIER CORPORATION, a Delaware
corporation (the “Corporation”), and the employee named above (the
“Participant”), an employee of the Corporation or one of its subsidiaries, and
is delivered under the International Rectifier Corporation 2000 Incentive Plan
(Amended and Restated as of November 24, 2004) (the “Plan”).

 

W I T N E S S E T H

 

WHEREAS, the Compensation and Stock Option Committee of the Board of Directors
has approved, and the Corporation has granted, effective as of the Award Date,
to the Participant with reference to services rendered to the Company, a
restricted stock unit award under the Plan (the “Stock Unit Award” or “Award”),
upon the terms and conditions set forth herein and in the Plan.

 

NOW THEREFORE, in consideration of services rendered by the Participant and the
mutual promises made herein and the mutual benefits to be derived therefrom, the
parties agree as follows:

 

1.                                      Defined Terms.  Capitalized terms used
herein and not otherwise defined herein shall have the meaning assigned to such
terms in the Plan.  For purposes of this Agreement, a “Stock Unit” means a
non-voting unit of measurement which is deemed for bookkeeping purposes to be
equivalent to one outstanding share of Common Stock of the Corporation.

 

2.                                      Grant.  Subject to the terms of this
Agreement and the Plan, the Corporation grants to the Participant a Stock Unit
Award with respect to an aggregate number of Stock Units set forth above.  The
Corporation acknowledges that the consideration for the shares payable with
respect to the Stock Units on the terms set forth in this Agreement shall be the
services rendered to the Company by the Participant prior to the applicable
vesting date, the fair value of which is not less than the par value per share
of the Corporation’s Common Stock.

 

3.                                      Vesting.  The Stock Units subject to the
Award shall vest in installments as set forth in the “Vesting Schedule” set
forth above, subject to earlier termination or acceleration and subject to
adjustment as provided herein.

 

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4.                                      Continuance of Employment Required. 
Except as otherwise provided herein, the vesting schedule applicable to the
Stock Units requires continued service through each applicable vesting date as a
condition to the vesting of the applicable installment of the award and the
rights and benefits under this Agreement.  Service for only a portion of the
vesting period, even if a substantial portion, will not entitle the Participant
to any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or service.

 

5.                                      Dividend and Voting Rights.

 

(a)                                  Limitations on Rights Associated with
Units.  The Participant shall have no rights as a stockholder of the
Corporation, no dividend rights (except as expressly provided in
Section 5(b) hereof with respect to Dividend Equivalents) and no voting rights
with respect to the Stock Units or any shares of Common Stock issuable in
respect of such Stock Units, until shares of Common Stock are actually issued to
and held of record by the Participant.  No adjustments will be made for
dividends or other rights of a holder for which the record date is prior to the
date of issuance of the stock certificate evidencing the shares.

 

(b)                                  Dividend Equivalent Distributions.  No
later than sixty (60) days following each date that the Corporation pays an
ordinary cash dividend on its outstanding Common Stock (if any ordinary cash
dividends are paid), for which the related record date occurs after the Award
Date and prior to the third anniversary of the Award Date, the Corporation shall
make a cash payment to the Participant equal to, subject to the tax withholding
provisions of Section 11 hereof and Section 5.5 of the Plan, the amount of the
ordinary cash dividend paid by the Corporation on a single share of Common Stock
multiplied by the number of Stock Units subject to this Agreement outstanding
and unpaid as of such record date (“Dividend Equivalents”).

 

6.                                      Restrictions on Transfer.  Prior to the
time the Stock Units are vested and paid, neither the Stock Units comprising the
Award nor any other rights of the Participant under this Agreement or the Plan
may be transferred, except as expressly provided in Section 1.9 of the Plan.  No
specific exception to the general transfer prohibitions set forth in Section 1.9
of the Plan has been authorized by the Committee.

 

7.                                      Timing and Manner of Payment with
Respect to Stock Units. Stock Units subject to this Agreement will be paid in an
equivalent number of shares of Common Stock within 60 days after the vesting of
such Stock Units in accordance with the terms hereof, subject to adjustment as
contemplated by Section 9 and subject to earlier payment pursuant to
Section 10.  The Participant or other person entitled under the Plan to receive
the shares shall deliver to the Corporation any representations or other
documents or assurances required pursuant to Section 5.4 of the Plan.

 

8.                                      Effect of Termination of Employment or
Change in Control.

 

(a)                                  Forfeiture after Certain Events.  The
Participant’s Stock Units shall be extinguished to the extent such Stock Units
have not become vested upon the date the Participant is no longer employed by
the Corporation or one of its Subsidiaries, regardless of the reason for such
termination of employment, whether with or without cause, voluntarily or
involuntarily; provided, however, that if the Participant incurs a permanent and
total disability or dies while employed by the Corporation or a Subsidiary, or
retires with the consent of the Corporation or a Subsidiary from employment by
the Corporation or a Subsidiary, then if the Stock Units subject to the Award
are not then otherwise fully vested the next scheduled vesting installment of
such Stock Units shall become vested upon such termination of employment.  If
the Participant is

 

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employed by an entity that is a Subsidiary and such entity ceases to be a
Subsidiary, such event shall be deemed to be a termination of employment of the
Participant unless the Participant otherwise continues following such event to
be employed by the Corporation or another Subsidiary that continues as such
following the event.  Absence from work caused by military service, authorized
sick leave or other leave approved in writing by the Committee shall not be
considered a termination of employment by the Corporation or a Subsidiary for
purposes of this Section 8.

 

(b)                                  Termination of Stock Units.  If any Stock
Units are extinguished hereunder, such unvested, extinguished Stock Units,
without payment of any consideration by the Corporation or any Subsidiary, shall
automatically terminate and be cancelled without any other action by the
Participant, or the Participant’s beneficiary, as the case may be.

 

(c)                                  Acceleration Upon Change in Control.  Upon
the occurrence of (or, as the circumstances may require, immediately prior to) a
Change in Control (as defined below), then any portion of the Stock Units
subject to the Award that have not previously vested or terminated shall
thereupon vest, unless prior to the Change in Control the Committee determines
that benefits under this or other awards will not accelerate upon occurrence of
the Change in Control or determines that only certain or limited benefits under
some or all awards will be accelerated and the extent to which they will be
accelerated, and/or establishes a different time in respect of the Change in
Control for such acceleration.  The Committee may accord the Participant a right
to refuse any acceleration pursuant to this Agreement, in such circumstances as
the Committee may approve.  For purposes of this Agreement, “Change in Control”
means any of the following:  (a) approval by the stockholders of the Corporation
of the dissolution or liquidation of the Corporation; (b) approval by the
stockholders of the Corporation of an agreement to merge or consolidate, or
otherwise reorganize, with or into one or more entities that are not
majority-owned subsidiaries of the Corporation, as a result of which 50% or less
of the outstanding voting securities of the surviving or resulting entity are,
or are to be, owned by former stockholders of the Corporation; (c) approval by
the stockholders of the Corporation of the sale or transfer of substantially all
of the Corporation’s business and/or assets to a person or entity that is not a
Subsidiary of the Corporation; or (d) the occurrence of any of the following:
(i) any “person,” alone or together with all “affiliates” and “associates” of
such person, without the prior approval of the Board, becomes the “beneficial
owner” of more than 50% of the outstanding voting securities of the Corporation
(the terms “person,” “affiliates,” “associates” and “beneficial owner” are used
as such terms are used in the Securities Exchange Act of 1934 and the General
Rules and Regulations thereunder); provided, however, that “Change in Control”
shall not be deemed to have occurred if such “person” is the Corporation, any
Subsidiary or any employee benefit plan or employee stock plan of the
Corporation or of any Subsidiary, or any trust or other entity organized,
established or holding shares of such voting securities by, for, or pursuant to
the terms of any such plan, or any member of or entity or group affiliated with
the Lidow family; or (ii) individuals who at the beginning of any period of two
consecutive calendar years constitute a majority of the Board cease for any
reason, during such period, to constitute at least a majority thereof, unless
the election, or the nomination for election by the Corporation’s stockholders,
of each new Board member was approved by a vote of at least two-thirds of the
Board members then still in office who were Board members at the beginning of
such period.

 

9.                                      Adjustments in Case of Changes in Common
Stock.  The Committee may adjust the number of Stock Units subject to this
Agreement as provided under Section 5.2 of the Plan.  Upon the occurrence of an
Event (as defined below), the Committee shall make adjustments as it deems
appropriate in the number and kind of securities or other consideration that may
become payable with respect to the Award.  If any adjustment shall be made under
Section 5.2 of the Plan or an Event shall occur and the Stock Unit Award has not
been fully

 

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vested and paid upon such Event or prior thereto, the Stock Unit Award may
become payable in securities or other consideration (the “Restricted Property”)
rather than in the Common Stock otherwise payable in respect of the Stock Unit
Award.  Such Restricted Property shall become payable at the times and in such
proportions set forth in Section 7 above or such earlier time as the Committee
may authorize pursuant to Section 10 below.  Notwithstanding the foregoing, to
the extent that the Restricted Property includes any cash, the commitment
hereunder shall become an unsecured promise to pay an amount equal to such cash
(with earnings attributable thereto as if such amount had been invested,
pursuant to policies established by the Committee, in interest bearing, FDIC
insured (subject to applicable insurance limits) deposits of a depository
institution selected by the Committee) at such times and in such proportions as
the Stock Unit Award becomes payable in accordance with Section 7 above. 
Notwithstanding the foregoing, the Stock Unit Award and any Common Stock or
other securities or property payable in respect of the Stock Unit Award shall
continue to be subject to proportionate and equitable adjustments (if any) under
Section 5.2 of the Plan consistent with the effect of such events on
stockholders generally, as the Committee determines to be necessary or
appropriate, and in the number, kind and/or character of shares of Common Stock
or other securities, property and/or rights payable in respect of Stock Units
granted under the Plan.  All rights of the Participant hereunder are subject to
those adjustments.  For purposes of this Agreement, “Event” means a liquidation,
dissolution, Change in Control, merger, consolidation, or other combination or
reorganization, or a recapitalization, reclassification, extraordinary dividend
or other distribution (including a split up or a spin off of the Corporation or
any significant Subsidiary), or a sale or other distribution of substantially
all the assets of the Corporation as an entirety.

 

10.                               Possible Early Settlement of Award.  The
Committee retains the right to accelerate the vesting and payment date of the
outstanding and previously unvested Stock Units subject to the Award in
connection with an Event, a Change in Control, or the termination of the
Participant’s employment with the Corporation or one of its Subsidiaries.  This
Section 10 is not intended to prevent vesting of the Award pursuant to
Section 8(c) above or an adjustment to the Award as provided in the Plan or
Section 9 above.

 

11.                               Tax Withholding.  Upon payment of Dividend
Equivalents and/or the distribution of shares of Common Stock in respect of the
Stock Units, the entity within the Company last employing the Participant shall
have the right at its option to (a) require the Participant (or the
Participant’s beneficiary, as the case may be) to pay or provide for payment in
cash of the amount of any taxes which the Company may be required to withhold
with respect to such payment or distribution or (b) deduct from any amount
payable to the Participant the amount of any taxes which the Company may be
required to withhold with respect to such payment or distribution.  In any case
where a tax is required to be withheld in connection with the delivery of shares
of Common Stock under this Agreement, the Committee may, but is not required to,
reduce the number of shares to be delivered by (or otherwise reacquire) the
appropriate number of shares valued at their then Fair Market Value, to satisfy
such withholding obligation.

 

12.                               Notices.  Any notice to be given under the
terms of this Agreement shall be in writing and addressed to the Corporation at
its principal office located at 233 Kansas Street, El Segundo, California 90245,
to the attention of the Assistant Secretary and to the Participant at the
address given beneath the Participant’s signature hereto, or at such other
address as either party may hereafter designate in writing to the other.

 

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13.                               Plan and Program.  The Award and all rights of
the Participant with respect thereto are subject to, and the Participant agrees
to be bound by, all of the terms and conditions of the provisions of the Plan,
incorporated herein by reference, to the extent such provisions are applicable
to Awards granted to employees.  The Participant acknowledges receipt of a copy
of the Plan, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof.  Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the Plan that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in the Participant unless such rights are expressly set forth herein or are
otherwise in the sole discretion of the Committee so conferred by appropriate
action of the Committee under the Plan after the date hereof.  If there is any
conflict or inconsistency between the terms and conditions of this Agreement and
of the Plan, the terms and conditions of the Plan shall govern.  Notwithstanding
the foregoing, this document is subject to and does not supersede any rights the
Participant may have to accelerated vesting, exercise rights and other rights
upon the termination of this employment as set forth in this employment
agreement dated February 6, 2008, including without limitation Section 5
thereof, which terms supersede this Agreement to the extent in conflict thereof.

 

14.                               No Service Commitment by Company.  Nothing
contained in this Agreement or the Plan constitutes an employment commitment by
the Corporation or any of its Subsidiaries, affects the Participant’s status as
an employee at-will who is subject to termination without cause, confers upon
the Participant any right to remain employed by the Corporation or any
Subsidiary, interferes in any way with the right of the Corporation or any
Subsidiary at any time to terminate such employment, or affects the right of the
Corporation or any Subsidiary to increase or decrease the Participant’s other
compensation.

 

15.                               Limitation on Participant’s Rights. 
Participation in the Plan confers no rights or interests other than as herein
provided.  This Agreement creates only a contractual obligation on the part of
the Corporation as to amounts payable and shall not be construed as creating a
trust.  The Plan, in and of itself, has no assets.  The Participant shall have
only the rights of a general unsecured creditor of the Corporation (or
applicable Subsidiary) with respect to amounts credited and benefits payable, if
any, with respect to the Stock Units, and rights no greater than the right to
receive the Common Stock (subject to adjustments) as a general unsecured
creditor with respect to Stock Units, as and when payable hereunder.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.  By the Participant’s execution of this Agreement, the
Participant agrees to the terms and conditions hereof and of the Plan.

 

INTERNATIONAL RECTIFIER

 

PARTICIPANT

CORPORATION, a Delaware corporation

 

 

 

 

 

By:

 

 

 

 

 

Signature

Print Name:

 

 

 

 

 

Address

Its:

 

 

 

 

 

City, State, Zip Code

 

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