Exhibit 10.2

 

March 6, 2008

 

Linda J. Pahl

 

Dear Linda:

 

I would like to extend to you the company’s appreciation for the extra efforts
you are making in connection with the company’s reconstruction and upcoming
restatement of financial statements, while the company manages through its
current transition.   While I cannot foresee how long this situation will last,
our current expectation is that we may ask you to provide these extra efforts
until at least June 2, 2008.

 

As a consequence of these additional responsibilities, the company would like to
extend to you the following additional incentives:

 

1.               Bonus:  You will receive a bonus payment of $100,000, if you
are still an employee in good standing with IR on June 2, 2008, or if your
employment is terminated by the company for any reason other than cause prior to
June 2, 2008, in each case conditioned upon the company completing its pending
financial restatement by that time.

 

2.               Separation Payment:  If your employment is terminated following
June 2, 2008 for any reason other than by the company for cause, then you will
be entitled to an enhanced severance payment equal to one year’s base pay, in
lieu of any other severance benefit from the company.

 

3.               Quarterly Incentive Bonus:  Your quarterly incentive bonus of
$25,000 shall be increased to $35,000 effective February 1, 2008.  The quarterly
incentive bonus shall be pro-rated for any partial quarter served as the
company’s acting chief financial officer.

 

4.               Change in Chief Financial Officer Position:  If prior to your
employment termination, the company shall appoint another person to serve as the
company’s chief financial officer, the company would appoint you to the position
of Senior Vice President — Finance in lieu of any return to your position in
effect prior to your service as the company’s acting chief financial officer
during the transition period, and in lieu of any other position within the
company’s finance department.

 

5.               Following your service as the company’s acting chief financial
officer, your service, at your option would become that of a part-time employee
for a minimum of ninety days to assist in any transition, with enough part-time
service to ensure coverage under the company’s health and dental benefit
programs during such period.  Following such ninety day period, either party
could terminate such service upon 30 days written notice.  Compensation as a
part time employee would be established at the beginning of the service period
by good faith agreement of the parties to approximate a reduction in pay and
regular bonus commensurate with the reduction in time and duties for the
part-time service.

 

If you become entitled to a payment under Section 1 or 2, the payment will be
made to you on (or within ten (10) business days after) the date of your
“separation from service” with the company (within the meaning of Treasury
Regulation Section 1.409A-1(h)(1), without regard to the optional alternative
definitions available thereunder).  However, if you are a “specified employee”
of the company for purposes of Section 409A of the Internal Revenue Code, the
amount otherwise payable to you pursuant to these Sections in connection with
your separation from service shall not be paid until the date that is six months
and one day after the date you have a separation from service with the company
(or, if earlier, the date of your death), and shall be paid (without interest)
on or within ten (10) business days after that date, to the extent such
six-month delay is required to avoid the imputation of any tax, penalty, or
interest under Section 409A of the Code.

 

As always, your employment is at will and can be terminated by either party at
any time, for any reason, with or without cause.  International Rectifier
reserves the right to change the terms and conditions, including job titles and
reporting responsibilities of anyone’s employment at any time.  Any compensation
under this letter would be subject to normal withholding and taxes.

 

Separately, you and the company have entered into a Severance Agreement, dated
as of October 29, 2007 (“Severance Agreement”), pursuant to which you would be
provided certain benefits in the event of a termination of your employment in
the event of employment termination related to a change in control on certain
terms and conditions as set forth in the Severance Agreement.

 

The parties agree that this letter does not  supersede the terms and benefits
set forth in the Severance Agreement, except as follows: (i) the Severance
Agreement is amended effective as of March 1, 2008 to provide that your changes
in position set forth in Sections 4 and 5 above do not and shall not constitute
a “Change in Control” under Section 1(e) of the Severance Agreement nor shall
they constitute “Good Reason” under Section 1(m) of the Severance Agreement,
(ii) you waive any and all rights you may have otherwise had to benefits under
the Severance Agreement as a result of the change in your title/position as set
forth in Section 4 and 5, and (ii) under no circumstances shall you be entitled
to receive benefits under this letter and the Severance Agreement in connection
with any termination of your employment, with the effect that  you will only be
able to claim benefits under the terms of the Severance Agreement and not this
letter for events that may give rise to benefits under both this letter and the
Severance Agreement.

 

The Severance Agreement is amended to the extent inconsistent herewith.

 

Please let me know if you have any questions.

 

Sincerely,

 

Donald R. Dancer

Executive Vice President & Chief Administrative Officer

 

Accepted:

 

 

LINDA J. PAHL

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