EXHIBIT 10.6
AMENDMENT #2
TO
AGREEMENT RE: CHANGE IN CONTROL
     THIS AMENDMENT #2 TO AGREEMENT RE: CHANGE IN CONTROL (this “Amendment #2)
is made and entered into as of the 21st day of February, 2008 (the “Effective
Date”) by and between JAMES R. TALEVICH, an individual (“Executive”), and I-FLOW
CORPORATION, a Delaware corporation (“Company”).
Background
     A. The Company and Executive previously entered into that certain Agreement
Re: Change in Control dated as of June 21, 2001, as subsequently amended by an
Amendment #1 to Agreement Re: Change in Control dated as of February 23, 2006
(collectively, the “Agreement”).
     B. The Internal Revenue Service issued final regulations interpreting the
rules and standards under Section 409A of the Internal Revenue Code on April 10,
2007 (the “Final 409A Regulations”).
     C. To comply with the Final 409A Regulations, the Company and Executive
wish to amend and modify certain provisions of the Agreement as provided herein,
effective as of the Effective Date, while leaving unchanged all other provisions
of the Agreement.
Agreement
     In consideration of the foregoing, and for other good and valuable
consideration the receipt of which is hereby acknowledged, Executive and the
Company hereby agree as follows:
          1. Qualifying Termination. Section 5(a) of the Agreement is hereby
amended and restated as follows:
(a) Executive voluntarily terminates his employment with the Company and its
affiliated companies. Executive, however, shall not be considered to have
voluntarily terminated his employment with the Company and its affiliated
companies if, following, or within ninety (90) days prior to, the Change in
Control, Executive’s base salary is reduced or adversely modified in any
material respect or Executive’s authority or duties are materially changed, and
subsequent to such reduction, modification or change Executive elects to
terminate his employment with the Company and its affiliated companies, after
having given the Company at least 30 days prior written notice of such
reduction, modification or change and a reasonable opportunity to cure the same
during such 30-day notice period. For such purposes, Executive’s authority or
duties shall conclusively be considered to have been “materially changed” if,
without Executive’s express and voluntary written consent, there is any
substantial diminution or adverse modification in Executive’s title, status,
overall position, responsibilities, reporting relationship, general working
environment (including without

 

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limitation secretarial and staff support, offices, and frequency and mode of
travel), or if, without Executive’s express and voluntary written consent,
Executive’s job location is transferred to a site more than thirty (30) miles
away from his place of employment ninety (90) days prior to the Change in
Control. In this regard as well, Executive’s authority and duties shall
conclusively be considered to have been “materially changed” if, without
Executive’s express and voluntary written consent, Executive no longer holds the
same title or no longer has the same authority and responsibilities or no longer
has the same reporting responsibilities, in each case with respect and as to a
publicly held parent company which is not controlled by another entity or
person.
          2. Compliance with Section 409A. Section 20 of the Agreement is hereby
amended and restated as follows:
20. Compliance with Section 409A. Notwithstanding any provision of this
Agreement to the contrary, if, at the time of Executive’s termination of
employment with the Company, Executive is a “specified employee” as defined in
Section 409A of the Code, and one or more of the payments or benefits received
or to be received by Executive pursuant to this Agreement would become subject
to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes
or penalties imposed under Section 409A of the Code (“Section 409A Taxes”) if
provided at the time otherwise required under this Agreement, no such payment or
benefit will be provided under this Agreement until the earliest of (a) the date
which is six (6) months after Executive’s “separation from service” or (b) the
date of Executive’s death, or such shorter period that, as determined by the
Company, is sufficient to avoid the imposition of Section 409A Taxes. The
provisions of this Section 20 shall only apply to the minimum extent required to
avoid Executive’s incurrence of any Section 409A Taxes. In addition, if any
provision of this Agreement would cause Executive to incur any penalty tax or
interest under Section 409A of the Code or any regulations or Treasury guidance
promulgated thereunder, the Company may reform such provision to maintain to the
maximum extent practicable the original intent of the applicable provision
without violating the provisions of Section 409A of the Code.
          3.No Other Changes. Except as otherwise set forth herein, all terms
and provisions of the Agreement remain unchanged and in full force and effect.

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     IN WITNESS WHEREOF, the parties hereto have entered into this Amendment #2
as of the Effective Date.

                      I-FLOW CORPORATION       JAMES R. TALEVICH    
 
                   
By:
  /s/ Donald M. Earhart
 
Donald M. Earhart
Chairman, President and
Chief Executive Officer       By:   /s/ James R. Talevich
 
James R. Talevich    

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