Exhibit 10.1


 


February 17,
2009


 


Donald
R. Dancer


 


Re:                             Employment Agreement Amendment


 


Dear
Don:


 


Reference is made to that
certain Compensation Agreement between you and International Rectifier
Corporation (the “Company”), dated as of October 29, 2007 (the “Compensation
Agreement”), that certain Severance Agreement between you and the Company dated
as of October 29, 2007 (the “Separation Agreement”), and that certain
letter agreement between you and the Company dated as of March 6, 2008, as
modified by amendment dated December 29, 2008 (the “Letter Agreement,”
with the Compensation Agreement and the Separation Agreement collectively
referred to herein as the “Prior Agreements”). 
The purpose of this agreement is to modify the terms of your employment
with the Company and to terminate the Separation Agreement effective as of March 2,
2009, as follows:


 


(1) 
Change in Title/Position.  Effective March 2, 2009 (the “Effective
Date”), you will no longer serve the Company in the capacity of Executive Vice
President or Chief Administrative Officer, or in any other full-time employment
capacity.  From and after the Effective
Date, your employment shall be on a part-time (namely, half-time) basis at a
fixed annual base salary of $225,000, with a title of ‘Senior Advisor,’
reporting to the Company’s General Counsel. 
You will not be entitled to bonus compensation or the grant of
additional equity awards, but shall be employed on a half-time basis of no less
than twenty hours per week and otherwise be entitled to all other benefits
generally available to part-time employees of the Company working between
twenty and twenty-nine hours per week (which shall include, without limitation,
(i) the continuation of health benefits on the same terms as available to
employees of the Company and (ii) the continued vesting of any outstanding
stock options subject to the terms of applicable plan documents and agreements
while you remain so employed).  Your
employment shall be on an at-will basis and may be terminated by either party
at any time for any reason or no reason, with or without cause on 30 days’
notice.


 


(2) 
Retention Payments.  As described in
paragraph 3 of your Letter Agreement, if you are employed with the Company on March 1,
2009, you will receive a one-time cash retention payment of $400,000 payable
within ten (10) business days after March 1, 2009.  Notwithstanding the foregoing, as described
in the Letter Agreement, if your employment is terminated by the Company
without Cause (as defined in the Separation Agreement) before the retention
payment become payable, you will receive a cash lump sum payment equal to the
unpaid portion (payable within ten (10) business days after the date of
your termination of employment).


 


(3) 
Special Severance Payment.  If your employment by the Company is
terminated for any reason other than by the Company with Cause, you will
receive the following payment and benefits as described more fully in paragraph
4 of your Letter Agreement,:


 


(i) a
cash amount equal to the sum of one times your annual base salary as in effect
on December 31, 2008 and your Target Bonus in effect then (namely, 0.75
times such annual base salary);


 


(ii) the
Employee Benefits described in Section 2(c) of the Separation
Agreement (namely at the same expense to Employee as before his date of
termination subject to immediate cessation (other than as to any pre-existing
condition not covered by the new benefits coverage) if Employee is offered
employee benefits coverage in connection with new employment), provided, however
that your Employee Benefits Continuation Period shall be 18 months from the
date of your “separation from service” (as defined below);  and


 


(iii) with
respect to any stock options that are vested as of the date of your employment
termination, you will have one year following your employment termination date
to exercise such vested options; provided, however, your vested stock options
shall be subject to all other terms and conditions of the plan and other
documents under which the options were originally granted, including, without
limitation, early termination upon the first to occur of (x) the maximum
year term of such options upon grant or (y) a change of control of the
Company, in each case on the terms provided for under the applicable option
plan and option agreement.


 


In
addition, the Company will provide you with the following benefits under the
conditions of this Section 3:


 

















 


(i) job
outplacement services for you (at Company expense and not to exceed $50,000 in
the aggregate) until the earlier of (a) six months after your employment
termination date or (b) the date when you accept an offer of new
employment.  The Company shall select the
outplacement service provider and provide any compensation benefit hereunder
directly with and to the service provider; and


 


(ii) 
upon your employment termination date, all of your then outstanding stock
options shall become fully vested.


 


For
purposes of this paragraph, the terms Target Bonus, Cause, Qualifying
Termination, Employee Benefits and Employee Benefit Continuation Period have
the meaning set forth in the Separation Agreement. Notwithstanding anything to
the contrary, as set forth in the amendment dated December 29, 2008 to
your Letter Agreement, you will only be entitled to receive the benefits
described in this Section 3 if you execute and deliver (and do not revoke)
a release agreement in the form set forth in paragraph 2(p) of your
Severance Agreement promptly but not later than fifty (50) days following your
termination.  Except to the extent the
specified employee provisions in Section 5 of your Letter Agreement apply,
any special severance payment shall be made on the sixtieth (60th) day following your separation from service.


 


(4) 
Section 409A/Taxes.  If you become entitled to a payment under
paragraph 3, above, upon your termination of employment, the payment will be
made to you on the sixtieth (60th)
business day following 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 of
1986, as amended (including the Treasury Regulations and other published
guidance related thereto) (“Section 409A”), the amount otherwise payable
to you pursuant to this paragraph 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.  Section 2(f) and 2(g) of the
Separation Agreement are incorporated herein by reference and such provisions
shall be applicable to the payments and benefits provided for under this
Agreement.


 


(5) Governing Law; Arbitration. The
terms of Section 7 of the Separation Agreement are incorporated herein by
reference and shall apply to this Agreement.


 


(6) 
Prior Agreements.  Except as expressly
set forth herein, you expressly waive any and all rights you may have otherwise
had to benefits under the Compensation Agreement, the Separation Agreement and
the Letter Agreement, as a result of the change in your employment status as
set forth herein and the Prior Agreements are hereby terminated as of the
Effective Date except to the extent of provisions incorporated by reference
herein, and you expressly acknowledge and agree that the benefits and promises
set forth herein constitute adequate consideration for your agreement to waive
any such rights thereunder.


 


If
this letter agreement accurately sets forth our agreement with respect to the
foregoing matters, please indicate your acceptance by signing this letter below
and returning it to me.  A duplicate copy
of this letter agreement is included for your records.


 


	
   

  	
  International Rectifier
  Corporation

  
	
   

  
	
   

  	
  By:

  	
   

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Donald R. Dancer

  	
   

  
	
  Date: