Document:

Exhibit
10.5.3

 

[10/22/04]

 

AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT

 

AMENDMENT
NO. 4 TO LOAN AND SECURITY AGREEMENT (“Amendment No. 4”), dated as of October 25,
2004, by and among LOUD Technologies Inc., a Washington corporation formerly
known as Mackie Designs Inc. (“US Borrower”), LOUD Technologies (Europe) Plc.
formerly known as Mackie Designs UK Plc, a company incorporated under the laws
of England and Wales with registration number 02506901 (“UK Borrower”, and
together with US Borrower, each individually a “Borrower” and collectively, “Borrowers”),
Mackie Designs Inc., a Washington corporation, formerly known as Mackie Designs
Manufacturing, Inc. (“Mackie”), SIA Software Company, Inc., a New York
corporation (“SIA”) Mackie Investment Co., a Washington corporation (“Mackie
Investment”, and together with Mackie and SIA, each individually a “Guarantor”
and collectively, “Guarantors”), Congress Financial Corporation (Florida), in
its capacity as agent pursuant to the Loan Agreement (as hereinafter defined)
acting for and on behalf of the parties thereto as lenders (in such capacity, “Agent”),
and the parties to the Loan Agreement as lenders (individually, each a “Lender”
and collectively, “Lenders”).

 

W I T N E S S E T H :

 

WHEREAS,
Agent, Lenders, Borrowers and Guarantors have entered into financing
arrangements pursuant to which Agent and Lenders have made and may make loans
and advances to Borrowers as set forth in the Loan and Security Agreement,
dated March 31, 2003, by and among Agent, Lenders, Borrowers and Guarantors, as
amended by Amendment No. 1 to Loan and Security Agreement dated as of June
30,2003, Amendment No. 2 and Waiver to Loan and Security Agreement dated April
16,2004 and Amendment No. 3 to Loan and Security Agreement dated August 3,2004
(as the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, the “Loan Agreement”) and other
agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto (all of
the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, being
collectively referred to herein as the “Financing Agreements”);

 

WHEREAS,
Agent, Lender, Borrowers and Guarantors desire to amend the Loan Agreement to
modify the EBITDA covenant;

 

WHEREAS,
by this Amendment No. 4, Agent, Lenders, Borrowers and Guarantors desire and
intend to evidence such amendment;

 

NOW
THEREFORE, in consideration of the foregoing and the mutual agreements and
covenants contained herein, the parties hereto agree as follows:

 

 

 

1.             Definitions. Capitalized
terms used herein which are not otherwise defined herein shall have the
respective meanings ascribed thereto in the Loan Agreement.

 

2.             EBITDA. Section 9.17 of the
Loan Agreement is hereby amended by deleting each reference to “September 30, 2004”
and replacing it with “December 31, 2004”.

 

3.             Additional Representations, Warranties
and Covenants. Borrowers represent, warrant and covenant with and to Agent
and Lenders as follows, which
representations, warranties and covenants, are continuing and shall survive the
execution and delivery hereof, and the truth and accuracy of, or compliance with each, together
with the representations, warranties and covenants in the other Financing
Agreements, being a continuing condition of the making of Loans by Lenders (or
Agent on behalf of Lenders) to Borrowers:

 

(a)           no Default or Event of Default has
occurred and is continuing as of the date of this Amendment No. 4; and

 

(b)           this Amendment No. 4 and all
agreements, documents and instruments executed and/or delivered in connection
herewith have been duly executed and delivered by Borrowers and Guarantors and
the agreements and obligations of Borrowers and Guarantors contained herein and
therein constitute legal, valid and binding obligations of Borrowers and
Guarantors enforceable against Borrowers and Guarantors in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or similar laws limiting creditors rights
generally and by general equitable principles.

 

4.             Conditions Precedent for
Amendment. The amendments contained herein shall be effective upon Agent’s
receipt this Amendment No. 4, duly authorized, executed and delivered by
Borrowers, Guarantors and Required Lenders.

 

5.             Effect of this Amendment.
Except as modified pursuant hereto, no other changes or modifications to the
Financing Agreements are intended or implied, and in all other respects the
Financing Agreements are hereby specifically ratified, restated and confirmed
by all parties hereto as of the effective date of this Amendment No. 4. To the
extent of conflict between the terms of this Amendment No. 4 and the other
Financing Agreements, the terms of this Amendment No. 4 shall control.

 

6.             Further Assurances. Borrowers
and Guarantors shall execute and deliver such additional documents and take
such additional action as may be reasonably necessary or desirable to
effectuate the provisions and purposes of this Amendment No. 4.

 

7.             Governing Law. The validity, interpretation and enforcement of this Amendment
No. 4 and any dispute arising out of the relationship between the parties
hereto whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of Florida (without giving effect to principles of
conflicts of laws).

 

2

 

8.             Binding Effect. This
Amendment No. 4 shall be binding upon and inure to the benefit of each of the
parties hereto and their respective successors and assigns.

 

9              Headings. The headings listed herein are for convenience only and do not
constitute matters to be construed in interpreting this Amendment No. 4.

 

10.           Counterparts. This Amendment
No. 4 may be executed in any number of counterparts, but all of such
counterparts shall together constitute but one and the same agreement. In
making proof of this Amendment No. 4, it shall not be necessary to produce or
account for more than one counterpart thereof signed by each of the parties
hereto. This Amendment No. 4 may be executed and delivered by telecopier with
the same force and effect as if
it were a manually executed and delivered counterpart.

 

3

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to be duly
executed and delivered by their authorized officers as of the day and year
first above written.

 

	
   

  	
  BORROWERS

  
	
   

  	
   

  
	
   

  	
  LOUD TECHNOLOGIES INC.,
  formerly known

  as Mackie Designs Inc.

  
	
   

  	
   

  
	
  `

  	
  By:

  	
  /s/ Timothy
  P. O’Neil

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
  LOUD TECHNOLOGIES (EUROPE)
  PLC.,

  formerly know as Mackie Designs UK Plc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy
  P. O’Neil

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
  `

  	
   

  
	
   

  	
  By:

  	
  /s/ James T.
  Engen

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
  MACKIE DESIGNS INC.,
  formerly known as

  Mackie Designs Manufacturing, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy
  P. O’Neil

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SIA SOFTWARE COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy
  P. O’Neil

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
					

 

 

	
   

  	
  MACKIE INVESTMENT CO.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy
  P. O’Neil

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT

  
	
   

  	
   

  
	
   

  	
  CONGRESS FINANCIAL
  CORPORATION

  (FLORIDA) , as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin J. Coloson

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  FIRST VICE
  PRESIDENT

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER

  
	
   

  	
   

  
	
   

  	
  CONGRESS FINANCIAL
  CORPORATION

  (FLORIDA)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin
  J. Coloson

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  FIRST VICE
  PRESIDENTExhibit 10.1

 

International Rectifier Corporation

Deferred
Compensation Plan

Master Plan
Document

 

 

Effective July 5, 2004

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE 1

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  SELECTION, ENROLLMENT, ELIGIBILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Selection by Committee

  	
   

  
	
  2.2

  	
  Enrollment
  and Eligibility Requirements; Commencement of Participation

  	
   

  
	
  2.3

  	
  Termination
  of a Participant’s Eligibility

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  DEFERRAL COMMITMENTS, COMPANY CONTRIBUTION
  AMOUNTS, VESTING, CREDITING, TAXES

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Minimum Deferrals

  	
   

  
	
  3.2

  	
  Maximum Deferral

  	
   

  
	
  3.3

  	
  Election to
  Defer; Effect of Election Form

  	
   

  
	
  3.4

  	
  Withholding
  and Crediting of Annual Deferral Amounts

  	
   

  
	
  3.5

  	
  Company Contribution Amount

  	
   

  
	
  3.6

  	
  Crediting
  of Amounts after Benefit Distribution

  	
   

  
	
  3.7

  	
  Vesting

  	
   

  
	
  3.8

  	
  Crediting/Debiting
  of Account Balances

  	
   

  
	
  3.9

  	
  FICA and Other Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  SCHEDULED DISTRIBUTION, UNFORESEEABLE
  FINANCIAL EMERGENCIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
  Scheduled Distribution

  	
   

  
	
  4.2

  	
  Other
  Benefits Take Precedence Over Scheduled Distributions

  	
   

  
	
  4.3

  	
  Withdrawal
  Payout/Suspensions for Unforeseeable Financial Emergencies

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  CHANGE IN CONTROL TERMINATION BENEFIT

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Change in Control
  Termination Benefit

  	
   

  
	
  5.2

  	
  Payment
  of Change in Control Termination Benefit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  RETIREMENT BENEFIT

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Retirement Benefit

  	
   

  
	
  6.2

  	
  Payment of Retirement Benefit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  TERMINATION BENEFIT

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Termination Benefit

  	
   

  
	
  7.2

  	
  Payment of Termination
  Benefit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  SHORT-TERM DISABILITY WAIVER, DISABILITY
  BENEFIT

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Short-Term Disability
  Waiver

  	
   

  
	
  8.2

  	
  Disability Benefit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  DEATH BENEFIT

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Death Benefit

  	
   

  
	
  9.2

  	
  Payment of Death Benefit

  	
   

  

 

i

 

	
  ARTICLE 10

  	
  BENEFICIARIES

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Beneficiary

  	
   

  
	
  10.2

  	
  Beneficiary Designation;
  Change; Spousal Consent

  	
   

  
	
  10.3

  	
  Acknowledgment

  	
   

  
	
  10.4

  	
  No Beneficiary Designation

  	
   

  
	
  10.5

  	
  Doubt as to Beneficiary

  	
   

  
	
  10.6

  	
  Discharge of Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  LEAVE OF ABSENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Paid Leave of Absence

  	
   

  
	
  11.2

  	
  Unpaid Leave of Absence

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  TERMINATION OF THE PLAN, AMENDMENT OR
  MODIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Termination of this Plan

  	
   

  
	
  12.2

  	
  Amendment

  	
   

  
	
  12.3

  	
  Plan Agreement

  	
   

  
	
  12.4

  	
  Effect of Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  ADMINISTRATION

  	
   

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Committee Duties

  	
   

  
	
  13.2

  	
  Committee Authority

  	
   

  
	
  13.3

  	
  Agents

  	
   

  
	
  13.4

  	
  Binding Effect of Decisions

  	
   

  
	
  13.5

  	
  Indemnity of Committee

  	
   

  
	
  13.6

  	
  Employer Information

  	
   

  
	
  13.7

  	
  Statements

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
  OTHER BENEFITS AND AGREEMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Coordination with
  Other Benefits

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
  CLAIMS PROCEDURES

  	
   

  
	
   

  	
   

  	
   

  
	
  15.1

  	
  Presentation of Claim

  	
   

  
	
  15.2

  	
  Notification of Decision

  	
   

  
	
  15.3

  	
  Review of a Denied Claim

  	
   

  
	
  15.4

  	
  Decision on Review

  	
   

  
	
  15.5

  	
  Pre and
  Post-Change in Control Procedures

  	
   

  
	
  15.6

  	
  Arbitration of Claims

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
  TRUST

  	
   

  
	
   

  	
   

  	
   

  
	
  16.1

  	
  Establishment of the Trust

  	
   

  
	
  16.2

  	
  Interrelationship
  of this Plan and the Trust

  	
   

  
	
  16.3

  	
  Distributions From the
  Trust

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  17.1

  	
  Status of Plan

  	
   

  
	
  17.2

  	
  Unsecured General Creditor

  	
   

  
				

 

ii

 

	
  17.3

  	
  Employer’s Liability

  	
   

  
	
  17.4

  	
  Nonassignability

  	
   

  
	
  17.5

  	
  Not a Contract of
  Employment

  	
   

  
	
  17.6

  	
  Furnishing Information

  	
   

  
	
  17.7

  	
  Terms

  	
   

  
	
  17.8

  	
  Captions

  	
   

  
	
  17.9

  	
  Governing Law

  	
   

  
	
  17.10

  	
  Notice

  	
   

  
	
  17.11

  	
  Successors

  	
   

  
	
  17.12

  	
  Spouse’s Interest

  	
   

  
	
  17.13

  	
  Validity

  	
   

  
	
  17.14

  	
  Incompetent

  	
   

  
	
  17.15

  	
  Court
  Order

  	
   

  
	
  17.16

  	
  Deduction
  Limitation on Benefit Payments

  	
   

  
	
  17.17

  	
  Insurance

  	
   

  
	
  17.18

  	
  Additional
  Special Rules Regarding Deferred Payment

  	
   

  
	
  17.19

  	
  Construction
  Consistent With Applicable Tax Rules

  	
   

  

 

iii

 

INTERNATIONAL
RECTIFIER CORPORATION

DEFERRED
COMPENSATION PLAN

Effective July 5,
2004

 

Purpose

 

The purpose of this Plan is to provide specified
benefits to Directors and a select group of management or highly compensated
Employees who contribute materially to the continued growth, development and
future business success of International Rectifier Corporation, a Delaware
corporation, and its subsidiaries, if any, that sponsor this Plan.  This Plan shall be unfunded for tax purposes
and for purposes of Title I of ERISA.

ARTICLE 1

DEFINITIONS

 

For the purposes of this Plan, unless otherwise
clearly apparent from the context, the following phrases or terms shall have
the following indicated meanings:

 

1.1                                 “Account
Balance” shall mean, with respect to a Participant, an entry on the records of
the Employer equal to the sum of (i) the Participant’s Deferral Account
balance and (ii) the Participant’s Company Contribution Account balance.  The Committee may establish such other
subaccounts as are advisable in the administration of this Plan.  The Account Balance, and each other specified
account balance, shall be a bookkeeping entry only and shall be utilized solely
as a device for the measurement and determination of the amounts to be paid to
the Participant, or his or her Beneficiary, pursuant to this Plan.

 

1.2                                 “Annual
Deferral Amount” as to a Participant shall mean that portion of the
Participant’s Base Salary, Bonus and Director Fees that the Participant defers
in accordance with Article 3 for any one Plan Year, without regard to
whether such amounts are withheld and credited during such Plan Year.  In the event of a Participant’s Retirement,
Disability, death or Termination of Employment prior to the end of a Plan Year,
the Participant’s Annual Deferral Amount for that Plan Year shall be the actual
amount withheld prior to such event.

 

1.3                                 “Annual
Installment Method” shall be an annual installment payment over the number of
years selected by the Participant in
accordance with this Plan, calculated as follows:  (i) for the first annual installment,
the Participant’s vested Account Balance shall be calculated as of the close of
business on or around the last Valuation Date that occurs prior to the
commencement of the Participant’s Plan benefits, and (ii) for remaining annual installments, the
Participant’s remaining vested Account Balance (which shall continue to be
adjusted pursuant to Section 3.8 over the period that installment payments are
made) shall be calculated as of the close of business on or around the
Valuation Date that occurs on or about the next anniversary of the first annual
installment payment to the Participant or on or around the first day of each
Plan Year following the Plan Year in which the Participant Retires or
experiences a Change in Control Termination, whichever payment timing is
selected by the Committee in its sole discretion in the circumstances.  Each annual installment shall be calculated
by multiplying the applicable balance by a 

 

1

 

fraction, the numerator of which is one and the
denominator of which is the remaining number of annual payments due the
Participant.  By way of example, if the
Participant elects a ten (10) year Annual Installment Method for the Retirement
Benefit, the first payment shall be 1/10 of the vested Account Balance,
calculated as described in this definition. 
The following year, the payment shall be 1/9 of the vested Account Balance,
calculated as described in this definition.

 

1.4                                 “Base
Salary” with respect to a Participant shall mean the Participant’s annual cash
compensation relating to services performed for an Employer during the
applicable Plan Year, excluding distributions from nonqualified deferred
compensation plans, bonuses (including, without limitation, Bonuses),
commissions, overtime, fringe benefits, stock options, stock appreciation
rights, restricted stock, stock units, performance shares, performance
units,  other incentive payments (whether
or not related to stock), non-monetary awards, relocation expenses, director
fees (including, without limitation, Director Fees) and other fees, severance
pay, and automobile and other allowances paid to a Participant.  Base Salary shall be calculated before reduction
for compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or nonqualified plans of any Employer and shall be
calculated to include amounts not otherwise included in the Participant’s gross
income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans
established by any Employer; provided, however, that all such amounts will be
included in compensation only to the extent that, had there been no such plan,
the amount would have been payable in cash to the Employee and otherwise would
have been included in the Participant’s Base Salary for the relevant year.

 

1.5                                 “Beneficiary”
as to a Participant shall mean one or more persons, trusts, estates or other
entities that are entitled, in accordance with Article 10, to receive the
Participant’s benefits under this Plan upon the death of the Participant.

 

1.6                                 “Beneficiary
Designation Form” shall mean the form established from time to time by the
Committee that a Participant must complete, sign and return to the Committee in
order to designate one or more Beneficiaries in accordance with Article 10.

 

1.7                                 “Board”
shall mean the board of directors of the Company.

 

1.8                                 “Bonus”
with respect to a Participant shall mean any cash compensation, in addition to
Base Salary, earned by the Participant for services rendered for an Employer
during the applicable Plan Year, payable to the Participant under any
Employer’s annual, semi-annual or quarterly bonus plans and/or short or
long-term incentive plans.

 

1.9                                 “Change
in Control” shall mean the occurrence of any of the following:

 

(a)                                  Approval
by the stockholders of the Company of the dissolution or liquidation of the
Company, except to the extent the dissolution is in connection with a
transaction which would not constitute a Change in Control under Section
1.10(b).

 

(b)                                 A
merger, consolidatation or other reorganization of the Company, with or into,
or a sale or transfer of all or substantially all of the Company’s business
and/or assets as an entirety to one or more entities that are not Subsidiaries,
as a result of which 50% or less of the outstanding voting securities of the
surviving or resulting 

 

2

 

entities immediately after the reorganization are, or
are to be, owned by former stockholders of the Company immediately before such
reorganization (assuming for purposes of such determination that there is no
change in the record ownership of the Company’s securities from the record date
for such approval until such reorganization, but including in such
determination any securities of the other parties to such reorganization held
by such affiliates of the Company).

 

(c)                                  Any
“person,” alone or with “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 Company (the terms “person,”
“affiliates,” “associates” and “beneficial owner” are used as such terms are
used in the United States Securities and Exchange Act of 1934 and the General
Rules and Regulations thereunder, as each may be amended from time to time);
provided, however, that a Change in Control shall not be deemed to have
occurred if such “person” is (A) the Company, (B) any Subsidiary, (C)
any employee benefit plan or employee stock plan of the Company, 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 (D) any
member of or entity or group affiliated with the Lidow family; or

 

(d)                                 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 Company’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.

 

1.10                           “Change
in Control Termination” shall mean the termination of a Participant’s
employment with the Company and all other Employers (and, in the case of a
Participant who is a Director, the termination of the Participant’s membership
on the Board) for any reason, other than a termination due to the Participant’s
death or Disability and other than an authorized leave of absence, that occurs
upon or during the two (2) year period following the occurrence of a Change in
Control.  If a Participant is both an
Employee and a Director, a Change in Control Termination shall not occur unless
and until the Participant is no longer an Employee and is no longer a Director.

 

1.11                           “Change
in Control Termination Benefit” shall mean the benefit set forth in Article 5.

 

1.12                           “Claimant”
shall have the meaning set forth in Section 15.1.

 

1.13                           “Code”
shall mean the United States Internal Revenue Code of 1986, as it may be
amended from time to time.

 

1.14                           “Committee”
shall mean the committee described in Article 13.

 

1.15                           “Company”
shall mean International Rectifier Corporation, a Delaware corporation, and any
successor to all or substantially all of the Company’s assets or business.

 

1.16                           “Company
Contribution Account” as to a Participant shall mean (i) the sum of the
Participant’s Company Contribution Amounts, plus (ii) amounts credited (net of
amounts 

 

3

 

debited, which may result in an aggregate negative
number) to the Participant’s Company Contribution Account in accordance with
this Plan, less (iii) all distributions made to, and withdrawals by, the
Participant or his or her Beneficiary pursuant to this Plan that relate to the
Participant’s Company Contribution Account.

 

1.17                           “Company
Contribution Amount” as to a Participant shall mean, for any one Plan Year, the
amount determined in accordance with Section 3.5 with respect to that
Participant.

 

1.18                           “Death
Benefit” shall mean the benefit set forth in Article 9.

 

1.19                           “Deduction
Limitation” shall mean the limitation on a benefit that may otherwise be
distributable pursuant to the provisions of this Plan, as set forth in Section
17.16.

 

1.20                           “Deferral
Account” as to a Participant shall mean (i) the sum of all of the
Participant’s Annual Deferral Amounts, plus (ii) amounts credited (net of
amounts debited, which may result in an aggregate negative number) to the
Participant’s Deferral Account in accordance with this Plan, less
(iii) all distributions made to, and withdrawals by, the Participant or
his or her Beneficiary pursuant to this Plan that relate to his or her Deferral
Account.

 

1.21                           “Director”
shall mean any member of the Board.

 

1.22                           “Director
Fees” with respect to a Director shall mean the annual cash fees paid to the
Director from the Company, including cash retainer fees and cash meetings fees,
as compensation for serving on the Board for the applicable Plan Year.

 

1.23                           “Disability”
or “Disabled” shall mean that a Participant is disabled in accordance with the
requirements of Section 223(d) of the United States Social Security Act, as it
may be amended from time to time.

 

1.24                           “Disability
Benefit” shall mean the benefit set forth in Article 8.

 

1.25                           “Election
Form” shall mean the form established from time to time by the Committee that a
Participant must complete, sign and return to the Committee in order to make an
election under this Plan.

 

1.26                           “Employee”
shall mean a person who is an employee of any Employer.

 

1.27                           “Employer(s)”
shall mean the Company and/or any of its Subsidiaries (now in existence or
hereafter formed or acquired) that have been selected by the Board to
participate in this Plan and have adopted this Plan as a sponsor (or, as the
context may require, the Company or other Employer that actually employs the
Participant in question).

 

1.28                           “ERISA”
shall mean the United States Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.

 

1.29                           “First
Plan Year” shall mean the period beginning July 5, 2004 and ending December 31,
2004.

 

1.30                           “Participant”
shall mean any Employee or Director (i) in the case of an Employee, who is
selected to participate in this Plan, (ii) who elects to participate in
this Plan, and (iii) who signs, completes and submits to the Company an
executed Plan Agreement, Election Form and Beneficiary Designation Form, which
are accepted by the Committee.  (The 

 

4

 

term “Participant” includes, to the extent required by
the context, any current or former Employee or Director with a remaining
Account Balance under this Plan, regardless of whether he or she is eligible to
defer additional compensation under this Plan.)

 

1.31                           “Plan”
shall mean the International Rectifier Corporation Deferred Compensation Plan,
which shall be evidenced by this instrument and by each Plan Agreement, as they
may be amended from time to time.

 

1.32                           “Plan
Agreement” shall mean a written agreement, as it may be amended from time to
time, which is entered into by and between an Employer and a Participant.  Each Plan Agreement executed by a Participant
and the Participant’s Employer shall provide for the entire benefit to which
such Participant is entitled under this Plan; should there be more than one
Plan Agreement, the Plan Agreement bearing the latest date of acceptance by the
Employer shall supersede all previous Plan Agreements in their entirety and
shall govern such entitlement.  The terms
of any Plan Agreement may be different for any Participant, and any Plan
Agreement may provide additional benefits not set forth in this Plan or limit
the benefits otherwise provided under this Plan; provided, however, that any
such additional benefits or benefit limitations must be agreed to by both the
Employer and the Participant.

 

1.33                           “Plan
Year” shall, except for the First Plan Year, mean a period beginning on
January 1 of each calendar year and continuing through December 31 of such
calendar year.

 

1.34                           “Retirement”,
“Retire(s)” or “Retired” shall mean, with respect to an Employee, severance
from employment from all Employers for any reason other than a leave of
absence, the Participant’s death or Disability, or a Change in Control
Termination, that occurs on or after the date on which the sum of the
Employee’s age and full Years of Service equals at least sixty (60); and shall
mean with respect to a Director, severance of his or her membership on the
Board.  If a Participant is both an
Employee and a Director, Retirement shall not occur until he or she Retires as
both an Employee and a Director.

 

1.35                           “Retirement
Benefit” shall mean the benefit set forth in Article 6.

 

1.36                           “Scheduled
Distribution” shall mean the distribution set forth in Section 4.1.

 

1.37                           “Short-Term
Disability” shall mean a determination that a Participant is disabled made by
the carrier of any individual or group short-term disability insurance policy,
sponsored by the Participant’s Employer. 
Upon request by the Employer, the Participant must submit proof of the
carrier’s determination.

 

1.38                           “Subsidiary”
means any corporation or other entity a majority of whose outstanding voting
stock or voting power is beneficially owned directly or indirectly by the
Company.

 

1.39                           “Termination
Benefit” shall mean the benefit set forth in Article 7.

 

1.40                           “Termination
of Employment” shall mean the severing of employment with all Employers,
whether such termination is voluntarily or involuntarily, and for any reason
other than a termination due to the Participant’s Retirement, Disability,
death, a Change in Control Termination or an authorized leave of absence.  If a Participant is both an Employee and a
Director, a Termination of Employment shall not occur unless and until the
Participant is no longer an Employee and is no longer a Director.

 

5

 

1.41                           “Trust”
shall mean one or more trusts established by the Company in accordance with
Article 16.

 

1.42                           “Unforeseeable
Financial Emergency” as to a Participant shall mean an unanticipated emergency
that is caused by an event beyond the control of the Participant that would
result in severe financial hardship to the Participant resulting from
(i) a sudden and unexpected illness or accident of the Participant, the
Participant’s spouse, or a dependent of the Participant, (ii) a loss of
the Participant’s property due to casualty, or (iii) such other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, all as determined by the Committee in
its sole discretion.

 

1.43                           “Valuation
Date” shall mean a date selected by the Committee in its sole discretion for
the adjustment of Account Balances pursuant to Section 3.8, provided that a
Valuation Date shall occur not less frequently than quarterly.

 

1.44                           “Years
of Service” shall mean the total number of whole years in which a Participant
has been employed by one or more Employers. 
A Participant’s whole years of employment for this purpose shall be
determined by dividing (i) the total number of calendar days that the
Participant was employed by one or more Employers (with employment by multiple
Employers on any single calendar day counted only as one day of employment), by
(ii) 365; with any fractional year of service rounded down to the next whole
number.  If a Participant incurs a
severance from employment and is later re-employed, all days of employment
(including pre- and post-break in employment service) with one or more
Employers will be aggregated for this purpose.

 

ARTICLE 2

SELECTION, ENROLLMENT,
ELIGIBILITY

 

2.1                                 Selection by Committee.  Participation in this Plan shall be limited
to Directors and, as determined by the Committee in its sole discretion, a
select group of management and highly compensated Employees.  From that group of eligible Employees, the
Committee shall select, in its sole discretion, those Employees who may actually
participate in this Plan.  Unless otherwise
provided by the Board, each Director may participate in this Plan.

 

2.2                                 Enrollment and Eligibility
Requirements; Commencement of Participation.

 

(a)                                  As
a condition to participation, each Director or selected Employee who is
eligible to participate in this Plan shall complete, execute and return to the
Committee a Plan Agreement, an Election Form and a Beneficiary Designation
Form.  In addition, the Committee shall
establish from time to time such other enrollment requirements as it determines
are advisable in its sole discretion. 
With respect to the First Plan Year, each Director or selected Employee
must complete these requirements before July 5, 2004 in order to participate in
this Plan for the First Plan Year. 
Except as provided in the next sentence, with respect to any Plan Year
after the First Plan Year each Director or selected Employee must complete
these requirements before the first day of that Plan Year in order to
participate in this Plan for that Plan Year; provided that the Committee may,
in its sole discretion, 

 

6

 

establish other deadlines with respect to Election
Forms to defer one or more Bonuses payable to any Participant or class of
Participants.  A person who first becomes
a Director or is otherwise first selected as an Employee eligible to
participate in this Plan during a Plan Year must complete these requirements
within thirty (30) days after he or she first becomes a Director or is first
selected to participate in this Plan, as applicable, in order to participate in
this Plan for that Plan Year, and, in such event, such person’s participation
in this Plan shall not commence earlier than the date determined by the
Committee pursuant to Section 2.2(b) and such person shall not be permitted to
defer under this Plan any portion of his or her Base Salary and/or Director
Fees that are paid with respect to services performed prior to his or her
participation commencement date.  In such
circumstances, the Committee may adopt such rules as it, in its sole
discretion, determines to be appropriate with respect to the deferral of any
Bonus by the person that relates to a period of service which commenced prior
to the person’s participation commencement date.

 

(b)                                 Each
Employee or Director who is eligible to participate in this Plan shall commence
participation in this Plan on the date that the Committee determines, in its
sole discretion, that the Employee or Director has met all enrollment
requirements set forth in this Plan and required by the Committee, including
returning all required documents to the Committee within the specified time
period.  The Committee shall process such
Participant’s deferral election as soon as administratively practicable after
such deferral election is submitted to and accepted by the Committee.  After completing the participation
requirements described in this Section 2.2, a Participant shall not, unless
otherwise expressly required by the Committee, be required to again complete
the enrollment process described in this Section 2.2 in order to participate in
this Plan in any subsequent Plan Year; provided that the Committee may require
Participants to complete new deferral elections each year and may require a
Participant who ceases to make deferrals to this Plan for any period of time to
re-enroll pursuant to this Section 2.2.

 

(c)                                  If
an Employee or a Director fails to meet all requirements contained in this
Section 2.2 within the period required, that Employee or Director shall not be
eligible to participate in this Plan during such Plan Year.

 

2.3                                 Termination of a
Participant’s Eligibility.  If the Committee determines in its sole
discretion that an Employee Participant no longer qualifies as a member of a
select group of management or highly compensated employees, as membership in
such group is determined in accordance with Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA, or that the inclusion of Directors in this Plan could
violate any applicable law or jeopardize the status of this Plan as a plan
intended to be  “unfunded” and
“maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees”
within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1), the Committee
shall have the right, in its sole discretion, to (i) terminate any
deferral election the Participant has made for the remainder of the Plan Year
in which the Committee takes such action, (ii) prevent the 

 

7

 

Participant from making future deferral elections,
(iii) immediately distribute the Participant’s then vested Account Balance
as a Termination Benefit and terminate the Participant’s participation in this
Plan, and/or (iv) take such further reasonable action that the Committee
deems appropriate in the circumstances. 
In the event that a Participant is no longer eligible to defer
compensation under this Plan, the Participant’s Account Balance shall
nevertheless continue to be adjusted pursuant to Section 3.8 until the
Participant’s Plan benefits are paid in accordance with the terms of this Plan
and, to the maximum extent permitted by law, the Participant shall continue to
have the ability to make Measurement Fund elections pursuant to Section 3.8 until
such payment occurs.

 

ARTICLE 3

DEFERRAL COMMITMENTS,
COMPANY CONTRIBUTION 

AMOUNTS, VESTING, CREDITING, TAXES

 

3.1                                 Minimum Deferrals.

 

(a)                                  Annual Deferral Amount.  For each Plan Year, a Participant may elect
to defer, as his or her Annual Deferral Amount, Base Salary, Bonus and/or
Director Fees in the following minimum amounts for each deferral elected:

 

	
  Deferral

  	
   

  	
  Minimum Amount

  	
   

  
	
  Base Salary and/or Bonus

  	
   

  	
  $5,000 in the aggregate

  	
   

  
	
  Director Fees

  	
   

  	
  $0

  	
   

  

 

If an election is made for less than the stated
minimum amount, or if no election is made, the amount deferred shall be zero.

 

(b)                                 Short Plan Year.  Notwithstanding the foregoing, if a
Participant first becomes a Participant after the first day of a Plan Year, or
in the case of the First Plan Year of this Plan itself, the minimum Annual
Deferral Amount shall be an amount equal to the minimum set forth above,
multiplied by a fraction, the numerator of which is the number of complete
months remaining in the Plan Year and the denominator of which is 12.

 

3.2                                 Maximum Deferral.

 

(a)                                  Annual Deferral Amount.  Subject to Sections 3.2(b) and (c), for each
Plan Year, a Participant may elect to defer, as his or her Annual Deferral
Amount, Base Salary, Bonus and/or Director Fees up to the following maximum
percentages for each deferral elected:

 

	
  Deferral

  	
   

  	
  Maximum Percentage

  	
   

  
	
  Base Salary

  	
   

  	
  75%

  	
   

  
	
  Bonus

  	
   

  	
  100%

  	
   

  
	
  Director Fees

  	
   

  	
  100%

  	
   

  

 

8

 

(b)                                 Short Plan Year.  If a Participant first becomes a Participant
after the first day of a Plan Year, the maximum Annual Deferral Amount
(i) with respect to Base Salary and Director Fees shall be limited to the
amount of compensation not yet earned by the Participant as of the date the
Participant submits a Plan Agreement and Election Form to the Committee for
acceptance, and (ii) with respect to Bonus, shall be limited to those
amounts deemed eligible for deferral in the sole discretion of the Committee.

 

(c)                                  Other Maximum Limit.  In no event shall the maximum amount of Base
Salary that a Participant may defer to this Plan in any one year exceed
(i) the Participant’s total Base Salary, less (ii) the sum of the
maximum amount that the Participant could elect to defer to the plan described
in Section 401(k) of the Code maintained by the Company or the Participant’s
Employer in which the Participant is eligible to participate (if any) for that
year plus the amount(s) that the Participant may elect to contribute to any
qualified welfare benefit plan of the Company or another Employer for that year
for medical, healthcare, insurance, or similar benefits coverage.  The minimum deferral limits of Section 3.1
shall not apply with respect to a Participant for a Plan Year if the amount
determined pursuant to the preceding sentence is less than the applicable
minimum amount determined in accordance with Section 3.1.

 

3.3                                 Election to Defer; Effect
of Election Form.

 

(a)                                  First Plan Year.  In connection with a Participant’s
commencement of participation in this Plan, the Participant shall make an
irrevocable deferral election for the Plan Year in which the Participant
commences participation in this Plan, along with such other elections as the
Committee deems necessary or desirable under this Plan.  For these elections to be valid, the Election
Form must be completed and signed by the Participant, timely delivered to the
Committee (in accordance with Section 2.2) and accepted by the Committee.

 

(b)                                 Subsequent Plan Years.  For each succeeding Plan Year, an irrevocable
deferral election for that Plan Year, and such other elections as the Committee
deems necessary or desirable under this Plan, shall be made by timely
delivering a new Election Form to the Committee, in accordance with its rules
and procedures, before the end of the Plan Year preceding the Plan Year for
which the election is made.  If no such
Election Form is timely delivered for a Plan Year, the Annual Deferral Amount
shall be zero for that Plan Year.

 

(c)                                  Suspension of Deferral Elections.  Notwithstanding anything else contained
herein to the contrary, if a Participant receives a hardship distribution under
any plan described in Section 401(k) of the Code maintained by the Company or
the Participant’s Employer or any of their respective affiliates, the
Participant may not make any deferrals to this Plan during the period required
under the hardship distribution rules of the applicable 401(k) plan.  Accordingly, any deferral election under this
Plan shall be suspended for such period of time.

 

9

 

3.4                                 Withholding and Crediting
of Annual Deferral Amounts.  For each Plan Year, the Base Salary portion
of the Participant’s Annual Deferral Amount for that Plan Year shall be
withheld from each regularly scheduled Base Salary payroll payment for the
Participant in equal amounts, as adjusted from time to time for increases and
decreases in the Participant’s Base Salary. 
The Bonus and/or Director Fees portion of the Participant’s Annual Deferral
Amount for that Plan Year shall be withheld at the time the Participant’s Bonus
and/or Director Fees are or otherwise would be paid to the Participant with
respect to service in that Plan Year, whether or not this occurs during the
Plan Year itself.  Annual Deferral
Amounts shall be credited to a Participant’s Deferral Account at the time such
amounts would otherwise have been paid to the Participant.  The Committee may, with respect to the First
Plan Year and any one or more Plan Years thereafter, establish and announce
prior to that Plan Year such other rules regarding the Base Salary, Bonus
and/or Director Fees to be covered by deferral elections made with respect to
that Plan Year as the Committee may determine to be advisable in its sole
discretion.

 

3.5                                 Company Contribution
Amount.

 

(a)                                  For
each Plan Year, an Employer may be required to credit amounts to a
Participant’s Company Contribution Account in accordance with employment or
other agreements entered into between the Participant and the Employer.  Such amounts shall be credited on the date or
dates prescribed by such agreements.

 

(b)                                 For
each Plan Year, an Employer, in its sole discretion, may, but is not required
to, credit any amount it desires to any Participant’s Company Contribution
Account under this Plan.  The Company Contribution
Amount described in this Section 3.5(b), if any, shall be credited on a date or
dates to be determined by the Employer making the contribution and, in the
absence of such a determination, the date or dates determined by the Committee
in its sole discretion.

 

(c)                                  Any
amount credited to a Participant’s Company Contribution Account pursuant to
Sections 3.5(a) and/or (b) with respect to a Plan Year shall be the
Participant’s Company Contribution Amount for that Plan Year.  The amount so credited to a Participant may
be smaller or larger than the amount credited to any other Participant, and the
amount credited to any Participant for a Plan Year may be zero, even though one
or more other Participants receive a Company Contribution Amount for that Plan
Year.

 

3.6                                 Crediting
of Amounts after Benefit Distribution.  Notwithstanding any provision in this Plan to
the contrary, should the complete distribution of a Participant’s vested
Account Balance occur prior to the date on which any portion of (i) the
Annual Deferral Amount that a Participant has elected to defer in accordance
with Section 3.3, or (ii) the Company Contribution Amount, would otherwise
be credited to the Participant’s Account Balance, such amounts shall not be
credited to the Participant’s Account Balance, but shall promptly be paid to
the Participant in a manner determined by the Committee in its reasonable
discretion.

 

3.7                                 Vesting.

 

(a)                                  A
Participant shall at all times be 100% vested in his or her Deferral Account.

 

10

 

(b)                                 A
Participant shall be vested in his or her Company Contribution Account in
accordance with the vesting schedule(s) set forth in his or her Plan Agreement,
employment agreement or any other agreement entered into between the
Participant and his or her Employer.  If
not addressed in such agreements, a Participant shall vest in his or her
Company Contribution Account in accordance with the schedule declared by the
Committee in its sole discretion.

 

3.8                                 Crediting/Debiting of Account Balances.  In accordance with, and subject to, the rules
and procedures that are established from time to time by the Committee, in its
reasonable discretion, a Participant’s Account Balance shall be adjusted from
time to time (and no less frequently than as of each Valuation Date) in
accordance with the following rules:

 

(a)                                  Measurement Funds.  The Committee shall select from time to time
certain mutual funds, insurance company separate accounts, indexed rates or
other methods (the “Measurement Funds”) for the purpose of crediting or
debiting additional amounts to Participants’ Account Balances.  Following a Change in Control, the number and
general type(s) of Measurement Funds offered shall not be substantially
diminished.  The Committee may, in its
sole discretion but subject to the preceding sentence, discontinue, substitute
or add a Measurement Fund.  Each such
action will take effect not earlier than the first day of the first calendar
quarter that begins at least thirty (30) days after the day on which the
Committee gives Participants advance written notice of such change, or if
necessary to comply with applicable laws, rules or regulations or is otherwise
due to circumstances beyond the control of the Company, such other date
designated by the Committee in its reasonable discretion.

 

(b)                                 Election of Measurement Funds.

 

(i)                                   Participant’s First Plan Year.  A Participant, in connection with his or her
initial deferral election in accordance with Section 3.3(a), shall elect, on
the Election Form, the manner in which his or her Annual Deferral Amount and/or
Company Contribution Amount will be allocated among one or more Measurement
Fund(s) (as described in Section 3.8(a)) for purposes of determining the
amounts to be credited or debited to his or her Account Balance.  If a Participant does not elect any of the
Measurement Funds as described in the previous sentence, the Participant’s
Annual Deferral Amount and/or Company Contribution Amount shall automatically
be allocated into the lowest-risk Measurement Fund, as determined by the
Committee in its reasonable discretion.

 

(ii)                                  Subsequent Plan Years.  For each succeeding Plan Year, a Participant,
in connection with his or her annual deferral election in accordance with
Section 3.3(b), may (but is not required to) elect, on the Election Form, the
manner in which his or her Annual Deferral Amount and/or Company Contribution
Amount for such Plan Year will be allocated among one or more Measurement
Fund(s) (as described in Section 3.8(a)) for purposes of determining the
amounts to be credited or debited to his or her Account 

 

11

 

Balance.  If a
Participant does not elect Measurement Funds in accordance with the previous
sentence, the Participant’s Annual Deferral Amount and/or Company Contribution
Amount for such Plan Year shall automatically be allocated among the
Measurement Funds in accordance with the Election Form most recently filed by
the Participant and accepted by the Committee; provided that the Committee may,
in its sole discretion, provide that such amounts shall automatically be
allocated into the lowest-risk Measurement Fund, as determined by the Committee
in its reasonable discretion.

 

(iii)                               Changing Elections.  At any time during a Plan Year, a Participant
may (but is not required to) elect, by submitting an Election Form to the
Committee that is accepted by the Committee, to change the portion of his or
her Account Balance allocated to each previously elected Measurement Fund;
provided, however, the cumulative number of such elections cannot exceed three
(3) per calendar quarter.  If an election
is made in accordance with the previous sentence, it shall apply as of the
first business day deemed reasonably practicable by the Committee, in its
reasonable discretion, and shall continue thereafter for each subsequent day in
which the Participant participates in this Plan, unless changed in accordance
with the previous sentence.  The Committee
may further limit the number of Measurement Fund changes that a Participant may
elect, provided that a Participant shall be entitled to elect such a change not
less frequently than quarterly.  The
Committee may provide that any change shall not take effect until a date that
is not later than the first business day of the calendar quarter following the
Committee’s receipt of such an election.

 

(c)                                  Proportionate Allocation.  In making any election described in Section
3.8(b), the Participant shall specify on the Election Form in increments of one
percent (1%), the percentage of his or her Annual Deferral Amount or Company
Contribution Amount, or in the case of a reallocation, the percentage of his or
her Account Balance, to be allocated to a Measurement Fund.  A Participant’s Measurement Fund elections
must total one hundred percent (100%). 
The Committee may require that a Participant’s percentage election with
respect to any particular Measurement Fund selected by the Participant be no
less than ten percent (10%).  Unless
otherwise expressly provided by the Committee, a Participant’s Measurement Fund
election(s) shall apply on a pro rata basis to each of the Participant’s
accounts under this Plan and a Participant may not make separate Measurement
Fund elections for his or her Deferral Account and/or Company Contribution
Account.

 

(d)                                 Crediting or Debiting
Method.  The
performance of each Measurement Fund (either positive or negative) will be
determined by the Committee, in its reasonable discretion, based on the
performance of the Measurement Funds themselves.  A Participant’s Account Balance shall be
credited or debited not less frequently than on a quarterly basis based on the
performance of each Measurement Fund selected by the Participant for the corresponding
period of 

 

12

 

time (with
such credit or debit calculated as though the portion of the Participant’s
Account Balance allocated to that Measurement Fund for the applicable period of
time had actually be invested in that Measurement Fund for that period of
time), such performance being determined by the Committee in its reasonable
discretion.

 

(e)                                  No Actual Investment.  Notwithstanding any other provision of this
Plan that may be interpreted to the contrary, the Measurement Funds are to be
used for measurement purposes only, and a Participant’s election of any such
Measurement Fund, the allocation of his or her Account Balance thereto, the
calculation of additional amounts and the crediting or debiting of such amounts
to a Participant’s Account Balance shall  not be considered or
construed in any manner as an actual investment of his or her Account Balance
in any such Measurement Fund.  In the
event that the Company or the Trustee (as that term is defined in the Trust),
in its own discretion, decides to invest funds in any or all of the investments
on which the Measurement Funds are based, no Participant shall have any rights
in or to such investments themselves. 
Without limiting the foregoing, a Participant’s Account Balance shall at
all times be a bookkeeping entry only and shall not represent any investment
made on his or her behalf by the Company or the Trust.  Each Participant shall at all times remain an
unsecured creditor of the Company with respect to his or her Plan benefits.

 

3.9                                 FICA and Other Taxes.

 

(a)                                  Annual Deferral Amounts.  For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant’s
Employer(s) may, in its or their reasonable discretion, either withhold from
that portion of the Participant’s Base Salary and/or Bonus that is not being
deferred, in a manner determined by the Employer(s), the Participant’s share of
FICA and other employment taxes on such Annual Deferral Amount or reduce the
Participant’s Annual Deferral Amount by the amount necessary to satisfy such
withholding obligation.

 

(b)                                 Company Contribution Account.  When a Participant becomes vested in a
portion of his or her Company Contribution Account, the Participant’s
Employer(s) may, in its or their reasonable discretion, either withhold from
that portion of the Participant’s Base Salary and/or Bonus that is not
deferred, in a manner determined by the Employer(s), the Participant’s share of
FICA and other employment taxes on such Company Contribution Amount or reduce
the vested portion of the Participant’s Company Contribution Account by the
amount necessary to satisfy such withholding obligation.

 

(c)                                  Distributions.  The Participant’s Employer(s), or the trustee
of the Trust, may withhold from any payments made to a Participant under this
Plan all federal, state and local income, employment and other taxes required
to be withheld by the Employer(s), or the trustee of the Trust, in connection
with such payments, in amounts and in a manner to be determined in the reasonable
discretion of the Employer(s) and the trustee of the Trust.

 

13

 

(d)                                 Distributions.  Except as provided above in this Section 3.9,
each Participant shall be wholly responsible and liable for all income,
employment, and other taxes that may result from compensation deferred under
this Plan, the adjustment of Account Balances pursuant to Section 3.8, and the
payment of benefits under this Plan.

 

ARTICLE 4

SCHEDULED DISTRIBUTION,
UNFORESEEABLE FINANCIAL EMERGENCIES

 

4.1                                 Scheduled
Distribution.  On each annual Election Form, a Participant
may irrevocably elect to receive a Scheduled Distribution for each type of
compensation (Base Salary, Bonus and/or Director Fees) deferred pursuant to the
Election Form.  Subject to the other
terms and conditions of this Plan, each Scheduled Distribution elected shall be
paid out during a sixty (60) day period commencing immediately after the first
day of any Plan Year designated by the Participant.  The Plan Year designated by the Participant
for payment of a Scheduled Distribution may be no earlier than the fourth Plan
Year following the Plan Year in which the compensation subject to the Scheduled
Distribution Election was actually deferred. 
By way of example, if a Scheduled Distribution is elected for Base
Salary that is deferred/credited to the Plan during the 2005 Plan Year, the
earliest Plan Year that the Participant could elect for a Scheduled
Distribution from such Base Salary is 2009 (in which case such Scheduled
Distribution would become payable during a sixty (60) day period commencing
January 1, 2009).  Each Scheduled
Distribution shall be a lump sum payment in an amount that is equal to the
portion of Base Salary, Bonus and/or Director Fees that the Participant elected
to have distributed as a Scheduled Distribution, plus amounts credited or
debited in the manner provided in Section 3.8 on that amount.  Each Scheduled Distribution shall be
calculated as of the close of business on or around the date on which such
Scheduled Distribution becomes payable, as reasonably determined by the
Committee.

 

4.2                                 Other Benefits Take
Precedence Over Scheduled Distributions.  Should a Participant become entitled to the
distribution of a benefit under Article 5, 6, 7, 8, or 9, prior to the date on
which such Participant’s Scheduled Distribution is payable, any portion of such
Participant’s Base Salary, Bonus and/or Director Fees, plus amounts credited or
debited thereon, that is subject to a Scheduled Distribution election under
Section 4.1 shall not be paid in accordance with Section 4.1, but shall be paid
in accordance with the other applicable Article.

 

4.3                                 Withdrawal Payout;
Suspensions for Unforeseeable Financial Emergencies.

 

(a)                                  If the Participant experiences an
Unforeseeable Financial Emergency, the Participant may petition the Committee
to suspend deferrals of Base Salary, Bonus and Director Fees to the extent
deemed necessary by the Committee to satisfy the Unforeseeable Financial
Emergency, plus amounts necessary to pay taxes reasonably anticipated as
a result of the suspension.  If suspension of deferrals is not sufficient
to satisfy the Participant’s Unforeseeable Financial Emergency, or if
suspension of deferrals is not required under applicable law and is
reasonably determined by the Committee to not be necessary to preserve the 

 

14

 

intended tax consequences of this Plan, the Participant may further petition the
Committee to receive a partial or full payout from this Plan.  The Participant shall only receive a payout
from this Plan to the extent such payout is deemed necessary by the Committee
to satisfy the Participant’s Unforeseeable Financial Emergency, plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution.

 

(b)                                 The
payout shall not exceed the lesser of (i) the Participant’s vested Account
Balance, calculated as of the close of business on or around the date on which
the amount becomes payable, as determined by the Committee in its reasonable
discretion, or (ii) the amount necessary to satisfy the Unforeseeable
Financial Emergency, plus amounts necessary to pay taxes reasonably anticipated
as a result of the distribution, as determined by the Committee in its
reasonable discretion.  Notwithstanding
the foregoing, a Participant may not receive a payout from this Plan to the
extent that the Unforeseeable Financial Emergency is or may be relieved
(A) through reimbursement or compensation by insurance or otherwise,
(B) by liquidation of the Participant’s assets, to the extent the
liquidation of such assets would not itself cause severe financial hardship or
(C) by suspension of deferrals under this Plan, if the Committee, in its
reasonable discretion, determines that suspension is required by applicable law
or is otherwise reasonably advisable to preserve the intended tax consequences
of this Plan.  A Participant may petition
the Committee for a withdrawal pursuant to this Section 4.3 prior to a hardship
withdrawal under any plan described in Section 401(k) of the Code.

 

(c)                                  If
the Committee, in its sole discretion, approves a Participant’s petition for
suspension, the Participant’s deferrals under this Plan shall be suspended as
of the date of such approval.  If the
Committee, in its sole discretion, approves a Participant’s petition for
payout, the Participant shall receive a payout from this Plan within sixty
(60) days of the date of such approval.

 

ARTICLE 5

CHANGE IN CONTROL
TERMINATION BENEFIT

 

5.1                                 Change in Control
Termination Benefit. 
A Participant who experiences a Change in Control Termination shall
receive, as a Change in Control Termination Benefit, his or her vested Account
Balance.

 

5.2                                 Payment of Change in
Control Termination Benefit.   The Change in Control Termination Benefit
shall be paid to the Participant in the same form in which such Participant
elected to receive his or her Retirement Benefit, regardless of whether the
Participant is otherwise eligible to Retire on the date of his or her Change in
Control Termination.  The payment of the
Participant’s Change in Control Benefit shall be made, or installment payments
shall commence, no later than ninety (90) days after the date of the
Participant’s Change in Control Termination. 
In the event of a lump sum payment, the Participant’s vested Account
Balance shall be calculated as of the close of business on or around the last
Valuation Date to occur prior to the date of payment of the Participant’s 

 

15

 

benefit.  Any
installment payments shall be calculated and paid in accordance with the Annual
Installment Method.  (For purposes of the
Change in Control Termination Benefit, the Valuation Date shall not be more
than fifteen (15) business days prior to the date such payment is made.  The Committee shall establish a special
Valuation Date or dates to the extent, if any, required to satisfy the
preceding sentence.)

 

ARTICLE 6

RETIREMENT BENEFIT

 

6.1                                 Retirement Benefit.  A Participant who Retires shall receive, as a
Retirement Benefit, his or her vested Account Balance.

 

6.2                                 Payment of Retirement
Benefit.  A Participant, in connection with his or her
commencement of participation in this Plan, shall elect on an Election Form to
receive the Retirement Benefit in a lump sum or pursuant to an Annual
Installment Method of 5, 10, 15 or 20 years.  
Once made, a Participant may not revoke or change any such election,
unless otherwise expressly provided by the Committee, in its sole discretion,
in the circumstances.  If a Participant
does not make any election with respect to the payment of the Retirement
Benefit in connection with his or her commencement of participation in this
Plan, then such Participant shall be deemed to have elected to receive the
Retirement Benefit in a lump sum.  The
payment of the Participant’s Retirement Benefit shall be made, or installment
payments shall commence, no later than ninety (90) days after the date of the
Participant’s Retirement.  In the event
of a lump sum payment, the Participant’s vested Account Balance shall be
calculated as of the close of business on or around the last Valuation Date to
occur prior to the payment of the Participant’s benefit.  Any installment payments shall be calculated
and paid in accordance with the Annual Installment Method.

 

ARTICLE 7

TERMINATION BENEFIT

 

7.1                                 Termination Benefit.  A Participant who experiences a Termination
of Employment shall receive, as a Termination Benefit, his or her vested
Account Balance.

 

7.2                                 Payment of Termination
Benefit.  The Termination Benefit shall be paid to the
Participant in a lump sum payment on a date selected by the Committee in its
sole discretion, provided that such date shall be upon or following the date on
which the Participant experiences a Termination of Employment and in no event
later than March 1 of the calendar year following the calendar year in
which the Participant experiences the Termination of Employment.  The Participant’s vested Account Balance
shall be calculated as of the close of business on or around the last Valuation
Date to occur prior to the date of payment of the Participant’s benefit.

 

16

 

ARTICLE 8

SHORT-TERM DISABILITY
WAIVER, DISABILITY BENEFIT

 

8.1                                 Short-Term Disability
Waiver.

 

(a)                                  Waiver of Deferral.  If a
Participant is both (i) suffering from a Short-Term Disability, and
(ii) receiving less than 100 percent of his or her Base Salary or Director
Fees during the period of such Short-Term Disability, then such Participant’s
deferrals under this Plan shall terminate for the period of time of such
Short-Term Disability and reduction of Base Salary or Director Fees.  During such period of time, the Participant
shall not be allowed to make any additional deferral elections, but will
continue to be eligible for the benefits provided in Articles 4, 5, 6, 7, 8, or
9 in accordance with the provision of those Articles.

 

(b)                           Deferral Following Short-Term Disability.  If a
Participant (i) returns to employment, or service as a Director, with an
Employer after a Short-Term Disability ceases, and (ii) payment of 100
percent of his or her Base Salary or Director Fees recommences, the
Participant’s deferrals shall again commence on a prospective basis effective
as of the date that both (i) and (ii) are satisfied if such date occurs in the
same Plan Year as the Participant’s deferrals originally terminated in
accordance with Section 8.1(a) (based on the Participant’s original deferral
election for that Plan Year); otherwise, the Participant (if he or she is still
eligible) must make a new deferral election in accordance with Section 3.3 if
the Participant wants to elect deferrals under this Plan in any later Plan
Year.

 

8.2                                 Disability Benefit.

 

(a)                            Disability Benefit.  Upon a Participant’s Disability, the
Participant shall receive a Disability Benefit, which shall be equal to the
Participant’s vested Account Balance.

 

(b)                           Payment of Disability Benefit.  The
Disability Benefit shall be paid to the Participant in a lump sum payment on a
date selected by the Committee in its sole discretion, provided that such date
shall be upon or following the date of the Participant’s Disability and in no
event later than March 1 of the calendar year following the calendar year
in which the Participant’s Disability occurs. 
The Participant’s vested Account Balance shall be calculated as of the
close of business on or around the last Valuation Date to occur prior to the
date of payment of the Participant’s benefit.

 

ARTICLE 9

DEATH BENEFIT

 

9.1                                 Death Benefit.  The Participant’s Beneficiary(ies) shall
receive a Death Benefit upon the Participant’s death which will be equal to the
Participant’s vested Account Balance.

 

9.2                                 Payment of Death Benefit.  The Death Benefit shall be paid to the
Participant’s Beneficiary(ies) in a lump sum payment on a date selected by the
Committee in its sole discretion, provided that such date shall be upon or
following the date of the Participant’s 

 

17

 

death and in no event later than March 1 of the
calendar year following the calendar year in which the Participant dies.  The Participant’s vested Account Balance
shall be calculated as of the close of business on or around the last Valuation
Date to occur prior to the date of payment of the Participant’s benefit.

 

ARTICLE 10

BENEFICIARIES

 

10.1                           Beneficiary.  Each Participant shall have the right, at any
time, to designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under this Plan to a beneficiary
upon the death of a Participant.  The
Beneficiary designated under this Plan may be the same as or different from the
Beneficiary designation under any other plan of an Employer in which the
Participant participates.

 

10.2                           Beneficiary Designation; Change; Spousal Consent.  A Participant shall designate his or her
Beneficiary by completing and signing the Beneficiary Designation Form, and
returning it to the Committee or its designated agent.  A Participant shall have the right to change
a Beneficiary by completing, signing and otherwise complying with the terms of
the Beneficiary Designation Form and the Committee’s rules and procedures, as
in effect from time to time.  If a
married Participant wishes to designate a person other than his or her spouse
as Beneficiary, the Committee may require (as a condition precedent to the
effectiveness of such designation) that such designation be consented to in
writing by the spouse.  Upon the
dissolution of marriage of a Participant, any designation of the Participant’s
former spouse as a Beneficiary shall be treated as though the Participant’s
former spouse had predeceased the Participant, unless (i) the Participant
executes another Beneficiary designation that complies with this Section 10.2
and that clearly names such former spouse as a Beneficiary, or (ii) a court
order presented to the Committee prior to distribution on behalf of the
Participant explicitly requires the Participant to continue to maintain the
former spouse as the Beneficiary.  In any
case in which the Participant’s former spouse is treated under the
Participant’s Beneficiary designation as having predeceased the Participant, no
heirs or other beneficiaries of the former spouse shall receive benefits from
the Plan as a Beneficiary of the Participant except as provided otherwise in
the Participant’s Beneficiary designation. 
Upon the acceptance by the Committee of a new Beneficiary Designation
Form, all Beneficiary designations previously filed shall be canceled.  The Committee shall be entitled to rely on
the last Beneficiary Designation Form filed by the Participant and accepted by
the Committee prior to his or her death.

 

10.3                           Acknowledgment.  No designation or change in designation of a
Beneficiary shall be effective unless signed by the Participant (and by the
Participant’s spouse, to the extent required pursuant to Section 10.2) and
until received in writing by the Committee or its designated agent.

 

10.4                           No Beneficiary Designation.  If a Participant fails to designate a
Beneficiary as provided in Sections 10.1, 10.2 and 10.3 or, if all
designated Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant’s benefits, then the Participant’s designated Beneficiary
shall be deemed to be his or her surviving spouse.  If 

 

18

 

the Participant has no surviving spouse, the duly
appointed and currently acting personal representative of the Participant’s
estate (which shall include either the Participant’s probate estate or living
trust) shall be deemed to be the Participant’s Beneficiary.  In any case where there is no such personal
representative of the Participant’s estate duly appointed and acting in that
capacity within ninety (90) days after the Participant’s death (or such
extended period as the Committee determines is reasonably necessary to allow
such personal representative to be appointed, but not to exceed one hundred
eighty (180) days after the Participant’s death), then the Participant’s
Beneficiary shall be deemed to be the person or persons who can verify by court
order that they are legally entitled to receive the benefits specified
hereunder.  If a Participant dies and his
or her benefits become payable to the Participant’s Beneficiary, but the
Beneficiary’s death occurs before such payment can actually be made, payment
shall be made to the Beneficiary’s surviving spouse.  If there is no surviving spouse to receive
any benefits payable in accordance with the preceding sentence, the duly
appointed and currently acting personal representative of the Beneficiary’s
estate (which shall include either the Beneficiary’s probate estate or living
trust) shall be the Beneficiary.  In any
case where there is no such personal representative of the Beneficiary’s estate
duly appointed and acting in that capacity within ninety (90) days after the
Beneficiary’s Death (or such extended period as the Committee determines is
reasonably necessary to allow such personal representative to be appointed, but
not to exceed one hundred eighty (180) days after the Beneficiary’s Death),
then payment shall be made to the person or persons who can verify by court
order that they are legally entitled to receive the benefits otherwise payable
to the Beneficiary.

 

10.5                           Doubt as to Beneficiary.  If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the Committee
shall have the right, exercisable in its reasonable discretion, to cause the
Participant’s Employer to withhold such payments until this matter is resolved
to the Committee’s reasonable satisfaction.

 

10.6                           Discharge of Obligations.  The payment of benefits under this Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant and that Participant’s Plan Agreement.

 

ARTICLE 11

LEAVE OF ABSENCE

 

11.1                           Paid Leave of Absence.  If a Participant is authorized by the
Participant’s Employer to take a paid leave of absence from the employment of
the Employer, (i) the Participant shall continue to be considered eligible
for the benefits provided in Articles 4, 5, 6, 7, 8, or 9 in accordance with
the provisions of those Articles, and (ii) the Annual Deferral Amount shall continue to be withheld during such
paid leave of absence in accordance with Section 3.3.

 

11.2                           Unpaid Leave of Absence.  If a Participant is authorized by the
Participant’s Employer to take an unpaid leave of absence from the employment
of the Employer for any reason, then such Participant’s deferrals under this
Plan shall terminate for the period of such leave.  During such period of time, the Participant
shall not be allowed to make any 

 

19

 

additional deferral elections, but will continue to be
eligible for the benefits provided in Articles 4, 5, 6, 7, 8, or 9 in
accordance with the provision of those Articles.  The Participant (if he or she is still
eligible) must make a new deferral election in accordance with Section 3.3 if
the Participant wants to elect deferrals under this Plan in any later Plan Year.

 

ARTICLE 12

TERMINATION OF THE PLAN,
AMENDMENT OR MODIFICATION

 

12.1                           Termination of this Plan.  Although each Employer anticipates that it
will continue this Plan for an indefinite period of time, there is no guarantee
that any Employer will continue this Plan or will not terminate this Plan at
any time in the future.  Accordingly,
each Employer reserves the right to discontinue its sponsorship of this Plan
and/or to terminate this Plan at any time with respect to any or all of its
participating Employees and Directors, by action of its board of
directors.  Upon the termination of this
Plan with respect to any Employer, the vested Account Balances of the affected
Participants who are employed by that Employer, or in the service of that Employer
as Directors, shall be determined (i) as if they had experienced a
Termination of Employment on the date of Plan termination; or (ii) if Plan
termination occurs after the date upon which a Participant was eligible to
Retire, then with respect to that Participant as if he or she had Retired on
the date of Plan termination.  Such
benefits shall be paid to the Participants as follows:  (i) prior to a Change in Control, if
this Plan is terminated with respect to all of its Participants, an Employer
shall have the right, in its sole discretion, and notwithstanding any elections
made by the Participant, to pay such benefits in a lump sum or pursuant to an
Annual Installment Method of up to five (5) years, with amounts credited and
debited during the installment period as provided herein; or (ii) prior to
a Change in Control, if this Plan is terminated with respect to less than all
of its Participants, an Employer shall be required to pay such benefits in a
lump sum; or (iii) after a Change in Control, if this Plan is terminated
with respect to some or all of its Participants, the Employer shall be required
to pay such benefits in a lump sum.  The
termination of this Plan shall not adversely affect any Participant or Beneficiary
who has become entitled to the payment of any benefits under this Plan as of
the date of termination; provided however, that the Employer shall have the
right to accelerate installment payments without a premium or prepayment
penalty by paying the vested Account Balance in a lump sum or pursuant to an
Annual Installment Method using fewer years.

 

12.2                           Amendment.  Any Employer may, at any time, amend or
modify this Plan in whole or in part with respect to that Employer by the
action of its board of directors (or its designate); provided, however,
that:  (i) no amendment or
modification shall be effective to decrease the value of a Participant’s vested
Account Balance in existence at the time the amendment or modification is made,
calculated as if the Participant had experienced a Termination of Employment as
of the effective date of the amendment or modification or, if the amendment or
modification occurs after the date upon which the Participant was eligible to
Retire, the Participant had Retired as of the effective date of the amendment
or modification, nor shall any amendment or modification materially and
adversely affect the Participant’s rights to be credited with additional
amounts on such vested Account 

 

20

 

Balance pursuant to Section 3.8 or otherwise
materially and adversely affect the Participant’s rights with respect to such
vested Account Balance, and (ii) no amendment or modification of this
Section 12.2 shall be effective.  The
amendment or modification of this Plan shall not affect any Participant or
Beneficiary who has become entitled to the payment of benefits under this Plan
as of the date of the amendment or modification.  Notwithstanding the foregoing provisions of
this Section 12.2, the Employer shall have the right to accelerate installment
payments by paying a Participant’s vested Account Balance in a lump sum or
pursuant to an Annual Installment Method using fewer years than the number of
years elected by the Participant.  A
change in the Measurement Funds offered under this Plan shall not constitute an
amendment or modification that is materially adverse to the Participant’s
rights with respect to the Participant’s Account Balance for purposes of the
first sentence of this Section 12.2; provided that such a change is consistent
with the provisions of Section 3.8(a) applicable upon and following a Change in
Control.

 

12.3                           Plan Agreement.  Despite the provisions of Sections 12.1
and 12.2, if a Participant’s Plan Agreement contains benefits or limitations that
are not in this Plan document, the Employer may only amend or terminate such
provisions with the written consent of the Participant.

 

12.4                           Effect of Payment.  The full payment of a Participant’s vested
Account Balance under Article 4, 5, 6, 7, 8, or 9, whichever is
applicable, of this Plan shall completely discharge all obligations to the
Participant and his or her designated Beneficiaries under this Plan and with
respect to the Participant’s Plan Agreement.

 

ARTICLE 13

ADMINISTRATION

 

13.1                           Committee Duties.  This Plan shall be administered by a
Committee, which shall consist of the Board, or such committee as the Board
shall appoint.  Members of the Committee
may be Participants in this Plan.  The
Committee shall act at meetings by affirmative vote of a majority of the
members of the Committee.  Any action
permitted to be taken at a meeting may be taken without a meeting if, prior to
such action, a unanimous written consent to the action is signed by all members
of the Committee and such written consent is filed with the minutes of the
proceedings of the Committee.  The
Chairman or any other member or members of the Committee designated by the
Chairman may execute any certificate or other written direction on behalf of
the Committee.  When making a
determination or calculation, the Committee shall be entitled to rely on
information furnished by a Participant or the Company.  Any individual serving on the Committee who
is a Participant shall not vote or act on any matter relating solely to himself
or herself.

 

13.2                           Committee Authority.  The Committee shall enforce this Plan in
accordance with its terms, shall be charged with the general administration of
this Plan, and shall have all powers necessary to accomplish its purposes, including,
but not by way of limitation, the following:

 

21

 

•                                          To
select the Measurement Funds available from time to time;

 

•                                          To
construe and interpret the terms and provisions of this Plan;

 

•                                          To
compute and certify to the amount and kind of benefits payable to Participants
and their Beneficiaries, to determine the time and manner in which such
benefits are paid, and to determine the amount of any withholding taxes to be
deducted pursuant to Section 3.9;

 

•                                          To
maintain all records that may be necessary for the administration of this Plan;

 

•                                          To
provide for the disclosure of all information and the filing or provision of
all reports and statements to Participants, Beneficiaries or governmental
agencies as shall be required by law;

 

•                                          To
make and publish such rules for the regulation of this Plan and procedures for
the administration of this Plan as are not inconsistent with the terms hereof;

 

•                                          To
administer this Plan’s claims procedures;

 

•                                          To
approve election forms and procedures for use under this Plan; and

 

•                                          To
appoint a plan recordkeeper or any other agent, and to delegate to them such
powers and duties in connection with the administration of this Plan as the
Committee may from time to time prescribe.

 

13.3                           Agents. In
the administration of this Plan, the Committee may, from time to time, employ
agents and delegate to them such administrative duties as it sees fit
(including acting through a duly appointed representative) and may from time to
time consult with counsel who may be counsel to any Employer.

 

13.4                           Binding Effect of
Decisions.  Except as expressly provided in Section 15.6
with respect to an arbitrator’s de novo review
of determinations related to claims arising upon or following the occurrence of
a Change in Control, the decision or action of the Committee with respect to
any question arising out of or in connection with the administration,
interpretation and application of this Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all
persons having any interest in this Plan.

 

13.5                           Indemnity of Committee.  The members of the Committee shall serve
without compensation for their services hereunder.  The Committee is authorized at the expense of
the Company to employ such legal counsel and/or Plan recordkeeper as it may
deem advisable to assist in the performance of its duties hereunder.  Expenses and fees in connection with the
administration of this Plan shall be paid by the Company.  All Employers shall, to the fullest extent
permitted by law, indemnify and hold harmless the members of the Committee, any
Employee to whom the duties of the Committee may be delegated against any and
all claims, losses, damages, expenses or liabilities arising from 

 

22

 

any action or failure to act with respect to this
Plan, except in the case of willful misconduct by the Committee, any of its
members, or any such Employee.

 

13.6                           Employer Information.  To enable the Committee to perform its
functions, the Company and each Employer shall supply full and timely
information to the Committee on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement, Disability, death,
Change in Control Termination or Termination of Employment of its Participants,
and such other pertinent information as the Committee may reasonably require.

 

13.7                           Statements.  Under procedures established by the
Committee, a Participant shall be provided a statement on no less than an
annual basis with respect to such Participant’s Account as of the last day of
the preceding calendar year.

 

ARTICLE 14

OTHER
BENEFITS AND AGREEMENTS

 

14.1                           Coordination with Other
Benefits.  The benefits provided for a Participant and
Participant’s Beneficiary under this Plan are in addition to any other benefits
available to such Participant under any other plan or program for employees of
the Participant’s Employer.  This Plan
shall supplement and shall not supersede, modify or amend any other such plan
or program except as may otherwise be expressly provided.

 

ARTICLE 15

CLAIMS
PROCEDURES

 

15.1                           Presentation of Claim.  Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
“Claimant”) may deliver to the Committee a written claim for a determination
with respect to the benefits payable to such Claimant pursuant to this
Plan.  If such a claim relates to the contents
of a notice received by the Claimant, the claim must be made within sixty
(60) days after such notice was received by the Claimant.  All other claims must be made within one
hundred eighty (180) days of the date on which the event that caused the claim
to arise occurred.  The claim must state
with particularity the determination desired by the Claimant.

 

15.2                           Notification of Decision.  The Committee shall consider a Claimant’s
claim within a reasonable time, but no later than ninety (90) days after
receiving the claim.  If the Committee
determines that special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished to the
Claimant prior to the termination of the initial ninety (90) day period.  In no event shall such extension exceed a
period of ninety (90) days from the end of the initial period.  The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination.  The Committee shall notify the Claimant in
writing:

 

(a)                                  that
the Claimant’s requested determination has been made, and that the claim has
been allowed in full; or

 

23

 

(b)                                 that
the Committee has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

 

(i)                                     the
specific reason(s) for the denial of the claim, or any part of it;

 

(ii)                                  specific
reference(s) to pertinent provisions of this Plan upon which such denial was
based;

 

(iii)                               a
description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary;

 

(iv)                              an
explanation of the claim review procedure set forth in Section 15.3; and

 

(v)                                 a
statement of the Claimant’s right to bring an arbitration pursuant to Section
15.6 or, to the extent required by law, a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

 

15.3                           Review of a Denied Claim.  On or before sixty (60) days after
receiving a notice from the Committee that a claim has been denied, in whole or
in part, a Claimant (or the Claimant’s duly authorized representative) may file
with the Committee a written request for a review of the denial of the
claim.  The Claimant (or the Claimant’s
duly authorized representative):

 

(a)                                  may,
upon request and free of charge, have reasonable access to, and copies of, all
documents, records and other information relevant to the claim for benefits;

 

(b)                                 may
submit written comments or other documents; and/or

 

(c)                                  may
request a hearing, which the Committee, in its sole discretion, may grant.

 

15.4                           Decision on Review.  The Committee shall render its decision on
review promptly, and no later than sixty (60) days after the Committee
receives the Claimant’s written request for a review of the denial of the claim.  If the Committee determines that special
circumstances require an extension of time for processing the claim, written
notice of the extension shall be furnished to the Claimant prior to the
termination of the initial sixty (60) day period.  In no event shall such extension exceed a
period of sixty (60) days from the end of the initial period.  The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination.  In rendering its decision, the Committee
shall take into account all comments, documents, records and other information
submitted by the Claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.  The decision must be
written in a manner calculated to be understood by the Claimant, and it must
contain:

 

(a)                                  specific
reasons for the decision;

 

(b)                                 specific
reference(s) to the pertinent Plan provisions upon which the decision was
based;

 

(c)                                  a
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other 

 

24

 

information relevant (as defined in applicable ERISA
regulations) to the Claimant’s claim for benefits; and

 

(d)                                 a
statement of the Claimant’s right to bring a civil action under ERISA Section
502(a).

 

15.5                           Pre and Post-Change in
Control Procedures.  With respect to claims made prior to the
occurrence of a Change in Control, a Claimant’s compliance with the foregoing
provisions of this Article 15 is a mandatory prerequisite to a Claimant’s right
to commence arbitration pursuant to Section 15.6 with respect to any claim for
benefits under this Plan.  With respect
to claims made upon and after the occurrence of a Change in Control, the
Claimant may proceed directly to arbitration in accordance with Section 15.6
and need not first satisfy the foregoing provisions of this Article 15.

 

15.6                           Arbitration of
Claims.  All claims or
controversies arising out of or in connection with this Plan, that the Company
or any Employer may have against any Claimant, or that any Claimant may have
against the Company or any Employer or against any of their respective
officers, directors, employees or agents acting in their capacity as such,
shall, subject to the initial review provided for in the foregoing provisions
of this Article 15 that are effective with respect to claims brought prior to
the occurrence of a Change in Control, be resolved through arbitration as
provided in this Section 15.6.  The
decision of an arbitrator on any issue, dispute, claim or controversy submitted
for arbitration, shall be final and binding upon the Company, each Employer and
the Claimant and that judgment may be entered on the award of the arbitrator in
any court having proper jurisdiction. 
With respect to claims arising upon or following the occurrence of a
Change in Control (but not with respect to any determination made by the
Committee prior to the Change in Control), the arbitrator shall review de novo any claim previously considered by
the Committee pursuant to this Article 15.

 

All expenses of such arbitration, including the fees
and expenses of the counsel for the Claimant, shall be advanced and borne by
the Company; provided, however, that if it is finally determined that the
Claimant did not commence the arbitration in good faith and had no reasonable
basis therefore, the Claimant shall repay to the Company all amounts advanced
by the Company to cover the Claimant’s fees and expenses of counsel and shall
reimburse the Company for its reasonable legal fees and expenses in connection
with the arbitration.

 

Except as otherwise provided in this procedure or by
mutual agreement of the parties, any arbitration shall be administered:  (1) in accordance with the then-current
Model Employment Arbitration Procedures of the American Arbitration Association
(“AAA”) before an arbitrator who is licensed to practice law in the state in
which the arbitration is convened; or (2) if locally available, the
Judicial Arbitration & Mediation Services, Inc. (“JAMS”), in accordance
with the JAMS procedures then in effect. 
The party who did not initiate the claim can designate between JAMS or
AAA (the “Tribunal”).  The arbitration
shall be held in the city in which the Claimant is or was last employed by the
Company in the nearest Tribunal office or at a mutually agreeable location.  Pre-hearing and post-hearing procedures may
be held by telephone or in person as the arbitrator deems necessary.

 

25

 

The arbitrator shall be selected as follows: if the
parties cannot agree on an arbitrator, the Tribunal (JAMS or AAA) shall then
provide the names of nine (9) available arbitrators experienced in business
employment matters along with their resumes and fee schedules.  Each party may strike all names on the list
it deems unacceptable.  If more than one
common name remains on the list of all parties, the parties shall strike names
alternately until only one remains.  The
party who did not initiate the claim shall strike first.  If no common name remains on the lists of the
parties, the Tribunal shall furnish an additional list or lists until an
arbitrator is selected.

 

The arbitrator shall interpret this Plan, any
applicable Company policy or rules and regulations, any applicable substantive
law (and the law of remedies, if applicable) of the state in which the claim
arose or applicable federal law (any such law to be applicable only to the
extent consistent with Section 17.9).  In
reaching his or her decision, the arbitrator shall have no authority to change
or modify any lawful Company policy, rule or regulation, or this Plan.  The arbitrator, and not any federal, state or
local court or agency, shall have exclusive and broad authority to resolve any
dispute relating to the interpretation, applicability, enforceability or
formation of this Plan, including but not limited to, any claim that all or any
part of this Plan is voidable.

 

The arbitrator shall have authority to entertain a
motion to dismiss and/or motion for summary judgment by any party and shall
apply the standards governing such motions under the Federal Rules of Civil
Procedure.

 

Each party shall have the right to take the deposition
of one individual and any expert witness(es) designated by another party.  Each party shall also have the opportunity to
obtain documents from another party through one request for production of
documents.  Additional discovery may be
had only when the arbitrator so orders upon a showing of substantial need.  Any disputes regarding depositions, requests
for production of documents or other discovery shall be submitted to the
arbitrator for determination.

 

Each party shall have the right to subpoena witnesses
and documents for the arbitration hearing by requesting a subpoena from the
arbitrator.  Any such request shall be
served on all other parties, who shall advise the arbitrator in writing of any
objections that the party may have to issuance of the subpoena within ten (10)
calendar days of receipt of the request.

 

At least thirty (30) calendar days before the
arbitration, the parties must exchange lists of witnesses, including any
expert(s), and copies of all exhibits intended to be used at the arbitration.

 

ARTICLE 16

THE
TRUST

 

16.1                           Establishment of the Trust.  In order to provide assets from which to
fulfill the obligations of the Participants and their beneficiaries under this
Plan, the Company may establish a trust by a trust agreement with a third
party, the trustee, to which each Employer may, in its discretion, contribute
cash or other property, including securities 

 

26

 

issued by the Company, to provide for the benefit
payments under this Plan, (the “Trust”).

 

16.2                           Interrelationship of this
Plan and the Trust.  The provisions of this Plan and the
applicable Plan Agreement shall govern the rights of a Participant to receive
distributions pursuant to this Plan.  The
provisions of the Trust shall govern the rights of the Employers, Participants
and the creditors of the Employers to the assets transferred to the Trust.  Each Employer shall at all times remain
liable to carry out its obligations under this Plan.

 

16.3                           Distributions From the
Trust.  Each Employer’s obligations under this Plan
may be satisfied with Trust assets distributed pursuant to the terms of the
Trust, and any such distribution shall reduce the Employer’s obligations under
this Plan.

 

ARTICLE 17

MISCELLANEOUS

 

17.1                           Status of Plan.  This Plan is intended to be a plan that is
not qualified within the meaning of Code Section 401(a) and that “is unfunded
and is maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1).  This Plan shall be
administered and interpreted to the extent possible in a manner consistent with
that intent.

 

17.2                           Unsecured General Creditor.  Each Employer’s obligation under this Plan
shall be merely that of an unfunded and unsecured promise of the Employer to
pay money in the future, and the rights of the Participants and Beneficiaries
shall be no greater than those of unsecured general creditors.  Participants and their Beneficiaries, heirs,
successors, and assigns shall have no legal or equitable rights, claims, or
interest in any specific property or assets of the Company or any
Employer.  No assets of the Company or
any other Employer shall be held under any trust (except as provided in Article
16), or held in any way as collateral security for the fulfilling of the
obligations of the Company or other Employer under this Plan.  Any and all of each Employer’s assets shall
be, and remain, the general unpledged, unrestricted assets of the Employer.

 

17.3                           Employer’s Liability.  An Employer’s liability for the payment of
benefits shall be defined only by this Plan and the Plan Agreement, as entered
into between the Employer and a Participant. 
An Employer shall have no obligation to a Participant under this Plan
except as expressly provided in this Plan and his or her Plan Agreement.  Each Employer shall be liable for the payment
of amounts deferred under this Plan (as adjusted pursuant to Section 3.8) with
respect to a Participant to the extent that such amounts would have otherwise
been payable to the Participant by that Employer.

 

17.4                           Nonassignability.  Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in
advance of actual receipt, the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are expressly declared to be,
unassignable and non-transferable.  No
part of the amounts payable shall, 

 

27

 

prior to actual payment, be subject to seizure,
attachment, garnishment (except to the extent the Participant’s Employer may be
required to garnish amounts from payments due under this Plan pursuant to
applicable law) or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person, be
transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency or be transferable to a spouse as a result of
a property settlement or otherwise.  If
any Participant, Beneficiary or successor in interest is adjudicated bankrupt
or purports to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate, alienate or convey in advance of
actual receipt, the amount, if any, payable hereunder, or any part thereof, the
Committee, in its sole discretion, may cancel such distribution or payment (or
any part thereof) to or for the benefit of such Participant, Beneficiary or
successor in interest in such manner as the Committee shall direct.

 

17.5                           Not a Contract of
Employment.  The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between any Employer and
the Participant.  Such employment is
hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without cause, and
with or without notice, unless expressly provided in a written employment
agreement.  Nothing in this Plan or in
any Plan Agreement or other document related to this Plan shall constitute such
an employment agreement or shall otherwise be deemed to give a Participant the
right to be retained in the service of any Employer, either as an Employee or a
Director, or to interfere with the right of any Employer to discipline or
discharge the Participant at any time.

 

17.6                           Furnishing Information.  A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information requested by
the Committee and take such other actions as may be requested in order to
facilitate the administration of this Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as
the Committee may deem necessary to obtain or maintain any insurance on the
life of the Participant as contemplated by Section 17.17.

 

17.7                           Terms.  Whenever any words are used herein in the
masculine, they shall be construed as though they were in the feminine in all
cases where they would so apply; and whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were used in
the plural or the singular, as the case may be, in all cases where they would
so apply.

 

17.8                           Captions.  The captions of the articles, sections and
paragraphs of this Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.

 

17.9                           Governing Law.  Subject to ERISA, the provisions of this Plan
shall be construed and interpreted according to the internal laws of the State
of California without regard to its conflicts of laws principles.

 

17.10                     Notice.  Any notice or filing required or permitted to
be given to the Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified U.S. mail, postage prepaid,
to the address below: 

 

28

 

	
  International Rectifier Corporation

  
	
  Attn: Director, Global Compensation, 

  
	
  Benefits and HR Services

  
	
  101 N. Sepulveda Avenue

  
	
  El Segundo, CA  90245

  
	
  (310) 726-8301

  

 

Any notice or filing required or permitted to be given
to a Participant under this Plan shall be sufficient if in writing and hand-delivered,
or sent by registered or certified U.S. mail, postage prepaid, to the last
address of the Participant reflected on the payroll records (or, in the case of
a Director, Board records) of the Company.

 

Any such notice shall be deemed given as of the date
of delivery or, if delivery is made by registered or certified U.S. mail, as of
the date shown on the postmark on the receipt for registration or
certification.  The Company or a
Participant may change its address pursuant to the foregoing by furnishing a
written notice pursuant to the foregoing to the other, which notice shall
include the person’s new address and make specific reference to the importance
of the notice.

 

17.11                     Successors.  The provisions of this Plan shall bind and
inure to the benefit of the Participant’s Employer and its successors and
assigns and the Participant and the Participant’s Beneficiaries.

 

17.12                     Spouse’s Interest.  The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse’s will, nor shall such
interest pass under the laws of intestate succession.

 

17.13                     Validity.  In case any provision of this Plan shall be
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been inserted
herein.

 

17.14                     Incompetent.  If the Committee determines in its reasonable
discretion that a benefit under this Plan is to be paid to a minor, a person
declared incompetent or to a person incapable of handling the disposition of
that person’s property, the Committee may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. 
The Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit.  Any payment of a benefit shall
be a payment for the account of the Participant and the Participant’s
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under this Plan for such payment amount.

 

17.15                     Court Order.  The Committee is authorized to comply with
any court order in any action in which this Plan or the Committee has been
named as a party, including any action involving a determination of the rights
or interests in a Participant’s benefits under this Plan.  Notwithstanding the foregoing, the Committee
shall interpret this provision in a 

 

29

 

manner that is consistent with applicable tax law,
including but not limited to guidance issued after the effective date of this
Plan.

 

17.16                     Deduction Limitation on
Benefit Payments.  Notwithstanding anything else contained
herein to the contrary, if an Employer determines in good faith prior to a
Change in Control that there is a reasonable likelihood that any compensation
paid to a Participant for a taxable year of the Employer would not be
deductible by the Employer solely by reason of the limitation under Code Section
162(m), then to the extent deemed necessary by the Employer to ensure that the
entire amount of any distribution to the Participant pursuant to this Plan
prior to the Change in Control is deductible, the Employer may defer all or any
portion of a distribution under this Plan. 
Any amounts deferred pursuant to this limitation shall continue to be
credited/debited with additional amounts in accordance with Section 3.8, even
if such amount is being paid out in installments.  The amounts so deferred and amounts credited
thereon shall be distributed to the Participant or his or her Beneficiary (in
the event of the Participant’s death) at the earliest possible date, as
determined by the Employer in good faith, on which the deductibility of
compensation paid or payable to the Participant for the taxable year of the
Employer during which the distribution is made will not be limited by Code
Section 162(m), or if earlier, upon or promptly following the effective date of
a Change in Control.  Notwithstanding
anything to the contrary in this Plan, the Deduction Limitation shall not apply
to any distributions made after a Change in Control.

 

17.17                     Insurance.  The Employers, on their own behalf or on
behalf of the trustee of the Trust, and, in their sole discretion, may apply
for and procure insurance on the life of the Participant, in such amounts and
in such forms as the Trust may choose. 
The Employers or the trustee of the Trust, as the case may be, shall be
the sole owner and beneficiary of any such insurance.  The Participant shall have no interest
whatsoever in any such policy or policies, and at the request of the Employers
shall submit to medical examinations and supply such information and execute
such documents as may be required by the insurance company or companies to whom
the Employers have applied for insurance.

 

17.18                     Additional Special Rules
Regarding Deferred Payment.  Notwithstanding any provision in this Plan to
the contrary, if a Participant becomes entitled to benefits under this Plan, the
Committee may delay the Participant’s benefit distribution date to a date
immediately following a Valuation Date that occurs not later than thirteen (13)
months after the date such amount was originally scheduled to be paid to the
extent that the Committee reasonably determines that such a later benefit
distribution date is reasonably necessary to comply with applicable laws, rules
or regulations or is otherwise reasonably advisable to preserve the intended
tax consequences of this Plan.

 

17.19                     Construction Consistent
With Applicable Tax Rules.  The Committee shall, to the maximum extent
reasonably possible, interpret all provisions of this Plan in a manner that is
consistent with all applicable laws, rules and regulations and the intended tax
consequences of this Plan (including, without limitation, guidance that may be
issued after the effective date of this Plan).

 

30

 

IN WITNESS WHEREOF,
the Company has caused the undersigned, its duly authorized officer, to execute
this Plan document as of this
            day of
                          ,
2004.

 

	
   

  	
  “Company”

  
	
   

  	
  International
  Rectifier Corporation,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

31

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