Document:

rbcfirstamendment.htm

 

Regal-Beloit Corporation

 

___________________________________

 

First Amendment

Dated as of August 16, 2011

 

to

 

Note Purchase Agreement

Dated as of July 14, 2011

 

___________________________________

 

Re:  

$500,000,000 Series 2011A Senior Notes

 

  

  

  

First Amendment to Note Purchase Agreement

 

This First Amendment to Note Purchase Agreement dated as of August 16, 2011 (the or this “First Amendment”) is among Regal-Beloit Corporation, a Wisconsin corporation (the “Company”), and each of the institutions set forth on the signature pages to this First Amendment (the “Purchasers”).  Capitalized definitional terms used herein shall have the respective meanings ascribed thereto in the Note Purchase Agreement (as defined below) unless herein defined or the context shall otherwise require.

 

Recitals:

 

A.The Company and each of the Purchasers have heretofore entered into a Note Purchase Agreement dated as of July 14, 2011 (the “Note Purchase Agreement”), pursuant to which (a) the Company issued an aggregate principal amount of its (i) $75,000,000 Series 2011A 4.99% Senior Notes, Tranche A, due July 14, 2021, (ii) $75,000,000 Series 2011A 5.09% Senior Notes, Tranche B, due July 14, 2023, (iii) $84,000,000 Series 2011A 4.09% Senior Notes, Tranche C, due July 14, 2018, (iv) $94,000,000 Series 2011A 4.77% Senior Notes, Tranche D, due July 14, 2021 and (v) $95,000,000 Series 2011A 4.87% Senior Notes, Tranche E, due July 14, 2023 and (b) the Company agreed to issue and certain of the Purchasers agreed to purchase, subject to the satisfaction of certain closing conditions, an aggregate principal amount of its (i) $16,000,000 Series 2011A 4.09% Senior Notes, Tranche F, due July 14, 2018 and (ii) $61,000,000 Series 2011A 4.77% Senior Notes, Tranche G, due July 14, 2021 (collectively, the “Notes”).  

 

B.Pursuant to Section 3 of the Note Purchase Agreement, the Second Closing is required to occur on or prior to August 17, 2011.

 

C.Pursuant to Section 4.14 of the Note Purchase Agreement, the obligation of the Purchasers of the Tranche F Notes and the Tranche G Notes to purchase and pay for such Notes at the Second Closing is conditioned upon the Company’s receipt, on or prior to the Second Closing, of all regulatory approvals to consummate the transactions contemplated by that certain Asset and Stock Purchase Agreement dated as of December 12, 2010 between the Company and A.O. Smith Corporation.

 

D.The condition to the Second Closing contained in Section 4.14 of the Note Purchase Agreement will not occur on or prior to August 17, 2011.

 

E.The Company has requested that the Purchasers agree to amend the Note Purchase Agreement as hereinafter set forth.

 

F.The Purchasers are willing to amend the Note Purchase Agreement, in the respects, but only in the respects, hereinafter set forth and on the terms and conditions set forth herein.

  

2

  

 

G.All requirements of law have been fully complied with and all other acts and things necessary to make this First Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

 

Now, therefore, the Company and the Purchasers, in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, do hereby agree as follows:  

 

	
  

	
Section 1.Amendment.

 

     Section 1.1. Section 3 and Section 17.1(a) of the Note Purchase Agreement shall be and is hereby amended by deleting the references to “August 17, 2011” therein and replacing them with “September 7, 2011.”

 

Section 1.2. The definition of “Required Holders” in Schedule B of the Note Purchase Agreement shall be and is hereby amended by deleting the references to “August 17, 2011” therein and replacing them with “September 7, 2011.”

 

	
  

	
Section 2.Representations and Warranties of the Company.

 

Section 2.1. To induce the Purchasers to execute and deliver this First Amendment (which representations shall survive the execution and delivery of this First Amendment), the Company represents and warrants to the Purchasers that:

 

(a)this First Amendment constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally (regardless of whether such enforceability is considered in a proceeding in equity or at law);

 

(b)the Note Purchase Agreement, as amended by this First Amendment, constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally (regardless of whether such enforceability is considered in a proceeding in equity or at law);

 

(c)the execution, delivery and performance by the Company of this First Amendment (i) has been duly authorized by all requisite corporate action and, if required, shareholder action, (ii) does not require the consent or approval of any governmental or regulatory body or agency, and (iii) will not (A) violate (1) any provision of law, statute, rule or regulation or its articles of incorporation or bylaws, (2) any order of any court or any rule, regulation or order of any other agency or government binding upon it, or (3) any provision of any indenture, agreement or other instrument to which it is a party or by which its properties or assets are or may be bound, or (B) result in a breach or

 

  

3

  

 

constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause (iii)(A)(3) of this Section 2.1(c); 

 

(d)as of the date hereof, no Default or Event of Default has occurred which is continuing; and

 

(e)all of the representations and warranties contained in Section 5 of the Note Purchase Agreement are true and correct in all material respects with the same force and effect as if made by the Company on and as of the date hereof, except to the extent that such representations and warranties expressly relate solely to an earlier date, in which case such representations and warranties shall have been true and correct on and as of such date.

 

	
  

	
Section 3.Conditions to Effectiveness of This First Amendment.

 

Section 3.1. This First Amendment shall become effective as of August 16, 2011 when each and every one of the following conditions shall have been satisfied:

 

(a)executed counterparts of this First Amendment, duly executed by the Company, the Subsidiary Guarantors and the Required Holders shall have been delivered to the Purchasers;

 

(b)the representations and warranties of the Company set forth in Section 2 hereof are true and correct on and with respect to the date hereof; 

 

(c)each Purchaser shall have received such certificates of officers of the Company as it may reasonably request with respect to this First Amendment; and

 

(d)all corporate and other proceedings in connection with the transactions contemplated by this First Amendment and all documents and instruments incident to such transactions shall be satisfactory to the Purchasers and their special counsel, and the Purchasers and their special counsel shall have received all such counterpart originals or certified or other copies of such documents as they may reasonably request.   

 

	
  

	
Section 4.Miscellaneous.

 

Section 4.1. This First Amendment shall be construed in connection with and as part of the Note Purchase Agreement, and except as modified and expressly amended by this First Amendment, all terms, conditions and covenants contained in the Note Purchase Agreement and the Notes are hereby ratified and shall be and remain in full force and effect.

 

Section 4.2. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this First Amendment may refer to the Note Purchase Agreement without making specific reference to this First Amendment but nevertheless all such references shall include this First Amendment unless the context otherwise requires.

 

  

4

  

 

Section 4.3. Each reference in the Note Purchase Agreement to “this Agreement,” “hereunder,” “hereof,” or words of similar import in instruments or documents provided for in the Note Purchase Agreement or delivered or to be delivered thereunder or in connection therewith, shall, except where the context otherwise requires, be deemed a reference to the Note Purchase Agreement, as amended hereby.

 

Section 4.4. The descriptive headings of the various Sections or parts of this First Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

 

Section 4.5. This First Amendment shall be governed by and construed in accordance with the internal laws of the State of New York excluding choice-of-law principles of the laws of such State that would permit the application of the laws of a jurisdiction other than such State.

 

Section 4.6. This First Amendment and all covenants herein contained shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereunder.  All covenants made by the Company herein shall survive the delivery of this First Amendment.

 

Section 4.7. This First Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which, taken together, shall constitute but one and the same amendment.  Delivery of an executed counterpart of this First Amendment by facsimile or email shall be as effective as delivery of a manually executed counterpart of this First Amendment.

 

Section 4.8. This First Amendment and the documents referred to herein contain the entire agreement among the Purchasers and the Company with respect to the subject matter hereof, superseding all previous communications and negotiations, and no representation, undertaking, promise or condition concerning the subject matter hereof shall be binding on the Purchasers unless clearly expressed in this Agreement or in the other documents referred to herein.

 

 

  

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The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this First Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.

	
  

	
Very truly yours,

	
  

	
Regal-Beloit Corporation

	
  

	
By     /s/   Charles A. Hinrichs                                                    

	
  

	 	
Name: Charles A. Hinrichs

	
  

	 	
Title:   Vice President and Chief Financial Officer

	
  

	
               

	
  

	
   

  

6

  

Consented to by the Subsidiary Guarantors:

	
  

	
Hub City, Inc.

	
  

	
Marathon Special Products Corporation

	
  

	
Regal-Beloit Flight Service, Inc.

	
  

	
RBC Horizon, Inc.

	
  

	
Morrill Motors, Inc.

	
  

	
RBC Manufacturing Corporation 

	
  

	
Jakel Motors Incorporated

	
  

	
RBC Power Electronics, Inc.

	
  

	
Ramu Inc.

	
  

	
Unico, Inc.

	
  

	
By       /s/ Charles A. Hinrichs

	
  

	
Name:  Charles A. Hinrichs

	
  

	
Title:    Vice President and Treasurer

	
  

	
Morrill Electric, Inc.

	
  

	
By         /s/  John M. Perino

	
  

	
Name:    John M. Perino

	
  

	
Title:      Vice President and Treasurer

	
  

	
Regal Beloit Logistics, LLC

	
  

	
By         /s/  Charles A. Hinrichs

	
  

	
Name:  Charles A. Hinrichs

	
  

	
Title:    Vice President and Treasurer

	
  

	
RBC Holding LLC

	
  

	
By        /s/  John M. Perino

	
  

	
Name:  John M. Perino

	
  

	
Title:    Director

  

7

  

Accepted and Agreed to:

	
  

	
First SunAmerica Life Insurance Company

	
  

	
Western National Life Insurance Company

	
  

	
by:   AIG Asset Management (U.S.), LLC, as

	
  

	
         Investment Advisor

	
  

	
By:      /s/  Gerald F. Herman                                                              

	
  

	
Name:  Gerald F. Herman

	
  

	
Title:     Vice President

  

8

  

Accepted and Agreed to:

	
  

	
Hartford Life Insurance Company

	
  

	
hartford Accident and Indemnity Company

	
  

	
Hartford Casualty Insurance Company

	
  

	
By:  Hartford Investment Management Company

	
  

	
        Their Agent and Attorney-in-Fact

	
  

	
By:       /s/  John R. Knox                                 

	
  

	
Name:  John R. Knox

	
  

	
Title:    Vice President

  

9

  

Accepted and Agreed to:

	
  

	
Massachusetts Mutual Life Insurance

	
  

	
Company

	
  

	
By:  Babson Capital Management LLC as

	
  

	
        Investment Advisor

	
  

	
By:       /s/  Thomas P. Shea                                 

	
  

	
Name:  Thomas P. Shea

	
  

	
Title:    Managing Director

	
  

	
C.M. Life Insurance company

	
  

	
By:  Babson Capital Management LLC as

	
  

	
        Investment Advisor

	
  

	
By:        /s/ Thomas P. Shea                                

     Name:  Thomas P. Shea

     Title:    Managing Director

  

10

  

Accepted and Agreed to:

	
  

	
Connecticut General Life Insurance Company

	
  

	
By:  CIGNA Investments, Inc. (authorized agent)

	
  

	
By:       /s/  Leonard Mazlish                                 

	
  

	
Name:  Leonard Mazlish

	
  

	
Title:    Managing Director

	
  

	
CIGNA Life Insurance Company of New York

	
  

	
By:  CIGNA Investments Inc. (authorized agent)

	
  

	
By:        /s/ Leonard Mazlish                                

     Name:  Leonard Mazlish

     Title:    Managing Director

	
  

	
Life Insurance Company of North America

	
  

	
By:  CIGNA Investments Inc. (authorized agent)

	
  

	
By:        /s/ Leonard Mazlish                                

     Name:  Leonard Mazlish

     Title:    Managing Director

  

11

  

Accepted and Agreed to:

	
  

	
The Northwestern Mutual Life Insurance

	
  

	
Company, a Wisconsin corporation

	
  

	
By:  /s/ Jerome R. Baier                                  

	
  

	
Name:  Jerome R. Baier

	
  

	
Its Authorized Representative

  

12

  

Accepted and Agreed to:

	
  

	
The Prudential Insurance Company of

	
  

	
     America

	
  

	
By:   /s/                                                               

	
  

	
         Vice President

	
  

	
Gilbraltar Life Insurance Co., Ltd.

	
  

	
By:  Prudential Investment Management (Japan)

	
  

	
        Inc., as Investment Manager

	
  

	
By:  Prudential Investment Management, Inc., as 

	
  

	
        Sub-Adviser 

	
  

	
By:   /s/                                                                 

	
  

	
         Vice President

	
  

	
Prudential Annuities Life Assurance

	
  

	
    Corporation

	
  

	
By:  Prudential Investment Management, Inc., as

	
  

	
        Investment Manager

	
  

	
By:   /s/                                                          

	
  

	
         Vice President

	
  

	
Physicians Mutual Insurance Company.

	
  

	
By:  Prudential Private Placement Investors, L.P.

	
  

	
        (as Investment Advisor)

	
  

	
By:  Prudential Private Placement Investors, Inc.

	
  

	
        (as its General Partner)

	
  

	
By:   /s/                                                                 

	
  

	
         Vice President

  

13

  

Accepted and Agreed to:

	
  

	
United of Omaha Life Insurance Company

	
  

	
By:       /s/     Justin P. Kavan                                 

	
  

	
Name:  Justin P. Kavan

	
  

	
Title:    Vice President

	
  

	
Companion Life Insurance Company

	
  

	
By:        /s/    Justin P. Kavan                                

     Name:  Justin P. Kavan

     Title:    Authorized Signer

  

14

  

Accepted and Agreed to:

	
  

	
The Guardian Life Insurance Company of

	
  

	
     America

	
  

	
By:       /s/     Barry Scheinholtz                            

	
  

	
Name:  Barry Scheinholtz

	
  

	
Title:    Senior Director, Private Placements

	
  

	
Berkshire Life Insurance Company of America

	
  

	
By:        /s/    Barry Scheinholtz                              

     Name:  Barry Scheinholtz

     Title:    Senior Director, Private Placements

  

15

  

Accepted and Agreed to:

	
  

	
American United Life Insurance Company

	
  

	
By:       /s/     Michael I. Bullock                          

	
  

	
Name:  Michael I. Bullock

	
  

	
Title:    V.P. Private Placements

  

16

  

Accepted and Agreed to:

	
  

	
Allstate Life Insurance Company of New York

	
  

	
By:       /s/     Orlando Purpura                                 

	
  

	
Name:  Orlando Purpura

	
  

	
Title:    Authorized Signatory

	
  

	
By:        /s/    Jerry D. Zinkula                                

	
  

	
               Name:  Jerry D. Zinkula

	
  

	
               Title:  Authorized Signatory

  

17

  

Accepted and Agreed to:

	
  

	
Modern Woodmen of America

	
  

	
By:       /s/     Michael E. Dau                                 

	
  

	
Name:  Michael E. Dau

	
  

	
Title:    Treasurer & Investment Manager

  

18

  

Accepted and Agreed to:

	
  

	
Woodmen of the World Life Insurance society

	
  

	
By:     /s/     Robert Maher                                 

	
  

	
Name:  Robert Maher

	
  

	
Title:    Vice President of Investments

  

19

  

Accepted and Agreed to:

	
  

	
The Automobile Insurance Company of

	
  

	
     Hartford, Connecticut

	
  

	
By:       /s/     Annette M. Masterson                        

	
  

	
Name:  Annette M. Masterson

	
  

	
Title:    Vice President

  

20

  

Accepted and Agreed to:

	
  

	
Southern Farm Bureau Life Insurance

	
  

	
     Company

	
  

	
By:      /s/     David Divine                                 

	
  

	
Name:  David Divine

	
  

	
Title:    Portfolio Manager

  

21

  

Accepted and Agreed to:

	
  

	
State of Wisconsin Investment Board

	
  

	
By:       /s/     Christopher P. Prestigiacomo        

	
  

	
Name:  Christopher P. Prestigiacomo

	
  

	
Title:    Portfolio Manager

  

22

  

Accepted and Agreed to:

	
  

	
Assurity Life Insurance Company

	
  

	
By:       /s/     Victor Weber                                 

	
  

	
Name:  Victor Weber

	
  

	
Title:    Senior Director – Investments 

  

23

  

Accepted and Agreed to:

	
  

	
Metropolitan Life Insurance Company

	
  

	
     on behalf of itself and as investment manager of

	
  

	
     the entities below:

	
  

	
MetLife Insurance company of Connecticut

	
  

	
MetLife Investors USA Insurance Company

	
  

	
General American Life Insurance Company

	
  

	
Missouri Reinsurance (Barbados), Inc.

	
  

	
Economy Fire and Casualty Company

	
  

	
By:       /s/     Judith A. Gulotta                                 

	
  

	
Name:  Judith A. Gulotta

	
  

	
Title:    Managing Director

	
  

	
Union Fidelity Life Insurance Company

	
  

	
By:  MetLife Investment Advisors Company, LLC,

	
  

	
        Its investment adviser

	
  

	
Employers Reassurance Company

	
  

	
By:  MetLife Investment Advisors Company, LLC,

	
  

	
        Its investment adviser

	
  

	
By:        /s/    Judith A. Gulotta                                

     Name:  Judith A. Gulotta

     Title:    Managing Director

  

24exh10-1.htm

 

 

EXHIBIT 10.1

Form of Updated June 2011 Extended Management Team Retention Restricted Stock Unit Award Agreement

INTERNATIONAL RECTIFIER CORPORATION

2000 INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

Participant Name:

	
Number of Stock Units:

	
1

	
Vesting Schedule:

	
One-third of the Stock Units subject to the Award will vest on each of the first three anniversary dates of Award Date1

	
Award Date:

	
_____, 2011

______________________________________________________________________________

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

THIS AGREEMENT is among INTERNATIONAL RECTIFIER CORPORATION, a Delaware corporation (the “Corporation”), and the employee named above (the “Participant”), an employee of the Corporation or one of its subsidiaries, and is delivered under the International Rectifier Corporation 2000 Incentive Plan (Amended and Restated as of November 22, 2004) (the “Plan”).

 

W I T N E S S E T H

 

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

 

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

 

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

 

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

 

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

 

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

 

5.           Limitations on Rights Associated with Units.

 

The Participant shall have no rights as a stockholder of the Corporation, no dividend rights  and no voting rights with respect to the Stock Units or any shares of Common Stock issuable in respect of such Stock Units, until shares of Common Stock are actually issued to and held of record by the Participant.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate evidencing the shares.

 

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

 

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

 

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

 

(a)           Forfeiture after Certain Events.  The Participant’s Stock Units shall be extinguished to the extent such Stock Units have not become vested upon the date the Participant is no longer employed by the Corporation or one of its Subsidiaries, regardless of the reason for such termination of employment, whether with or without cause, voluntarily or involuntarily; provided, however, that if the Participant incurs a permanent and total disability or dies while employed by the Corporation or a Subsidiary, then if the Stock Units subject to the Award are not then otherwise fully vested the next scheduled vesting installment of such Stock Units shall become vested upon such termination of employment.  If the Participant is employed by an entity that is a Subsidiary and such entity ceases to be a Subsidiary, such even shall be deemed to be a termination of employment of the Participant unless the Participant otherwise continues following such event to be employed by the Corporation or another Subsidiary that continues as such following the event.  Absence from work caused by military service, authorized sick leave or other leave approved in writing by the Committee shall not be considered a termination of employment by the Corporation or a Subsidiary for purposes of this Section 8.

 

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

 

(c)           Possible Acceleration Upon Change in Control.  Notwithstanding any other provision to the contrary contained herein or in the Plan, in the event the Participant’s employment with the Corporation or a Subsidiary is terminated by the Corporation or a Subsidiary other than for Cause (as defined below) (or Participant resigns from his or her employment with the Corporation or a Subsidiary for Good Reason) upon or any time during a Protected Period (as defined below), then any portion of the Stock Units subject to the Award that have not previously vested or terminated shall thereupon vest and shall be paid in accordance with Section 7.

For purposes of this Agreement, “Cause” means any one or more of the following committed (or omitted) by the Participant:  (i) conviction of, or guilty plea or plea of nolo contendre to, a felony crime; (ii) gross misconduct that is materially injurious to the Corporation and/or any of its Subsidiaries or affiliates; (iii) repeated failure to follow the reasonable and lawful directions of the Corporation after the Participant has received at least one written warning from the Corporation; (iv) any willful and/or intentional material violation of any written Corporation policy or procedure; or (v) a material breach of any agreement to which the Participant is a party with the Corporation or any of its Subsidiaries.  Whether or not Cause exists in clauses (ii) through (v) shall in each case be determined in good faith by the Corporation.  Notwithstanding the foregoing, the Participant shall not be deemed to have been terminated for “Cause” under clauses (ii) through (v) unless and until the Corporation shall provide the Participant with written notice detailing why the Corporation believes a Cause event has occurred and specifying the particulars thereof in detail.  The Corporation shall also provide the Participant with ten days after his/her receipt of such notice to cure the Cause event(s) (if curable) and the opportunity, together with the Participant’s counsel (if the Participant chooses to have counsel present at such meeting), to be heard before the Board (or, in the Board’s discretion, the Committee or their delegates) during such ten day period.  Nothing herein will limit the right of the Participant to contest the validity or propriety of any such determination.

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

 

For purposes of this Agreement, “Good Reason” means that any one or more of the following have occurred without the Participant’s prior written consent:  (i) the Participant has, except in connection with termination of employment for Cause or due to the Participant’s death or total disability, suffered a material and substantial diminution in the Participant’s job responsibilities as in effect immediately prior to the public announcement of a contemplated Change in Control (and where such Change in Control does occur); provided, however, that neither mere changes in title and/or reporting relationship, nor reassignment following a Change in Control to a position that is similar to the position held immediately prior to such public announcement of the contemplated Change in Control shall constitute a material and substantial diminution in job responsibilities; provided further, that if the Participant’s job title as of the Award Date is denoted as or is in effect an “Interim” or “Acting” position, then a subsequent reassignment to a position of the same level which the Participant held immediately prior to assuming such Interim or Acting position or to a higher level shall not constitute a Good Reason event; (ii) the Participant has incurred a reduction in his or her annual rate of base pay or his or her annual target bonus opportunity; (iii) the Participant has been notified that his or her principal place of work will be relocated to a new location that is twenty miles or more from the Participant’s principal work location as of immediately before the public announcement of a contemplated Change in Control (and where such Change in Control does occur); or (iv) the Corporation has materially breached any agreement to which the participant is a party.  Before “Good Reason” has been deemed to have occurred, the Participant must give the Corporation written notice detailing why the Participant believes a Good Reason event has occurred and such notice must be provided to the Corporation within sixty days of the initial occurrence of such alleged Good Reason event(s) or else such Good Reason event(s) will be deemed to have been irrevocably waived by the Participant.  The Corporation shall then have thirty days after its receipt of written notice to cure or remedy the items cited in the written notice so that “Good Reason” will not have formally occurred with respect to the event(s) in question.  If the Corporation does not timely remedy or cure the Good Reason events, then the Participant may terminate employment for “Good Reason” with respect to such event(s) only for a period of sixty days following the end of the Corporation’s thirty day cure period.

For purposes of this Agreement, “Protected Period” means the two-year period immediately following (and commencing on) a Change in Control.

 

9.           Adjustments in Case of Changes in Common Stock.  The Committee may adjust the number of Stock Units subject to this Agreement as provided under Section 5.2 of the Plan.  Upon the occurrence of an Event (as defined below), the Committee shall make adjustments as it deems appropriate in the number and kind of securities or other consideration that may become payable with respect to the Award.  If any adjustment shall be made under Section 5.2 of the Plan or an Event shall occur and the Stock Unit Award has not been fully vested and paid upon such Event or prior thereto, the Stock Unit Award may become payable in securities or other consideration (the “Restricted Property”) rather than in the Common Stock otherwise payable in respect of the Stock Unit Award.  Such Restricted Property shall become payable at the times and in such proportions set forth in Section 7 above or such earlier time as the Committee may authorize pursuant to Section 10 below.  Notwithstanding the foregoing, to the extent that the Restricted Property includes any cash, the commitment hereunder shall become an unsecured promise to pay an amount equal to such cash (with earnings attributable thereto as if such amount had been invested, pursuant to policies established by the Committee, in interest bearing, FDIC insured (subject to applicable insurance limits) deposits of a depository institution selected by the Committee) at such times and in such proportions as the Stock Unit Award becomes payable in accordance with Section 7 above.  Notwithstanding the foregoing, the Stock Unit Award and any Common Stock or other securities or property payable in respect of the Stock Unit Award shall continue to be subject to proportionate and equitable adjustments (if any) under Section 5.2 of the Plan consistent with the effect of such events on stockholders generally, as the Committee determines to be necessary or appropriate, and in the number, kind and/or character of shares of Common Stock or other securities, property and/or rights payable in respect of Stock Units granted under the Plan.  All rights of the Participant hereunder are subject to those adjustments.  For purposes of this Agreement, “Event” means a liquidation, dissolution, Change in Control, merger, consolidation, or other combination or reorganization, or a recapitalization, reclassification, extraordinary dividend or other distribution (including a split up or a spin off of the Corporation or any significant Subsidiary), or a sale or other distribution of substantially all the assets of the Corporation as an entirety.

 

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

 

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

 

12.           Notices.  Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office located at 101 North Sepulveda Boulevard, El Segundo, California 90245, to the attention of the Assistant Secretary and to the Participant at the address given beneath the Participant’s signature hereto, or at such other address as either party may hereafter designate in writing to the other.

 

13.          Plan and Program.  The Award and all rights of the Participant with respect thereto are subject to, and the Participant agrees to be bound by, all of the terms and conditions of the provisions of the Plan, incorporated herein by reference, to the extent such provisions are applicable to Awards granted to employees.  The Participant acknowledges receipt of a copy of the Plan, which is made a part hereof by this reference, and agrees to be bound by the terms thereof.  Unless otherwise expressly provided in other Sections of this Agreement, provisions of the Plan that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the Plan after the date hereof.  If there is any conflict or inconsistency between the terms and conditions of this Agreement and of the Plan, the terms and conditions of the Plan shall govern. Notwithstanding the foregoing, this document does not supersede any rights the Participant may have to accelerated vesting under the terms of any written severance agreement entered into between Participant and the Company prior to the date hereof.  The Stock Units are subject to the terms of the Corporation’s recoupment or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Stock Units or any Common Stock or other cash or property received with respect to the Stock Units or the Common Stock issued with respect thereto.

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

 

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

 

16.           Electronic Signature or Acknowledgement. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument.  The provision of photographic or facsimile copies, or electronic signature, confirmation or acknowledgement of or by a party, shall constitute an effective original signature of a party for all purposes under this Agreement, and  may be used with the same effect as manually signed originals of this Agreement for any purpose.

 

 

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

 

INTERNATIONAL RECTIFIER                                                                                                PARTICIPANT

CORPORATION, a Delaware corporation

By:                                                                           

Signature

Print Name:  _______________­                                                                           

Address

Its:                                                      

City, State, Zip Code

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