Document:

Exhibit 10.6

 

December 29, 2008

 

Oleg
Khaykin

 

Dear
Oleg:

 

Reference
is made to your Employment Agreement dated February 6, 2008 by and between
you and International Rectifier Corporation (the “Company”) (the “Employment
Agreement”).

 

The
purpose of this letter is to supplement the terms of the Employment Agreement to
include terms and conditions designed to make any payments pursuant to the Employment
Agreement compliant with Section 409A of the Internal Revenue Code of
1986, as amended (including the Treasury Regulations and other published
guidance related thereto) (“Section 409A”). Capitalized terms used
but not defined herein shall have the meaning ascribed to them in the
Employment Agreement.

 

Your
Employment Agreement is hereby amended as follows:

 

1.                                       Reimbursement
of Legal Expenses.  Section 4.2
is hereby amended to insert the following sentence as the last sentence of the
paragraph:  “No payment shall be made
pursuant to this Section 4.2 unless the Executive is employed by the
Company on the date that the payment or reimbursement for any eligible legal
expenses is made.”

 

2.                                       Relocation Expenses.  Section 4.4
is hereby amended to insert the following sentence as the last sentence of the
paragraph:  “No payment shall be made
pursuant to this Section 4.4 unless the Executive is employed by the
Company on the date that the payment or reimbursement for any eligible expenses
is made.”

 

3.                                       Release; Exclusive Remedy.  The
second sentence of Section 5.4(a) is hereby amended to read as
follows:  “As a condition precedent to
any Corporation obligation to the Executive pursuant to Section 5.3(b),
the Executive shall, upon or promptly following, but in no event later than
twenty-one (21) days following, his last day of employment with the
Corporation:  (i) provide the
Corporation with a valid, executed, written release of claims (in substantially
the form attached hereto as Exhibit A, with such changes to such
form as the Corporation may determine necessary or appropriate to help ensure
that the release contemplated by such form is maximally enforceable in
accordance with applicable law) and such release shall have not been revoked by
the Executive pursuant to any revocation rights afforded by applicable law; and
(ii) satisfy his obligations under Section 5.4(c).”

 

4.                                       Section 409A.  The
following paragraphs are hereby added to Section 5.7 of the Employment
Agreement, with the paragraph that begins “If the Executive is a “specified
employee within the meaning...” as paragraph (a) of Section 5.7:

 

“(b)                           It is intended that any amounts payable under
this Agreement shall either be exempt from or comply with Section 409A so
as not to subject the Executive to payment of any additional tax, penalty or
interest imposed under Section 409A. 
The provisions of this Agreement shall be construed and interpreted to
avoid the imputation of any such additional tax, penalty or interest under Section 409A
yet preserve (to the nearest extent reasonably possible) the intended benefit
payable to the Executive.

 

1

 

(c)                                  To the extent required in order to avoid
accelerated taxation and/or tax penalties under Section 409A, the
Executive shall not be considered to have terminated employment with the
Company for purposes of the Agreement and no payments shall be due under the
Agreement which are payable upon termination of employment until the Executive
would be considered to have incurred a “separation from service” from the
Company within the meaning of Section 409A.

 

(d)                                 For purposes of this Agreement, each amount
to be paid or benefit to be provided to the Executive pursuant to the Agreement
shall be construed as a separate identified payment for purposes of Section 409A.”

 

Except
as modified hereby, your Employment Agreement remains unmodified.  Please indicate your agreement with the
foregoing by signing where indicated below.

 

	
  Regards,

  	
   

  
	
   

  	
   

  
	
  INTERNATIONAL
  RECTIFIER CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
  Its:
   Assistant Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged
  and agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Oleg
  Khaykin

  	
   

  
	
  Date:

  	
   

  

 

2Exhibit 10.7

 

INTERNATIONAL RECTIFIER CORPORATION

2000
INCENTIVE PLAN

RESTRICTED
STOCK UNIT AWARD AGREEMENT

 

	
  Participant Name:

  	
   

  	
  Oleg Khaykin

  
	
   

  	
   

  	
   

  
	
  Number of Stock Units:

  	
   

  	
  250,000(1)

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  One-fifth of the Stock
  Units subject to the Award will vest on each of the first five anniversary
  dates of Award Date(1)

  
	
   

  	
   

  	
   

  
	
  Award Date:

  	
   

  	
  August 6, 2008

  

 

(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 24, 2004) (the “Plan”).

 

W I T N E S S E T H

 

WHEREAS, the Compensation and
Stock Option Committee of the Board of Directors has approved, and the
Corporation has granted, effective as of the Award Date, to the Participant
with reference to services rendered to the Company, 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.                                      Dividend and Voting
Rights.

 

(a)                                  Limitations
on Rights Associated with Units. 
The Participant shall have no rights as a stockholder of the
Corporation, no dividend rights (except as expressly provided in Section 5(b) hereof
with respect to Dividend Equivalents) 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.

 

(b)                                  Dividend
Equivalent Distributions.  No
later than sixty (60) days following each date that the Corporation pays an
ordinary cash dividend on its outstanding Common Stock (if any ordinary cash
dividends are paid), for which the related record date occurs after the Award
Date and prior to the third anniversary of the Award Date, the Corporation
shall make a cash payment to the Participant equal to, subject to the tax
withholding provisions of Section 11 hereof and Section 5.5 of the
Plan, the amount of the ordinary cash dividend paid by the Corporation on a
single share of Common Stock multiplied by the number of Stock Units subject to
this Agreement outstanding and unpaid as of such record date (“Dividend
Equivalents”).

 

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 within 60 days after the vesting of such Stock Units in accordance with
the terms hereof, subject to adjustment as contemplated by Section 9 and
subject to earlier payment pursuant to Section 10.  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,
or retires with the consent of the Corporation or a Subsidiary from employment
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 event 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)                                  Acceleration
Upon Change in Control.  Upon the
occurrence of (or, as the circumstances may require, immediately prior to) a
Change in Control (as defined below), then any portion of the Stock Units
subject to the Award that have not previously vested or terminated shall
thereupon vest, unless prior to the Change in Control the Committee determines
that benefits under this or other awards will not accelerate upon occurrence of
the Change in Control or determines that only certain or limited benefits under
some or all awards will be accelerated and the extent to which they will be
accelerated, and/or establishes a different time in respect of the Change in
Control for such acceleration.  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 any member of or entity or group affiliated with the Lidow family; 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.

 

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 and payment date 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 payment of
Dividend Equivalents and/or 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 233 Kansas Street, 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 is
subject to and does not supersede any rights the Participant may have to
accelerated vesting, exercise rights and other rights upon the termination of
this employment as set forth in this employment agreement dated February 6,
2008, including without limitation Section 5 thereof, which terms supersede
this Agreement to the extent in conflict thereof.

 

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.

 

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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