[LETTERHEAD]
June 22, 1998
Xx. Xxxx Xxxxx
000 Xxxxxx Xxx
Xxx Xxxxxxx, XX 00000
Dear Xxxx:
In accordance with the decision of the Compensation and Stock Option Committee
of the Board of Directors of International Rectifier Corporation on June 22,
1998, it is proposed to amend the Executive Employment Agreement between you and
the Company, dated May 15, 1991 (as amended April 12, 1995 and June 22, 1998) as
follows.
Section 3 of the Agreement is amended by the addition of the following
sub-section (c):
"c) Executive may elect prior to his termination of employment
with the Corporation to reduce the founder's retirement pension
set forth in Section 3(a)(iii) (the "Pension") by an amount
selected by the Executive not to exceed $3,000,000 (the
"Reduction Amount"). The Executive shall provide the Corporation
with written notice of such election. If the Executive elects to
reduce the Pension, the following shall occur:
i) The Executive shall receive a payment (the
"Pre-Retirement Payment") from the Corporation or, at the
Corporation's election, from the International Rectifier
Grantor Trust for Retirement Benefits for Xxxx Xxxxx (the
"Trust") equal to 94 percent of the Reduction Amount.
The Pre-Retirement Payment shall be paid to the Executive
as soon as practicable following the Executive's election
to reduce the Pension.
ii) The Pension benefit otherwise payable at retirement
pursuant to Section 3(a)(iii) shall be reduced as
follows. The Reduction Amount shall be increased at an
annual rate of eight percent from the date of payment of
the Pre-Retirement Payment to the date of the
Participant's retirement or death, whichever occurs
first. The resulting amount shall be referred to as the
Hypothetical Lump Sum. If the Executive survives until
his retirement, the Hypothetical Lump Sum shall be
converted into a joint and
66-2/3% survivor annuity commencing at the Participant's
retirement date using the actuarial assumptions set forth
in Section 1(e) of the agreement establishing the Trust.
The resulting joint and survivor annuity amounts shall
then be subtracted from the benefits otherwise payable in
accordance with Section 3(a)(iii) to determine the actual
Pension amounts payable to the Executive and surviving
spouse respectively.
iii) Notwithstanding the foregoing, if the Executive dies
prior to retirement, the Hypothetical Lump Sum shall be
converted into a single life annuity for the life of the
Executive's surviving spouse using the actuarial
assumptions set forth in Section 1(e) of the agreement
establishing the Trust. The amount of such annuity shall
then be subtracted from the benefit otherwise payable to
the surviving spouse in accordance with Section 3(a) to
determine the actual benefit payable to the surviving
spouse."
Except as hereinabove stated, the subject agreement shall remain in full force
and effect. If the foregoing is acceptable to you, please so indicate by
signing and returning one copy of this letter to me.
Sincerely,
/s/ Xxxxxxx X. XxXxx
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Xxxxxxx X. XxXxx
Chief Financial Officer
Accepted and Agreed to:
/s/ Xxxx Xxxxx Date: June 23, 1998
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Xxxx Xxxxx
