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Exhibit 10.2

POWER-ONE, INC

AMENDED AND RESTATED

1996 STOCK INCENTIVE PLAN

(As Amended and Restated January 25, 2002)

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TABLE OF CONTENTS

 
  Page

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1.   THE PLAN   1
 
 
1.1
 
Purpose
 
1
 
 
1.2
 
Administration
 
1
 
 
1.3
 
Participation
 
2
 
 
1.4
 
Shares Subject to the Plan
 
2
 
 
1.5
 
Grant of Awards
 
3
 
 
1.6
 
Exercise of Awards
 
3
 
 
1.7
 
Payment Forms
 
3
 
 
1.8
 
Cashless Exercises
 
3
 
 
1.9
 
Award Period
 
4
 
 
1.10
 
No Transferability; Limited Exception to Transfer Restrictions
 
4
 
 
1.11
 
Options Granted by Subsidiaries
 
4
2.
 
OPTIONS.
 
4
 
 
2.1
 
Grants
 
4
 
 
2.2
 
Option Price
 
5
 
 
2.3
 
Option Period
 
5
 
 
2.4
 
Exercise of Options
 
5
 
 
2.5
 
Limitations on Grant of ISOs
 
5
 
 
2.6
 
Limits on 10% Holders
 
5
 
 
2.7
 
Option Repricing/Cancellation and Regrant/Waiver
 
5
 
 
2.8
 
Options and Rights in Substitution for Stock Options Granted by Other
Corporations
 
6
3.
 
STOCK APPRECIATION RIGHTS
 
6
 
 
3.1
 
Grants
 
6
 
 
3.2
 
Exercise of Stock Appreciation Rights
 
6
 
 
3.3
 
Payment
 
6
 
 
3.4
 
Limited Stock Appreciation Rights
 
7
4.
 
RESTRICTED STOCK AWARDS
 
7
 
 
4.1
 
Grants
 
7
 
 
4.2
 
Restrictions and Rights
 
7
 
 
4.3
 
Return to the Corporation
 
7
 
 
 
 
 
 
 

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5.
 
STOCK BONUSES, OTHER CASH OR STOCK PERFORMANCE-BASED AWARDS, DEFERRED PAYMENTS
AND DIVIDEND EQUIVALENT RIGHTS
 
8
 
 
5.1
 
Grants of Stock Bonuses
 
8
 
 
5.2
 
Other Performance-Based Awards
 
8
 
 
5.3
 
Deferred Payments
 
9
 
 
5.4
 
Dividend Equivalent Rights
 
9
6.
 
STOCK UNITS
 
9
 
 
6.1
 
Grants
 
9
 
 
6.2
 
Other Provisions
 
9
7.
 
NON-EMPLOYEE DIRECTOR OPTIONS.
 
10
 
 
7.1
 
Participation
 
10
 
 
7.2
 
Option Grants
 
10
 
 
7.3
 
Option Price
 
11
 
 
7.4
 
Option Period and Exercisability
 
11
 
 
7.5
 
Termination of Directorship
 
11
 
 
7.6
 
Adjustments; Acceleration; Termination
 
11
 
 
7.7
 
Non-Citizen Non-Employee Directors
 
12
 
 
7.8
 
Prior Option Grants
 
12
8.
 
OTHER PROVISIONS
 
12
 
 
8.1
 
Rights of Eligible Persons, Participants and Beneficiaries
 
12
 
 
8.2
 
Adjustments; Acceleration; Possible Early Termination of Awards
 
13
 
 
8.3
 
Termination of Employment
 
14
 
 
8.4
 
Compliance With Laws
 
15
 
 
8.5
 
Tax Withholding
 
15
 
 
8.6
 
Amendment, Termination and Suspension
 
15
 
 
8.7
 
Privileges of Stock Ownership
 
16
 
 
8.8
 
Effective Date of the Plan
 
16
 
 
8.9
 
Term of the Plan
 
16
 
 
8.10
 
Governing Law/Construction/Severability
 
16
 
 
8.11
 
Captions
 
17
 
 
8.12
 
Non-Exclusivity of Plan
 
17
9.
 
DEFINITIONS
 
17
 
 
9.1
 
Definitions
 
17

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POWER-ONE, INC.
AMENDED AND RESTATED
1996 STOCK INCENTIVE PLAN

(As Amended and Restated January 25, 2002)

1.    THE PLAN.

        1.1  Purpose.    The purpose of this Power-One, Inc. Amended and
Restated 1996 Stock Incentive Plan (referred to herein as the "Plan" and
formerly known as the Power-One, Inc. 1996 Stock Incentive Plan) is to promote
the success of the Company by providing equity incentives to attract, motivate
and retain key personnel and to attract, motivate and retain experienced and
knowledgeable non-employee directors. Capitalized terms are defined in
Article 9.

        1.2  Administration.

        1.2.1    Committee.    This Plan shall be administered by and all awards
to Eligible Persons shall be authorized by the Committee, acting by a majority
vote or by written consent of its members. The Committee may delegate
ministerial, non-discretionary functions to third parties, including officers or
employees of the Company, except as specifically provided in this Plan. Further,
the Committee may delegate (i) to the Chief Executive Officer, for so long as
such officer is a director, the ability to grant options of limited amount and
in specific circumstances, as set forth in this Plan, or (ii) to the Board of
Directors of any Subsidiary the ability to grant Options to a Non-Citizen
Non-Employee Director in accordance with Section 7.7 of the Plan.

        1.2.2    Powers of Committee.    Subject to the express provisions of
this Plan, the Committee shall have the authority:

        (a)  to determine from among those persons eligible, the particular
Eligible Persons who will receive Awards; provided that with respect to the
grant of an option to an individual who is not an officer or director, the
determination of an Eligible Employee and the number of shares to be covered by
an option may be determined by the Chairman of the Board; and provided further,
that (i) the maximum number of shares that may be granted under stock options by
the Chairman of the Board in each fiscal year shall be limited to an aggregate
amount determined by the Compensation Committee, (ii) options granted by the
Chairman of the Board may only be granted pursuant to the standard and
appropriate grant agreements of the Company, (iii) no grant shall be issued
below Fair Market Value, and (iv) no grant shall be made retroactively;

        (b)  to grant Awards to Eligible Persons, determine the price at which
securities will be offered or awarded and the amount of securities to be offered
or awarded to any of such persons, and determine the other specific terms and
conditions of such Awards consistent with the express limits of this Plan, and
establish the installments (if any) in which such Awards shall become
exercisable or shall vest, or determine that no delayed exercisability or
vesting is required, and establish the events of termination or reversion of
such Awards; provided that with respect to the grant of an option by the
Chairman of the Board as permitted by Section 1.2.2(a), all of the actions
described in this paragraph may be exercised by the Chairman of the Board, so
long as such officer is serving as a director of the Corporation, If such grants
are made by the Chairman of the Board, he shall place a memorandum in the
records of the Compensation Committee setting forth the names of the person
being granted options, the number of options, and the date of grant. All such
grants shall be communicated in writing to the Compensation Committee on a
monthly basis;

        (c)  to approve the forms of Award Agreements (which need not be
identical either as to type of award or among Participants);

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        (d)  to construe and interpret this Plan and any agreements defining the
rights and obligations of the Corporation and Participants under this Plan,
further define the terms used in this Plan, and prescribe, amend and rescind
rules and regulations relating to the administration of this Plan;

        (e)  to cancel, modify, or waive the Corporation's rights with respect
to, or modify, discontinue, suspend, or terminate any or all outstanding Awards
held by Eligible Persons, subject to any required consent under Section 8.6;

        (f)    to accelerate or extend the exercisability or extend the term of
any or all such outstanding Awards within the maximum term of Awards under
Section 1.9;

        (g)  to determine the effect, in any, on a Participant's rights during
or following a leave of absence; and

        (h)  to make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.

        Notwithstanding the foregoing, the provisions of Article 7 relating to
Non-Employee Director Awards shall be automatic (except as provided therein)
and, to the maximum extent possible, self-effectuating.

        1.2.3    Binding Determinations; Reliance.    Any action taken by, or
inaction of, the Corporation, the Board or the Committee relating to or pursuant
to this Plan shall be within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member of the Board or
Committee, or officer of the Corporation or any Subsidiary, shall be liable for
any such action or inaction. In making any determination or not taking any
action under this Plan, the Committee or the Board, as the case may be, may
obtain and may rely upon the advice of counsel, accountants and other experts or
professional advisors to the Company and such determination shall be conclusive.

        1.2.4    Committee Membership.    Subject to the requirements of the
definition of Committee contained in Article 9, the Board may, at any time
(a) change the number of members of the Committee, (b) remove from membership on
the Committee all or any of its members, (c) fill any vacancy existing on the
Committee, whether caused by removal, resignation or otherwise, or (d) change or
assume the administration of this Plan.

        1.2.5    Awards to Committee Members.    Any Award issued to a member of
the Committee (other than under Article 7) shall be subject to approval or
ratification by the Board.

        1.3  Participation.    Awards other than under Article 7 may be granted
by the Committee only to those persons that the Committee determines to be
Eligible Persons. An Eligible Person who has been granted an Award may, if
otherwise eligible, be granted additional Awards.

        1.4  Shares Subject to the Plan.

        1.4.1    Shares.    Subject to the provisions of Section 8.2, the
capital stock that may be delivered under this Plan shall be shares of the
Corporation's authorized but unissued Common Stock and any shares of its Common
Stock held as treasury shares. The Shares may be delivered for any lawful
consideration.

        (a)  Aggregate Limit.    The maximum number of Shares subject to
outstanding Awards granted to Eligible Persons under this Plan and available for
additional Awards under this Plan shall equal 2,000,000 plus 20% of the
difference between (i) the number of Shares outstanding on each December 31
beginning on December 31, 1997 and (ii) the largest number of Shares outstanding
on any previous December 31; provided, however, that the

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above equation shall never result in a decrease in the maximum number of shares
available under this Plan.

        (b)  ISO Limit.The maximum number of Shares that may be delivered
pursuant to ISOs granted to Eligible Persons under this Plan shall not exceed
1,000,000 Shares.

        (c)  Individual Limit.    The maximum number of Shares subject to those
Options, Stock Appreciation Rights and other Awards payable in Shares or
alternatively in Shares or cash that are granted during any calendar year to any
one individual shall be limited to 500,000.

        (d)  Adjustment.    Each of the foregoing specific Share limits in this
Section 1.4.1 shall be subject to adjustment as contemplated by Section 1.4.2
and Section 8.2.

        1.4.2    Calculation of Available Shares and Replenishment.    If any
Option, Stock Appreciation Right, or other right to acquire Shares under or
receive cash or Shares in respect of an Award lapses or terminates without
having been exercised in full, or any Shares subject to a Restricted Stock Award
or other Award do not vest or are not delivered, the unpurchased, unvested or
undelivered Shares will again be available for purposes of this Plan. The
foregoing sentence does not apply to any Shares withheld under Section 8.5.

        1.5  Grant of Awards.    Subject to the express provisions of this Plan,
the Committee, and only to the extent permitted by Section 1.2.2, the Chief
Executive Officer of the Corporation, will determine the Eligible Persons to
whom Awards will be granted, the number of Shares subject to each Award, the
price (if any) to be paid for the Shares or the Award and, in addition to
matters addressed in Section 1.2.2, the specific objectives, goals and
performance criteria that further define the terms of any performance-based
award. Each Award shall be evidenced by an Award Agreement signed by the
Corporation and, if required by the Committee, by the Participant. The Award
Agreement shall set forth or may incorporate by reference the material terms and
conditions of the Award established by the Committee consistent with the
specific provisions of this Plan. Unless a later date is specified by the
Committee in the applicable Award Agreement, the grant of an Award is made on
the Award Date.

        1.6  Exercise of Awards.    An exercisable Award will be deemed to be
exercised when the Secretary of the Corporation receives an executed Exercise
Agreement from the Participant, together with payment of any required Purchase
Price in accordance with Section 1.7, 1.8, or 7.3, as the case may be. Awards of
Shares are exercisable only for and payable only in whole shares. Fractional
shares will be disregarded for all purposes under this Plan.

        1.7  Payment Forms.    The Purchase Price of each Award (if any) must be
paid in full at the time of each purchase in one or a combination of the
following methods, to the extent authorized by the Committee or set forth in the
Award Agreement: (a) cash or cashier's check payable to the Corporation, (b) if
the Committee approves, a Note, or (c) by Shares already owned by the
Participant, subject to any conditions (including holding periods) that the
Committee may impose. Any Shares delivered that were initially acquired upon
exercise of an Award must have been owned by the Participant at least six months
as of the date of delivery. Shares used to satisfy the Purchase Price or (if
authorized by the Committee) applicable tax withholding will be valued at their
Fair Market Value on the exercise or purchase date.

        1.8  Cashless Exercises.    Award Agreements may also provide that an
Option or similar right may be exercised and payment can be made by delivering a
properly executed exercise notice to the Corporation, together with irrevocable
instructions to a bank or broker to promptly deliver to the Corporation the
amount of sale proceeds necessary to pay the Purchase Price and, unless
otherwise provided by the Committee, any applicable tax withholding under
Section 8.5. The date of exercise will be deemed to be the date the Corporation
receives the proceeds.

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        1.9  Award Period.    Any Option, Stock Appreciation Right, or similar
right shall expire and other Awards shall either vest or be forfeited not more
than 10 years after the date of grant; provided, however, that any right to
payment of cash or delivery of stock that has vested pursuant to an Award may be
delayed until a future date if specifically authorized by the Committee in
writing.

        1.10 No Transferability; Limited Exception to Transfer Restrictions.

        1.10.1    Limit on Exercise and Transfer.    Unless otherwise expressly
provided in (or pursuant to) this Section 1.10, by applicable law and by the
Award Agreement, as the same may be amended, (i) all Awards are non-transferable
and shall not be subject in any manner to sale, transfer, anticipation,
alienation, assignment, pledge, encumbrance or charge; Awards shall be exercised
only by the Participant; and (ii) amounts payable or shares issuable pursuant to
an Award shall be delivered only to (or for the account of) the Participant.

        1.10.2    Exceptions.    The Committee may permit Awards to be exercised
by and paid to certain persons or entities related to the Participant, including
but not limited to members of the Participant's family, charitable institutions,
or trusts or other entities whose beneficiaries or beneficial owners are members
of the Participant's immediate family and/or charitable institutions, or to such
other persons or entities as may be approved by the Committee, pursuant to such
conditions and procedures as the Committee may establish. Any permitted transfer
shall be subject to the condition that the Committee receive evidence
satisfactory to it that the transfer is being made for estate and/or tax
planning purposes on a gratuitous or donative basis and without consideration
(other than nominal consideration). Notwithstanding the foregoing, ISOs and
Restricted Stock Awards shall be subject to any and all additional transfer
restrictions under the Code.

        1.10.3    Further Exceptions to Limits on Transfer.    The exercise and
transfer restrictions in Section 1.10.1 shall not apply to:

        (a)  transfers to the Corporation,

        (b)  the designation of a beneficiary to receive benefits in the event
of the Participant's death or, if the Participant has died, transfers to or
exercise by the Participant's beneficiary, or, in the absence of a validly
designated beneficiary, transfers by will or the laws of descent and
distribution,

        (c)  transfers pursuant to a QDRO order if approved or ratified by the
Committee,

        (d)  if the Participant has suffered a disability, permitted transfers
or exercises on behalf of the Participant by his or her legal representative, or

        (e)  the authorization by the Committee of "cashless exercise"
procedures with third parties who provide financing for the purpose of (or who
otherwise facilitate) the exercise of Awards consistent with applicable laws and
the express authorization of the Committee.

        1.11 Options Granted by Subsidiaries.    Notwithstanding anything in
this Article 1 to the contrary, with respect to Options granted to a Non-Citizen
Non-Employee Director by any Subsidiary pursuant to Section 7.7, the Board of
Directors of such Subsidiary shall have all of the powers of the Committee
specified in Section 1.2.2, and the Subsidiary and the Secretary thereof shall
perform the responsibilities required to be performed by the Corporation and the
Secretary of the Corporation contained in this Article 1.

2.    OPTIONS.

        2.1  Grants.    One or more Options may be granted under this Section 2
to any Eligible Person. Each Option granted shall be designated by the Committee
as either a NQSO or an ISO, and such intent will be indicated in the Award
Agreement. ISOs may be granted only to Eligible Persons who

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are employed by the Corporation or a corporation that is a "parent" or
"subsidiary" corporation within the meaning of Sections 424(e) and 424(f) of the
Code, respectively.

        2.2  Option Price.    The Purchase Price per Share covered by each
Option shall be determined by the Committee at the time of the Award. In the
case of ISOs the Purchase Price per Share must be at least 100% (110% in the
case of persons described in Section 2.6) of the Fair Market Value of the Shares
on the Award Date and in all cases shall not be less than the minimum
consideration required under applicable law.

        2.3  Option Period.    Subject to Section 1.9, each Option will expire
on a date determined by the Committee, but not later than 10 years after the
Award Date, and will be subject to earlier termination as set forth in this Plan
or the Award Agreement.

        2.4  Exercise of Options.    An Option may become exercisable, in whole
or in part, on the date or dates specified in the Award Agreement and thereafter
will remain exercisable until the earlier of the expiration or termination of
the Option, or as otherwise set forth in this Plan or the related Award
Agreement. At least 100 Shares must be purchased at one time unless the number
purchased is the total number at the time available for purchase under the
Option.

        2.5  Limitations on Grant of ISOs.

        2.5.1    $100,000 Limit.    To the extent that the aggregate "Fair
Market Value" of stock with respect to which incentive stock options first
become exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to ISOs under this Plan and stock
subject to incentive stock options under all other plans of the Company, such
options shall be treated as NQSOs. For this purpose, the "Fair Market Value" of
the stock subject to options shall be determined as of the date the options were
awarded. In reducing the number of options treated as incentive stock options to
meet the $100,000 limit, the most recently granted options shall be reduced
first. To the extent a reduction of simultaneously granted options is necessary
to meet the $100,000 limit, the Committee may, in the manner and to the extent
permitted by law, designate which Shares are to be treated as shares acquired
pursuant to the exercise of an ISO.

        2.5.2    Other Code Limits.    ISOs may only be granted to employees of
the Corporation or a Subsidiary that satisfies the other eligibility
requirements of the Code and shall include such other terms and conditions as
from time to time are required in order that the Option be an "incentive stock
option" as defined in Section 422 of the Code.

        2.6  Limits on 10% Holders.    No ISO may be granted to any person who,
at the time the Option is granted, owns (or is deemed to own under
Section 424(d) of the Code) Shares possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation, unless the
Purchase Price of such Option is at least 110% of the Fair Market Value of the
stock subject to the Option and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is granted.

        2.7  Option Repricing/Cancellation and Regrant/Waiver.    Subject to
Section 1.4 and Section 8.6 and the specific limitations on Awards contained in
this Plan, the Committee from time to time may authorize, generally or in
specific cases only, for the benefit of any Eligible Person any adjustment in
the exercise or purchase price, the vesting schedule, the number of shares
subject to, the restrictions upon or the term of, an Award granted under this
Article 2 by cancellation of an outstanding Award and a subsequent regranting of
an Award, by amendment, by substitution of an outstanding Award, by waiver or by
other legally valid means. Such amendment or other action may result among other
changes in an exercise or purchase price which is higher or lower than the
exercise or purchase price of the original or prior Award, provide for a greater
or lesser number of shares subject to the Award, or provide for a longer or
shorter vesting or exercise period.

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        2.8  Options and Rights in Substitution for Stock Options Granted by
Other Corporations.    Options and Stock Appreciation Rights may be granted to
Eligible Persons under this Plan in substitution for employee stock options
granted by other entities to persons who are or who will become Eligible Persons
in respect of the Company, in connection with a distribution, merger or
reorganization by or with the granting entity or an affiliated entity, or the
acquisition by the Company, directly or indirectly, of all or a substantial part
of the stock or assets of the other entity.

3.    STOCK APPRECIATION RIGHTS.

        3.1  Grants.    In its discretion, the Committee may grant Stock
Appreciation Rights to any Eligible Person either concurrently with the grant of
another Award or in respect of an outstanding Award, in whole or in part, or
independently of any other Award. A Stock Appreciation Right granted
concurrently with the grant of another Award may extend to all or a portion of
the Shares covered by the related Award. A Stock Appreciation Right will entitle
the Participant to holds the related Award, upon exercise of the Stock
Appreciation Right and surrender of the related Award, or portion thereof, to
receive payment of an amount determined pursuant to Section 3.3. Any Stock
Appreciation Right granted in connection with an ISO shall contain such terms as
may be required to comply with the provisions of Section 422 of the Code and the
regulations promulgated thereunder, unless the holder otherwise agrees.

        3.2  Exercise of Stock Appreciation Rights.

        3.2.1    Exercisability.    Unless the Award Agreement or the Committee
provides otherwise, a Stock Appreciation Right related to another Award shall be
exercisable only at such time or times, and to the extent, that the related
Award is exercisable.

        3.2.2    Effect on Available Shares.    Unless the Committee otherwise
provides, to the extent that a Stock Appreciation Right is exercised, the number
of Shares theretofore subject to a related Award shall be charged against the
maximum number of Shares that may be issued pursuant to Awards. The number of
Shares subject to the Stock Appreciation Right and the related Award will also
be reduced by such number of shares. If a Stock Appreciation Right granted
concurrently with an Award extends to fewer than all the Shares covered by the
related Award, and if a portion of the related Award is subsequently exercised,
the number of Shares subject to the unexercised Stock Appreciation Right will be
reduced only to the extent that the remaining number of Shares covered by such
related Award is less than the remaining number of Shares subject to the Stock
Appreciation Right.

        3.2.3    Independent Stock Appreciation Right.    A Stock Appreciation
Right granted independently of any other Award shall be exercisable pursuant to
the terms of the applicable Award Agreement.

        3.3  Payment.

        3.3.1    Amount.    Unless the Committee otherwise provides, upon
exercise of a Stock Appreciation Right and the attendant surrender of an
exercisable portion of any related Award, the Participant shall be entitled to
receive payment of an amount determined by multiplying:

        (a)  the difference obtained by subtracting the Purchase Price per share
of Common Stock under the related Award (if applicable) or the initial base
price or share value specified in the Award from the Fair Market Value of a
share of Common Stock on the date of exercise of the Stock Appreciation Right,
by

        (b)  the number of Shares with respect to which the Stock Appreciation
Right shall have been exercised.

        3.3.2    Form of Payment.    The Committee, in its sole discretion,
shall determine the form in which payment shall be made of the amount determined
under paragraph (a) above, either solely in cash, solely in Shares (valued at
Fair Market Value on the date of exercise of the Stock

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Appreciation Right), or partly in Shares and partly in cash, on a current or
deferred basis as may be authorized by the Committee, consistent with the terms
of this Plan. If the Committee permits the Participant to elect to receive cash
or Shares (or a combination thereof) on such exercise, or to use Shares to pay
any applicable withholding taxes payable, any such election shall be subject to
such conditions as the Committee may impose.

        3.4  Limited Stock Appreciation Rights.    The Committee may grant to
any Eligible Person Stock Appreciation Rights exercisable only upon or in
respect of a change in control or any other specified event ("Limited SARs") and
such Limited SARs may relate to or operate in tandem or combination with or
substitution for Options, other Stock Appreciation Rights or other Awards (or
any combination thereof), and may be payable in cash or shares based on the
spread between the base price of the Stock Appreciation Right and a price based
upon the Fair Market Value of the Shares during a specified period or at a
specified time within a specified period before, after or including the date of
such event.

4.    RESTRICTED STOCK AWARDS.

        4.1  Grants.    The Committee may, in its discretion, grant one or more
Restricted Stock Awards to any Eligible Person. Each Restricted Stock Award
Agreement shall specify the number of Shares to be issued to the Participant,
the date of such issuance, the consideration for such shares (but not less than
the minimum lawful consideration under applicable state law) by the Participant,
the extent (if any) to which and the time (if ever) at which the Participant
shall be entitled to dividends, voting and other rights in respect of the shares
prior to vesting, and the restrictions (which may be based on performance
criteria, passage of time or other factors or any combination thereof) imposed
on such shares and the conditions of release or lapse of such restrictions. Such
restrictions shall not lapse earlier than six months after the Award Date,
except to the extent the Committee may otherwise provide. Stock certificates
evidencing shares of Restricted Stock pending the lapse of the restrictions
("Restricted Shares") shall bear a legend making appropriate reference to the
restrictions imposed hereunder and shall be held by the Corporation or by a
third party designated by the Committee until the restrictions on such shares
shall have lapsed and the shares shall have vested in accordance with the
provisions of the Award and Section 1.9. Upon issuance of the Restricted Stock
Award, the Participant may be required to provide such further assurance and
documents as the Committee may require to enforce the restrictions.

        4.2  Restrictions and Rights.

        4.2.1    Pre-Vesting Restraints.    Except as provided in Sections 4.1
and 1.10, restricted shares comprising any Restricted Stock Award may not be
sold, assigned, transferred, pledged or otherwise disposed of or encumbered,
either voluntarily or involuntarily, until the restrictions on such shares have
lapsed and the shares have become vested.

        4.2.2    Dividend and Voting Rights.    Unless otherwise provided in the
applicable Award Agreement, a Participant receiving a Restricted Stock Award
shall be entitled to cash dividends and voting rights for all Shares issued even
though they are not vested, provided that such rights shall terminate
immediately as to any Restricted Shares that cease to be eligible for vesting.

        4.2.3    Cash Payments.    If the Participant shall have paid cash or
other property in respect of the Restricted Stock Award, the Award Agreement
shall specify whether and to what extent such cash or other property shall be
returned (with or without an earnings factor) as to any restricted Shares that
cease to be eligible for vesting.

        4.3  Return to the Corporation.    Unless the Committee otherwise
expressly provides, restricted shares that remain subject to restrictions at the
time of termination of employment or are subject to other conditions to vesting
that have not been satisfied by the time specified in the applicable Award
Agreement shall not vest and shall be returned to the Corporation as therein
provided.

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5.    STOCK BONUSES, OTHER CASH OR STOCK PERFORMANCE-BASED AWARDS, DEFERRED
PAYMENTS AND DIVIDEND EQUIVALENT RIGHTS.

        5.1  Grants of Stock Bonuses.    The Committee may grant a Stock Bonus
to any Eligible Person to reward exceptional or special services, contributions
or achievements in the manner and on such terms and conditions (including any
restrictions on such shares) as determined from time to time by the Committee.
The number of shares so awarded shall be determined by the Committee. The Award
may be granted independently or in lieu of a cash bonus. Notwithstanding
Section 1.9 and anything contained in Section 5.2 to the contrary, Awards
pursuant to this Section 5.1 for past service need not include any minimum
vesting requirement.

        5.2  Other Performance-Based Awards.

        5.2.1    General Provisions.    Without limiting the generality of the
foregoing, and in addition to qualifying awards granted under other provisions
of this Plan (i.e., Options or Stock Appreciation Rights granted with an
exercise price not less than Fair Market Value at the applicable date of grant
for Section 162(m) purposes to Eligible Persons who are either salaried
employees or officers ("Presumptively Qualifying Awards")), other cash or
stock-related performance-based awards, including "performance-based" awards
within the meaning of Section 162(m) ("Performance-Based Awards"), whether in
the form of restricted stock, performance stock, phantom stock, stock units, or
Dividend Equivalent Rights, or other rights, whether or not related to stock
values or appreciation, and whether payable in cash, Common Stock, or a
combination thereof, may be granted under this Plan. If the Award (other than a
Presumptively Qualifying Award) is intended as performance-based compensation
under Section 162(m) and is not entitled to the benefits of Section 1.162-27(f)
of the regulations thereunder, the vesting or payment thereof shall be based on
the performance of the Company on a consolidated, segment, subsidiary, or
division basis with reference to one or more of the following business criteria
(the "criterion"): funds from operations, EBITDA, stock appreciation, total
stockholder return, net earnings (before or after taxes), cash flow, return on
equity or on assets or on net investment, or cost containment or reduction. To
the extent so defined, these terms are used as applied under generally accepted
accounting principles and in the Company's financial reporting. To qualify
Awards as performance-based under Section 162(m), the applicable business
criteria and specific performance goal or goals ("targets") must be established
and approved by the Committee during the first 90 days of the year (or before
one-quarter of the performance measurement period has elapsed, if such period
exceeds one year) and while the performance relating to such targets remains
substantially uncertain within the meaning thereof. The applicable performance
measurement period may not be less than one nor (except as provided in
Section 1.9) more than 10 years. The Committee is not, however, limited to the
grant of this type of performance-based awards.

        5.2.2    Maximum Award.    Grants or awards under this Section 5.2 may
be paid in cash or Shares or any combination thereof. In no event shall grants
of stock-related Awards made in any calendar year to any Eligible Employee under
this Plan relate to more than 500,000 Shares. In no event shall grants to any
Eligible Employee under this Plan of Awards payable only in cash and not related
to stock provide for payment of more than $5,000,000.

        5.2.3    Committee Certification.    Except as otherwise permitted to
qualify as performance-based compensation under Section 162(m), before any
Performance-Based Award under this Section 5.2 is paid, the Committee must
certify that the performance standard, target(s), and the other material terms
of the Performance-Based Award were in fact satisfied.

        5.2.4    Terms and Conditions of Awards.    The Committee will have
discretion to determine the restrictions or other limitations of the individual
Awards under this Section 5.2, including the authority to reduce Awards, to
determine payout schedules and the extent of vesting or to pay no Awards, in its
sole discretion, if the Committee preserves such authority at the time of grant
by

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language to this effect in its authorizing resolutions or otherwise. The
Committee may provide that in the event a Participant terminates employment or
service for any one or more reasons during any year, the Participant shall
forfeit all rights to any Award for that year.

        5.2.5    Adjustments for Material Changes.    Performance goals or other
features of an Award under this Section 5.2 may provide that they (a) shall be
adjusted to reflect a change in corporate capitalization, a corporate
transaction (such as a reorganization, combination, separation, or merger) or a
complete or partial corporate liquidation, or (b) shall be calculated either
without regard for or to reflect any change in accounting policies or practices
affecting the Company and/or the business criteria or performance goals or
targets, or (c) shall be adjusted for any other circumstances or event, or
(d) any combination of (a) through (c), but only to the extent in each case that
such adjustment or determination in respect of Performance-Based Awards would be
consistent with the requirements of Section 162(m) to qualify as
performance-based compensation.

        5.3  Deferred Payments.    The Committee may authorize for the benefit
of any Eligible Person the deferral of any payment of cash or shares that may
become due or of cash otherwise payable under this Plan, and provide for the
crediting of benefits thereon based upon such deferment, at the election or at
the request of such Participant, subject to the other terms of this Plan. Such
deferral shall be subject to such further conditions, restrictions or
requirements as the Committee may impose, subject to any then vested rights of
Participants.

        5.4  Dividend Equivalent Rights.    In its discretion, the Committee may
grant to any Eligible Person Dividend Equivalent Rights concurrently with the
grant of any Option, Restricted Stock, Stock Unit, or other stock-based Award,
on such terms as set forth by the Committee in the Award Agreement. Dividend
Equivalent Rights shall be based on all or part of the amount of dividends
declared on Shares and shall be credited as of the dividend payment dates,
during the period between the date of grant (or such later date as the Committee
may set) and the date the stock-based Award is exercised or expires (or such
earlier date as the Committee may set), as determined by the Committee. Dividend
Equivalent Rights shall be payable in cash or Shares, or (to the extent
permitted by law) may be subject to such conditions, not inconsistent with
Section 162(m) (in the case of Options or Stock Appreciation Rights, or other
Awards intended to satisfy its conditions with respect to deductibility), as may
be determined by the Committee.

6.    STOCK UNITS.

        6.1  Grants.    Subject to such rules and procedures as the Committee
may establish from time to time, the Committee may, in its discretion, authorize
a Stock Unit Award or the crediting of Stock Units pursuant to the terms of this
Plan and any applicable deferred compensation plan maintained by the
Corporation, permit an Eligible Person to irrevocably elect to defer or receive
in Stock Units all or a portion of any Award hereunder, or may grant Stock Units
in lieu of, in exchange for, in respect of, or in addition to any other Award
under this Plan or any other stock option plan or deferred compensation plan of
the Corporation. The specific terms, conditions and provisions relating to each
Stock Unit grant or election, including the form of payment to be made at or
following the vesting thereof, shall be set forth in or pursuant to the
applicable deferred stock Award Agreement and the applicable deferred
compensation plan of the Company, in form substantially as approved by the
Committee.

        6.2  Other Provisions.    The Committee shall determine, among other
terms of a Stock Unit grant or Award, the form of payment of Stock Units,
whether in cash, Shares, or other consideration (including any other Award) or
any combination thereof, the valuation of the Stock Units or any non-cash
payment for the purpose of the Award, and the applicable vesting and payout
provisions of the Stock Units. The Committee in the applicable Award Agreement
or the relevant deferred compensation plan of the Company may permit the
Participant to elect the form and time of payout of the vested Stock Units on
such conditions or subject to such procedures as the Committee may impose,

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and may permit Stock Unit offsets or other provision for payment of any
applicable taxes that may be due on the crediting, vesting or payment in respect
of the Stock Units.

7.    NON-EMPLOYEE DIRECTOR OPTIONS.

        7.1  Participation.    Awards under this Article 7 shall be made only to
Non-Employee Directors and shall be evidenced by Award Agreements substantially
in the form of Exhibit A hereto.

        7.2  Option Grants.

        7.2.1    Time of Initial Award.    Subject to Section 7.2.5, if any
person who is not, immediately prior to his or her appointment or election, an
officer or employee of the Company shall become a Non-Employee Director of the
Corporation after May 14, 2002, there shall be granted automatically to such
person (without any action by the Board or Committee) a NQSO, the Award Date of
which shall be the date such person takes office, to purchase 30,000 shares of
Common Stock, unless the Board otherwise provides in advance of such appointment
or election.

        7.2.2    Subsequent Annual Awards.    Subject to Section 7.2.5, each
Non-Employee Director shall be granted automatically (without any action by the
Committee or the Board) a NQSO to purchase 10,000 shares of Common Stock
immediately following each annual stockholders meeting during the term of this
Plan commencing with the year 2003; provided, however, that a Non-Employee
Director shall be granted an Option pursuant to this Section 7.2.2 with respect
to a particular annual stockholders meeting only if (i) the Non-Employee
Director continues in office after such annual stockholders meeting, and
(ii) the Non-Employee Director has served on the Board for not less than
180 days prior to the first day of the month in which such annual stockholders
meeting occurs. The Award Date of each such NQSO shall be the date of the
related annual stockholders meeting.

        7.2.3    Annual Committee Member Awards.    Immediately following each
annual stockholders meeting during the term of this Plan commencing with the
year 2002 and subject to Section 7.2.5, each Non-Employee Director then
continuing in office and who then serves as a member of either the Audit
Committee of the Board or the Compensation Committee of the Board shall be
granted automatically (without any action by the Committee or the Board) a NQSO
to purchase 5,000 shares of Common Stock immediately following such annual
stockholders meeting. A Non-Employee Director who is a member of both the Audit
and Compensation Committees shall be eligible for two grants under this
Section 7.2.3—one grant with respect to the director's membership on each such
committee. The Award Date of each NQSO granted pursuant to this Section 7.2.3
shall be the date of the related annual stockholders meeting.

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        7.2.4    Special 2002 Award.    Subject to Section 7.2.5, each
Non-Employee Director continuing in office after the Company's 2002 annual
stockholders meeting shall be granted automatically (without any action by the
Committee or the Board) a NQSO to purchase 30,000 shares of Common Stock
immediately following such annual stockholders meeting. The Award Date of each
such NQSO shall be the date of the 2002 annual stockholders meeting.

        7.2.5    Maximum Number of Options/Shares.    Grants pursuant to this
Section 7.2 that would otherwise exceed the maximum number of shares under
Section 1.4.1(a) shall be prorated within such limitation.

        7.3  Option Price.    The purchase price per share of the Common Stock
covered by each Option granted pursuant to Section 7.2 hereof shall be
100 percent of the Fair Market Value of the Common Stock on the Award Date. The
exercise price of any Option granted under this Article 7 shall be paid in full
at the time of each purchase in cash or by check or in Shares valued at their
Fair Market Value on the date of exercise of the Option, or partly in such
Shares and partly in cash, provided that any Shares used in payment shall have
been owned by the Participant at least six months prior to the date of exercise
unless the Board otherwise permits. In addition, an Option granted under this
Article 7 may be exercised and payment can be made in accordance with the
cashless exercise provisions contained in Section 1.8.

        7.4      Option Period and Exercisability.    Each Option granted under
this Article 7 and all rights or obligations thereunder shall expire ten years
after the Award Date and shall be subject to earlier termination as provided
below. Each Option granted under Section 7.2.1 or 7.2.4 shall become exercisable
as to 331/3% of the total number of shares subject thereto on each of the
following dates: (i) the earlier of the first anniversary of the Award Date or
the annual stockholders meeting that occurs in the year following the year of
the Award Date, (ii) the earlier of the second anniversary of the Award Date or
the annual stockholders meeting that occurs in the second year following the
year of the Award Date, or (iii) the earlier of the third anniversary of the
Award Date or the annual stockholders meeting that occurs in the third year
following the year of the Award Date; in each case subject to Sections 7.5 and
7.6. Subject to Sections 7.5 and 7.6, each Option granted under Section 7.2.2 or
7.2.3 shall become exercisable as to 100% of the total number of shares subject
thereto on the earlier of the first anniversary of the Award Date or the annual
stockholders meeting that occurs in the year following the year of the Award
Date.

        7.5      Termination of Directorship.    If a Non-Employee Director's
services as a member of the Board terminate for any reason other than upon or
because of an Event, any portion of an Option granted pursuant to this Article 7
which is not then exercisable shall terminate. Subject to Section 7.6, any
portion of the Option which is then exercisable may be exercised for one year
after the termination of service in the case of a termination because of death,
Total Disability, or Retirement, or for three months after the date of
termination of service in all other cases, and shall then terminate, but in no
event may the Option be exercised after the expiration of the stated ten-year
term of the Option. If a Non-Employee Director's services as a member of the
Board terminate upon or because of an Event, an Option granted pursuant to this
Article 7 and then held by such Participant may (as provided in or pursuant to
Section 7.6) immediately become and, subject to Section 7.6, remain exercisable
for three months after the date of such termination or until the expiration of
the stated term of the Option, whichever first occurs, and shall then terminate.

        7.6      Adjustments; Acceleration; Termination.    Options granted
under this Article 7 will be subject to adjustments, acceleration, and
termination as provided in Section 8.2, but only to the extent that such
adjustment and any Board or Committee action in respect thereof in the case of
an Event is effected pursuant to the terms of a reorganization agreement
approved by the stockholders of the Corporation or is otherwise consistent with
adjustments to Options held by persons other than executive officers or
directors of the Corporation (or, if there are none, consistent in respect of
the

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underlying Shares, with the effect on or rights offered to stockholders
generally). To the extent that any Option granted under this Article 7 is not
exercised prior to a dissolution of the Corporation or a merger or other
corporate event that the Corporation does not survive, and no provision is (or
consistent with the provisions of this Plan can be) made for the assumption,
conversion, substitution or exchange of the Option, the Option will terminate
upon the occurrence of the event. The Participant, however, shall be entitled to
the benefits of any alternative settlement of the Option in such circumstances,
as contemplated by Section 8.2.

        7.7      Non-Citizen Non-Employee Directors.    Notwithstanding anything
in Section 7.2 to the contrary, grants of Options to Non-Employee Directors who
are non-citizens and non-residents of the United States (a "Non-Citizen
Non-Employee Director") shall not be automatic and shall be made in accordance
with this Section 7.7. Any Non-Citizen Non-Employee Director shall either be
granted the same Options by the Committee as are granted to Non-Employee
Directors pursuant to Section 7.2, or the Committee or the Board shall authorize
the Board of Directors of any Subsidiary to grant Options for the purpose and on
terms and conditions that are substantially equivalent to those provided in
Section 7.2; provided, however, that the Board, Committee, or Board of Directors
of a Subsidiary, as applicable, may determine that one or more grants of such
Options to a Non-Citizen Non-Employee Director shall be on terms that are more
restrictive to the director than the terms set forth above in this Article VII
with respect to Non-Employee Director Option grants generally (for example, and
without limitation, Option grants to a Non-Citizen Non-Employee Director may be
granted with a maximum term of less than ten years, and/or a longer vesting
schedule than the schedule contemplated by Section 7.4).

        7.8      Prior Option Grants.    Options granted under this Article 7
prior to this restatement of the Plan shall be governed by the provisions of
this Article 7 as previously in effect. If Options are granted pursuant to
Section 7.2.4 in connection with the 2002 annual stockholders meeting,
Non-Employee Directors who are elected at and/or who continue in office after
such meeting shall have no right to any Option grant in connection with such
meeting pursuant to Sections 7.2.1 and 7.2.2 nor under the provisions of those
sections as in effect prior to this restatement of this Plan.

8.    OTHER PROVISIONS.

        8.1      Rights of Eligible Persons, Participants and Beneficiaries.

        8.1.1    No Binding Commitment.    Status as an Eligible Person shall
not be construed as a commitment that any Award will be made under this Plan to
any Eligible Person or to Eligible Persons generally.

        8.1.2    No Employment Contract.    Nothing contained in this Plan (or
any documents relating to this Plan or to any Award) shall confer upon any
Eligible Person or other Participant any right to continue in the employ or
other service of the Company or constitute any contract or agreement of
employment or other service, nor shall interfere in any way with the right of
the Company to change such person's compensation or other benefits or to
terminate the services or employment of such person, with or without cause, but
nothing in this Plan or any document related hereto shall adversely affect any
independent contractual right of such person without his or her consent thereto.

        8.1.3    Plan Not Funded.    Awards payable under this Plan shall be
payable in shares or from the general assets of the Corporation, and (except as
provided in Section 1.4) no special or separate reserve, fund or deposit shall
be made to assure payment of such Awards. No Participant, Beneficiary or other
person shall have any right, title or interest in any fund or in any specific
asset (including Shares, except as expressly otherwise provided) of the Company
by reason of any Award. Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan shall create, or be construed to create,
a trust of any kind or a fiduciary relationship between the Company and

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any Participant, Beneficiary or other person. To the extent that a Participant,
Beneficiary or other person acquires a right to receive payment pursuant to any
Award hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Company.

        8.2  Adjustments; Acceleration; Possible Early Termination of Awards.

        8.2.1    Adjustments.    If the outstanding Shares are changed into or
exchanged for cash or a different number or kind of shares or securities of the
Corporation or of another issuer, or if additional Shares or new or different
securities are distributed with respect to the outstanding Shares, through a
reorganization or merger to which the Corporation is a party, or through a
combination, consolidation, spin off, recapitalization, reclassification, stock
split, stock dividend, reverse stock split, stock consolidation or other capital
change or adjustment, an appropriate adjustment will be made in the number and
kind of Shares or other consideration that is subject to or may be delivered
under this Plan and pursuant to outstanding Awards, the Purchase Price of
outstanding Awards, performance criteria under outstanding Awards (subject to
Section 5.2 and 8.10.3) and the numerical share limits set forth in Section 1.4,
5.2.2 and Article 7. In any of such events, the Committee may take such action
sufficiently prior to such event if necessary or deemed appropriate to permit
the Participants to realize the benefits intended to be conveyed with respect to
the underlying shares on substantially the same terms as are available to
stockholders generally.

        8.2.2    Acceleration of Awards Upon Certain Events.    Subject to the
exceptions noted below, (i) each Option and Stock Appreciation Right shall
become immediately exercisable, (ii) each Restricted Stock Award shall
immediately vest free of restrictions, (iii) each Award under Article 5 shall
become payable to the Participant, and (iv) the number of Shares covered by each
Stock Unit Account shall be issued to the Participant:

        (a)  immediately prior to the occurrence of an Event, unless the
Committee determines prior to such Event that, upon its occurrence, there shall
be no acceleration of benefits under Awards or determines that only certain or
limited benefits under Awards shall be accelerated and the extent to which they
shall be accelerated, and/or establishes a different time in respect of such
Event for such acceleration; or

        (b)  immediately prior to the termination by the Company of a
Participant's employment or services for any reason other than for Cause
(1) within two years after the occurrence of an Event with respect to which
vesting has not been accelerated pursuant to Section 8.2.2(a), or (2) within
90 days prior to an Event and in express contemplation of the Event.

The Committee may override the limitations on acceleration in this Section 8.2.2
by express provision in the Award Agreement and may accord any Eligible Person a
right to refuse any acceleration, whether pursuant to the Award Agreement or
otherwise, in such circumstances as the Committee may approve. Any acceleration
of Awards shall comply with applicable regulatory requirements, including
without limitation Section 422 of the Code. Any discretion with respect to these
events shall be limited to the extent required by applicable accounting
requirements in the case of a transaction intended to be accounted for as a
pooling of interests transaction.

        8.2.3    Possible Early Termination of Awards.    If any Option or other
right to acquire Common Stock under this Plan (except as provided under
Article 7 with respect to Non-Employee Director Awards) has been fully
accelerated pursuant to Section 8.2.2 but is not exercised prior to (a) a
dissolution of the Corporation, or (b) an event described in Section 8.2.1 that
the Corporation does not survive, or (c) the consummation of an event described
in Section 8.2.1 involving an Event approved by the Board, such Option or right
shall thereupon terminate, subject to any provision that has been expressly made
by the Committee or the Board (through a plan of reorganization approved by the
Board or otherwise) for the survival, substitution, assumption, exchange or
alternative settlement of the Option or right.

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        8.3  Termination of Employment.

        8.3.1    Options.

        (a)  Any Option, to the extent not exercised, will terminate and become
null and void upon a Participant's termination of employment or services with
the Company, except as set forth in this Section 8.3 or otherwise expressly
provided in the Award Agreement. All Options shall be subject to earlier
termination under Section 2.3, and any and all rights under an Option, to the
extent not exercised or vested, will expire immediately upon a Participant's
termination of employment or services with the Company for Cause. The Committee
shall be the sole judge of Cause.

        (b)  Unless otherwise expressly provided in the Award Agreement, a
Participant will have the following time periods to exercise Options to the
extent they are exercisable on the date of the Participant's termination of
employment or services with the Company:

        (1)  If the Participant's employment or services with the Company
terminates by any reason other than death, Total Disability or Cause, the
Participant will have 90 days after the date of such termination to exercise any
Option;

        (2)  If the Participant's employment or services with the Company is
terminated for Cause, the Option shall lapse immediately upon such termination.

        (3)  If the Participant's employment or services with the Company
terminates by reason of Total Disability, or if the Participant suffers a Total
Disability within 90 days after a termination of service described in
Section 8.3.1(b)(1), the Participant or the Participant's Personal
Representative, as the case may be, will have 180 days after the date of Total
Disability (or, if earlier, date of termination), to exercise any Option;

        (4)  If the Participant dies while employed by or while performing
services to the Company, or within 90 days after a termination of service
described in Section 8.3,1(b)(1) or 8.3.1(b)(3) above, the Participant's
Beneficiary may exercise, at any time within 180 days after the date of the
Participant's death (or, if earlier date of termination) any Option.

        8.3.2    Stock Appreciation Rights.    Each Stock Appreciation Right
granted concurrently with an Award will have the same termination provisions and
exercisability periods as the related Award. The termination provisions and
exercisability periods of any Stock Appreciation Right granted independent of an
Award will be established by the Committee.

        8.3.3    Restricted Stock Awards and Awards Under Article 5.    If a
Participant's employment or services terminates for any reason, (a) Shares
subject to the Participant's Restricted Stock Award will be terminated in
accordance with the related Award Agreement to the extent such Shares have not
become vested on the date of such termination; and (b) any Award granted to the
Participant under Article 5 will be terminated in accordance with the related
Award Agreement to the extent such Award has not become vested or payable on the
date of such termination.

        8.3.4    Stock Units.    Each Deferred Stock Alternative Exercise
Agreement or other Award Agreement in respect of Stock Units shall include the
applicable benefit distribution and termination provisions for the grant or
Award and shall specify the form of payment and may incorporate (to the extent
applicable) any terms of this Plan, another Award and/or any other deferred
compensation plan under which it is governed.

        8.3.5    Adjustments to Exercisable Portion.    Notwithstanding the
foregoing, if a Participant's employment or services with the Company terminates
for any reason other than for Cause, the Committee may increase the portion of a
Participant's Award exercisable to the Participant, or

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Participant's Beneficiary or Personal Representative, as the case may be, and
extend the applicable periods of exercise, upon such terms as the Committee
determines.

        8.3.6    Effect of Cessation of Subsidiary Status.    If an entity
ceases to be a Subsidiary, such action will be deemed for purposes of this Plan
to be a termination of services or employment of each Eligible Person of that
entity who does not continue as an Eligible Person of the Corporation or another
Subsidiary.

        8.4      Compliance With Laws.    This Plan, the granting and vesting of
Awards under this Plan and the offer, issuance and delivery of Shares and/or the
payment of money or other benefits under this Plan or under Awards granted
hereunder are subject to compliance with all applicable federal and state laws,
rules and regulations (including but not limited to state and federal securities
law and federal margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the judgment of the Committee,
be necessary or advisable in connection therewith. Any securities delivered
under this Plan shall be subject to such restrictions, and the person acquiring
such securities shall, if requested by the Corporation, provide such assurances
and representations to the Corporation as the Corporation may deem necessary or
desirable to assure compliance with all applicable legal requirements.

        8.5  Tax Withholding.

        8.5.1    Cash or Shares.    Upon any exercise, vesting, or payment of
any Award or upon the disposition of Shares acquired pursuant to the exercise of
an ISO prior to satisfaction of the holding period requirements of Section 422
of the Code, the Corporation shall have the right at its option to (i) require
the Participant (or Personal Representative or Beneficiary, as the case may be)
to pay or provide for payment in cash or by cashier's check payable to the
Corporation of the amount of any taxes which the Company may be required to
withhold with respect to such Award event or payment or (ii) deduct from any
amount payable in cash the amount of any taxes which the Company may be required
to withhold with respect to such cash payment. In any case where a tax is
required to be withheld in connection with the delivery of Shares under this
Plan, the Committee may, in its sole discretion and at the time of the Award or
thereafter, either require the Participant or grant to the Participant the right
to elect, pursuant to such rules and subject to such conditions as the Committee
may establish, to have the Corporation 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.

        8.5.2    Tax Loans.    The Corporation may, in its discretion and to the
extent permitted by law, authorize a loan to an Eligible Person in the amount of
any taxes which the Company may be required to withhold with respect to Shares
received (or disposed of, as the case may be) pursuant to a transaction
described in Section 8.5.1. Such a loan shall be for a term, at a rate of
interest and pursuant to such other terms and conditions as the Corporation,
under applicable law, may establish and such loan need not comply with the
provisions of a "Loan" defined in Section 9.1.

        8.6  Amendment, Termination and Suspension.

        8.6.1    Amendment, Termination and Suspension.    The Board may, at any
time, terminate or, from time to time, amend, modify or suspend this Plan, in
whole or in part. No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee shall retain jurisdiction as
to Awards then outstanding in accordance with the terms of this Plan.

        8.6.2    Stockholder Approval.    Any amendment that would
(i) materially increase the benefits accruing to Participants under this Plan,
(ii) materially increase the aggregate number of securities that may be issued
under this Plan, or (iii) materially modify the requirements as to eligibility
for participation in this Plan, shall be subject to stockholder approval to the
extent then required by Section 422 of the Code or applicable law, or deemed
necessary or advisable by the Board.

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        8.6.3    Amendments to Awards.    Without limiting any other express
authority of the Committee under but subject to the express limits of this Plan,
the Committee by agreement or resolution may waive conditions of or limitations
on Awards to Eligible Persons that the Committee in the prior exercise of its
discretion has imposed, without the consent of a Participant, and may make other
changes to the terms and conditions of Awards that do not affect in any manner
materially adverse to the Participant, his or her rights and benefits under an
Award.

        8.6.4    Limitations on Amendments to Plan and Awards.    No amendment,
suspension or termination of this Plan or change of or affecting any outstanding
Award shall, without written consent of the Participant, affect in any manner
materially adverse to the Participant any rights or benefits of the Participant
or obligations of the Corporation under any Award granted under this Plan prior
to the effective date of such change. Changes contemplated by Section 8.2 shall
not be deemed to constitute changes or amendments for purposes of this
Section 8.6.

        8.7  Privileges of Stock Ownership.    A Participant will not be
entitled to the privilege of stock ownership as to any Shares not actually
issued to the Participant. No adjustment will be made for dividends or other
rights as a stockholder for which a record date is prior to the date of issue.

        8.8  Effective Date of the Plan.    This Plan was originally effective
as of February 23, 1996 and was amended and restated as of May 4, 1999. The Plan
was originally approved by the stockholders of the Corporation on September 30,
1997.

        8.9  Term of the Plan.    Except as permitted by Section 1.9, no Award
shall be granted under this Plan after February 22, 2006 (the "termination
date"). Unless otherwise expressly provided in this Plan or in an applicable
Award Agreement, any Award granted prior to the termination date may extend
beyond such date, and all authority of the Committee with respect to Awards
hereunder, including the authority to amend an Award or defer payment of a
vested Award, shall continue during any suspension of this Plan and in respect
of Awards outstanding on the termination date.

        8.10 Governing Law/Construction/Severability.

        8.10.1    Choice of Law.    This Plan, the Awards, all documents
evidencing Awards and all other related documents shall be governed by, and
construed in accordance with the laws of the state of incorporation of the
Corporation.

        8.10.2    Severability.    If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining provisions
of this Plan shall continue in effect.

        8.10.3    Plan Construction.

        (a)  It is the intent of the Corporation that transactions in and
affecting Awards in the case of an Eligible Person or Participant who is or may
be subject to Section 16 of the Exchange Act (a "Section 16 Person") satisfy any
then applicable requirements of Rule 16b-3 so that such persons (unless they
otherwise agree) will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the Exchange Act in respect of those
transactions and will not be subjected to avoidable liability thereunder. If any
provision of this Plan or of any Award would otherwise frustrate or conflict
with the intent expressed above, that provision to the extent practicable shall
be interpreted so as to avoid such conflict. If the conflict remains
irreconcilable, the Committee may disregard the provision if it concludes that
to do so furthers the interest of the Corporation and is consistent with the
purposes of this Plan as to such persons in the circumstances.

        (b)  It is the further intent of the Company that Options or Stock
Appreciation Rights with an exercise or base price not less than Fair Market
Value on the date of grant and performance awards under Section 5.2 of this Plan
that are granted to or held by a Section 16 Person shall qualify as
performance-based compensation under Section 162(m), and this Plan shall be
interpreted consistent with such intent.

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        8.11 Captions.    Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate reference.

        8.12 Non-Exclusivity of Plan.    Nothing in this Plan shall limit or be
deemed to limit the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to the Common Stock,
under any other plan or authority.

9.    DEFINITIONS.

        9.1  Definitions.

        "Award"    means an award of any Option (which may be designated as a
NQSO or an ISO and which may include as an incident thereto Stock Units), Stock
Appreciation Right, Stock Unit, Restricted Stock, Stock Bonus, Deferred Stock
Alternative, Performance-Based Award, Dividend Equivalent Rights, or deferred
payment right, or any combination thereof, whether alternative or cumulative,
authorized by and granted under this Plan.

        "Award Agreement"    means a written agreement, approved by the
Committee, setting forth the terms of an Award.

        "Award Date"    means the date upon which the Committee takes the action
granting an Award or such later date as the Committee designates as the Award
Date at the time of the Award or, in the case of Awards under Article 7, the
applicable date set forth therein.

        "Beneficiary"    means the person, persons, trust, or trusts designated
by a Participant or, in the absence of a designation, entitled by will or the
laws of descent and distribution to receive the benefits specified in the Award
Agreement and under this Plan in the event of a Participant's death, and shall
mean the Participant's executor or administrator if no other Beneficiary is
designated and able to act under the circumstances.

        "Board"    means the Board of Directors of the Corporation.

        "Cause"    means a determination by the Committee that the Participant:
(a) has committed a material breach of the Participant's duties and
responsibilities (other than as a result of incapacity due to a Total
Disability); or (b) has been convicted of a felony, or entered a plea of guilty
or nolo contendre with respect to such a crime; or (c) has violated any
fiduciary duty or duty of loyalty owed to the Company; or (d) has been generally
incompetent or grossly negligent in the discharge of the Participant's duties
and responsibilities; or (e) has engaged or is engaging in immoderate use of
alcoholic beverages or narcotics or other substance abuse; or (f) has violated
in any material respect any of the Company's established employment policies in
effect from time to time.

        "Code"    means the Internal Revenue Code of 1986, as amended from time
to time.

        "Commission"    means the Securities and Exchange Commission.

        "Committee"    means the Compensation Committee appointed by the Board
and consisting of two or more Board members or such greater number as may be
required under applicable law. In the absence of such appointment, the Board
shall be the Committee. Each of the members of the Committee, in respect of any
decision at a time when the Eligible Person affected by the decision may be (or,
in the Committee's judgment is likely to become) subject to Section 162(m),
shall be an "outside director" within the meaning of Section 162(m) if the
subject Award is intended as a performance-based award for purposes of that
section. In acting on any transaction with or for the benefit of a Section 16
Person, each acting member of the Committee shall be a "non-employee director"
within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act,
unless the Committee's action is approved or ratified by the Board in advance of
the effective time of the action.

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        "Common Stock"    means the Common Stock of the Corporation.

        "Company"    means, collectively, the Corporation and its Subsidiaries
or the Corporation or any Subsidiary, as the context requires.

        "Corporation"    means Power-One, Inc., a Delaware corporation, and its
successors.

        "Deferred Stock Alternative"    mean a deferred payment alternative
payable in Shares or cash or other consideration, as determined by the
Committee, based on the number of Stock Units credited to a Participant's Stock
Unit Account.

        "Dividend Equivalent Right"    means a right authorized under
Section 5.4 of this Plan.

        "Eligible Person"    means (subject to applicable limits under the Code
in the case of ISOs) (a) an officer, director, or key employee of the Company,
or (b) any Non-Employee Director or any individual consultant or advisor who
renders or has rendered bona fide services (other than services in connection
with the offering or sale of securities of the Company in a capital raising
transaction) to the Company, and who is selected to participate in this Plan by
the Committee. A non-employee agent providing bona fide services to the Company
(other than as an eligible advisor or consultant) may also be selected by the
Committee as an Eligible Person if such agent's participation in this Plan would
not adversely affect (x) the Corporation's eligibility to use Form S-8 to
register under the Securities Act the offer and sale of shares issuable under
this Plan by the Corporation or (y) the Corporation's compliance with any other
applicable laws.

        "Event"    means any of the following:

        (a)  the dissolution or liquidation of the Corporation;

        (b)  a merger or consolidation, or other reorganization, with or into
one or more entities that are not Subsidiaries, as a result of which 50% or more
of the outstanding voting securities of either the surviving or resulting entity
or its parent, as the case may be, immediately after the reorganization are not,
and will not be, owned, directly or indirectly, by stockholders of the
Corporation immediately before such reorganization (assuming for purposes of
such determination that there is no change in the record ownership of the
Corporation's securities from the record date for such approval until such
reorganization and that such record owners hold no securities of the other
parties to such reorganization);

        (c)  the sale of substantially all of the Corporation's business and/or
assets as an entirety to a person or entity that is not a Subsidiary;

        (d)  any "person" (as such term is used in Sections 13(d) and 14 (d) of
the Exchange Act but excluding (1) any person described in and satisfying the
conditions of Rule 13d-1(b)(1) thereunder, and (2) any person or entity
(including any successor) that is a beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of more than 20% of the Corporation as of
August 31,1997), becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing more than 50% of the combined voting
power of the Corporation's then outstanding securities entitled to then vote
generally in the election of directors of the Corporation; or

        (e)  during any period not longer than two consecutive years,
individuals who at the beginning of such period constituted the Board and
(without duplication in the case of successors) persons whose election or
nomination for election by the Corporation's stockholders was approved by a vote
of at least three-fourths of the Board members then still in office cease to
constitute at least a majority of the Board.

        "Exchange Act"    means the Securities Exchange Act of 1934, as amended
from time to time.

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        "Exercise Agreement"    means a written agreement, approved by the
Committee, setting forth the terms for the exercise of an Award.

        "Fair Market Value"    on any date shall mean:

        (a)  if the Shares are publicly traded: (1) if the Shares are listed or
admitted to trade on a national securities exchange, the closing price of the
Shares on the Composite Tape, as published in the Western Edition of The Wall
Street Journal, of the principal national securities exchange on which the
Shares are so listed or admitted to trade, on such date, or, if there is no
trading of the Shares on such date, then the closing price of the Shares as
quoted on such Composite Tape on the next preceding date on which there was
trading in such Shares; (2) if the Shares are not listed or admitted to trade on
a national securities exchange, the last price for the Shares on such date, as
furnished by the National Association of Securities Dealers, Inc. ("NASD")
through the NASDAQ National Market Reporting System or a similar organization if
the NASD is no longer reporting such information; (3) if the Shares are not
listed or admitted to trade on a national securities exchange and are not
reported on the National Market Reporting System, the mean between the bid and
asked price for the Shares on such date, as furnished by the NASD or a similar
organization; or

        (b)  if the Shares are not publicly traded or the NASD or a similar
organization does not furnish the mean between the bid and asked prices for the
Shares on such date, the fair market value of a Share as determined by the
Committee in good faith. Any determination as to fair market value made pursuant
to this Plan shall be determined without regard to any restriction other than a
restriction which, by its terms, will never lapse, and shall be conclusive and
binding on all persons.

        "ISO"    means an Option which is intended, as evidenced by its
designation, as an incentive stock option within the meaning of Section 422 of
the Code, the award of which contains such provisions and is made under such
circumstances and to such persons as may be necessary to comply with that
section.

        "NQSO"    means an Option that is designated as a nonqualified stock
option and shall include any Option intended to be an ISO that fails to meet the
applicable legal requirements thereof. Any Option granted hereunder that is not
designated as an incentive stock option shall be deemed to be designated a
nonqualified stock option under this Plan and not an incentive stock option
under the Code.

        "Non-Employee Director"    means a member of the Board of Directors of
the Corporation who is not an officer or employee of the Company.

        "Non-Employee Director Participant"    means a Non-Employee Director who
holds an outstanding Award under the provisions of Article 7.

        "Note"    means a promissory note approved by the Committee evidencing a
loan from the Corporation to the Eligible Person of an amount equal to the
Purchase Price of an Award. Any Note shall be subject to the following terms:

        (a)  The principal of the Note shall not exceed the amount required to
be paid to the Corporation upon the exercise or receipt of such Award, and the
note shall be delivered directly to the Corporation in consideration of such
exercise or receipt.

        (b)  The term of the Note, including extensions, shall not exceed ten
(10) years.

        (c)  The note shall provide for full recourse to the Participant.

        (d)  The Note shall bear interest at a rate determined by the Committee,
but not less than the interest rate necessary to avoid the imputation of
interest under the Code.

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        (e)  The unpaid balance of the Note shall become due and payable on the
tenth day after the termination of employment or service of a Participant;
provided, however, that if a sale of such shares would cause such Participant to
incur liability under Section 16(b) of the Exchange Act, the unpaid balance
shall become due and payable on the 10th business day after the first day on
which a sale of such shares could have been made without incurring such
liability assuming for these purposes that there are no other transactions (or
deemed transactions in securities of this Corporation) by the Participant
subsequent to such termination.

        (f)    If required by the Committee or by applicable law, the Note shall
be secured by a pledge of any Shares or Awards financed thereby (and other
collateral if required by the Committee).

        (g)  The terms, repayment provisions, and collateral release provisions
of the note and the pledge securing the note shall conform with applicable rules
and regulations of the Commission and the Federal Reserve Board, as then in
effect.

        "Option"    means an option to purchase Shares granted under this Plan.
The Committee shall designate any Option granted to any Eligible Person as a
NQSO or an ISO.

        "Participant"    means an Eligible Person who has been granted an Award
under this Plan and a Non-Employee Director Participant who has been granted an
Award under Article 7 of this Plan.

        "Personal Representative"    means the person or persons who, upon the
disability or incompetence of a Participant, shall have acquired on behalf of
the Participant, by legal proceeding or otherwise, the power to exercise the
rights or receive the benefits under this Plan and who shall have become the
legal representative of the Participant.

        "Purchase Price"    means the exercise or purchase price, if any,
payable by the Participant to the Corporation upon exercise of an Award in
accordance with the applicable Award Agreement, Exercise Agreement, and the
terms of this Plan; provided, however, that such exercise price shall not be
less than the minimum lawful consideration required under applicable state law.

        "Restricted Stock"    means Shares awarded to a Participant under this
Plan, subject to payment of such consideration, if any, and such conditions on
vesting (which may include, among others, the passage of time, specified
performance objectives or other factors) and such transfer and other
restrictions as are established in or pursuant to this Plan and the related
Award Agreement, for so long as such Shares remain unvested under the terms of
the applicable Award Agreement.

        "Restricted Stock Award"    means an Award of Restricted Stock made
pursuant to Article 4.

        "Retirement"    means retirement from employment by, or providing
services to, the Corporation or any Subsidiary which occurs, in the case of
employees, at or after the Company's normal retirement age and in accordance
with the retirement policies of the Company then in effect or, in the case of a
Non-Employee Director, a retirement or resignation as a director after age 65 or
after at least 15 years of service as a director.

        "Rule 16b-3"    means Rule 16b-3 as promulgated by the Commission
pursuant to the Exchange Act, as amended from time to time.

        "Section 16 Person"    means a person subject to Section 16(a) of the
Exchange Act.

        "Section 162(m)"    means Section 162(m) of the Code.

        "Securities Act"    means the Securities Act of 1933, as amended form
time to time.

        "Shares"    means shares of the Corporation's Common Stock.

20

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        "Stock Appreciation Right"    means a right authorized under this Plan
to receive a number of Shares or an amount of cash, or a combination of Shares
and cash, the aggregate amount of or value of which is determined by reference
to a change in the Fair Market Value of the Common Stock.

        "Stock Bonus"    means an Award of Shares granted under this Plan for no
consideration other than past services and without restriction other than such
transfer or other restrictions as the Committee may deem advisable to assure
compliance with law.

        "Stock Unit"    means a non-voting unit of measurement which is deemed
for bookkeeping purposes to be equivalent to one outstanding share of the
Corporation's Common Stock (subject to adjustment) solely for purposes of this
Plan.

        "Stock Unit Account"    means the bookkeeping account maintained by the
Corporation on behalf of each Participant who is credited with Stock Units in
accordance with Article 6, which account may be payable in cash, Shares and/or
other consideration, as the Committee may determine.

        "Subsidiary"    means any corporation or other entity a majority or more
of whose outstanding voting stock or voting power is beneficially owned directly
or indirectly by the Corporation.

        "Total Disability"    means a "permanent and total disability" within
the meaning of Section 22(e)(3) of the Code and such other disabilities,
infirmities, afflictions, or conditions as the Committee by rule may include.

21

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Exhibit A

POWER-ONE, INC.
ELIGIBLE DIRECTOR

NONQUALIFIED STOCK OPTION AGREEMENT

        THIS AGREEMENT dated as of the            day
of                        ,            , between Power-One, Inc., a Delaware
corporation (the "Corporation"), and                        (the "Director").

W I T N E S S E T H

        WHEREAS, the Corporation has adopted and the stockholders of the
Corporation have approved the Power-One, Inc. Amended and Restated 1996 Stock
Incentive Plan, as amended (the "Plan").

        WHEREAS, pursuant to Article 7 of the Plan, the Corporation has granted
an option (the "Option") to the Director upon the terms and conditions evidenced
hereby, as required by the Plan, which Option is not an incentive stock option
within the meaning of Section 422 of the Code.

        NOW, THEREFORE, in consideration of the services rendered and to be
rendered by the Director, the Corporation and the Director agree to the terms
and conditions set forth herein as required by the terms of the Plan.

        1.    Option Grant.    This Agreement evidences the grant to the
Director, as of                        ,            (the "Option Date"), of an
Option to purchase an aggregate of            shares of Common Stock, par
value            per share, under Section 7.2.    of the Plan, subject to the
terms and conditions and to adjustment as set forth herein or in the Plan.

        2.    Exercise Price.    The Option entitles the Director to purchase
(subject to the terms of Sections 3 through 5 below and to the extent
exercisable) all or any part of the Option shares at a price per share of
$            , which amount represents the Fair Market Value of the shares on
the Option Date.

        3.    Option Exercisability and Term.    [ALT 1—SECTION 7.2.1 and 7.2.4
GRANTS: The Option shall become exercisable as to 331/3% of the total number of
shares subject thereto on each of the following dates: (i) the earlier of the
first anniversary of the Option Date or the annual stockholders meeting in the
year                        , (ii) the earlier of the second anniversary of the
Option Date or the annual stockholders meeting in the
year                        , or (iii) the earlier of the third anniversary of
the Option Date or the annual stockholders meeting in the
year                        , in each case subject to Sections 7.5 and 7.6 of
the Plan.] [ALT 2—SECTION 7.2.2 AND 7.2.3 GRANTS: Subject to Sections 7.5 and
7.6 of the Plan, the Option shall become exercisable as to 100% of the total
number of shares subject thereto on the earlier of the first anniversary of the
Option Date or the annual stockholders meeting that occurs in the
year                        .] The Option shall terminate
                        ,            , unless earlier terminated in accordance
with the terms of the Plan.

        4.    Service and Effect of Termination of Service.    The Director
agrees to serve as a director in accordance with the provisions of the
Corporation's Certificate of Incorporation, bylaws and applicable law. If the
Director's services as a member of the Board shall terminate, this Option shall
terminate at the times and to the extent set forth in Section 7.5 of the Plan.

        5.    General Terms.    The Option and this Agreement are subject to,
and the Corporation and the Director agree to be bound by, the provisions of the
Plan that apply to the Option. Such provisions are incorporated herein by this
reference. The Director acknowledges receiving a copy of the Plan and reading
its applicable provisions. Capitalized terms not otherwise defined herein shall
have the meaning assigned to such terms in the Plan.

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        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

    POWER-ONE, INC.
(a Delaware corporation)
 
 
By
 

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Title
 

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Optionee Director
 
 

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(Signature)
 
 

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(Print Name)
 
 

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(Address)
 
 

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(City, State, Zip Code)

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Consent of Spouse

        In consideration of the execution of the foregoing Stock Option
Agreement by Power-One, Inc., I,                         , the spouse of the
Director therein named, do hereby agree to be bound by all of the terms and
provisions thereof and of the Plan.

DATED:                        ,        

 
 

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(Signature of Spouse)

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POWER-ONE, INC AMENDED AND RESTATED 1996 STOCK INCENTIVE PLAN (As Amended and
Restated January 25, 2002)
TABLE OF CONTENTS
POWER-ONE, INC. AMENDED AND RESTATED 1996 STOCK INCENTIVE PLAN
POWER-ONE, INC. ELIGIBLE DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT
Consent of Spouse