Exhibit 10.5

 

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POWER-ONE, INC.

AMENDED AND RESTATED
2004 STOCK INCENTIVE PLAN
PERFORMANCE STOCK UNIT AWARD AGREEMENT

 

THIS PERFORMANCE STOCK UNIT AWARD AGREEMENT (this “Agreement”) is dated as of
[·] by and between Power-One, Inc., a Delaware corporation (the “Corporation”)
and [·] (the “Employee”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to the Power-One, Inc. Amended and Restated 2004 Stock
Incentive Plan (the “Plan”), the Corporation has granted to the Employee
effective as of the date hereof (the “Award Date”), a credit of stock units
under the Plan, upon the terms and conditions set forth herein and in the Plan.

 

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

 

1.     Defined Terms.   Capitalized terms used herein and not otherwise defined
herein shall have the meaning assigned to such terms in the Plan.

 

2.     Grant.   Subject to the terms of this Agreement, the Corporation hereby
grants to the Employee a Stock Unit Award pursuant to which the Employee is
eligible to earn a target number of [·] stock units (subject to adjustment as
provided in Section 7.1 of the Plan) (the “Stock Unit Award” or “Award”). As
used herein, the term “Stock Unit” shall mean 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 as provided in
Section 7.1 of the Plan) solely for purposes of the Plan and this Agreement. The
Stock Units shall be used solely as a device for the determination of the
payment to eventually be made to the Employee if such Stock Units vest pursuant
to Section 3. The Stock Units shall not be treated as property or as a trust
fund of any kind.

 

3.     Vesting.   Subject to Sections 8 and 9 below, the Award shall vest and
become nonforfeitable in accordance with Appendix A, attached hereto.

 

4.     Continuance of Employment.   The vesting schedule requires continued
employment or service through the vesting date as a condition to the vesting of
the Award and the rights and benefits under this Agreement. Partial employment
or service, even if substantial, during any vesting period will not entitle the
Employee to any proportionate vesting or avoid or mitigate a termination of
rights and benefits upon or following a termination of employment or services as
provided in Section 8 below or under the Plan.

 

Nothing contained in this Agreement or the Plan constitutes an employment or
service commitment by the Corporation, affects the Employee’s status as an
employee at will who is subject to termination without cause, confers upon the
Employee any right to remain employed by or in service to the Corporation or any
Subsidiary, interferes in any way with the right of the Corporation or any
Subsidiary at any time to terminate such employment or services, or affects the
right of the Corporation or any Subsidiary to increase or decrease the
Employee’s other compensation or benefits. Nothing in this paragraph, however,
is intended to adversely affect any independent contractual right of the
Employee without his consent thereto.

 

5.     Limitations on Rights Associated with Units.   The Employee shall have no
rights as a stockholder of the Corporation, no dividend rights and no voting
rights, with respect to the Stock Units and any shares of Common Stock
underlying or issuable in respect of such Stock Units until such shares of
Common Stock are actually issued to and held of record by the Employee. No
adjustments will be made for

 

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dividends or other rights of a holder for which the record date is prior to the
date of issuance of the stock certificate.

 

6.     Restrictions on Transfer.   Neither the Stock Unit Award, nor any
interest therein or amount or shares payable in respect thereof may be sold,
assigned, transferred, pledged or otherwise disposed of, alienated or
encumbered, either voluntarily or involuntarily. The transfer restrictions in
the preceding sentence shall not apply to (a) transfers to the Corporation, or
(b) transfers by will or the laws of descent and distribution.

 

7.     Timing and Manner of Payment of Stock Units.   Subject to Sections 8 and
9, if the Award vests, pursuant to Section 3, above, on or as soon as
administratively practical following the vesting date, the Corporation shall
deliver to the Employee a number of shares of Common Stock (or cash equivalents)
equal to the number of Stock Units subject to this Award that vested. The
Employee shall have no further rights with respect to any Stock Units that are
so paid or that are terminated pursuant to Section 8.

 

8.     Effect of Termination of Employment.   Except as provided in Sections 7.2
or 7.3 of the Plan, the Employee’s Stock Units shall terminate to the extent
such units have not become vested prior to the date the Employee is no longer
employed by the Corporation or one of its Subsidiaries, regardless of the reason
for the termination of the Employee’s employment by the Corporation or a
Subsidiary, whether with or without cause, voluntarily or involuntarily. If the
Employee is employed by a Subsidiary and that entity ceases to be a Subsidiary,
such event shall be deemed to be a termination of employment of the Employee for
purposes of this Award Agreement, unless the Employee otherwise continues to be
employed by the Corporation or another of its Subsidiaries following such event.
If any Stock Units are terminated hereunder, such unvested, termination Stock
Units shall automatically terminate and be cancelled as of the applicable
termination date without payment of any consideration by the Company and without
any other action by the Employee, or the Employee’s Beneficiary or Personal
Representative, as the case may be.

 

9.     Adjustments Upon Specified Events; Acceleration Upon a Corporate
Transaction.   Upon the occurrence of certain events relating to the
Corporation’s stock contemplated by Section 7.1 of the Plan, the Committee shall
make adjustments if appropriate in the number of Stock Units and the number and
kind of securities that may be issued in respect of the Stock Unit Award. 
Notwithstanding anything herein to the contrary, upon the occurrence of any
merger, combination, consolidation, or other reorganization; any exchange of
Common Stock or other securities of the Corporation; a sale of all or
substantially all the business, stock or assets of the Corporation; a
dissolution of the Corporation; or any other event in which the Corporation does
not survive (or does not survive as a public company in respect of its Common
Stock), the Stock Unit Award shall vest in accordance with Appendix A.

 

10.   Tax Withholding.   Upon the distribution of shares of the Common Stock (or
cash equivalents) in respect of the Stock Units, the Corporation (or the
Subsidiary last employing the Employee) shall have the right at its option to
(a) require the Employee to pay or provide for payment in cash of the amount of
any taxes that the Corporation or the Subsidiary may be required to withhold
with respect to such payment and/or distribution, or (b) deduct from any amount
payable to the Employee the amount of any taxes which the Corporation or the
Subsidiary may be required to withhold with respect to such payment and/or
distribution. In any case where a tax is required to be withheld in connection
with the delivery of shares of Common Stock under this Award Agreement, the
Committee may, in its sole discretion, direct the Corporation or the Subsidiary
to reduce the number of shares to be delivered by (or otherwise reacquire) the
appropriate number of shares, valued at their then Fair Market Value, to satisfy
such withholding obligation.

 

11.   Notices.   Any notice to be given under the terms of this Agreement shall
be in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Employee at the Employee’s last address
reflected on the Corporation’s records, or at such other address as either party
may hereafter designate in writing to the other. Any such notice shall be given
only when received, but if the Employee is no longer an employee of the Company,
shall be deemed to have been duly given by the Corporation when enclosed in a
properly sealed envelope addressed as aforesaid, registered or certified, and
deposited (postage and registry or certification fee prepaid) in a post office
or branch post office regularly maintained by the United States Government.

 

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12.   Plan.   The Award and all rights of the Employee under this Agreement are
subject to, and the Employee agrees to be bound by, all of the terms and
conditions of the provisions of the Plan, incorporated herein by reference. In
the event of a conflict or inconsistency between the terms and conditions of
this Agreement and of the Plan, the terms and conditions of the Plan shall
govern. The Employee agrees to be bound by the terms of the Plan and this
Agreement. The Employee acknowledges having read and understanding the Plan, the
Prospectus for the Plan, and this Agreement. Unless otherwise expressly provided
in other sections of this Agreement, provisions of the Plan that confer
discretionary authority on the Committee do not (and shall not be deemed to)
create any rights in the Employee unless such rights are expressly set forth
herein or are otherwise in the sole discretion of the Committee so conferred by
appropriate action of the Committee under the Plan after the date hereof.

 

13.   Entire Agreement.   This Agreement and the Plan together constitute the
entire agreement and supersede all prior understandings and agreements, written
or oral, of the parties hereto with respect to the subject matter hereof. The
Plan and this Award Agreement may be amended pursuant to Section 8.6 of the
Plan. Such amendment must be in writing and signed by the Corporation. The
Corporation may, however, unilaterally waive any provision hereof in writing to
the extent such waiver does not adversely affect the interests of the Employee
hereunder, but no such waiver shall operate as or be construed to be a
subsequent waiver of the same provision or a waiver of any other provision
hereof.

 

14.   Limitation on Employee’s Rights.   Participation in this Plan confers no
rights or interests other than as herein provided. This Agreement creates only a
contractual obligation on the part of the Company as to amounts payable and
shall not be construed as creating a trust. Neither the Plan nor any underlying
program, in and of itself, has any assets. The Employee shall have only the
rights of a general unsecured creditor of the Corporation (or applicable
Subsidiary) with respect to amounts credited and benefits payable in cash, if
any, with respect to the Stock Units, and rights no greater than the right to
receive the Common Stock (or equivalent value) as a general unsecured creditor
with respect to Stock Units, as and when payable thereunder.

 

15.   Counterparts.   This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.

 

16.   Section Headings.   The section headings of this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.

 

17.   Governing Law.   This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.

 

IN WITNESS WHEREOF,   the Corporation has caused this Agreement to be executed
on its behalf by a duly authorized officer and the Employee has hereunto set his
or her hand as of the date and year first above written.

 

 

POWER-ONE, INC.,

EMPLOYEE

a Delaware corporation

 

 

 

By:

 

 

 

 

 

 

Signature

Print Name:

 

 

 

 

 

 

 

Its:

 

 

 

 

 

 

Print Name

 

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Appendix A

 

1.     Standard Vesting Provisions.   Subject to the Employee’s continued
employment or service with the Corporation or one of its Subsidiaries until the
end of the Performance Period, as defined below (the “vesting date”), and
subject to Section 2, below, the Stock Units shall vest, based on the
Corporation’s performance measured over the 3-year period beginning on the Award
Date and ending on the third anniversary of the Award Date (the “Performance
Period”) as follows:

 

(a)  Payout Calculation.  For every full percentage point that the Corporate
Total Stockholder Return exceeds the SUNIDX Total Stockholder Return, the
Employee shall earn 5% of the Target Stock Units, up to a maximum of 150% of the
Target Stock Units.

 

(b)  Definitions.  The following definitions shall apply for purposes of the
Agreement and this Appendix:

 

(i)  Corporate Total Stockholder Return.  The “Corporate Total Stockholder
Return” shall be the percentage increase between the Initial Average Corporate
Stock Price and the Final Average Corporate Stock Price.  The Company’s Stock
Price shall also be adjusted to reflect the reinvestment of any dividends issued
by the Company during the Performance Period or during the 60 trading days used
to calculate the Initial Average Corporate Stock Price.  For purposes of this
calculation, such reinvestment is assumed to occur on the applicable ex-dividend
date.

 

(ii)  Initial Average Corporate Stock Price.  The “Initial Average Corporate
Stock Price” shall be the average closing stock price for the Corporation’s
Common Stock for the 60 trading days prior to the Award Date.

 

(iii)  Initial Average SUNIDX Value.  The “Initial Average SUNIDX Value” shall
be the average closing index value for the MAC Global Solar Energy Index for the
60 trading days in which the U.S. securities markets are open prior to the Award
Date.

 

(iv)  Final Average Corporate Stock Price.  The “Final Average Corporate Stock
Price” shall be the average closing stock price for the Corporation’s Common
Stock for the 60 trading days prior to the last day in the Performance Period.

 

(v)  Final Average SUNIDX Value.  The “Final Average SUNIDX Value” shall be the
average closing index value for the MAC Global Solar Energy Index for the 60
trading days in which the U.S. securities markets are open prior to the last day
in the Performance Period.

 

(vi)  SUNIDX Total Stockholder Return.  The “SUNIDX Total Stockholder Return”
shall be the percentage increase between the Initial Average SUNIDX Value and
the Final Average SUNIDX Value.

 

(vii)  Target Stock Units.  Subject to the terms of the Agreement, including the
provisions regarding adjustments, the target number of Stock Units subject to
the Award shall be the number of target Stock Units set forth in Section 2 of
the Agreement.

 

2.     Acceleration Upon a Corporate Transaction.   By accepting this award, the
Employee agrees that upon the occurrence of  any merger, combination,
consolidation, or other reorganization; any exchange of all or substantially all
of the Common Stock of the Corporation; a sale of all or substantially all the
business, stock or assets of the Corporation; a dissolution of the Corporation;
or any other event in which the Corporation does not survive (or does not
survive as a public company in respect of its Common Stock) (a “Corporate
Transaction”), the following treatment shall apply irrespective of the
provisions of any existing individual or other agreement in place with the
Employee.

 

The Performance Period shall be deemed to end upon the closing of the Corporate
Transaction for purposes of determining the Corporate Total Stockholder Return
and the SUNIDX Total Stockholder Return.  The Number of Restricted Stock Units
that will be deemed earned (Earned RSUs) will be calculated in accordance with
the Payout Calculation described in Section 1(a) of this Appendix A, except that
the Corporate Total Stockholder Return shall be calculated based on the Fair
Market Value of a share

 

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of the Company’s common stock on the date the Corporate Transaction closes
instead of the Final Average Corporate Stock Price.

 

At the time the Corporate Transaction closes, the Employee shall vest in a
pro-rata number of the Earned RSUs as determined based on the number of whole
months of the Performance Period completed as of the consummation of the
Corporate Transaction.  The remainder of the Earned RSUs will not be treated as
vested, but instead will be subject to continued vesting over the remainder of
the Performance Period, with the remainder of the Earned RSUs becoming vested
ratably on the first day of each month until the end of the Performance Period. 
If the Employee terminates his or her service prior to the end of the
Performance Period, unless the following sentence applies, any unvested Earned
RSUs will be forfeited.  If following a Corporate Transaction, the Grantee’s
service is terminated by the Company (or its successor) without Cause, or the
Grantee terminates his or her service for Good Reason, the vesting of any
unvested Earned RSUs shall be accelerated in full.  Notwithstanding the
inapplicability of the terms of any individual or other agreement with respect
to this award, for purposes of this provision the meaning of the word “Cause”
and the word “Good Reason” shall have the meanings for those words set forth in
an individual agreement between the Employee and the Company.

 

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