Exhibit 10.3


 


SEPARATION AGREEMENT AND
RELEASE OF CLAIMS


 


This Separation Agreement and Release of Claims (“Agreement”), is
entered into by Linda C. Heller, and Power-One, Inc. (“Power-One”) for the
purpose of resolving all matters between Ms. Heller and Power-One including
those concerning Ms. Heller’s employment with Power-One and the termination of
that employment.


 


1.                                       Termination of
Employment. Ms. Heller’s employment with Power-One will
terminate effective August 13, 2010 (the “Separation Date”).


 


2.                                       Final Wages, Vacation
Pay, Company Contribution to Retirement Plan. On Ms. Heller’s last day
of employment, Power-One will pay the following:


 


(a)                             All wages or
salary earned and unpaid through and including Ms. Heller’s last day of employment;
and


 


(b)                            Accrued, unused
vacation, if any, as of Ms. Heller’s Separation Date.


 


Ms. Heller will receive these sums whether or not
she enters into this Agreement. Payment of these sums will be subject to
appropriate deductions and withholdings. Ms. Heller is also entitled to
one-hundred percent (100%) of the Company’s contribution to her retirement
plan, which vested in full on the second anniversary of her employment, subject
to the terms of the plan.


 


3.                                       Separation
Payment. On the eighth day following the execution and return of this
Agreement by Ms. Heller (or on the next business day, if the eighth day is a
weekend day or a holiday), and provided that Ms. Heller has not exercised her
right to revoke this Agreement, Power-One will pay to Ms. Heller the gross sum
of $280,000, less appropriate payroll tax deductions and withholdings. This
amount will be paid to Ms. Heller in a lump sum through Power-One’s regular
payroll system.


 


4.                                       Benefits. Power-One
acknowledges that, regardless of whether Ms. Heller enters into this Agreement,
she is eligible to elect continuation of current medical, dental and vision
benefit coverage under the Consolidated Omnibus Budget Reconciliation Act, as
amended (“COBRA”), in accordance with its terms. Regardless of whether Ms.
Heller enters into this Agreement, Ms. Heller’s rights and responsibilities
under the benefit plans and programs offered by Power-One to its employees are
subject to applicable law and plan documents as they apply to terminated
employees.


 


If Ms. Heller enters into this Agreement and elects
to continue her current medical, dental, and/or vision insurance coverage
through COBRA following her Separation Date, as additional consideration for
entering into this Agreement, Power-One will pay one hundred percent (100%) of
the applicable total COBRA premium payable for such coverage for a term of one
year following the Separation Date. Power-One will also continue Ms. Heller’s
executive medical supplement through December 31, 2010. Payment of the premium
will be made directly to the insurance company by Power-One. Power-One’s
obligation to pay COBRA premiums will terminate if Ms. Heller becomes eligible
to participate in any medical benefits coverage provided by a subsequent
employer. COBRA premiums due and payable after the one year anniversary of the
Separation Date will become the sole responsibility of Ms. Heller, as outlined
in separate COBRA rights information provided to Ms. Heller by COBRA source.


 


Ms. Heller acknowledges that except as provided in
paragraph 7 below, she is not entitled to participate in any other Power-One
benefit plans after the Separation Date, and further acknowledges that she will
not accrue further benefits under the plans, including, but not limited to,
allowances of any type, accruals of paid time off, incentive payments and
bonuses. Her eligibility to make further contributions to any Power-One
retirement plan such as the 401-K plan will end as of the Separation Date.


 


1

















 


5.                                       Equity Awards. On the
Separation Date, Ms. Heller will fully vest in 75,000 restricted stock units
previously awarded to Ms. Heller that have not vested and were not scheduled to
vest prior to the Separation Date. The stock units are fully paid shares of
Power-One, Inc. common stock that Ms. Heller will own; provided however, that
taxes due on the shares must be paid by Ms. Heller prior to distribution of the
stock. Alternatively, Ms. Heller may direct Power-One to trade a sufficient
number of her shares to pay her estimated tax liability. There are no
restrictions, time limits, expiration dates or other limitations upon Ms.
Heller’s ownership of the shares or on her freedom to hold, sell, exchange,
donate or dispose of any or all of such shares, although Ms. Heller will remain
subject to Rule 16(b) of the Securities Exchange Act of 1934, which governs
short-swing profits, for a term of six (6) months following the Separation Date.


 


6.                                       Outplacement. Power-One
will pay the cost of outplacement services for Ms. Heller in an amount not to
exceed Fifteen Thousand Dollars ($15,000) for a period of up to one year
following Ms. Heller’s Separation Date, after which any unused amount allocated
for outplacement services will be forfeited.


 


7.                                       Acknowledgment
of Consideration. Ms. Heller acknowledges that she is not entitled
to the payment set forth in Paragraph 3 above, to the payment by Power-One of
COBRA premiums as described in Paragraph 4 above, to the full vesting of the
75,000 restricted stock units described in paragraph 5 or to the outplacement
services described in paragraph 6 (collectively the “Separation Benefits”), and
that she has been offered the Separation Benefits in return for entering into
this Agreement. Ms. Heller acknowledges that separate and apart from this
Agreement, Ms. Heller is entitled only to the monies and benefits described in
paragraph 2 of this Agreement, to participate in COBRA coverage in accordance
with COBRA, as amended, and to certain rights under Power-One’s 401K plan, such
as her right to the vested portion of the Company’s contribution to her plan.


 


8.                                       Return of
Property and Documents. On or before her Separation Date, Ms.
Heller will return to Power-One all property, documents, electronic information
and materials of Power-One including any copies thereof, that were in her
possession, including, but not limited to, Ms. Heller’s laptop computer, cell
phone and American Express credit card. Ms. Heller agrees that she will provide
any passwords, access codes or other information necessary for Power-One to
access her files and records created and maintained by her during her term of
employment with Power-One. Ms. Heller further agrees to advise Richard Thompson
of the date time and place of any scheduled meetings with analysts, bankers,
tax advisors or any other person or entity as of the Separation Date.


 


9.                                       8-K Disclosure. Ms. Heller
acknowledges that the termination of her employment is an event that must be
timely disclosed in a Current Report on Form 8-K. Ms. Heller will cooperate
with Power-One to timely prepare and file the report. Power-One has agreed that
the report will be subject to Ms. Heller’s review and approval, which shall not
be unreasonably delayed or withheld.


 


10.                                 Mutual Release.


 


(a) Excepting only those obligations expressly
recited to be performed hereunder, Ms. Heller (for herself and her agents,
heirs, successors, assigns, executors and/or administrators) does hereby and
forever release and discharge Power-One and its subsidiary corporations and the
successors, assigns, agents, employees, Board of Directors, officers, attorneys
and representatives of each of them, past, present and future, and Power-One
and its subsidiary corporations and the successors, assigns and agents of
Power-One hereby and forever release and discharge Ms. Heller (collectively Ms.
Heller and Power-One are referred to as the “Released Persons”) from any and
all causes of action, actions, judgments, liens, debts, contracts,
indebtedness, damages, losses, claims, liabilities, rights, interests and
demands of whatsoever kind or character, known or unknown, suspected to exist
or not suspected to exist, vested or contingent, anticipated or not
anticipated, whether or not heretofore brought before any state or federal
court or before any other governmental agency or entity, which the Released
Persons have or may have against the other Released


 

















 


Person or entity, by reason of any and all acts, omissions, events or
facts occurring or existing as of date of this Agreement.


 


(b)                                 Matters
released by this Agreement include, without limitation, all claims attributable
to the employment of Ms. Heller or the termination of that employment, under
any theory of pleading or proof, including but not limited to any claim for
breach of contract, breach of implied covenant, breach of oral or written
promise, wrongful termination, infliction of emotional distress, defamation,
discrimination, interference with contractual relations or prospective economic
advantage, negligence, misrepresentation or and including, without limitation,
any claim arising under or alleging violation of any federal, state or other
governmental statute, regulation or ordinance, such as, for example and without
limitation, Title VII of the Civil Rights Act of 1964 which prohibits
discrimination on the basis of sex, race, color, national origin and religion,
the Age Discrimination in Employment Act which prohibits discrimination on the
basis of age 40 and over, the Civil Rights Act of 1866, the Americans With
Disabilities Act, the California Fair Employment and Housing Act which
prohibits discrimination on the basis of race, religious creed, color, national
origin, ancestry, physical disability, mental disability, medical condition,
marital status, age 40 and over, sexual orientation, gender identity and sex,
the California Constitution and the California Labor Code. Provided, however,
anything to the contrary in this Separation Agreement notwithstanding, this
Agreement does not release or waive workers’ compensation claims or any other
claims that cannot be released as a matter of law.


 


(c)                                  The Released
Persons intend that this release extend to any and all claims of whatsoever
kind or character, known or unknown, and therefore expressly waive any and all
rights granted by California Civil Code Section 1542 (or any other analogous
federal or state law or regulation). Section 1542 reads as follows:


 


A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.


 


Cal. Civ. Code § 1542.


 


11.                                 No Admissions. Nothing
contained herein is an admission of wrongdoing or liability by Ms. Heller or
Power-One.


 


12.                                 Entire
Agreement, California Law. This Agreement constitutes a single
integrated contract expressing the entire agreement of the parties with respect
to the subject matter hereof and supersedes and controls over all prior and
contemporaneous oral and written agreements and discussions with respect to the
subject matter hereof. There are no other agreements, written or oral, express
or implied, between the parties hereto, concerning the subject matter of this
Agreement, except as set forth herein. This Agreement may be amended or
modified only in writing. This Agreement is governed by California law.


 


13.                                 Partial
Invalidity. The invalidity or unenforceability of any
provision or portion of this Agreement will not affect the validity or
enforceability of the other provisions or portions of this Agreement. Should
any provision or portion of this Agreement be declared invalid or
unenforceable, the remaining provisions of this Agreement shall remain in full
force and effect.


 


14.                                 Confidentiality. Ms. Heller
acknowledges that during her employment with Power-One she had access to
confidential and proprietary information about the Company as part of her job,
including, but not limited to, financial information, key performance indices,
strategic plans, roadmaps, inventions and other sensitive information. Power-One
employees, including Ms. Heller, invested substantial time, energy and
resources in developing the information to which Ms. Heller had access as a
representative of Power-One and as a consequence, Ms. Heller gained significant
insight into Power-One’s past, present and future business operations. Ms.
Heller acknowledges that Power-One is in a highly competitive industry and
agrees that she will remain obligated to maintain the confidentiality of
information about Power-One even after her separation


 

















 


from the company. Ms. Heller represents that she has not and will not
copy, record, save or otherwise retain confidential Power-One information,
whether in electronic format or otherwise, and that she will (if she has not
already done so), prior to her Separation Date, return or destroy any and all
confidential information in her possession, including electronic data and
including information stored on a personal home computer or on any type of
remote storage device. Ms. Heller and Power-One and its senior executives (the
Chief Executive Officer and employees who report directly to him on a permanent
basis) further agree that except as required to be disclosed by the Securities
Exchange Act of 1934, they will keep the existence and the terms and conditions
of this Agreement strictly confidential and will not disclose or discuss this
Agreement with any other person or entity, including any current, former or
prospective employees of Power-One, other than (a) Ms. Heller may discuss the
Agreement with members of her immediate family, (b) the parties may discuss the
Agreement with legal and/or financial advisors, (c) as required by law, or (d)
to enforce this Agreement. It shall not be considered a breach of this
Agreement for the parties to disclose any terms hereof in compliance with any
court order or subpoena. In addition, both parties acknowledge and agree that
the duty to keep Power-One information confidential, including the existence
and terms of this Agreement, does not in any way prohibit Ms. Heller from
testifying truthfully under oath if ever called upon to do so or to cooperate,
if required by law and subject to advice of counsel, in any investigation in
which either of them might be required to testify or provide information


 


15.                                 Non-disparagement. Both Ms.
Heller and Power-One, on behalf of itself and its senior executives (the Chief
Executive Officer and employees who report directly to him on a permanent
basis), agree not to make any statements, written or verbal, or cause or
encourage others to make any statements, written or verbal, that defame,
disparage or in any way criticize the personal or business reputation,
practices, or conduct of Ms. Heller, Power-One, or any of its senior
executives. Ms. Heller and Power-One acknowledge and agree that this
prohibition extends to statements, written or verbal, made to anyone, whether
public or private, including statements made to investors, potential investors,
analysts, members of the board of directors, employees of Power-One (past and
present), competitors, strategic partners, vendors, and customers. Ms. Heller
and Power-One understand and agree that this paragraph is a material provision
of this Agreement and that any breach of this paragraph shall be a material
breach of this Agreement that would irreparably harm the non-breaching party
and may entitle the damaged party to damages and other legal remedies. Nothing
in this Paragraph 15 shall prohibit Ms. Heller or any representative, employee
or officer of Power-One from testifying truthfully about any matter in any
legal proceeding or in any statements to any federal or state regulators.


 


16.                                 WAITING PERIOD
AND RIGHT OF REVOCATION. MS. HELLER ACKNOWLEDGES AND IS AWARE, AND
IS HEREBY EXPRESSLY ADVISED OF HER RIGHT TO CONSIDER THIS AGREEMENT FOR TWENTY-ONE
DAYS BEFORE SIGNING IT AND THAT IF SHE SIGNS THIS AGREEMENT PRIOR TO THE
EXPIRATION OF TWENTY-ONE DAYS, SHE IS WAIVING THIS RIGHT FREELY AND VOLUNTARILY.
MS. HELLER FURTHER ACKNOWLEDGES THAT SHE IS AWARE OF AND THAT SHE IS HEREBY
EXPRESSLY ADVISED OF HER RIGHT TO REVOKE THIS AGREEMENT FOR A PERIOD OF SEVEN
DAYS FOLLOWING THE SIGNING OF THIS AGREEMENT AND THAT IT SHALL NOT BECOME
EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED. TO REVOKE
THIS AGREEMENT, MS HELLER MUST NOTIFY POWER-ONE WITHIN SEVEN DAYS OF SIGNING IT
BY SENDING A FACSIMILE OF HER REVOCATION TO TINA MCKNIGHT, GENERAL COUNSEL, AT
(805) 383-5898 OR BY CAUSING THE NOTICE TO BE DELIVERED TO TINA MCKNIGHT AT 740
CALLE PLANO, CAMARILLO, CALIFORNIA 93012.


 


17.                                 ATTORNEY ADVICE. MS HELLER
ACKNOWLEDGES THAT SHE IS AWARE OF HER RIGHT TO CONSULT AN ATTORNEY, THAT SHE IS
HEREBY EXPRESSLY ADVISED TO CONSULT WITH AN ATTORNEY, AND THAT SHE HAS HAD THE
OPPORTUNITY TO CONSULT WITH AN ATTORNEY, IF DESIRED, PRIOR TO SIGNING THIS
AGREEMENT.


 

















 


18.                                 Understanding
of Agreement. Ms. Heller represents to Power-One, and Power-One
hereby relies upon Ms. Heller’s representation that she has carefully read this
Agreement, that she fully understands its final and binding effect, that the
only promises made to her in connection with signing this Agreement are those
stated above, and that she is signing this Agreement voluntarily.


 


 


	
  Dated: August 10, 2010

  	
  /s/ Linda C. Heller

  
	
   

  	
  Linda C. Heller

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: August 10, 2010

  	
  POWER-ONE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Tina McKnight

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Tina McKnight

  
	
   

  	
   

  	
  General Counsel