Prepared by MERRILL CORPORATION




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Exhibit 4.2    
  


     

  


 
 

EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT    
  


    THIS AGREEMENT, dated as of      (the  "Agreement"), between Power One, Inc., a
Delaware corporation (the "Company"), and      
("Employee"). 


 
 

R E C I T A L    
  


    WHEREAS, pursuant to the Power-One 2001 Stock Option Plan (the  "Plan"), the Company has granted to Employee
effective as of        (the  "Award Date"), a nonqualified stock option to purchase all or any part
of      Shares upon the terms and conditions set forth herein and in
the Plan. 


    NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, 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 of Option.  This Agreement evidences the Company's grant to Employee of
the right and option to purchase, on the terms and conditions set forth herein and in the Plan, all or any part of      Shares at the price of  $       per share (the "Option"), exercisable from time to time, prior to the close of
business on the day before the tenth anniversary of the date of this Agreement (the "Expiration Date"). 


    3.  Consideration to the Company.  In consideration of the granting of the Option
by the Company, Employee agrees to render faithful and efficient services to the Company, with such duties and responsibilities as the Company shall from time to time prescribe. Nothing contained in
this Agreement or in any other documents related to the Plan shall confer upon Employee any right to continue in the employ of the Company or constitute any contract of employment, or interfere in any
way with the right of the Company to reduce such person's compensation or other benefits or to terminate the employment of Employee, with or without Cause. 



    4.  Exercisability of Option.  Except as earlier permitted by or pursuant to
Section 12 of the Plan or by resolution of the Committee adopted after the date hereof, no Shares may be purchased by exercise of the Option until the expiration of twelve months after the Award Date.
This Option shall become exercisable in installments as to twenty-five percent (25%) of the total number of Shares set forth in paragraph 2 hereof (subject to adjustment) on each of the first, second,
third and fourth anniversaries of the Award Date. 


    5.  Continuing Right to Purchase Cumulatively.  If Employee does not purchase all
or any part of the Shares to which Employee is entitled on the vesting date, Employee has the right cumulatively thereafter to purchase any Shares not so purchased and such right shall continue until
the Option terminates or expires. The Option shall only be exercisable in respect of whole Shares, and fractional Share interests shall be disregarded. 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. 


    6.  Method of Exercise of Option.  You acknowledge that You have already entered
into, or will promptly execute and consummate, an Account Activation Form for activation of an "OptionsLink" stock option account via Power-One's arrangements with E*TRADE Securities, Inc. (or such
other or substitute employee stock option plan administrative service as Power-One may elect to engage) (such stock option administrative service being the "Plan
Agency", and your account with the Plan Agency 


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being your "Stock Option Account"). With the existence of your Stock Option Account, You may exercise the Option by utilizing the procedures established
by the Plan Agency for exercise of this Option. Such procedures may include provisions for execution of an electronic or a written notice stating the number of Shares to be purchased pursuant to the
Option and accompanied by (i) delivery of such executed Exercise Agreement as implemented by the Plan Agency (the "Exercise Agreement") and (ii) payment
made in accordance with and in a form permitted by Section 9 of the Plan for the full purchase price of the Shares to be purchased, subject to such further limitations and rules or procedures as the
Administrator may from time to time establish as to any non-cash payment and as to the tax withholding requirements of Section 18 of the Plan. Subject to the provisions of the Plan, the purchase price
may be paid in full or in part by Shares already owned by You; provided, however, that any Shares delivered which were initially acquired upon exercise of a stock option must have been owned by You at
least six months as of the date of delivery. Shares used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date Employee exercises the Option. In
addition, You (or your beneficiary or personal representative) shall furnish any written statements required pursuant to paragraph 10 of this Agreement. 


    7.  Termination of Employment.  The Option and all other rights hereunder, to the
extent not exercised, will terminate and become null and void upon Employee's termination of employment, except that: 



    (a) if
Employee terminates for any reason other than death, Disability or for Cause, Employee has 90 days after the date of termination to exercise the Option to the
extent the Option was exercisable on the date of termination; 


    (b) if
Employee is terminated for Cause, the Option shall lapse immediately upon Employee's termination of employment; 


    (c) if
Employee terminates as a result of a Disability, or if Employee suffers a Disability within 90 days of a termination of employment under subsection (a) above,
Employee or Employee's personal representative may exercise the Option, to the extent the Option was exercisable on the date of Employee's termination of employment, within a period of 180 days from
the date of Disability (or, if earlier, termination of employment); 


    (d) if
Employee dies while in the employ of the Company, or within 90 days after a termination described in subsection (a) or (c) of this paragraph 7., then Employee's
beneficiary may exercise the Option, to the extent the Option was exercisable on the date of Employee's termination of employment, within a period of 180 days after the date of Employee's death (or,
if earlier, Employee's termination of employment); 




provided,
however, that in no event may the Option be exercised by anyone under this paragraph 7. or otherwise after the Expiration Date. In other words, in no event may the Option be exercised by
anyone under this paragraph 7. or otherwise after the Expiration Date. 


    8.  Termination of Option Under Certain Events.  As permitted by Section 12 of
the Plan, the Administrator retains the right to terminate the Option to the extent not previously exercised upon an event or transaction in which the Company does not survive. 


    9.  Non-Transferability of Option.  The Option and any other rights of Employee
under this Agreement or the Plan are nontransferable. 


    10.  Privileges of Stock Ownership; Nondistributive Intent.  Employee shall not
be, nor have any of the rights or privileges of, a stockholder of the Company in respect of the Shares unless and until certificates representing such Shares shall have been issued by the Company to
Employee. Upon the issuance and transfer of Shares to Employee pursuant to the Exercise Agreement, unless a registration statement is in effect under the Securities Act of 1933, as amended,
("Securities Act") and applicable 


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state securities laws, relating to such issued and transferred Shares and there is available for delivery a prospectus meeting the requirements of Section 10 of the Securities Act, the Shares may be
issued and transferred to Employee only if he or she represents and warrants in writing to the Company as reasonably requested by the Company. Employee or any other person then entitled to exercise
such Option or portion thereof will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the
Shares by such person is contrary to the representations and agreement referred to above. 


    The
Administrator may take whatever additional actions it deems appropriate to insure the observance and performance of such representations and agreement and to effect compliance
with the Securities Act and any other federal or state securities laws or regulations. Without limiting the generality of the foregoing, the Administrator may require an opinion of counsel acceptable
to it to the effect that any subsequent transfer of Shares acquired upon exercise of the Option does not violate the Securities Act, and may issue stop-transfer orders covering such Shares. No Shares
shall be issued and transferred unless and until there shall have been full compliance with any then applicable regulatory requirements (including those of exchanges upon which any Common Stock of the
Company may be listed). 


    11.  Assignments.  This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assignees. Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either party without the prior written consent of the other. 


    12.  Shares to be Reserved.  The Company shall at all times during the term of
the Option reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of this Agreement. 


    13.  Notices.  Any notice to be given under the terms of this Agreement shall be
in writing and addressed to the Company at its principal office to the attention of the Secretary, and to Employee at the address given beneath Employee's signature hereto, or at such other address as
either party may hereafter designate in writing to the other. Any such notice shall be deemed to have been duly given 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. 


    14.  Plan.  The Option and all rights of Employee under this Agreement are
subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the Plan, incorporated herein by this reference, to the extent such provisions are applicable to
options granted to Service Providers. 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.
Employee acknowledges receipt of a copy of the Plan and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other paragraphs of this Agreement, provisions of the Plan that
confer discretionary authority on the Administrator do not (and shall not be deemed to) create any rights in Employee unless such rights are expressly set forth herein or are otherwise in the sole
discretion of the Administrator so conferred by appropriate action of the Administrator under the Plan after the date hereof. 


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    IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has
hereunto set his or her hand. 



	 	 	"THE COMPANY"
	

 	
 	
Power One, Inc.
	

 	
 	

By:	
 	

 Title: President/CEO
	

 	
 	

"THE EMPLOYEE"
	

 	
 	

By:	
 	

 
	 	 	 	 	






	 	 	Address:	 	 
	

 	
 	

 	
 	


	

 	
 	

 	
 	


	

 	
 	

 	
 	






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CONSENT OF SPOUSE    
  


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



	DATED:	 	,	2001.	 	 
	 	
	 	 	 	 
	

 	

 	

 	

 	
 	


	 	 	 	 	 	Signature of Spouse








	Employee:	 	 	 
	 	
	 	 





	Power-One Division:	 	 	 
	 	
	 	 




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Exhibit 4.2


EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT

R E C I T A L

CONSENT OF SPOUSE