Document:

Exhibit 10.1

 

EMPLOYMENT
SEPARATION AND GENERAL RELEASE AGREEMENT

 

This Employment Separation and General
Release Agreement (this “Separation Agreement”) is entered into this 1st
day of October 2008, by and between Brad W. Godfrey, an individual (“Executive”),
and Power-One, Inc., a Delaware corporation (the “Company”).

 

WHEREAS, Executive
has been employed as the President and Chief Operating Officer for the Company;

 

WHEREAS, Executive
and the Company are parties to that certain Change in Control Agreement dated May 24,
2007 (the “Change in Control Agreement”);

 

WHEREAS, Executive
and the Company are parties to that certain Indemnification Agreement dated April 25,
2006 (the “Indemnification Agreement”);

 

WHEREAS, Executive
agrees to provide transitional consulting services to the Company upon the
terms and conditions herein; and

 

WHEREAS, Executive
and the Company mutually agreed to terminate Executive’s employment
relationship with the Company effective on September 29, 2008 (the “Separation
Date”) upon the terms set forth herein.

 

NOW, THEREFORE, in
consideration of the covenants undertaken and the releases contained in this
Separation Agreement, Executive and the Company agree as follows:

 

I.              Resignation /
Consulting Services.

 

A.            Resignation.
Executive’s employment by the Company terminated on the Separation Date. Executive
hereby confirms that he resigned as an officer, director, employee, member,
manager and in any other capacity with the Company and each of its affiliates
effective as of the Separation Date and that he currently holds no such
position with the Company or any of its affiliates. The Company confirms that
it and each of its affiliates accepted such resignation effective as of the
Separation Date. Executive acknowledges and agrees that he has received all
amounts owed for his regular and usual salary (including, but not limited to,
any severance (other than the Severance Benefits expressly provided for in, and
subject to the terms of, this Separation Agreement), overtime, bonus, accrued vacation,
commissions, or other wages), reimbursement of expenses, and usual benefits,
and that all payments due to Executive from the Company and each of its
affiliates after the Separation Date shall be determined under this Separation
Agreement. Notwithstanding the foregoing, the Company acknowledges and agrees
that Executive is not waiving his right to file for state unemployment
insurance, which the Company will not contest.

 

B.            Consulting Services.
For up to thirty (30) days following the Separation Date, the Executive
shall be available to perform consulting, transition and advisory services as
reasonably requested by the Company. During such period, the Executive shall
not have any right to act for, represent or otherwise bind the Company or its
affiliates and the Executive shall not be entitled to participate in any
employee benefit plans of the Company or its

 

 

affiliates
(except as provided in this Separation Agreement). Executive shall not be
entitled to any additional compensation for such services.

 

II.            Severance.

 

A.            Subject to
Sections II(B) and II(C) below, the Company shall provide to the
Executive the following benefits, collectively the “Severance Benefits”:

 

(i)            Severance Pay. The
Company shall provide as severance pay to Executive continued payment of his
base salary in effect immediately prior to the Separation Date during the
thirteen (13) month period following the Separation Date (the “Severance Pay”),
less standard withholding and authorized deductions. The Severance Pay shall be
paid in substantially equal biweekly installments beginning in the biweekly
period immediately following the Separation Date.

 

(ii)           Outplacement
Services Reimbursement. The Company shall reimburse Executive’s costs
for reasonable outplacement services during the twelve (12) month period
following the Separation Date up to a maximum of $25,000 (twenty-five thousand
and 00/100), payable quarterly in arrears upon the Company’s receipt of
satisfactory invoices (the “Outplacement Benefits”).

 

(iii)         Benefits Continuation.
The Company shall provide to Executive reimbursement of medical and dental
benefits under COBRA (the “Benefits Continuation”) for up to thirteen
(13) months following the Separation Date. Benefits Continuation shall cease
upon the Executive being eligible to obtain coverage from a new employer.

 

(iv)          Relocation
Reimbursement. The Company shall provide to Executive reimbursement,
or, in the alternative, the Company shall arrange for direct payment, of
reasonable and documented costs relating to the relocation of Executive’s
personal and household property from Camarillo/Thousand Oaks to the Dominican
Republic to the extent Executive so relocates within one year after the
Separation Date (the “Relocation Benefit”).

 

(v)            Continued Vesting
of Equity Awards. As of the Separation Date, Executive holds 320,000
fully vested stock options to purchase shares of the Company’s common stock
(the “Options”). Notwithstanding anything to the contrary under any
equity plan or award agreement evidencing the Options, the Company shall permit
the Options to remain exercisable for a period of ninety (90) days following
the Separation Date (subject to earlier termination on a change in control or
similar event in accordance with the provisions of the equity compensation plan
under which such awards were granted and the applicable stock option agreement).
As of the Separation Date, Executive also holds 200,000 outstanding and
unvested restricted stock units (collectively, the “Restricted Awards”).
Notwithstanding anything to the contrary under any equity plan or award
agreement evidencing the Restricted Awards, the Company shall permit the
Restricted Awards to continue to vest for twelve (12) months following the
Separation Date (to the extent they are scheduled to vest during that period in
accordance with their customary vesting schedules). Any Restricted Awards not
scheduled (in accordance with the usual vesting schedule applicable to such
awards) to vest

 

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within one
year after the Separation Date, terminated on the Separation Date and Executive
has no further right with respect thereto or in respect thereof.

 

B.            The Company’s
obligation to provide the Severance Benefits (or to continue providing any
portion thereof, as applicable) is subject to the Executive’s agreement to
execute any and all agreements to waive and release, without additional
consideration from the Company other than as explicitly set forth in this
Agreement, all Claims against Releasees under international laws. In addition,
the Company’s obligation to provide the Severance Benefits (or to continue
providing any portion thereof, as applicable) is subject to continuing
compliance with the restrictive covenants set forth in Section VII hereof.
The Company shall have no obligation to provide the Severance Benefits at any
time after a breach by Executive of either or both of the covenants set forth
in Sections VII.A and B, or after any material breach of any other covenant set
forth in Section VII. For purposes of clarity, upon any breach by
Executive of either or both of the covenants set forth in Sections VII.A and B,
or after any material breach of any other covenant set forth in Section VII
(which material breach remains uncured following written notice thereof), the
Options and Restricted Awards shall be immediately forfeited by the Executive.
Notwithstanding the foregoing provisions of this Section II(B), in no
event shall the amount of the Severance Pay actually paid by the Company to
Executive be less than Ten Thousand Dollars ($10,000) in the aggregate,
regardless of any breach by Executive of the restrictive covenants set forth in
Section VII, which amount the parties agree is good and sufficient
consideration for the Release and other obligations of Executive under this
Separation Agreement.

 

C.            The Company’s
obligation to provide the Severance Benefits (or any portion thereof, as
applicable) is further subject to the condition that Executive shall not have
revoked the Release set forth in Section III hereof pursuant to any
revocation rights afforded by applicable law. The Company shall have no
obligation to provide the Severance Benefits to Executive unless and until the
Release becomes irrevocable by Executive under all applicable laws.

 

D.            To the extent that
the Outplacement Benefits, Benefits Continuation or Relocation Benefit are
taxable to the Executive, any reimbursement payment due to the Executive
pursuant to such provisions shall be paid to the Executive on or before the
last day of the Executive’s taxable year following the taxable year in which
the related expense was incurred. The Outplacement Benefits, Benefits
Continuation and Relocation Benefit are not subject to liquidation or exchange
for another benefit and the amount of such benefits and reimbursements that the
Executive receives in one taxable year shall not affect the amount of such
benefits or reimbursements that the Executive receives in any other taxable
year.

 

III.           Release. Executive,
on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to sue and fully releases and discharges the Company and each of its parents,
subsidiaries and affiliates, past and present, as well as its and their trustees,
directors, officers, members, managers, partners, agents, attorneys, insurers,
employees, stockholders, representatives, assigns, and successors, past and
present, and each of them, hereinafter together and collectively referred to as
the “Releasees,” with respect to and from any and all claims, wages,
demands, rights, liens, agreements or contracts (written or oral), covenants,
actions, suits, causes of

 

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action,
obligations, debts, costs, expenses, attorneys’ fees, damages, judgments,
orders and liabilities of whatever kind or nature in law, equity or otherwise,
whether now known or unknown, suspected or unsuspected, and whether or not
concealed or hidden (each, a “Claim”), which he now owns or holds or he
has at any time heretofore owned or held or may in the future hold as against
any of said Releasees (including, without limitation, any Claim arising out of
or in any way connected with Executive’s service as an officer, director,
employee, member or manager of any Releasee, Executive’s separation from his
position as an officer, director, employee, manager and/or member, as
applicable, of any Releasee, or any other transactions, occurrences, acts or
omissions or any loss, damage or injury whatever), whether known or unknown,
suspected or unsuspected, resulting from any act or omission by or on the part
of said Releasees, or any of them, committed or omitted prior to the date of
this Release Agreement including, without limiting the generality of the foregoing,
any Claim under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act,
the Family and Medical Leave Act of 1993, the California Fair Employment and
Housing Act, the California Family Rights Act, or any other federal, state or
local law, regulation, or ordinance, or any Claim for severance pay, bonus,
sick leave, holiday pay, vacation pay, life insurance, health or medical
insurance, pension, retirement or any other fringe benefit, workers’
compensation or disability (the “Release”); provided, however, that the
foregoing Release does not apply to any obligation of the Company to Executive
pursuant to any of the following: (1) the Executive’s rights to receive
the Severance Benefits pursuant to the terms and conditions of this Agreement; (2) any
right to indemnification that Executive may have pursuant to the Bylaws of the
Company, its Articles of Incorporation, the laws of the State of Delaware, or
under any written indemnification agreement with the Company (or any
corresponding provision of any subsidiary or affiliate of the Company) with
respect to any loss, damages or expenses (including but not limited to
attorneys’ fees to the extent otherwise provided) that Executive may in the
future incur with respect to his service as an employee, officer or director of
the Company or any of its subsidiaries or affiliates; (3) with respect to
any rights that Executive may have to insurance coverage for such losses,
damages or expenses under any Company (or subsidiary or affiliate) directors
and officers liability insurance policy; (4) any rights to continued
medical or dental coverage that Executive may have under COBRA; or (5) any
rights to payment of benefits that Executive may have under a retirement plan
sponsored or maintained by the Company that is intended to qualify under Section 401(a) of
the Internal Revenue Code of 1986, as amended. In addition, this Release does
not cover any Claim that cannot be so released as a matter of applicable law. Executive
acknowledges and agrees that he has received any and all leave and other
benefits that he has been and is entitled to pursuant to the Family and Medical
Leave Act of 1993.

 

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IV.           1542 Waiver. It
is the intention of Executive in executing this Separation Agreement that the
same shall be effective as a bar to each and every Claim hereinabove specified.
In furtherance of this intention, Executive hereby expressly waives any and all
rights and benefits conferred upon him by the provisions of SECTION 1542
OF THE CALIFORNIA CIVIL CODE and expressly consents that this Separation
Agreement (including, without limitation, the Release set forth above) shall be
given full force and effect according to each and all of its express terms and
provisions, including those related to unknown and unsuspected Claims, if any,
as well as those relating to any other Claims hereinabove specified. SECTION 1542
provides:

 

“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.”

 

Executive acknowledges that he may hereafter discover Claims or facts
in addition to or different from those which Executive now knows or believes to
exist with respect to the subject matter of this Separation Agreement and
which, if known or suspected at the time of executing this Separation Agreement,
may have materially affected this settlement. Nevertheless, Executive hereby
waives any right, Claim or cause of action that might arise as a result of such
different or additional Claims or facts. Executive acknowledges that he
understands the significance and consequences of the foregoing Release and such
specific waiver of SECTION 1542.

 

V.            ADEA Waiver. Executive
expressly acknowledges and agrees that by entering into this Separation
Agreement, he is waiving any and all rights or claims that he may have arising
under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”),
which have arisen on or before the date of execution of this Separation
Agreement. Executive further expressly acknowledges and agrees that:

 

A.            In return for this
Separation Agreement, he will receive consideration beyond that which he was
already entitled to receive before entering into this Separation Agreement,
including, without limitation, the Severance Benefits;

 

B.            He is hereby
advised in writing by this Separation Agreement to consult with an attorney
before signing this Separation Agreement;

 

C.            He was given a
copy of this Separation Agreement on September 30, 2008 and informed that
he had twenty-one (21) days within which to consider the Separation Agreement and
that if he wished to execute this Separation Agreement prior to expiration of
such 21-day period, he should execute the Acknowledgement and Waiver attached
hereto as Exhibit A;

 

D.            Nothing in this
Separation Agreement prevents or precludes Executive from challenging or
seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties or costs from doing
so, unless specifically authorized by federal law; and

 

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E.             He was informed
that he has seven (7) days following the date of execution of this
Separation Agreement in which to revoke this Separation Agreement, and this
Separation Agreement will become null and void if Executive elects revocation
during that time. Any revocation must be in writing and must be received by the
Company during the seven-day revocation period. In the event that Executive
exercises his right of revocation, neither the Company nor Executive will have
any obligations under this Separation Agreement.

 

VI.           No Transferred
Claims. Executive warrants and represents that Executive has not
heretofore assigned or transferred to any person not a party to this Separation
Agreement any released matter or any part or portion thereof and he shall
defend, indemnify and hold the Company and each of its affiliates harmless from
and against any claim (including the payment of attorneys’ fees and costs
actually incurred whether or not litigation is commenced) based on or in connection
with or arising out of any such assignment or transfer made, purported or
claimed.

 

VII.         Restrictive Covenants.

 

A.            Solicitation of
Customers. Executive promises and agrees that, for a period of one (1) year
following the Separation Date, he will not influence or attempt to influence
customers, vendors, or business partners of the Company or any of its
subsidiaries, either directly or indirectly, to divert their business from the
Company or any of its subsidiaries to any individual, partnership, firm, corporation
or other entity then in competition with the business of the Company or any
subsidiary. Notwithstanding the foregoing, the Company acknowledges that
Executive is entitled to seek and obtain employment and business opportunities
within the same industry as the Company, and that Executive may compete,
directly or indirectly, with the Company.

 

B.            Solicitation of
Employees. Executive promises and agrees that, for a period of one (1) year
following the Separation Date, he will not directly or indirectly solicit any
employee of the Company or any of its subsidiaries to work for any business,
individual, partnership, firm, corporation, or other entity then in competition
with the business of the Company or any subsidiary.

 

C.            Confidentiality.
Executive promises and agrees that he will not at any time after the
Separation Date, unless compelled by lawful process, disclose or use for his
own benefit or purposes or the benefit or purposes of any other person, firm,
partnership, joint venture, association, corporation or other business
organization, entity or enterprise (other than the Company and any of its
subsidiaries or affiliates), any trade secrets, or other confidential data or
information relating to customers, design programs, costs, marketing, sales
activities, promotion, credit and financial data, financing methods, or plans
of the Company or any subsidiary or affiliate of the Company; provided that the
foregoing shall not apply to information which is not unique to the Company (or
subsidiary or affiliate, as applicable) or which is generally known to the
industry or the public other than as a result of Executive’s breach of this
covenant. Executive agrees that, to the extent he has not already done so, he
will return to the Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or therefrom, in
any way relating to the business of the

 

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Company or any
subsidiary or affiliate of the Company, whether such information is in tangible
or electronic form. Executive further agrees that he has not retained and will
not retain or use for his account at any time any trade names, trademark or
other proprietary business designation used or owned in connection with the
business of the Company or any subsidiary or affiliate of the Company;
provided, however, that Executive may retain his rolodex, address books,
information relating to his compensation or relating to reimbursement of
expenses, documents relating to his participation in employee benefit plans or
programs of the Company or any of its subsidiaries, any agreement between
Executive and the Company or a subsidiary relating to his employment with the
Company or a subsidiary, and other personal property provided that such items
do not contain any confidential information of the Company or a subsidiary.

 

D.            Non-Disparagement.
Executive promises and agrees that, for a period of one (1) year
following the Separation Date, he will not by any means issue or communicate
any private or public statement that may be critical or disparaging of any
member of the Company or its affiliates, or any of their respective products,
services, officers, directors or employees. The Company promises and agrees
that it will not by any means issue or communicate any private or public
statement that may be critical or disparaging of Executive. However, nothing in
this paragraph shall affect Executive’s or the Company’s ability or obligation
to provide complete and truthful testimony or other information in connection
with any (i) governmental and/or regulatory investigation or proceeding, (ii) required
public, governmental or regulatory disclosure or filing, or (iii) pleadings,
discovery and/or trial in litigation.

 

E.             Injunctive Relief.
Executive expressly agrees that the Company will or would suffer
irreparable injury if he were to breach any of the provisions of this Section VII
and that the Company would by reason of such conduct be entitled, in addition
to any other remedies, to injunctive relief. Executive consents and stipulates
to the entry of such injunctive relief prohibiting him from engaging in conduct
which violates any of the provisions of this Section VII.

 

VIII.        Miscellaneous.

 

A.            Company Insider
Trading Restrictions. The Company agrees to immediately notify E*Trade,
as the administrative brokerage for the Executive’s stock options and equity
grants, that as of the Separation Date the Executive is no longer considered a “company
insider” for the purposes of trading of any Company stock options. Executive
hereby acknowledges that he is personally responsible for complying with all
applicable securities laws regarding trading while in possession of material
inside information.

 

B.            Section 16
Officer Status/SEC Reporting Requirements. The parties hereby
acknowledge and agree that as of the Separation Date, the Executive will cease
to be considered an officer of the Company who is subject to Section 16 of
the Securities Exchange Act of 1934. The Company will arrange for necessary
public filings and reports, as applicable, which confirm and memorialize this Section 16
status change, and such other reports (e.g., 8-K, 10-Q) as are required. The
Executive may be subject to certain additional filings and Section 16
considerations for a period of up to six (6) months following the
Separation Date, in

 

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the event he
engages in any transaction in Company common stock. Executive is encouraged to
coordinate with his own personal legal advisor, as may be relevant for any
transaction in Company stock within a period of up to six (6) months
following the Separation Date.

 

C.            Return of Company
Property. On the Separation Date, the Executive shall return the
Company automobile, laptop computer, cellular phone, employee identification,
and all other equipment, devices, or items provided to the Executive by the
Company. Except as otherwise provided herein, all Company provided services
will be discontinued as of the Separation Date.

 

D.            Successors.

 

(i)            This Separation
Agreement is personal to Executive and shall not, without the prior written
consent of the Company, be assignable by Executive. However, should Executive
die during the twelve (12) month period following the Separation Date, then, so
long as Executive had not theretofore materially breached his obligations under
this Separation Agreement, (and such material breach remains uncured following
notice thereof) the Company agrees to pay any then remaining balance of the
Severance Benefits to the Executive’s heirs or his estate, as applicable.

 

(ii)           This Separation
Agreement shall inure to the benefit of and be binding upon the Company and its
respective successors and assigns and any such successor or assignee shall be
deemed substituted for the Company under the terms of this Separation Agreement
for all purposes. As used herein, “successor” and “assignee” shall include any
person, firm, corporation or other business entity which at any time, whether
by purchase, merger, acquisition of assets, or otherwise, directly or
indirectly acquires the ownership of the Company, acquires all or substantially
all of the Company’s assets, or to which the Company assigns this Separation
Agreement by operation of law or otherwise.

 

E.             Waiver. No
waiver of any breach of any term or provision of this Separation Agreement
shall be construed to be, nor shall be, a waiver of any other breach of this
Separation Agreement. No waiver shall be binding unless in writing and signed
by the party waiving the breach.

 

F.             Modification. This
Separation Agreement shall not be modified by any oral agreement, either
express or implied, and all modifications hereof shall be in writing and signed
by the parties hereto.

 

G.            Complete Agreement.
This Separation Agreement embodies the entire agreement of the parties
hereto respecting the matters within its scope. This Separation Agreement
supersedes all prior agreements of the parties hereto on the subject matter
hereof. Any prior negotiations, correspondence, agreements, proposals, or
understandings relating to the subject matter hereof shall be deemed to be
merged into this Separation Agreement and to the extent inconsistent herewith,
such negotiations, correspondence, agreements, proposals, or understandings
shall be deemed to be of no force or effect. There are no representations,
warranties, or agreements, whether express or implied, or oral or written, with
respect to the subject matter hereof, except as set forth herein. Notwithstanding
the foregoing, the

 

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Company’s
rights under any confidentiality, trade secret, proprietary information,
inventions or similar agreement to which Executive was a party or otherwise
bound, including but not limited to the Employee Agreement dated March 28,
1994, are not integrated into this Agreement and such rights of the Company
shall continue in effect.

 

H.            Termination and
Cessation of Change in Control Agreement. For the avoidance of doubt,
the Company and Executive acknowledge and agree that the Change in Control
Agreement terminated as of the Separation Date, as of and as a direct result of
Executive’s termination of employment as of the Separation Date, independent of
and unrelated to this Separation Agreement. The Company and Executive further
acknowledge and agree that Executive retains no further rights, interests,
claims for benefits, or eligibility for coverage under the terms and conditions
of such Change in Control Agreement.

 

I.              Severability.
In the event that a court of competent jurisdiction determines that any
portion of this Separation Agreement is in violation of any statute or public
policy, then only the portions of this Separation Agreement which violate such
statute or public policy shall be stricken, and all portions of this Separation
Agreement which do not violate any statute or public policy shall continue in
full force and effect. Furthermore, any court order striking any portion of
this Separation Agreement shall modify the stricken terms as narrowly as
possible to give as much effect as possible to the intentions of the parties
under this Separation Agreement.

 

J.             Governing Law.
This Separation Agreement and the legal relations hereby created between
the parties hereto shall be governed by and construed under and in accordance
with the internal laws of the State of California, without regard to conflicts
of laws principles thereof.

 

K.            Legal Counsel;
Mutual Drafting. Each party recognizes that this is a legally binding
contract and acknowledges and agrees that they have had the opportunity to
consult, and have consulted, with legal counsel of their choice. Each party has
cooperated in the drafting, negotiation and preparation of this Separation
Agreement. Hence, in any construction to be made of this Separation Agreement, the
same shall not be construed against either party on the basis of that party
being the drafter of such language. Executive agrees and acknowledges that he
has read and understands this Separation Agreement, is entering into it freely
and voluntarily, and has been advised to seek counsel prior to entering into
this Separation Agreement, has had ample opportunity to do so, and has had the
benefit of such counsel.

 

L.            Notices. All
notices under this Separation Agreement shall be in writing and shall be either
personally delivered or mailed postage prepaid, by certified mail, return
receipt requested:

 

(i)            if to the Company:

 

Power-One, Inc.

Attention:
General Counsel

740 Calle
Plano

 

9

 

Camarillo,
California 93012

 

(ii)           if to Executive:

 

At the address
on file with the Company

 

Notice shall be effective when personally delivered, or five (5) business
days after being so mailed. Any party may change its address for purposes of
giving future notices pursuant to this Agreement by notifying the other party
in writing of such change in address, such notice to be delivered or mailed in
accordance with the foregoing.

 

M.           On-going
Communication and Cooperation with the Company. For the purposes of
coordinating and controlling any ongoing communications, contacts, or
interactions between the Executive and the Company following the Separation
Date, Glenn Grindstaff, Vice President, Corporate Human Resources, is to be the
sole and exclusive point of contact between the Executive and the Company. Any
and all communications, contacts, questions, requests, or other interactions of
any nature by the Executive or on the Executive’s behalf whatsoever must be
directed to Mr. Grindstaff  as the
exclusive point of contact with and “entry” to the Company for any matter
dealing with the Company, or for any matter which arises from or relates in any
way to the Executive’s involvement with the Company. This arrangement includes,
by way of example and not as any limitation or restriction on the generality of
the foregoing, requests involving employee benefit questions, matters involving
any transaction with equity awards the Executive beneficially owns from
whatever source, or matters of administration of any aspect of this Separation
Agreement. Mr. Grindstaff  will arrange
for contact with, response by, or communication with, the applicable personnel
of the Company on a case-by-case basis. Mr. Grindstaff  may
be reached at office phone 805-445-1700. If Mr. Grindstaff  is not then employed by the Company, the Company’s General
Counsel will designate the appropriate new contact person.

 

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

 

O.            Arbitration. Any
controversy arising out of or relating to this Separation Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or any other
controversy arising out of Executive’s employment or the termination thereof,
including, but not limited to, any state or federal statutory claims, shall be
submitted to arbitration before a sole arbitrator (the “Arbitrator”) selected
from Judicial Arbitration and Mediation Services, Inc., or its successor (“JAMS”),
or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be
selected from the American Arbitration Association, and shall be conducted in
accordance with the provisions of California Code of Civil Procedure §§ 1280 et
seq. as the exclusive forum for the resolution of such dispute. The arbitration
shall be held in the JAMS’ office nearest to the city in which the Executive
was last employed by the Company or at a mutually agreeable location. Pursuant
to California Code of Civil Procedure § 1281.8, provisional injunctive relief
may, but need not, be sought by either party to this Separation Agreement in a
court of law while arbitration proceedings are pending, and any provisional
injunctive relief

 

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granted by
such court shall remain effective until the matter is finally determined by the
Arbitrator. Final resolution of any dispute through arbitration may include any
remedy or relief which the Arbitrator deems just and equitable, including any
and all remedies provided by applicable state or federal statutes. At the
conclusion of the arbitration, the Arbitrator shall issue a written decision
that sets forth the essential findings and conclusions upon which the
Arbitrator’s award or decision is based. Any award or relief granted by the
Arbitrator hereunder shall be final and binding on the parties hereto and may
be enforced by any court of competent jurisdiction. The parties acknowledge and
agree that they are hereby waiving any rights to trial by jury in any action,
proceeding or counterclaim brought by either of the parties against the other
in connection with any matter whatsoever arising out of or in any way connected
with this Separation Agreement or Executive’s employment. The parties agree
that (i) the Company shall be responsible for payment of the forum costs
of any arbitration hereunder, including the Arbitrator’s fee, in connection
with any proceeding to enforce the terms of this Separation Agreement, and (ii) in
any such arbitration, the prevailing party shall be entitled to his or its
reasonable attorney’s fees and expenses, including costs of expert witnesses
(if any) (except that in all cases the Company shall be responsible for payment
of the forum costs of such arbitration, including the Arbitrator’s fee).

 

P.            Number and Gender. Where
the context requires, the singular shall include the plural, the plural shall
include the singular, and any gender shall include all other genders.

 

Q.            Headings. The
section headings in this Separation Agreement are for the purpose of
convenience only and shall not limit or otherwise affect any of the terms
hereof.

 

R.            Taxes. The
Company has the right to withhold from any payment hereunder or under any other
agreement between the Company and Executive the amount required by law to be
withheld with respect to such payment or other benefits provided to Executive. Other
than as to such withholding right, Executive shall be solely responsible for
any taxes due as a result of the payments and benefits received by Executive
contemplated by this Separation Agreement.

 

[Remainder of
page intentionally left blank.]

 

11

 

I have read the foregoing Separation Agreement and I accept and agree
to the provisions it contains and hereby execute it voluntarily with full
understanding of its consequences.

 

EXECUTED this 1st day of October 2008,
at Camarillo, California.

 

	
   

  	
  “Executive”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Brad W. Godfrey

  
	
   

  	
  Brad W. Godfrey

  
	
   

  	
   

  

 

EXECUTED this 1st  day
of October 2008, at Camarillo, California.

 

	
   

  	
  “Company”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Power-One, Inc.,

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
        /s/  Glenn Grindstaff

  
	
   

  	
  By:

  	
  Glenn Grindstaff

  
	
   

  	
  Its:

  	
  Vice President, Corporate

  
	
   

  	
   

  	
    Human Resources

  
				

 

 

EXHIBIT A

 

ACKNOWLEDGEMENT AND WAIVER

 

I, Brad W. Godfrey, hereby acknowledge that I was given 21 days to
consider the foregoing Employment Separation and General Release Agreement and
voluntarily chose to sign the Employment Separation and General Release
Agreement prior to the expiration of the 21-day period.

 

I declare under penalty of perjury under the laws of the state of
California, that the foregoing is true and correct.

 

EXECUTED this 1st day of October 2008,
at Camarillo, California.

 

 

	
   

  	
  /s/ Brad W. Godfrey

  
	
   

  	
  Brad W. GodfreyExhibit 10.2

 

 

This letter supersedes job offer letter dated August 6, 2008 in
its entirety.

 

August 12,
2008

 

Mr. Neil
Dial

582
Lake Crest Drive

El
Dorado Hills, CA 95762

 

Dear
Neil,

 

Thank
you for taking the time to discuss employment opportunities available within
Power-One, Inc.  Power-One is
pleased to extend this offer of employment to you.

 

A
summary of your employment offer, and the terms and conditions of your
employment with Power-One, is provided below. Per our conversations, and in
anticipation of your acceptance, your effective start of employment (hire) date
would be September 29, 2008 or a mutually agreeable date. It is agreed
that you will advise us of your start (hire) date on or before August 15,
2008.  This position will be based
primarily from our Camarillo, CA facility and extensive travel will be
required.

 

Position

 

It
is our pleasure to offer you the position of Senior Vice President Worldwide
Operations.  You will be reporting
directly to Mr. Richard Thompson, Chief Executive Officer.

 

Base
Pay

 

You
have been offered a bi-weekly base salary rate of $13,461.54 (on an annualized
basis, this is equivalent to $350,000.00).

 

Car Allowance

 

You
will be eligible to receive an automobile allowance of $150.00 per week. (On an
annualized basis, this is equivalent to $7,800.00)  This allowance is intended to reimburse you
for all expenses incurred while using your personal vehicle for company
business.  In order to receive this
allowance, you must maintain a minimum of $300,000.00 personal liability
insurance coverage on your vehicles at all times.  Proof of this coverage must be submitted
annually to Human Resources.  This
allowance will be available once you no longer require a rental vehicle at the
Camarillo, CA site, as noted below in sections dealing with your relocation.

 

One
Time Sign-On Bonus

 

Power-One
will be pleased to provide you with a $120,000.00 (one hundred and twenty
thousand dollars) one time sign-on bonus payable to you within 2 weeks of
employment.  This will be a taxable event to you. Further, the sign-on
bonus is subject to meeting a minimum of 2 years of employment with the
organization. This does not alter our “At-will policy” nor does it specify any
agreement to tenure. You will be required to sign a contract which indicates
that you will be obligated to pay back a pro-rata portion of the sign-one bonus
should you leave Power-One prior to the completion of 24 months of employment
from your date of hire.

 

Corporate Human Resources

740 Calle Plano ·  Camarillo, CA 93012 ·
(805) 987-8741 ·
Fax (805) 987-5212 ·
www.power-one.com

 

 

Management Incentive Plan

 

You
will also be eligible to participate in Power-One’s 2008 Management Incentive
Plan. Employees may earn bonuses based upon the achievement of the Company’s
corporate financial objectives and the Employee’s personal goals (MBOs).  The financial objectives component will
determine 75% of the bonus amount while the MBO achievement component will
comprise of 25%. However, the Company must earn net income for the 2008 fiscal
year for any bonus to be earned from either component.

 

You
will be eligible to receive up to 60% of your base annual salary under the 2008
Management Incentive Plan.  Your MBO
target(s) will be assigned by Richard Thompson and will be determined within 60
days from your date of hire.

 

Bonuses
are paid annually in March for prior year performance.   Employees must be employed as of the payout
date in order to receive the bonus.   The
employee’s first bonus is pro-rated based upon his or her start date.   Bonuses are calculated based upon existing
base salary at the time the Plan is issued.

 

Power
One reserves the right to change the Incentive Program, on a going forward
basis, at any point in time in order to meet the needs of the business.
Incentive compensation is not guaranteed but instead, is based on achieving
actual results against a preset target. 
A detailed plan will follow in the near future.

 

Stock
Incentive Plan

 

We
are also pleased to inform you that pursuant to the Company’s 2004 Stock
Incentive Plan (the “Plan”) and in accordance with the terms and conditions set
forth in the Plan, subject to confirmation and approval by the
Compensation Committee of our Board of Directors, you will be granted a
non-qualified stock option on your date of hire (the “Award Date”) for 250,000 (two hundred and fifty thousand) stock
options.  Your option will have a ten (10) year term.  The option exercise price will be set at fair
market value (i.e. the closing price of our stock) on your Award
Date.

 

The stock option will vest in full at the
4th anniversary of the Award Date if vesting has not been accelerated before
that anniversary date.  Vesting may be
accelerated under certain circumstances tied to improvement in our stock
price.   The acceleration provisions will be essentially as follows
(using key definitions that will be used in the formal stock option award
agreement to be presented to you in due course after you start employment with
Power-One):

 

·                  Target Price #1- 
this target is reached when the average closing price of Power-One (measured
during a period of any 20 out of 30 consecutive trading days that occur at
any time starting 90 days before the first anniversary of your Award Date)
is equal to or greater than 175% of the exercise price of the option.

 

·                  Target Price #2- 
this target is reached when the average closing price of Power-One
(measured during a period of any 20 out of 30 consecutive trading days
that occur at any 

 

 

time starting 90 days before the second
anniversary of your Award Date) is equal to or greater than 275% of the
exercise price of the option.

 

·                  First Accelerated
Vesting Date -  this vesting will occur seven days after Target
Price #1 has been reached, except that in no event will this vesting be
effective prior to the first anniversary of the Award Date.   At this
First Accelerated Vesting, the option vests for 50% of the total options
granted.

 

·                  Second Accelerated
Vesting Date -  this vesting will occur seven days after Target Price
#2 has been reached, except that in no event will this vesting be effective
prior to the second anniversary of the Award Date.  At this Second
Accelerated Vesting, the option vests for 50% of the total options granted.

 

·                  Once a given Target
Price (#1 and #2) is first reached, your vesting acceleration
will occur on the applicable Accelerated Vesting Date noted.  Once
vesting has occurred after reaching the applicable Target Price and Accelerated
Vesting Date, subsequent changes in our stock price will not change the vested
status of the options.

 

These
acceleration provisions are designed to reward you for being part of the team
effort to improve our performance and profitability, improvements we believe
will result in a much improved stock price.  The first and second
anniversary provisions are used to encourage you to work aggressively and
continually toward improving our business over periods we believe are
reasonable and realistic time horizons that will reward hard work and achieve
the anticipated increase in our stock price.

 

Under
separate cover you will receive a package containing details of the stock
option and a full award agreement.

 

Section 16

 

Subject
to confirmation from the Board of Directors, your position is expected to be classified
as a “Section 16 Officer”, and is subject to all applicable rules and
regulations of the Securities and Exchange Commission.

 

Change
In Control Agreement/Indemnification Agreement

 

You
will be eligible to participate in and receive a Senior Executive Change in
Control Agreement using a “one-times” multiplier of the basic severance benefit
elements in the Change in Control Agreement (e.g. base salary, bonus
entitlement, medical benefits continuation). 
Additionally, you will be granted a standard Power-One executive officer
Indemnification Agreement per our bylaws. 
Copies of the agreements noted in this paragraph detailing all terms and
conditions of each will follow.

 

Benefits

 

·                  medical
coverage;

·                  dental;

·                  optical
coverage;

·                  life
insurance at two and a half times the annual salary rate (limited to
$500,000.00 of life insurance, with no medical certification).  You may acquire up to $750,000.00 of life
insurance with medical certification)

 

 

·                  eligibility
for supplemental life insurance; at your sole discretion and cost

·                  short-term
and long-term disability coverage;

·                  tuition
reimbursement;

·                  paid
annual physical exams per Power-One policy for senior executives;

·                  Paid
Time Off  pay  ( see “PTO” section below);

·                  Participation
in the Power-One 401(k)/profit sharing plan – 2 plan entry dates (January 1st
and July 1st of each calendar year). Employer matching
contribution is 75 cents for every dollar the employee saves, up to 2% of their
pay and 50 cents for every dollar they save thereafter, up to the next 5% of
their pay, for a total partial matching contribution of up to 7% of pay. (The
employer matching rates are subject to change and will be evaluated on an
annual basis)

 

All
of these benefits are administered in accordance with the plan provisions on
file in the Human Resources office, and most become effective on the date of
hire. Power-One reserves the right to modify benefits at its discretion.

 

PTO

 

You
will earn PTO at the rate of four (4) weeks vacation per year. You will
receive a pro-rata portion of 2008 personal time based upon your date of
hire.  Please be advised that the Company
generally carries out a year-end business closure of several of its global
facilities for up two weeks commencing late December. You may take this time off
as unpaid or utilize any amount of accrued PTO that you may have at that point,
to cover this period.

 

Relocation

 

It
would be our desire for you to relocate to the Ventura County (or surrounding
area) within a reasonable time frame.

 

Power-One
will reimburse you for your relocation to Ventura County, California (or
surrounding area) as follows.

 

Temporary
Housing/Car Rental

 

1.               Temporary Housing – Power-One will pay you separately
for temporary residential housing costs, in the amount of $4,000/month, for a
maximum period of six months from your date of hire.

 

2.               Car Rental – Power-One will lease a vehicle
for your use in the local area, for a maximum of six (6) months, or until
you arrange for your own personal vehicle in the local area, whichever occurs
first.

 

Physical
Move

 

Power-One
will pay the cost associated with the packing and moving of your household
goods to the local area.  Please obtain
estimates from two carriers of your choice and we will work with you to select
the best option. This charge will be billed directly to Power-One.

 

 

Storage

 

In
the event that you are required to store any household goods during your
relocation, Power-One will pay a storage provider directly for up to six (6) months
of furniture storage should this required.

 

General
Terms of Relocation Monies Paid

 

You
will be required to sign a contract which indicates that you will be obligated
to pay back a pro-rata portion of the relocation expense monies which were paid
on your behalf should you leave Power-One prior to the completion of 24 months
of employment from the date you report to work at our Corporate Offices in
Camarillo.

 

Selling/Purchasing
Costs

 

Power-One
will reimburse you for reasonable and customary costs, fees, commission(s), and
expenses for the sale of your home in El Dorado Hills, CA and purchasing a
replacement residence in the new location. 
These reimbursements will be paid at the time the expense is incurred
and acceptable receipts are provided to Power-One. This reimbursement will
apply to applicable amounts for which you as the seller and/or buyer are
responsible per the relevant contract of sale and/or purchase other related
transactional documents.  Items normally
considered in this reimbursement are loan origination fees up to 1 point, title
search and title guarantee policy, survey fees, inspection fees, transfer and
documentary taxes, recording fees, and appraisal fees.

 

Tax
Responsibility

 

Power-One
does not provide personal income tax advice.  
You will be responsible for payment, if any, of local, state and/or
federal taxes on the various sums paid to or for you by Power-One as outlined
in this letter. We recommend that you seek professional tax advice on the
impact to your personal federal and state income tax liabilities that may arise
or result from the various sums paid to or for you by Power-One in connection
with your employment with us.   To the
extent possible under applicable law, we will work in cooperation with you to
minimize any income taxes payable for the various sums paid to or for you by
Power-One in connection with your employment with us.

 

Closing

 

We have agreed
that your employment with Power-One is conditional upon your respecting all
legal, confidential and contractual obligations relating to your ex-employers.
As a result, you will respect all said obligations and understand that as a
condition of employment with Power-One that you will destroy and/or return all
proprietary information and equipment including but not limited to, documents,
software, confidential information, equipment, procedures, formats, day-timers,
agenda, rolodex, etc. to your current employer and that you will respect all of
your obligations under the law and under our policies.

 

It is very
important that you respect your obligations, as we intend to respect ours as
well.  Toward that end, and as a condition of employment, you will be
required to sign documents and agreements which will include provisions
governing the use and disclosure of Power-One trade secrets and confidential
information.

 

 

At Will
Employment

 

You
should also understand that you are employed “at will” which means that either
you or the Company can terminate employment at any time.  Nothing in this letter should be interpreted
as a contract.

 

This
offer and your employment with Power-One, Inc. is contingent upon a
positive and acceptable outcome of your references and background check.

 

We
would appreciate your confirming this offer by signing below and returning one
copy for our files by August 15, 2008, stating your anticipated start date
below. If you have any further questions, please do not hesitate to contact me
at 805-987-8741 extension 4378.

 

The
executive management team is delighted that you have chosen to join Power-One, Inc.

 

Congratulations
and welcome to Power-One!

 

 

	
  Sincerely,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Clara Shokat-Fadai

  	
   

  	
   

  
	
  Clara
  Shokat-Fadai

  	
   

  	
   

  
	
  Vice
  President, Corporate Human Resources

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed:

  	
  /s/ Neil Dial

  	
   

  	
  Date:

  	
    August 12, 2008

  
	
   

  	
  Neil Dial

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Anticipated
  Start Date:

  	
  September 29,
  2008

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