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Prepared by MERRILL CORPORATION

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Exhibit 4.1    
  

     

  

2001 STOCK OPTION PLAN  

 
  
 

    POWER-ONE, INC.    
    
    2001 STOCK OPTION PLAN    
  

	

1.	
 	
Purposes of the Plan. The purposes of this Plan are:
	

 	
 	

•	
 	

to attract and retain the best available personnel for positions of substantial responsibility,
	

 	
 	

•	
 	

to provide additional incentive to Employees and Consultants, and
	

 	
 	

•	
 	

to promote the success of the Company's business.
	

 	
 	

Options granted under the Plan will be Nonstatutory Stock Options.
	

2.	
 	
Definitions. As used herein, the following definitions shall apply:
	

 	
 	

(a)	
 	

"Administrator" means the Committee or the Chief Executive Officer of the Company if he has been delegated as the Administrator in accordance with Section 4 of the Plan.
	

 	
 	

(b)	
 	

"Applicable Laws" means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is
listed or quoted and the applicable laws of any foreign country or jurisdiction where Options are, or will be, granted under the Plan.
	

 	
 	

(c)	
 	

"Board" means the Board of Directors of the Company.
	

 	
 	

(d)	
 	

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

 	
 	

(e)	
 	

"Committee" means the Compensation Committee of the Board.
	

 	
 	

(f)	
 	

"Common Stock" means the Common Stock of the Company.
	

 	
 	

(g)	
 	

"Company" means Power-One, Inc., a Delaware corporation.
	

 	
 	

(h)	
 	

"Consultant" means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.
	

 	
 	

(i)	
 	

"Director" means a member of the Board.
	

 	
 	

(j)	
 	

"Disability" means total and permanent disability as defined in Section 22(e)(3) of the Code.
	

 	
 	

(k)	
 	

"Employee" means any person employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any successor. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company.
	

 	
 	

(l)	
 	

"Event" means any of the following:
	

 	
 	

 	
 	

(i)	
 	

the dissolution or liquidation of the Company, other than in the context of a transaction that does not constitute an Event under clause (ii) below;

2

 

	

 	
 	

 	
 	

(ii)	
 	

Consummation of a merger, consolidation, or other reorganization, with or into, or the sale of all or substantially all of the Company's business and/or assets as an entirety to, one or more entities that are not Subsidiaries (a "Business
Combination"), unless (1) as a result of the Business Combination at least 50% of the outstanding securities voting generally in the election of directors of the surviving or resulting entity or a parent thereof (the "Successor Entity") immediately
after such reorganization are, or will be, owned, directly or indirectly, by stockholders of the Company immediately before the Business Combination; and (2) no person (as defined in clause (iii) of this definition below, but excluding the Successor
Entity) beneficially owns directly or indirectly, more than 50% of the outstanding shares of the combined voting power of the outstanding voting securities of the Successor Entity, after giving effect to the Business Combination, except to the extent
that such ownership existed prior to the Business Combination; and (3) at least 50% of the members of the board of directors of the Successor Entity were members of the Board at the time of the execution of the initial agreement or of the action of
the Board approving the Business Combination (the stockholders before and after the Business Combination shall be determined on the presumption that the record owners of securities of the Company hold no securities of the other parties to such
reorganization);
	

 	
 	

 	
 	

(iii)	
 	

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

 	
 	

 	
 	

(iv)	
 	

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

 	
 	

(m)	
 	

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

 	
 	

(n)	
 	

"Fair Market Value" means, as of any date, the value of Common Stock determined as follows:
	

 	
 	

 	
 	

(i)	
 	

If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, the Fair Market Value of a share of Common
Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination (or, if the day of determination is not a market trading day, then on the last
market trading day prior to the day of determination), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

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(ii)	
 	

If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the
day of determination (or, if the day of determination is not a market trading day, then on the last market trading day prior to the day of determination), as reported in The Wall Street Journal or such other source as the Administrator deems
reliable; or
	

 	
 	

 	
 	

(iii)	
 	

In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator.
	

 	
 	

(o)	
 	

"Notice of Grant" means a written or electronic notice evidencing certain terms and conditions of an individual Option grant. The Notice of Grant is part of the Option Agreement.
	

 	
 	

(p)	
 	

"Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
	

 	
 	

(q)	
 	

"Option" means a nonstatutory stock option granted pursuant to the Plan, that is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
	

 	
 	

(r)	
 	

"Option Agreement" means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan.
	

 	
 	

(s)	
 	

"Optioned Stock" means the Common Stock subject to an Option.
	

 	
 	

(t)	
 	

"Optionee" means the holder of an outstanding Option granted under the Plan.
	

 	
 	

(u)	
 	

"Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code.
	

 	
 	

(v)	
 	

"Plan" means this 2001 Nonstatutory Stock Plan.
	

 	
 	

(w)	
 	

"Service Provider" means an Employee or Consultant.
	

 	
 	

(x)	
 	

"Share" means a share of the Common Stock, as adjusted in accordance with Section 12 of the Plan.
	

 	
 	

(y)	
 	

"Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code.
	

3.	
 	
Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares which may be optioned and sold under the Plan is 2,500,000 Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock.
	

 	
 	

If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an option exchange program, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the
Plan (unless the Plan has terminated).
	

4.	
 	
Administration of the Plan.
	

 	
 	

(a)	
 	
Administration. The Plan shall be administered by (i) the Committee or (ii) the Chief Executive Officer of the Company pursuant to delegation authority provided by the Committee, provided that
such officer is serving as a director of the Company.

4

 

	

 	
 	

(b)	
 	
Powers of the Administrator. Subject to the provisions of the Plan, and in the case of the Chief Executive Officer, subject to the specific duties delegated to such officer as provided for
under the Plan, the Administrator shall have the authority, in the Administrator's discretion:
	

 	
 	

 	
 	

(i)	
 	

to determine the Fair Market Value of the Common Stock;
	

 	
 	

 	
 	

(ii)	
 	

to select the Service Providers to whom Options may be granted hereunder;
	

 	
 	

 	
 	

(iii)	
 	

to determine whether and to what extent Options are granted hereunder;
	

 	
 	

 	
 	

(iv)	
 	

to determine the number of shares of Common Stock to be covered by each Option granted hereunder;
	

 	
 	

 	
 	

(v)	
 	

to approve forms of agreement for use under the Plan (which forms need not be identical either as to type of award or among Optionees);
	

 	
 	

 	
 	

(vi)	
 	

to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options may be exercised (which
may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or the shares of Common Stock relating thereto, based in each case on such factors as the
Administrator, in the Administrator's sole discretion, shall determine;
	

 	
 	

 	
 	

(vii)	
 	

to construe and interpret the terms of the Plan and awards granted pursuant to the Plan;
	

 	
 	

 	
 	

(viii)	
 	

to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws;
	

 	
 	

 	
 	

(ix)	
 	

to modify or amend each Option (subject to Section 14(b) of the Plan), including the discretionary authority to extend the post-termination exercisability period of Options longer than is otherwise provided for in the Plan;
	

 	
 	

 	
 	

(x)	
 	

to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option or previously granted by the Administrator;
	

 	
 	

 	
 	

(xi)	
 	

to determine the terms and restrictions applicable to Options;
	

 	
 	

 	
 	

(xii)	
 	

to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option that number of Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by an Optionee to have Shares withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or advisable; and
	

 	
 	

 	
 	

(xiii)	
 	

to make all other determinations deemed necessary or advisable for administering the Plan.
	

 	
 	

(c)	
 	
Effect of Administrator's Decision. The Administrator's decisions, determinations and interpretations shall be final and binding on all Optionees and any other holders of Options.
	

5.	
 	
Eligibility. Except as noted further in this Section 5, Options may be granted to any Service Providers; provided, however, that notwithstanding anything to the contrary contained elsewhere in
the Plan, no Options may be granted under the Plan to any Officer or Director.

5

 

	

6.	
 	
Limitation. Neither the Plan nor any Option shall confer upon an Optionee any right with respect to continuing the Optionee's relationship as a Service Provider with the Company, nor shall
they interfere in any way with the Optionee's right or the Company's right to terminate such relationship at any time, with or without cause.
	

7.	
 	
Term of Plan. The Plan shall become effective upon its adoption by the Board. It shall continue in effect for ten (10) years, unless sooner terminated under Section 14 of the Plan.
	

8.	
 	
Term of Option. The term of each Option shall be stated in the Option Agreement.
	

9.	
 	
Option Exercise Price and Consideration.
	

 	
 	

(a)	
 	
Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator.
	

 	
 	

(b)	
 	
Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions which
must be satisfied before the Option may be exercised.
	

 	
 	

(c)	
 	
Form of Consideration. The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. In making a determination as to the
type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company. Such consideration may consist entirely of:
	

 	
 	

 	
 	

(i)	
 	

cash;
	

 	
 	

 	
 	

(ii)	
 	

check;
	

 	
 	

 	
 	

(iii)	
 	

promissory note;
	

 	
 	

 	
 	

(iv)	
 	

other Shares which (A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than one hundred and eighty (180) days on the date of surrender, and (B) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option shall be exercised;
	

 	
 	

 	
 	

(v)	
 	

"cashless exercise" instructions, which will consist of delivery of a properly executed exercise notice to the Company together with irrevocable instructions to a bank or broker to promptly deliver to the Company the amount of sale proceeds necessary
to pay the exercise price and any applicable tax withholding, along with such other documentation as the Administrator and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan
proceeds required to pay the exercise price;
	

 	
 	

 	
 	

(vi)	
 	

such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or
	

 	
 	

 	
 	

(vii)	
 	

any combination of the foregoing methods of payment.

6

 

	

10.	
 	
Exercise of Option.
	

 	
 	

(a)	
 	
Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined
by the Administrator and set forth in the Option Agreement. An Option may not be exercised for a fraction of a Share. An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator
and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued
(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date
the Shares are issued, except as provided in Section 12 of the Plan. Exercising an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.
	

 	
 	

(b)	
 	
Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, other than upon the Optionee's death or Disability, the Optionee may exercise his or her
Option, but only within such period of time as is specified in the Option Agreement, and only to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the
Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for ninety (90) days following the Optionee's termination (but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, any portion of an
Option has not been exercised as of the termination date of such Option, such Option shall terminate, and the Shares covered thereby shall revert to the Plan. Notwithstanding anything to the contrary set forth above in this Section 10 (b), if
Optionee's employment or services with the Company is terminated for Cause (as defined in the next sentence), the Option shall lapse immediately upon such termination. "Cause" for purposes of this Section 10 (b) means a determination by the
Administrator that the Optionee: (a) has committed a material breach of the Optionee's duties and responsibilities (other than as a result of incapacity due to a Disability); or (b) has been convicted of a felony, or entered a plea of guilty or nolo
contendre with respect to such a crime; or (c) has violated any fiduciary duty or duty of loyalty owed to the Company; or (d) has been generally incompetent or grossly negligent in the discharge of the Optionee's duties and responsibilities; or (e)
has engaged or is engaging in the immoderate use of alcoholic beverages or narcotics or other substance abuse; or (f) has violated in any material respect any of the Company's established employment policies in effect from time to time.

7

 

	

 	
 	

(c)	
 	
Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee's Disability, the Optionee may exercise his or her Option within such period of time as is
specified in the Option Agreement, to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for one hundred and eighty (180) days following the Optionee's termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). If, on the
date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, any portion of an Option has not been exercised as of the
termination date of such Option, such Option shall terminate, and the Shares covered thereby shall revert to the Plan.
	

 	
 	

(d)	
 	
Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Option Agreement (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee's estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date
of death. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for one hundred and eighty (180) days following the Optionee's termination (but in no event later than the expiration of the term of such Option
as set forth in the Option Agreement). If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. The Option may be exercised by
the executor or administrator of the Optionee's estate or, if none, by the person(s) entitled to exercise the Option under the Optionee's will or the laws of descent or distribution. If any portion of an Option has not been exercised by the
termination date of such Option, such Option shall terminate, and the Shares covered thereby shall revert to the Plan.
	

 	
 	

(e)	
 	
Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares, an Option previously granted based on such terms and conditions as the Administrator
shall establish and communicate to the Optionee at the time that such offer is made.
	

11.	
 	
Non-Transferability of Options. Unless determined otherwise by the Administrator, an Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. If the Administrator makes an Option transferable, such Option shall contain such additional terms and conditions
as the Administrator deems appropriate.

8

 

	

12.	
 	
Adjustments Upon Changes in Capitalization and Certain Events.
	

 	
 	

(a)	
 	
Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Option, and the number of shares
of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common
Stock covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock
subject to an Option.
	

 	
 	

(b)	
 	
Adjustments. If the outstanding Shares are changed into or exchanged for cash or a different number or kind of shares or securities of the Company or of another issuer, or if additional Shares
or new or different securities are distributed with respect to the outstanding Shares, through a reorganization or merger to which the Company is a party, or through a combination, consolidation, spin off, recapitalization, reclassification, stock
split, stock dividend, reverse stock split, stock consolidation or other capital change or adjustment, an appropriate adjustment will be made in the number and kind of Shares or other consideration that is subject to or may be delivered under this
Plan and pursuant to outstanding Options, the exercise price of outstanding Options, performance criteria under outstanding Options and the numerical share limits set forth in Section 3 of the Plan. In any of such events, the Administrator may take
such action sufficiently prior to such event if necessary or deemed appropriate to permit the Optionees to realize the benefits intended to be conveyed with respect to the underlying shares on substantially the same terms as are available to
stockholders generally.
	

 	
 	

(c)	
 	
Upon Certain Events. Unless prior to an Event, the Administrator determines that, upon its occurrence, benefits under any or all Options shall not be accelerated or determines that only
certain or limited benefits under any or all Options shall be accelerated and the extent to which they shall be accelerated, and/or establishes a different time in respect of such Event, then immediately prior to the occurrence of an Event, each
Option shall become immediately exercisable. The Administrator may override the limitations on acceleration in this Section 12 (c) by express provision in the Option Agreement and may accord any Service Provider a right to refuse any acceleration,
whether pursuant to the Option Agreement or otherwise, in such circumstances as the Administrator may approve. Any acceleration of Options shall comply with applicable regulatory requirements. If the vesting of an Option has been accelerated
expressly in anticipation of an event and the Administrator later determines that the event will not occur, the Administrator may rescind the effect of the acceleration as to any then outstanding and unexercised or otherwise unvested
Options.

9

 

	

 	
 	

(d)	
 	
Possible Early Termination of Options. If any Option under this Plan has been fully accelerated as required or permitted by Section 12(b), but is not exercised prior to (1) the dissolution of
the Company, or (2) an event described in Section 12 (b) that the Company does not survive, or (3) the consummation of an event described in Section 12 (b) involving an Event approved by the Board, such Option shall terminate, subject to any
provision that has been expressly made by the Board or the Administrator, through a plan of reorganization or otherwise, for the survival, substitution, assumption, exchange or settlement of such Option.
	

13.	
 	
Date of Grant. The date of grant of an Option shall be, for all purposes, the date on which the Administrator makes the determination granting such Option, or such other later date as is
determined by the Administrator. Notice of the determination shall be provided to each Optionee within a reasonable time after the date of such grant.
	

14.	
 	
Amendment and Termination of the Plan.
	

 	
 	

(a)	
 	
Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.
	

 	
 	

(b)	
 	
Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to options
granted under the Plan prior to the date of such termination.
	

15.	
 	
Conditions Upon Issuance of Shares.
	

 	
 	

(a)	
 	
Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable
Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.
	

 	
 	

(b)	
 	
Investment Representations. As a condition to the exercise of an Option the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that
the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
	

16.	
 	
Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
	

17.	
 	
Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the
Plan.
	

18.	
 	
Tax Withholding. Upon any exercise, vesting or payment of any Option, the Company shall have the right at its option to (a) require the Optionee to pay or provide for payment in cash or by
cashier's check payable to the Company of the amount of any taxes which the Company may be required to withhold with respect to such Option event or payment or (b) reduce the number of shares of Common Stock otherwise deliverable to the Optionee by
the appropriate number of shares, valued at their then Fair Market Value, to satisfy the minimum withholding obligation with respect to the benefits hereunder.

10

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Exhibit 4.1

POWER-ONE, INC. 2001 STOCK OPTION PLANPrepared 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 

2

 

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. 

3

 

    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:	 	 
	

 	
 	

 	
 	

	

 	
 	

 	
 	

	

 	
 	

 	
 	

4

 
 
 

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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QuickLinks

Exhibit 4.2

EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT

R E C I T A L

CONSENT OF SPOUSE

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