Document:

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                                                                    EXHIBIT 10.4

                                 POWER-ONE, INC.
                      CHANGE IN CONTROL SEVERANCE AGREEMENT

            THIS CHANGE IN CONTROL SEVERANCE AGREEMENT is made and entered into
by and between Power-One, Inc., a Delaware corporation (hereinafter referred to
as the "Company") and Donna M. Schnopp (Koep) (hereinafter referred to as the
"Executive").

                                    RECITALS

            A. The Board of Directors of the Company has approved the Company
entering into a severance agreement with the Executive.

            B. The Executive is a key executive of the Company.

            C. Should the possibility of a Change in Control of the Company
arise, the Board believes it imperative that the Company and the Board should be
able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon the Executive's advice, if
requested, as to the best interests of the Company and its stockholders without
concern that the Executive might be distracted by the personal uncertainties and
risks created by the possibility of a Change in Control.

            D. Should the possibility of a Change in Control arise, in addition
to his regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management and the Board
as to whether such Change in Control would be in the best interests of the
Company and its stockholders, and to take such other actions as the Board might
determine to be appropriate.

            NOW THEREFORE, to help assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat, or occurrence of a Change in
Control of the Company, and to induce the Executive to remain in the employ of
the Company in the face of these circumstances and for other good and valuable
consideration, the Company and the Executive agree as follows:

ARTICLE 1. TERM

      This Agreement shall be effective as of April 28, 2004 (the "Effective
Date"). This Agreement will continue in effect through April 27, 2005. However,
at the end of such one (1) year period and, if extended, at the end of each
additional year thereafter, the term of this Agreement shall be extended
automatically for one (1) additional year, unless the Committee delivers written
notice at least six (6) months prior to the end of such term, or extended term,
to the Executive that this Agreement will not be extended, and if such notice is
timely given this Agreement will terminate at the end of the term then in
progress; provided, however, that this provision for automatic extension shall
have no application following a Change in Control.
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      However, in the event a Change in Control occurs during the original or
any extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change in Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive. Any subsequent Change in Control ("Subsequent Change in Control")
that occurs during the original or any extended term shall also continue the
term of this Agreement until the later of: (i) twenty-four (24) months beyond
the month in which such Subsequent Change in Control occurred; or (ii) until all
obligations of the Company hereunder have been fulfilled, and until all benefits
required hereunder have been paid to the Executive; provided, however, that if a
Subsequent Change in Control occurs, it shall only be considered a Change in
Control under this Agreement if it occurs no later than twenty-four (24) months
after the immediately preceding Change in Control or Subsequent Change in
Control.

ARTICLE 2. ERISA

      This Agreement is intended as part of a severance program of the Company
that constitutes (i) a pension plan within the meaning of Section 3(2) of ERISA,
and (ii) an unfunded pension plan maintained by the Company for a select group
of management or highly compensated employees within the meaning of Department
of Labor Regulation 2520.104-23 promulgated under ERISA, and Sections 201, 301,
and 401 of ERISA.

ARTICLE 3. DEFINITIONS

            Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized:

      (a)   "Agreement" means this Change in Control Severance Agreement.

      (b)   "Base Salary" means the salary of record paid to the Executive by
            the Company as annual salary (whether or not deferred), but excludes
            amounts received under incentive or other bonus plans.

      (c)   "Beneficial Owner" shall have the meaning ascribed to such term in
            Rule 13d-3 of the General Rules and Regulations under the Exchange
            Act.

      (d)   "Beneficiary" means the persons or entities designated or deemed
            designated by the Executive pursuant to Section 11.2.

      (e)   "Board" means the Board of Directors of the Company.

      (f)   "Cause" means the occurrence of either or both of the following:

            (i)   the Executive's conviction for committing an act of fraud,
                  embezzlement, theft, or other act constituting a felony (other
                  than traffic related offenses or as a result of vicarious
                  liability); or

            (ii)  the willful engaging by the Executive in misconduct that is
                  significantly injurious to the Company. However, no act or
                  failure to act, on the Executive's part shall be considered
                  "willful" unless done, or omitted to be done, by the Executive
                  not in good faith and without reasonable belief that the
                  Executive's action or omission was in the best interest of the
                  Company.
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      (g)   "Change in Control" of the Company shall be deemed to have occurred
            as of the first day that any one or more of the following conditions
            shall have been satisfied:

            (i)   Any Person (other than those Persons in control of the Company
                  as of the Effective Date) becomes the Beneficial Owner,
                  directly or indirectly, of securities of the Company
                  representing twenty percent (20%) or more of either (1) the
                  then-outstanding shares of common stock of the Company (the
                  "Outstanding Company Common Stock") or (2) the combined voting
                  power of the then-outstanding voting securities of the Company
                  entitled to vote generally in the election of directors (the
                  "Outstanding Company Voting Securities"); provided, however,
                  that, for purposes of this clause (i), the following
                  acquisitions shall not constitute a Change in Control: (A) any
                  acquisition directly from the Company, (B) any acquisition by
                  the Company, (C) any acquisition by any employee benefit plan
                  (or related trust) sponsored or maintained by the Company or
                  any affiliate of the Company or a successor, or (D) any
                  acquisition by any entity pursuant to a transaction that
                  complies with Sections (g)(ii), (iii) and (iv) below; further
                  provided, that, creditors of the Company who become
                  stockholders of the Company in connection with any bankruptcy
                  of the Company under the laws of the United States shall not,
                  by virtue of such bankruptcy, be deemed a "group" or a single
                  Person for the purposes of this clause (i) (provided that any
                  one of such creditors may trigger a Change in Control pursuant
                  to this clause (i) if such creditor's ownership of Company
                  securities equals or exceeds the foregoing threshold);

            (ii)  On any day after the Effective Date (the "Measurement Date")
                  Continuing Directors cease for any reason to constitute
                  either: (1) if the Company does not have a Parent, a majority
                  of the Board; or (2) if the Company has a Parent, a majority
                  of the Board of Directors of the Controlling Parent. A
                  director is a "Continuing Director" if he or she either:

                  (1)   was a member of the Board on the applicable Initial Date
                        (an "Initial Director"); or

                  (2)   was elected to the Board (or the Board of Directors of
                        the Controlling Parent, as applicable), or was nominated
                        for election by the Company's or the Controlling
                        Parent's stockholders, by a vote of at least two-thirds
                        (2/3) of the Initial Directors then in office.

                  A member of the Board (or Board of Directors of the
                  Controlling Parent, as applicable) who was not a director on
                  the applicable Initial Date shall be deemed to be an Initial
                  Director for purposes of clause (2) above if his or her
                  election, or nomination for election by the Company's or the
                  Controlling Parent's stockholders, was approved by a vote of
                  at least two-thirds (2/3) of the Initial Directors (including
                  directors elected after the applicable Initial Date who are
                  deemed to be Initial Directors by application of this
                  provision) then in office; provided that such member of the
                  Board shall not be deemed to be an Initial Director if his or
                  her initial assumption of office occurs as a result of an
                  actual or threatened election contest with respect to the
                  election or removal of directors or other actual or threatened
                  solicitation of proxies or consents by or on behalf of a
                  Person other than the Board.

                  "Initial Date" means the later of (1) the Effective Date or
                  (2) the date that is two (2) years before the Measurement
                  Date.
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            (iii) Consummation of a reorganization, merger, statutory share
                  exchange or consolidation or similar corporate transaction
                  involving the Company or any of its subsidiaries, a sale or
                  other disposition of all or substantially all of the assets of
                  the Company, or the acquisition of assets or stock of another
                  entity by the Company or any of its subsidiaries (each, a
                  "Business Combination"), in each case unless, following such
                  Business Combination, (1) all or substantially all of the
                  individuals and entities that were the Beneficial Owners of
                  the Outstanding Company Common Stock and the Outstanding
                  Company Voting Securities immediately prior to such Business
                  Combination Beneficially Own, directly or indirectly, more
                  than sixty percent (60%) of the then-outstanding shares of
                  common stock and the combined voting power of the
                  then-outstanding voting securities entitled to vote generally
                  in the election of directors, as the case may be, of the
                  entity resulting from such Business Combination (including,
                  without limitation, an entity that, as a result of such
                  transaction, is a Parent of the Company or the successor of
                  the Company) in substantially the same proportions as their
                  ownership immediately prior to such Business Combination of
                  the Outstanding Company Common Stock and the Outstanding
                  Company Voting Securities, as the case may be, (2) no Person
                  (excluding any entity resulting from such Business Combination
                  or a Parent of the Company or any successor of the Company or
                  any employee benefit plan (or related trust) of the Company or
                  such entity resulting from such Business Combination or a
                  Parent of the Company or the successor entity) Beneficially
                  Owns, directly or indirectly, twenty percent (20%) or more of,
                  respectively, the then-outstanding shares of common stock of
                  the entity resulting from such Business Combination or the
                  combined voting power of the then-outstanding voting
                  securities of such entity, except to the extent that the
                  ownership in excess of twenty percent (20%) existed prior to
                  the Business Combination, and (3) a Change in Control is not
                  triggered pursuant to clause (ii) above with respect to the
                  Company (including any successor entity) or any Parent of the
                  Company (or the successor entity).

            (iv)  A complete liquidation or dissolution of the Company other
                  than in the context of a transaction that does not constitute
                  a Change in Control of the Company under clause (iii) above.

            Notwithstanding the foregoing, in no event shall a transaction or
            other event that occurred prior to the Effective Date constitute a
            Change in Control. Notwithstanding anything to the contrary in
            clause (iii) above to the contrary, a change in ownership of the
            Company resulting from creditors of the Company becoming
            stockholders of the Company in connection with any bankruptcy of the
            Company under the laws of the United States shall not trigger a
            Change in Control pursuant to clause (iii) above.

      (h)   "Code" means the United States Internal Revenue Code of 1986, as
            amended.

      (i)   "Committee" means the Compensation Committee of the Board, or any
            other committee appointed by the Board to perform the functions of
            the Compensation Committee.

      (j)   "Company" means Power-One, Inc., a Delaware corporation (including,
            for purposes of determining whether the Executive is employed by the
            Company, any and all subsidiaries specified by the Committee), or
            any successor thereto as provided in Article 10.

      (k)   "Controlling Parent" means the Company's Parent so long as a
            majority of the voting stock or voting power of that Parent is not
            Beneficially Owned, directly or indirectly through one or more
            subsidiaries, by any other Person. In the event that the Company has
            more than one "Parent," then "Controlling Parent" shall mean the
            Parent of the Company the majority of the voting stock
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            or voting power of which is not Beneficially Owned, directly or
            indirectly through one or more subsidiaries, by any other Person.

      (l)   "Disability" means disability as defined in the Company's long-term
            disability plan in which the Executive participates at the relevant
            time or, if the Executive does not participate in a Company
            long-term disability plan at the relevant time, such term shall mean
            a "permanent and total disability" within the meaning of Section
            22(e)(3) of the Code.

      (m)   "Effective Date" has the meaning given to such term in Article 1
            hereof.

      (n)   "Effective Date of Termination" means the date on which a Qualifying
            Termination occurs.

      (o)   "ERISA" means the Employee Retirement Income Security Act of 1974,
            as amended.

      (p)   "Exchange Act" means the United States Securities Exchange Act of
            1934, as amended.

      (q)   "Executive" means the individual identified in the first sentence,
            and on the signature page, of this Agreement.

      (r)   "Good Reason" means, without the Executive's express written
            consent, the occurrence of any one or more of the following:

            (i)   A material reduction in the nature or status of the
                  Executive's authorities, duties, and/or responsibilities,
                  (when such authorities, duties, and/or responsibilities are
                  viewed in the aggregate) from their level in effect on the day
                  immediately prior to the start of the Protected Period, other
                  than an insubstantial and inadvertent act that is remedied by
                  the Company promptly after receipt of notice thereof given by
                  the Executive; provided that if the Executive is a vice
                  president, for purposes of the preceding phrase the
                  Executive's loss of vice president status (other than a
                  promotion to a higher level officer) will constitute Good
                  Reason. In addition, Good Reason will be deemed to exist if
                  the Executive's reporting relationship is diminished from the
                  Executive's reporting relationship in effect on the day
                  immediately prior to the start of the Protected Period (for
                  example, if the Executive reports directly to the Company's
                  Chief Executive Officer on the day immediately prior to the
                  start of the Protected Period, Good Reason will be deemed to
                  exist if the Executive's reporting relationship is changed
                  such that the Executive no longer reports directly to the
                  Chief Executive Officer of the Company or any Parent or
                  directly to the Board of Directors of the Company or any
                  Parent). The change in status of the Company from a
                  publicly-traded company to a company the securities of which
                  are not publicly-traded (including any related termination of
                  the Company's reporting obligations under the Exchange Act)
                  shall not, in and of itself, constitute Good Reason or a
                  material reduction in the nature or status of the Executive's
                  authorities, duties, and/or responsibilities.

            (ii)  A reduction by the Company in the Executive's Base Salary as
                  in effect immediately prior to the start of the Protected
                  Period or as the same shall be increased from time to time.

            (iii) A significant reduction by the Company of the Executive's
                  aggregate incentive opportunities under the Company's short
                  and/or long-term incentive programs, as such opportunities
                  exist immediately prior to the start of the Protected Period,
                  or as such opportunities may be increased from time to time.
                  For this purpose, a significant reduction in the Executive's
                  incentive opportunities shall be deemed to have occurred in
                  the event his targeted annualized award opportunities and/or
                  the degree of probability of
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                  attainment of such annualized award opportunities are
                  materially diminished by the Company from the levels and
                  probability of attainment that existed immediately prior to
                  the start of the Protected Period. If the Company has a
                  Parent, a significant reduction of the Executive's aggregate
                  incentive opportunities under the Company's short and/or
                  long-term incentive programs shall not be deemed to have
                  occurred if there is an across-the-board reduction in or
                  elimination of any such program which similarly affects all
                  executives of the Company and the reduced or eliminated
                  incentives are replaced by a similar program of a Parent.

            (iv)  The failure of the Company to maintain (x) the Executive's
                  relative level of coverage and accruals under the Company's
                  employee benefit and/or retirement plans, policies, practices,
                  or arrangements in which the Executive participates
                  immediately prior to the start of the Protected Period, both
                  in terms of the amount of benefits provided, and amounts
                  accrued and (y) the relative level of the Executive's
                  participation in such plans, policies, practices, or
                  arrangements on a basis at least as beneficial as, or
                  substantially equivalent to, that on which the Executive
                  participated in such plans immediately prior to the start of
                  the Protected Period. For this purpose, the Company may
                  eliminate and/or modify existing programs and coverage levels;
                  provided, however, that the Executive's level of coverage
                  under all such programs must be at least as great as is
                  provided to executives who have the same or lesser levels of
                  reporting responsibilities within the Company's organization.

            (v)   The failure of the Company to obtain a satisfactory agreement
                  from any successor to the Company to assume and agree to
                  perform this Agreement, as contemplated in Article 10.

            (vi)  Any purported termination by the Company of the Executive's
                  employment that is not effected pursuant to a Notice of
                  Termination satisfying the requirements of Section 4.6 and for
                  purposes of this Agreement, no such purported termination
                  shall be effective.

            (vii) The Executive is informed by the Company that his principal
                  place of employment for the Company will be relocated to a
                  location that is greater than thirty-five (35) miles away from
                  the Executive's principal place of employment for the Company
                  at the start of the corresponding Protected Period; provided
                  that, if the Company communicates an intended effective date
                  for such relocation, in no event shall Good Reason exist
                  pursuant to this clause (vii) more than ninety (90) days
                  before such intended effective date.

            The Executive's right to terminate employment for Good Reason shall
            not be affected by the Executive's incapacity due to physical or
            mental illness. The Executive's continued employment shall not
            constitute a consent to, or a waiver of rights with respect to, any
            circumstances constituting Good Reason herein; provided, however,
            that if the Executive does not terminate employment and claim Good
            Reason for such termination within ninety (90) days after the
            Executive has knowledge of an event or circumstance that would
            constitute Good Reason, then the Executive shall be deemed to have
            waived his right to claim Good Reason as to that specific fact or
            circumstance (except that the event or circumstance may be
            considered for purposes of determining whether any subsequent,
            separate, event or circumstance constitutes Good Reason; for
            example, and without limitation, a reduction in the Executive's
            authorities that is deemed waived by operation of this clause may be
            considered for purposes of determining whether any subsequent
            reduction in the Executive's authorities (when taken into
            consideration with the first reduction) constitutes a "material
            reduction" in the nature or status of the Executive's authorities
            from their level in effect on the day immediately prior to the start
            of the Protected Period).
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      (s)   "Parent" means an entity that Beneficially Owns a majority of the
            voting stock or voting power of the Company, or all or substantially
            all of the Company's assets, directly or indirectly through one or
            more subsidiaries.

      (t)   "Qualifying Termination" has the meaning given to such term in
            Section 4.2(a).

      (u)   "Severance Benefits" means the payments and/or benefits provided in
            Section 4.3.

ARTICLE 4. SEVERANCE BENEFITS

      4.1. RIGHT TO SEVERANCE BENEFITS. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Section 4.3, if the
Executive has incurred a Qualifying Termination.

            The Executive shall not be entitled to receive Severance Benefits if
his employment terminates (regardless of the reason) before the Protected Period
(as such term is defined in Section 4.2(c)) corresponding to a Change in Control
of the Company or more than twenty-four (24) months after the date of a Change
in Control of the Company.

      4.2. QUALIFYING TERMINATION.

      (o)   Subject to Sections 4.2(d), 4.4, and 4.5, the occurrence of any one
            or more of the following events within the Protected Period
            corresponding to a Change in Control of the Company, or within
            twenty-four (24) calendar months following the date of a Change in
            Control of the Company shall constitute a "Qualifying Termination":

            (i)   An involuntary termination of the Executive's employment by
                  the Company for reasons other than Cause;

            (ii)  A voluntary termination of employment by the Executive for
                  Good Reason;

            (iii) A successor company fails or refuses to assume by written
                  instrument the Company's obligations under this Agreement, as
                  required by Article 10; or

            (iv)  The Company or any successor company repudiates or breaches
                  any of the provisions of this Agreement.

      (b)   If more than one of the events set forth in Section 4.2(a) occurs,
            such events shall constitute but a single Qualifying Termination and
            the Executive shall be entitled to but a single payment of the
            Severance Benefits.

      (c)   The "Protected Period" corresponding to a Change in Control of the
            Company shall be a period of time determined in accordance with the
            following:

            (i)   If the Change in Control is triggered by a tender offer for
                  shares of the Company's stock or by the offeror's acquisition
                  of shares pursuant to such a tender offer, the Protected
                  Period shall commence on the date of the initial tender offer
                  and shall continue through and including the date of the
                  Change in Control; provided that in no case will the Protected
                  Period commence earlier than the date that is six (6) months
                  prior to the Change in Control.

            (ii)  If the Change in Control is triggered by a merger,
                  consolidation, or reorganization of the Company with or
                  involving any other corporation, the Protected Period shall
                  commence
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                  on the date that serious and substantial discussions first
                  take place to effect the merger, consolidation, or
                  reorganization and shall continue through and including the
                  date of the Change in Control; provided that in no case will
                  the Protected Period commence earlier than the date that is
                  six (6) months prior to the Change in Control.

            (iii) In the case of any Change in Control not described in clause
                  (i) or (ii) above, the Protected Period shall commence on the
                  date that is six (6) months prior to the Change in Control and
                  shall continue through and including the date of the Change in
                  Control.

      (d)   Notwithstanding anything else contained herein to the contrary, the
            Executive's termination of employment on account of reaching
            mandatory retirement age, as such age may be defined from time to
            time in policies adopted by the Company prior to the commencement of
            the Protected Period, and consistent with applicable law, shall not
            be a Qualifying Termination.

      (e)   Notwithstanding anything else contained herein to the contrary
            (other than those provisions that contain an express exception to
            this Section 4.2(e)), the Executive's Severance Benefits under this
            Agreement shall be reduced by the severance benefits (including,
            without limitation, any other change-in-control severance benefits
            and any other severance benefits generally) that the Executive may
            be entitled to under any other plan, program, agreement or other
            arrangement with the Company (including, without limitation, any
            such benefits provided for by an employment agreement). For purposes
            of the foregoing, any cash severance benefits payable to the
            Executive under any other plan, program, agreement or other
            arrangement with the Company shall offset the cash severance
            benefits otherwise payable to the Executive under this Agreement on
            a dollar-for-dollar basis. For purposes of the foregoing, non-cash
            severance benefits to be provided to the Executive under any other
            plan, program, agreement or other arrangement with the Company shall
            offset any corresponding benefits otherwise to be provided to the
            Executive under this Agreement or, if there are no corresponding
            benefits otherwise to be provided to the Executive under this
            Agreement, the value of such benefits shall offset the cash
            severance benefits otherwise payable to the Executive under this
            Agreement on a dollar-for-dollar basis. If the amount of other
            benefits to be offset against the cash severance benefits otherwise
            payable to the Executive under this Agreement in accordance with the
            preceding two sentences exceeds the amount of cash severance
            benefits otherwise payable to the Executive under this Agreement,
            then the excess may be used to offset other non-cash severance
            benefits otherwise to be provided to the Executive under this
            Agreement on a dollar-for-dollar basis. For purposes of this
            paragraph, the Committee shall reasonably determine the value of any
            non-cash benefits.

      4.3. DESCRIPTION OF SEVERANCE BENEFITS. In the event that the Executive
becomes entitled to receive Severance Benefits, as provided in Sections 4.1 and
4.2, the Company shall pay to the Executive and provide him with the following:

      (a)   An amount equal to one (1) times the Executive's highest annualized
            rate of Base Salary in effect at any time after the commencement of
            the Protected Period and on or before the Effective Date of
            Termination.

      (b)   An amount equal to one (1) times the highest aggregate bonus(es)
            paid by the Company to the Executive for any one of the three (3)
            full fiscal years of the Company immediately preceding Executive's
            Effective Date of Termination.

      (c)   A continuation of the Executive's medical coverage, dental coverage,
            and group term life insurance for the Executive, his spouse, and his
            eligible dependents for the one (1) year(s) following the
            Executive's Effective Date of Termination; provided that such
            continuation of
<PAGE>
            coverage shall run concurrently with COBRA continuation or similar
            state law continuation periods; and provided further that the
            continuation of such coverage shall be discontinued prior to the end
            of the one (1) year period in the event the Executive has available
            substantially similar benefits from a subsequent employer, as
            reasonably determined by the Committee. Except as provided in the
            next sentence, such benefits shall be provided to the Executive at
            the same premium cost, and at the same coverage level, as in effect
            as of the Executive's Effective Date of Termination. However, in the
            event the premium cost and/or level of coverage shall change for all
            employees of the Company, the cost and/or coverage level, likewise,
            shall change for the Executive in a corresponding manner. The
            continuation of coverage for the period contemplated by this Section
            4.3(c) shall be coordinated with and paid secondary to any benefits
            that the Executive, his spouse, or his dependent receives from
            another employer or from Medicare (following the Executive's, his
            spouse's, and/or his dependent's entitlement to Medicare benefits)
            to the maximum extent permissible under relevant law.

      (d)   A lump-sum cash amount equal to the portion of the Executive's
            account under the Company's qualified retirement plan (including,
            without limitation, any 401(k) matching contributions) that has not
            become vested under the terms of such plan as of the Effective Date
            of Termination.

      (e)   A lump-sum cash amount equal to the portion of the Executive's
            account under any Company nonqualified deferred compensation or
            other supplemental retirement plan that has not become vested under
            the terms of such plan as of the Effective Date of Termination.

      (f)   If any stock option, restricted stock, or other equity or
            equity-based award granted by the Company to the Executive is
            subject to a vesting schedule and does not automatically become
            fully vested upon or in connection with the termination of the
            Executive's employment with the Company or the related Change in
            Control event, the portion of such award that was scheduled to vest
            (assuming that the Executive continued to be employed by the
            Company) at any time within the one (1) year period following the
            Effective Date of Termination shall automatically become vested as
            of the Effective Date of Termination; provided, however, that any
            portion of such award remaining unvested after giving effect to the
            foregoing clause shall immediately terminate upon the Effective Date
            of Termination. In the event that the Effective Date of Termination
            occurs during the Protected Period related to a Change in Control
            and a portion of a stock option or other award referred to in the
            preceding sentence is deemed to become vested in connection with the
            termination of the Executive's employment pursuant to the preceding
            sentence, and such portion of the award would otherwise terminate or
            expire upon or prior to the date of the related Change in Control,
            the Executive shall be given a reasonable opportunity to exercise
            such accelerated portion of the option or other award before it
            terminates.

      (g)   The Company shall pay or reimburse the Executive for up to $15,000
            of outplacement services obtained by the Executive during the twelve
            (12) month period following the Effective Date of Termination.

      4.4. TERMINATION DUE TO DISABILITY, DEATH OR RETIREMENT. Termination of
the Executive's employment due to the Executive's death or Disability is not a
Qualifying Termination. However, if immediately prior to the condition or event
leading to, or the commencement of, the Disability of the Executive (but not the
death of the Executive), the Executive would have experienced a Qualifying
Termination if he had terminated at that time, then upon termination of his
employment for Disability he shall be entitled to the benefits provided by this
Agreement for a Qualifying Termination. A voluntary termination of employment by
the Executive due to the Executive's retirement is not a Qualifying Termination.
However, if immediately prior to the Executive's retirement (but not death), the
Executive would have experienced a Qualifying Termination if he had terminated
<PAGE>
at that time, then upon his retirement he shall (subject to Section 4.2(d)) be
entitled to the benefits provided by this Agreement for a Qualifying
Termination.

      4.5. TERMINATION FOR CAUSE OR BY THE EXECUTIVE OTHER THAN FOR GOOD REASON
Termination of the Executive's employment by the Company for Cause or by the
Executive other than for Good Reason does not constitute a Qualifying
Termination.

      4.6. NOTICE OF TERMINATION. Any termination by the Company for Cause or
by the Executive for Good Reason shall be communicated by a Notice of
Termination. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon, and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.

ARTICLE 5. FORM AND TIMING OF SEVERANCE BENEFITS; TAX WITHHOLDING;

      5.1. FORM AND TIMING OF SEVERANCE BENEFITS. The Severance Benefits
described in Section 4.3(a), 4.3(b), 4.3(d) and 4.3(e) shall be paid in cash to
the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination, but in no event beyond thirty (30) days from such
date.

      5.2. WITHHOLDING OF TAXES. The Company shall be entitled to withhold from
any amounts payable under or pursuant to this Agreement all taxes as legally
shall be required (including, without limitation, any United States Federal
taxes, and any other state, city, or local taxes).

ARTICLE 6. SECTION 280G POTENTIAL CUT-BACK

      6.1. CUT-BACK. Notwithstanding anything contained in this Agreement to
the contrary, to the extent that any payment or distribution of any type to or
for the Executive by the Company or any of its affiliates, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (including, without limitation, any accelerated vesting of stock
options or restricted stock granted by the Company pursuant to this Agreement or
otherwise) (collectively, the "Total Payments") is or will be subject to the
excise tax imposed under Section 4999 of the Code (which reference includes, for
purposes of this Agreement, any similar successor provision to Section 4999),
then the Total Payments shall be reduced (but not below zero) so that the
maximum amount of the Total Payments (after reduction) shall be one dollar
($1.00) less than the amount which would cause the Total Payments to be subject
to the excise tax imposed by Section 4999 of the Code. Unless the Executive
shall have given prior written notice to the Company to effectuate a reduction
in the Total Payments if such a reduction is required, the Company shall reduce
or eliminate the Total Payments by first reducing or eliminating any cash
severance benefits, then by reducing or eliminating any accelerated vesting of
stock options, then by reducing or eliminating any accelerated vesting of
restricted stock, then by reducing or eliminating any other remaining Total
Payments. The preceding provisions of this Section 6.1 shall take precedence
over the provisions of any other plan, arrangement or agreement governing the
Executive's rights and entitlements to any benefits or compensation; provided,
however, that if the Executive is a party to a written employment or other
written agreement with the Company that contains express provisions for a
so-called "gross-up" payment to the extent that excise taxes are imposed under
Section 4999 of the Code, the Section 280G and/or Section 4999 provisions of
such employment or other agreement shall control.

      6.2. DETERMINATION. Any determination that Total Payments to the
Executive must be reduced or eliminated in accordance with the forgoing
provisions of this Section 6 and the assumptions to be utilized in arriving at
such determination, shall be made by a nationally recognized accounting firm or
consulting firm with experience in such matters selected by the Company (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and the Executive within fifteen (15) business days after the date
such calculation is requested by the Company or the Executive. In the event that
the Accounting Firm is serving
<PAGE>
as accountant or auditor for the individual, entity or group effecting the
Change in Control, the Executive shall appoint another nationally recognized
accounting or consulting firm with experience in such matters to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. If a reduction or elimination of
Total Payments to the Executive in accordance with the foregoing is necessary
based on the Accounting Firm's determination, the Accounting Firm shall furnish
the Executive with a written opinion that failure to limit the amount of the
Total Payments would result in the imposition of a tax under Section 4999 of the
Code. Any determination by the Accounting Firm shall be binding upon the Company
and the Executive. As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Total Payments to the Executive which will not
have been made by the Company should have been made ("Underpayment"). The
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive. In the event that any Total Payment made to the
Executive shall be determined by the Accounting Firm to result in the imposition
of any tax under Section 4999 of the Code, the Executive shall promptly repay
the amount of such excess to the Company together with interest on such amount
(at the same rate as is applied to determine the present value of payments under
Section 280G or any successor thereto), from the date the reimbursable payment
was received by the Executive to the date the same is repaid to the Company.

ARTICLE 7. THE COMPANY'S PAYMENT OBLIGATION

      7.1. PAYMENT OF OBLIGATIONS ABSOLUTE. Except as provided in Sections
4.2(e) and 5.2 and in Article 6, the Company's obligation to make the payments
and the arrangements provided for herein shall be absolute and unconditional,
and shall not be affected by any circumstances, including, without limitation,
any offset, counterclaim, recoupment, defense, or other right which the Company
may have against the Executive or anyone else. All amounts payable by the
Company hereunder shall be paid without notice or demand. Each and every payment
made hereunder by the Company shall be final, and the Company shall not seek to
recover all or any part of such payment from the Executive or from whoever may
be entitled thereto, for any reasons whatsoever, except as otherwise provided in
Article 6 or Article 9.

            The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 4.3(c).

      7.2. CONTRACTUAL RIGHT TO BENEFITS. This Agreement establishes and vests
in the Executive a contractual right to the benefits to which he or she is
entitled hereunder. The Company expressly waives any ability, if possible, to
deny liability for any breach of its contractual commitment hereunder upon the
grounds of lack of consideration, accord and satisfaction or any other defense.
In any dispute arising after a Change in Control as to whether the Executive is
entitled to benefits under this Agreement, there shall be a presumption that the
Executive is entitled to such benefits and the burden of proving otherwise shall
be on the Company. However, nothing herein contained shall require or be deemed
to require, or prohibit or be deemed to prohibit, the Company to segregate,
earmark, or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder.

      7.3. PENSION PLANS; DUPLICATE BENEFITS. All payments, benefits and
amounts provided under this Agreement shall be in addition to and not in
substitution for any pension rights under the Company's tax-qualified pension
plan, supplemental retirement plans, nonqualified deferred compensation plans,
and any disability, workers' compensation or other Company benefit plan
distribution that the Executive is entitled to at his Effective Date of
Termination. Notwithstanding the foregoing, this Agreement shall not create an
inference that any duplicate payments shall be required. No payments made
pursuant to this Agreement shall be considered
<PAGE>
compensation for purposes of any such benefit plan. Payment of the Executive's
accrued and unpaid Base Salary and accrued vacation pay through the Executive's
Effective Date of Termination shall be deemed to not duplicate any benefit
contemplated by this Agreement and shall not result in an offset pursuant to
Section 4.2(e). If the acceleration of vesting, lapse of restrictions and/or
payout provisions triggered by a Change in Control as to any award held by the
Executive under any long-term incentive plan are more favorable to the Executive
as to that award than the provisions of Section 4.3(f), the provisions more
favorable to the Executive shall control; provided that if the provisions of
such a plan are more favorable to the Executive in the circumstances and the
provisions of such plan are deemed to control as to an award, Section 4.3(f)
shall not be applied to provide any duplicate benefits or result in any greater
vesting as to the award than the provisions of such plan.

ARTICLE 8. TRADE SECRETS; NON-SOLICITATION AND NON-DISPARAGEMENT

            By executing this Agreement and again by receiving any benefits
provided for by this Agreement, the Executive agrees follows:

      (p)   In the course of performing his duties for the Company, the
            Executive will receive, and acknowledges that he or she has
            received, confidential information, including without limitation,
            information not available to competitors relating to the Company's
            existing and contemplated financial plans, products, business plans,
            operating plans, research and development information, and customer
            information, all of which is hereinafter referred to as "Trade
            Secrets." The Executive agrees that he or she will not, either
            during his employment or subsequent to the termination of his
            employment with the Company, directly or indirectly disclose,
            publish or otherwise divulge any Trade Secret of the Company or any
            of its affiliates to anyone outside the Company, or use such
            information in any manner which would adversely affect the business
            or business prospects of the Company, without prior written
            authorization from the Company to do so. The Executive further
            agrees that if, at the time of the termination of his employment
            with the Company, he is in possession of any documents or other
            written or electronic materials constituting, containing or
            reflecting Trade Secrets, the Executive will return and surrender
            all such documents and materials to the Company upon leaving its
            employ. The restrictions and protection provided for in this Section
            8(a) shall be in addition to any protection afforded to Trade
            Secrets by law or equity and in addition to any protection afforded
            to Trade Secrets by any other agreement between the Executive and
            the Company.

      (q)   For a period of one year following the termination of the
            Executive's employment with the Company, the Executive shall not,
            directly or indirectly through, aid, assistance or counsel, on the
            Executive's own behalf or on behalf of another person or entity (i)
            contact, solicit or offer to hire any person who was, within a
            period of six months prior to the termination of the Executive's
            employment with the Company, employed by the Company or one of its
            subsidiaries, or (ii) by any means issue or communicate any private
            or public statement that may be critical or disparaging of the
            Company or any of its affiliates, or any of their respective
            products, services, officers, directors or employees.

ARTICLE 9. CLAIMS PROCEDURE

      9.1. COMMITTEE REVIEW. The Executive or, in the event of the Executive's
death, the Executive's Beneficiary (as applicable, the "Claimant") may deliver
to the Committee a written claim for a determination with respect to the amounts
distributable to such Claimant from this Agreement. Such claim shall be
delivered to the Committee care of the Company in accordance with the notice
provisions of Section 11.6. If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within sixty (60) days after
such notice was received by the Claimant. All other claims must be made within
two hundred and seventy (270) days of the date on which the event that caused
the claim to arise occurred (subject to Section 3(r) as to the timing
<PAGE>
of certain claims related to a purported termination for Good Reason). The claim
must state with particularity the determination desired by the Claimant.

      9.2. NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
claim pursuant to Section 9.1 within a reasonable time, but no later than ninety
(90) days after receiving the claim. If the Committee determines that special
circumstances require an extension of time for processing the claim, written
notice of the extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period. In no event shall such
extension exceed a period of ninety (90) days from the end of the initial
period. The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the Committee expects to render the
benefit determination. The Committee shall notify the Claimant in writing:

      (r)   that the Claimant's requested determination has been made, and that
            the claim has been allowed in full; or

      (s)   that the Committee has reached a conclusion contrary, in whole or in
            part, to the Claimant's requested determination, and such notice
            must set forth in a manner calculated to be understood by the
            Claimant:

            (i)   the specific reason(s) for the denial of the claim, or any
                  part of it;

            (ii)  specific reference(s) to pertinent provisions of this
                  Agreement upon which such denial was based;

            (iii) a description of any additional material or information
                  necessary for the Claimant to perfect the claim, and an
                  explanation of why such material or information is necessary;

            (iv). a statement that the Claimant is entitled to receive, upon
                  request and free of charge, reasonable access to and copies
                  of, all documents, records and other information relevant (as
                  defined in applicable ERISA regulations) to the Claimant's
                  claim for benefits; and

            (v)   a statement of the Claimant's right to seek arbitration
                  pursuant to Section 9.4.

      9.3. PRE AND POST-CHANGE IN CONTROL PROCEDURES. With respect to claims
made prior to the occurrence of a Change in Control, a Claimant's compliance
with the foregoing provisions of this Article 9 is a mandatory prerequisite to a
Claimant's right to commence arbitration pursuant to Section 9.4 with respect to
any claim for benefits under this Agreement. With respect to claims made upon
and after the occurrence of a Change in Control, the Claimant may proceed
directly to arbitration in accordance with Section 9.4 and need not first
satisfy the foregoing provisions of this Article 9.

      9.4. ARBITRATION OF CLAIMS. All claims or controversies arising out of or
in connection with this Agreement, that the Company may have against any
Claimant, or that any Claimant may have against the Company or against its
officers, directors, employees or agents acting in their capacity as such,
shall, subject to the initial review provided for in the foregoing provisions of
this Article 9 that are effective with respect to claims brought prior to the
occurrence of a Change in Control, be resolved through arbitration as provided
in this Section 9.4. The decision of an arbitrator on any issue, dispute, claim
or controversy submitted for arbitration, shall be final and binding upon the
Company and the Claimant and that judgment may be entered on the award of the
arbitrator in any court having proper jurisdiction. The arbitrator shall review
de novo any claim previously considered by the Committee pursuant to Section
9.1.

            Except as otherwise provided in this procedure or by mutual
agreement of the parties, any arbitration shall be administered: (1) in
accordance with the then-current Model Employment Arbitration Procedures of the
American Arbitration Association ("AAA") before an arbitrator who is licensed to
practice
<PAGE>
law in the state in which the arbitration is convened; or (2) if locally
available, the Judicial Arbitration & Mediation Services, Inc. ("JAMS"), in
accordance with the JAMS procedures then in effect. The party who did not
initiate the claim can designate between JAMS or AAA (the "Tribunal"). The
arbitration shall be held in the city in which the Claimant is or was last
employed by the Company in the nearest Tribunal office or at a mutually
agreeable location. Pre-hearing and post-hearing procedures may be held by
telephone or in person as the arbitrator deems necessary.

            The arbitrator shall be selected as follows: if the parties cannot
agree on an arbitrator, the Tribunal (JAMS or AAA) shall then provide the names
of nine (9) available arbitrators experienced in business employment matters
along with their resumes and fee schedules. Each party may strike all names on
the list it deems unacceptable. If more than one common name remains on the list
of all parties, the parties shall strike names alternately until only one
remains. The party who did not initiate the claim shall strike first. If no
common name remains on the lists of the parties, the Tribunal shall furnish an
additional list or lists until an arbitrator is selected.

            The arbitrator shall interpret this Agreement, any applicable
Company policy or rules and regulations, any applicable substantive law (and the
law of remedies, if applicable) of the state in which the claim arose, or
applicable federal law. In reaching his or her decision, the arbitrator shall
have no authority to change or modify any lawful Company policy, rule or
regulation, or this Agreement. The arbitrator, and not any federal, state or
local court or agency, shall have exclusive and broad authority to resolve any
dispute relating to the interpretation, applicability, enforceability or
formation of this Agreement, including but not limited to, any claim that all or
any part of this Agreement is voidable.

            The arbitration shall be conducted pursuant to California Code of
Civil Procedure Sections 1282 et. seq.

       9.5. CLAIMS EXPENSES; LEGAL FEES AND EXPENSES OF EXECUTIVE. The Company
shall advance and bear all reasonable expenses of any arbitration conducted
under this Section 9 and all reasonable legal fees and expenses incurred by
Claimant in pursuing a claim at and through any stage of review or dispute
resolution pursuant to this Section 9; provided, however, that if it is finally
determined that the Claimant did not pursue the claim or commence the
arbitration in good faith and had no reasonable basis therefore, the Claimant
shall repay all of Claimant's legal fees and expenses advanced by the Company
and shall reimburse the Company for its reasonable legal fees and expenses in
connection therewith (except that, in any event, the Company shall be
responsible for payment of the forum costs of any arbitration hereunder,
including the arbitrator's fee).

ARTICLE 10. SUCCESSORS AND ASSIGNMENT

      10.1. SUCCESSORS TO THE COMPANY. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
of all or substantially all of the business and/or assets of the Company or of
any division or subsidiary thereof (the business and/or assets of which
constitute at least fifty percent (50%) of the total business and/or assets of
the Company) to expressly assume and agree to perform the Company's obligations
under this Agreement in the same manner and to the same extent that the Company
would be required to perform them if such succession had not taken place.
Failure of the Company to obtain such assumption and agreement in a written
instrument prior to the effective date of any such succession shall be a breach
of this Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as they would be entitled to
hereunder if they had terminated their employment with the Company voluntarily
for Good Reason. Except for the purpose of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Executive's
Effective Date of Termination if the Executive so elects, but any delay or
failure by the Executive to so elect shall not be a waiver or release of any
rights hereunder which may be asserted at any time.
<PAGE>
      10.2. ASSIGNMENT BY THE EXECUTIVE. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If the Executive dies while any amount would still be
payable to him hereunder had he continued to live, all such amounts, unless
otherwise provided herein, shall be paid to the Executive's Beneficiary in
accordance with the terms of this Agreement. If the Executive has not named a
Beneficiary, then such amounts shall be paid to the Executive's devisee,
legatee, or other designee, or if there is no such designee, to the Executive's
estate.

ARTICLE 11. MISCELLANEOUS

      11.1. EMPLOYMENT STATUS. Except as may be provided under any other written
agreement between the Executive and the Company, the employment of the Executive
by the Company is "at will," and, prior to the effective date of a Change in
Control, may be terminated by either the Executive or the Company at any time,
subject to applicable law.

      11.2. BENEFICIARIES. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. The Executive may make or
change such designation at any time, provided that any designation or change
thereto must be in the form of a signed writing acceptable to and received by
the Committee.

      11.3. GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.

      11.4. SEVERABILITY. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of this Agreement, and this Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.

      11.5. MODIFICATION. Except as expressly provided in Section 3(r) with
respect to certain waivers of circumstances that would otherwise constitute Good
Reason, no provision of this Agreement may be modified, waived, or discharged
unless such modification, waiver, or discharge is agreed to in writing and
signed by the Executive and by an authorized member of the Committee or its
designee, or by the respective parties' legal representatives and successors.

      11.6. NOTICE. For purposes of this Agreement, notices, including a Notice
of Termination, and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
or on the date stamped as received by the U.S. Postal Service for delivery by
certified or registered mail, postage prepaid and addressed: (i) if to the
Executive, to his latest address as reflected on the records of the Company, and
(ii) if to the Company: Power-One, Inc., 740 Calle Plano, Camarillo, California
93012, Attn: Corporate Secretary, or to such other address as the Company may
furnish to the Executive in writing with specific reference to this Agreement
and the importance of the notice, except that notice of change of address shall
be effective only upon receipt.

      11.7. APPLICABLE LAW. To the extent not preempted by the laws of the
United States, the laws of the State of California shall be the controlling law
in all matters relating to this Agreement. Any statutory reference in this
Agreement shall also be deemed to refer to all applicable final rules and final
regulations promulgated under or with respect to the referenced statutory
provision.

                                       9
<PAGE>
            IN WITNESS WHEREOF, the parties have executed this Agreement on this
28th day of April, 2004.

POWER-ONE, INC.                           EXECUTIVE

By: /s/ RANDALL H. HOLLIDAY               /s/ DONNA M. SCHNOPP (KOEP)
   --------------------------------       -------------------------------------

Print Name:  Randall H. Holliday          Donna M. Schnopp (Koep)

Its: Secretary and General Counsel<PAGE>

                                                                    EXHIBIT 10.5

                                 POWER-ONE, INC.
                     CHANGE IN CONTROL SEVERANCE AGREEMENT

            THIS CHANGE IN CONTROL SEVERANCE AGREEMENT is made and entered into
by and between Power-One, Inc., a Delaware corporation (hereinafter referred to
as the "Company") and Randall H. Holliday (hereinafter referred to as the
"Executive").

                                    RECITALS

            A. The Board of Directors of the Company has approved the Company
entering into a severance agreement with the Executive.

            B. The Executive is a key executive of the Company.

            C. Should the possibility of a Change in Control of the Company
arise, the Board believes it imperative that the Company and the Board should be
able to rely upon the Executive to continue in his position, and that the
Company should be able to receive and rely upon the Executive's advice, if
requested, as to the best interests of the Company and its stockholders without
concern that the Executive might be distracted by the personal uncertainties and
risks created by the possibility of a Change in Control.
<PAGE>
            D. Should the possibility of a Change in Control arise, in addition
to his regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management and the Board
as to whether such Change in Control would be in the best interests of the
Company and its stockholders, and to take such other actions as the Board might
determine to be appropriate.

            NOW THEREFORE, to help assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat, or occurrence of a Change in
Control of the Company, and to induce the Executive to remain in the employ of
the Company in the face of these circumstances and for other good and valuable
consideration, the Company and the Executive agree as follows:

ARTICLE 1.  TERM

      This Agreement shall be effective as of April 28, 2004 (the "Effective
Date"). This Agreement will continue in effect through April 27, 2005. However,
at the end of such one (1) year period and, if extended, at the end of each
additional year thereafter, the term of this Agreement shall be extended
automatically for one (1) additional year, unless the Committee delivers written
notice at least six (6) months prior to the end of such term, or extended term,
to the Executive that this Agreement will not be extended, and if such notice is
timely given this Agreement will terminate at the end of the term then in
progress; provided, however, that this provision for automatic extension shall
have no application following a Change in Control.

      However, in the event a Change in Control occurs during the original or
any extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change in Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive. Any subsequent Change in Control ("Subsequent Change in Control")
that occurs during the original or any extended term shall also continue the
term of this Agreement until the later of: (i) twenty-four (24) months beyond
the month in which such Subsequent Change in Control occurred; or (ii) until all
obligations of the Company hereunder have been fulfilled, and until all benefits
required hereunder have been paid to the Executive; provided, however, that if a
Subsequent Change in Control occurs, it shall only be considered a Change in
Control under this Agreement if it occurs no later than twenty-four (24) months
after the immediately preceding Change in Control or Subsequent Change in
Control.

ARTICLE 2.  ERISA

      This Agreement is intended as part of a severance program of the Company
that constitutes (i) a pension plan within the meaning of Section 3(2) of ERISA,
and (ii) an unfunded pension plan maintained by the Company for a select group
of management or highly compensated employees within the meaning of Department
of Labor Regulation 2520.104-23 promulgated under ERISA, and Sections 201, 301,
and 401 of ERISA.

ARTICLE 3.  DEFINITIONS

            Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized:

      (a)   "Agreement" means this Change in Control Severance Agreement.

      (b)   "Base Salary" means the salary of record paid to the Executive by
            the Company as annual salary (whether or not deferred), but excludes
            amounts received under incentive or other bonus plans.
<PAGE>
      (c)   "Beneficial Owner" shall have the meaning ascribed to such term in
            Rule 13d-3 of the General Rules and Regulations under the Exchange
            Act.

      (d)   "Beneficiary" means the persons or entities designated or deemed
            designated by the Executive pursuant to Section 11.2.

      (e)   "Board" means the Board of Directors of the Company.

      (f)   "Cause" means the occurrence of either or both of the following:

            (i)   the Executive's conviction for committing an act of fraud,
                  embezzlement, theft, or other act constituting a felony (other
                  than traffic related offenses or as a result of vicarious
                  liability); or

            (ii)  the willful engaging by the Executive in misconduct that is
                  significantly injurious to the Company. However, no act or
                  failure to act, on the Executive's part shall be considered
                  "willful" unless done, or omitted to be done, by the Executive
                  not in good faith and without reasonable belief that the
                  Executive's action or omission was in the best interest of the
                  Company.

      (g)   "Change in Control" of the Company shall be deemed to have occurred
            as of the first day that any one or more of the following conditions
            shall have been satisfied:

            (i)   Any Person (other than those Persons in control of the Company
                  as of the Effective Date) becomes the Beneficial Owner,
                  directly or indirectly, of securities of the Company
                  representing twenty percent (20%) or more of either (1) the
                  then-outstanding shares of common stock of the Company (the
                  "Outstanding Company Common Stock") or (2) the combined voting
                  power of the then-outstanding voting securities of the Company
                  entitled to vote generally in the election of directors (the
                  "Outstanding Company Voting Securities"); provided, however,
                  that, for purposes of this clause (i), the following
                  acquisitions shall not constitute a Change in Control: (A) any
                  acquisition directly from the Company, (B) any acquisition by
                  the Company, (C) any acquisition by any employee benefit plan
                  (or related trust) sponsored or maintained by the Company or
                  any affiliate of the Company or a successor, or (D) any
                  acquisition by any entity pursuant to a transaction that
                  complies with Sections (g)(ii), (iii) and (iv) below; further
                  provided, that, creditors of the Company who become
                  stockholders of the Company in connection with any bankruptcy
                  of the Company under the laws of the United States shall not,
                  by virtue of such bankruptcy, be deemed a "group" or a single
                  Person for the purposes of this clause (i) (provided that any
                  one of such creditors may trigger a Change in Control pursuant
                  to this clause (i) if such creditor's ownership of Company
                  securities equals or exceeds the foregoing threshold);

            (ii)  On any day after the Effective Date (the "Measurement Date")
                  Continuing Directors cease for any reason to constitute
                  either: (1) if the Company does not have a Parent, a majority
                  of the Board; or (2) if the Company has a Parent, a majority
                  of the Board of Directors of the Controlling Parent. A
                  director is a "Continuing Director" if he or she either:

                  (1)   was a member of the Board on the applicable Initial Date
                        (an "Initial Director"); or
<PAGE>
                  (2)   was elected to the Board (or the Board of Directors of
                        the Controlling Parent, as applicable), or was nominated
                        for election by the Company's or the Controlling
                        Parent's stockholders, by a vote of at least two-thirds
                        (2/3) of the Initial Directors then in office.

                  A member of the Board (or Board of Directors of the
                  Controlling Parent, as applicable) who was not a director on
                  the applicable Initial Date shall be deemed to be an Initial
                  Director for purposes of clause (2) above if his or her
                  election, or nomination for election by the Company's or the
                  Controlling Parent's stockholders, was approved by a vote of
                  at least two-thirds (2/3) of the Initial Directors (including
                  directors elected after the applicable Initial Date who are
                  deemed to be Initial Directors by application of this
                  provision) then in office; provided that such member of the
                  Board shall not be deemed to be an Initial Director if his or
                  her initial assumption of office occurs as a result of an
                  actual or threatened election contest with respect to the
                  election or removal of directors or other actual or threatened
                  solicitation of proxies or consents by or on behalf of a
                  Person other than the Board.

                  "Initial Date" means the later of (1) the Effective Date or
                  (2) the date that is two (2) years before the Measurement
                  Date.

            (iii) Consummation of a reorganization, merger, statutory share
                  exchange or consolidation or similar corporate transaction
                  involving the Company or any of its subsidiaries, a sale or
                  other disposition of all or substantially all of the assets of
                  the Company, or the acquisition of assets or stock of another
                  entity by the Company or any of its subsidiaries (each, a
                  "Business Combination"), in each case unless, following such
                  Business Combination, (1) all or substantially all of the
                  individuals and entities that were the Beneficial Owners of
                  the Outstanding Company Common Stock and the Outstanding
                  Company Voting Securities immediately prior to such Business
                  Combination Beneficially Own, directly or indirectly, more
                  than sixty percent (60%) of the then-outstanding shares of
                  common stock and the combined voting power of the
                  then-outstanding voting securities entitled to vote generally
                  in the election of directors, as the case may be, of the
                  entity resulting from such Business Combination (including,
                  without limitation, an entity that, as a result of such
                  transaction, is a Parent of the Company or the successor of
                  the Company) in substantially the same proportions as their
                  ownership immediately prior to such Business Combination of
                  the Outstanding Company Common Stock and the Outstanding
                  Company Voting Securities, as the case may be, (2) no Person
                  (excluding any entity resulting from such Business Combination
                  or a Parent of the Company or any successor of the Company or
                  any employee benefit plan (or related trust) of the Company or
                  such entity resulting from such Business Combination or a
                  Parent of the Company or the successor entity) Beneficially
                  Owns, directly or indirectly, twenty percent (20%) or more of,
                  respectively, the then-outstanding shares of common stock of
                  the entity resulting from such Business Combination or the
                  combined voting power of the then-outstanding voting
                  securities of such entity, except to the extent that the
                  ownership in excess of twenty percent (20%) existed prior to
                  the Business Combination, and (3) a Change in Control is not
                  triggered pursuant to clause (ii) above with respect to the
                  Company (including any successor entity) or any Parent of the
                  Company (or the successor entity).

            (iv)  A complete liquidation or dissolution of the Company other
                  than in the context of a transaction that does not constitute
                  a Change in Control of the Company under clause (iii) above.
<PAGE>
            Notwithstanding the foregoing, in no event shall a transaction or
            other event that occurred prior to the Effective Date constitute a
            Change in Control. Notwithstanding anything to the contrary in
            clause (iii) above to the contrary, a change in ownership of the
            Company resulting from creditors of the Company becoming
            stockholders of the Company in connection with any bankruptcy of the
            Company under the laws of the United States shall not trigger a
            Change in Control pursuant to clause (iii) above.

      (h)   "Code" means the United States Internal Revenue Code of 1986, as
            amended.

      (i)   "Committee" means the Compensation Committee of the Board, or any
            other committee appointed by the Board to perform the functions of
            the Compensation Committee.

      (j)   "Company" means Power-One, Inc., a Delaware corporation (including,
            for purposes of determining whether the Executive is employed by the
            Company, any and all subsidiaries specified by the Committee), or
            any successor thereto as provided in Article 10.

      (k)   "Controlling Parent" means the Company's Parent so long as a
            majority of the voting stock or voting power of that Parent is not
            Beneficially Owned, directly or indirectly through one or more
            subsidiaries, by any other Person. In the event that the Company has
            more than one "Parent," then "Controlling Parent" shall mean the
            Parent of the Company the majority of the voting stock or voting
            power of which is not Beneficially Owned, directly or indirectly
            through one or more subsidiaries, by any other Person.

      (l)   "Disability" means disability as defined in the Company's long-term
            disability plan in which the Executive participates at the relevant
            time or, if the Executive does not participate in a Company
            long-term disability plan at the relevant time, such term shall mean
            a "permanent and total disability" within the meaning of Section
            22(e)(3) of the Code.

      (m)   "Effective Date" has the meaning given to such term in Article 1
            hereof.

      (n)   "Effective Date of Termination" means the date on which a Qualifying
            Termination occurs.

      (o)   "ERISA" means the Employee Retirement Income Security Act of 1974,
            as amended.

      (p)   "Exchange Act" means the United States Securities Exchange Act of
            1934, as amended.

      (q)   "Executive" means the individual identified in the first sentence,
            and on the signature page, of this Agreement.

      (r)   "Good Reason" means, without the Executive's express written
            consent, the occurrence of any one or more of the following:

            (i)   A material reduction in the nature or status of the
                  Executive's authorities, duties, and/or responsibilities,
                  (when such authorities, duties, and/or responsibilities are
                  viewed in the aggregate) from their level in effect on the day
                  immediately prior to the start of the Protected Period, other
                  than an insubstantial and inadvertent act that is remedied by
                  the Company promptly after receipt of notice thereof given by
                  the Executive; provided that if the Executive is a vice
                  president, for purposes of the preceding phrase the
                  Executive's loss of vice president status (other than a
                  promotion to a higher level officer) will constitute Good
                  Reason. In addition, Good Reason will be deemed to exist if
                  the Executive's reporting relationship is diminished from the
                  Executive's reporting relationship in effect on the day
                  immediately prior to the start of the Protected Period (for
<PAGE>
                  example, if the Executive reports directly to the Company's
                  Chief Executive Officer on the day immediately prior to the
                  start of the Protected Period, Good Reason will be deemed to
                  exist if the Executive's reporting relationship is changed
                  such that the Executive no longer reports directly to the
                  Chief Executive Officer of the Company or any Parent or
                  directly to the Board of Directors of the Company or any
                  Parent). The change in status of the Company from a
                  publicly-traded company to a company the securities of which
                  are not publicly-traded (including any related termination of
                  the Company's reporting obligations under the Exchange Act)
                  shall not, in and of itself, constitute Good Reason or a
                  material reduction in the nature or status of the Executive's
                  authorities, duties, and/or responsibilities.

            (ii)  A reduction by the Company in the Executive's Base Salary as
                  in effect immediately prior to the start of the Protected
                  Period or as the same shall be increased from time to time.

            (iii) A significant reduction by the Company of the Executive's
                  aggregate incentive opportunities under the Company's short
                  and/or long-term incentive programs, as such opportunities
                  exist immediately prior to the start of the Protected Period,
                  or as such opportunities may be increased from time to time.
                  For this purpose, a significant reduction in the Executive's
                  incentive opportunities shall be deemed to have occurred in
                  the event his targeted annualized award opportunities and/or
                  the degree of probability of attainment of such annualized
                  award opportunities are materially diminished by the Company
                  from the levels and probability of attainment that existed
                  immediately prior to the start of the Protected Period. If the
                  Company has a Parent, a significant reduction of the
                  Executive's aggregate incentive opportunities under the
                  Company's short and/or long-term incentive programs shall not
                  be deemed to have occurred if there is an across-the-board
                  reduction in or elimination of any such program which
                  similarly affects all executives of the Company and the
                  reduced or eliminated incentives are replaced by a similar
                  program of a Parent.

            (iv)  The failure of the Company to maintain (x) the Executive's
                  relative level of coverage and accruals under the Company's
                  employee benefit and/or retirement plans, policies, practices,
                  or arrangements in which the Executive participates
                  immediately prior to the start of the Protected Period, both
                  in terms of the amount of benefits provided, and amounts
                  accrued and (y) the relative level of the Executive's
                  participation in such plans, policies, practices, or
                  arrangements on a basis at least as beneficial as, or
                  substantially equivalent to, that on which the Executive
                  participated in such plans immediately prior to the start of
                  the Protected Period. For this purpose, the Company may
                  eliminate and/or modify existing programs and coverage levels;
                  provided, however, that the Executive's level of coverage
                  under all such programs must be at least as great as is
                  provided to executives who have the same or lesser levels of
                  reporting responsibilities within the Company's organization.

            (v)   The failure of the Company to obtain a satisfactory agreement
                  from any successor to the Company to assume and agree to
                  perform this Agreement, as contemplated in Article 10.

            (vi)  Any purported termination by the Company of the Executive's
                  employment that is not effected pursuant to a Notice of
                  Termination satisfying the requirements of Section 4.6 and for
                  purposes of this Agreement, no such purported termination
                  shall be effective.

            (vii) The Executive is informed by the Company that his principal
                  place of employment for the Company will be relocated to a
                  location that is greater than thirty-five (35) miles away
<PAGE>
                  from the Executive's principal place of employment for the
                  Company at the start of the corresponding Protected Period;
                  provided that, if the Company communicates an intended
                  effective date for such relocation, in no event shall Good
                  Reason exist pursuant to this clause (vii) more than ninety
                  (90) days before such intended effective date.

            The Executive's right to terminate employment for Good Reason shall
            not be affected by the Executive's incapacity due to physical or
            mental illness. The Executive's continued employment shall not
            constitute a consent to, or a waiver of rights with respect to, any
            circumstances constituting Good Reason herein; provided, however,
            that if the Executive does not terminate employment and claim Good
            Reason for such termination within ninety (90) days after the
            Executive has knowledge of an event or circumstance that would
            constitute Good Reason, then the Executive shall be deemed to have
            waived his right to claim Good Reason as to that specific fact or
            circumstance (except that the event or circumstance may be
            considered for purposes of determining whether any subsequent,
            separate, event or circumstance constitutes Good Reason; for
            example, and without limitation, a reduction in the Executive's
            authorities that is deemed waived by operation of this clause may be
            considered for purposes of determining whether any subsequent
            reduction in the Executive's authorities (when taken into
            consideration with the first reduction) constitutes a "material
            reduction" in the nature or status of the Executive's authorities
            from their level in effect on the day immediately prior to the start
            of the Protected Period).

      (s)   "Parent" means an entity that Beneficially Owns a majority of the
            voting stock or voting power of the Company, or all or substantially
            all of the Company's assets, directly or indirectly through one or
            more subsidiaries.

      (t)   "Qualifying Termination" has the meaning given to such term in
            Section 4.2(a).

      (u)   "Severance Benefits" means the payments and/or benefits provided in
            Section 4.3.

ARTICLE 4.  SEVERANCE BENEFITS

      4.1.  RIGHT TO SEVERANCE BENEFITS. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Section 4.3, if the
Executive has incurred a Qualifying Termination.

            The Executive shall not be entitled to receive Severance Benefits if
his employment terminates (regardless of the reason) before the Protected Period
(as such term is defined in Section 4.2(c)) corresponding to a Change in Control
of the Company or more than twenty-four (24) months after the date of a Change
in Control of the Company.

      4.2.  QUALIFYING TERMINATION.

      (t)   Subject to Sections 4.2(d), 4.4, and 4.5, the occurrence of any one
            or more of the following events within the Protected Period
            corresponding to a Change in Control of the Company, or within
            twenty-four (24) calendar months following the date of a Change in
            Control of the Company shall constitute a "Qualifying Termination":

            (i)   An involuntary termination of the Executive's employment by
                  the Company for reasons other than Cause;

            (ii)  A voluntary termination of employment by the Executive for
                  Good Reason;

            (iii) A successor company fails or refuses to assume by written
                  instrument the Company's obligations under this Agreement, as
                  required by Article 10; or
<PAGE>
            (iv)  The Company or any successor company repudiates or breaches
                  any of the provisions of this Agreement.

      (b)   If more than one of the events set forth in Section 4.2(a) occurs,
            such events shall constitute but a single Qualifying Termination and
            the Executive shall be entitled to but a single payment of the
            Severance Benefits.

      (c)   The "Protected Period" corresponding to a Change in Control of the
            Company shall be a period of time determined in accordance with the
            following:

            (i)   If the Change in Control is triggered by a tender offer for
                  shares of the Company's stock or by the offeror's acquisition
                  of shares pursuant to such a tender offer, the Protected
                  Period shall commence on the date of the initial tender offer
                  and shall continue through and including the date of the
                  Change in Control; provided that in no case will the Protected
                  Period commence earlier than the date that is six (6) months
                  prior to the Change in Control.

            (ii)  If the Change in Control is triggered by a merger,
                  consolidation, or reorganization of the Company with or
                  involving any other corporation, the Protected Period shall
                  commence on the date that serious and substantial discussions
                  first take place to effect the merger, consolidation, or
                  reorganization and shall continue through and including the
                  date of the Change in Control; provided that in no case will
                  the Protected Period commence earlier than the date that is
                  six (6) months prior to the Change in Control.

            (iii) In the case of any Change in Control not described in clause
                  (i) or (ii) above, the Protected Period shall commence on the
                  date that is six (6) months prior to the Change in Control and
                  shall continue through and including the date of the Change in
                  Control.

      (d)   Notwithstanding anything else contained herein to the contrary, the
            Executive's termination of employment on account of reaching
            mandatory retirement age, as such age may be defined from time to
            time in policies adopted by the Company prior to the commencement of
            the Protected Period, and consistent with applicable law, shall not
            be a Qualifying Termination.

      (e)   Notwithstanding anything else contained herein to the contrary
            (other than those provisions that contain an express exception to
            this Section 4.2(e)), the Executive's Severance Benefits under this
            Agreement shall be reduced by the severance benefits (including,
            without limitation, any other change-in-control severance benefits
            and any other severance benefits generally) that the Executive may
            be entitled to under any other plan, program, agreement or other
            arrangement with the Company (including, without limitation, any
            such benefits provided for by an employment agreement). For purposes
            of the foregoing, any cash severance benefits payable to the
            Executive under any other plan, program, agreement or other
            arrangement with the Company shall offset the cash severance
            benefits otherwise payable to the Executive under this Agreement on
            a dollar-for-dollar basis. For purposes of the foregoing, non-cash
            severance benefits to be provided to the Executive under any other
            plan, program, agreement or other arrangement with the Company shall
            offset any corresponding benefits otherwise to be provided to the
            Executive under this Agreement or, if there are no corresponding
            benefits otherwise to be provided to the Executive under this
            Agreement, the value of such benefits shall offset the cash
            severance benefits otherwise payable to the Executive under this
            Agreement on a dollar-for-dollar basis. If the amount of other
            benefits to be offset against the cash severance benefits otherwise
            payable to the Executive under this Agreement in accordance with the
            preceding two sentences exceeds the amount of cash severance
            benefits otherwise payable to the Executive under this Agreement,
            then
<PAGE>
            the excess may be used to offset other non-cash severance benefits
            otherwise to be provided to the Executive under this Agreement on a
            dollar-for-dollar basis. For purposes of this paragraph, the
            Committee shall reasonably determine the value of any non-cash
            benefits.

      4.3.  DESCRIPTION OF SEVERANCE BENEFITS. In the event that the Executive
becomes entitled to receive Severance Benefits, as provided in Sections 4.1 and
4.2, the Company shall pay to the Executive and provide him with the following:

      (a)   An amount equal to one (1) times the Executive's highest annualized
            rate of Base Salary in effect at any time after the commencement of
            the Protected Period and on or before the Effective Date of
            Termination.

      (b)   An amount equal to one (1) times the highest aggregate bonus(es)
            paid by the Company to the Executive for any one of the three (3)
            full fiscal years of the Company immediately preceding Executive's
            Effective Date of Termination.

      (c)   A continuation of the Executive's medical coverage, dental coverage,
            and group term life insurance for the Executive, his spouse, and his
            eligible dependents for the one (1) year(s) following the
            Executive's Effective Date of Termination; provided that such
            continuation of coverage shall run concurrently with COBRA
            continuation or similar state law continuation periods; and provided
            further that the continuation of such coverage shall be discontinued
            prior to the end of the one (1) year period in the event the
            Executive has available substantially similar benefits from a
            subsequent employer, as reasonably determined by the Committee.
            Except as provided in the next sentence, such benefits shall be
            provided to the Executive at the same premium cost, and at the same
            coverage level, as in effect as of the Executive's Effective Date of
            Termination. However, in the event the premium cost and/or level of
            coverage shall change for all employees of the Company, the cost
            and/or coverage level, likewise, shall change for the Executive in a
            corresponding manner. The continuation of coverage for the period
            contemplated by this Section 4.3(c) shall be coordinated with and
            paid secondary to any benefits that the Executive, his spouse, or
            his dependent receives from another employer or from Medicare
            (following the Executive's, his spouse's, and/or his dependent's
            entitlement to Medicare benefits) to the maximum extent permissible
            under relevant law.

      (d)   A lump-sum cash amount equal to the portion of the Executive's
            account under the Company's qualified retirement plan (including,
            without limitation, any 401(k) matching contributions) that has not
            become vested under the terms of such plan as of the Effective Date
            of Termination.

      (e)   A lump-sum cash amount equal to the portion of the Executive's
            account under any Company nonqualified deferred compensation or
            other supplemental retirement plan that has not become vested under
            the terms of such plan as of the Effective Date of Termination.

      (f)   If any stock option, restricted stock, or other equity or
            equity-based award granted by the Company to the Executive is
            subject to a vesting schedule and does not automatically become
            fully vested upon or in connection with the termination of the
            Executive's employment with the Company or the related Change in
            Control event, the portion of such award that was scheduled to vest
            (assuming that the Executive continued to be employed by the
            Company) at any time within the one (1) year period following the
            Effective Date of Termination shall automatically become vested as
            of the Effective Date of Termination; provided, however, that any
            portion of such award remaining unvested after giving effect to the
            foregoing clause shall immediately terminate upon the Effective Date
            of Termination. In the event that the Effective Date of Termination
            occurs during the Protected Period related to a Change in Control
            and a portion of a stock option
<PAGE>
            or other award referred to in the preceding sentence is deemed to
            become vested in connection with the termination of the Executive's
            employment pursuant to the preceding sentence, and such portion of
            the award would otherwise terminate or expire upon or prior to the
            date of the related Change in Control, the Executive shall be given
            a reasonable opportunity to exercise such accelerated portion of the
            option or other award before it terminates.

      (g)   The Company shall pay or reimburse the Executive for up to $15,000
            of outplacement services obtained by the Executive during the twelve
            (12) month period following the Effective Date of Termination.

      4.4.  TERMINATION DUE TO DISABILITY, DEATH OR RETIREMENT. Termination of
the Executive's employment due to the Executive's death or Disability is not a
Qualifying Termination. However, if immediately prior to the condition or event
leading to, or the commencement of, the Disability of the Executive (but not the
death of the Executive), the Executive would have experienced a Qualifying
Termination if he had terminated at that time, then upon termination of his
employment for Disability he shall be entitled to the benefits provided by this
Agreement for a Qualifying Termination. A voluntary termination of employment by
the Executive due to the Executive's retirement is not a Qualifying Termination.
However, if immediately prior to the Executive's retirement (but not death), the
Executive would have experienced a Qualifying Termination if he had terminated
at that time, then upon his retirement he shall (subject to Section 4.2(d)) be
entitled to the benefits provided by this Agreement for a Qualifying
Termination.

      4.5.  TERMINATION FOR CAUSE OR BY THE EXECUTIVE OTHER THAN FOR GOOD REASON
Termination of the Executive's employment by the Company for Cause or by the
Executive other than for Good Reason does not constitute a Qualifying
Termination.

      4.6.  NOTICE OF TERMINATION. Any termination by the Company for Cause or
by the Executive for Good Reason shall be communicated by a Notice of
Termination. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon, and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.

ARTICLE 5.  FORM AND TIMING OF SEVERANCE BENEFITS; TAX WITHHOLDING;

      5.1.  FORM AND TIMING OF SEVERANCE BENEFITS. The Severance Benefits
described in Section 4.3(a), 4.3(b), 4.3(d) and 4.3(e) shall be paid in cash to
the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination, but in no event beyond thirty (30) days from such
date.

      5.2.  WITHHOLDING OF TAXES. The Company shall be entitled to withhold from
any amounts payable under or pursuant to this Agreement all taxes as legally
shall be required (including, without limitation, any United States Federal
taxes, and any other state, city, or local taxes).

ARTICLE 6.  SECTION 280G POTENTIAL CUT-BACK

      6.1.  CUT-BACK. Notwithstanding anything contained in this Agreement to
the contrary, to the extent that any payment or distribution of any type to or
for the Executive by the Company or any of its affiliates, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (including, without limitation, any accelerated vesting of stock
options or restricted stock granted by the Company pursuant to this Agreement or
otherwise) (collectively, the "Total Payments") is or will be subject to the
excise tax imposed under Section 4999 of the Code (which reference includes, for
purposes of this Agreement, any similar successor provision to Section 4999),
then the Total Payments shall be reduced (but not below zero) so that the
maximum amount of the Total Payments (after reduction) shall be one dollar
($1.00) less
<PAGE>
than the amount which would cause the Total Payments to be subject to the excise
tax imposed by Section 4999 of the Code. Unless the Executive shall have given
prior written notice to the Company to effectuate a reduction in the Total
Payments if such a reduction is required, the Company shall reduce or eliminate
the Total Payments by first reducing or eliminating any cash severance benefits,
then by reducing or eliminating any accelerated vesting of stock options, then
by reducing or eliminating any accelerated vesting of restricted stock, then by
reducing or eliminating any other remaining Total Payments. The preceding
provisions of this Section 6.1 shall take precedence over the provisions of any
other plan, arrangement or agreement governing the Executive's rights and
entitlements to any benefits or compensation; provided, however, that if the
Executive is a party to a written employment or other written agreement with the
Company that contains express provisions for a so-called "gross-up" payment to
the extent that excise taxes are imposed under Section 4999 of the Code, the
Section 280G and/or Section 4999 provisions of such employment or other
agreement shall control.

      6.2.  DETERMINATION. Any determination that Total Payments to the
Executive must be reduced or eliminated in accordance with the forgoing
provisions of this Section 6 and the assumptions to be utilized in arriving at
such determination, shall be made by a nationally recognized accounting firm or
consulting firm with experience in such matters selected by the Company (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and the Executive within fifteen (15) business days after the date
such calculation is requested by the Company or the Executive. In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Executive shall appoint
another nationally recognized accounting or consulting firm with experience in
such matters to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company. If a
reduction or elimination of Total Payments to the Executive in accordance with
the foregoing is necessary based on the Accounting Firm's determination, the
Accounting Firm shall furnish the Executive with a written opinion that failure
to limit the amount of the Total Payments would result in the imposition of a
tax under Section 4999 of the Code. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Total Payments to the Executive which will not have been made by the Company
should have been made ("Underpayment"). The Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive. In the
event that any Total Payment made to the Executive shall be determined by the
Accounting Firm to result in the imposition of any tax under Section 4999 of the
Code, the Executive shall promptly repay the amount of such excess to the
Company together with interest on such amount (at the same rate as is applied to
determine the present value of payments under Section 280G or any successor
thereto), from the date the reimbursable payment was received by the Executive
to the date the same is repaid to the Company.

ARTICLE 7.  THE COMPANY'S PAYMENT OBLIGATION

      7.1.  PAYMENT OF OBLIGATIONS ABSOLUTE. Except as provided in Sections
4.2(e) and 5.2 and in Article 6, the Company's obligation to make the payments
and the arrangements provided for herein shall be absolute and unconditional,
and shall not be affected by any circumstances, including, without limitation,
any offset, counterclaim, recoupment, defense, or other right which the Company
may have against the Executive or anyone else. All amounts payable by the
Company hereunder shall be paid without notice or demand. Each and every payment
made hereunder by the Company shall be final, and the Company shall not seek to
recover all or any part of such payment from the Executive or from whoever may
be entitled thereto, for any reasons whatsoever, except as otherwise provided in
Article 6 or Article 9.

            The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other
<PAGE>
employment shall in no event effect any reduction of the Company's obligations
to make the payments and arrangements required to be made under this Agreement,
except to the extent provided in Section 4.3(c).

      7.2.  CONTRACTUAL RIGHT TO BENEFITS. This Agreement establishes and vests
in the Executive a contractual right to the benefits to which he or she is
entitled hereunder. The Company expressly waives any ability, if possible, to
deny liability for any breach of its contractual commitment hereunder upon the
grounds of lack of consideration, accord and satisfaction or any other defense.
In any dispute arising after a Change in Control as to whether the Executive is
entitled to benefits under this Agreement, there shall be a presumption that the
Executive is entitled to such benefits and the burden of proving otherwise shall
be on the Company. However, nothing herein contained shall require or be deemed
to require, or prohibit or be deemed to prohibit, the Company to segregate,
earmark, or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder.

      7.3.  PENSION PLANS; DUPLICATE BENEFITS. All payments, benefits and
amounts provided under this Agreement shall be in addition to and not in
substitution for any pension rights under the Company's tax-qualified pension
plan, supplemental retirement plans, nonqualified deferred compensation plans,
and any disability, workers' compensation or other Company benefit plan
distribution that the Executive is entitled to at his Effective Date of
Termination. Notwithstanding the foregoing, this Agreement shall not create an
inference that any duplicate payments shall be required. No payments made
pursuant to this Agreement shall be considered compensation for purposes of any
such benefit plan. Payment of the Executive's accrued and unpaid Base Salary and
accrued vacation pay through the Executive's Effective Date of Termination shall
be deemed to not duplicate any benefit contemplated by this Agreement and shall
not result in an offset pursuant to Section 4.2(e). If the acceleration of
vesting, lapse of restrictions and/or payout provisions triggered by a Change in
Control as to any award held by the Executive under any long-term incentive plan
are more favorable to the Executive as to that award than the provisions of
Section 4.3(f), the provisions more favorable to the Executive shall control;
provided that if the provisions of such a plan are more favorable to the
Executive in the circumstances and the provisions of such plan are deemed to
control as to an award, Section 4.3(f) shall not be applied to provide any
duplicate benefits or result in any greater vesting as to the award than the
provisions of such plan.

ARTICLE 8.  TRADE SECRETS; NON-SOLICITATION AND NON-DISPARAGEMENT

            By executing this Agreement and again by receiving any benefits
provided for by this Agreement, the Executive agrees follows:

      (u)   In the course of performing his duties for the Company, the
            Executive will receive, and acknowledges that he or she has
            received, confidential information, including without limitation,
            information not available to competitors relating to the Company's
            existing and contemplated financial plans, products, business plans,
            operating plans, research and development information, and customer
            information, all of which is hereinafter referred to as "Trade
            Secrets." The Executive agrees that he or she will not, either
            during his employment or subsequent to the termination of his
            employment with the Company, directly or indirectly disclose,
            publish or otherwise divulge any Trade Secret of the Company or any
            of its affiliates to anyone outside the Company, or use such
            information in any manner which would adversely affect the business
            or business prospects of the Company, without prior written
            authorization from the Company to do so. The Executive further
            agrees that if, at the time of the termination of his employment
            with the Company, he is in possession of any documents or other
            written or electronic materials constituting, containing or
            reflecting Trade Secrets, the Executive will return and surrender
            all such documents and materials to the Company upon leaving its
            employ. The restrictions and protection provided for in this Section
            8(a) shall be in addition to any protection afforded to Trade
            Secrets by law or equity and in addition to any protection afforded
            to Trade Secrets by any other agreement between the Executive and
            the Company.
<PAGE>
      (v)   For a period of one year following the termination of the
            Executive's employment with the Company, the Executive shall not,
            directly or indirectly through, aid, assistance or counsel, on the
            Executive's own behalf or on behalf of another person or entity (i)
            contact, solicit or offer to hire any person who was, within a
            period of six months prior to the termination of the Executive's
            employment with the Company, employed by the Company or one of its
            subsidiaries, or (ii) by any means issue or communicate any private
            or public statement that may be critical or disparaging of the
            Company or any of its affiliates, or any of their respective
            products, services, officers, directors or employees.

ARTICLE 9. CLAIMS PROCEDURE

      9.1. COMMITTEE REVIEW. The Executive or, in the event of the Executive's
death, the Executive's Beneficiary (as applicable, the "Claimant") may deliver
to the Committee a written claim for a determination with respect to the amounts
distributable to such Claimant from this Agreement. Such claim shall be
delivered to the Committee care of the Company in accordance with the notice
provisions of Section 11.6. If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within sixty (60) days after
such notice was received by the Claimant. All other claims must be made within
two hundred and seventy (270) days of the date on which the event that caused
the claim to arise occurred (subject to Section 3(r) as to the timing of certain
claims related to a purported termination for Good Reason). The claim must state
with particularity the determination desired by the Claimant.

      9.2. NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
claim pursuant to Section 9.1 within a reasonable time, but no later than ninety
(90) days after receiving the claim. If the Committee determines that special
circumstances require an extension of time for processing the claim, written
notice of the extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period. In no event shall such
extension exceed a period of ninety (90) days from the end of the initial
period. The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the Committee expects to render the
benefit determination. The Committee shall notify the Claimant in writing:

      (w)   that the Claimant's requested determination has been made, and that
            the claim has been allowed in full; or

      (x)   that the Committee has reached a conclusion contrary, in whole or in
            part, to the Claimant's requested determination, and such notice
            must set forth in a manner calculated to be understood by the
            Claimant:

            (i)   the specific reason(s) for the denial of the claim, or any
                  part of it;

            (ii)  specific reference(s) to pertinent provisions of this
                  Agreement upon which such denial was based;

            (iii) a description of any additional material or information
                  necessary for the Claimant to perfect the claim, and an
                  explanation of why such material or information is necessary;

            (iv). a statement that the Claimant is entitled to receive, upon
                  request and free of charge, reasonable access to and copies
                  of, all documents, records and other information relevant (as
                  defined in applicable ERISA regulations) to the Claimant's
                  claim for benefits; and

            (v)   a statement of the Claimant's right to seek arbitration
                  pursuant to Section 9.4.

      9.3. PRE AND POST-CHANGE IN CONTROL PROCEDURES. With respect to claims
made prior to the occurrence of a Change in Control, a Claimant's compliance
with the foregoing provisions of this Article 9 is a
<PAGE>
mandatory prerequisite to a Claimant's right to commence arbitration pursuant to
Section 9.4 with respect to any claim for benefits under this Agreement. With
respect to claims made upon and after the occurrence of a Change in Control, the
Claimant may proceed directly to arbitration in accordance with Section 9.4 and
need not first satisfy the foregoing provisions of this Article 9.

      9.4. ARBITRATION OF CLAIMS. All claims or controversies arising out of or
in connection with this Agreement, that the Company may have against any
Claimant, or that any Claimant may have against the Company or against its
officers, directors, employees or agents acting in their capacity as such,
shall, subject to the initial review provided for in the foregoing provisions of
this Article 9 that are effective with respect to claims brought prior to the
occurrence of a Change in Control, be resolved through arbitration as provided
in this Section 9.4. The decision of an arbitrator on any issue, dispute, claim
or controversy submitted for arbitration, shall be final and binding upon the
Company and the Claimant and that judgment may be entered on the award of the
arbitrator in any court having proper jurisdiction. The arbitrator shall review
de novo any claim previously considered by the Committee pursuant to Section
9.1.

            Except as otherwise provided in this procedure or by mutual
agreement of the parties, any arbitration shall be administered: (1) in
accordance with the then-current Model Employment Arbitration Procedures of the
American Arbitration Association ("AAA") before an arbitrator who is licensed to
practice law in the state in which the arbitration is convened; or (2) if
locally available, the Judicial Arbitration & Mediation Services, Inc. ("JAMS"),
in accordance with the JAMS procedures then in effect. The party who did not
initiate the claim can designate between JAMS or AAA (the "Tribunal"). The
arbitration shall be held in the city in which the Claimant is or was last
employed by the Company in the nearest Tribunal office or at a mutually
agreeable location. Pre-hearing and post-hearing procedures may be held by
telephone or in person as the arbitrator deems necessary.

            The arbitrator shall be selected as follows: if the parties cannot
agree on an arbitrator, the Tribunal (JAMS or AAA) shall then provide the names
of nine (9) available arbitrators experienced in business employment matters
along with their resumes and fee schedules. Each party may strike all names on
the list it deems unacceptable. If more than one common name remains on the list
of all parties, the parties shall strike names alternately until only one
remains. The party who did not initiate the claim shall strike first. If no
common name remains on the lists of the parties, the Tribunal shall furnish an
additional list or lists until an arbitrator is selected.

            The arbitrator shall interpret this Agreement, any applicable
Company policy or rules and regulations, any applicable substantive law (and the
law of remedies, if applicable) of the state in which the claim arose, or
applicable federal law. In reaching his or her decision, the arbitrator shall
have no authority to change or modify any lawful Company policy, rule or
regulation, or this Agreement. The arbitrator, and not any federal, state or
local court or agency, shall have exclusive and broad authority to resolve any
dispute relating to the interpretation, applicability, enforceability or
formation of this Agreement, including but not limited to, any claim that all or
any part of this Agreement is voidable.

            The arbitration shall be conducted pursuant to California Code of
Civil Procedure Sections 1282 et. seq.

      9.5. CLAIMS EXPENSES; LEGAL FEES AND EXPENSES OF EXECUTIVE. The Company
shall advance and bear all reasonable expenses of any arbitration conducted
under this Section 9 and all reasonable legal fees and expenses incurred by
Claimant in pursuing a claim at and through any stage of review or dispute
resolution pursuant to this Section 9; provided, however, that if it is finally
determined that the Claimant did not pursue the claim or commence the
arbitration in good faith and had no reasonable basis therefore, the Claimant
shall repay all of Claimant's legal fees and expenses advanced by the Company
and shall reimburse the Company for its
<PAGE>
reasonable legal fees and expenses in connection therewith (except that, in any
event, the Company shall be responsible for payment of the forum costs of any
arbitration hereunder, including the arbitrator's fee).

ARTICLE 10. SUCCESSORS AND ASSIGNMENT

      10.1. SUCCESSORS TO THE COMPANY. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
of all or substantially all of the business and/or assets of the Company or of
any division or subsidiary thereof (the business and/or assets of which
constitute at least fifty percent (50%) of the total business and/or assets of
the Company) to expressly assume and agree to perform the Company's obligations
under this Agreement in the same manner and to the same extent that the Company
would be required to perform them if such succession had not taken place.
Failure of the Company to obtain such assumption and agreement in a written
instrument prior to the effective date of any such succession shall be a breach
of this Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as they would be entitled to
hereunder if they had terminated their employment with the Company voluntarily
for Good Reason. Except for the purpose of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Executive's
Effective Date of Termination if the Executive so elects, but any delay or
failure by the Executive to so elect shall not be a waiver or release of any
rights hereunder which may be asserted at any time.

      10.2. ASSIGNMENT BY THE EXECUTIVE. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If the Executive dies while any amount would still be
payable to him hereunder had he continued to live, all such amounts, unless
otherwise provided herein, shall be paid to the Executive's Beneficiary in
accordance with the terms of this Agreement. If the Executive has not named a
Beneficiary, then such amounts shall be paid to the Executive's devisee,
legatee, or other designee, or if there is no such designee, to the Executive's
estate.

ARTICLE 11. MISCELLANEOUS

      11.1. EMPLOYMENT STATUS. Except as may be provided under any other written
agreement between the Executive and the Company, the employment of the Executive
by the Company is "at will," and, prior to the effective date of a Change in
Control, may be terminated by either the Executive or the Company at any time,
subject to applicable law.

      11.2. BENEFICIARIES. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. The Executive may make or
change such designation at any time, provided that any designation or change
thereto must be in the form of a signed writing acceptable to and received by
the Committee.

      11.3. GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.

      11.4. SEVERABILITY. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of this Agreement, and this Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.

      11.5. MODIFICATION. Except as expressly provided in Section 3(r) with
respect to certain waivers of circumstances that would otherwise constitute Good
Reason, no provision of this Agreement may be modified, waived, or discharged
unless such modification, waiver, or discharge is agreed to in writing and
signed by the
<PAGE>
Executive and by an authorized member of the Committee or its designee, or by
the respective parties' legal representatives and successors.

      11.6. NOTICE. For purposes of this Agreement, notices, including a Notice
of Termination, and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
or on the date stamped as received by the U.S. Postal Service for delivery by
certified or registered mail, postage prepaid and addressed: (i) if to the
Executive, to his latest address as reflected on the records of the Company, and
(ii) if to the Company: Power-One, Inc., 740 Calle Plano, Camarillo, California
93012, Attn: Corporate Secretary, or to such other address as the Company may
furnish to the Executive in writing with specific reference to this Agreement
and the importance of the notice, except that notice of change of address shall
be effective only upon receipt.

      11.7. APPLICABLE LAW. To the extent not preempted by the laws of the
United States, the laws of the State of California shall be the controlling law
in all matters relating to this Agreement. Any statutory reference in this
Agreement shall also be deemed to refer to all applicable final rules and final
regulations promulgated under or with respect to the referenced statutory
provision.

            IN WITNESS WHEREOF, the parties have executed this Agreement on this
28th day of April, 2004.

POWER-ONE, INC.                                  EXECUTIVE

By: /s/ EDDIE K. SCHNOPP                         /s/ RANDALL H. HOLLIDAY
    ----------------------------------           -------------------------------

Print Name:  Eddie K. Schnopp                    Randall H. Holliday

Its:  Senior Vice President, Finance,
       Treasurer and Chief Financial
       Officer

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