Document:

EX-4.2

Reserve Capital Policy

Approved by Board of Directors on June 29, 2006

Effective August 1, 2006

(Amended August 24, 2006)

I. Retained Earnings Minimum

A. Objectives

The Bank’s retained earnings objectives are to –

(1) Protect the redemption value of capital stock;

(2) Maintain sufficient retained earnings to facilitate safe and sound operations;

(3) Ensure the Bank’s ability to pay a relatively stable dividend with a high degree of certainty;
and

(4) Comply with policies established by the Board as well as rules and regulations promulgated by
the Federal Housing Finance Board (Finance Board).

B. Roles and Responsibilities

The Bank’s ALCO is responsible for reviewing and recommending retained earnings policies and
procedures in conformity with Finance Board rules and regulations to the Board. ALCO reviews and
approves procedures relating to the Bank’s retained earnings objectives and monitors compliance
with all measurements and limits.

C. Measurements & Limits

The Bank’s Retained Earnings Minimum level shall be the greater of:

	 	 	 	 ̈ Limits set by Finance Board rules and regulations; or

	 	 	 	 ̈ Limit defined by the Bank’s calculation of its Market Risk, Credit Risk and
Operational Risk. For purposes of this policy the calculation of each portion of risk
is defined as:

	 	•	 	Market Risk: 6 month moving average of the FHFB VaR calculation based
on a 6 month holding period at a 99% confidence level divided by square
root of 2. (This measures the 3 month potential loss due to market risk at
a 99% confidence level, if the FHFB revises its process for calculating VaR
the Bank will continue to operate under the previous method until a full
review of the revised process and any necessary changes to this policy are
complete and approved by the Board.

	 	•	 	Credit Risk: Credit risk inherent in the advances, MPF, investment, and
derivative portfolio measured in accordance with the Bank’s Credit Risk
Management Policy at a AA confidence level.

	 	•	 	Operational Risk: $30 million consistent with historical analysis
performed by the Bank.

D. Reporting & Controls

The Chief Risk Officer is responsible for calculating the Bank’s retained earnings minimum level
and reporting the results to ALCO monthly.

ALCO reviews and approves the Bank’s retained earnings minimum level and reports to the Board the
results as part of the Board’s dividend approval process.

The Board will review the policy annually and revise as necessary.

II. Dividend Limits

A. Objectives

The Bank’s dividend policy is to maintain an appropriate level of retained earnings to facilitate
safe and sound operations while providing members a relatively stable dividend.

B. Roles & Responsibilities

ALCO reviews and recommends dividend payments to the Board.

The Capital Markets Division is responsible for:

	 	 	 	 ̈ Providing ALCO with analysis to facilitate in the recommendation of a dividend
payment to the Board.

C. Measurements & Limits

The Bank shall set a dividend limit equal to the lower of:

	 	•	 	The average 3 month LIBOR rate during the period plus 15 basis points; or

	 	•	 	The average estimated dividend payout available under a stress test as defined by:

	 	•	 	10 year time horizon;

	 	•	 	Constant Advance balance;

	 	•	 	Constant operating expenses;

	 	•	 	Declining mortgage balance;

	 	•	 	Base, +/- 100 basis point interest rate scenarios; and

	 	•	 	Estimate of required retained earnings minimum.

Estimated dividend payout would include forecasted earnings and previously retained earnings
available after meeting the Bank’s forecasted retained earnings minimum.

This method provides a conservative estimate of a long-term sustainable dividend for the Bank.

An exception can be made to the above given:

	 	 	 	 ̈ The Bank’s calculation of a conservative long-term sustainable dividend as defined in
bullet point #2 of section C above, is greater then the average 3 month LIBOR rate
during the period plus 15 basis points for at least four consecutive quarters; and

	 	 	 	 ̈ Payment of such dividend would not cause the Bank to be in violation of Section I of
this Policy.

This exception offers a trigger for identifying the prudent return of capital to members while
maintaining safe and sound operations.

In addition to the above, the Bank shall further limit the amount of any dividend paid to the GAAP
income earned in the fiscal period for which the dividend is declared until the Policy is reviewed
by the Board on the earlier to occur of: (1) the effective date of any final rule of the Federal
Housing Finance Board requiring the Bank to maintain certain retained earnings levels; or (2) June
2007.

D. Reporting & Controls

The Bank’s Disclosure Committee will be responsible for the appropriate dissemination of the Bank’s
dividend to members and the public.

The Bank’s Accounting Department will be responsible for the accurate payment of the dividend to
members.

III. Risk Management – Limits and Controls

A. Objectives

To ensure safe and sound operations of the Bank by limiting dividend payments during periods where
violations of risk limits defined below have occurred.

B. Roles & Responsibilities

ALCO provides oversight of the Bank’s reserve capital policy by reviewing risk management measures
effecting the overall risk position of the Bank and reporting to the Board risk measures in
violation, or likely to violate limits defined in section III. C of this Policy.

The Financial Risk Management Department is responsible for:

	 	 	 
	 ̈

	 	Recommending appropriate interest rate risk management limits to ALCO; and
	 
	 	 
	 ̈

	 	Monitoring limits and reporting results to ALCO.
	 
	 	 
	 ̈

	 	The Credit and Collateral Department is responsible for:
	 
	 	 
	 ̈

	 	Recommending appropriate credit risk management limits to ALCO; and
	 
	 	 
	 ̈

	 	Monitoring limits and reporting results to ALCO.

C. Measurements & Limits

All of the following limits relating to interest rate risk are defined as:

“..... the risk that changes in interest rates may adversely affect an institution’s financial
condition and performance. More specifically, interest rate risk is the sensitivity of an
institution’s cash flows, reported earnings, and economic value to changes in interest
rates.”1

Therefore, the Board acknowledges that the liquidation value of the Bank is not equal to the
economic value.2 Additionally, due to the Bank’s restatement certain risk
management measures need to be adjusted to accurately reflect the Bank’s current risk
position. Limits defined below identify adjustments needed.

A violation of any of the following limits would result in a reduction of the dividend calculated
in section II. C of this Policy:

	 	1.	 	Market Value of Capital Stock: Net market value of capital stock, adjusted for
normalizing the LIBOR option adjusted spread of the mortgage portfolio, will be greater
than or equal to $95 per share (par $100 per share) in the base case after adjusting for
restatement;

	 	2.	 	Realized losses resulting in actual retained earnings below level determined in section
I. C of this Policy; or

	 	3.	 	Market Value of Equity to Book Value of Equity (MVE/BVE): MVE/BVE, adjusted for
normalizing the LIBOR option adjusted spread of the mortgage portfolio, will be greater
than or equal to 90% in the base case after adjusting for restatement.

Violations of limits numbered 1 or 2 above would require reducing the dividend by the lower of:

Half the amount calculated in section II. C of this Policy; or

Amount required to be within compliance 12 months after violation. If the Bank remains
non-compliant 12 months after initial violation, dividend is to be reduced by half the
amount calculated in section II. C of this Policy.

Violation of limit numbered 3 above would require a review and recalculation of dividend
defined by section II. C of this Policy.

D. Reporting & Controls

The Financial Risk Management Department reports on risk management limits to ALCO on at least a
monthly basis.

ALCO reports to the Board risk measures in violation, or likely to violate limits defined in
section III. C of this Policy during the dividend recommendation process.

1 Interest rate risk as defined in Advisory
Bulletin 04-5 of the Federal Housing Finance Board.

2 Majority of the difference for the Bank
between liquidation value and economic value is attributable to LOAS of the
mortgage portfolio.EX-10.1

Exhibit 10.1

Ixys Corporation

1999 Equity Incentive Plan

Restricted Stock Unit Award Agreement

IXYS Corporation (the “Company”) wishes to grant to the person (the
“Participant”) named in the Notice of Grant of Restricted Stock Unit Award (the “Notice
of Grant”) a Restricted Stock Unit award (the “Award”) pursuant to the provisions of
the Company’s 1999 Equity Incentive Plan (the “Plan”). The Award will entitle Participant
to shares of Common Stock from the Company, if Participant meets the vesting requirements described
herein. Therefore, pursuant to the terms of the attached Notice of Grant and this Restricted Stock
Unit Award Agreement (the “Agreement”), the Company grants Participant the number of
Restricted Stock Units listed in the Notice of Grant.

The details of the Award are as follows:

1. Grant Pursuant to Plan. This Award is granted pursuant to the Plan, which is
incorporated herein for all purposes. The Participant hereby acknowledges receipt of a copy of the
Plan and agrees to be bound by all of the terms and conditions of this Agreement and of the Plan.
All capitalized terms in this Agreement shall have the meaning assigned to them in this Agreement,
or, if such term is not defined in this Agreement, such term shall have the meaning assigned to it
under the Plan.

2. Restricted Stock Unit Award. The Company hereby grants to the Participant the
Restricted Stock Units listed in the Notice of Grant as of the grant date specified in the Notice
of Grant (the “Grant Date”). Such number of Restricted Stock Units may be adjusted from
time to time pursuant to Section 11(a) of the Plan.

3. Vesting and Forfeiture of Restricted Stock Units.

(a) Vesting. The Participant shall become vested in the Restricted Stock Units in
accordance with the vesting schedule in the Notice of Grant, except as otherwise accelerated
pursuant to Section 3(b).

(b) Forfeiture. The Participant shall forfeit any unvested Restricted Stock Units, if
any, in the event that the Participant’s Continuous Service is terminated for any reason, except
(i) as otherwise provided in this Agreement or the Plan or (ii) as otherwise determined by the Plan
Administrator in its sole discretion, which determination need not be uniform as to all
Participants.

(c) Vesting Acceleration.

(i) Change in Control – Asset Sale, Merger, Consolidation or Reverse Mergers. In the event of
(1) a sale of substantially all of the assets of the Company, (2) a merger or consolidation in
which the Company is not the surviving corporation or (3) a reverse merger in which the Company is
the surviving corporation but the share of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, then, to the extent your Continuous Service has not terminated, your
Award shall become fully vested.

(ii) Change in Control – Securities Acquisition. In the event of an acquisition by any
person, entity or group within the meaning of Section 13(d) or 14 (d) of the Exchange Act, or any
comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored
or maintained by the Company or an Affiliate) of the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the
Company representing at least fifty percent (50%) of the combined voting power entitled to vote in
the election of directors, then, to the extent your Continuous Service has not terminated, your
Award shall become fully vested.

(iii) Change in Control – Change in Incumbent Board. In the event that the individual who, as
of the date of the adoption of this Plan, are members of the Board (the “Incumbent Board”), cease
for any reason to constitute at least fifty percent (50%) of the Board, then, to the extent your
Continuous Service has not terminated, your Award shall become fully vested. If the election, or
nomination for election, by the Company’s stockholders of any new director was approved by a vote
of at least fifty percent (50%) of the Incumbent Board, such new director shall be considered as a
member of the Incumbent Board.

4. Settlement of Restricted Stock Unit Award.

(a) Settlement of Units for Stock. The Company shall deliver to the Participant one
share of Common Stock for each vested Restricted Stock Unit subject of this Award on the
appropriate Delivery Date (as defined in Section 4(b)). The Company shall not have any obligation
to settle this Award for cash.

(b) Delivery of Common Stock. Shares of Common Stock shall be delivered on the
delivery date(s) (each a “Delivery Date”) specified in the Notice of Grant. Once a share of Common
Stock is delivered with respect to a vested Restricted Stock Unit, such vested Restricted Stock
Unit shall terminate and the Company shall have no further obligation to deliver shares of Common
Stock or any other property for such vested Restricted Stock Unit.

(c) Deferral of Delivery. Notwithstanding the foregoing, the Participant may elect,
in writing received by the Plan Administrator at least twelve (12) months prior to a Delivery Date,
to defer that date until any later date (which such date is at least five years after the original
Delivery Date).

5. No Rights as Shareholder until Delivery. The Participant shall not have any
rights, benefits or entitlements with respect to any Common Stock subject to this Agreement unless
and until the Common Stock has been delivered to the Participant. On or after delivery of the
Common Stock, the Participant shall have, with respect to the Common Stock delivered, all of the
rights of an equity interest holder of the Company, including the right to vote the Common Stock
and the right to receive all dividends, if any, as may be declared on the Common Stock from time to
time.

6. Tax Provisions.

(a) Tax Consequences. Participant has reviewed with Participant’s own tax advisors
the federal, state, local and foreign tax consequences of this investment and the transactions
contemplated by this Agreement. Participant is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. Participant understands that
Participant (and not the Company) shall be responsible for any tax liability that may arise as a
result of the transactions contemplated by this Agreement.

(b) Withholding Obligations. At the time the Award is granted, or at any time
thereafter as requested by the Company, Participant hereby authorizes withholding from payroll and
any other amounts payable to Participant, including shares of Common Stock deliverable pursuant to
this Award, and otherwise agrees to make adequate provision for, any sums required to satisfy the
minimum federal, state, local and foreign tax withholding obligations of the Company or a
Affiliate, if any, which arise in connection with the Award.

The Company, in its sole discretion, and in compliance with any applicable legal conditions or
restrictions, may withhold from fully vested shares of Common Stock otherwise deliverable to
Participant upon the vesting of the Award a number of whole shares of Common Stock having a Fair
Market Value, as determined by the Company as of the date the Participant recognizes income with
respect to those shares of Common Stock, not in excess of the amount of minimum tax required to be
withheld by law (or such lower amount as may be necessary to avoid adverse financial accounting
treatment). Any adverse consequences to Participant arising in connection with such Common Stock
withholding procedure shall be the Participant’s sole responsibility.

In addition, the Company, in its sole discretion, may establish a procedure whereby the
Participant may make an irrevocable election to direct a broker (determined by the Company) to sell
sufficient shares of Common Stock from the Award to cover the tax withholding obligations of the
Company or any Affiliate and deliver such proceeds to the Company.

Unless the tax withholding obligations of the Company or any Affiliate are satisfied, the
Company shall have no obligation to issue a certificate for such shares of Common Stock.

(c) Section 409A Amendments. The Company agrees to cooperate with Participant to
amend this Agreement to the extent either the Company or Participant deems necessary to avoid
imposition of any additional tax or income recognition prior to actual payment to Participant under
Code Section 409A and any temporary or final Treasury Regulations and Internal Revenue Service
guidance thereunder, but only to the extent such amendment would not have an adverse effect on the
Company and would not provide Participant with any additional rights, in each case as determined by
the Company, in its sole discretion.

7. Consideration. With respect to the value of the shares of Common Stock to be
delivered pursuant to the Award, such shares of Common Stock are granted in consideration for the
services Participant shall provide to the Company during the vesting period.

8. Transferability. The Restricted Stock Units granted under this Agreement are not
transferable otherwise than by will or under the applicable laws of descent and distribution. In
addition, the Restricted Stock Units shall not be assigned, negotiated, pledged or hypothecated in
any way (whether by operation of law or otherwise), and the Restricted Stock Units shall not be
subject to execution, attachment or similar process.

9. General Provisions.

(a) Employment At Will. Nothing in this Agreement or in the Plan shall confer upon
Participant any right to continue in the service of the Company or its Affiliates for any period of
specific duration or interfere with or otherwise restrict in any way the rights of the Company (or
any Affiliate employing or retaining Participant) or of Participant, which rights are hereby
expressly reserved by each, to terminate Participant’s service at any time for any reason, with or
without cause.

(b) Notices. Any notice required to be given under this Agreement shall be in writing
and shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, registered
or certified, postage prepaid and properly addressed to the party entitled to such notice at the
address indicated below such party’s signature line on this Agreement or at such other address as
such party may designate by ten (10) days’ advance written notice under this paragraph to all other
parties to this Agreement.

(c) No Limit on Other Compensation Arrangements. Nothing contained in this Agreement
shall preclude the Company from adopting or continuing in effect other or additional compensation
arrangements, and those arrangements may be either generally applicable or applicable only in
specific cases.

(d) Severability. If any provision of this Agreement is or becomes or is deemed to be
invalid, illegal, or unenforceable in any jurisdiction or would disqualify this Agreement or the
Award under any applicable law, that provision shall be construed or deemed amended to conform to
applicable law (or if that provision cannot be so construed or deemed amended without materially
altering the purpose or intent of this Agreement and the Award, that provision shall be stricken as
to that jurisdiction and the remainder of this Agreement and the Award shall remain in full force
and effect).

(e) No Trust or Fund Created. Neither this Agreement nor the grant of the Award shall
create or be construed to create a trust or separate fund of any kind or a fiduciary relationship
between the Company and the Participant or any other person. The Restricted Stock Units subject to
this Agreement represent only the Company’s unfunded and unsecured promise to issue shares of
Common Stock to the Participant in the future. To the extent that the Participant or any other
person acquires a right to receive shares of Common Stock from the Company pursuant to this
Agreement, that right shall be no greater than the right of any unsecured general creditor of the
Company.

(f) Cancellation of Award. If any Restricted Stock Units subject to this Agreement
are forfeited, then from and after such time, the Participant (and any other person from whom such
Restricted Stock Units are forfeited) shall no longer have any rights to such Restricted Stock
Units or the corresponding shares of Common Stock. Such Restricted Stock Units shall be deemed
forfeited in accordance with the applicable provisions hereof.

(g) Participant Undertaking. Participant hereby agrees to take whatever additional
action and execute whatever additional documents the Company may deem necessary or advisable in
order to carry out or effect one or more of the obligations or restrictions imposed on either
Participant or the shares of Common Stock deliverable pursuant to the provisions of this Agreement.

(h) Amendment, Modification, and Entire Agreement. No provision of this Agreement may
be modified, waived or discharged unless that waiver, modification or discharge is agreed to in
writing and signed by the Participant and the Plan Administrator. This Agreement constitutes the
entire contract between the parties hereto with regard to the subject matter hereof. This
Agreement is made pursuant to the provisions of the Plan and shall in all respects be construed in
conformity with the terms of the Plan. In the event of a conflict between the Plan and this
Agreement, the terms of the Plan shall govern. Participant further acknowledges that as of the
Grant Date, this Agreement and the Plan set forth the entire understanding between Participant and
the Company regarding the acquisition of Stock pursuant to this Award and supersede all prior oral
and written agreements on that subject with the exception of awards from the Company previously
granted and delivered to Participant. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either party which are not
set forth expressly in this Agreement.

(i) Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California without regard to the conflict-of-laws rules thereof or
of any other jurisdiction.

(j) Interpretation. The Participant accepts this Award subject to all the terms and
provisions of this Agreement and the terms and conditions of the Plan. The undersigned Participant
hereby accepts as binding, conclusive and final all decisions or interpretations of the Plan
Administrator upon any questions arising under this Agreement.

(k) Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Company and its successors and assigns and upon Participant,
Participant’s assigns and the legal representatives, heirs and legatees of Participant’s estate,
whether or not any such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof. The Company may assign its rights and
obligations under this Agreement, including, but not limited to, the forfeiture provision of
Section 3(b) to any person or entity selected by the Board.

(l) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and the same
instrument.

(m) Headings. Headings are given to the Paragraphs and Subparagraphs of this
Agreement solely as a convenience to facilitate reference. The headings shall not be deemed in any
way material or relevant to the construction or interpretation of this Agreement or any provision
thereof.

10. Representations. Participant acknowledges and agrees that Participant has
reviewed the Agreement in its entirety, has had an opportunity to obtain the advice of counsel
prior to executing and accepting the Award and fully understands all provisions of the Award.

[Remainder of page is intentionally blank]

1

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first
indicated above.

IXYS CORPORATION

By:

Title:

PARTICIPANT

	 	 	 	Address:

2

Ixys Corporation

1999 Equity Incentive Plan

Restricted Stock Unit Award Grant Notice

IXYS Corporation (the “Company”), pursuant to its 1999 Equity Incentive Plan (the “Plan”),
hereby grants to Participant a right to receive the number of shares of the Company’s Common Stock
set forth below. This Restricted Stock Unit award is subject to all of the terms and conditions as
set forth herein and in the Restricted Stock Unit Award Agreement and the Plan, all of which are
attached hereto and incorporated herein in their entirety.

	 
	 

	Participant:

	 

	Date of Grant:

	 

	Vesting Commencement Date:

	 

	Number of Restricted Stock Units:

	 	 	 	Expiration Date: Subject to termination as provided in Section 3(b) of the
Restricted Stock Award Agreement

	 	 	 	 	 
	Vesting Schedule:
	 		—	
	 
	 		—	
	 
	 		—	
	 
	 	___________________________All vesting is
	 
	 	subject to Participant’s Continuous Service.

	 
	 	In addition, the Restricted Stock Units are

	 
	 	subject to vesting acceleration as provided

	 
	 	in Section 3(c) of the Restricted Stock Unit

	 
	 	Award Agreement.

	Delivery Schedule:
	 	Same as Vesting Schedule.

Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and
understands and agrees to, this Restricted Stock Unit Award Grant Notice, Restricted Stock Unit
Award Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this
Restricted Stock Unit Award Grant Notice, the Restricted Stock Unit Award Agreement and the Plan
set forth the entire understanding between Participant and the Company regarding the acquisition of
Common Stock in the Company and supersede all prior oral and written agreements on that subject
with the exception of (i) options previously granted and delivered to Participant under the Plan,
and (ii) the following agreements only:

Other Agreements:

	 	 	 
	IXYS Corporation	 	 
	By:

	 	

	Signature

Title:

Date:

	 	Participant:

Signature

Date:

	 	 	Attachments: Restricted Stock Unit Award Agreement and 1999 Equity Incentive Plan.

3

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