Document:

Exhibit 10.4

 

INDEMNIFICATION
AGREEMENT

 

BETWEEN

 

POWER ONE,
INC.

 

AND

 

[OFFICER INDEMNITEE]

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
  2

  
	
  2.

  	
  Indemnification

  	
  3

  
	
   

  	
  2.1

  	
  Indemnification in
  Third-Party Actions

  	
  3

  
	
   

  	
  2.2

  	
  Indemnification in
  Proceedings By or In the Name of the Company

  	
  3

  
	
   

  	
  2.3

  	
  Partial Indemnification

  	
  3

  
	
   

  	
  2.4

  	
  Indemnification
  Hereunder Not Exclusive

  	
  3

  
	
   

  	
  2.5

  	
  Indemnification of
  Indemnified Costs of Successful Party

  	
  3

  
	
   

  	
  2.6

  	
  Indemnified Costs
  Advanced

  	
  3

  
	
   

  	
  2.7

  	
  Limitations on
  Indemnification

  	
  4

  
	
  3.

  	
  Presumptions

  	
  4

  
	
   

  	
  3.1

  	
  Presumption Regarding
  Standard of Conduct

  	
  4

  
	
   

  	
  3.2

  	
  Determination of Right
  to Indemnification

  	
  4

  
	
   

  	
   

  	
  3.2.1

  	
  Burden

  	
  4

  
	
   

  	
   

  	
  3.2.2

  	
  Standard

  	
  5

  
	
  4.

  	
  Other
  Agreements

  	
  5

  
	
   

  	
  4.1

  	
  Change in Control Event

  	
  5

  
	
   

  	
  4.2

  	
  Maintenance of
  Liability Insurance

  	
  5

  
	
   

  	
   

  	
  4.2.1

  	
  Affirmative Covenant of
  the Company

  	
  5

  
	
   

  	
   

  	
  4.2.2

  	
  Indemnitee Named as
  Insured

  	
  6

  
	
   

  	
  4.3

  	
  Agreement to Serve

  	
  6

  
	
   

  	
  4.4

  	
  Effect of this
  Agreement on Employment Agreement

  	
  6

  
	
   

  	
  4.5

  	
  Nature of Rights;
  Separability

  	
  6

  
	
   

  	
  4.6

  	
  Savings Clause

  	
  6

  
	
   

  	
  4.7

  	
  Repayment of
  Indemnified Costs

  	
  6

  
	
   

  	
  4.8

  	
  Repayment

  	
  7

  
	
   

  	
  4.9

  	
  Mutual Acknowledgment

  	
  7

  
	
   

  	
  4.10

  	
  Duration of Agreement

  	
  7

  
	
  5.

  	
  Indemnification
  Procedure

  	
  7

  
	
   

  	
  5.1

  	
  Notice

  	
  7

  
	
   

  	
  5.2

  	
  Company Participation

  	
  7

  

 

i

 

	
   

  	
  5.3

  	
  Settlement

  	
  8

  
	
   

  	
  5.4

  	
  Subrogation

  	
  8

  
	
  6.

  	
  Miscellaneous
  Provisions

  	
  8

  
	
   

  	
  6.1

  	
  Amendments; Waivers

  	
  8

  
	
   

  	
  6.2

  	
  Interpretation;
  Governing Law

  	
  8

  
	
   

  	
  6.3

  	
  Headings

  	
  8

  
	
   

  	
  6.4

  	
  Consent to Jurisdiction

  	
  8

  
	
   

  	
  6.5

  	
  Counterparts

  	
  9

  
	
   

  	
  6.6

  	
  Successors and Assigns

  	
  9

  
	
   

  	
  6.7

  	
  Expenses; Legal Fees

  	
  9

  
	
   

  	
  6.8

  	
  Representation by
  Counsel; Interpretation

  	
  9

  
	
   

  	
  6.9

  	
  Specific Performance

  	
  9

  
	
   

  	
  6.10

  	
  Time is of the Essence

  	
  9

  
	
   

  	
  6.11

  	
  Notices

  	
  9

  

 

POWER ONE,
INC.

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “Agreement”) is made as of [          ],
2009, by and between Power One, Inc., a Delaware corporation (the “Company”), and the individual whose name appears below the
word “Indemnitee” on the signature page of this Agreement (the “Indemnitee”).  In
consideration of the services of the Indemnitee to the Company, and to induce
the Indemnitee to provide services as a director and/or officer of the Company
or any of its subsidiaries, the Company and the Indemnitee agree as follows:

 

RECITALS

 

A.                                    The Indemnitee has
agreed to serve, or as applicable, to continue to provide service, as a director
and/or officer of the Company or any of its subsidiaries, and in such capacity
will render valuable services to the Company.

 

B.                                    The Company has
concluded that insurance and statutory indemnity provisions may provide
inadequate protection to individuals requested to serve as its directors and
officers.

 

C.                                    To induce and
encourage the Indemnitee to serve as a director and/or officer of the Company
or any of its subsidiaries, the Company’s Board of Directors has decided that
this Agreement is not only reasonable and prudent, but necessary, to promote
and ensure the best interests of the Company and its stockholders.

 

 

AGREEMENT

 

1.                                      Definitions

 

As used in this Agreement:

 

“Agent”
means a director, officer, employee, consultant, fiduciary or agent of the
Company or of any other corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise that the Indemnitee served in any of
such capacities at the request of the Company.

 

“Change in
Control Event” has the same meaning as a “Change in Control Event”
as defined in the Company’s 2004 Stock Incentive Plan (as it may be amended
from time to time).

 

“DGCL”
means the General Corporation Law of the State of Delaware.

 

“Expenses”
includes, but is not limited to, attorneys’ fees, disbursements and retainers,
accounting and witness fees, travel and deposition costs, expenses of
investigations judicial or administrative proceedings or appeals and amounts
paid in settlement by or on behalf of the Indemnitee, and any expenses of
establishing a right to indemnification pursuant to this Agreement, to the
extent actually and reasonably incurred by the Indemnitee in connection with
any Proceeding. “Expenses” does not include the amount of judgments, fines,
penalties or ERISA excise taxes actually levied against the Indemnitee.

 

“Final
Determination” or “Finally Determined”
means a determination made by a court of competent jurisdiction as to which
there is no further right or option of appeal or as to which the time within
which an appeal must be filed has expired without such filing.

 

“Indemnified
Costs” means all Expenses, judgments, fines, penalties and ERISA
excise taxes actually and reasonably incurred by the Indemnitee in connection
with the investigation, defense, appeal, or settlement of any Proceeding.

 

A “Potential
Change in Control Event” will be deemed to have occurred if:

 

(a)                                  the Company enters
into an agreement or arrangement that would constitute a Change in Control
Event if consummated;

 

(b)                                 any person (including
the Company) publicly announces an intention to take or to consider taking
actions that would constitute a Change in Control Event if consummated; or

 

(c)                                  the Board of
Directors adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control Event has occurred.

 

“Proceeding”
means any threatened, pending or completed action, suit or proceeding
(including appeals thereof), whether brought by or in the name of the Company
or otherwise and whether of a civil, criminal or administrative or
investigative nature, in which the Indemnitee is or will be a party, witness or
other participant in, because the Indemnitee is or was an Agent, whether or not
the Indemnitee is serving in such capacity at the time any liability or Expense
is incurred for which indemnification or reimbursement is to be provided under
this Agreement.

 

2

 

2.                                      Indemnification

 

2.1                               Indemnification in Third-Party Actions.  The Company will indemnify the Indemnitee if
the Indemnitee becomes a party to, is threatened to be made a party to, is a
witness or other participant in, or is otherwise involved in any Proceeding
(other than a Proceeding by or in the name of the Company to procure a judgment
in its favor), because the Indemnitee is or was an Agent, against all
Indemnified Costs, to the fullest extent permitted by applicable law.

 

2.2                               Indemnification in Proceedings By or In the Name of the Company.  The Company will indemnify the Indemnitee if
the Indemnitee is a party to, is threatened to be made a party to, is a witness
or other participant in, or is otherwise involved in any Proceeding by or in
the name of the Company to procure a judgment in its favor because the
Indemnitee was or is an Agent of the Company against all Indemnified Costs in
connection with the defense or settlement of the Proceeding, to the fullest
extent permitted by applicable law.

 

2.3                               Partial Indemnification. 
If the Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of, but not the total
amount of, the Indemnified Costs, the Company will nevertheless indemnify the
Indemnitee for the portion of the Indemnified Costs to which the Indemnitee is
entitled.

 

2.4                               Indemnification Hereunder Not Exclusive.  The indemnification provided by this
Agreement is not exclusive of any other rights to which the Indemnitee may be
entitled under the Company’s Certificate of Incorporation, the Bylaws, any
agreement, any vote of stockholders or disinterested directors, applicable law,
or otherwise, both as to action in the Indemnitee’s official capacity and as to
action in another capacity on behalf of the Company.

 

2.5                               Indemnification of Indemnified Costs of Successful Party.  Notwithstanding any other provisions of this
Agreement, to the extent that the Indemnitee has been successful in defense of
any Proceeding or in defense of any claim, issue or matter in the Proceeding,
on the merits or otherwise, including, but not limited to, the dismissal of a
Proceeding without prejudice (unless such dismissal is based upon a settlement
that would not be covered under this Agreement), the Indemnitee will be
indemnified against all Indemnified Costs incurred in connection therewith to
the fullest extent permitted by applicable law.

 

2.6                               Indemnified Costs Advanced. 
The Indemnified Costs incurred by the Indemnitee in any Proceeding will
be paid promptly by the Company in advance of the final disposition of the
Proceeding at the written request of the Indemnitee to the fullest extent
permitted by applicable law.  The
advances to be made will be paid, or caused to be paid, by the Company to the
Indemnitee within 30 days following delivery of the written request by
Indemnitee to the Company, accompanied by substantiating documentation.  Notwithstanding the foregoing, no advance
shall be made by the Company if a determination is reasonably and promptly made
by a majority vote of those directors who are not parties to such action, suit
or proceeding, or, if there are no such directors or if such directors so
direct, by independent legal counsel in a written opinion, that, based 

 

3

 

upon the facts known to such directors or counsel at the time such
determination is made, such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Company, or, with respect to any criminal proceeding, that such person had
reasonable cause to believe his conduct was unlawful.

 

2.7                               Limitations on Indemnification.  Notwithstanding anything to the contrary in
this Agreement, the Company is not required to make payments to:

 

a.                                       indemnify or
advance Indemnified Costs with respect to Proceedings initiated or brought
voluntarily by the Indemnitee and not by way of defense, except with respect to
Proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
applicable law;

 

b.                                      indemnify the
Indemnitee for any Indemnified Costs for which payment is actually made to the
Indemnitee under an insurance policy, except for any excess beyond the amount
of payment under the policy;

 

c.                                       indemnify the Indemnitee for any
Indemnified Costs sustained in any Proceeding for an accounting of profits made
from the purchase or sale by the Indemnitee of securities of the Company
pursuant to Section 16(b) of the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder and amendments
thereto or similar provisions of any federal, state or local law; or

 

d.                                      indemnify the Indemnitee for any
Indemnified Costs resulting from Indemnitee’s conduct that is finally adjudged
by a court of competent jurisdiction to have been willful misconduct, knowingly
fraudulent or deliberately dishonest; or

 

e.                                       indemnify the
Indemnitee if it is Finally Determined that such payment is unlawful.

 

3.                                      Presumptions

 

3.1                               Presumption Regarding Standard of Conduct.  The Indemnitee will be conclusively presumed
to have met the relevant standards of conduct as defined by applicable law for
indemnification pursuant to this Agreement unless a determination that the
Indemnitee has not met the relevant standards is made by (a) the Board of
Directors of the Company by a majority vote of a quorum consisting of directors
who are not parties to the Proceeding, (b) the stockholders of the Company
by majority vote, or (c) in a written opinion by independent legal
counsel, selection of whom has been made by the Company’s Board of Directors
and approved by the Indemnitee.

 

3.2                               Determination of Right to Indemnification.

 

3.2.1                     Burden.  If a claim under this Agreement is not paid,
or caused to be paid, by the Company within 30 days of receipt of written
notice, the right to indemnification as provided by this Agreement will be
enforceable by the Indemnitee in any court of competent jurisdiction, and all
reasonable costs and expenses incurred by the Indemnitee 

 

4

 

in connection with such
enforcement will be paid promptly by the Company in advance of the final
disposition by such court at the written request of the Indemnitee to the
fullest extent permitted by applicable law; provided that Indemnitee
will reimburse the Company for all such costs and expenses paid by the Company
or any of its subsidiaries if and only to the extent that a court of competent
jurisdiction Finally Determines that the Indemnitee is not entitled to be
indemnified by the Company for such costs and expenses under the provisions of applicable
law, the Company’s Bylaws, Certificate of Incorporation, this Agreement, or
otherwise.  The burden of proving by
clear and convincing evidence that indemnification or advances are not
appropriate will be on the Company. 
Neither the failure of the directors, stockholders, or independent legal
counsel to have made a determination prior to the commencement of the action
that indemnification or advances are proper in the circumstances because the
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the directors, stockholders or independent legal counsel that
the Indemnitee has not met the applicable standard of conduct, will be a
defense to the action or create a presumption that the Indemnitee has not met
the applicable standard of conduct.

 

3.2.2                     Standard.  The Indemnitee’s Expenses incurred in
connection with any Proceeding concerning the Indemnitee’s right to
indemnification or advances in whole or in part pursuant to this Agreement will
be indemnified by the Company regardless of the outcome of the Proceeding,
unless it is Finally Determined that each of the material assertions made by
the Indemnitee in the Proceeding was not made in good faith or was frivolous.

 

4.                                      Other Agreements

 

4.1                               Change in Control Event. 
If there is a Change in Control Event or a Potential Change in Control
Event of the Company (other than a Change in Control Event or Potential Change
in Control Event that has been approved by a majority of the Company’s Board of
Directors who were directors immediately prior to the Change in Control Event
or Potential Change in Control Event), then with respect to all matters
thereafter arising concerning the rights of the Indemnitee to be indemnified
for Indemnified Costs, the Company will seek legal advice only from independent
counsel selected by the Indemnitee, and reasonably satisfactory to the Company,
and who has not otherwise performed other services for the Company or the
Indemnitee within the last three years (“Special Independent
Counsel”).  The Special
Independent Counsel, among other things, will render its written opinion to the
Company and the Indemnitee as to whether and to what extent the Indemnitee
would be permitted to be indemnified under applicable law.  The Company will pay, or cause to be paid,
the reasonable fees and expenses of the Special Independent Counsel.

 

4.2                               Maintenance of Liability Insurance.

 

4.2.1                     Affirmative
Covenant of the Company.  While the
Indemnitee continues to serve as a director or officer of the Company or any of
its subsidiaries, and thereafter while the Indemnitee is subject to any
possible Proceeding, the Company will maintain in full force and effect
directors’ and officers’ liability insurance (“D&O
Insurance”) in 

 

5

 

reasonable amounts from
reputable insurers.  The Company has no
obligation, however, to obtain or maintain D&O Insurance if it determines
in good faith that insurance is not reasonably available, the premium costs for
insurance are disproportionate to the amount of coverage provided, the coverage
provided by insurance is so limited by exclusions that it provides an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company. 
The Company will notify promptly the Indemnitee upon termination of all
D&O Insurance.  If the Company has
D&O Insurance at the time it receives a notice that a Proceeding has
commenced, the Company will give prompt notice of such commencement to the
insurers as required by the respective policies.  The Company will thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such proceeding in accordance with
the terms of such policies.

 

4.2.2                     Indemnitee
Named as Insured.  In all D&O
Insurance policies, the Indemnitee will be named as an insured in a manner that
provides the Indemnitee the same rights and benefits accorded to the most
favorably insured of the Company’s directors and officers.

 

4.3                               Agreement to Serve. 
Indemnitee will serve or continue to serve as an Agent of the Company or
any of its subsidiaries for so long as the Indemnitee is duly elected or
appointed or until the Indemnitee voluntarily resigns.  Indemnitee will give written notice to the
Company at least thirty (30) days prior to voluntarily resigning.

 

4.4                               Effect of this Agreement on Employment Agreement.  Any present or future employment agreement
between the Indemnitee and the Company is not modified by the terms of this Agreement.  Nothing contained in this Agreement creates
in the Indemnitee any right of continued employment.

 

4.5                               Nature of Rights; Separability.  The rights afforded to the Indemnitee by this
Agreement are contract rights and may not be diminished, eliminated or
otherwise affected by amendments to the Company’s Certificate of Incorporation,
Bylaws, any applicable subsidiary’s charter documents, or agreements, including
D&O Insurance policies.  Each
provision of this Agreement, to the extent practicable, is a separate and
distinct agreement and independent of the others, so that if any provision of
this Agreement is held to be invalid or unenforceable for any reason, the
invalidity or unenforceability will not affect the validity or enforceability
of the other provisions.  To the extent
required, any provision of this Agreement may be modified by a court of
competent jurisdiction to preserve its validity and to provide the Indemnitee
with the broadest possible indemnification permitted under applicable law.

 

4.6                               Savings Clause.  If
this Agreement or any portion of it is invalidated on any ground by any court
of competent jurisdiction, then the Company will nevertheless indemnify the
Indemnitee as to Indemnified Costs with respect to any Proceeding to the full
extent permitted by any applicable portion of this Agreement that is not
invalidated, or by any applicable law.

 

4.7                               Repayment of Indemnified Costs.  The Indemnitee will reimburse the Company for
all Indemnified Costs paid by the Company or any of its subsidiaries in
defending any 

 

6

 

Proceeding against the Indemnitee if and only to the extent that a Final
Determination is made  that the
Indemnitee is not entitled to be indemnified by the Company for such Indemnified
Costs under the provisions of applicable law, the Company’s Bylaws, Certificate
of Incorporation, this Agreement, or otherwise. 
The Indemnitee will repay such amounts advanced only if, and to the
extent that, it is ultimately determined that Indemnitee is not entitled to be
indemnified for such Indemnified Costs by the Company pursuant to this
Agreement.

 

4.8                               Repayment.  The
Indemnitee will promptly repay to the Company any amounts paid to the
Indemnitee pursuant to other rights of indemnification or under any insurance
policy, to the extent those payments are duplicative of payments made to the
Indemnitee under this Agreement.

 

4.9                               Mutual Acknowledgment. 
Both the Company and the Indemnitee acknowledge that in certain cases
Federal law or applicable public policy may prohibit the Company from
indemnifying its directors and officers under this Agreement or otherwise.  The Indemnitee understands and acknowledges
that the Company has undertaken or may be required in the future to undertake
with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company’s right under public policy to indemnify the Indemnitee.

 

4.10                        Duration of Agreement. 
For the avoidance of doubt, the
indemnification and advancement of expenses provided under this Agreement shall
continue as to the Indemnitee even though he may have ceased to be an Agent.

 

5.                                      Indemnification Procedure

 

5.1                               Notice.  Promptly
after receipt of notice that a Proceeding has commenced, the Indemnitee will,
if a claim is to be made under this Agreement, notify the Company of that
fact.  The failure to notify the Company
will not relieve it from any liability that it may have to the Indemnitee
except to the extent of the Company’s material damage resulting from such
failure.

 

5.2                               Company Participation. 
The Company will be entitled to participate in any Proceeding at its own
expense and, except as otherwise provided below, to the extent that it may
wish, the Company may assume the defense of any Proceeding for which
indemnification is sought hereunder, with counsel reasonably satisfactory to
the Indemnitee.  After the Company
notifies the Indemnitee of the Company’s election to assume the defense of a
Proceeding, during the Company’s good faith defense the Company will not be
liable to the Indemnitee under this Agreement for any Expenses subsequently
incurred by the Indemnitee in connection with the defense of the Proceeding,
other than reasonable costs of investigation or as otherwise provided
below.  The Indemnitee will have the
right to employ the Indemnitee’s counsel in any Proceeding, but the fees and
expenses of the counsel incurred after the Company assumes the defense of the
Proceeding will be at the expense of the Indemnitee, unless (a) the
employment of counsel by the Indemnitee has been authorized by the Company, (b) the
Indemnitee has reasonably concluded that there is be a conflict of interest
between the Company and the Indemnitee in the conduct of the 

 

7

 

defense of a Proceeding, or (c) the Company has not in fact
employed counsel to assume the defense of a Proceeding.  In each of the foregoing cases the fees and
expenses of the Indemnitee’s counsel will be at the expense of the
Company.  The Company will not be
entitled to assume the defense of any Proceeding brought by or on behalf of the
Company or any of its subsidiaries or as to which the Indemnitee has made the
conclusion that there may be a conflict of interest between the Company and the
Indemnitee.

 

5.3                               Settlement.  The
Company will not settle or compromise any Proceeding in any manner that would
impose any penalty (unless the penalty imposed is a monetary amount that will
be paid in full by the Company) or limitation on the Indemnitee, or would constitute
an admission or acknowledgement of wrongdoing, negligence or liability in such
Proceeding or any future Proceeding without the Indemnitee’s consent.  The Indemnitee will not settle or compromise
any Proceeding without the Company’s consent. 
Neither the Company nor the Indemnitee will unreasonably withhold their
consent or approval under this Agreement.

 

5.4                               Subrogation.  If the
Company pays, or causes to be paid, Indemnified Costs, the Company will be
subrogated to the extent of such payment to all of the rights of recovery of
the Indemnitee against third parties. 
The Indemnitee will do all things reasonably necessary to secure such
rights, including the execution of documents necessary to enable the Company
effectively to bring suit to enforce such rights.

 

6.                                      Miscellaneous Provisions

 

6.1                               Amendments; Waivers. 
Amendments, waivers, consents and approvals under this Agreement must be
in writing and designated as such.  No
failure or delay in exercising any right will be deemed a waiver of such
right.  For the avoidance of doubt, this
Agreement may not be terminated by the Company without Indemnitee’s prior
written consent.

 

6.2                               Interpretation; Governing Law.  This Agreement is to be construed as a whole
and in accordance with its fair meaning. 
This Agreement is to be interpreted in accordance with the laws of the
State of Delaware relating to indemnification of Agents to the fullest extent
now or hereafter permitted by law, notwithstanding that such indemnification
may not be specifically authorized by the Company’s Certificate of
Incorporation or Bylaws or by statute as of the date hereof.

 

6.3                               Headings.  Headings of
Sections and subsections are for convenience only and are not a part of this
Agreement.

 

6.4                               Consent to Jurisdiction. 
The Company and the Indemnitee irrevocably consent to the jurisdiction
of the courts of the State of Delaware for all purposes in connection with any
action or proceeding which arises out of or relates to this Agreement and agree
that any action instituted under this Agreement will be brought only in the
state courts of the State of Delaware.

 

8

 

6.5                               Counterparts.  This
Agreement may be signed in one or more counterparts and by facsimile, and when
so signed and delivered will have the same effect as if all signatures appeared
on the same document.

 

6.6                               Successors and Assigns. 
All of the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the parties hereto
and their respective successors, assigns, spouses, heirs, executors,
administrators and legal representatives. 
The Company shall require and cause any direct or indirect successor
(whether by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by written
agreement in form and substance reasonably satisfactory to Indemnitee,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no such
succession had taken place.

 

6.7                               Expenses; Legal Fees. 
Each party will pay its own expenses in the negotiation, preparation and
performance of this Agreement.  Subject
to Section 3.2.2, the prevailing party in any action relating to this
Agreement will be entitled to reasonable legal fees, costs and expenses
incurred in such action.

 

6.8                               Representation by Counsel; Interpretation.  Each party acknowledges that it has been
given an opportunity to be represented by counsel in connection with this
Agreement.  Any rule of law,
including, but not limited to, Section 1654 of the California Civil Code,
or any legal decision that would require interpretation of any claimed
ambiguities in this Agreement against the party that drafted it, has no
application and is expressly waived.

 

6.9                               Specific Performance. 
The Company acknowledges that in view of the uniqueness of the matters
contemplated by this Agreement, the Indemnitee would not have an adequate
remedy at law for money damages if this Agreement is not being performed in
accordance with its terms.  The Company
therefore agrees that the Indemnitee will be entitled to specific enforcement
of the terms hereof in addition to any other remedy to which the Indemnitee may
be entitled.

 

6.10                        Time is of the Essence. 
Time is of the essence in the performance of each provision of this
Agreement.

 

6.11                        Notices.  Any notice
to be given hereunder must be in writing and will be deemed effective upon
personal delivery, upon delivery by confirmed facsimile or electronic
transmission (in either case with duplicate original sent by United States
mail) or, if sent by United States mail, three (3) business days after
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed as follows (or to another address designated in
writing by a party):

 

9

 

	
  If to the Company:  

  

  Power One, Inc.

  740 Calle Plano

  Camarillo, California 93012-8583

  Attention: President

  	
  If to the Indemnitee:  

  

  At the Indemnitee’s most recent address on the books and records of the
  Company or at such other address as Indemnitee indicates to the Company

  

 

10

 

The parties have signed this Agreement as of
the date first written above.

 

	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  POWER ONE, INC.:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

11exhibit10-61.htm

    
10-Q

    Amended and Restated

    AAM
2009 Long-Term Incentive Plan

    

    Article
1. Establishment, Purpose, and Duration

    

    1.1          Establishment of the Plan.
American Axle & Manufacturing Holdings, Inc. (the “Company”), a Delaware
corporation, hereby establishes an incentive compensation plan to be known as
the “AAM 2009 Long-Term Incentive Plan” (the “Plan”), as set forth in this
document. The Plan permits the payment of cash awards based upon the achievement
of predefined performance goals established by the Committee.

     

    The Plan
shall become effective as of January 1, 2009 (the “Effective Date”) and shall
remain in effect as provided in Section 1.3 hereof.

     

    1.2          Purpose of the Plan. The
purposes of the Plan are to reward Participants for the overall success of the
Company; to provide Participants with an incentive for excellence in individual
performance; to retain key senior employees; and to provide a competitive and
valuable long-term incentive program for Participants.

     

    1.3          Duration of the Plan. The Plan
shall commence on the Effective Date and shall remain in effect, subject to the
right of the Board to alter, amend, suspend, or terminate the Plan at any time
pursuant to Article 7 hereof.

     

    Article
2. Definitions

    

    For
purposes of the Plan, the capitalized words shall have the meanings set forth
below:

     

    
      	
               
      

            	
              (a)

            	
              “Affiliate” means any
      Parent or Subsidiary and any person that directly or indirectly through
      one or more intermediaries, controls, is controlled by, or is under common
      control with, the Company.

            

    

     

    
      	
               
      

            	
              (b)

            	
              “Award” means a grant
      under the Plan of a cash incentive opportunity to be earned by and paid to
      a Participant pursuant to the terms of the Plan and Award
      Document.

            

    

     

    
      	
               
      

            	
              (c)

            	
              “Award Document” means
      an agreement, certificate or other type or form of document or
      documentation approved by the Committee that sets forth the terms and
      conditions of an Award. An Award Document may be written, electronic, or
      other media, may be limited to a notation on the books and records of the
      Company and, unless the Committee requires otherwise, need not be signed
      by a representative of the Company or
  Participant.

            

    

     

    
      	
               
      

            	
              (d)

            	
              “Award Opportunity” or
      “Award
      Opportunities” means the Award or Awards that a Participant can
      earn based upon the achievement of a pre-established performance goal or
      goals during a Performance Period as specified in the Participant’s Award
      Document and pursuant to the terms of the
Plan.

            

    

     

    
      	
               
      

            	
              (e)

            	
              “Beneficial Owner” or
      “Beneficial
      Ownership” shall have the meaning ascribed to such terms in Rule
      13d-3 of the General Rules and Regulations under the Exchange
      Act.

            

    

     

    
      	
               
      

            	
              (f)

            	
              “Board of Directors” or
      “Board” means the
      Board of Directors of the Company.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (g)

            	
              “Change in Control” means
      any of the following events:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Any
      Person, excluding the Company and any subsidiary and any employee benefit
      plan sponsored or maintained by the Company or any subsidiary (including
      any trustee of such plan acting as trustee), directly or indirectly,
      becomes the beneficial owner (as defined in Rule 13d-3 under the
      Exchange Act), of securities of the Company representing 30% or more of
      the combined voting power of the Company’s then outstanding
      securities; or

            

    

    

    
      	
              (ii)  

            	
              The
      consummation of any merger or other business combination involving the
      Company, a sale of 51% or more of the Company’s assets, liquidation or
      dissolution of the Company or a combination of the foregoing transactions
      (the “Transactions”) other
      than a Transaction immediately following which the shareholders of the
      Company immediately prior to the Transaction own, in the same proportion,
      at least 51% of the voting power, directly or indirectly, of (A) the
      surviving corporation in any such merger or other business combination;
      (B) the purchaser of or successor to the Company’s assets;
      (C) both the surviving corporation and the purchaser in the event of
      any combination of Transactions; or (D) the parent company owning
      100% of such surviving corporation, purchaser or both the surviving
      corporation and the purchaser, as the case may
  be; or

            

    

    

    
      	
               
      

            	
              (iii)

            	
              Within
      any 12-month period, the persons who were directors immediately before the
      beginning of such period (the “Incumbent Directors”)
      cease (for any reason other than death) to constitute at least a majority
      of the Board or the board of directors of a successor to the Company. For
      this purpose, any director who was not a director at the beginning of such
      period shall be deemed to be an Incumbent Director if such director was
      elected to the Board by, or on the recommendation of or with the approval
      of, at least two thirds of the directors who then qualified as Incumbent
      Directors, so long as such director was not nominated by a person who
      commenced or threatened to commence an election contest or proxy
      solicitation by or on behalf of a person (other than the Board) or who has
      entered into an agreement to effect a Change in Control or expressed an
      intention to cause such a Change in
Control.

            

    

    

     

    
      	
               
      

            	
              (h)

            	
              “Code” means the
      Internal Revenue Code of 1986, as amended from time to
    time.

            

    

     

    
      	
               
      

            	
              (i)

            	
              “Committee” means the
      Compensation Committee of the Board, which shall consist entirely of
      “non-employee directors” for purposes of Rule 16b-3 of the Exchange Act
      and “outside directors” for purposes of Section 162(m) of the Code;
      provided, however, that a failure to meet such requirements shall not
      invalidate awards granted or decisions made by the
    Committee.

            

    

    

    
      	
               
      

            	
              (j)

            	
              “Director” means any
      individual who is a member of the Board of Directors of the
      Company.

            

    

     

    
      	
               
      

            	
              (k)

            	
              “Disability” shall have
      the meaning ascribed to such term in the governing long-tern disability
      plan pursuant to which the Participant may be entitled to benefits, if
      any, or if there shall be no such plan, as determined by the Committee in
      its absolute discretion.

            

    

     

    
      	
               
      

            	
              (l)

            	
              “Effective Date” shall
      have the meaning ascribed to such term in Section 1.1
    hereof.

            

    

     

    
      	
               
      

            	
              (m)

            	
              “Eligible Individuals”
      means the individuals described in Article 4 who are eligible for Awards
      under the Plan.

            

    

     

    
      	
               
      

            	
              (n)

            	
              “Exchange Act” means the
      Securities Exchange Act of 1934, as amended from time to time, or any
      successor act thereto.

            

    

     

    
      	
               
      

            	
              (o)

            	
              “Participant” means
      Eligible Individual who has been granted an Award under the
      Plan.

            

    

     

    
      	
               
      

            	
              (p)

            	
              “Performance Period”
      means the period established by the Committee and set forth in the
      Award Document over which performance goals are
  measured.

            

    

     

    
      	
               
      

            	
              (q)

            	
              “Person” shall have the
      meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and
      used in Sections 13(d) and 14(d) thereof, including a “group” as defined
      in Section 13(d) thereof.

            

    

     

    
      	
               
      

            	
              (r)

            	
              “Retirement” means, with
      respect to any Participant, such Participant’s voluntary resignation at
      any time after attaining age 65 or as such term is defined in the
      governing retirement plan(s) to which the Participant may be entitled to
      benefits, if any.

            

    

     

    
      	
               
      

            	
              (s)

            	
              “Subsidiary”
      means

            

    

     

    
      	
              (i)  

            	
              a
      corporation or other entity with respect to which the Company, directly or
      indirectly, has the power, whether through the ownership of voting
      securities, by contract or otherwise, to elect at least a majority of the
      members of the board of directors or analogous governing body,
      or

            

    

     

    
      	
              (ii)  

            	
              any
      other corporation or other entity in which the Company, directly or
      indirectly, has an equity or similar interest and that the Committee
      designates as a Subsidiary for purposes of the Plan. For purposes of
      determining eligibility for the grant of Incentive Stock Options under the
      Plan, the term “Subsidiary” shall be defined in the manner required by
      Section 424(f) of the Code.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              (t)  

            	
              “Target Award
      Opportunity” means the target award opportunity specified in the
      Participant’s Award Document, as determined by the
    Committee.

            

    

     

    Article
3. Administration

    

    3.1          The Committee. The Plan shall
be administered by the Committee.

     

    3.2          Authority of the Committee.
Except as limited by law or by the Certificate of Incorporation or Bylaws of the
Company, and subject to the provisions herein, the Committee shall have full and
absolute discretionary power to select Eligible Individuals who shall
participate in the Plan; determine the terms and conditions of Awards and Award
Documents in a manner consistent with the Plan; construe and interpret the Plan
and any agreement or instrument entered into under the Plan (including, without
limitation, any Award Document); establish, amend, or waive rules and
regulations for the Plan’s administration; and, subject to the provisions of
Article 7 herein, amend the terms and conditions of any outstanding Award
to the extent such terms and conditions are within the discretion of the
Committee as provided in the Plan and the related Award Document. Further, the
Committee shall make all other determinations which may be necessary or
advisable for the administration of the Plan.

     

    3.3          Decisions Binding. All
interpretations, determinations, and decisions made by the Committee pursuant to
the provisions of the Plan and all related orders and resolutions of the
Committee shall be final, conclusive, and binding on all individuals or
entities, including the Company, Eligible Individuals, Participants, and their
estates and beneficiaries.

     

    Article
4. Eligibility and Participation

    

    4.1          Eligible
Individuals.  Awards may be granted to officers, executives and
other key employees, as determined by the Compensation Committee, directors and
Non-Employee Directors of the Company or any of its Subsidiaries or joint
ventures, partnerships or business organizations in which the Company or its
Subsidiaries have an equity interest. Only employees of the Company or a Parent
or Subsidiary may be granted Awards. The Committee shall have the authority to
select the persons to whom Awards may be granted and to determine the number and
terms of Awards to be granted to each Participant. Under the Plan, references to
“employment” or “employed” include the service of Participants who are
Non-Employee Directors, except for purposes of determining
eligibility.

     

    4.2          Actual Participation. The
Committee, in its sole discretion, shall determine which Eligible Individuals
shall participate in the Plan during a Performance Period. Such determination
shall be made no later than three months after the start of each applicable
Performance Period. The Committee shall have no obligation to grant any Eligible
Individual an Award or to designate an Eligible Individual as a Participant
solely by reason of the Eligible Individual having received a prior Award or
having been previously designated as a Participant. The Committee may grant more
than one Award to a Participant and may designate an Eligible Individual as a
Participant for overlapping periods of time.

     

    Article
5. Award Opportunity, Performance Goals, and Performance Period

    

    5.1          Setting Award Opportunities.
The Committee shall determine the duration of each Performance Period and set
each Participant’s Award Opportunities with respect to a Performance Period. In
addition, the Committee shall establish the performance goal or goals that must be achieved
during a Performance Period for a Participant to earn and be paid his Award. The
Committee shall specify the foregoing in each Participant’s Award
Document.

     

    5.2          Earning Awards. Subject to the
terms of the Plan and the Award Document, an Award shall be earned by and paid
to a Participant for a Performance Period based on the achievement of the
performance goal or performance goals for such Performance Period as set forth
in his Award Document.

     

    5.3          Award Document. The right to
earn and be paid an Award shall be evidenced by an Award Document that shall
specify the Performance Period, the Participant’s Target Award Opportunity for
the Performance Period, the performance measures and related performance goals
for earning an Award, the determination of the Participant’s Award, and such
other provisions as the Committee shall determine. Award Documents may differ
among Participants. The right to earn an Award by a Participant under an Award
Document shall not confer upon any other Participant or Eligible Individual or
any future Participant or Eligible Individual a right to the same or similar
benefits.

     

    5.4          Form and Timing of Payment of
Awards. Payment of an Award shall be made solely in cash in a single lump
sum at such time as specified in a Participant’s Award Document and shall be
subject to the approval of the Committee.

     

    5.5          Effect of Termination of
Employment. The effect of a Participant’s termination of employment
during a Performance Period regarding an outstanding Award, if any, shall be
specified in the Participant’s Award Document.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.6          Effect of a Change in Control.
The effect of a Change in Control during a Performance Period on a
Participant’s outstanding Award, if any, shall be specified in the Award
Document.

     

    5.7          Nontransferability.  The
Award may not be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Participant other than by will or by the laws
of descent and distribution.  Except for the designation of the
Participant's beneficiary, the purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance of the Award shall be void and
unenforceable against the Company or any Affiliate.

     

    Article
6. Employment and Participation

    

    6­­­­­­­­­­­­­­­­­­.1          Employment. Neither this Plan
nor the Award Document shall be construed as giving the Participant the right to
be retained in the employ of, or in any consulting relationship to, the Company
or any Affiliate.  Further, the Company or any Affiliate may at any
time dismiss the Participant or discontinue any consulting relationship, free
from any liability or any claim under this Plan or the Award Document, except as
expressly provided in this Plan.

     

    6.2          Participation. No employee
shall have the right to be selected to be paid an Award under this Plan, or,
having been so selected, to be paid an award at a future date.

     

    Article
7. Amendment and Termination

    

    7.1          Amendment and Termination. The
Board may, at any
time and from time to time, alter, amend, suspend, or terminate the Plan in
whole or in part.

     

    7.2          Effect of Amendment or Termination.
No amendment or termination of the Plan may adversely affect in any
material way any Award previously granted under the Plan without the written
consent of the Participant holding such Award.

     

    Article
8. Tax Withholding

    

    The
Company shall have the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, and local
taxes, as required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan.

     

    Article
9. Indemnification

    

    Each
individual who is or shall have been a member of the Committee, or of the Board,
shall be indemnified by the Company against and from any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit, or proceeding to which he may be
a party or in which he may be involved by reason of any good faith action taken
or good faith failure to act under the Plan. Such individuals shall be
indemnified by the Company for all amounts paid by him in settlement thereof,
with the Company’s approval, or paid by him in satisfaction of any judgment in
any such action, suit, or proceeding against him; provided he shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such individuals may be entitled under the Company’s Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.

     

    Article
10. Successors

    

    All
obligations of the Company under the Plan shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially of all of the business and/or assets of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Article
11. Nature of the Plan

    

    The Plan
constitutes a mere promise by the Company to make benefit payments in the
future. A Participant has the status of a general unsecured creditor of the
Company. Nothing contained herein shall be deemed to create a trust or fund of
any kind or create any fiduciary relationship. The Plan is intended to be an
unfunded arrangement for tax purposes and for purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended.

     

    Article
12. Miscellaneous

    

    12.1               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.

     

    12.2               Severability. In the event any
provision of the Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of the Plan, and
the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.

     

    12.3               Requirements of Law. The grant
of Awards under the Plan and any Award Document shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be
required.

     

    12.4               Governing Law. To the extent
not preempted by federal law, the Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the state of New York,
without giving effect to the principles of conflicts of law.

     

    Article
13. Section 409A

    

    Awards
granted pursuant to the Plan are intended to satisfy the requirements of Section
409A of the Code with respect to amounts subject thereto and shall be
interpreted and construed in a manner consistent with that intent. If any
provision of this Plan or an Award Document causes the Award not to satisfy the
requirements of Section 409A of the Code, or could otherwise cause the
Participant to recognize income or be subject to the interest and penalties
under section 409A of the Code, then the provision shall have no effect or, to
the extent practicable, the Company may modify the provision to maintain the
original intent without violating the requirements of Section 409A of the
Code.

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