Exhibit 10.3

ADVANCED ENERGY INDUSTRIES, INC.
2003 STOCK OPTION PLAN
STANDARD STOCK OPTION AGREEMENT

     The Optionee described in the accompanying Notice of Option Grant has been
awarded an option to purchase common stock of Advanced Energy Industries, Inc.
(“Option”), the terms of which are contained in:

  •   this Standard Stock Option Agreement (“Agreement”);     •   the Notice of
Option Grant (the “Notice”); and     •   the Advanced Energy Industries, Inc.
2003 Stock Option Plan (the “Plan”).

     This Agreement is entered into by and between the Optionee and Advanced
Energy Industries, Inc. (“AEI”), as of the Grant Date specified in the Notice.

     1. Defined Terms. Specified in the Notice are the Optionee, the Grant Date
(which is the effective date of this Option), the number of Shares subject to
this Agreement, the Exercise Price per Share and the latest Expiration Date.
Other terms used but not defined in this Agreement have the meanings given to
them in the Plan.

     2. Exercisability. Subject to the limitations herein, this Option is
exercisable in installments according to the vesting schedule set forth in the
Notice. An installment shall not become exercisable on the otherwise applicable
vesting date for that installment if the Optionee’s Date of Termination (see
Section 4 below) occurs on or before that date. This Option may be exercised on
or after the Date of Termination (if at all) only as to that portion of the
Shares as to which it was exercisable immediately before the Date of
Termination. Further vesting of this Option shall be suspended on and after the
91st day of the Optionee’s approved leave of absence (unless such suspension is
prohibited by law) and will resume (without credit for the suspension period) if
and when the leave of absence terminates before the Optionee’s Date of
Termination.

     3. Termination. This Option shall terminate, and cease to be exercisable,
on the close of business of the last business day that occurs on or before the
earliest to occur of:

  (i)   the date the Optionee voluntarily terminates Service before retirement
(as described in (vi) below), is terminated for Cause, or terminates for any
other reason not described below in this section;     (ii)   the 91st day of a
leave of absence, or such later date that the Optionee’s right to reemployment
is no longer guaranteed by law or by agreement with the Company;     (iii)   if
the Optionee is terminated by the Company involuntarily, 180 days after the Date
of Termination;     (iv)   if the Optionee terminates Service by reason of
disability as defined in Plan Section 9(c), the period of twenty-four
(24) months after the Date of Termination;

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  (v)   if the Optionee terminates Service by reason of the Optionee’s death,
the period of twelve (12) months after the date of death;     (vi)   if the
Optionee retires by terminating after having attained age 60 and having earned 5
or more years of continuous Service, the 3-year anniversary of the Date of
Termination; and     (vii)   the expiration date listed in the Notice (or, if
earlier, the 10-year anniversary of the Grant Date).

     This Option may terminate earlier than the date described above in this
section in connection with a Change in Control as provided under Section 10 of
the Plan.

     4. Date of Termination. An Optionee’s “Date of Termination” is the first
day after the Grant Date on which the Optionee is no longer in the Service of
the Company, regardless of the reason for such termination. For purposes of this
definition, the Optionee’s Service shall not be considered terminated while the
Optionee is on a leave of absence from the Company until the leave exceeds
90 days or such later date as the Optionee’s right to employment is no longer
guaranteed by statute or contract. If, as a result of a sale or other
transaction, (i) the Optionee’s employer ceases to be an entity within the
Company and (ii) the Optionee is not, at the end of the 30-day period following
the transaction, employed by the Company, then the occurrence of such
transaction shall be treated as the Optionee’s Date of Termination caused by the
Optionee being discharged by the Company involuntarily.

     5. Method of Exercise. Subject to its terms, this Option may be exercised
in whole or in part by filing a written notice with AEI’s stock plan
administrator at its corporate headquarters before this Option terminates. Such
notice shall specify the number of Shares which the Optionee elects to purchase
and will include payment of the Exercise Price for such Shares. Payment shall be
by cash or personal check payable to Advanced Energy Industries, Inc. In
addition to any other method approved by the Administrator, this Option may be
exercised by (i) delivery (or attestation, if acceptable to the Administrator)
of Shares owned by the Optionee having an aggregate Fair Market Value (valued as
of the date of exercise) that is equal to the amount of cash that would
otherwise be required and (ii) authorizing a third party to sell the Shares (or
a sufficient portion of the Shares) acquired upon exercise of this Option and
remitting to AEI a sufficient portion of the sale proceeds to pay the entire
Exercise Price and any tax withholding resulting from exercise. This Option is
not exercisable if and to the extent AEI determines that exercise would violate
applicable securities laws or the rules and regulations of any securities
exchange on which AEI stock is traded. If AEI makes such a determination, it
shall use all reasonable efforts to obtain compliance with such laws, rules and
regulations. In making any determination hereunder, AEI may rely on the opinion
of its counsel.

Special Rule for Residents of China. A resident of China must pay the Exercise
Price through the immediate sale of Shares acquired upon Option exercise and
remitting to the Company a sufficient portion of the proceeds to pay the
aggregate Exercise Price and tax withholding.

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     6. Withholding. Performance under this Agreement is subject to withholding
of all applicable taxes. Subject to such rules that the Administrator may
establish from time to time, Optionee may elect to satisfy any withholding
obligations by surrendering Shares that the Optionee already owns, or to which
the Optionee is otherwise entitled under the Plan. If this Option is exercised
while the Optionee is resident outside the United States, AEI may require
settlement of all applicable tax withholding through the immediate sale of a
sufficient number of Shares that would otherwise be acquired upon Option
exercise.

     7. Transferability. Except as provided in Plan Section 6(c), this Option is
not transferable.

     8. Heirs and Successors. This Agreement shall be binding upon, and inure to
the benefit of, AEI and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company’s assets and business. If any rights
exercisable by the Optionee under this Agreement have not been exercised at the
time of the Optionee’s death, such rights shall be exercisable in accordance
with Section 9(e) of the Plan.

     9. Administration. The Administrator shall control the operation and
administration of this Option, and the Administrator shall have all powers with
respect to this Agreement as it has with respect to the Plan. Any interpretation
of the Agreement by the Administrator and any decision made by it with respect
to the Agreement is final and binding on all persons.

     10. Plan Governs. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which may be obtained by the Optionee from AEI’s stock plan
administrator; and this Agreement is subject to all interpretations, amendments,
rules and regulations promulgated by the Administrator from time to time
pursuant to the Plan.

     11. Not An Employment Contract. This Option does not confer on the Optionee
any right with respect to continuance of employment or other service with the
Company, nor will it interfere in any way with any right the Company would
otherwise have to terminate or modify the terms of such Optionee’s employment or
other service at any time.

     12. Notices. Any written notices provided for in this Agreement or the Plan
shall be in writing and shall be deemed sufficiently given if either hand
delivered or if sent by fax or overnight courier, or by postage paid first class
mail. Notices sent by mail shall be deemed received three business days after
mailing but in no event later than the date of actual receipt. Notices shall be
directed, if to the Optionee, at the Optionee’s address indicated by AEI’s
records, or if to AEI, to AEI’s stock plan administrator at its principal
executive office.

     13. Fractional Shares. No exercise shall be allowed with respect to a
fraction of a Share. Should only a fraction of one Share remain vested but
unexercised when the last exercise under this Option is made, AEI shall pay to
the Optionee an amount equal to the Fair Market Value of such fractional Share.

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     14. No Rights As Stockholder. The Optionee shall have no rights of a
stockholder with respect to the Shares subject to this Option, until a stock
certificate has been duly issued following exercise of this Option as provided
herein.

     15. Amendment. This Agreement may be amended by written agreement of the
Optionee and the Administrator, without the consent of any other person.

     16. Acknowledgements. Optionee acknowledges receipt of and understands and
agrees to the terms of this Option. Optionee also understands and agrees to the
following:

  (a)   As of the Grant Date, this Agreement, the Notice and the Plan set forth
the entire understanding between Optionee and the Company regarding the
acquisition of Shares and supersedes all prior oral and written agreements
pertaining to this Option.     (b)   In order to perform its duties under the
Plan, the Company may process sensitive personal data about Optionee that is not
limited to the information provided above, any changes thereto and other
appropriate personal and financial data about Optionee. Optionee hereby gives
explicit consent to the Company to process any such personal data and/or
sensitive personal data. Optionee also hereby gives explicit consent to the
Company to transfer any such personal data and/or sensitive personal data
outside the country in which Optionee is employed, and to the United States. The
legal persons for whom such personal data are intended are Advanced Energy
Industries, Inc. and [INSERT BROKER NAME]. Optionee has been informed of his or
her right of access and correction to his or her personal data by applying to
[INSERT NAME OF LOCAL ADMINISTRATOR].     (c)   Optionee understands that AEI
has reserved the right to amend or terminate the Plan at any time, and that the
grant of an option under the Plan at one time does not in any way obligate AEI
to grant additional options at any future time in any amount. Optionee
acknowledges and understands that the grant of this Option and any future
options granted under the Plan is wholly discretionary in nature and is not to
be considered part of any normal or expected compensation that is or would be
subject to severance, resignation, redundancy or similar pay, other than to the
extent required by local law.

     17. Immediate Sale of Shares for Residents of China. Upon the exercise of
this Option, an Optionee who is a resident of China shall authorize and direct
the broker to immediately sell any and all Shares that otherwise would have been
delivered, net of applicable taxes and exercise consideration due AEI. This
Agreement shall serve as such Optionee’s express authorization to sell
immediately any and all Shares acquired upon the exercise of this Option. As
soon as reasonably practical, Optionee shall be entitled to payment of the
proceeds resulting from such disposition, net of the applicable tax withholding
and exercise consideration due to the Company.

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     By executing this Agreement, Optionee agrees to the foregoing and
acknowledges having received a copy of the separate Plan and Notice, both of
which contain important terms.

      OPTIONEE   ADVANCED ENERGY INDUSTRIES, INC.         By:
_________________________________ Print Name: ________________________   Title:
Chief Financial Officer, Executive Vice
           President of Finance & Administration

 

 

 

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