Exhibit 10.3
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ADVISORY AGREEMENT
This Advisory Agreement (the “Agreement”) is entered into as of May 3, 2010 (the
“Effective Date”) between Advanced Energy Industries, Inc., a Delaware
Corporation, and its Affiliates (as defined below), having an address at 1625
Sharp Point Drive, Fort Collins, Colorado, 80525 (collectively, the “AEI”) and
Elwood Spedden, having an address at 5916 Watson Drive, Fort Collins, Coloado
80528 (the “Consultant”). “Affiliates” shall mean any person, or entity directly
or indirectly controlled by, controlling or under common control with Advanced
Energy Industries, Inc.
In consideration of the mutual promises contained herein, the Parties agree as
follows:

1.   Services. During the Term (defined below), AEI agrees to retain Consultant
to perform executive advisory services to Dr. Hans Betz, the Chief Executive
Officer (the “CEO”) of AEI (the “Services”). During the Term, Consultant will
routinely meet with the CEO at times mutually determined by them to review the
operations of the business. As a former member of the Board of Directors of AEI,
the Consultant has significant expertise and experience in the areas of customer
relations, sales, marketing and field service operations. AEI values such
expertise and experience and seeks such advisiory services during the Term.

2.   Term. This Agreement will commence as of the Effective Date and will
continue until May 2, 2011, unless earlier terminated in accordance with the
Agreement (the “Term”).

3.   Compensation. As full and complete payment for all Services rendered and
subject to Consultant’s compliance with all of its obligations under the
Agreement, AEI shall pay Consultant an aggregate amount of $35,000.00 payable in
four (4) quarterly installments of $8,750 as follows: May 15, 2010, August 15,
2010, November 15, 2010 and February 15, 2011 upon submission of a quarterly
invoice submitted by Consultant to AEI (the “Advisory Fee”). Consultant will not
be granted any stock options, restricted stock units or other equity awards for
the Service. To the extent permissible, the stock options and restricted stock
units that Consultant currently holds will continue to vest and be exercisable
in accordance with their terms, so long as Consultant provides Service during
the Term. It is the express intent of AEI and the Consultant that the
Consultant’s Services rendered to AEI during the Term shall not be interpreted
as an interruption of service or termination of services under any applicable
AEI equity plan as outlined in Exhibit A attached hereto (such continuation of
vesting and continuous sevice is referred collectively herein as the “Equity
Continuation”). Exhibit A provides a listing of Consultant’s equity treatment
under various equity plans and equity listing.

4.   Expenses. Reasonable and customary expenses may be invoiced to AEI if the
expenses are pre-approved by the CEO. All expenses and travel are subject to
AEI’s expense and travel policies.

5.   Independent Contractor. Consultant is an independent contractor, and except
for Equity Continuation, is not eligible to participate in or receive any
benefit from any benefit plan or program available to employees of AEI such as
health, disability, or life insurance, vacation or holiday pay, sick leave,
profit sharing or pension plans. Consultant is not entitled to and AEI shall not
provide workers’ compensation coverage for Consultant. Consultant is not
entitled to and AEI shall not provide unemployment compensation coverage for
Consultant. Consultant shall comply with all applicable laws and regulations and
all AEI safety and security rules, in the course of performing the Services and
shall have sole responsibility for the payment of all applicable taxes and
withholdings with respect to any and all compensation paid to Consultant
hereunder. Since

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    Consultant is an independent contractor, Consultant acknowledges that AEI
will comply with all appropriate tax requirements. Consultant is neither an
agent nor employee of AEI, and has no authority whatsoever to bind AEI by
contract or agreement of any kind.

6.   Intellectual Property. Consultant agrees that all deliverables, and any
other work product conceived, developed, written, or contributed by Consultant,
either individually or in collaboration with others, in connection with
providing the Services (collectively “Works”) are the sole property of AEI. All
right, title, and interest in or to the Works including, without limitation, all
patent rights, copyrights, mask work rights, trademark rights, and all other
present and future intellectual and industrial property rights of any kind
anywhere in the world (collectively, “Proprietary Rights”) shall belong
exclusively to AEI, and the Works shall constitute “works made for hire” as that
term is defined in the U. S. Copyright Act (17 USCA, Section 101). Consultant
agrees to disclose all Works to AEI as promptly and fully as practicable.
Consultant hereby irrevocably assigns and agrees to irrevocably assign to AEI,
without further consideration, all right, title and interest that Consultant may
presently have or acquire, free and clear of all liens and encumbrances, in and
to all the Works, and all Proprietary Rights therein. Consultant agrees to
perform, during and after the Term, all acts deemed reasonably necessary or
desirable by AEI to permit and assist it in evidencing, perfecting, obtaining,
maintaining, defending and enforcing the Proprietary Rights and the assignments
and licenses granted herein, all at AEI’s expense, but for no consideration to
Consultant in addition to Consultant’s fees. Consultant hereby irrevocably
designates and appoints AEI and its duly authorized officers and agents, as
Consultant’s agents and attorneys-in-fact, with full power of substitution, to
act for or on behalf and instead of Consultant to accomplish the foregoing,
which appointment is coupled with an interest. If the Works include previously
developed items owed or licensed by Consultant, Consultant hereby grants Company
an unrestricted, royalty-free, perpetual, irrevocable license to make, have
made, use, market, import, distribute, copy, modify, prepare derivative works,
perform, display, disclose, sublicense and otherwise exploit such previously
developed items. Consultant hereby irrevocably waives (and to the extent
necessary, has caused its employees, contractors and others to waive) all rights
under all laws (of the United States and all other countries) now existing or
hereafter permitted, with respect to any and all purposes for which the Works
may be used, including without limitation: (a) all rights under the United
States Copyright Act, or any other country’s copyright law, including but not
limited to, any rights provided in 17 U.S.C. §§ 106 and 106A; (b) any rights of
attribution and integrity or any other “moral rights of authors” existing under
statutory, common or any other law.

7.   Representations and Warranties; Disclaimer. Consultant represents, warrants
and covenants that its performance under this Agreement shall be conducted with
due diligence. EXCEPT FOR THE EXPRESS WARRANTIES PROVIDED IN THIS AGREEMENT, TO
THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY DISCLAIMS AND
EXCLUDES ALL REPRESENTATIONS, WARRANTIES, AND CONDITIONS WHETHER EXPRESS,
IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO REPRESENTATIONS, WARRANTIES,
OR CONDITIONS OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO ANY SERVICES, OR DELIVERABLES.

8.   Assignment. Consultant shall not assign, transfer or subcontract any right
in or obligation arising under this Agreement without AEI’s prior express
written consent (which consent may be withheld or delayed in AEI’s sole
discretion). Any assignment in violation of this paragraph shall be void and of
no effect.

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9.   Confidential Information. “Confidential Information” means, without
limitation, (a) all information relating to AEI’s business, products, services,
finances, or employees disclosed by AEI or otherwise obtained by Consultant
through the performance of Services either directly or indirectly in writing,
orally or by drawings, inspection of parts or equipment, whether or not marked
“Confidential Information” and (b) all information that is developed, created or
discovered by Consultant, either individually or in collaboration with others,
in providing the Services. Consultant shall not disclose or reveal to any third
party any Confidential Information (or any information derived therefrom) for
any purpose, except to those Consultant employees who have a legitimate “need to
know” and are bound in writing or by law or regulation to all of the
restrictions contained in this Section. Consultant shall not use Confidential
Information (or any information derived therefrom) for any purpose, except for
Consultant’s use (and not any third party’s use) as necessary in the ordinary
course of performing the Services. Consultant agrees to use its best efforts to
prevent inadvertent disclosure of Confidential Information to others. Consultant
agrees to treat the Confidential Information with at least the degree of care
that it treats similar materials of its own. Consultant will immediately notify
AEI of any unauthorized disclosure or release of Confidential Information.

10.   Confidentiality Exceptions. The obligations of Section 9 shall not apply
to any particular portion of the Confidential Information that: (i) was in the
public domain at the time it was received by Consultant; (ii) entered the public
domain subsequent to the time it was received by Consultant, through no fault of
Consultant; (iii) was in Consultant’s possession free of any obligation of
confidence prior to the time it was received by Consultant; (iv) was rightfully
communicated to Consultant free of any obligation of confidence subsequent to
the time it was communicated by Consultant; or (v) was developed by employees or
agents of Consultant independently of and without reference to any information
received by Consultant.

11.   Ownership and Return of Confidential Information. All materials furnished
to Consultant by AEI including Confidential Information shall remain the sole
property of AEI and nothing contained herein shall be construed as giving
Consultant any license or rights with respect to any information or materials
which may be disclosed to Consultant including Confidential Information.
Consultant shall make no copies of any Confidential Information without the
prior written consent of AEI and Consultant shall return to AEI promptly at its
request all Confidential Information along with all copies made thereof and all
documents or things containing any portion of any Confidential Information.

12.   Return of Other Materials. Consultant agrees that upon request or upon
termination of this Agreement, the Consultant will deliver to AEI any and all
drawings, notes, documents, Confidential Information, and other materials
received from AEI or originating from the consulting activity.

13.   No Conflicts. Consultant will refrain from any activity, and will not
enter into any agreement or make any commitment, that is inconsistent or
incompatible with Consultant’s obligations under this Agreement, including
Consultant’s ability to perform the Services. Consultant represents and warrants
that Consultant is not subject to any contract or duty that would be breached by
Consultant’s entering into or performing Consultant’s obligations under this
Agreement or that is otherwise inconsistent with this Agreement.

14.   Termination. Either party may terminate this Agreement if the other party
breaches any provision of this Agreement and fails to cure such breach within
30 days of the breaching party’s receipt of

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    written notice of the breach. Sections 5, 6, 7, 9, 10, 11, 12, 14, 15 and 16
shall survive termination or expiration of the Agreement.

15.     Limitation on Liability. in no event will AEI be liable for any
consequential, indirect, exemplary, special, or incidental damages arising from
or relating to this Agreement. AEI’s total cumulative liability in connection
with this Agreement, whether in contract or tort or otherwise, will not exceed
the aggregate amount of Advisory Fees and Expenses paid by AEI to Consultant for
Services performed under this Agreement.

16.   General. In the event that any of the provisions of this Agreement shall
be held by a court or other tribunal of competent jurisdiction to be illegal,
invalid or unenforceable, such provisions shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain in full
force and effect. This Agreement shall be governed and interpreted in accordance
with the laws of the State of Colorado without regard to the conflicts of law
provisions thereof that would require the application of the laws of any other
state. The sole jurisdiction and venue for actions related to the Agreement
shall be the state of Colorado. All notices shall be in writing and deemed duly
given if (a) delivered in person or sent by registered or certified mail,
postage prepaid, and (b) addressed in accordance with this Section. Notices
shall be deemed effective only upon receipt by the party being served. All
notices to either party shall be addressed to the address set forth on the first
page of this Agreement. This Agreement contains the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and merges and supersedes all prior agreements, discussions and writings with
respect thereto. Time is of the essence with respect to Consultant’s performance
of the Services and delivery of the deliverables. This Agreement may be executed
(a) in counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same instrument, and (b) by
facsimile signature and facsimile signatures shall be fully binding and
effective for all purposes and shall be given the same effect as original
signatures.

    In witness whereof, the parties have executed this Agreement as of the
Effective Date.

    FOR ADVANCED ENERGY INDUSTRIES, INC.:

         
/s/ Hans Betz
 
Dr. Hans Betz, Chief Executive Officer
  May 3, 2010
 
Date    
Name/Title
       
 
       
FOR CONSULTANT:
         
/s/ Elwood Spedden
 
Elwood Spedden
  May 3, 2010
 
Date    
“Consultant”
       

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