exv10w2



 




Exhibit 10.2


ADVANCED ENERGY INDUSTRIES, INC.




AMENDED AND RESTATED 2003 NON-EMPLOYEE DIRECTORS’

STOCK OPTION PLAN

Adopted February 12, 2003

AMENDED AND RESTATED FEBRUARY 15, 2006

AMENDED AND RESTATED FEBRUARY 21, 2007




     1. PURPOSE. The purpose of the Plan is to attract and retain the services of
experienced and knowledgeable non-employee directors of Advanced Energy Industries, Inc., and to
provide an incentive for such directors to increase their proprietary interests in the Company’s
long-term success and progress.



     2. DEFINITIONS. Whenever the following terms are used in the Plan, they shall have the
meaning indicated below, unless a different meaning is required by the context.



     (a) “Administrator” means the administrative committee described in Section 3.



     (b) “Board” means the board of directors of the Company.



     (c) “Company” means Advanced Energy Industries, Inc., a Delaware corporation.



     (d) “Non-Employee Director” means any member of the Board who is a “non-employee
director” within the meaning of Rule 16b-3(b)(3)(i) under Section 16 of the Securities Exchange Act
of 1934 (“1934 Act”).



     (e) “Plan” means this Advanced Energy Industries, Inc. Amended and Restated 2003
Non-Employee Directors’ Stock Option Plan.



     (f) “Share” means one share of common stock of the Company.



     3. ADMINISTRATION. The Plan shall be administered by a committee selected by the Board
consisting of at least 2 individuals each of whom is either (i) a member of the Board and not a
Non-Employee Director or (ii) a senior officer of the Company who is not a member of the Board.
Subject to the provisions of the Plan, the Administrator shall have the authority to determine all
other matters relating to administration and operation of the Plan. All questions of
interpretation, implementation, and application of the Plan shall be determined by the
Administrator in its sole discretion. Such determinations shall be final and binding on all
persons.



     4. SHARES SUBJECT TO THE PLAN. The maximum number of Shares that may be issued pursuant
to awards granted under the Plan is seven hundred fifty thousand (750,000), subject to adjustment
as provided in Section 6(b) and subject to limited re-issuance as indicated below. If an award
expires, is surrendered, or in the case of options becomes unexercisable without having been
exercised in full, the unissued or retained Shares shall become available for future grant under
the Plan. Other Shares that actually have been issued under the Plan pursuant to an award shall not
be returned to the Plan and shall not become available for future grant under the Plan.



     5. ELIGIBILITY. A Non-Employee Director may receive awards under this Plan on the terms
and conditions set forth in Sections 6 and 7. No other person may benefit under this Plan.



     6. GENERAL TERMS AND CONDITIONS.



     (a) Automatic Grants. On and after the date of the annual meeting of the
Company’s stockholders to be held in 2007, and subject to adjustment under Section 6(b), a
Non-Employee Director will automatically receive fifteen thousand (15,000) Restricted Stock Units
on the date first elected or appointed as a member of the Board and (ii) six thousand (6,000)
Restricted Stock Units on any date re-elected (or first elected after an appointment) as a member
of the Board by the Company’s stockholders. In addition, any incumbent Non-Employee Director who is
re-elected at the 2007 annual meeting of stockholders will receive ten thousand (10,000) Restricted
Stock Units upon such re-election. Any such grant will be subject to the terms and conditions set
forth in this Plan, and will be evidenced by written notice in such form as the Administrator shall
determine. Pursuant to Section 7, the form of award granted may be changed from time to time by
resolution of the Board of Directors.



     (b) Changes in Capitalization or Corporate Transaction. In the event of any
merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock
split, separation, liquidation or other change in the corporate structure or capitalization
affecting the Shares, appropriate adjustment shall be made by the Administrator in the kind, price, and number of shares of stock (including, but not limited to, the
maximum number of Shares reserved under the Plan) that are or may become subject to the Plan. If in
connection with the change the Company ceases to exist, the surviving or successor entity must
either assume the Company’s rights and obligations with respect to outstanding awards or substitute
for outstanding awards substantially equivalent awards for equity interests in the entity. If there
is no surviving or successor entity, a Non-Employee Director’s outstanding option shall become
fully vested and exercisable as of the date seven (7) calendar days before the change. Restricted
Stock



 









 




and Restricted Stock Units shall vest upon consummation of the change. The exercise of any option
that was permissible solely by reason of the change shall be conditioned upon consummation of the
change. Options that are neither assumed, substituted nor exercised as of the time of the change
shall terminate and cease to be outstanding.




     (c) Amendment. The Administrator shall have the power to modify, extend, or
renew an outstanding award granted under this Plan, in a manner consistent with the terms of the
Plan, provided that any such action may not significantly impair the award holder’s rights without
his or her consent. However, the Company will not reduce the exercise price of any outstanding
option or cancel outstanding options and grant replacement options with a lower exercise price
without the prior approval of the shareholders.



     7. AWARDS.



     (a) Awards may take the form of Restricted Stock Units, Restricted Stock and/or Stock
Options. The form of award granted under the Plan may be changed from time to time by resolution of
the Board of Directors. Restricted Stock Units will be granted upon approval of this amended and
restated Plan.



     (b) Restricted Stock Units



     i) Vesting. Restricted Stock Units shall vest over a period of time to be
established by the Administrator at the time of grant. Each award of Restricted Stock Units may be
subject to a different vesting schedule. At the time of the grant, the Administrator may, in its
sole discretion, prescribe restrictions in addition to or other than the expiration of the vesting
period, including the satisfaction of corporate or individual performance objectives, which may be
applicable to all or any portion of the Restricted Stock Units.



     ii) Payment for Shares. At the time Shares are issued to the Non-Employee
Director pursuant to Restricted Stock Units, the Non-Employee Director shall be required, to the
extent required by applicable law, to purchase such Shares from the Company at a purchase price
equal to the aggregate par value of the Shares represented by such Restricted Stock. The purchase
price, if any, shall be payable in cash or, in the discretion of the Administrator, in
consideration for past Services rendered to the Company or for such other form of consideration
determined by the Administrator.



     iii) Withholding Taxes. The Company shall have the right to deduct from the
Shares issuable pursuant to Restricted Stock Units, or to accept from the Non-Employee Director the
tender of, a number of whole Shares having a fair market value, as determined by the Administrator,
equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to
be withheld by the Company with respect to the Restricted Stock Units or the Shares acquired
pursuant thereto. Alternatively or in addition, in its sole discretion, the Company shall have the
right to require Non-Employee Director, through payroll withholding, cash payment or otherwise, to
make adequate provision for any such tax withholding obligations of the Company arising in
connection with the Restricted Stock Units or the Shares acquired pursuant thereto.



     iv) Termination of Service. Unless otherwise provided in an Award Agreement or
in writing after the Award Agreement is issued, upon the termination of the Non-Employee Director’s
Service, any Restricted Stock Units held by such Non-Employee Director that have not vested, or
with respect to which all applicable restrictions and conditions have not lapsed, shall immediately
be deemed forfeited. Upon forfeiture of Restricted Stock Units, the grantee shall have no further
rights with respect to such award.



     v) Transferability. Restricted Stock Units granted under the Plan are not
transferable by the Non-Employee Director; provided, however, that a restricted stock unit may be
transferred upon the approval of the Administrator (in its sole discretion) by appropriate
instrument pursuant to a domestic relations order described in Rule 16a-12 of the 1934 Act or to an
inter vivos or testamentary trust in which the option is to be passed to the Non-Employee
Director’s beneficiaries upon the Non-Employee Director’s death or by gift to his or her immediate
family (consisting of the Non-Employee Director’s child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships). Any other purported transfer
shall be null and void.



     vi) Rights of a Holder. A Non-Employee Director shall have no rights as a
shareholder with respect to the Shares covered by his or her Restricted Stock Units until the date
of the issuance to him or her of a share certificate for the Shares, and no adjustment will be made
for dividends or other rights for which the record date is prior to the date the certificate is
issued. A holder of Restricted Stock Units shall have no rights other than those of a general
creditor of the Company. Restricted Stock Units shall represent an unfunded and unsecured
obligation of the Company, subject to the terms and conditions of the applicable award agreement.



     (c) Restricted Stock



     i) Vesting. An award under this section may condition the vesting of Shares on
the performance of future services by the eligible person, and may alternatively or additionally
condition the vesting of Shares on such other performance-related conditions that the Administrator
shall impose in its sole discretion.



 









 





     ii) Transferability



     (1) An unvested Share will not be transferable by the Non-Employee Director until it
becomes vested. The Company shall receive a stock power duly endorsed in blank with respect to
restricted Shares, and the related stock certificate shall bear the following legend:



     (a) The transferability of this certificate and the shares of stock represented hereby
are subject to the restrictions, terms and conditions (including forfeiture provisions and
restrictions against transfer) contained in the Advanced Energy Industries, Inc. 2003 Non-Employee
Directors’ Stock Option Plan and an award agreement entered into between the registered owner of
such shares and Advanced Energy Industries, Inc. A copy of the plan and agreement is on file in the
office of the Secretary of Advanced Energy Industries, Inc.



     (2) Such legend shall be removed from the certificate only after the Shares vest. Each
certificate issued with respect to Shares subject to this section, together with the stock powers
related to the Shares, shall be deposited by the Company with a custodian designated by the Company
(and which may be the Company or an affiliate).



     iii) Voting Rights and Dividends. Unvested Shares may be voted by the holder of
such Shares. Dividends payable with respect to unvested Shares will be paid to the holder of the
Shares without regard to restrictions.



     (d) Options



     i) Options Are Not Qualified. Options granted under the Plan are not incentive
stock options described in Internal Revenue Code Section 422.



     ii) Transferability. Options granted under the Plan are not transferable by the
Non-Employee Director and shall be exercisable during the Non-Employee Director’s lifetime only by
the Non-Employee Director; provided, however, that an option may be transferred upon the approval
of the Administrator (in its sole discretion) by appropriate instrument pursuant to a domestic
relations order described in Rule 16a-12 of the 1934 Act or to an inter vivos or testamentary trust
in which the option is to be passed to the Non-Employee Director’s beneficiaries upon the
Non-Employee Director’s death or by gift to his or her immediate family (consisting of the
Non-Employee Director’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships). Except as provided in Section 7(d)(vi), no option
or interest therein may be otherwise transferred, assigned, pledged, or hypothecated by a
Non-Employee Director, whether by operation of law or otherwise, or be made subject to execution,
attachment, or similar process. Any such purported assignment, sale, transfer, delegation, or other
disposition shall be null and void.



     iii) Exercise Price. The exercise price of an option shall be not less than one
hundred percent (100%) of the fair market value of a Share on the date of grant. The fair market
value of a Share as of any date means the closing sale price of a Share on such date (or previous
business day if such date is not a business day) on the principal exchange or market on which
Shares are then listed or admitted to trading. If, for any reason, the preceding rule cannot be
applied to determine fair market value, then the Administrator shall make a good faith
determination of fair market value.



     iv) Vesting. An option shall be immediately and fully exercisable (i.e., vested)
on the date granted; provided, however, that the option awarded on the date first elected or
appointed as a member of the Board shall instead (i) be immediately exercisable to the extent of
one-third of the Shares subject to the option upon grant, then another one-third of such Shares on
each of the next two anniversaries of the date granted, and (ii) become fully exercisable upon a
Change in Control while the optionee is a member of the Board, as provided in Section 10.
Notwithstanding clauses (i) and (ii) of the preceding sentence, no additional vesting will occur
after the date the Non-Employee Director ceases to be a member of the Board.



     v) Payment of Exercise Price. An option may be exercised in whole or in part (to
the extent exercisable) at any time and from time to time. The purchase price of Shares purchased
under an option will be paid in full to the Company incident to the exercise of the option by
delivery of consideration equal to the product of the option price and the number of Shares
purchased. Such consideration may be paid (i) in cash, (ii) at the discretion of the Administrator,
in shares of Company common stock either already owned by the Non-Employee Director, or (iii) any
combination thereof. The fair market value of such common stock as delivered shall be valued as of
the day prior to delivery. The Administrator can determine that additional forms of payment will be
permitted. To the extent permitted by the Administrator and applicable laws and regulations
(including, but not limited to, federal tax and securities laws, regulations and state corporate
law), an option may also be exercised in a “cashless” exercise by delivery of a properly executed
exercise notice together with irrevocable instructions to a broker designated by the Administrator
to deliver promptly to the Company the amount of sale or loan proceeds to pay the purchase price. A
Non-Employee Director shall have none of the rights of a stockholder until the Shares are issued.



     vi) Exercise After Death. In the event of the death of a Non-Employee Director
who holds an exercisable option under the Plan, the Non-Employee Director’s option shall (subject
to Section 9) be exercisable by the legal



 









 




representative or the estate of such decedent, by any person or persons whom the decedent
shall have designated in writing on forms prescribed by and filed with the Company or, if no such
designation has been made, by the person or persons to whom the decedent’s rights have passed by
will or the laws of descent and distribution. To the extent permitted by applicable law and the
rules promulgated under Section 16(b) of the 1934 Act, the Administrator may permit a Non-Employee
Director to designate in writing during the Non-Employee Director’s lifetime a beneficiary to
receive and exercise stock options in the event of the Non-Employee Director’s death.




     8. STOCK APPRECIATION RIGHTS. The Administrator may award a right to receive in cash
the amount that the Fair Market Value of a Share exceeds a stated exercise price (a “stock
appreciation right” or “SAR”) to a person eligible under Section 5 on such terms that the
Administrator shall determine, consistent with the terms of this Plan. A SAR shall be subject to
the same general terms that apply to an option granted hereunder, including (but not limited to)
the terms set forth in Sections 6, 7, 9 and 10 as appropriately modified. An exercised SAR will
reduce the Shares reserved for issuance under the Plan under Section 4.



     9. TERMINATION OF OPTIONS. An option shall cease to be exercisable after the earlier of
(i) six (6) months after the date the Non-Employee Director ceases to be a member of the Board
(including by reason of death), (ii) the occurrence of a Change in Control and (iii) the 10th
anniversary of the date of grant; provided, however, that in the case of a Non-Employee Director
who has served continuously as a member of the Board for at least five (5) years, the period
described in clause (i) shall be eighteen (18) months.



     10. CHANGE IN CONTROL. A Non-Employee Director’s outstanding option shall become fully
exercisable as of the date seven (7) calendar days before a Change in Control. Restricted Stock and
Restricted Stock Units shall vest upon consummation of the Change in Control. The exercise of any
option that was permissible solely by reason of a Change in Control shall be conditioned upon
consummation of the Change in Control. Options that are not exercised as of the Change in Control shall terminate and cease to be outstanding. A
Change in Control means a single Ownership Change Event or combination of proximate (in time,
purpose, cause and effect, and/or the identity of the parties involved) Ownership Change Events
(collectively, a “Transaction”) wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially the same proportions
as their ownership of shares of the Company’s voting stock immediately before the Transaction,
direct or indirect beneficial ownership of more than 50% of the total combined voting power of the
outstanding voting stock of the Company or the company or companies to which the assets of the
Company were transferred (the “Transferee Company(s)”), as the case may be. For purposes of the
preceding sentence, indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more companies which, as a result of the
Transaction, own the Company or the Transferee Company(ies), as the case may be, either directly or
through one or more subsidiary companies. An Ownership Change Event means (i) the direct or
indirect sale, exchange or transfer of the voting stock of the Company, (ii) a merger or
consolidation in which the Company is a party, (iii) the sale, exchange or transfer of all or
substantially all of the assets of the Company, or (iv) a liquidation or dissolution of the
Company. The Administrator shall have sole discretion to determine whether any particular facts and
circumstances constitute an Ownership Change Event or a Transaction, and its determination shall be
final, binding and conclusive.



     11. SECURITIES LAW COMPLIANCE. All awards under this plan shall be subject to
compliance with all applicable requirements of federal, state or foreign law with respect to such
securities. Options may not be exercised if the issuance of Shares upon exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Shares may then be
listed. In addition, no option may be exercised unless (i) a registration statement under the
Securities Act of 1933 (“1933 Act”) shall at the time of exercise of the option be in effect with
respect to the Shares issuable upon exercise of the option, or (ii) in the opinion of legal counsel
to the Company, the Shares issuable upon exercise of the option may be issued in accordance with
the terms of an applicable exemption from the registration requirements of the 1933 Act. The
inability of the Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any
shares hereunder shall relieve the Company of any liability in respect of the failure to issue or
sell such shares as to which such requisite authority shall not have been obtained. As a condition
to the exercise of any option, the Company may require a Non-Employee Director to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as may be requested
by the Company.



 









 





     12. MISCELLANEOUS.



     (a) No Stockholders’ Rights. A Non-Employee Director shall have no rights as a
stockholder with respect to the Shares covered by his or her awards until the date of the issuance
to him or her of a stock certificate for the Shares.



     (b) No Right to Serve. Neither the Plan, nor the granting of an award, nor any
other action taken under the Plan, shall be evidence of any agreement or understanding, express or
implied, that a Non-Employee Director has a right to continue as a member of the Board for any
period of time or rate of compensation.



     (c) Claims. Any person who makes a claim for benefits under the Plan or under
any award agreement entered into pursuant to the Plan shall file the claim in writing with the
Administrator. Written notice of the disposition of the claim shall be delivered to the claimant
within 60 days after filing. If the claim is denied, the Administrator’s written decision shall set
forth (i) the specific reason or reasons for the denial, (ii) a specific reference to the pertinent
provisions of the Plan or award agreement on which the denial is based, and (iii) a description of
any additional material or information necessary for the claimant to perfect his or her claim and
an explanation of why such material or information is necessary. No lawsuit may be filed by the
claimant until a claim is made and denied pursuant to this subsection.



     (d) Attorneys’ Fees. In any legal action or other proceeding brought by either
party to enforce or interpret the terms of the award agreement, the prevailing party shall be
entitled to recover reasonable attorneys’ fees and costs.



     (e) Company Free to Act. An award grant shall not affect in any way the right or
power of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company’s capital structure or its
business, or any merger or consolidation of any member of the Company or any issue of bonds,
debentures, or preferred or preference stocks affecting the Shares or the rights thereof, or of any
rights, options, or warrants to purchase any capital stock of the Company, or the dissolution or
liquidation of the Company, any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceedings of the Company, whether of a similar character or otherwise.



     (f) Severability. If any provision of the Plan or award agreement, or its
application to any person, place, or circumstance, is held by an arbitrator or a court of competent
jurisdiction to be invalid, unenforceable, or void, that provision shall be enforced to the
greatest extent permitted by law, and the remainder of this Plan and award agreement and of that
provision shall remain in full force and effect as applied to other persons, places, and
circumstances.



     (g) Governing Law. This Plan and the award agreement shall be governed by and
construed in accordance with the laws of the State of Colorado applicable to contracts wholly made
and performed in the State of Colorado.



     (h) Exchange Requirements. So long as Shares are listed on any established stock
exchange or traded on the NASDAQ National Market or the NASDAQ SmallCap Market, the applicable
requirements of any such exchange or market shall be hereby incorporated by reference.



     (i) Compliance with Section 16. So long as any of the Company’s equity
securities are registered pursuant to Section 12(b) or 12(g) of the 1934 Act, with respect to
awards granted to or held by Section 16 insiders, the Plan will comply in all respects with Rule
16b-3 or any successor rule or rule of similar application under Section 16 of the 1934 Act or
rules thereunder, and, if any Plan provision is later found not to be in compliance with such
exemption under Section 16, that provision shall be deemed modified as necessary to meet the
requirements of such applicable exemption.



     13. EFFECTIVE DATE OF THE PLAN. The Plan will become effective upon adoption by the
Board, subject to approval by the Company’s stockholders. The Plan shall terminate on the 10th
anniversary of its adoption.



     14. AMENDMENT OF THE PLAN. With the approval of the Board, the Administrator may
suspend or discontinue the Plan or revise or amend it in any respect whatsoever; provided, however,
that without approval of the Company’s stockholders no revision or amendment shall change the
number of Shares issuable under the Plan (except as provided in Section 6(b)), change the
designation of the class of individuals eligible to receive awards, or materially increase the
benefits accruing to Non-Employee Directors under the Plan.



     IN WITNESS WHEREOF, the undersigned Secretary of the Corporation certifies that this Plan
was adopted by the Board on February 12, 2003, and effective as of the same date, amended on
February 15, 2006, and amended and restated February 21, 2007.