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                                                                    EXHIBIT 10.2

                        ADVANCED ENERGY INDUSTRIES, INC.

                 1995 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

                         ADOPTED ON SEPTEMBER 20, 1995,
               AS AMENDED ON FEBRUARY 9, 1999 AND FEBRUARY 7, 2001


1.       PURPOSE.

         (a) The purpose of the 1995 Non-Employee Directors' Stock Option Plan,
         as amended (the "Plan") is to provide a means by which each director of
         Advanced Energy Industries, Inc. (the "Company") who is not otherwise
         an employee of or consultant to the Company or of any Affiliate of the
         Company (a "Non-Employee Director") will be given an opportunity to
         purchase stock of the Company.

         (b) The word "Affiliate" as used in the Plan means any parent
         corporation or subsidiary corporation of the Company as those terms are
         defined in Sections 424(e) and (f), respectively, of the Internal
         Revenue Code of 1986, as amended from time to time (the "Code").

         (c) The Company, by means of the Plan, seeks to retain the services of
         persons now serving as Non-Employee Directors of the Company, to secure
         and retain the services of persons capable of serving in such capacity,
         and to provide incentives for such persons to exert maximum efforts for
         the success of the Company.

2.       ADMINISTRATION.

         (a) The Plan shall be administered by the Board of Directors of the
         Company (the "Board") unless and until the Board delegates
         administration to a committee, as provided in subparagraph 2(b).

         (b) The Board may delegate administration of the Plan to a committee
         composed of not fewer than two (2) members of the Board (the
         "Committee"). If administration is delegated to a Committee, the
         Committee shall have, in connection with the administration of the
         Plan, the powers theretofore possessed by the Board, subject, however,
         to such resolutions, not inconsistent with the provisions of the Plan,
         as may be adopted from time to time by the Board. The Board may abolish
         the Committee at any time and revest in the Board the administration of
         the Plan.

3.       SHARES SUBJECT TO THE PLAN.

         (a) Subject to the provisions of paragraph 10 relating to adjustments
         upon changes in stock, the stock that may be sold pursuant to options
         granted under the Plan shall not exceed in the aggregate Two Hundred
         Thousand (200,000) shares of the Company's common stock. If any option
         granted under the Plan shall for any reason expire or otherwise
         terminate without having been exercised in full, the stock not
         purchased under such option shall again become available for the Plan.

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         (b) The stock subject to the Plan may be unissued shares or reacquired
         shares, bought on the market or otherwise.

4.       ELIGIBILITY.

         Options shall be granted only to Non-Employee Directors of the Company.

5.       NON-DISCRETIONARY GRANTS.

         (a) Each person who, on September 20, 1995, is a Non-Employee Director
         automatically shall be granted on that date an option to purchase Seven
         Thousand Five Hundred (7,500) shares of common stock of the Company (an
         "Initial Grant") on the terms and conditions set forth herein.

         (b) Each person who, after September 20, 1995, is elected for the first
         time to be a Non-Employee Director automatically shall, upon the date
         of his or her initial election to be a Non-Employee Director by the
         Board or stockholders of the Company, receive an Initial Grant on the
         terms and conditions set forth herein.

         (c) Each Non-Employee Director automatically shall be granted, on the
         first and each subsequent anniversary of his or her Initial Grant, an
         option to purchase Two Thousand Five Hundred (2,500) shares of common
         stock of the Company (an "Annual Grant") on the terms and conditions
         set forth herein.

6.       OPTION PROVISIONS.

         Each option shall be subject to the following terms and conditions:

         (a) The term of each option commences on the date it is granted and,
         unless sooner terminated as set forth herein, expires on the date
         ("Expiration Date") ten (10) years from the date of grant. If the
         optionee's service as director or employee of or consultant to the
         Company or any Affiliate of the Company terminates for any reason or
         for no reason, the option shall terminate on the earlier of the
         Expiration Date or the date six (6) months following the date of
         termination of service. In any and all circumstances, an option may be
         exercised following termination of the optionee's service as a director
         or employee of or consultant to the Company or any Affiliate of the
         Company only as to that number of shares as to which it was exercisable
         on the date of termination of such service under the provisions of
         subparagraph 6(e).

         (b) The exercise price of each option shall be one hundred percent
         (100%) of the fair market value of the stock subject to such option on
         the date such option is granted.

         (c) Payment of the exercise price of each option is due in full in cash
         upon any exercise when the number of shares being purchased upon such
         exercise is less than 1,000 shares; but when the number of shares being
         purchased upon an exercise is 1,000 or more shares, the optionee may
         elect to make payment of the exercise price under one of the following
         alternatives:


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                  (i) Payment of the exercise price per share in cash at the
time of exercise; or

                  (ii) Provided that at the time of the exercise the Company's
common stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of shares of common stock of the Company already owned by
the optionee, held for the period required to avoid a charge to the Company's
reported earnings, and owned free and clear of any liens, claims, encumbrances
or security interest, which common stock shall be valued at its fair market
value on the date preceding the date of exercise; or

                  (iii) Payment by a combination of the methods of payment
specified in subparagraph 6(c)(i) and 6(c)(ii) above.

         Notwithstanding the foregoing, this option may be exercised pursuant to
         a program developed under Regulation T as promulgated by the Federal
         Reserve Board which results in the receipt of cash (or check) by the
         Company prior to the issuance of shares of the Company's common stock.

         (d) An option shall not be transferable except by will or by the laws
         of descent and distribution, or pursuant to a domestic relations order
         satisfying the requirements of Rule 16b-3 under the Securities Exchange
         Act of 1934, as amended (the "DRO"), and shall be exercisable during
         the lifetime of the person to whom the option is granted only by such
         person or by his or her guardian or legal representative or transferee
         pursuant to a DRO. The person to whom the Option is granted may, by
         delivering written notice to the Company, in a form satisfactory to the
         Company, designate a third party who, in the event of the death of the
         Optionee, shall thereafter be entitled to exercise the Option.

         (e) Upon an Initial Grant, one-third of the Option (2,500 shares) shall
         be fully vested and exercisable. On each of the second and third
         anniversaries of an Initial Grant, an additional one-third of the
         Option (2,500 shares) shall become fully vested and exercisable,
         provided that the optionee has, during the entire period prior to such
         vesting date, continuously served as a director or employee of or
         consultant to the Company or any Affiliate of the Company. The Option
         representing an Annual Grant shall become fully vested and exercisable
         on the third anniversary of the Annual Grant, provided that the
         optionee has, during the entire period prior to such vesting date,
         continuously served as a director or employee of or consultant to the
         Company or any Affiliate of the Company.

         (f) The Company may require any optionee, or any person to whom an
         option is transferred under subparagraph 6(d), as a condition of
         exercising any such option: (i) to give written assurances satisfactory
         to the Company as to the optionee's knowledge and experience in
         financial and business matters; and (ii) to give written assurances
         satisfactory to the Company stating that such person is acquiring the
         stock subject to the option for such person's own account and not with
         any present intention of selling or otherwise distributing the stock.
         These requirements, and any assurances given pursuant to such
         requirements, shall be inoperative if (i) the issuance of the shares
         upon the exercise of the option has been registered under a
         then-currently-effective registration statement under the Securities
         Act of 1933, as amended (the "Securities Act"), or (ii), as


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         to any particular requirement, a determination is made by counsel for
         the Company that such requirement need not be met in the circumstances
         under the then-applicable securities laws.

         (g) Notwithstanding anything to the contrary contained herein, an
         option may not be exercised unless the shares issuable upon exercise of
         such option are then registered under the Securities Act or, if such
         shares are not then so registered, the Company has determined that such
         exercise and issuance would be exempt from the registration
         requirements of the Securities Act.

7.       COVENANTS OF THE COMPANY.

         (a) During the terms of the options granted under the Plan, the Company
         shall keep available at all times the number of shares of stock
         required to satisfy such options.

         (b) The Company shall seek to obtain from each regulatory commission or
         agency having jurisdiction over the Plan such authority as may be
         required to issue and sell shares of stock upon exercise of the options
         granted under the Plan; provided, however, that this undertaking shall
         not require the Company to register under the Securities Act either the
         Plan, any option granted under the Plan, or any stock issued or
         issuable pursuant to any such option. If, after reasonable efforts, the
         Company is unable to obtain from any such regulatory commission or
         agency the authority which counsel for the Company deems necessary for
         the lawful issuance and sale of stock under the Plan, the Company shall
         be relieved from any liability for failure to issue and sell stock upon
         exercise of such options.

8.       USE OF PROCEEDS FROM STOCK.

         Proceeds from the sale of stock pursuant to options granted under the
         Plan shall constitute general funds of the Company.

9.       MISCELLANEOUS.

         (a) Neither an optionee nor any person to whom an option is transferred
         under subparagraph 6(d) shall be deemed to be the holder of, or to have
         any of the rights of a holder with respect to, any shares subject to
         such option unless and until such person has satisfied all requirements
         for exercise of the option pursuant to its terms.

         (b) Throughout the term of any option granted pursuant to the Plan, the
         Company shall make available to the holder of such option, not later
         than one hundred twenty (120) days after the close of each of the
         Company's fiscal years during the option term, upon request, such
         financial and other information regarding the Company as comprises the
         annual report to the stockholders of the Company provided for in the
         Bylaws of the Company and such other information regarding the Company
         as the holder of such option may reasonably request.

         (c) Nothing in the Plan or in any instrument executed pursuant thereto
         shall confer upon any Non-Employee Director any right to continue in
         the service of the Company or


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         any Affiliate or shall affect any right of the Company, its Board or
         stockholders or any Affiliate to terminate the service of any
         Non-Employee Director with or without cause.

         (d) No Non-Employee Director, individually or as a member of a group,
         and no beneficiary or other person claiming under or through him or
         her, shall have any right, title or interest in or to any option
         reserved for the purposes of the Plan except as to such shares of
         common stock, if any, as shall have been reserved for him or her
         pursuant to an option granted to him or her.

         (e) In connection with each option made pursuant to the Plan, it shall
         be a condition precedent to the Company's obligation to issue or
         transfer shares to a Non-Employee Director, or to evidence the removal
         of any restrictions on transfer, that such Non-Employee Director make
         arrangements satisfactory to the Company to insure that the amount of
         any federal or other withholding tax required to be withheld with
         respect to such sale or transfer, or such removal or lapse, is made
         available to the Company for timely payment of such tax.

         (f) As used in this Plan, fair market value means, as of any date, the
         value of the common stock of the Company determined as follows:

                  (i) If the common stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market, the Fair Market Value of a share of common stock shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in common stock) on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or such
other source as the Board deems reliable;

                  (ii) If the common stock is quoted on The Nasdaq SmallCap
Market or is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a share of common stock shall
be the mean between the bid and asked prices for the common stock on the last
market trading day prior to the day of determination, as reported in the Wall
Street Journal or such other source as the Board deems reliable;

                  (iii) In the absence of an established market for the common
stock, the Fair Market Value shall be determined in good faith by the Board.

10.      ADJUSTMENTS UPON CHANGES IN STOCK.

         (a) If any change is made in the stock subject to the Plan, or subject
         to any option granted under the Plan (through merger, consolidation,
         reorganization, recapitalization, stock dividend, dividend in property
         other than cash, stock split, liquidating dividend, combination of
         shares, exchange of shares, change in corporate structure or
         otherwise), the Plan and outstanding options will be appropriately
         adjusted in the class(es) and maximum number of shares subject to the
         Plan and the class(es) and number of shares and price per share of
         stock subject to outstanding options.


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         (b) In the event of: (1) a merger or consolidation in which the Company
         is not the surviving corporation; (2) a reverse merger in which the
         Company is the surviving corporation but the shares of the Company's
         common stock outstanding immediately preceding the merger are converted
         by virtue of the merger into other property, whether in the form of
         securities, cash or otherwise; or (3) any other capital reorganization
         in which more than fifty percent (50%) of the shares of the Company
         entitled to vote are exchanged, the time during which options
         outstanding under the Plan may be exercised shall be accelerated and
         the options terminated if not exercised prior to such event.

11.      AMENDMENT OF THE PLAN.

         (a) The Board at any time, and from time to time, may amend the Plan,
         provided, however, that the Board shall not amend the plan more than
         once every six (6) months, with respect to the provisions of the Plan
         which relate to the amount, price and timing of grants, other than to
         comport with changes in the Code, the Employee Retirement Income
         Security Act, or the rules thereunder. Except as provided in paragraph
         10 relating to adjustments upon changes in stock, no amendment shall be
         effective unless approved by the stockholders of the Company within
         twelve (12) months before or after the adoption of the amendment, where
         the amendment will:

                  (i) Increase the number of shares which may be issued under
the Plan;

                  (ii) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires stockholder
approval in order for the Plan to comply with the requirements of Rule 16b-3);
or

                  (iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to comply with the
requirements of Rule 16b-3.

         (b) Rights and obligations under any option granted before any
         amendment of the Plan shall not be altered or impaired by such
         amendment unless (i) the Company requests the consent of the person to
         whom the option was granted and (ii) such person consents in writing.

12.      TERMINATION OR SUSPENSION OF THE PLAN.

         (a) The Board may suspend or terminate the Plan at any time. Unless
         sooner terminated, the Plan shall terminate on September 20, 2005. No
         options may be granted under the Plan while the Plan is suspended or
         after it is terminated.

         (b) Rights and obligations under any option granted while the Plan is
         in effect shall not be altered or impaired by suspension or termination
         of the Plan, except with the consent of the person to whom the option
         was granted.

         (c) The Plan shall terminate upon the occurrence of any of the events
         described in Section 10(b) above.


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13.      EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.

         (a) The Plan shall become effective upon adoption by the Board of
         Directors, subject to the condition subsequent that the Plan is
         approved by the stockholders of the Company.

         (b) No option granted under the Plan shall be exercised or exercisable
         unless and until the condition of subparagraph 13(a) above has been
         met.



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