Document:

exv10w4

 

Exhibit 10.4

EXECUTIVE TRANSITION AGREEMENT

     This agreement (the “Agreement”), dated as of the 31st day of December, 2007 (the “Effective
Date”), is by and between Advanced Energy Industries, Inc. (the “Company”) and Charles S. Rhoades
(the “Executive”). The Company and Executive shall be referred to collectively as the “Parties” and
individually as a “Party.”

Recitals

     Executive has been employed by the Company since on or about September 16, 2002.

     Executive and the Company have agreed that Executive’s employment relationship with the
Company shall end and desire to provide for a transition period during which the terms and
conditions of the current employment relationship shall be modified.

     Executive and the Company are parties to the Change in Control Severance Agreement dated as of
March 29, 2005 (the “CIC Agreement”).

     Accordingly, Executive and the Company have entered into this Agreement to set forth the terms
and conditions of their relationship on and after the Effective Date.

Agreement

     In consideration of the following obligations, the Parties agree as follows.

     1. Separation
Date; Public Announcement. Executive’s last day of employment with the
Company shall be June 30, 2008, provided that Executive’s employment is not earlier terminated for
Cause, as defined below, or voluntarily by Executive. As of the final date of Executive’s
employment with the Company (however terminated) (the “Separation Date”), Executive shall be deemed
to have resigned from all positions within the Company and all affiliates thereof, including
without limitation employment, offices, trusteeships, committee memberships and Board membership,
if any. At a time determined by the Company in its reasonable discretion, the Company may announce
the terms of this Agreement and Executive’s separation from the Company. Executive acknowledges and
understands that the Company intends to file a Form 8-K under the Securities Exchange Act of 1934
to report Executive’s resignation from the Company, and the principal terms of this Agreement,
promptly following the Effective Date.

     2. Transition Period.

          (a)
Transition Period Defined. The Company shall continue to employ Executive, and Executive agrees to continue in the employ of the Company, on the terms and subject
to the conditions of this Agreement, for the period commencing on the Effective Date and ending on
the Separation Date (the “Transition Period”).

          (b) Position and Duties During Transition.

               (i) During
the Transition Period and except as set forth in part (ii) below: (A) Executive shall serve as Executive Vice President and Chief Operating Officer, with duties,

 

 

authorities and responsibilities commensurate with such title and office and/or as may reasonably
be assigned to Executive by the Company; and (B) Executive agrees to travel to the extent
reasonably necessary to perform the duties contemplated by this Agreement. During the Transition
Period, and excluding any periods of disability, approved vacation and sick leave to which
Executive is entitled, Executive agrees to devote full-time to the business and affairs of the
Company as reasonably directed or specified by the Company, and, to the extent necessary to
discharge Executive’s responsibilities hereunder, to use Executive’s reasonable best efforts to
perform such responsibilities, subject to Executive’s ability to: (A) serve on corporate, civic or
charitable boards or committees; provided that such service must be disclosed to and approved by
the Company in advance, pursuant to Company policy; (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions; provided that such engagements must be disclosed
to and approved by the Company in advance, pursuant to Company policy; and (C) to explore
employment opportunities no more than one day per week and to manage personal investments; all so
long as such activities do not interfere with the performance of Executive’s responsibilities as an
employee of the Company in accordance with this Agreement, Company policies and applicable law.

               (ii) During the Transition Period, Executive shall report to the Chief
Executive Officer or to such other Company representative as the Company may reasonably designate.
Executive and the Company acknowledge and agree that, during the Transition Period, many of
Executive’s principal responsibilities may be transferred to other Company personnel, including the
Chief Executive Officer, and that, therefore, Executive’s day-to-day job functions are likely to
change substantially from such functions prior to the Effective Date and as the Transition Period
progresses. At minimum, the Chief Executive Officer shall assume immediate responsibility and
authority over the Company’s Engineering Department. Executive and the Company also acknowledge and
agree that it may be inappropriate or unnecessary, during the Transition Period, to include
Executive in certain meetings and discussions of the sort in which Executive may previously have
participated. Notwithstanding the foregoing, the Company agrees that during the Transition Period,
Executive shall be assigned only responsibilities that are consistent with Executive’s skills,
experience and status within the Company. Company shall not take any adverse action of any kind
against Executive based upon Executive’s failure or inability to attend said meetings, or to
participate in any decision, from which the Company excluded
Executive.

               (iii) Following the Separation Date, Executive shall not be deemed to be
an employee of the Company or any affiliate, and except as provided in this Agreement or allowed
under applicable law, Executive shall not be entitled to participate in any employee benefit or
welfare program of any kind, including but not limited to any executive fringe benefit program.

          (c) Payments and Benefits During Transition.

               (i) Base Salary. During the Transition Period, Executive shall receive a base salary
(“Base Salary”) payable at the gross rate of Executive’s base salary in effect as of the Effective
Date. The Base Salary shall be payable in installments, less legally required and elected
withholdings, consistent with the Company’s payroll procedures in effect from time to time,
provided that such installments shall be no less frequent than monthly.

               (ii) Incentives, Savings and Retirement Plans. During the Transition
Period, Executive shall continue to be entitled to participate in all incentive plans, practices,
policies and programs, and all savings and retirement plans, practices, policies and programs that
Executive is

 

 

entitled to participate in immediately prior to the Effective Date, in each case on terms and
conditions no less favorable than the terms and conditions generally applicable to others members
of the Company’s Executive Leadership Team (“Comparable Executives”). Vesting of any Company
contributions to Executive’s 401(k) Plan account shall be in accordance with the terms of the
Company’s 401(k) Plan, as amended.

               (iii) Welfare Benefit Plans. During the Transition Period, Executive and Executive’s
dependents shall continue to be eligible to participate in, and shall receive all benefits under,
welfare benefit plans, practices, policies and programs provided by the Company and its affiliates
(including, without limitation, medical, prescription, dental, disability, employee life, group
life, accidental death and travel accident insurance plans and programs) that Executive is entitled
to participate in immediately prior to the Effective Date, on terms and conditions no less
favorable than the terms and conditions generally applicable to Comparable Executives.

               (iv) Vacation. During the Transition Period, Executive shall be entitled to paid
vacation in accordance with the plans, policies, programs and practices of the Company as in effect
for the Comparable Executives.

               (v) Performance Reviews. Notwithstanding any Company policy or practice to the
contrary, the Company shall not complete any written review of Executive’s performance during the
2007 or 2008 calendar years, except to note a 2007 performance rating of “Meets Expectations (3)”
and an individual modifier of 1.00 for purposes of computing Employee’s annual bonus for 2007.

               (vi) Reimbursement of Legal Expenses. Company agrees to reimburse
Executive for attorneys fees up to Five Thousand Dollars ($5,000) incurred in the rendering of
advice, negotiation and preparation of this and other Agreements between them. Executive agrees to
submit an invoice for legal services within three business days of the Effective Date.

     3. Payments and Benefits Upon Separation of Employment. Provided that Executive’s
employment is not terminated for Cause, and so long as Executive complies with the obligations set
forth in the section entitled “Restrictive Covenants” below, and conditioned upon Executive’s
execution (and if applicable non-revocation) of a legal release in the form attached hereto as
Exhibit A (the “Supplemental Release”) within 21 days following the Separation Date (collectively,
the “Conditions”), the Company shall provide the following payments and benefits to Executive.

          (a) Salary Through Separation Date. Regardless of whether the above Conditions are
met, the Company shall pay to Executive, in a lump sum in cash within fifteen (15) business days
after the Separation Date, Executive’s base salary as of the Effective Date earned through the
Separation Date, all to the extent not already paid as of the Separation Date.

          (b) Lump-sum Payment. Provided the Conditions are met, the Company shall pay to
Executive a one-time, lump sum payment in an amount equal to twelve (12) months of Executive’s
salary in effect as of the Effective Date, less legally required and elected withholdings. Provided
that Executive does not voluntarily terminate employment during the Transition period prior to June
30, 2008, the lump sum payment shall be increased to an amount equal to fifteen (15) months of
Executive’s salary in effect as of the Effective Date, less legally required and elected
withholdings. This payment shall be made within thirty (30) days after the later of (i) the
Separation

 

 

Date or (ii) the expiration of the rescission period specified in Section 12(d) below
following Executive’s execution of the Supplemental Release.

          (c) 2007 Bonus Payment. In consideration of Executive’s work during 2007, at the same
time that the Company pays Comparable Executives annual bonuses for their work in 2007, the Company
shall pay Executive a bonus calculated by multiplying Executive’s 2007 bonus target by the same
corporate bonus multiplier used in calculating the 2007 annual bonuses of other Executive Vice
Presidents of the Company receiving an annual bonus for 2007. Payment of such bonus shall remain
subject to the Company’s policies regarding bonus eligibility and payment, including the
requirement of remaining employed by the Company through the applicable bonus payment date.

          (d) Company Payment of COBRA Premiums. Executive’s current benefit elections and
coverage shall continue through the Separation Date. If Executive timely elects to participate in
the COBRA program by completing and returning the required paperwork to the Company’s
administrator, provided Executive pays the Company the employee share of the premiums for such
benefits in the same amount that was in place immediately prior to the Separation Date on or before
the first of the month for which COBRA is being elected, and provided the Conditions are met, then
the Company will pay COBRA premiums for Employee’s medical, dental and group life insurance (“COBRA Payments”) on behalf of Executive directly to the COBRA insurance carrier(s) for a period of
up to 12 months following the Separation Date (“COBRA Benefit Termination Date”). Executive’s right
to have COBRA Payments made on Executive’s behalf shall terminate as of the date on which Executive
becomes eligible for substantially similar welfare benefits under another employer’s group benefit
plans. Executive shall promptly notify Human Resources if other employment is secured or if
Executive is covered by another plan prior to the COBRA Benefit Termination Date.

          (e) Equity Incentive Awards. Executive is the grantee of certain outstanding and
unexercised options listed in Attachment A to this Agreement (the
“Options”). Effective as of the
Separation Date, contingent upon the execution and return of the Supplemental Release, Executive’s
right to exercise any options vested as of the Separation Date shall be extended through one
calendar year from the Separation Date (the “Extended Exercise Date”). Notwithstanding the
foregoing, in no event shall the Extended Exercise Date exceed the lesser of the maximum term of
the Options or ten (10) years from the Options’ respective dates of grant. Executive shall have no
rights under any Option after the Extended Exercise Date. Effective as of the Separation Date,
Executive shall forfeit any Options that are unvested as of the Separation Date and such unvested
Options shall immediately lapse. Any restricted stock units vested as of the Separation Date shall
be delivered to the Executive as provided under the applicable plan and agreements. The Company
shall not grant any equity incentive awards to the Executive in 2008.

          (f)
401(k), Profit Sharing. Without regard as to whether the Conditions are met, this
Agreement shall not diminish or otherwise affect Executive’s vested rights under the Company’s 401(k) Plan (the “Plan”). The Parties expressly agree that after the Separation Date, neither the
Company nor any of its affiliates shall make any contribution on Executive’s behalf to the Plan,
excepting only such contributions as are expressly required by the Plan.

          (g) Outplacement. Provided the Conditions are met and Executive provides the Company
with receipts of such expenses, the Company shall reimburse Executive up to $15,000 (the ”
Outplacement Amount”) for outplacement services to be provided to Executive by a mutually

 

 

agreeable vendor. Any part of the Outplacement Amount not utilized by Executive for outplacement
services shall be forfeited.

          4. Termination of Employment.

          (a) Death. Executive’s employment shall terminate automatically upon Executive’s death
during the Transition Period. In the Event of Executive’s death during the Transition Period, all
amounts payable hereunder to Executive shall be thereafter payable to Executive’s heirs and
assigns, as and when such amounts would have been paid in the absence of Executive’s death.

          (b) Cause. If Executive’s employment is terminated for Cause during the Transition
Period, the Company shall be required to pay to Executive only Executive’s Base Salary through the
date of termination to the extent theretofore unpaid.

     For purposes of this Agreement, “Cause” shall mean any of the following:

          (i) the
Executive’s (A) conviction of a felony; (B) commission of any other material act or omission involving dishonesty or fraud with respect to the Company or any of its
Affiliates or any of the customers, vendors or suppliers of the Company or its Affiliates; (C)
misappropriation of material funds or assets of the Company for personal use; or (D) engagement in
unlawful harassment or unlawful discrimination with respect to any employee of the Company or any
of its subsidiaries;

          (ii) the Executive’s continued substantial and repeated neglect of his duties, after written
notice thereof from the board of directors of the Company (“the Board”), and such neglect has not
been cured within 30 days after the Executive receives notice thereof from the Board;

          (iii) the Executive’s gross negligence or willful misconduct in the performance of his duties
hereunder that is materially and demonstrably injurious to the Company; or

          (iv) the Executive’s engaging in conduct constituting a breach of his written obligations to
the Company in respect of confidentiality and/or the use or ownership of proprietary information.

     The Executive shall not be deemed to have been terminated for Cause under this Agreement
unless the following procedures have been observed: To terminate the Executive for Cause, the Board
must deliver to the Executive notice of such termination in writing, which notice must specify the
facts purportedly constituting Cause in reasonable detail. The Executive will have the right,
within 10 calendar days of receipt of such notice, to submit a written request for review by the
Board. If such request is timely made, within a reasonable time thereafter, the Board (with all
directors attending in person or by telephone) shall give the Executive the opportunity to be heard
(personally or by counsel). Following such hearing, unless a majority of the directors then in
office confirm that the Executive’s termination was for Cause, the Executive’s termination shall be
deemed to have been made by the Company without Cause for purposes of this Agreement.

 

 

          (c) Relief of Duties. The Company shall not terminate Executive’s employment without
Cause at any time between the Effective Date and the Separation Date; provided that at any time the
Company shall have the right to relieve Executive of Executive’s obligation to report for work, so
long as in doing so the Company does not reduce or otherwise affect Executive’s economic rights
pursuant to this Agreement.

     5. Excise Tax. Notwithstanding any other language to the contrary in this Agreement,
the Company shall not be obligated to pay and shall not pay that portion of any payment or
distribution in the nature of compensation within the meaning of Section 280G(b)(2) of the Internal
Revenue Code to the benefit of Executive otherwise due or payable Executive under this Agreement if
that portion would cause any excise tax imposed by Section 4999 of the Internal Revenue Code to
become due and payable by Executive.

     6. Non-exclusivity of Rights. Except as otherwise specifically provided in this
Agreement, nothing in this Agreement shall prevent or limit Executive’s continuing or future
participation in any plan, program, policy or practice provided by the Company or any affiliate for
which Executive may qualify. Amounts that are vested benefits, which consist of any compensation
previously deferred by Executive, or which Executive is otherwise entitled to receive under any
plan, policy, practice or program of or any contract or agreement with the Company or any affiliate
at or subsequent to the date of termination (“Other Benefits”) shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as explicitly modified by
this Agreement. Notwithstanding any other provision of this Agreement, Executive shall not be
entitled to receive any payments or benefits under any severance program or the CIC Agreement,
other than those that are described and anticipated under this Agreement.

     7. Restrictive Covenants. Executive acknowledges and affirms the duties and
restrictions applicable to Executive under both the Employee Agreement and the Confidentiality
Agreement entered into between Executive and the Company on September 12, 2002. It is agreed that
the restrictions set forth therein are reasonable and necessary for the protection of the interests
of the Company and that any violation of such restrictions would cause substantial and irreparable
injury to the Company.

     8. Successors.

          (a) This Agreement is personal to Executive and without the prior written consent of the
Company shall not be assignable by Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal
representatives.

          (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

          (c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly, 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. As
used in this Agreement, “Company” shall mean the Company as hereinbefore defined and

 

 

any successor to its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

     9. Prior Agreements.

          (a) Except for the Employee Agreement and the Confidentiality Agreement referenced in the
section entitled “Restrictive Covenants” above, or as otherwise provided in this Agreement, all
other agreements between Executive and the Company, including without limitation the CIC Agreement,
shall be deemed terminated hereby and superseded by this Agreement, and shall hereafter be of no
further force or effect.

          (b) Notwithstanding any other provision of this Agreement, this Agreement shall not be deemed
to limit, release, impair or otherwise affect, in any way, Executive’s rights to indemnification
and/or defense that Executive had in connection with Executive’s employment with the Company,
whether pursuant to any certificate of incorporation, bylaw, policy, insurance contract, or
otherwise.

     10. Assistance Following Separation Date. The Parties are aware that certain lawsuits
have been filed involving challenges to Company’s intellectual and other property rights and that
Executive may have information that will assist Company in preparing its responses to said
lawsuits. Executive agrees to cooperate with reasonable requests for information and assistance on
an as-needed, as-requested basis; provided that the Company shall exercise reasonable good faith
efforts to limit the extent to which its requests for such information and assistance interfere
with Executive’s personal and business commitments; and provided further that Executive shall
exercise reasonable, good faith efforts to respond to the Company’s requests for such information
and assistance in a timely and complete fashion. Company shall reimburse Executive for any expenses
that are approved in advance and incurred by Executive in connection with the performance of such
assistance and, after the Separation Date, shall also offer reasonable compensation to Executive
for time spent in performance of his duties under this Section.

     11. Cooperation in Proceedings. The Company and Executive agree that they shall fully
cooperate with respect to any claim, litigation or judicial, arbitral or investigative proceeding
initiated by any private party or by any regulator, governmental entity, or self-regulatory
organization, that relates to or arises from any matter with which Executive was involved during
Executive’s employment with the Company, or that concerns any matter of which Executive has
information or knowledge (collectively, a
“Proceeding”). Executive’s duty of cooperation includes,
but is not limited to: (i) meeting with the Company’s attorneys by telephone or in person at
mutually convenient times and places in order to state truthfully Executive’s recollection of
events; (ii) appearing at the Company’s request as a witness at depositions or trials, without the
necessity of a subpoena, in order to state truthfully Executive’s knowledge of matters at issue;
and (iii) signing at the Company’s request declarations or affidavits that truthfully state matters
of fact of which Executive has personal knowledge obtained during the course of Executive’s
relationship with the Company. The Company’s duty of cooperation includes, but is not limited to
providing Executive and Executive’s counsel access to documents, information, witnesses and the
Company’s legal counsel as is reasonably necessary to litigate on behalf of Executive in any
Proceeding. In addition, Executive agrees to promptly notify the Company’s General Counsel of any
requests for information or testimony that Executive receives in connection with any litigation or
investigation relating to the Company’s business, and the Company agrees to notify Executive of any
requests for information or testimony

 

 

that it receives relating to Executive. Notwithstanding any other provision of this Agreement,
this Agreement shall not be construed or applied so as to require any Party to violate any
confidentiality agreement or understanding with any third party, nor shall it be construed or
applied so as to compel any Party to take any action, or omit to take any action, requested or
directed by any regulatory or law enforcement authority. The Company shall exercise reasonable
good faith efforts to minimize the extent to which its requests for cooperation pursuant to this
section conflict with Executive’s prior professional and personal commitments, and shall reimburse
Executive for the expenses (but shall not pay Executive for Executive’s time) that Executive
reasonably and necessarily incurs in honoring Executive’s duty of cooperation under this section,
provided that Executive has secured the Company’s prior consent to incur such expenses.

     12. Legal Releases.

          (a) RELEASE BY EXECUTIVE.

               (1) Executive, on behalf of Executive and Executive’s heirs, personal
representatives and assigns, and any other person or entity that could or might act on behalf of
Executive, including, without limitation, Executive’s counsel (all of whom are collectively
referred to
as “Executive Releasers”), hereby fully and forever releases and discharges the Company, its present
and future affiliates and subsidiaries, and each of their past, present and future officers,
directors,
employees, shareholders, independent contractors, attorneys, insurers and any and all other
persons or
entities that are now or may become liable to any Releaser due to any Releasee’s act or omission,
(all of
whom are collectively referred to as “Executive Releasees”) of and from any and all actions, causes
of action, claims, demands, costs and expenses, including attorneys’ fees, of every kind and nature
whatsoever, in law or in equity, whether now known or unknown, that Executive Releasers, or any
person acting under any of them, may now have, or claim at any future time to have, based in whole
or
in part upon any act or omission occurring on or before the Effective Date, without regard to
present
actual knowledge of such acts or omissions, including specifically, but not by way of limitation,
matters
which may arise at common law, such as breach of contract, express or implied, promissory estoppel,
wrongful discharge, tortious interference with contractual rights, infliction of emotional distress,
defamation, or under federal, state or local laws, such as the Fair Labor Standards Act, the
Employee
Retirement Income Security Act, the National Labor Relations Act, Title VII of the Civil Rights Act
of
1964, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Equal Pay Act,
the Americans with Disabilities Act, the Family and Medical Leave Act, and any civil rights law of
any
state or other governmental body; provided, however, that notwithstanding the foregoing or
anything else
contained in this Agreement, the release set forth in this Section shall not extend to: (i) any
rights
arising under this Agreement; or; (ii) any vested rights under any pension, retirement, profit
sharing or
similar plan; (iii) Executive’s rights, if any, to indemnification, and/or defense under any Company
certificate of incorporation, bylaw and/or policy or procedure, or under any insurance contract, in
connection with Executive’s acts an omissions within the course and scope of Executive’s
employment with the Company; or (iv) any rights or remedies that cannot by law be waived by private
agreement. Executive hereby warrants that Executive has not assigned or transferred to any person
any portion of any claim which is released, waived and discharged above. Executive further states
and
agrees that Executive has not experienced any illness, injury, or disability that is compensable or
recoverable under the worker’s compensation laws of any state that was not reported to the Company
by Executive before the Effective Date. Executive has specifically consulted with counsel with
respect
to the agreements, representations, and declarations set forth in the previous sentence. Executive
understands and agrees that by signing this Agreement Executive is giving up any right to bring any

 

 

legal claim against the Company concerning, directly or indirectly, Executive’s employment
relationship with the Company, including Executive’s separation from employment. Executive agrees
that this legal release is intended to be interpreted in the broadest possible manner in favor of
the Company, to include all actual or potential legal claims that Executive may have against the
Company, except as specifically provided otherwise in this Agreement.

               (2) Executive agrees and acknowledges that Executive: (i) understands the
language used in this Agreement and the Agreement’s legal effect; (ii) is specifically releasing
all claims and rights under the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section
621 et seq.; (iii) will receive compensation under this Agreement to which Executive would not have
been entitled without signing this Agreement; (iv) has been advised by the Company to consult with
an attorney before signing this Agreement; and (v) will be given up to twenty one (21) calendar
days to consider whether to sign this Agreement. For a period of seven days after Executive signs
this Agreement, Executive may, in Executive’s sole discretion, rescind this Agreement by delivering
a written notice of rescission to the Company’s General Counsel. If Executive rescinds this
Agreement within seven calendar days after Executive signs the Agreement, or if Executive does not
sign this Agreement within the twenty-one day consideration period, this Agreement shall be void,
all actions taken pursuant to this Agreement shall be reversed, and neither this Agreement nor the
fact of or circumstances surrounding its execution shall be admissible for any purpose whatsoever
in any proceeding between the Parties, except in connection with a claim or defense involving the
validity or effective rescission of this Agreement. If Executive does not rescind this Agreement
within seven calendar days after the Effective Date, this Agreement shall become final and binding
and shall be irrevocable.

     (b) RELEASE BY COMPANY AND REPRESENTATIONS BY EXECUTIVE.

          (1) As a material inducement to Executive to enter into this Agreement, and in return for the
consideration to which Company would not otherwise be entitled absent this Agreement, which
consideration is hereby acknowledged by the Company, the Company hereby releases, acquits and
forever discharges Executive and his heirs, executors, assigns, attorneys and agents of and from
any and all claims arising out of: (1) actions taken by the Company during the Transition Period to
the extent that Executive was not assigned responsibility for or otherwise involved with such
actions and (2) acts of simple negligence or business judgments made by Executive before the
Effective Date. Notwithstanding anything to the contrary in this Agreement, this provision neither
releases nor discharges claims that arise out of or are related to Executive’s obligations under
this Agreement or the dishonest, willful or grossly negligent acts of Executive.

          (2) Executive represents and warrants that:

               a. Executive is changing the scope of his responsibilities voluntarily and that his age has
not been a factor in any employment decision involving Executive;

               b. Executive has not been the victim of discrimination or other wrongful treatment in
connection with his employment with the Company;

               c. Executive has not breached any portion of the Confidentiality
Agreement referenced above, or any other duty owed to the Company in respect of confidentiality
and/or the use or ownership of proprietary information;

 

 

               d. Executive has not suffered any job-related injury to which Executive might be entitled to
compensation or relief, such as an injury for which Executive might receive a workers’ compensation
award now or in the future;

               e. Executive is not aware of any facts that would (i) establish, (ii) tend to establish, or
(iii) in any way support an allegation of, a violation by Executive of any law, rule, regulation or
statute applicable to the Company or its business; and

               f. Executive has not committed any dishonest, willful or grossly negligent acts in
connection with his employment by the Company.

     (c) MUTUAL RELEASES. In order to provide a full and complete release, the Parties understand
and agree that this Agreement is intended to include all claims, if any, covered under this section
entitled “Legal Releases” (“LR Section”) that they may have and not now know or suspect to exist in
their favor against any each other and that this Agreement extinguishes such claims. Thus, each
Party expressly waives all rights under any statute or common law principle in any jurisdiction
that provides, in effect, that a general release does not extend to claims which the releasing
party does not know or suspect to exist in his or its favor at the time of executing the release,
which if known, must have materially affected his or its settlement with the party being released.
Notwithstanding any other provision of this LR Section, however, nothing in this LR Section is
intended or shall be construed to limit or otherwise affect in any way either Party’s rights under
this Agreement.

     13. Additional Representation and Covenant. Executive represents and warrants that as
of the Effective Date, Executive is unaware of any facts or circumstances relating to the Company’s
business that Executive believes suggest or support a claim of wrongdoing or illegal conduct of any
kind by the Company or any employee, officer or director thereof, except as previously disclosed to
the Company by Executive in writing.

     14. Non-Disparagement.

          (a) Executive covenants never to disparage or speak ill of the Company or any Company product
or service, or of any past or present employee, officer or director of the Company, nor shall
Executive at any time harass or behave unprofessionally toward any past, present or future Company
employee, officer or director.

          (b) The Company covenants that no Company officer or director shall, while employed by or
while serving on the board of directors of the Company, disparage or speak ill of Executive to any
third person, nor shall any such person, while employed by or while serving on the board of
directors of the Company, at any time harass or behave unprofessionally toward Executive.

     15. Miscellaneous.

          (a) This Agreement shall be governed by and construed in accordance with the laws of the State
of Colorado without reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the Parties hereto or their
respective successors and legal representatives.

 

 

          (b) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other Party or by registered or certified mail return receipt requested,
postage prepaid, addressed as follows:

          If to Executive: At the most recent address on file at the Company,

	 	 	 
	          If to the Company:

	 	Advanced Energy Industries, Inc.
	 	 	ATTN: General Counsel
	 	 	1625 Sharp Point Drive
	 	 	Fort Collins, Colorado 80525
	 	 	Attn.: General Counsel

or to such other address as either Party shall have furnished to the other in writing in accordance
herewith, Notice and communications shall be effective when actually received by the addressee. If
Executive becomes eligible for welfare benefits under another employer’s group benefit plans and
such benefits are substantially similar to those to be provided to Executive under Section 3(d),
then Executive shall notify the Company of that fact in writing.

          (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

          (d) All payments made by the Company under this Agreement will be subject to legally required
tax and other withholdings.

          (e) Executive’s or the Company’s failure to insist upon strict compliance with any provision
of this Agreement or the failure to assert any right Executive or the Company may have hereunder,
shall not be deemed to be a waiver of such provision or right or any other provision or right of
this Agreement.

          (f) All covenants and warranties contained in this Agreement are contractual and shall survive
the closing of the Agreement.

          (g) In the event of any dispute relating to or arising from this Agreement, the Party
substantially prevailing therein shall recover the costs and expenses that it incurred in
connection with the dispute, including reasonable attorneys’ fees.

          (h) All disputes relating to or arising from this agreement shall be tried only in the state
or federal courts situated in the Denver, Colorado metropolitan area.

          (i) This Agreement may be executed in counterparts, or by copies transmitted by
facsimile, all of which shall be given the same force and effect as the original.

[SIGNATURE PAGE FOLLOWS]

 

 

          IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand and the Company has caused
these presents to be executed in its name on its behalf, all as of the day and year first above
written.

	 	 	 	 	 	 	 	 	 	 	 
	EXECUTIVE	 	 	 	ADVANCED ENERGY INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Lawrence D. Firestone	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	/s/ Charles Rhoades	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	1/4/08
	 	 	 	Date:
	 	1/4/08	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

 

 

EXHIBIT A

Supplemental Legal Release

     This Supplemental Legal Release (“Supplemental Release”) is between Advanced Energy
Industries, Inc. (the “Company”) and Charles S. Rhoades
(“Executive”) (each a “Party,” and
together, the “Parties”).

Recitals

     A. Executive and the Company are parties to an Executive Transition Agreement to which this
Supplemental Release is appended as Exhibit A (the “Separation Agreement”).

     B. Executive wishes to receive the benefits described in Section 3 of the Transition
Agreement.

     C. Executive and the Company wish to resolve, except as specifically set forth herein, all
claims between them arising from or relating to any act or omission predating the Final Separation
Date of [                    ].

Agreement

     The Parties agree as follows:

     Confirmation of Section 3 Obligations. The Company shall pay or provide to Executive
the payments and benefits, as, when and on the terms and conditions specified in the Transition
Agreement.

     Legal Releases

          (a) Executive, on behalf of Executive and Executive’s heirs, personal
representatives and assigns, and any other person or entity that could or might act on behalf of
Executive, including, without limitation, Executive’s counsel (all of whom are collectively
referred to as “Executive Releasers”), hereby fully and forever releases and discharges the
Company, its present and future affiliates and subsidiaries, and each of their past, present and
future officers, directors, employees, shareholders, independent contractors, attorneys, insurers
and any and all other persons or entities that are now or may become liable to any Releaser due to
any Releasee’s act or omission, (all of whom are collectively referred to as “Executive Releasees”)
of and from any and all actions, causes of action, claims, demands, costs and expenses, including
attorneys’ fees, of every kind and nature whatsoever, in law or in equity, whether now known or
unknown, that Executive Releasers, or any person acting under any of them, may now have, or claim
at any future time to have, based in whole or in part upon any act or omission occurring on or
before the Final Separation Date, without regard to present actual knowledge of such acts or
omissions, including specifically, but not by way of limitation, matters which may arise at common
law, such as breach of contract, express or implied, promissory estoppel, wrongful discharge,
tortious interference with contractual rights, infliction of emotional distress, defamation, or
under federal, state or local laws, such as the Fair Labor Standards Act, the Employee Retirement
Income Security Act, the National Labor Relations Act, Title VII of the Civil Rights Act of 1964,
the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Equal Pay Act, the
Americans with Disabilities Act, the Family and Medical Leave Act, and any civil

 

 

rights law of any state or other governmental body; PROVIDED, HOWEVER, that notwithstanding the
foregoing or anything else contained in this Agreement, the release set forth in this Section shall
not extend to: (i) any rights arising under this Agreement; or; (ii) any vested rights under any
pension, retirement, profit sharing or similar plan; (iii) Executive’s rights, if any, to
indemnification, and/or defense under any Company certificate of incorporation, by law and/or policy
or procedure, or under any insurance contract, in connection with Executive’s acts an omissions
within the course and scope of Executive’s employment with the Company; or (iv) any rights or
remedies that cannot by law be waived by private agreement. Executive hereby warrants that
Executive has not assigned or transferred to any person any portion of any claim which is released,
waived and discharged above. Executive further states and agrees that Executive has not experienced
any illness, injury, or disability that is compensable or recoverable under the worker’s
compensation laws of any state that was not reported to the Company by Executive before the Final
Separation Date. Executive has specifically consulted with counsel with respect to the agreements,
representations, and declarations set forth in the previous sentence. Executive understands and
agrees that by signing this Agreement Executive is giving up any right to bring any legal claim
against the Company concerning, directly or indirectly, Executive’s employment relationship with
the Company, including Executive’s separation from employment. Executive agrees that this legal
release is intended to be interpreted in the broadest possible manner in favor of the Company, to
include all actual or potential legal claims that Executive may have against the Company, except as
specifically provided otherwise in this Agreement.

          (b) In order to provide a full and complete release, Executive understands and agrees that
this Agreement is intended to include all claims, if any, covered under this Section 2 that
Executive may have and not now know or suspect to exist in Executive’s favor against any Executive
Releasee and that this Agreement extinguishes such claims. Thus, Executive expressly waives all
rights under any statute or common law principle in any jurisdiction that provides, in effect, that
a general release does not extend to claims which the releasing party does not know or suspect to
exist in Executive’s favor at the time of executing the release, which if known by Executive must
have materially affected Executive’s settlement with the party being released. Notwithstanding any
other provision of this Section 2, however, nothing in this Section 2 is intended or shall be
construed to limit or otherwise affect in any way Executive’s rights under this Agreement.

          (c) Executive agrees and acknowledges that Executive: (i) understands the
language used in this Agreement and the Agreement’s legal effect; (ii) is specifically releasing
all claims and rights under the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section
621 et seq.; (iii) will receive compensation under this Agreement to which Executive would not have
been entitled without signing this Agreement; (iv) has been advised by the Company to consult with
an attorney before signing this Agreement; and (v) will be given up to twenty one (21) calendar
days to consider whether to sign this Agreement. For a period of seven days after Executive signs
this Agreement, Executive may, in Executive’s sole discretion, rescind this Agreement by delivering
a written notice of rescission to the Company’s General Counsel. If Executive rescinds this
Agreement within seven calendar days after Executive signs the Agreement, or if Executive does not
sign this Agreement within the twenty-one day consideration period, this Agreement shall be void,
all actions taken pursuant to this Agreement shall be reversed, and neither this Agreement nor the
fact of or circumstances surrounding its execution shall be admissible for any purpose whatsoever
in any proceeding between the Parties, except in connection with a claim or defense involving the
validity or effective rescission of this Agreement. If Executive does not rescind this Agreement
within seven calendar days after the day Executive signs this Agreement, this Agreement shall
become final and binding and shall be irrevocable.

 

 

     Executive acknowledges that Executive has received all compensation to which Executive is
entitled for Executive’s work up to Executive’s last day of employment with the Company, and that
Executive is not entitled to any further pay or benefit of any kind, for services rendered or any
other reason, other than the payments and benefits, to the extent not already paid, described in
Section 3 of the Transition Agreement.

     Executive agrees that the only thing of value that Executive will receive by signing this
Supplemental Release is the payments and benefits described in Section 3 of the Transition
Agreement.

     The Parties agree that their respective rights and obligations under the Transition Agreement
shall survive the execution of this Supplemental Release.

NOTE: DO NOT SIGN THIS SUPPLEMENTAL LEGAL RELEASE UNTIL AFTER EXECUTIVE’S FINAL DAY OF EMPLOYMENT.

	 	 	 	 	 	 	 	 	 	 	 
	EXECUTIVE	 	 	 	ADVANCED ENERGY INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

 

 

     

	 	 	 	 	 	 	 
	Advanced Energy Industries, Inc.
	PERSONNEL SUMMARY	 	Page:	 	1
	 
	 	AS OF 12/31/2007	 	File:	 	Persnl
	 
	 	 	 	Date:	 	1/4/2008
	 
	 	Report Type:      All	 	Time:	 	3:47:56PM
	 
	 	ID is equal to 2716	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Grant	 	Grant	 	 	 	 	 	 	 	 	 	 	 	 	 	Exercised/	 	 	 	 	 	 	 	 	 	 	 	 	 	Outstanding/	 	Exercisable/
	Name	 	ID	 	Number	 	Date	 	Plan /Type	 	Shares	 	Price	 	Released	 	Vested	 	Cancelled	 	Unvested	 	Unreleased	 	Releasable
	Rhoades, Charles S.
	 	 	2716	 	 	 	003683	 	 	 	10/17/2002	 	 	1995/NQ	 	 	30,000.00	 	 	$	7.7000	 	 	 	0.00	 	 	 	30,000.00	 	 	 	0.00	 	 	 	0.00	 	 	 	30,000.00	 	 	 	30,000.00	 
	 
	 	 	 	 	 	 	003958	 	 	 	12/11/2002	 	 	1995/NQ	 	 	10,000.00	 	 	$	14.5000	 	 	 	0.00	 	 	 	10,000.00	 	 	 	0.00	 	 	 	0.00	 	 	 	10,000.00	 	 	 	10,000.00	 
	 
	 	 	 	 	 	 	004191	 	 	 	2/12/2003	 	 	1995/ISO	 	 	5,000.00	 	 	$	9.1200	 	 	 	0.00	 	 	 	5,000.00	 	 	 	0.00	 	 	 	0.00	 	 	 	5,000.00	 	 	 	5,000.00	 
	 
	 	 	 	 	 	 	004541	 	 	 	4/16/2003	 	 	1995/ISO	 	 	5,000.00	 	 	$	7.6100	 	 	 	0.00	 	 	 	5,000.00	 	 	 	0.00	 	 	 	0.00	 	 	 	5,000.00	 	 	 	5,000.00	 
	 
	 	 	 	 	 	 	004878	 	 	 	7/23/2003	 	 	2003/ISO	 	 	5,000.00	 	 	$	19.2400	 	 	 	0.00	 	 	 	5,000.00	 	 	 	0.00	 	 	 	0.00	 	 	 	5,000.00	 	 	 	5,000.00	 
	 
	 	 	 	 	 	 	005167	 	 	 	10/15/2003	 	 	2003/ISO	 	 	1,824.00	 	 	$	22.5200	 	 	 	0.00	 	 	 	1,824.00	 	 	 	0.00	 	 	 	0.00	 	 	 	1,824.00	 	 	 	1,824.00	 
	 
	 	 	 	 	 	 	005267	 	 	 	2/11/2004	 	 	2003/NQ	 	 	3,315.00	 	 	$	22.3000	 	 	 	0.00	 	 	 	3,315.00	 	 	 	0.00	 	 	 	0.00	 	 	 	3,315.00	 	 	 	3,315.00	 
	 
	 	 	 	 	 	 	005268	 	 	 	2/11/2004	 	 	2003/NQ	 	 	435.00	 	 	$	22.3000	 	 	 	0.00	 	 	 	435.00	 	 	 	0.00	 	 	 	0.00	 	 	 	435.00	 	 	 	435.00	 
	 
	 	 	 	 	 	 	005588	 	 	 	4/14/2004	 	 	2003/NQ	 	 	1,694.00	 	 	$	20.8100	 	 	 	0.00	 	 	 	1,694.00	 	 	 	0.00	 	 	 	0.00	 	 	 	1,694.00	 	 	 	1,694.00	 
	 
	 	 	 	 	 	 	005589	 	 	 	4/14/2004	 	 	2003/NQ	 	 	2,056.00	 	 	$	20.8100	 	 	 	0.00	 	 	 	2,056.00	 	 	 	0.00	 	 	 	0.00	 	 	 	2,056.00	 	 	 	2,056.00	 
	 
	 	 	 	 	 	 	005678	 	 	 	7/20/2004	 	 	2003/ISO	 	 	2,579.00	 	 	$	12.8000	 	 	 	0.00	 	 	 	1,875.00	 	 	 	0.00	 	 	 	704.00	 	 	 	2,579.00	 	 	 	1,875.00	 
	 
	 	 	 	 	 	 	005679	 	 	 	7/20/2004	 	 	2003/NQ	 	 	1,171.00	 	 	$	12.8000	 	 	 	0.00	 	 	 	1,171.00	 	 	 	0.00	 	 	 	0.00	 	 	 	1,171.00	 	 	 	1,171.00	 
	 
	 	 	 	 	 	 	005705	 	 	 	8/26/2004	 	 	2003/NQ	 	 	50,000.00	 	 	$	9.9700	 	 	 	0.00	 	 	 	40,625.00	 	 	 	0.00	 	 	 	9,375.00	 	 	 	50,000.00	 	 	 	40,625.00	 
	 
	 	 	 	 	 	 	005719	 	 	 	10/19/2004	 	 	2003/ISO	 	 	2,814.00	 	 	$	10.3700	 	 	 	0.00	 	 	 	1,876.00	 	 	 	0.00	 	 	 	938.00	 	 	 	2,814.00	 	 	 	1,876.00	 
	 
	 	 	 	 	 	 	005720	 	 	 	10/19/2004	 	 	2003/NQ	 	 	936.00	 	 	$	10.3700	 	 	 	0.00	 	 	 	936.00	 	 	 	0.00	 	 	 	0.00	 	 	 	936.00	 	 	 	936.00	 
	 
	 	 	 	 	 	 	005756	 	 	 	1/31/2005	 	 	2003/ISO	 	 	34,759.00	 	 	$	7.1500	 	 	 	0.00	 	 	 	16,934.00	 	 	 	0.00	 	 	 	17,825.00	 	 	 	34,759.00	 	 	 	16,934.00	 
	 
	 	 	 	 	 	 	005757	 	 	 	1/31/2005	 	 	2003/NQ	 	 	891.00	 	 	$	7.1500	 	 	 	0.00	 	 	 	891.00	 	 	 	0.00	 	 	 	0.00	 	 	 	891.00	 	 	 	891.00	 
	 
	 	 	 	 	 	 	006046	 	 	 	10/15/2003	 	 	2003/NQ	 	 	3,176.00	 	 	$	22.5200	 	 	 	0.00	 	 	 	3,176.00	 	 	 	0.00	 	 	 	0.00	 	 	 	3,176.00	 	 	 	3,176.00	 
	 
	 	 	 	 	 	 	006162	 	 	 	1/31/2005	 	 	2003/RSU	 	 	1,000.00	 	 	$	0.0000	 	 	 	1,000.00	 	 	 	1,000.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	006491	 	 	 	1/31/2005	 	 	2003/RSU	 	 	2,000.00	 	 	$	0.0000	 	 	 	2,000.00	 	 	 	2,000.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	006518	 	 	 	1/31/2005	 	 	2003/RSU	 	 	3,000.00	 	 	$	0.0000	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	3,000.00	 	 	 	3,000.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	006739	 	 	 	1/31/2005	 	 	2003/RSU	 	 	4,000.00	 	 	$	0.0000	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	4,000.00	 	 	 	4,000.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	006916	 	 	 	2/15/2006	 	 	2003/ISO	 	 	9,965.00	 	 	$	16.1300	 	 	 	0.00	 	 	 	430.00	 	 	 	0.00	 	 	 	9,535.00	 	 	 	9,965.00	 	 	 	430.00	 
	 
	 	 	 	 	 	 	006917	 	 	 	2/15/2006	 	 	2003/NQ	 	 	60,035.00	 	 	$	16.1300	 	 	 	0.00	 	 	 	17,070.00	 	 	 	0.00	 	 	 	42,965.00	 	 	 	60,035.00	 	 	 	17,070.00	 
	 
	 	 	 	 	 	 	007182	 	 	 	5/15/2006	 	 	2003/RSU	 	 	5,625.00	 	 	$	0.0000	 	 	 	5,625.00	 	 	 	5,625.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	007916	 	 	 	2/21/2007	 	 	2003/ISO	 	 	4,687.00	 	 	$	20.1900	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	4,687.00	 	 	 	4,687.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	007917	 	 	 	2/21/2007	 	 	2003/NQ	 	 	14,063.00	 	 	$	20.1900	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	14,063.00	 	 	 	14,063.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	008865	 	 	 	5/15/2006	 	 	2003/RSU	 	 	5,625.00	 	 	$	0.0000	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	5,625.00	 	 	 	5,625.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	008866	 	 	 	5/15/2006	 	 	2003/RSU	 	 	5,625.00	 	 	$	0.0000	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	5,625.00	 	 	 	5,625.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	008867	 	 	 	5/15/2006	 	 	2003/RSU	 	 	5,625.00	 	 	$	0.0000	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	5,625.00	 	 	 	5,625.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	008911	 	 	 	4/27/2007	 	 	2003/ISO	 	 	221.00	 	 	$	24.2100	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	221.00	 	 	 	221.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	008912	 	 	 	4/27/2007	 	 	2003/NQ	 	 	18,529.00	 	 	$	24.2100	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	18,529.00	 	 	 	18,529.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	009120	 	 	 	7/24/2007	 	 	2003/NQ	 	 	18,750.00	 	 	$	22.4700	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	18,750.00	 	 	 	18,750.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	009174	 	 	 	10/26/2007	 	 	2003/NQ	 	 	18,750.00	 	 	$	14.9300	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	18,750.00	 	 	 	18,750.00	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Account: Rhoades, Charles S.	 	 	 	 	 	 	 	 	 	 	338,150.00	 	 	 	 	 	 	 	8,625.00	 	 	 	157,933.00	 	 	 	0.00	 	 	 	180,217.00	 	 	 	329,525.00	 	 	 	149,308.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	TOTALS	 	 	 	 	 	 	 	338,150.00	 	 	 	 	 	 	 	8,625.00	 	 	 	157,933.00	 	 	 	0.00	 	 	 	180,217.00	 	 	 	329,525.00	 	 	 	149,308.00	 

 

* This
option requires acceptance before exercise, but has not yet been
accepted.exv10w1

 

Exhibit 10.1

SYBASE, INC.

AMENDED AND RESTATED 2003 STOCK PLAN

FORM OF NOTICE OF GRANT 

AND 

RESTRICTED STOCK 

AGREEMENT

You have been granted the number of Shares of Restricted Stock of the Company set forth below
(“Shares”), subject to the terms and conditions of the Sybase, Inc. Amended and Restated
2003 Stock (“Plan”), and this Notice of Grant and Restricted Stock Agreement (collectively,
“Notice and Agreement”). Unless otherwise defined, capitalized terms in the Notice and
Agreement shall have the same meanings set forth in the Plan. Unless otherwise defined in the
Notice and Agreement, terms with initial capital letters shall have the meanings set forth in the
Plan.

	 	 	 
	Participant:
	 	 
	 
	 	 
	Home Address:
	 	 
	 
	 	 
	Purchase Price Per Share:

	 	$0
	 
	 	 
	Number of Shares of Restricted

 Stock
Granted:
	 	 
	 
	 	 
	Grant Date:
	 	 
	 
	 	 
	Period of Restriction and Release of
Shares from Company’s Return Right
(see Sections 2 and 3 of attached
Agreement)

	 	During the Period of Restriction,
the Shares shall be subject to
the Company’s Return Right, which
shall lapse as follows:  [INSERT
SPECIFIC PROVISIONS HERE]

By signing below, you accept this grant of Shares and you hereby represent that you: (i) agree to
the terms and conditions of this Notice and Agreement and the Plan; (ii) have reviewed the Plan and
the Notice and Agreement in their entirety, and have had an opportunity to obtain the advice of
legal counsel and/or your tax advisor with respect thereto; (iii) fully understand and accept all
provisions hereof; (iv) agree to accept as binding, conclusive, and final all of the
Administrator’s decisions regarding, and all interpretations of, the Plan and the Notice and
Agreement; and (v) agree to notify the Company upon any change in your home address indicated
above.

	 	 	 
	 

	 	AGREED AND ACCEPTED:
	 
	 	 
	 

	 	Signature:
	 
	 	 
	 

	 	Print Name:

 

 

SYBASE, INC.

AMENDED AND RESTATED 2003 STOCK PLAN

RESTRICTED STOCK AGREEMENT

1. Grant of Restricted Stock. The Company has granted to you the number of Shares of
Restricted Stock specified in the Notice of Grant on the preceding page (“Notice of
Grant”), subject to the following terms and conditions. In consideration of such grant, you
agree to be bound by such terms and conditions, and by the terms and conditions of the Plan.

2. Period of Restriction. During the Period of Restriction specified in the Notice of
Grant, the Shares shall remain subject to the Company’s Return Right (defined in Section 3). The
Period of Restriction shall expire and the Company’s Return Right shall lapse as to the Shares
granted in the amount(s) and on the date(s) specified in the Notice of Grant (each, a “Release
Date”); provided, however, that no Shares shall be released on any Release Date if the
Participant has ceased Continuous Status as an Employee, Consultant or Director on or prior to such
date. Any and all Shares subject to the Company’s Return Right at any time shall be defined in
this Notice and Agreement as “Unreleased Shares.”

3. Company’s Return Right. Subject to the terms of any Employment Agreement or Change of
Control Agreement the Participant has entered into with the Company, if Participant ceases
Continuous Status as an Employee, Consultant or Director for any reason (including death or
Disability), or in the event of Participant’s Misconduct, the Participant’s Unreleased Shares shall
be automatically returned to the Company on the effective date of Participant’s termination or
Misconduct, as the case may be (“Return Right”), whereupon the Company shall become the
legal and beneficial owner of the Unreleased Shares and all rights and interests therein or
relating thereto, and the Company shall have the right to retain and transfer such Unreleased
Shares to its own name.

4. Restriction on Transfer. Except for the transfer of the Shares to the Company or its
assignees contemplated by this Notice and Agreement, none of the Shares or any beneficial interest
therein shall be transferred, encumbered or otherwise disposed of in any way until such Shares are
released from the Company’s Return Right in accordance with this Notice and Agreement. In addition,
as a condition to any transfer of the Shares after expiration of the Company’s Return Right, the
Company may, in its discretion, require: (i) that the Shares shall have been duly listed upon any
national securities exchange or automated quotation system on which the Company’s Common Stock may
then be listed or quoted; (ii) that either (a) a registration statement under the Securities Act of
1933, as amended (“Securities Act”) with respect to the Shares shall be effective, or (b)
in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration
under the Securities Act and the Participant shall have entered into agreements with the Company as
reasonably required; and (iii) fulfillment of any other requirements deemed necessary by counsel
for the Company to comply with Applicable Law.

5. Retention of Shares. To ensure the availability for delivery of the Participant’s
Unreleased Shares upon their return to the Company pursuant to the Company’s Return Right, the
Company shall retain possession of the share certificates representing the Unreleased Shares,
together with a stock assignment duly endorsed in blank, attached hereto as Exhibit A. The
Company shall hold the Unreleased Shares and related stock assignment until the Company’s Return
Right expires as to such Shares. In addition, the Company may require the spouse of Participant, if
any, to execute and deliver to the Company a spousal consent acknowledging the Company’s Return
Right. When the Return Right has been exercised or expires, the Company shall promptly deliver the
certificate to the Company or the Participant, as the case may be.

6. Stockholder Rights. Subject to the terms hereof, the Participant shall have all the
rights of a stockholder with respect to the Shares while they are retained by the Company pursuant
to Section 5, including without limitation, the right to vote the Shares and to receive any cash
dividends declared thereon. If, from time to time during the term of the Return Right, there is (i)
any stock dividend, stock split or other change in the Shares, or (ii) any merger or sale of all or
substantially all of the assets or other acquisition of the Company, any and all new, substituted
or additional securities to which the Participant shall be entitled by reason of the Participant’s
ownership of the Shares shall be immediately subject to the terms of this Notice and Agreement and
included thereafter as “Shares” for purposes of this Notice and Agreement and the Company’s Return
Right.

7. Legends. The share certificate evidencing the Shares, if any, issued hereunder shall
be endorsed with the following legend (in addition to any legend required under applicable state
securities laws):

 

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND
THE COMPANY’S RETURN RIGHT AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE HOLDER, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

8. U.S. Tax Consequences. The Participant has reviewed with the Participant’s own tax
advisors the federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Notice and Agreement. The Participant is relying solely on such
advisors and not on any statements or representations of the Company or any of its employees or
agents. The Participant understands that the Participant (and not the Company) shall be responsible
for the Participant’s own tax liability that may arise as a result of the transactions contemplated
by this Notice and Agreement. The Participant understands that for U.S. taxpayers, Section 83 of
the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income the
difference between the purchase price for the Shares and the fair market value of the Shares as of
the date any restrictions on the Shares lapse. In this context, “restriction” includes the right of
the Company to claim return of the Shares pursuant to the Company’s Return Right. The Participant
understands that if he/she is a U.S. taxpayer, the Participant may elect to be taxed at the time
the Shares are acquired rather than when and as the Return Right expires by filing an election
under Section 83(b) of the Code with the IRS within 30 days from the date of acquisition.

THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S
TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), IF APPLICABLE, EVEN IF THE PARTICIPANT REQUESTS
THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PARTICIPANT’S BEHALF.

9. Taxation at Vesting

Notwithstanding any contrary provision of this Notice and Agreement, no certificate representing
the Shares exercised shall be released, unless and until satisfactory arrangements (as determined
by the Administrator, in its sole discretion) will have been made by the Participant with respect
to the payment of income and employment taxes which the Company determines must be withheld with
respect to the vesting of such Shares. The Administrator, in its sole discretion and pursuant to
such procedures as it may specify from time to time, may permit the Participant to satisfy such tax
withholding obligation, in whole or in part by one or more of the following: (a) paying cash (or by
check), (b) electing to have the Company withhold otherwise deliverable Shares having a Fair Market
Value equal to the minimum amount statutorily required to be withheld, or (c) selling a sufficient
number of such Shares otherwise deliverable to Participant through such means as the Company may
determine in its sole discretion (whether through a broker or otherwise) equal to the minimum
amount statutorily required to be withheld.

10. General.

(a) This Notice and Agreement shall be governed by and construed under the laws of the State of
California. The Notice and Agreement and the Plan, which is incorporated herein by reference,
represents the entire agreement between the parties with respect to the Shares of Restricted Stock
granted to the Participant. In the event of a conflict between the terms and conditions of the Plan
and the terms and conditions of this Notice and Agreement, the terms and conditions of the Plan
shall prevail.

(b) Any notice, demand or request required or permitted to be delivered by either the Company or
the Participant pursuant to the terms of this Notice and Agreement shall be in writing and shall be
deemed given when delivered personally, deposited with an international courier service, or
deposited in the U.S. Mail, First Class with postage prepaid, and addressed to the parties at the
addresses set forth in the Notice of Grant, or such other address as a party may request by
notifying the other in writing.

(c) The rights of the Company under this Notice and Agreement and the Plan shall be transferable to
any one or more persons or entities, and all covenants and agreements hereunder shall inure to the
benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations
of the Participant under this Notice and Agreement may only be assigned with the prior written
consent of the Company.

 

 

(d) The Participant agrees upon request to execute any further documents or instruments necessary
or desirable to carry out the purposes or intent of this Notice and Agreement.

(e) PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE RELEASE OF SHARES PURSUANT TO THIS AGREEMENT SHALL
BE EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE, CONSULTANT OR DIRECTOR, AND NOT THROUGH THE
ACT OF BEING HIRED, APPOINTED OR OBTAINING SHARES HEREUNDER.

11. Clawback Policy. The Participant acknowledges and agrees that this Notice and
Agreement and the Shares granted hereunder are subject to the following Company policy:

(a) If the Company’s Board of Directors determines that there has been a significant restatement of
the Company’s financial results due to misconduct by one or more of the Company’s employees (as
determined by the Board), the Board will review any incentive compensation (including the Shares
granted under this Notice and Agreement) that was paid to such employees and calculated on the
basis of having met or exceeded specific performance targets for performance periods which occurred
during the restatement period. If the Board determines that the incentive compensation would have
been lower had it been calculated based on such restated results, to the extent permitted by
governing law and employment contracts, then with respect to the employees whose misconduct
contributed to the restatement, (1) the Board will seek to recoup, for the benefit of the Company,
and such employees agree to return, the difference between the cash compensation actually paid to
the employees and the cash compensation that would have been paid had the calculation been based on
the restated financial statements, and (2) such employees agree to (i) forfeit all of his or her
outstanding equity grants (including the Shares granted under this Notice and Agreement) granted on
or after February 5, 2008, whether or not they have vested, and (ii) repay proceeds from the sale
of shares obtained pursuant to an equity grant including the Shares granted under this Notice and
Agreement) granted on or after February 5, 2008 if the sale occurred during the 12 month period
following the initial filing of the financial statements that are later restated.

(b) The actions contemplated by this section are in addition to any other actions imposed by law
enforcement agencies, regulators or other authorities.

#####

 

 

EXHIBIT A

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I,                                         , hereby sell, assign and transfer unto
                                                                                 (                    ) shares of the Common Stock of Sybase, Inc.
standing in my name of the books of said corporation represented by Certificate No.                     
herewith and do hereby irrevocably constitute and appoint                                          to transfer
the said stock on the books of the within named corporation with full power of substitution in the
premises.

This Stock Assignment may be used only in accordance with the Notice of Grant and the Restricted
Stock Agreement between Sybase, Inc. and the undersigned dated                     , 200_.

Dated:                     , 200__

	 	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 

	 	 

INSTRUCTIONS:

Please DO NOT fill in any blanks other than the signature lines.

The purpose of this assignment is to enable the Company to exercise its Return Right as set forth
in the Notice and Agreement, without requiring additional signatures on the part of the
Participant.

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