Document:

exv10w4

Exhibit 10.4

August 14, 2010

VIA EMAIL

Mr. Danny C. Herron

7211 Stadler Court

Fort Collins, CO 80528

Dear Mr. Herron:

We are pleased to offer you the position of Executive Vice President and Chief Financial Officer
with Advanced Energy Industries, Inc. in our Fort Collins location, reporting to Dr. Hans Betz,
Chief Executive Officer. This offer is subject to satisfactory completion of Advanced Energy’s
pre-employment screening process.

Assuming a satisfactory background check and drug screen, your employment will commence on a date
to be agreed which will be as soon as possible subject to your commitments to your current
employer. Your starting salary will be $305,000 on an annualized basis and will be paid
semi-monthly.

At the first regular Board of Directors meeting following your start date, we will request approval
to grant you 7,500 Restricted Stock Units (RSUs) and the option to purchase 52,500 shares of common
AE stock. The grants will be made in four quarterly installments (1,875 RSU’s and 13,125 options
each) over your first year of employment. The option price will be the fair market value of the
stock, which would be the closing price on the dates of each grant. You must be an employee of the
company for the grants to be made. Other terms will be defined in the document that provides the
grants.

All employees are eligible to participate in the Corporate Incentive Plan. The 2010 target cash
incentive percentage for this position is 60% of the annual base salary, and in accordance with the
plan document, will be dependent on both company financial performance and your individual
performance. Incentive plans are re-evaluated and are subject to change at any time, at the
discretion of the company. These plans typically reward performance related to corporate and
individual objectives. The incentive compensation is described in a separate document and will be
provided to you upon acceptance.

Benefits become effective the first day of the month following your hire date. Benefit programs
are re-evaluated and are subject to change at any time, at the discretion of the company. This may
include coverage offered and the cost of coverage. You will be provided with additional
information and will have an opportunity to enroll in benefits when your employment commences.

As an executive of Advanced Energy you are expected to manage your personal time off in an
efficient manner. You will not accrue PTO but will be able to take time off at your own
discretion. Advanced Energy also recognizes seven (7) company-sponsored holidays during each
calendar year.

Page 1 of 2

 

Please bring the following documents with you on your first day of employment:

	 	•	 	Code of Ethical Conduct
	 
	 	•	 	New Employee Confidential Information Form
	 
	 	•	 	Designated Medical Provider
	 
	 	•	 	Key Employee Confidentiality Agreement
	 
	 	•	 	Employment Eligibility Verification form — In order to comply with the Immigration
Reform and Control Act of 1986, you will be required to present documentation authorizing
your right to work in the United States. A list of acceptable documents is enclosed for
your review. Please bring original documents with you on your first day of employment
	 
	 	•	 	W-4 form — Employee’s Withholding Allowance Certificate.
	 
	 	•	 	Invitation to Self-Identify — Submission of this form is voluntary and refusal to
provide it will not subject you to any adverse treatment
	 
	 	•	 	Automated Deposits Authorization

The information in this letter is not intended to constitute a contract of employment, either
express or implied. Your employment with Advanced Energy Industries, Inc. is at will.

Danny, we believe we can offer you a challenging and rewarding experience at Advanced Energy and we
look forward to a positive response from you no later than August 16, 2010, at which time this
offer expires. In the interim, please do not hesitate to contact me directly with any questions
you may have.

Kind regards,

Randall S. Hester

Vice President, Human Resources

Advanced Energy Industries, Inc.

(970) 407-6357 office

(970) 214-2810 mobile

Page 2 of 2exv10w5

Exhibit 10.5

SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS

I. RECITALS

     A. This Agreement, which is effective upon the Effective Date, is by and between Advanced
Energy Industries, Inc. (“AEI”) and Lawrence D. Firestone (“Executive”) (collectively referred to
as the “Parties”).

     B. Executive has been employed by Advanced Energy Industries, Inc. full time as Chief
Financial Officer.

     C. The Parties desire to terminate Executive’s employment with AEI in an amicable way and to
settle any disputes, known and unknown, in accordance with the terms and conditions set forth in
this Agreement.

     D. Executive’s employment with AEI shall be terminated effective August 10, 2010 (“Termination
Date”).

     E. Executive may accept the offer of severance pay set forth in this Agreement in exchange for
the releases of claims set forth below and in exchange for Executive’s agreement to be bound by the
other terms and conditions set forth in this Agreement.

     In consideration of the promises contained in this Agreement, the Parties to this Agreement
agree as follows:

II. DEFINITIONS

     The following definitions shall be applicable for the purposes of only this Agreement:

     A. “Agreement” means this Separation Agreement And Release Of All Claims.

     B. “AEI” means Advanced Energy Industries, Inc. and any predecessor or current or former
parent, subsidiary or affiliated company of any of them, or successor of any of them, or benefit
plan maintained by any of them, and the current and former directors, officers, employees,
shareholders and agents of any or all of them, unless otherwise specifically stated in this
Agreement.

     C. “Claims” means any debt, obligation, demand, cause of action, claim for relief, judgment,
controversy or claim of any kind whatsoever between Executive and AEI, whether sounding in
contract, statute, tort, fraud, misrepresentation, discrimination, retaliation, claim for
attorneys’ fees or costs, or any other legal theory; including claims under Title VII of the Civil
Rights Act of 1964, as amended; claims under the Civil Rights Act of 1991; claims under the Age
Discrimination in Employment Act of 1967, as amended; claims under 42 U.S.C. § 1981, § 1981a, §

 

 

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1983, § 1985, or § 1988; claims under the Americans with Disabilities Act of 1990, as amended;
claims under the Rehabilitation Act of 1973, as amended; claims under the Fair Labor Standards Act
of 1938, as amended; claims under the Employee Retirement Income Security Act of 1974, as amended;
claims under the Family Medical Leave Act of 1993, as amended; claims under the Sarbanes-Oxley Act;
claims under the Colorado Wage Claim Act; and claims under any other applicable federal, state or
local statute, regulation, ordinance or common law principle, excluding, however, claims that
cannot be released by private agreement as a matter of law.

     D. “Effective Date” means the first date upon which all of the following have occurred: (1)
Executive has executed this Agreement, (2) the Agreement has been received by Thomas McGimpsey
located at 1625 Sharp Point Drive, Fort Collins CO 80525, (3) an authorized representative of AEI
has executed the Agreement, and (4) the revocation period set forth in Paragraph III.F. has
expired.

III. COVENANTS

     A. Consideration To Executive. Advanced Energy Industries, Inc. shall provide to
Executive the consideration described in Addendum A.

     B. Release Of Claims By Executive. Executive, as a free and voluntary act, forever
releases, discharges and covenants not to sue AEI for any and all Claims, known and unknown, by
reason of any matter, cause or thing whatsoever which may have occurred prior to Executive’s
execution of this Agreement, including but not limited to Claims arising out of Executive’s
employment with AEI, the termination of that employment, or any other interaction between Executive
and AEI.

     C. Release Applies To Representative Actions. The above release applies to any Claims
brought by any person or agency on behalf of Executive, or any class or representative action
pursuant to which Executive may have any right or benefit. Executive covenants and agrees not to
participate in any class or representative action that may include or encompass any of the released
Claims. Executive promises not to accept any recoveries or benefits which may be obtained on
Executive’s behalf by any other person or agency or in any class or representative action that may
include or encompass any of the released Claims, and Executive assigns any such recovery or benefit
to Advanced Energy Industries, Inc.

     D. Matters Not Released. Notwithstanding anything stated anywhere else in this
Agreement, Executive does not release any claims for workers’ compensation benefits, unemployment
compensation, claims for vested pension benefits, or any claims that cannot be released by private
agreement as a matter of law.

     E. Waiver Of Right To Seek Individual Relief. Executive represents, as a material
term of this Agreement, that there are no charges or disputes pending before any governmental
agency or forum for which approval by the agency or forum is

 

 

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required for dismissal. Executive further waives the right to individual relief in connection
with any charges filed or to be filed before or otherwise investigated by any governmental agency
regarding any conduct that occurred on or prior to Executive’s execution of this Agreement.

     F. Compliance With Older Workers Benefit Protection Act. Executive acknowledges that
he is not entitled to the consideration being provided to him under this Agreement unless Executive
enters into this Agreement, including the releases of Claims contained in this Agreement.
Executive acknowledges that he is waiving claims under the Age Discrimination in Employment Act, as
amended, that arose on or prior to his execution of this Agreement. Executive also acknowledges
that he is being given twenty-one (21) days to consider this Agreement, and that he has carefully
read and understands all of the provisions of this Agreement. Executive is hereby advised in
writing to consult with an attorney prior to signing this Agreement. Executive acknowledges that
his decision to execute this Agreement is knowing and voluntary. Executive has the right to revoke
this Agreement within seven (7) days of signing this Agreement by sending a letter by certified
mail indicating his intention to revoke to Thomas McGimpsey located at 1625 Sharp Point Drive, Fort
Collins CO 80525. The waiver of claims under the Age Discrimination in Employment Act, as amended,
shall not become effective until the expiration of the revocation period set forth above.

     G. Confidentiality Of Agreement.

     Executive agrees to the following provisions regarding confidentiality of this Agreement:

     (1) Except as otherwise specifically provided in this Agreement, Executive will not disclose
(in whole or in part) any of the terms or provisions of this Agreement (including but not limited
to the fact or the amount of the payment) or characterize any of the terms and provisions of this
Agreement, or disclose any of the negotiations leading to the making of this Agreement to any other
person or entity other than Executive’s spouse, tax accountant, attorney, or taxing authority.
Executive represents and warrants that he has not made any disclosure of any of the terms or
provisions of this Agreement or any of the negotiations leading to the making of this Agreement to
any other person or entity, except to his attorney.

     (2) If Executive breaches this provision, Executive shall be liable to Advanced Energy
Industries, Inc. for the sum of Fifty Thousand Dollars ($50,000.00) per breach as liquidated
damages. The parties agree that the exact harm to AEI by virtue of any breach of the
confidentiality provisions of this Agreement would be impossible to calculate, and that liquidated
damages are appropriate.

     (3) It shall not be a breach of this Agreement for Executive to disclose the terms and
provisions of this Agreement in response to any lawful court order or subpoena, provided Executive
first gives AEI as much notice as is possible of the

 

 

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existence of the subpoena or court order so that AEI can object to the court order or
subpoena.

     (4) Executive agrees that he will not solicit nor provoke any inquiry concerning the terms and
provisions of this Agreement. Nothing in this Agreement, however, shall limit Executive’s right to
contact any governmental agency or authority regarding any issues concerning AEI’s business.

     H. Agreement Not To Compete. Executive acknowledges and agrees that the Key Employee
Agreement to Protect Confidential Information, Assign Inventions, and Prevent Unfair Competition
and Unfair Solicitation (“Key Employee Agreement”) executed by Executive on May 19, 2006 is not
superseded or modified by this Agreement.

     I. Revocation Of Prior Agreements. All prior agreements entered into by the Parties,
with the exception of the Agreements referenced in Section III.H. above, are revoked upon the
effective date of this Agreement. This revocation includes the Executive Change In Control
Agreement executed on March 29, 2008 and the Executive Change In Control Severance Agreement
executed on November 28, 2006.

     J. No Disparagement. Executive agrees not to disparage AEI, its officers, its
directors, its products, or its services.

     K. Press Release. AEI agrees to issue a press release stating that AEI appreciates
the work that Executive has performed on its behalf and wishes him well in his future endeavors.

     L. Executive’s Resignation And Agreement Not To Seek Reemployment. As a free and
voluntary act, Executive agrees to resign from AEI effective on the Termination Date. Unless
otherwise agreed to in writing by AEI, Executive further agrees never to seek direct or indirect
employment or consulting or contracting employment with AEI at any time after the execution of this
Agreement. If the above provision is breached by Executive, his application will be rejected
without any resulting liability for AEI. In the event Executive is employed as an employee,
consultant, independent contractor, or otherwise, in contravention of the terms of paragraph III.L.
of this Agreement, Executive shall be subject to summary dismissal or discharge without any
resulting liability for AEI. This provision shall not apply in the event Executive is working for
an entity that is acquired by Advanced Energy Industries, Inc. subsequent to Advanced Energy
Industries, Inc.’s execution of this Agreement.

     M. Executive’s Agreement To Resign From All Executive Positions. As a free and
voluntary act, Executive agrees to resign from all officer and director positions he holds at
Advanced Energy Industries, Inc. and its affiliates.

 

 

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     N. Prior Agreements. Executive and AEI entered into a Key Employee Agreement To
Protect Confidential Information, Assign Inventions, and Prevent Unfair Competition And Unfair
Solicitation (“Key Employee Agreement”) at the inception of Executive’s employment with AEI and in
consideration of Executive’s new employment with AEI. Executive and AEI entered into an Executive
Change In Control Severance Agreement with an effective date as of November 28, 2006. The parties
agree, as a material term of this Agreement, that they did not intend for the Executive Change In
Control Severance Agreement to modify or supersede the Key Employee Agreement, or any term or
provision of the Key Employee Agreement, and that it did not in fact modify or supersede the Key
Employee Agreement, or any term or provision of the Key Employee Agreement. The parties to this
Agreement further agree, as a material term of this Agreement, that the Executive Change In Control
Severance Agreement was and is null and void, and never had any legal effect. The parties each
specifically waive the right to assert that the Executive Change In Control Severance Agreement
modified or superseded any term or provision of the Key Employee Agreement. Executive and AEI
entered into an Executive Change In Control Agreement effective as of March 29, 2008. The parties
agree, as a material term of this Agreement, that they did not intend for the Executive Change In
Control Agreement to modify or supersede the Key Employee Agreement, or any term or provision of
the Key Employee Agreement, and that it did not in fact modify or supersede the Key Employee
Agreement, or any term or provision of the Key Employee Agreement. The parties to this Agreement
further agree, as a material term of this Agreement, that the Executive Change In Control Agreement
was and is null and void, and never had any legal effect. The parties each specifically waive the
right to assert that the Executive Change In Control Agreement modified or superseded any term or
provision of the Key Employee Agreement.

     O. Additional Agreements. Executive agrees to sign the Addendum to this Agreement as
well as the Restrictive Covenant Agreement. This Agreement, the Addendum to this Agreement, and
the Restrictive Covenant Agreement shall not be enforceable until all three agreements have been
executed and the revocation period set forth in section III.F. of this Agreement has expired.

IV. ADDITIONAL PROVISIONS

     A. Voluntary Agreement. Executive acknowledges that he is only entitled to the
consideration specified in this Agreement as the result of his execution of this Agreement and that
Executive’s execution of the Agreement is knowing and voluntary.

     B. Severability. In case any one or more of the provisions of this Agreement shall be
found to be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not in any way be
affected or impaired. Further, any provision found to be invalid, illegal or unenforceable shall
be deemed, without further action on the

 

 

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part of the parties to this Agreement, to be modified, amended and/or limited to the minimum
extent necessary to render such clauses and/or provisions valid and enforceable.

     C. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement, and may be amended, modified or
superseded only by a written agreement signed by each Party directly affected by the amendment. No
prior, contemporaneous or future oral statements shall modify or otherwise affect the terms and
provisions of this Agreement.

     D. Choice Of Law. This Agreement shall be construed in accordance with the
substantive laws of the state of Colorado without regard to its conflict of laws principles.

     E. No Admission Of Liability. AEI denies that AEI took any improper action against
Executive or that it violated any federal, state, or local law or common law principle in its
treatment or compensation of him. This Agreement shall not be admissible in any proceeding as
evidence of any improper conduct by AEI.

     F. Assignment. Neither party may assign its rights or obligations under this
Agreement to any other party without the prior written consent of the other party to this
Agreement. As an exception to this provision, AEI may assign this Agreement to an affiliated
entity or a successor (which includes a purchaser of more than 50% of Advanced Energy Industries,
Inc.’s assets) without Executive’s prior approval.

     G. Authority. Executive and the undersigned representative of AEI both separately
represent and warrant that they each, respectively, have the right and authority to execute this
Agreement, and that they each, respectively, have not sold, assigned, transferred, conveyed, or
otherwise disposed of any Claims or potential Claims relating to any matter covered by this
Agreement.

     H. Binding Effect. This Agreement is binding upon the Parties, their heirs,
representatives, executors, administrators, successors, and assigns.

     I. Drafting Of Agreement. The Parties each acknowledge that they each, respectively,
have had the opportunity to retain counsel of their own choosing concerning the making and entering
into this Agreement; that they have read and fully understand the terms of this Agreement and have
had the opportunity to have it reviewed and approved by their counsel of choice, with adequate
opportunity and time for such review; and that they are fully aware of its contents and of its
legal effect. The parties further agree that this Agreement shall not be construed against any
Party on the grounds that such Party drafted this Agreement. Instead, this Agreement shall be
interpreted as though drafted equally by all of the Parties.

 

 

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YOUR SIGNATURE BELOW ACKNOWLEDGES THAT YOU HAVE READ THIS AGREEMENT CAREFULLY IN ITS ENTIRETY THAT
YOU KNOW AND UNDERSTAND ITS CONTENTS, AND THAT YOU ENTER INTO THIS AGREEMENT FREELY AND AS A
VOLUNTARY ACT.

	 	 	 	 	 

	Executive

	 	Advanced Energy Industries, Inc.	 	 
	 
	 	 	 	 
	/s/ Lawrence D. Firestone
 

Executive

	 	/s/ Thomas McGimpsey
 

Thomas McGimpsey
	 	 
	 

	 	Vice President, General Counsel &	 	 
	 

	 	Corporate Secretary	 	 
	 
	 	 	 	 
	Dated: August 11, 2010

	 	Dated: August 11, 2010	 	 

 

 

ADDENDUM A TO SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS

BETWEEN ADVANCED ENERGY INDUSTRIES, INC. AND EXECUTIVE

     Advanced Energy Industries, Inc. shall provide the following consideration to Executive
pursuant to Section III.A. of the Agreement.

     1. Salary Continuation. Advanced Energy Industries, Inc. will provide Executive with
continuation of Executive’s base salary as set forth below. The salary continuation payments will
be paid in accordance with AEI’s payroll practice and shall be subject to all normal withholdings.

          a. Following the termination of Executive’s employment with AEI, AEI will continue Executive’s
base salary for each continuous month Executive remains unemployed for up to a maximum of six (6)
months. Provided, however, that the payments described in this paragraph will be guaranteed for a
minimum of three (3) months regardless of when Executive obtains new employment. The period of time
described above will be known, for purposes of this Addendum, as the Salary Continuation Period.

          b. During the Salary Continuation Period, Executive will provide continued advisory services
until the earlier of six (6) months or until Executive is employed on a full-time basis with
another employer. To the extent permissible, the stock options and restricted stock units that
Executive currently holds will continue to vest and be exercisable in accordance with their terms,
so long as Executive provides such continued advisory services to Advanced Energy Industries, Inc.
during the Salary Continuation Period. It is the express intent of AEI and Executive that such
services rendered to AEI during the Salary Continuation Period shall not be interpreted as
an interruption of service or termination of services under any applicable Advanced Energy
Industries, Inc. equity plans (such continuation of vesting and continuous service is referred
collectively herein as the “Equity Continuation”).

          c. As a condition to entitlement to any salary continuation payments during the last 3 months
of the Salary Continuation Period, Executive agrees to complete the “Employment Status Report,”
attached to this Addendum as Exhibit A, each such month. Employment Status Reports will be due on
the 10th day of each calendar month starting with December 2010. Salary continuation
payments during the last 3 months of the Salary Continuation Period will cease for the remainder of
the Salary Continuation Period, and will not be due to Executive, in the event Executive does not
timely submit any Employment Status Report that is due. Nothing in this Addendum relieves
Executive of his obligations under the agreement referred to in Paragraph III.H. of the Agreement.

     2. Pro-Rata Bonus Payment For Fiscal Year 2010. The Parties agree to the following
provisions regarding Executive’s eligibility for a pro-rata portion of the bonus for Advanced
Energy Industries, Inc.’s 2010 Fiscal Year:

 

 

ADDENDUM A TO SEPARATION AGREEMENT, RELEASE AND WAIVER

Advanced Energy Industries, Inc. and Executive

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          a. Executive will be eligible to receive a prorated bonus for Fiscal Year 2010 computed as
follows. First, AEI will calculate the bonus that Executive would have received had he remained
employed through the end of the year, based on the plan’s formula for computing the Individual
Award Calculation. Next, AEI will prorate the result of the Individual Award Calculation through
the end of the month of August 2010, 243 days, divided by 365.

          b. The bonus payment, if any, shall be paid to Executive on or before March 31, 2011.

          c. The Parties acknowledge and agree that Executive will be unable to meet all unique
milestones required of him. Therefore, the Individual Award Calculation shall be calculated
assuming an Individual Performance Modifier of 1.0 and applying the Corporate Modifier applied to
executives who are employed by Advanced Energy Industries, Inc. at the time the bonus for 2010 is
calculated. The phrases “Individual Award Calculation,” “Individual Performance Modifier,” and
“Corporate Modifier” shall be given the same meaning they are given in the Leadership Corporate
Incentive Plan Tiers 1 through 4, which is attached to this Addendum as Exhibit B. The parties
further agree that, as correctly interpreted, the maximum Individual Award Calculation
available under the terms of this Addendum and the Leadership Corporate Incentive Plan Tiers 1
through 4 is approximately One Hundred Seventy Six Thousand Seven Hundred Fifty Seven Dollars And
No Cents ($176,757), subject to ordinary withholdings. The maximum Individual Award Calculation is
computed as follows: One Hundred Fifty Percent (150%) times Executive’s target bonus of Sixty
Percent (60%), times Executive’s base salary of Two Hundred Ninety Five Thousand Dollars And No
Cents ($295,000.00). Therefore, Executive’s maximum prorated bonus under this Addendum is Two
Hundred Sixty Five Thousand Five Hundred Dollars And No Cents ($265,500.00) times the number of
days of the 2010 Fiscal Year through the end of August (243) divided by Three Hundred Sixty Five
(365).

     3. Restrictive Covenant Payment. Advanced Energy Industries, Inc. shall pay Executive
Seventy Five Thousand Dollars And No Cents ($75,000) as consideration for Executive’s execution of
the Restrictive Covenant Agreement contemporaneously with his execution of the Agreement and this
Addendum.

     4. COBRA Benefits. AEI will provide Executive a gross payment of approximately Thirty
Four Thousand Seven Hundred Fifty Two Dollars ($34,752) in lieu of Twelve (12) months of
reimbursement for benefits under the Consolidated Omnibus Budget Reconciliation Act.

     5. Placement Assistance. AEI will provide Executive with up to Twelve Thousand
Dollars ($12,000) in placement assistance through Lee Hecht & Harrison during the Salary
Continuation Period.

 

 

ADDENDUM A TO SEPARATION AGREEMENT, RELEASE AND WAIVER

Advanced Energy Industries, Inc. and Executive

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     6. Other Benefits. This Addendum will supersede any other AEI severance policy as
provided to employees generally under the current Corporate Policy Manual and will be in
satisfaction and in lieu of any other severance (including but not limited to statutory or
contractual severance), notice period, wrongful termination damages or other claims or rights
Executive may have arising out of the termination of Executive’s employment.

	 	 	 	 	 	 	 

	I accept the terms and
conditions of this Addendum:	 	Advanced Energy Industries, Inc.	 	 
	 
	 	 	 	 	 	 
	/s/ Lawrence D. Firestone
 

	 	By:
	 	/s/ Thomas McGimpsey
 

	 	 
	Executive	 	Its: Vice President, General Counsel &	 	 
	 	 	Corporate Secretary	 	 
	 
	 	 	 	 	 	 
	Date: August 11, 2010	 	Date: August 11, 2010	 	 

 

 

RESTRICTIVE COVENANT AGREEMENT

     This Restrictive Covenant Agreement is entered into by and between Advanced Energy Industries,
Inc. (“Company”) and Lawrence D. Firestone (“Executive”) :

1. Payment To Executive.  Company shall pay to Executive Seventy Five Thousand
Dollars and No Cents ($75,000.00) as consideration for entering into this Restrictive Covenant
Agreement. Executive agrees that he would not be entitled to this payment if he did not enter into
this Agreement. This amount is subject to ordinary withholdings.

2. Recognition of Company’s Rights; Nondisclosure. Executive agrees to hold in strictest
confidence and not to disclose, use, lecture upon or publish any of the Company’s Proprietary
Information (defined below) at any time. By signing this Agreement, Executive knowingly and
voluntarily assigns to the Company any rights Executive may have or acquire in Proprietary
Information. Executive recognizes that all Proprietary Information is and shall be the sole
property of the Company and its assigns.

3. Proprietary Information. The term “Proprietary Information” shall mean any and all
confidential and/or proprietary knowledge, data or information of the Company, and includes any
“trade secrets” as that term is defined in the Uniform Trade Secrets Act, C.R.S. §§ 7-74-101 et
seq. By way of illustration but not limitation, “Proprietary Information” includes (a) information
relating to products, processes, know-how, designs, drawings, clinical data, test data, formulas,
methods, samples, media and/or cell lines, developmental or experimental work, improvements,
discoveries, plans for research, new products, manufacturing, marketing and selling, business
plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and
customers, and information regarding the skills and compensation of other employees of the Company
(collectively referred to as “Inventions”); (b) information regarding plans for research,
development, new products, marketing and selling, business plans, budgets and unpublished financial
statements, licenses, prices and costs, suppliers and customers; and (c) information regarding the
skills and compensation of other employees of the Company. Notwithstanding anything said above, it
is understood that, at all times, Executive is free to use information which is generally known in
the trade or industry, which is not gained as result of a breach of this Agreement, and Executive’s
own, skill, knowledge, know-how and experience, to whatever extent and in whichever way Executive
wishes.

4.  Covenants Not To Compete And Not to Solicit Certain Customers.  Executive recognizes
and agrees that, in Executive’s role as an employee of the Company, Executive was an “executive”
and a “management personnel” and an “officer” of Company within the meaning of C.R.S. §
8-2-113(2)(d). Executive further recognizes and agrees that Executive learned “trade secrets”
belonging to the Company, as that term is used in C.R.S. § 8-2-113(2)(b), during the course and
scope of the performance of Executive’s duties for the Company. Executive agrees that, for a
period of twelve (12) months following the conclusion of Executive’s employment, Executive will
not, directly or indirectly, as an officer, director, employee, consultant, owner, shareholder,
adviser, joint venture, agent, or otherwise:

     (1) Solicit any customer with whom Executive had contact in the two years prior to the
termination of Executive’s employment, to purchase products or services that compete with
any products or services Company sold or attempted to sell in the two years prior to the conclusion
of Executive’s employment and/or consulting relationship; and

     (2) Perform any work for or provide consulting advice to a Listed Competitor of the Company.
For purposes of this clause (2), Listed Competitor shall be limited to the companies known as the
following: Satcon, SMA, MKS Instruments, Novellus, LAM Research, Comet, Solectria Renewable,
PowerOne, Schneider/Xantrax, Huettinger, and Applied Materials, as well as their affiliates,
successors, and assigns. With respect to Applied Materials, Executive may seek Company’s written
consent to work in a non-competitive position, and such consent shall not be unreasonably withheld.

5. Non-Solicitation Of Employees. Executive agrees that, for a period of twelve (12)
months following the conclusion of Executive’s employment and/or consulting relationship with
Company, Executive will not form a business relationship with, offer to employ, or arrange
employment of, anyone who is at that time employed by the Company , nor shall Executive induce any
employee of the Company to leave the employ of the Company.

6. Return of Company Property. Executive agrees to deliver to the Company all property of
Company that is in Executive’s possession, custody or control, together with all copies of such
property, and any other material containing or disclosing any Company Inventions, or Proprietary
Information of the Company.

7. Legal and Equitable Remedies. The Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other equitable relief,
without bond and without prejudice to any other rights and remedies that the Company may have for a
breach of this Agreement.

1

 

8. Notices. Any notices required or permitted by this Agreement shall be given to the
Company at the Company’s headquarters and to Employee at Employee’s last known address in the
Company’s records, or at a different address specified in writing by the appropriate party. Notice
shall be deemed given upon personal delivery to the appropriate address or if sent by certified or
registered mail, or through private post subject to tracking (such as UPS or Federal Express) three
(3) days after the date of mailing.

9. Notification of New Employer. Executive consents to the notification of any new
employer or other business affiliate of Executive’s rights and obligations under this Agreement.

10. General Provisions.

     10.1 Governing Law; Consent to Personal Jurisdiction, And Venue. This Agreement will be
governed by and construed according to the laws of the State of Colorado, as such laws are applied
to agreements entered into and to be performed entirely within Colorado between Colorado residents.
Executive and Company each expressly consents to the personal jurisdiction of the state courts
located in Colorado and the federal district court for the District of Colorado, for any dispute
arising from or related to this Agreement. The state and federal courts of Colorado shall have
exclusive jurisdiction and venue over any dispute between Executive and the Company arising out of
or related to this Agreement. The Company and Employee each waive the right to assert any defense
to venue in Colorado based on the inconvenience of the forum.

     10.2 Severability. In case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, the
invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement,
and this Agreement shall be construed as if the invalid, illegal or unenforceable provision had
never been contained in this Agreement. If any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration, geographical scope,
activity or subject, it shall be construed by limiting and reducing it the minimum extent necessary
so as to be enforceable to the extent compatible with the applicable law.

     10.3 Successors and Assigns. This Agreement will be binding upon Executive’s heirs,
executors, administrators and other legal representatives and will be for the benefit of the
Company, its successors, and its assigns. Executive specifically consents, without the payment of
further consideration, to the assignment of this Restrictive Covenant Agreement to any affiliate or
successor of Company, including but not limited to a purchaser of the majority of Company’s assets.

     10.4 Survival. The provisions of this Agreement shall survive the termination of Executive’s
employment and the assignment of this Agreement by the Company to any successor in interest or
other assignee. However, Executive’s rights and obligations under this Agreement may not be
assigned to anyone without the prior written consent of the Company.

     10.5 Waiver. No waiver by the Company of any breach of this Agreement shall be a waiver of
any preceding or succeeding breach. No waiver by the Company of any right under this Agreement
shall be construed as a waiver of any other right. The Company shall not be required to give
notice to enforce strict adherence to all terms of this Agreement.

     10.6 Merger Clause. Except as described below, this Agreement is the final, complete and
exclusive agreement of the parties with respect to the subject matter of this Agreement and
supersedes and merges all prior discussions between us. However, this Restrictive Covenant
Agreement supplements, but does not supersede, the Key Employee Agreement To Protect Confidential
Information, Assign Inventions, And Prevent Unfair Competition And Unfair Solicitation signed by me
on or about May 18, 2006. No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, will be effective unless in writing and signed by the party to be
charged. Any subsequent change or changes in my duties, salary or compensation will not affect the
validity or scope of this Agreement.

Executive’s Signature:

	 	 	 

	/s/ Lawrence D. Firestone
	 	 
	 

Signature

	 	 
	 
	 	 
	Lawrence D. Firestone
	 	 
	 

(Printed Name)

	 	 

Dated: August 11, 2010

Advanced Energy Industries, Inc.

	 	 	 

	/s/ Thomas McGimpsey
	 	 
	 

Signature

	 	 
	 
	 	 
	Thomas McGimpsey
	 	 
	 

(Printed Name)

	 	 

Title: Vice President

Dated: August 11, 2010

Firmwide:96793938.1 063821.1000

2.

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