Document:

Exhibit 10.7 LTI - PSO Agreement

ADVANCED ENERGY INDUSTRIES, INC.
2008 OMNIBUS INCENTIVE PLAN

PERFORMANCE STOCK OPTION AGREEMENT

Advanced Energy Industries, a Delaware corporation (the “Company”), hereby grants Incentive Stock Options (or ISOs) and/or Non-Qualified Stock Options (or NQs) to purchase shares of its common stock, $0.001 par value, (the “Stock”) to you in the amounts outlined in the attached Notice of Grant of Performance Stock Options and Award of Performance Stock Units (the “Notice of Grant”). Additional terms and conditions of the grant are set forth in this Agreement, the 2012–2014 Long-Term Incentive Plan (“LTI Plan”) and in the Company’s 2008 Omnibus Incentive Plan (the “2008 Plan”), as amended.

This is not a stock certificate or a negotiable instrument.

		
	Incentive Stock Option 
	The ISOs identified in the Notice of Grant are intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly. If you cease to be an employee of the Company, its parent or a subsidiary (“Employee”) but continue to provide Service, this option may be deemed a nonstatutory stock option three months after you cease to be an Employee if allowed under the terms of the LTI Plan.  In addition, to the extent that all or part of this option exceeds the $100,000 rule of section 422(d) of the Internal Revenue Code, this option or the lesser excess part will be deemed to be a nonstatutory stock option.

		
	Non-Qualified Stock Option 
	The NQs identified in the Notice of Grant are not intended to be ISOs under Section 422 of the Internal Revenue Code and will be interpreted accordingly.

		
	Vesting 
	This option is performance based and only vests if the Company meets or exceeds the performance metrics outlined in the LTI Plan.  This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested shares not less than 100 shares, unless the number of shares purchased is the total number available for purchase under the option, by following the procedures set forth in the 2008 Plan.

No additional shares of Stock will vest after your Service has terminated for any reason.

		
	Term 
	If vested, your option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown in the Notice of Grant. As set forth in the LTI Plan, if this option does not vest as a result of meeting the performance metrics in the LTI Plan, it will expire.  Your option will expire earlier if your Service terminates, as described below.

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	Termination 
	If your Service terminates for any reason, then you shall immediately forfeit all rights to your option and the option shall immediately expire.

		
	Notice of Exercise
	When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase (in a parcel of at least 100 shares generally). Your notice must also specify how your shares of Stock should be registered (e.g. in your name only or in your and your spouse’s names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company.  If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.  

		
	Form of Payment 
	When you submit your notice of exercise, you must include payment of the option price for the shares you are purchasing.  Payment may be made in one (or a combination) of the following forms:  

    
•     Cash, your personal check, a cashier’s check, a money order or another cash equivalent acceptable to the Company.
    
•     Shares of Stock which have already been owned by you and which are surrendered to the Company. The value of the shares, determined as of the effective date of the option exercise, will be applied to the option price. 

•     By delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price and any withholding taxes.  

    
		
	Withholding Taxes 
	You will not be allowed to exercise this option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the option exercise or sale of Stock acquired under this option. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of shares arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate.  Subject to the prior approval of the Company, which may be withheld by the Company, in its sole discretion, you may elect to satisfy this withholding obligation, in whole or in part, by causing 

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the Company to withhold shares of Stock otherwise issuable to you or by delivering to the Company shares of Stock already owned by you. The shares of Stock so delivered or withheld must have an aggregate Fair Market Value equal to the withholding obligation and may not be subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.  

		
	Corporate Transaction 
	Notwithstanding the vesting schedule set forth in the Notice of Grant, upon the consummation of a Corporate Transaction, this option will become 100% vested if it is not assumed, or equivalent options are not substituted for the options, by the Company or its successor. Vesting may also occur pursuant to the terms of a separate authorized agreement.

		
	Transfer of Option 
	During your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise the option. You cannot transfer or assign this option.  For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or it may be transferred upon your death by the laws of descent and distribution.  

Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouse’s interest in your option in any other way.  

		
	Retention Rights 
	Neither your option nor this Agreement gives you the right to be retained by the Company (or any parent, Subsidiaries or Affiliates) in any capacity. The Company (and any parent, Subsidiaries or Affiliates) reserves the right to terminate your Service at any time and for any reason.  

		
	Shareholder Rights 
	You, or your estate or heirs, have no rights as a shareholder of the Company until a certificate for your option’s shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the 2008 Plan.  

		
	Forfeiture of Rights
	If during your term of Service you should take actions in competition with the Company, the Company shall have the right to cause a forfeiture of your rights, including, but not limited to, the right to cause: (i) a forfeiture of any outstanding option, and (ii) with respect to the period commencing twelve (12) months prior to your termination of Service with the Company and ending twelve (12) months following such termination of Service (A) a forfeiture of any gain recognized by you upon the exercise of an option or 

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(B) a forfeiture of any Stock acquired by you upon the exercise of an option (but the Company will pay you the option price without interest). Unless otherwise specified in an employment or other agreement between the Company and you, you take actions in competition with the Company if you directly or indirectly, own, manage, operate, join or control, or participate in the ownership, management, operation or control of, or are a proprietor, director, officer, stockholder, member, partner or an employee or agent of, or a consultant to any business, firm, corporation, partnership or other entity which competes with any business in which the Company or any of its Affiliates is engaged during your employment or other relationship with the Company or its Affiliates or at the time of your termination of Service. Under the prior sentence, ownership of less than 1% of the securities of a public company shall not be treated as an action in competition with the Company. 

		
	Adjustments 
	In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this option and the option price per share shall be adjusted (and rounded down to the nearest whole number) pursuant to the 2008 Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity in accordance with the terms of the 2008 Plan.

		
	Applicable Law 
	This Agreement will be interpreted and enforced under the laws of the State of Colorado, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

		
	The Plans 
	The text of the LTI Plan and the 2008 Plan is incorporated in this Agreement by reference.  This Agreement, the LTI Plan and the 2008 Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded.

		
	Data Privacy 
	In order to administer the LTI Plan and 2008 Plan, the Company may process personal data about you. Such data includes but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the LTI Plan and 2008 Plan.

By accepting this option, you give explicit consent to the Company to process any such personal data. You also give explicit consent to the Company to transfer any such personal data outside the 

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country in which you work or are employed, including, with respect to non-U.S. resident Optionees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the LTI Plan and 2008 Plan.

		
	Consent to Electronic 
	The Company may choose to deliver certain statutory

		
	Delivery
	materials relating to the LTI Plan and 2008 Plan in electronic form. By accepting this option grant you agree that the Company may deliver the LTI Plan and 2008 Plan prospectus and the Company’s annual report to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact the Company’s Stock Plan Administrator to request paper copies of these documents.  Certain Dispositions If you sell or otherwise dispose of Stock acquired pursuant to the exercise of this option sooner than the one year anniversary of the date you acquired the Stock, then you agree to notify the Company in writing of the date of sale or disposition, the number of shares of Stock sold or disposed of and the sale price per share within 30 days of such sale or disposition.

By accepting this Agreement, you agree to all of the terms and conditions described above and in the LTI Plan and 2008 Plan.

5Exhibit 10.8 LTI PSU Agreement

ADVANCED ENERGY INDUSTRIES, INC.
2008 OMNIBUS INCENTIVE PLAN
PERFORMANCE STOCK UNIT AGREEMENT

Advanced Energy Industries, Inc., a Delaware corporation (the “Company”), hereby awards performance stock units (“PSUs”) relating to shares of its common stock, $0.001 par value (the “Stock”), to you in the amounts outlined in the attached Notice of Grant of Performance Stock Options and Award of Performance Stock Units (the “Notice of Award”).  The terms and conditions of the award are set forth in this Agreement, the 2012–2014 Long-Term Incentive Plan (“LTI Plan”) and the Advanced Energy Industries, Inc. 2008 Omnibus Incentive Plan (the “2008 Plan”), as amended.  Capitalized terms used but not defined in this Agreement have the meanings given to them in the LTI Plan and 2008 Plan.
Attachment

This is not a stock certificate or a negotiable instrument.

	
		
	Stock Unit Transferability
	This is an award of performance stock units in the number identified in the Notice of Award, subject to the vesting conditions described below (“PSUs”).  Your PSUs may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may your PSUs be made subject to execution, attachment or similar process.  

	Vesting
	This is a performance based award of PSUs that may result in shares of the Company’s common stock being granted and vested if the Company’s meets or exceeds the performance metrics outlined in the LTI Plan.  Please note that the Company may settle all or a portion of the shares underlying the PSUs by the payment of cash as outlined in the LTI Plan.  
Your PSUs only vest as set forth in the LTI Plan; provided, that, you remain in Service on the relevant vesting dates if allowed under the LTI Plan.  If your Service terminates for any reason, you will forfeit any PSUs in which you have not yet become vested.
Notwithstanding anything in this Agreement to the contrary, your PSUs shall not vest unless and until you confirm that you are not obliged to make any Hart-Scott-Rodino filings in connection with the vesting of your award of PSUs.

 

	
		
	Delivery of Stock Pursuant to Vesting of PSUs
	A certificate for the shares of Stock represented by your PSUs typically shall be delivered to you upon vesting, unless the Administrator (in its sole discretion) allows you to elect to defer delivery of such Stock and you make such election in a timely manner.  If your Service terminates for a reason other than for Cause prior to such date, you will instead be delivered a certificate for the vested portion of your PSUs represented by this Agreement.  If your Service terminates for Cause, you shall forfeit of all of your PSUs.
Notwithstanding the preceding paragraph:
If you are a “key employee” within the meaning of Section 409A of the Code and shares would otherwise be delivered to you on account of your separation from Service, then such shares shall not be delivered to you until six months after your separation from Service; and

If the shares relating to the vested PSUs would otherwise be delivered during a period in which you are (i) subject to a lock-up agreement restricting your ability to sell shares of Stock in the open market or (ii) restricted from selling shares of Stock in the open market because you are not then eligible to sell under the Company’s insider trading or similar plan as then in effect (whether because a trading window is not open or you are otherwise restricted from trading), delivery of the shares related to the vested PSUs may be delayed until no earlier than the first date on which you are no longer prohibited from selling shares of Stock due to a lock-up agreement or insider trading plan restriction; provided, however, that the delivery of the shares related to vested PSUs will be made within 2 1⁄2 months after the end of taxable year in which the PSUs vest or such other time as is required to comply with the requirements of Section 409A of the Internal Revenue Code.

	Deferral of Delivery of Stock
	The American Jobs Creation Act of 2004 added Section 409A to the Internal Revenue Code.  Section 409A of the Internal Revenue Code provides that deferred compensation that is not structured to satisfy Section 409A may result in accelerated federal income taxation, a 20% penalty tax applied in addition to federal income tax otherwise owed and, potentially, interest for any underpayment of tax at the ordinary underpayment rate plus one percentage point.  PSUs that allow for deferral of delivery of stock following vesting are likely to be impacted.  For this reason, unless you have received written notice otherwise, the Administrator does not intend to allow for such deferral.

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	Withholding Taxes
	You agree, as a condition of this award, that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of vesting in PSUs or your acquisition of Stock under this award.  In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the delivery of shares under your PSUs, the Company will have the right to: (i) require that you arrange such payments to the Company, (ii) withhold such amounts from other payments due to you from the Company or any affiliate, or (iii) cause an immediate forfeiture of shares of Stock subject to the PSUs awarded pursuant to this Agreement in an amount equal to the withholding or other taxes due.

	Corporate Transaction
	Notwithstanding the vesting schedule set forth in the LTI Plan, upon the consummation of a Corporate Transaction, the PSUs will become 100% vested if it is not assumed, or equivalent PSUs are not substituted for the PSUs, by the Company or its successor. Vesting may also occur pursuant to the terms of a separate authorized agreement. 
 

	Employment Rights
	This Agreement does not confer on you any right with respect to continuance of employment or other service with the Company or of its affiliates, nor will it interfere in any way with any right the Company or its affiliates would otherwise have to terminate or modify the terms of your employment or other service at any time.
You acknowledge and understand that this award of PSUs and any future PSUs awarded under the LTI Plan and 2008 Plan are wholly discretionary in nature and are not to be considered part of any normal or expected compensation that is or would be subject to severance, resignation, redundancy or similar pay, other than to the extent required by local law.

	Shareholder Rights
	You do not have any of the rights of a shareholder with respect to the PSUs, unless and until the Stock relating to the PSUs has been delivered to you.

	Adjustments
	In the event of a stock split, a stock dividend or a similar change in the Company stock, the number of PSUs covered by this award will be adjusted (and rounded down to the nearest whole number) in accordance with the terms of the LTI Plan and 2008 Plan.

	Applicable Law
	This Agreement will be interpreted and enforced under the laws of the State of Colorado, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

	Consent to Electronic Delivery
	The Company may choose to deliver certain statutory materials relating to the LTI Plan and 2008 Plan in electronic form.  By accepting this award you agree that the Company may deliver the 2008 Plan prospectus and the Company’s annual report to you in an electronic format.  If at any time you would prefer to receive paper copies of these documents, as you are entitled to receive, the Company would be pleased to provide copies.  Please contact the Stock Plan Administrator to request paper copies of these documents.

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	Consent to Process Personal Data
	You acknowledge that in order to perform its requirements under the LTI Plan and 2008 Plan, the Company and its affiliates may process sensitive personal data about you.  Such data include but are not limited to the information provided in the Notice of Award and any changes thereto and other appropriate personal and financial data about you.  You hereby give explicit consent to the Company to process any such personal data and/or sensitive personal data. You also hereby give explicit consent to the Company to transfer any such personal data and/or sensitive personal data outside the country in which you are employed, and to the United States. The legal persons for whom such personal data are intended are Advanced Energy Industries, Inc. and E*TRADE.  You have been informed of your right of access and correction to your personal data by applying to Advanced Energy’s stock plan administrator.

	The Plan
	The text of the LTI Plan and the 2008 Plan is incorporated in this Agreement by reference.  This Agreement, LTI Plan and the 2008 Plan constitute the entire understanding between you and the Company regarding this award of PSUs.  Any prior agreements, commitments or negotiations concerning this award are superseded.  The LTI Plan and the 2008 Plan will control in the event any provision of this Agreement should appear to be inconsistent with the terms of the LTI Plan and 2008 Plan.
You understand that the Company has reserved the right to amend or terminate the LTI Plan and the 2008 Plan at any time, and that the award of a PSU under the LTI Plan and 2008 Plan at one time does not in any way obligate the Company or its affiliates to award additional PSUs in any future year or in any given amount.

By accepting this Agreement, you agree to all of the terms and conditions described above and in the LTI Plan and the 2008 Plan.

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ADVANCED ENERGY INDUSTRIES, INC.
2008 OMNIBUS INCENTIVE PLAN

PERFORMANCE STOCK UNIT AGREEMENT ADDENDUM

This Addendum is incorporated into the Performance Stock Unit Agreement (“Agreement”), awarded under the Long-Term Incentive Plan (“LTI Plan”) and the Advanced Energy Industries, Inc. 2008 Omnibus Incentive Plan (the “2008 Plan”), as amended.  The provisions set forth below shall apply to certain recipients performing services outside the United States as specified herein.  As designated below, the provisions set forth in this Addendum shall substitute the identified corresponding provisions of the Agreement in their entirety.

The following shall apply with respect to the vesting of a PSU if, on the date of such vesting, you are a resident in China:

	
		
	Delivery of Stock Pursuant to Vesting of PSUs
	Upon the vesting of this PSU, you shall authorize the Company to direct the broker to immediately sell any and all shares of Stock that otherwise would have been delivered net of applicable withholding taxes and acquisition consideration due to the Company.  This Agreement shall serve as your express authorization to immediately sell any and all shares of Stock to be acquired upon the vesting of this PSU.  As soon as reasonably practical, you shall be entitled to payment of the proceeds resulting from such sale, net of the applicable tax withholding and acquisition consideration (if any) due to the Company.

	Withholding Taxes
	You agree, as a condition of this award, that the Company shall have the right to cause an immediate forfeiture of a number of shares of Stock subject to the PSUs awarded pursuant to this Agreement in an amount equal to the withholding or other taxes due to the Company.

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