Document:

exv10w1

Exhibit 10.1

EMPLOYEE EXCESS BENEFITS AGREEMENT

          THIS AGREEMENT, made this ____ day of _______, 201_, by and between _____________________ (the
“Employee”), and THE TIMKEN COMPANY (“Timken”), an Ohio corporation having its principal offices at
Canton, Ohio.

          WHEREAS, the Employee has been employed by Timken since ____________________ and is currently
serving as ____________________ in a capable and efficient manner; and

          WHEREAS, Timken desires to retain the services of the Employee and to provide additional
retirement compensation (hereinafter referred to as “Excess Benefits”) to the Employee for his
services; and

          WHEREAS, the Employee is willing to continue in the employ of Timken until his retirement,
provided that Timken will pay Excess Benefits to the Employee upon the Employee’s retirement and/or
to the Employee’s Spouse upon the Employee’s death.

          NOW, THEREFORE, the parties covenant and agree as follows:

	1.	 	Timken shall provide the following Excess Benefits:

	 	(a)	 	Except as provided in Section 2(a), if, under the Amended and Restated Supplemental
Pension Plan of The Timken Company (the “Supplemental Plan”), the Employee would be
eligible for a benefit pursuant to paragraph 2(a) of the Supplemental Plan but for this
Agreement and the Employee Terminates Employment (as defined in Section 4(a) of this
Agreement) after having been an elected officer of Timken for five or more years, the
Employee shall be eligible to receive a benefit in an amount equal to the difference
between

	 	(i)	 	the monthly pension the Employee would be entitled to receive under the 1984
Retirement Plan for Salaried Employees of The Timken Company, the Retirement Plan for
Salaried Employees of The Timken Company and the Timken-Latrobe-MPB-Torrington
Retirement Plan (hereinafter the “Retirement Plans”) were it not for the limitations
imposed by the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”)
and Sections 401 and 415 of the Internal Revenue Code of 1986, as amended (hereinafter
collectively referred to as “the Code Limitations”), and
	 
	 	(ii)	 	the monthly pension he would actually receive under the Retirement Plans.

 

 

	 	 	 	If any portion of the Employee’s benefit under the Retirement Plans is not payable at the
same time the Employee’s Excess Benefits are payable, the corresponding portion of the
Excess Benefit under this Section 1(a) shall be determined by calculating such corresponding
portion of the Excess Benefit that would be payable under Section 1(a) and that portion of
the benefit that would be payable under the Retirement Plans at age 65 and then actuarially
reducing such Excess Benefit from age 65 to the commencement date provided under this
Agreement for the Excess Benefits. Any actuarial adjustments under this Section 1(a) shall
be based on the “applicable mortality table,” as defined in Section 417(e)(3) of the
Internal Revenue Code of 1986 (the “Code”) and the “applicable interest rate” as defined in
Section 417(e)(3) of the Code, during the third calendar month (October) immediately
preceding the first day of the calendar year in which the determination is made.
	 
	 	 	 	The Excess Benefits to which the Employee is entitled under this Section 1(a) shall
commence, subject to Section 3, on the first day of the month following the later of (A) the
Employee’s Termination of Employment or (B) the Employee’s ____ birthday1. The
form of payment of the Excess Benefits to which the Employee is entitled under this Section
1(a) shall be as specified under the provisions applicable to Participants under the
Supplemental Plan.
	 
	 	(b)	 	If a married Employee dies after having been an elected officer of Timken for five or
more years but prior to commencement of the Employee’s benefit payments and the Employee’s
Spouse is entitled to a monthly pension under the Retirement Plans, Timken shall pay to the
Employee’s Spouse an amount equal to the difference between the monthly pension the
Employee’s Spouse would be entitled to receive under the Retirement Plans, were it not for
the Code Limitations, and the monthly pension the Employee’s Spouse would actually receive
under the Retirement Plans. Monthly payments shall be made until the Spouse’s death. A
Spouse’s benefit under this Section 1(b), shall commence on the first day of the month
following the later of (A) the Employee’s death, or (B) the date on which the Employee
would have reached age 55.
	 
	 	(c)	 	Except as provided in Section 2(a), if the Employee Terminates Employment after having
been an elected officer of Timken for five or more years, the Employee shall be entitled to
a monthly benefit under this Agreement equal to 60% of one-twelfth of Final Average
Earnings (as defined in the Retirement Plans without consideration of the pay limitation
under Internal Revenue Code (“Code”) Section 401(a)(17) and based on a five non-consecutive
year average), multiplied by the following ratio:

Years of Continuous Service (to a maximum of 15)

15

 

			
	1	 	This age should be 55 or the date elected by
the participant under the Supplement Plan prior to Jan. 1, 2009 to be
consistent with the Supplemental Plan and to avoid impermissible changes to
timing of payment under Section 409A.

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	 	 	 	reduced by each of the following:

	 	(i)	 	the monthly payment from the Retirement Plans before any adjustments for
optional forms of benefits are made but after any adjustment for early commencement,
	 
	 	(ii)	 	the monthly payment under subsection (a) above before any adjustments for
optional forms of benefits are made but after any adjustment for early commencement,
and
	 
	 	(iii)	 	the monthly annuity value of the account balance the employee would have
accumulated under the Savings and Investment Pension (SIP) Plan and any other qualified
defined contribution plans sponsored by Timken and the Post-Tax Savings Plan (the
“Savings Plans”) on the date that Excess Benefits are to commence under this Section
1(c), but excluding amounts contributed by the Employee, such account balance being
determined in the manner set forth in the next to last paragraph of this Section 1(c).

	 	 	 	The benefit to which the Employee is entitled to receive under this Section 1(c) shall
commence, subject to Section 3, on the first day of the month following the later of (A) the
Employee’s Termination of Employment, or (B) the Employee’s ___ birthday,2 and
shall be paid in the form of a monthly annuity for the life of the Employee. “Continuous
Service” shall mean the Employee’s years of ‘Continuous Service’ as determined under the
applicable Retirement Plans or Savings Plans as of the Employee’s Termination of Employment
or, if earlier, death. Notwithstanding any provision to the contrary, for purposes of the
ratio set forth in the first paragraph of this Section 1(c), if an Employee who has been an
elected officer of Timken for five or more years but who has less than 15 years of
Continuous Service experiences an involuntary Termination of Employment as a result of a
layoff and such Termination of Employment is not for Cause (as defined in Section 2(b),
below), the Employee will be credited, as of Employee’s Termination of Employment, with the
lesser of (C) two additional years of Continuous Service or (D) the number of years of
Continuous Service necessary for the Employee’s total years of Continuous Service to equal
15.
	 
	 	 	 	In the event the benefits described in Sections 1(c)(i) and 1(c)(ii) are not payable
immediately because the Employee has not met the service requirements in the Retirement
Plans, for purposes of this section, the benefits will be reduced for early commencement in
the same manner as if the Employee met the service requirement for immediate commencement.
	 
	 	 	 	For purposes of Section 1(c)(iii), the account balances related to the Savings Plans will be
determined by (A) assuming the Employee received in an account held for the Employee under
the Savings Plans the maximum amount of matching contributions at the rate specified for
matching contributions in Exhibit B for each year he was an employee and eligible to
participate in the Savings Plans and (B) assuming Timken’s contributions to the account held
for the Employee under the Savings Plan, in addition to the matching

 

			
	2	 	See Footnote No. 1.

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	 	 	 	contributions described in (A), consisted only of the Core Contributions (as defined in the
Savings Plans) under the Savings Plans at the rate specified for Core Contributions in
Exhibit B for each year he was an employee and eligible for Core Contributions in
the Savings Plans. Interest will be credited to such account at a rate of eight percent
(8%) per annum beginning at the end of the year to which the contributions are attributable.
The monthly annuity will be that which could be purchased on the date of the Employee’s
Termination of Employment with the account balance at the date that Excess Benefits are to
commence under this Section 1(c) from an insurance company which at the time of purchase has
the highest rating by A. M. Best assuming that the annuity is purchased with assets from a
qualified retirement plan, is based on group rates, is on a no commission basis and is
payable for the Employee’s lifetime, with no continuation after the Employee’s death.
	 
	 	 	 	Notwithstanding the foregoing provisions of this subsection (c), if the Employee’s benefit
payable under this subsection (c) commences prior to attaining age 62, such benefit (before
the reductions described in Sections 1(c)(i), 1(c)(ii) and 1(c)(iii) are made) shall be
reduced by 4% for each year by which the commencement date of the benefit precedes age 62.
	 
	 	(d)	 	If a married Employee is eligible for a benefit under Section 1(c), his surviving
spouse shall be entitled to a monthly benefit after the death of the Employee as follows:

	 	(i)	 	If a married Employee dies after the Employee has started to receive the
benefit provided for under Section 1(c), the Employee’s surviving spouse shall be
entitled to receive an immediate monthly benefit equal to 50% of the amount the
Employee was receiving pursuant to Section 1(c). Such benefit will commence on the
first day of the month next following the month of the Employee’s death.
	 
	 	(ii)	 	If a married Employee dies before the Employee has started to receive the
benefit provided for under Section 1(c) but after having been an elected officer of
Timken for five or more years, the Employee’s Surviving Spouse shall be entitled to a
monthly benefit equal to 50% of the amount the Employee would have received pursuant to
Section 1(c) if the Employee had commenced to receive that monthly benefit at the
Surviving Spouse’s benefit commencement date specified below, determined by taking into
account the Employee’s Final Average Earnings and years of Continuous Service as of the
Employee’s date of death. The surviving spouse’s benefit payments pursuant to this
subsection (ii) will commence on the first day of the month next following the later of
(A) the Employee’s death, or (B) the date on which the Employee would have reached age
55.
	 
	 	(iii)	 	Monthly payments to a surviving spouse pursuant to this Section 1(d) shall be
made until the spouse’s death.

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	2.	 	(a) If (i) the Employee voluntarily terminates employment with Timken prior to having been an
elected officer of Timken for five or more years, (ii) Timken discharges the Employee or
requests that he resign his employment, prior to the Employee having been an elected officer
of Timken for five or more years, or (iii) the Employee’s employment with Timken terminates
for Cause, no Excess Benefits shall become due and payable to the Employee and this Agreement
shall be considered terminated.

	 	(b)	 	For purposes of this Section 2, a termination shall be deemed to have been for “Cause”
only if based on the fact that the Employee has done any of the following acts and such is
materially harmful to Timken:

	 	(i)	 	An intentional act of fraud, embezzlement or theft in
connection with the Employee’s duties with Timken and resulting or intended to
result directly or indirectly in substantial personal gain to the Employee at
the expense of Timken;
	 
	 	(ii)	 	Intentional wrongful disclosure of secret processes or
confidential information of Timken or any of its subsidiaries; or
	 
	 	(iii)	 	Intentional wrongful engagement in any Competitive Activity
which would constitute a material breach of the Employee’s duty of loyalty to
Timken.
	 
	 	 	 	For purposes of this Section 2, the term “Competitive Activity” shall mean
the Employee’s participation, without the written consent of an officer of
Timken, in the management of any business enterprise if such enterprise
engages in substantial and direct competition with Timken and such
enterprise’s sales of any product or service competitive with any product or
service of Timken amounted to 25% of such enterprise’s net sales for its
most recently completed fiscal year and if Timken’s net sales of said
product or service amounted to 25% of Timken’s net sales for its most
recently completed fiscal year. “Competitive Activity” shall not include
(A) the mere ownership of securities in any enterprise and exercise of
rights appurtenant thereto or (B) participation in the management of any
enterprise or business operation thereof other than in connection with the
competitive operation of such enterprise.
	 
	 	 	 	For purposes of this Section 2(b), no act, or failure to act, on the part of
the Employee shall be deemed “intentional” unless done, or omitted to be
done, by the Employee not in good faith and without reasonable belief that
his action or omission was in or not opposed to the best interest of Timken.
Notwithstanding the foregoing, the Employee shall not be deemed to have
been terminated for “Cause” hereunder unless and until there shall have been
delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the

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	 	 	 	Directors then in office at a meeting of the Directors called and held for
such purpose (after reasonable notice to the Employee and an opportunity for
the Employee, together with his counsel, to be heard before the Directors),
finding that, in the good faith opinion of the Directors, the Employee had
committed an act set forth in subsection (b) of this Section and specifying
the particulars thereof in detail. Nothing herein shall limit the right of
the Employee or his beneficiaries to contest the validity or propriety of
any such determination.

	3.	 	Notwithstanding any provision of this Agreement to the contrary, if the Employee is a
“specified employee,” determined pursuant to procedures adopted by Timken in compliance with
Section 409A of the Code, on the date the Employee Terminates Employment and if any portion
of the payments to be received by the Employee are by reason of his Termination of Employment,
then to the extent necessary to comply with Section 409A, amounts that would otherwise be
payable pursuant to this Agreement during the six-month period immediately following the
Employee’s Termination of Employment will instead be paid or made available on the earlier of
(i) the first business day of the seventh month after the date of the Employee’s Termination
of Employment, or (ii) the Employee’s death. Any benefit payments that are scheduled to be
paid more than six months after such Employee’s Termination of Employment shall not be delayed
and shall be paid in accordance with the schedule prescribed by Sections 1(a) and 1(c), as
applicable.

	 
	4.	(a)	 	For purposes of this Agreement, “Terminates Employment” and “Termination of Employment”
shall mean a termination of employment (within the meaning of Treasury Regulation Section
1.409A-1(h)(1)(ii)) with Timken and any member of its controlled group (as such term is used
for purposes of ERISA and the Code, except that a 50% ownership or common control threshold
shall be used to determine controlled group status instead of an 80% ownership or common
control threshold). For purposes of the preceding sentence a termination of employment shall
also include a permanent decrease in the level of bona fide services performed by the Employee
after a certain date to a level that is 20% or less of the average level of bona fide services
performed by the Employee over the immediately preceding 36-month period.

	 	(b)	 	Any references to the Employee’s Spouse herein shall mean the Employee’s Spouse at the
time of the Employee’s death or commencement of the Employee’s Excess Benefits, whichever
is applicable, under the Retirement Plans or Savings Plans if the Employee is not a
participant in the Retirement Plans, provided that if a qualified domestic relations order
provides that a former spouse of the Employee is to be considered the Employee’s Spouse for
purposes of pension benefits, Timken shall consider such former spouse of the Employee to
be the Employee’s Spouse for purposes of this Agreement.

	5.	 	This Agreement shall be binding upon and shall inure to the benefit of Timken and the
Employee and their respective successors and assigns; provided, however, that, except as set
forth herein, no rights to any benefit under this Agreement shall be transferable or
assignable by the Employee or any other person, or be subject to alienation, encumbrance,
garnishment,

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	 	 	attachment, execution or levy of any kind, voluntary or involuntary. Any such attempted
assignment or transfer shall terminate this Agreement and Timken shall have no further liability
hereunder.
	 
	6.	 	Timken is hereby designated as the Named Fiduciary of this Agreement, in accordance with
ERISA. The Named Fiduciary shall have the authority to control and manage the operation and
administration of this Agreement and is hereby designated as the Agreement Administrator.
	 
	7.	 	The obligations of Timken hereunder constitute an unsecured promise of Timken to make payment
of the amounts provided for in this Agreement. No property of Timken is or shall be, by
reason of this Agreement, held in trust for the Employee, or any other person, and neither the
Employee nor any other person shall have, by reason of this Agreement, any rights, title or
interest of any kind in or to any property of Timken.
	 
	 	 	Notwithstanding the foregoing paragraph, upon the earlier to occur of (i) a Change of Control
that involves a transaction that was not approved by the Board of Directors, and was not
recommended to Timken’s shareholders by the Board of Directors, (ii) a declaration by the Board
of Directors that the trusts under the Employee Excess Benefits Agreements should be funded in
connection with a Change of Control that involves a transaction that was approved by the Board
of Directors, or was recommended to shareholders by the Board of Directors, or (iii) a
declaration by the Board of Directors that a Change of Control is imminent, Timken shall
promptly, to the extent it has not previously done so, and in any event within five business
days fund a trust established for the sole purpose of the payment of the amounts payable under
this Agreement. The amount to be contributed by Timken prior to the Change of Control shall be
calculated, using the actuarial assumptions set forth in Exhibit A, by Towers Watson or
another independent actuary appointed by Timken. Notwithstanding any provision of this
Agreement to the contrary, no amount shall be transferred to a trust in accordance with this
paragraph if, pursuant to Section 409A(b)(3)(A) of the Code, such amount would, for purposes of
Section 83 of the Code, be treated as property transferred in connection with the performance of
services. Upon a Change of Control, the rights of the Employee under this Agreement shall be
fully vested and shall be forfeited only if the Employee voluntarily terminates his employment
prior to completing five years of service as an elected officer of Timken.
	 
	 	 	For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the
following events:

	 	(a)	 	The sale or transfer of all or substantially all of the assets of Timken; or the
merger, consolidation or reorganization of Timken with or into another corporation or
entity with the result that upon the completion of the transaction, less than 51% of the
outstanding securities entitled to vote generally in the election of directors or other
capital interests of the surviving corporation or entity are owned, directly or indirectly,
by the pre-transaction shareholders of Timken;

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	 	(b)	 	A Schedule 13D or 14D-1F report (or any successor schedule, form or report promulgated
pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”)), is filed with the
United States Securities and Exchange Commission (the “SEC”) disclosing that any person
(including a person as defined in Sections 13(d)(3) or 14(d)(2) of the Exchange Act) has
become the beneficial owner (as defined in SEC Rule 13d-3) of securities representing 30%
or more of the combined voting power of the outstanding shares of Timken;
	 
	 	(c)	 	Timken files a report or proxy statement with the SEC that includes a disclosure,
including, but not limited to, a disclosure in Item 1 of Form 8-K or Item 6(e) of Schedule
14A, that a change of control of Timken has or may have occurred or will or may occur in
the future pursuant to any existing contract or transaction; and
	 
	 	(d)	 	The individuals who at the beginning of any two consecutive calendar year period
constituted the Board of Directors cease for any reason to constitute a majority of the
Board of Directors; provided, however, this subsection (d) shall not apply if the
nomination of each new Director elected during such two-year period was approved by the
vote of at least two-thirds of the Directors of Timken still in office who were Directors
of Timken on the first day of such two-year period.

	8.	 	In the event that, in its discretion, Timken purchases an insurance policy or policies
insuring the life of the Employee to allow Timken to recover in whole or in part, the cost of
providing the benefits under this Agreement, neither the Employee nor any beneficiary shall
have any right whatsoever therein; Timken shall be the sole owner and beneficiary of such
insurance policy or policies and shall possess and may exercise all incidents of ownership
therein.
	 
	9.	 	All questions of interpretation, construction or application arising under this Agreement
shall be decided by the Board of Directors of Timken and its decision shall be final and
conclusive upon all parties. Timken, in its discretion, shall make all determinations as to
rights to benefits under this Agreement. Any decision by Timken denying a claim for benefits
under this Agreement shall be stated in writing and delivered or mailed to the Employee or the
Employee’s Spouse. Such decision shall (i) be made and issued in accordance with the claims
regulations issued by the Department of Labor, (ii) set forth the specific reasons for the
denial of the claim, and (iii) state that the decision may be appealed by the Employee.
	 
	10.	 	Nothing contained in this Agreement shall be construed to be a contract of employment nor as
conferring upon the Employee the right to continue in the employ of Timken in any capacity.
It is expressly understood by the parties hereto that this Agreement relates exclusively to
Excess Benefits and is not intended to be an employment contract.
	 
	11.	 	This Agreement may not be amended, altered or modified, except by a written instrument signed
by the parties hereto. If Timken and the Employee previously entered into an Employee Excess
Benefits Agreement, this Agreement shall supersede the provisions of the prior agreement and
the Employee shall be entitled to benefits solely under this Agreement.

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	12.	 	Following Termination of Employment, the Employee shall comply with the Restriction on
Competition in paragraph 9 of the Supplemental Plan. If the Employee engages in activity
prohibited by this Section, then in addition to all other remedies available to Timken, Timken
shall be released from any obligation under this Agreement to pay benefits to the Employee or
the Employee’s Spouse under this Agreement. Any such cessation of payments shall not reduce
any monetary damages that may be available to Timken as a result of the Employee’s breach.
	 
	13.	 	The failure at any time to require performance of any provision expressed herein shall in no
way affect the right thereafter to enforce such provision; nor shall the waiver of any breach
of any provision expressed herein be taken or held to be a waiver of any succeeding breach of
any such provision or as a waiver of a provision itself.
	 
	 	 	In the event that any provision or term of this Agreement is finally determined by any judicial,
quasi-judicial or administrative body to be void or not enforceable for any reason, it is the
agreed upon intent of the parties hereto that all other provisions or terms of the Agreement
shall remain in full force and effect and that the Agreement shall be enforceable as if such
void or unenforceable provision or term had never been included herein.
	 
	14.	 	Every designation, election, revocation or notice authorized or required hereunder shall be
deemed delivered to Timken: (a) on the date it is personally delivered to Timken offices at
1835 Dueber Avenue, S.W., Canton, OH 44706-0927 or (b) three business days after it is sent by
registered or certified mail, postage prepaid, addressed to Timken at the offices indicated
above. Every designation, election, revocation or notice authorized or required hereunder
which is to be delivered to the Employee or a beneficiary shall be deemed delivered to the
Employee or beneficiary: (a) on the date it is personally delivered to such individual (either
physically or through interactive electronic communication), or (b) three business days after
it is sent by registered or certified mail, postage prepaid, addressed to such individual at
the last address shown for him on Timken records. Any notice required hereunder may be waived
by the person entitled thereto.
	 
	15.	 	In the event the Employee or the Employee’s Spouse is declared incompetent and a guardian,
conservator or other person is appointed and legally charged with the care of the person or
the person’s estate, the payments under this Agreement to which the Employee or the Employee’s
Spouse is entitled shall be paid to such guardian, conservator or other person legally charged
with the care of the person or the estate. Except as provided hereinabove, when Timken, in
its sole discretion, determines that the Employee or the Employee’s Spouse is unable to manage
his financial affairs, Timken may make distribution(s) of the amounts payable to the Employee
or the Employee’s Spouse to any one or more of the spouse, lineal ascendants or descendants or
other closest living relatives of the Employee or the Employee’s Spouse who demonstrate to the
satisfaction of Timken the propriety of making such distribution(s). Any payment so made
shall be made at the same time and in the same form as such benefit would be made to the
Employee and shall be in complete discharge of

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	 	 	any liability under this Agreement for such payment. Timken shall not be required to see to the
application of any such distribution made under this Section 15.
	 
	16.	 	This Agreement shall be subject to and construed under the laws of the State of Ohio.

	 
	17.	(a)	 	To the extent applicable, it is intended that this Agreement (including all amendments
thereto) comply with the requirements of Section 409A of the Code and the Treasury regulations
and other authoritative guidance issued thereunder (“Section 409A”). This Agreement shall be
administered in a manner consistent with this intent.

	 	(b)	 	Notwithstanding any provision of this Agreement to the contrary, in light of the
uncertainty with respect to the proper application of Section 409A, Timken reserves the
right to make amendments to this Agreement as Timken deems necessary or desirable to avoid
the imposition of taxes or penalties under Section 409A of the Code. In any case, the
Employee shall be solely responsible and liable for the satisfaction of all taxes and
penalties that may be imposed on the Employee or for the Employee’s account in connection
with this Agreement and neither Timken nor any of its affiliates shall have any obligation
to indemnify or otherwise hold Employee harmless from any or all of such taxes or
penalties.

               IN WITNESS WHEREOF, the parties hereto have executed this Agreement on this ____ day of
______________,201__.

	 	 	 	 	 	 	 

	 

	 	 	 	THE TIMKEN COMPANY	 	 
	 
	 	 	 	 	 	 
	 

Employee
	 	 
	 	 

By: William R. Burkhart
	 	 
	 

	 	 	 	Its: Senior Vice President & General Counsel	 	 

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EXHIBIT A

The amount to be contributed to a trust fund pursuant to Section 7 of this Agreement to insure the
performance of Timken’s obligations under this Agreement in the event of a Change of Control shall
be calculated using the “applicable mortality table,” and the “applicable interest rate” as defined
in Code Section 417(e)(3), during the third calendar month immediately preceding the date in which
the contribution to the trust fund occurs.

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EXHIBIT B

Assumptions for Determination of Savings Plans Account Balances

Matching Contributions Rate:

	 	 	 	4.5% of the Employee’s Gross Earnings (as defined in Timken’s Savings and Investment Pension
(SIP) Plan as of January 1, 20113 for purposes of matching contributions for
highly compensated employees)

Core Contributions Rate:

	 	 	 	The contribution percentage rate of the Core Contribution is based on the sum of the
Employee’s full years of Credited Service and age as of December 31 of the previous calendar
year with any fractional portion of a year of Credited Service or age disregarded, and
calculated as follows:

	 	 	 
	Age Plus Years of Credited Service*	 	Contribution Percentage Rate
	0-34
	 	1.00% of Gross Earnings**

	 	 	 

	35-44
	 	2.00% of Gross Earnings**

	 	 	 

	45-54
	 	3.00% of Gross Earnings**

	 	 	 

	55-64
	 	3.50% of Gross Earnings**

	 	 	 

	65-74
	 	4.00% of Gross Earnings**

	 	 	 

	75+
	 	4.50% of Gross Earnings**

 

			
	*	 	“Credited Service” has the meaning given to such term in Timken’s Savings and Investment
Pension (SIP) Plan as of January 1, 2011.4
	 
	**	 	“Gross Earnings” has the meaning given to such term in Timken’s Savings and Investment
Pension (SIP) Plan as of January 1, 20115 for purposes of matching contributions
for highly compensated employees.
	 
	3	 	If the restatement of the Savings and
Investment Plan effective January 1, 2011 has been amended, this date should be
reviewed to determine if a more recent version of the Savings and Investment
Plan should be cross-referenced. Any changes to the Savings and Investment
Plan should be considered to ensure compliance with Section 409A in light of
the cross-reference.
	 
	4	 	See footnote 3.
	 
	5	 	See footnote 3.

 - 12 -Exhibit 10.1

Exhibit 10.1

EXECUTIVE CHANGE IN CONTROL AGREEMENT

This Executive Change in Control Agreement (this “Agreement”), is made as of the 4th day of August, 2011 (the
“Effective Date”), by and between Advanced Energy Industries, Inc., a Delaware corporation (the “Company”), and Garry
Rogerson (the “Executive”).

Recitals

A. The Executive has agreed to serve, and the Company has agreed to engage the Executive, as the Chief Executive
Officer of the Company, effective as of the 4th day of August, 2011.

B. The Board of Directors of the Company (the “Board”) acknowledges that consolidation within the industries in
which the Company operates is likely to continue and the potential for a change in control of the Company, whether
friendly or hostile, currently exists and from time to time in the future will exist, which potential can give rise to
uncertainty among the senior executives of the Company. The Board considers it essential to the best interests of the
Company to reduce the risk of the Executive’s departure and/or the inevitable distraction of the Executive’s attention
from his duties to the Company, which are normally attendant to such uncertainties.

C. The Executive confirms that the terms of this Agreement reduce the risks of his departure and distraction of
his attention from his duties to the Company and, accordingly, desires to enter into this Agreement.

Agreement

In consideration of the foregoing and the mutual covenants contained herein, the Company and the Executive agree
as follows:

1. Definitions. Capitalized terms used herein shall have the meanings given to them in Annex A
attached hereto, except where the context requires otherwise.

2. Term of Agreement.

This Agreement shall be effective as of the Effective Date and shall continue in effect until August 3, 2012 (the
“Initial Expiration Date”), provided, however, that the term of this Agreement automatically shall be extended for one
additional year effective as of the Initial Expiration Date and each anniversary thereof (each, a “Scheduled Expiration
Date”), unless either the Company or the Executive provides written notice to the other that the term of this Agreement
shall terminate on the upcoming Scheduled Expiration Date, provided such notice is received by the receiving party not
less than ninety (90) days prior to the applicable Scheduled Expiration Date, and provided further that the Company
shall not be entitled to deliver to the Executive such notice in the event of a Change in Control or a Pending Change
in Control. Notwithstanding the foregoing, this Agreement shall terminate immediately upon the termination of the
Executive’s employment prior to a Change in Control.

3. At Will Employment; Reasons for Termination.

The Executive’s employment shall be at-will, as defined under applicable law. If the Executive’s employment
terminates for any reason or no reason, the Executive shall not be entitled to any compensation, benefits, damages,
awards or other payments in respect of such termination, except as provided in this Agreement or pursuant to the terms
of any Applicable Benefit Plan. “Applicable Benefit Plan” means any written employee benefit plan in effect and in
which the Executive participates as of the time of the termination of his employment.

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4. Benefits Upon Separation.

(a)  Compensation and Benefits Required by Law or Applicable Benefit Plan. Notwithstanding anything to the
contrary herein, the Executive or his estate shall be entitled to any and all compensation, benefits, awards and other
payments required by any Applicable Benefit Plan, the COBRA Act or other applicable law, after taking into account the
agreements set forth herein.

(b)  No Payments Without Release. The Executive shall not be entitled to any of the compensation (other
than Accrued Compensation), benefits or other payments provided herein in respect of the termination of his employment,
unless and until he has provided to the Company a full release of claims, substantially in the form of
Appendix I attached hereto, which release shall be dated not earlier than the date of the termination of his
employment, which release shall be executed within 30 days of Executive’s termination of employment.

(c)  Voluntary Resignation or Termination for Cause.

(i)  In the event of the Executive’s Voluntary Resignation or termination of his employment by the Company for
Cause, the Executive shall not be entitled to any compensation, benefits, awards or other payments in connection with
such termination of his employment, except as provided in paragraph (a) of this Section 4.

(ii)  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.

(d)  Death or Long-Term Disability. In the event of the Executive’s death or Long-Term Disability, the
Executive (or his estate or personal representative) shall be entitled to receive (i) the proceeds of any life
insurance policy carried by the Company with respect to the Executive, or (ii) payments pursuant to any long-term
disability insurance policy carried by the Company with respect to the Executive, as applicable. 

(e)  Involuntary Termination. In the event Executive’s employment is terminated under circumstances
constituting an Involuntary Termination, the Executive shall be entitled to receive:

(i)  within fifteen (15) calendar days after the Date of Termination, the Executive’s Accrued Compensation and
Pro-Rata Bonus through the Date of Termination; and

(ii)  within fifteen (15) calendar days after the period for revocation of the release has elapsed, the amount in
cash equal to the sum of (x) two (2) times the Executive’s annual Base Salary and (y) the Executive’s Target Bonus in
effect as of the Date of Termination; and

(iii)  for eighteen (18) months after the period for revocation of the release has elapsed continuation of the
Benefits, as if the Executive’s employment had not been terminated; provided, however, that if the Executive commences
employment with another employer during such eighteen (18) month period and is eligible to receive medical benefits
under the new employer’s plan(s), the Benefits shall terminate as of the date the Executive becomes eligible to receive
such benefits;

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(iv)  within fifteen (15) calendar days after the after the period for revocation of the release has elapsed, an
amount equal to the contributions to the Company’s retirement plans on behalf of the Executive that would have been
made for the benefit of the Executive if the Executive’s employment had continued for twelve (12) months after the Date
of Termination, assuming for this purpose that all benefits under any such retirement plans were fully vested and that
the Executive’s compensation during such twelve (12) months were the same as it had been immediately prior to the Date
of Termination; and

(v)  reimbursement, up to $15,000, for outplacement services reasonably selected by the Executive incurred by the
end of the second calendar year after termination of employment such reimbursement to occur by the end of the following
calendar year.

5. Effect on Option and Restricted Unit Agreements.

(a)  In the event Options held by the Executive are assumed by the surviving entity in connection with a Change in
Control, if an Involuntary Termination of Executive’s employment occurs following the Change of Control before the end
of the CIC Period, vesting of any and all assumed Options held by the Executive shall be accelerated so that all
unexpired Options then held by the Executive shall be fully vested and exercisable immediately upon the Involuntary
Termination.

(b)  In the event RSUs held by the Executive are assumed by the surviving entity in connection with a Change in
Control, if an Involuntary Termination of Executive’s employment occurs following the Change of Control before the end
of the CIC Period, vesting of any and all assumed RSUs held by the Executive shall be accelerated so that all RSUs then
held by the Executive shall be fully vested and exercisable immediately upon the Involuntary Termination. 

(c)  The termination of the Executive’s employment by the Company without Cause during a Pending Change in Control
shall have no effect on the vesting of the Options or RSUs then held by the Executive, and no shares of Common Stock or
common stock of any subsidiary of the Company shall be delivered to the Executive in connection with the RSUs held by
the Executive at the time of the termination of his employment unless the Change in Control is effected within three
(3) months following the Date of Termination. If the Change in Control is effected, then the Options and RSUs held by
the Executive as of the Date of Termination shall be treated as if the Executive’s employment had not been terminated
and the Executive shall have rights as set forth under Section 5(a) above. If the Change in Control is not effected
within three (3) months following the Date of Termination, then the Options and RSUs held by the Executive as of the
Date of Termination shall be treated as if the Executive’s employment had been terminated as of such three-month
anniversary of the Date of Termination.

(d)  In the event the Executive’s employment is terminated by the Company under any circumstances other than those
described in paragraphs (a) through (c) of this Section 5, the effect of such termination of employment on the Options
and/or RSUs then held by the Executive shall be as set forth in the agreements representing such Options and/or RSUs.

6. Mitigation. In no event shall the Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and
except as set forth in Section 4, such amounts shall not be reduced whether or not the Executive obtains other
employment.

7. Successors.

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

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

(c)  The Company shall 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.

8. Miscellaneous.

(a)  The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This
Agreement constitutes the entire agreement and understanding of the parties in respect of the subject matter hereof and
supersedes all prior understanding, agreements, or representations by or among the parties, written or oral, to the
extent they relate in any away to the subject matter hereof; provided, however, this Agreement shall have no effect on
any confidentiality agreements or assignment of inventions agreements between the parties. This Agreement may not be
amended or modified other 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 the Executive:

Mr. Garry Rogerson

P.O. Box 60185

Palo Alto CA 94306

if to the Company:

Advanced Energy Industries, Inc.

1625 Sharp Point Drive

Fort Collins, CO 80525

Attention: 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.

(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)  The Company may withhold from any amounts payable under this Agreement such United States federal, state or
local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e)  The 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 the 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.

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(f)  All claims by the Executive for payments or benefits under this Agreement shall be promptly forwarded to and
addressed by the Compensation Committee and shall be in writing. Any denial by the Compensation Committee of a claim
for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied upon. The Compensation Committee shall
afford the Executive a reasonable opportunity for a review of the decision denying a claim and shall further allow the
Executive make a written demand upon the Company to submit the disputed matter to arbitration in accordance with the
provisions of paragraph (g) below. The Company shall pay all expenses of the Executive, including reasonable
attorneys and expert fees, in connection with any such arbitration. If for any reason the arbitrator has not made his
award within one hundred eighty (180) days from the date of Executive’s demand for arbitration, such arbitration
proceedings shall be immediately suspended and the Company shall be deemed to have agreed to Executive’s position.
Thereafter, the Company shall, as soon as practicable and in any event within 10 business days after the expiration of
such 180-day period, pay Executive his reasonable expenses and all amounts reasonably claimed by him that were the
subject of such dispute and arbitration proceedings.

(g)  Subject to the terms of paragraph (f) above, any dispute arising from, or relating to, this Agreement shall
be resolved at the request of either party through binding arbitration in accordance with this paragraph (g).
Within 10 business days after demand for arbitration has been made by either party, the parties, and/or their counsel,
shall meet to discuss the issues involved, to discuss a suitable arbitrator and arbitration procedure, and to agree on
arbitration rules particularly tailored to the matter in dispute, with a view to the dispute’s prompt, efficient, and
just resolution. Upon the failure of the parties to agree upon arbitration rules and procedures within a reasonable
time (not longer than 15 business days from the demand), the Commercial Arbitration Rules of the American Arbitration
Association shall be applicable. Likewise, upon the failure of the parties to agree upon an arbitrator within a
reasonable time (not longer than 15 business days from demand), there shall be a panel comprised of three arbitrators,
one to be appointed by each party and the third one to be selected by the two arbitrators jointly, or by the American
Arbitration Association, if the two arbitrators cannot decide on a third arbitrator. At least 30 days before the
arbitration hearing (which shall be set for a date no later than 60 days from the demand), the parties shall allow each
other reasonable written discovery including the inspection and copying of documents and other tangible items relevant
to the issues that are to be presented at the arbitration hearing. The arbitrator(s) shall be empowered to decide any
disputes regarding the scope of discovery. The award rendered by the arbitrator(s) shall be final and binding upon
both parties. The arbitration shall be conducted in Larimer County in the State of Colorado. The Colorado District
Court located in Larimer County shall have exclusive jurisdiction over disputes between the parties in connection with
such arbitration and the enforcement thereof, and the parties consent to the jurisdiction and venue of such court for
such purpose.

(h)  This Agreement shall be governed by the laws of the State of Colorado, without giving effect to any choice of
law provision or rule (whether of the State of Colorado or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Colorado.

9. Other Terms Relating to Section 409A

(a)  Except as provided in Section 9(b), amounts payable under this Agreement following Executive’s termination of
employment, other than those expressly payable on a deferred or installment basis or as reimbursement of expenses, will
be paid as promptly as practicable after such a termination of employment and, in any event, within 2 1/2 months after
the end of the year in which employment terminates and amounts payable as reimbursements of expenses to the Executive
must be made on or before the last day of the calendar year following the calendar year in which such expense was
incurred.

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(b)  Anything in this Agreement to the contrary notwithstanding, if (A) on the date of termination of Executive’s
employment with the Company or a subsidiary, any of the Company’s stock is publicly traded on an established securities
market or otherwise (within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, as amended (the
“Code”)), (B) if Executive is determined to be a “specified employee” within the meaning of Section 409A(a)(2)(B) of
the Code, (C) the payments exceed the amounts permitted to be paid pursuant to Treasury Regulations section
1.409A-1(b)(9)(iii) and (D) such delay is required to avoid the imposition of the tax set forth in Section 409A(a)(1)
of the Code, as a result of such termination, the Executive would receive any payment that, absent the application of
this Section 9(b), would be subject to interest and additional tax imposed pursuant to Section 409A(a) of the Code as a
result of the application of Section 409A(2)(B)(i) of the Code, then no such payment shall be payable prior to the date
that is the earliest of (1) six (6) months after the Executive’s termination date, (2) the Executive’s death or
(3) such other date as will cause such payment not to be subject to such interest and additional tax (with a catch-up
payment equal to the sum of all amounts that have been delayed to be made as of the date of the initial payment).

(c)  It is the intention of the parties that payments or benefits payable under this Agreement not be subject to
the additional tax imposed pursuant to Section 409A of the Code. To the extent such potential payments or benefits
could become subject to such Section, the parties shall cooperate to amend this Agreement with the goal of giving the
Executive the economic benefits described herein in a manner that does not result in such tax being imposed.

(d)  A termination of employment under this Agreement shall be deemed to occur only in circumstances that would
constitute a separation from service for purposes of Treasury Regulations section 1.409A-1(h)(1)(ii).

(e)  Wherever payments under this Agreement are to be made in installments, each such installment shall be deemed
to be a separate payment for purposes of Section 409A.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth in the Preamble hereto.

ADVANCED ENERGY INDUSTRIES, INC.

By: /s/ Tom McGimpsey

Name: Tom McGimpsey

Title: Senior Vice President

GARRY ROGERSON

/s/ Garry Rogerson

 

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ANNEX A

DEFINITIONS

(a) “Accrued Compensation” means an amount including all amounts earned or accrued through the Date of Termination
but not paid as of the Date of Termination including (i) Base Salary, (ii) reimbursement for reasonable and necessary
expenses incurred by the Executive on behalf of the Company during the period ending on the Date of Termination,
(iii) vacation and sick leave pay (to the extent provided by Company policy or applicable law), and (iv) incentive
compensation (if any) earned in respect of any period ended prior to the Date of Termination. It is expressly
understood that incentive compensation shall have been “earned” as of the time that the conditions to such incentive
compensation have been met, even if not calculated or payable at such time.

(b) “Agreement” means this Executive Change in Control Agreement, as set forth in the Preamble hereto.

(c) “Applicable Benefit Plan” means any written employee benefit plan in effect and in which the Executive
participates as of the time of the termination of his employment.

(d) “Base Salary” means the Executive’s annual base salary at the rate in effect during the last regularly
scheduled payroll period immediately preceding the occurrence of the Change in Control or termination of employment and
does not include, for example, bonuses, overtime compensation, incentive pay, fringe benefits, sales commissions or
expense allowances.

(e) “Board” means the Board of Directors of the Company, as set forth in the Recitals hereto.

(f) “Capital Stock” means capital stock of the Company or any of its subsidiaries.

(g) “Cause” means 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, 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.

(h) “Change in Control” shall be deemed to occur upon the consummation of any of the following transactions,
unless the only parties to the transaction are the Company and/or one or more of its direct or indirect majority-owned
subsidiaries and/or one or more companies directly or indirectly owning a majority interest in the Company immediately
prior to the transaction:

(i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the state of the Company’s incorporation or a transaction in which 50% or more
of the surviving entity’s outstanding voting stock following the transaction is held by holders who held 50% or more of
the Company’s outstanding voting stock prior to such transaction; or

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(ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company; or

(iii) any reverse merger in which the Company is the surviving entity, but in which 50% or more of the Company’s
outstanding voting stock is transferred to holders different from those who held the stock immediately prior to such
merger; or

(iv) the acquisition by any person (or entity), other than Douglas Schatz and/or any of his affiliates or members
of his immediate family, directly or indirectly of 50% or more of the combined voting power of the outstanding shares
of Common Stock.

(i) “CIC Period” means the six month period following the effective date of a Change in Control.

(j) “Code” means the Internal Revenue Code of 1986, as amended.

(k) “Common Stock” means common stock, par value $0.001, of the Company.

(l) “Company” means Advanced Energy Industries, Inc., a Delaware corporation, as set forth in the Preamble hereto.

(m) “Date of Termination” means (i) if the Executive’s employment is terminated for Cause, the date of receipt by
the Executive of written notice from the Board or the Chief Executive Officer that the Executive has been terminated,
or any later date specified therein, as the case may be, (ii) if the Executive’s employment is terminated by the
Company other than for Cause, death or Long-Term Disability, the date specified in the Company’s written notice to the
Executive of such termination, (iii) if the Executive’s employment is terminated by reason of the Executive’s death or
Long-Term Disability, the date of such death or the effective date of such Long-Term Disability, (iv) if the
Executive’s employment is terminated by Executive’s resignation that constitutes Involuntary Termination under this
Agreement, the date of the Company’s receipt of the Executive’s notice of termination or any later date specified
therein.

(n) “Effective Date” means the date set forth in the Preamble hereto.  

(o) “Executive” means the individual identified in the Preamble hereto.

(p) “Good Reason” means any of the following:

(i) a material reduction in the Executive’s duties, level of responsibility or authority, other than
(A) reductions solely attributable to the Company ceasing to be a publicly held company or becoming a subsidiary or
division of another company, or (B) isolated incidents that are promptly remedied by the Company; or

(ii) a material reduction in the Executive’s Base Salary, without (A) the Executive’s express written consent or
(B) an increase in the Executive’s benefits, perquisites and/or guaranteed bonus, which increase(s) have a value
reasonably equivalent to the reduction in Base Salary; or

(iii) a material reduction in the Executive’s Target Bonus, without (A) the Executive’s express written consent or
(B) an corresponding increase in the Executive’s Base Salary; or

(iv) the relocation of the Executive’s principal place of business to a location more than thirty-five (35) miles
from the Executive’s principal place of business immediately prior to the Change in Control, without the Executive’s
express written consent; or

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(v) the Company’s (or its successor’s) material breach of this Agreement.

(q) “Involuntary Termination” means the termination of Executive’s employment with the Company at the time of or
following a Change in Control before the end of the CIC Period:

(i) by the Company without Cause, or

(ii) by the Executive for Good Reason.

(r) “Long-Term Disability” is defined according to the Company’s insurance policy regarding long-term disability
for its employees.

(s) “Option” means options to purchase Capital Stock granted by the Company or any of its subsidiaries under a
compensation plan adopted or approved by the Company.

(t) A “Payment” means any payment or distribution in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid or payable pursuant to this
Agreement or otherwise.

(u) “Pending Change in Control” means that one or more of the following events has occurred and a Change in
Control pursuant thereto is reasonably expected to be effected within 90 days of the date as of the determination as to
whether there is a Pending Change in Control: (i) the Company executes a letter of intent, term sheet or similar
instrument with respect to a transaction or series of transactions, the consummation of which transaction(s) would
result in a Change in Control; (ii) the Board approves a transaction or series of transactions, the consummation of
which transaction(s) would result in a Change in Control; or (iii) a person makes a public announcement of tender offer
for the Common Stock, the completion of which would result in a Change in Control. A Pending Change in Control shall
cease to exist upon a Change in Control.

(v) “Pro Rata Bonus” means an amount equal to 100% of the Target Bonus that the Executive would have been eligible
to receive for the Company’s fiscal year in which the Executive’s employment terminates following a Change in Control,
multiplied by a fraction, the numerator of which is the number of days in such fiscal year through the Termination Date
and the denominator of which is 365.

(w) “RSUs” means restricted stock units granted by the Company or any of its subsidiaries under a compensation
plan adopted or approved by the Company, pursuant to which the Executive has the right to receive Capital Stock upon
the satisfaction of vesting and other conditions.

(x) “Target Bonus” means the bonus which would have been paid to the Executive for achievement of specific
performance objectives pertaining to the business of the Company or any of its specific business units or divisions, or
to individual performance criteria applicable to the Executive or his position, which objectives have been established
by the Board of Directors (or the Compensation Committee thereof) for the Executive relating to such plan or budget for
the year in question. “Target Bonus ” shall not mean the “maximum bonus” which the Executive might have been paid for
overachievement of such plan.

(y) “Value” of a Payment means the economic present value of a Payment as of the date of the change of control for
purposes of Section 280G of the Code, as determined by the Accounting Firm using the discount rate required by
Section 280G(d)(4) of the Code.

(z) “Voluntary Resignation” means the termination of the Executive’s employment upon his voluntary resignation,
which includes retirement, as set forth in Section 3 hereof.

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APPENDIX I

Legal Release

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

Recitals

A. Executive and the Company are parties to an Executive Change In Control Agreement dated as of August 4, 2011
(the “ CIC Agreement ”).

B. Executive wishes to receive the compensation, benefits, awards and/or other payments described in the CIC
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 CIC Agreement Obligations. The Company shall pay or provide to Executive the payments and
benefits, as, when and on the terms and conditions specified in the CIC 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, bylaw and/or policy or procedure, or under any insurance contract, in connection with Executive’s acts
and 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

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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 the CIC 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 the CIC Agreement.

B-ii

 

12

 

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

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

	 	 	 
	GARRY ROGERSON

	 	ADVANCED ENERGY INDUSTRIES, INC.
	
 
	 	By:                                                              
	Date:                                                              

	 	Title:                                                              
	
 
	 	Date:                                                              

B-iii

 

13

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