Document:

<PAGE>

                                                                    EXHIBIT 10.2

                        ADVANCED ENERGY INDUSTRIES, INC.
                 2003 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
                            ADOPTED FEBRUARY 12, 2003

         1.       PURPOSE. The purpose of the Plan is to attract and retain the
services of experienced and knowledgeable non-employee directors of Advanced
Energy Industries, Inc., and to provide an incentive for such directors to
increase their proprietary interests in the Company's long-term success and
progress.

         2.       DEFINITIONS. Whenever the following terms are used in the
Plan, they shall have the meaning indicated below, unless a different meaning is
required by the context.

         (a)      "Administrator" means the administrative committee described
in Section 3.

         (b)      "Board" means the board of directors of the Company.

         (c)      "Company" means Advanced Energy Industries, Inc., a Delaware
corporation.

         (d)      "Non-Employee Director" means any member of the Board who is a
"non-employee director" within the meaning of Rule 16b-3(b)(3)(i) under Section
16 of the Securities Exchange Act of 1934 ("1934 Act").

         (e)      "Plan" means this Advanced Energy Industries, Inc. 2003
Non-Employee Directors' Stock Option Plan.

         (f)      "Share" means one share of common stock of the Company.

         3.       ADMINISTRATION. The Plan shall be administered by a committee
selected by the Board consisting of at least 2 individuals each of whom is
either (i) a member of the Board and not a Non-Employee Director or (ii) a
senior officer of the Company who is not a member of the Board. Subject to the
provisions of the Plan, the Administrator shall have the authority to determine
all other matters relating to administration and operation of the Plan. All
questions of interpretation, implementation, and application of the Plan shall
be determined by the Administrator in its sole discretion. Such determinations
shall be final and binding on all persons.

         4.       SHARES SUBJECT TO THE PLAN. The maximum number of Shares that
may be issued pursuant to options granted under the Plan is one hundred fifty
thousand (150,000), subject to adjustment as provided in Section 6(e) and
subject to limited re-issuance as indicated below. If an option expires, is
surrendered, or becomes unexercisable without having been exercised in full, the
unissued or retained Shares shall become available for future grant under the
Plan. Other Shares that actually have been issued under the Plan pursuant to an
option shall not be returned to the Plan and shall not become available for
future grant under the Plan.

         5.       ELIGIBILITY. A Non-Employee Director will receive option
grants under this Plan on the terms and conditions set forth in Section 6. No
other person may benefit under this Plan.

<PAGE>

         6.       GENERAL TERMS AND CONDITIONS.

         (a)      Automatic Grants. On and after the date of the annual meeting
of the Company's stockholders to be held in 2003, and subject to adjustment
under subsection (e), a Non-Employee Director will automatically receive an
option to purchase (i) fifteen thousand (15,000) Shares on the date first
elected or appointed as a member of the Board and (ii) five thousand (5,000)
Shares on any date re-elected (or first elected after an appointment) as a
member of the Board by the Company's stockholders. Any such option will be
subject to the terms and conditions set forth in this Plan, and will be
evidenced by written notice in such form as the Administrator shall determine.

         (b)      Options Are Not Qualified. Options granted under the Plan are
not incentive stock options described in Internal Revenue Code Section 422.

         (c)      Transferability. Options granted under the Plan are not
transferable by the Non-Employee Director and shall be exercisable during the
Non-Employee Director's lifetime only by the Non-Employee Director; provided,
however, that an option may be transferred upon the approval of the
Administrator (in its sole discretion) by appropriate instrument pursuant to a
domestic relations order described in Rule 16a-12 of the 1934 Act or to an inter
vivos or testamentary trust in which the option is to be passed to the
Non-Employee Director's beneficiaries upon the Non-Employee Director's death or
by gift to his or her immediate family (consisting of the Non-Employee
Director's child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships). Except as
provided in Section 7(d), no option or interest therein may be otherwise
transferred, assigned, pledged, or hypothecated by a Non-Employee Director,
whether by operation of law or otherwise, or be made subject to execution,
attachment, or similar process. Any such purported assignment, sale, transfer,
delegation, or other disposition shall be null and void.

         (d)      Modification, Extension, and Renewal. The Administrator shall
have the power to modify, extend, or renew an outstanding option granted under
this Plan, in a manner consistent with the terms of the Plan, provided that any
such action may not significantly impair the optionholder's rights without his
or her consent. However, the Company will not reduce the exercise price of any
outstanding option or cancel outstanding options and grant replacement options
with a lower exercise price without the prior approval of the shareholders.

         (e)      Changes in Capitalization or Corporate Transaction. In the
event of any merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, reverse stock split, separation, liquidation or other
change in the corporate structure or capitalization affecting the Shares,
appropriate adjustment shall be made by the Administrator in the kind, option
price, and number of shares of stock (including, but not limited to, the maximum
number of Shares reserved under the Plan) that are or may become subject to
options granted or to be granted under the Plan. If in connection with the
change the Company ceases to exist, the surviving or successor entity must
either assume the Company's rights and obligations with respect to outstanding
options or substitute for outstanding options substantially equivalent options
for equity interests in the entity. If there is no surviving or successor
entity, a Non-Employee Director's outstanding option shall become fully vested
and exercisable as of the date seven (7) calendar days before the change. The
exercise of any option that was permissible solely by reason of the change shall
be conditioned upon consummation of the change. Options that are neither
assumed, substituted nor exercised as of the time of the change shall terminate
and cease to be outstanding.

                                      -2-

<PAGE>

         7.       EXERCISE.

         (a)      Exercise Price. The exercise price of an option shall be not
less than one hundred percent (100%) of the fair market value of a Share on the
date of grant. The fair market value of a Share as of any date means the closing
sale price of a Share on such date (or previous business day if such date is not
a business day) on the principal exchange or market on which Shares are then
listed or admitted to trading. If, for any reason, the preceding rule cannot be
applied to determine fair market value, then the Administrator shall make a good
faith determination of fair market value.

         (b)      Vesting. An option shall be immediately and fully exercisable
(i.e., vested) on the date granted; provided, however, that the option awarded
on the date first elected or appointed as a member of the Board shall instead
(i) be immediately exercisable to the extent of one-third of the Shares subject
to the option upon grant, then another one-third of such Shares on each of the
next two anniversaries of the date granted, and (ii) become fully exercisable
upon a Change in Control while the optionee is a member of the Board, as
provided in Section 9. Notwithstanding clauses (i) and (ii) of the preceding
sentence, no additional vesting will occur after the date the Non-Employee
Director ceases to be a member of the Board.

         (c)      Payment of Exercise Price. An option may be exercised in whole
or in part (to the extent exercisable) at any time and from time to time. The
purchase price of Shares purchased under an option will be paid in full to the
Company incident to the exercise of the option by delivery of consideration
equal to the product of the option price and the number of Shares purchased.
Such consideration may be paid (i) in cash, (ii) at the discretion of the
Administrator, in shares of Company common stock either already owned by the
Non-Employee Director for at least six (6) months or not acquired, directly or
indirectly, from the Company, or (iii) any combination thereof. The fair market
value of such common stock as delivered shall be valued as of the day prior to
delivery. The Administrator can determine that additional forms of payment will
be permitted. To the extent permitted by the Administrator and applicable laws
and regulations (including, but not limited to, federal tax and securities laws,
regulations and state corporate law), an option may also be exercised in a
"cashless" exercise by delivery of a properly executed exercise notice together
with irrevocable instructions to a broker designated by the Administrator to
deliver promptly to the Company the amount of sale or loan proceeds to pay the
purchase price. A Non-Employee Director shall have none of the rights of a
stockholder until the Shares are issued.

         (d)      Exercise After Death. In the event of the death of a
Non-Employee Director who holds an exercisable option under the Plan, the
Non-Employee Director's option shall (subject to Section 8) be exercisable by
the legal representative or the estate of such decedent, by any person or
persons whom the decedent shall have designated in writing on forms prescribed
by and filed with the Company or, if no such designation has been made, by the
person or persons to whom the decedent's rights have passed by will or the laws
of descent and distribution. To the extent permitted by applicable law and the
rules promulgated under Section 16(b) of the 1934 Act, the Administrator may
permit a Non-Employee Director to designate in writing during the Non-Employee
Director's lifetime a beneficiary to receive and exercise stock options in the
event of the Non-Employee Director's death.

         8.       TERMINATION OF OPTIONS. An option shall cease to be
exercisable after the earlier of (i) six (6) months after the date the
Non-Employee Director ceases to be a member of the Board (including by reason of
death), (ii) the occurrence of a Change in Control and (iii) the 10th
anniversary of the date of grant; provided, however, that in the case of a
Non-Employee Director

                                      -3-

<PAGE>

who has served continuously as a member of the Board for at least five (5)
years, the period described in clause (i) shall be eighteen (18) months.

         9.       CHANGE IN CONTROL. A Non-Employee Director's outstanding
option shall become fully exercisable as of the date seven (7) calendar days
before a Change in Control. The exercise of any option that was permissible
solely by reason of a Change in Control shall be conditioned upon consummation
of the Change in Control. Options that are not exercised as of the Change in
Control shall terminate and cease to be outstanding. A Change in Control means a
single Ownership Change Event or combination of proximate (in time, purpose,
cause and effect, and/or the identity of the parties involved) Ownership Change
Events (collectively, a "Transaction") wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares
of the Company's voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than 50% of the total combined voting
power of the outstanding voting stock of the Company or the company or companies
to which the assets of the Company were transferred (the "Transferee
Company(s)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more companies which, as
a result of the Transaction, own the Company or the Transferee Company(ies), as
the case may be, either directly or through one or more subsidiary companies. An
Ownership Change Event means (i) the direct or indirect sale, exchange or
transfer of the voting stock of the Company, (ii) a merger or consolidation in
which the Company is a party, (iii) the sale, exchange or transfer of all or
substantially all of the assets of the Company, or (iv) a liquidation or
dissolution of the Company. The Administrator shall have sole discretion to
determine whether any particular facts and circumstances constitute an Ownership
Change Event or a Transaction, and its determination shall be final, binding and
conclusive.

         10.      SECURITIES LAW COMPLIANCE. The grant of options and the
issuance of Shares upon exercise of options shall be subject to compliance with
all applicable requirements of federal, state or foreign law with respect to
such securities. Options may not be exercised if the issuance of Shares upon
exercise would constitute a violation of any applicable federal, state or
foreign securities laws or other law or regulations or the requirements of any
stock exchange or market system upon which the Shares may then be listed. In
addition, no option may be exercised unless (i) a registration statement under
the Securities Act of 1933 ("1933 Act") shall at the time of exercise of the
option be in effect with respect to the Shares issuable upon exercise of the
option, or (ii) in the opinion of legal counsel to the Company, the Shares
issuable upon exercise of the option may be issued in accordance with the terms
of an applicable exemption from the registration requirements of the 1933 Act.
The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company's legal counsel to be
necessary to the lawful issuance and sale of any shares hereunder shall relieve
the Company of any liability in respect of the failure to issue or sell such
shares as to which such requisite authority shall not have been obtained. As a
condition to the exercise of any option, the Company may require a Non-Employee
Director to satisfy any qualifications that may be necessary or appropriate, to
evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the
Company.

                                      -4-

<PAGE>

         11.      MISCELLANEOUS.

         (a)      No Stockholders' Rights. A Non-Employee Director shall have no
rights as a stockholder with respect to the Shares covered by his or her options
until the date of the issuance to him or her of a stock certificate for the
Shares.

         (b)      No Right to Serve. Neither the Plan, nor the granting of an
option, nor any other action taken under the Plan, shall be evidence of any
agreement or understanding, express or implied, that a Non-Employee Director has
a right to continue as a member of the Board for any period of time or rate of
compensation.

         (c)      Claims. Any person who makes a claim for benefits under the
Plan or under any option agreement entered into pursuant to the Plan shall file
the claim in writing with the Administrator. Written notice of the disposition
of the claim shall be delivered to the claimant within 60 days after filing. If
the claim is denied, the Administrator's written decision shall set forth (i)
the specific reason or reasons for the denial, (ii) a specific reference to the
pertinent provisions of the Plan or option agreement on which the denial is
based, and (iii) a description of any additional material or information
necessary for the claimant to perfect his or her claim and an explanation of why
such material or information is necessary. No lawsuit may be filed by the
claimant until a claim is made and denied pursuant to this subsection.

         (d)      Attorneys' Fees. In any legal action or other proceeding
brought by either party to enforce or interpret the terms of the option
agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs.

         (e)      Company Free to Act. An option grant shall not affect in any
way the right or power of the Company or its stockholders to make or authorize
any or all adjustments, recapitalizations, reorganizations, or other changes in
the Company's capital structure or its business, or any merger or consolidation
of any member of the Company or any issue of bonds, debentures, or preferred or
preference stocks affecting the Shares or the rights thereof, or of any rights,
options, or warrants to purchase any capital stock of the Company, or the
dissolution or liquidation of the Company, any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceedings of the
Company, whether of a similar character or otherwise.

         (f)      Severability. If any provision of the Plan or option
agreement, or its application to any person, place, or circumstance, is held by
an arbitrator or a court of competent jurisdiction to be invalid, unenforceable,
or void, that provision shall be enforced to the greatest extent permitted by
law, and the remainder of this Plan and option agreement and of that provision
shall remain in full force and effect as applied to other persons, places, and
circumstances.

         (g)      Governing Law. This Plan and the option agreement shall be
governed by and construed in accordance with the laws of the State of Colorado
applicable to contracts wholly made and performed in the State of Colorado.

         (h)      Exchange Requirements. So long as Shares are listed on any
established stock exchange or traded on the NASDAQ National Market or the NASDAQ
SmallCap Market, the applicable requirements of any such exchange or market
shall be hereby incorporated by reference.

         (i)      Compliance with Section 16. So long as any of the Company's
equity securities are registered pursuant to Section 12(b) or 12(g) of the 1934
Act, with respect to awards granted to or

                                      -5-

<PAGE>

held by Section 16 insiders, the Plan will comply in all respects with Rule
16b-3 or any successor rule or rule of similar application under Section 16 of
the 1934 Act or rules thereunder, and, if any Plan provision is later found not
to be in compliance with such exemption under Section 16, that provision shall
be deemed modified as necessary to meet the requirements of such applicable
exemption.

         12.      EFFECTIVE DATE OF THE PLAN. The Plan will become effective
upon adoption by the Board, subject to approval by the Company's stockholders.
The Plan shall terminate on the 10th anniversary of its adoption.

         13.      AMENDMENT OF THE PLAN. With the approval of the Board, the
Administrator may suspend or discontinue the Plan or revise or amend it in any
respect whatsoever; provided, however, that without approval of the Company's
stockholders no revision or amendment shall change the number of Shares issuable
under the Plan (except as provided in Section 6(e)), change the designation of
the class of individuals eligible to receive options, or materially increase the
benefits accruing to Non-Employee Directors under the Plan.

         IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies
that this Plan was adopted by the Board on February 12, 2003, effective as of
the same date.

                                      -6-<PAGE>

                                                                    Exhibit 10.3

                        ADVANCED ENERGY INDUSTRIES, INC.
                             2001 STOCK OPTION PLAN
                            ADOPTED JANUARY 22, 2001
                      AS AMENDED AND RESTATED JUNE 24, 2002

         1.       PURPOSE. The purpose of the Plan is to provide an incentive to
attract, retain and reward individuals performing services for the Company, and
to motivate such individuals to contribute to the growth and profitability of
the Company.

         2.       DEFINITIONS. Whenever the following terms are used in the
Plan, they shall have the meaning indicated below, unless a different meaning is
required by the context.

         (a)      "Administrator" means either the Board or a committee of at
least two Board members to which the Board allocates administration of the Plan.

         (b)      "Board" means the board of directors of the Corporation.

         (c)      "Code" means the Internal Revenue Code of 1986, as amended.

         (d)      "Company" means, collectively, the Corporation and any "parent
corporation" or "subsidiary corporation" of the Corporation as defined in Code
Section 424(e) and Section 424(f), respectively.

         (e)      "Corporation" means Advanced Energy Industries, Inc., a
Delaware corporation.

         (f)      "Fair Market Value" means, with respect to a Share as of any
date, the closing sale price of a Share on such date (or previous business day
if such date is not a business day) on the principal exchange or market on which
Shares are then listed or admitted to trading. If, for any reason, the preceding
rule cannot be applied to determine fair market value, then the Committee shall
make a good faith determination of fair market value.

         (g)      "Optionee" means a person to whom an option has been granted
under the Plan. If an option is assigned pursuant to Section 6(b), the term
"Optionee" shall mean the assignee when required by the context.

         (h)      "Plan" means this Advanced Energy Industries, Inc. 2001 Stock
Option Plan.

         (i)      "Service" means the Optionee's employment or service with the
Company, whether in the capacity of an employee, a director, or a consultant.

         (j)      "Share" means one share of common stock of the Corporation.

         3.       ADMINISTRATION. The Plan shall be administered by the
Administrator. Subject to the provisions of the Plan, the Administrator shall
have the authority to select the persons to be granted options under this Plan,
to fix the number of shares that each Optionee may purchase, to determine the
exercise price of options granted, to set the terms and conditions of each
option (including the period over which the option becomes exercisable), and to
determine all other matters relating to administration and operation of the
Plan. All questions of interpretation,

                                      -1-

<PAGE>

implementation, and application of the Plan shall be determined by the
Administrator in its sole discretion. Such determinations shall be final and
binding on all persons. No member of the Board or committee that acts as
Administrator shall be liable for any act or omission on such member's own part,
including but not limited to the exercise of any power or discretion given to
such member under the Plan, except for those acts or omissions resulting from
such member's own gross negligence or willful misconduct.

         4.       SHARES SUBJECT TO THE PLAN. The maximum number of Shares that
may be issued pursuant to options granted under the Plan is 600,000 (Six Hundred
Thousand), subject to adjustment as provided in section 6(d). If an option
expires, is surrendered, or becomes unexercisable without having been exercised
in full, or if any unissued Shares are retained by the Corporation upon exercise
of an option in order to satisfy the exercise price for such option or any
withholding taxes due with respect to such exercise, the unissued or retained
Shares shall become available for future grant under the Plan (unless the Plan
has terminated). If unvested Shares are forfeited (repurchased by the
Corporation at their original purchase price), such Shares shall also become
available for future grant under the Plan, but the total number of such
forfeited Shares that become available may not exceed twice the maximum number
set forth above (subject to adjustment as provided in section 6(d)). Other
Shares that actually have been issued under the Plan pursuant to an option shall
not be returned to the Plan and shall not become available for future grant
under the Plan.

         5.       ELIGIBILITY. The Administrator may grant an option or options
to any employee or consultant of the Company, as selected in the sole discretion
of the Administrator; provided, however, that no option may be granted to an
individual who, with respect to the Corporation at the date of grant, is a
director or officer (within the meaning of Section 16 of the Securities Exchange
Act of 1934).

         6.       GENERAL TERMS AND CONDITIONS.

         (a)      Option Agreements. Each option granted under the Plan shall be
authorized by action of the Administrator and shall be evidenced by a written
agreement in such form as the Administrator shall from time to time approve,
which agreement shall comply with and be subject to the terms and conditions of
the Plan. All options granted under the Plan are nonqualified options, and are
not subject to the provisions of Code Section 422.

         (b)      Transferability. Options granted under the Plan are not
transferable by the Optionee and shall be exercisable during the Optionee's
lifetime only by the Optionee; provided, however, that an option may be
transferred upon the approval of the Administrator (in its sole discretion) by
appropriate instrument to an inter vivos or testamentary trust in which the
option is to be passed to the Optionee's beneficiaries upon the Optionee's death
or by gift to the Optionee's immediate family (consisting of the Optionee's
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and shall include adoptive relationships). No option or interest
therein may be otherwise transferred, assigned, pledged, or hypothecated by
Optionee, whether by operation of law or otherwise, or be made subject to
execution, attachment, or similar process. Any such purported assignment, sale,
transfer, delegation, or other disposition shall be null and void.

                                      -2-

<PAGE>

         (c)      Modification, Extension, and Renewal. The Administrator shall
have the power to modify, extend, or renew outstanding options and authorize the
grant of new options in substitution therefor, provided that any such action may
not have the effect of significantly impairing any rights or obligations of any
option previously granted without the consent of Optionee.

         (d)      Changes in Capitalization or Corporate Transaction. In the
event of any merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, reverse stock split, separation, liquidation or other
change in the corporate structure or capitalization affecting the Shares,
appropriate adjustment shall be made by the Administrator in the kind, option
price, and number of shares of stock (including, but not limited to, the maximum
number of Shares reserved under the Plan) that are or may become subject to
options granted or to be granted under the Plan.

         7.       EXERCISE.

         (a)      Exercise Price. The exercise price of an option shall be not
less than the Fair Market Value of a Share on the date of the grant of the
option.

         (b)      Time of Exercise. An option shall become exercisable as
specified in the option agreement; provided, however, that (i) an option shall
not be exercisable after the 10th anniversary of the date of grant and (ii)
unless expressly provided otherwise in the option agreement, an option shall not
be exercisable to the extent its exercise would result (determined at the time
of exercise) in compensation not deductible by the Company under Code Section
162(m).

         (c)      Notice of Exercise. Optionees may exercise only by providing
written notice to the Corporation at the address specified in the option
agreement, accompanied by full payment for the Shares to be purchased. After
receiving proper notice of exercise and payment, the Corporation shall issue a
certificate(s) for the Shares purchased, registered in Optionee's name (or in
Optionee's name and the name of Optionee's spouse as community property or as
joint tenants with a right of survivorship). Such certificate(s) shall bear a
legend similar to the following, if applicable:

             This Stock is Subject to Restrictions on Negotiability

         This stock is held pursuant to a certain Agreement effective as of
         _________________, a copy of which is filed with the Secretary of the
         Corporation, and this stock cannot be sold, transferred, bequeathed,
         hypothecated, encumbered, or otherwise disposed of, except as provided
         in the Agreement and subject to the terms thereof.

         (d)      Taxes and Withholding. The Company shall have the right to
deduct from the Shares issuable upon the exercise of an option, or to accept
from Optionee the tender of, a number of whole Shares having a fair market
value, as determined by the Administrator, equal to all or any part of the
federal, state, local and foreign taxes, if any, required by law to be withheld
by the Company with respect to such option or the Shares acquired upon the
exercise thereof. Alternatively or in addition, in its sole discretion, the
Company shall have the right to require Optionee, through payroll withholding,
cash payment or otherwise, including by means of a

                                      -3-

<PAGE>

cashless exercise (as described in Section 8(b)), to make adequate provision for
any such tax withholding obligations of the Company arising in connection with
the option, or the Shares acquired upon the exercise thereof.

         8.       PAYMENT OF EXERCISE PRICE. Payment of any option's exercise
price may be made in cash, by check or cash equivalent. At the sole discretion
of the Administrator, the exercise price may be made as follows:

         (a)      By Tender of Stock. Payment may be made by tender (or by
attestation) to the Corporation of Shares owned by Optionee having a Fair Market
Value (as determined by the Administrator without regard to any restrictions on
transferability applicable to such Shares by reason of federal or state
securities laws or agreements with the Corporation's underwriter) not less than
the exercise price; provided that, an option may not be exercised by tender to
the Corporation of Shares to the extent such tender would constitute a violation
of the provisions of any law, regulation or agreement restricting the redemption
of the Shares. Unless otherwise provided by the Administrator, an option may not
be exercised by tender to the Corporation of Shares unless such Shares either
have been owned by Optionee for more than six (6) months or were not acquired,
directly or indirectly, from the Corporation.

         (b)      By Cashless Exercise. The Administrator reserves, at any and
all times, the right, in the Administrator's sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the
exercise of options by payment by the assignment of the proceeds of a sale or
loan with respect to some or all of the Shares being acquired upon the exercise
of the option, including, without limitation, through an exercise complying with
the provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System.

         (c)      By Promissory Note. Payment may be made by Optionee's
promissory note in a form approved by the Administrator, except that no
promissory note shall be permitted if the exercise of an option using a
promissory note would be a violation of any law. Any permitted promissory note
shall be on such terms as the Administrator shall determine; provided that (i)
the note (including interest) shall be full recourse, (ii) interest shall be
payable in at least annual installments at a current market interest rate, (iii)
the note shall be secured by the Shares acquired, and (iv) the remaining balance
of the note (including accrued interest) shall be due and payable within 90 days
of termination of Optionee's Service for any reason. Unless otherwise provided
by the Administrator, if the Corporation at any time is subject to the
regulations promulgated by the Board of Governors of the Federal Reserve System
or any other governmental entity affecting the extension of credit in connection
with the Corporation's securities, any promissory note shall comply with such
applicable regulations, and Optionee shall pay the unpaid principal and accrued
interest, if any, to the extent necessary to comply with such applicable
regulations.

         (d)      By Other Consideration. Payment may be made by such other
consideration or by any combination of cash, stock, cashless exercise,
promissory note or other consideration as may be approved by the Administrator
from time to time to the extent permitted by applicable laws.

                                      -4-

<PAGE>

         9.       TERMINATION OF OPTIONS.

         (a)      Termination of Service. If an Optionee's Service terminates,
his or her rights to exercise an option then held shall be limited. Optionee's
Service shall not be deemed to have terminated merely because of a change in the
capacity in which Optionee renders Service or a change in the Company, provided
that there is no interruption or termination of Optionee's employment or
service. Optionee's Service with the Company shall be treated as continuing
intact while the Optionee is on military, sick leave, or other bona fide leave
of absence (such as temporary employment by the government) approved by the
Company if the period of such leave does not exceed 90 days, or, if longer, so
long as the Optionee's right to reemployment with the Corporation is guaranteed
either by statute or by contract. Where the period of leave exceeds 90 days and
where the Optionee's right to reemployment is not guaranteed either by statute
or by contract, Service will be deemed to have terminated on the 91st day of
such leave. Subject to the foregoing, the Administrator, in its sole discretion,
shall determine whether Optionee's Service has terminated and the effective date
thereof.

         (b)      Regular Termination. Except as otherwise provided in
paragraphs (c) through (e), if an Optionee's Service terminates, Optionee shall
have the right for a period of 3 months after the date of termination to
exercise the option to the extent Optionee was entitled to exercise the option
on that date; provided, however, that the date of exercise is in no event after
the expiration of the term of the option. To the extent the option is not
exercised within this period, the option will terminate.

         (c)      Termination by Disability. If an Optionee becomes disabled
(within the meaning of Code Section 22(e)(3)) while in Service, Optionee or his
or her qualified representative shall have the right for a period of twelve (12)
months after the date on which Optionee's Service ends to exercise the option to
the extent Optionee was entitled to exercise the option on that date, provided
the date of exercise is in no event after the expiration of the term of the
option. To the extent the option is not exercised within this period, the option
will terminate.

         (d)      Termination Upon Death. If an Optionee dies while in Service,
the person who acquired the right to exercise the option by bequest or
inheritance or by reason of the death of the Optionee shall have the right for a
period of twelve (12) months after the date of death to exercise the option to
the extent Optionee was entitled to exercise the option on that date, provided
the date of exercise is in no event after the expiration of the term of the
option. To the extent the option is not exercised within this period, the option
will terminate.

         (e)      Termination for Cause. If an Optionee's Service is terminated
by the Company for Cause, Optionee shall have no right to exercise the option,
and the option will terminate. "Cause" means that Optionee is determined by the
Administrator to have committed an act of embezzlement, fraud, dishonesty, or
breach of fiduciary duty to the Company, or to have deliberately disregarded the
rules of the Company which resulted in loss, damage, or injury to the Company,
or because Optionee has made any unauthorized disclosure of any of the secrets
or confidential information of the Company, has induced any client or customer
of the Company to breach any contract with the Company, has induced any
principal for whom the Company acts as agent to terminate the agency
relationship, or has engaged in any conduct that constitutes unfair competition
with the Company. Any action on the part of the Optionee that is described in
this

                                      -5-

<PAGE>

paragraph will constitute Cause, for purposes of this Plan, only if the action
results in a material or significant loss to the Company, as determined in the
sole discretion of the Administrator.

         (f)      Option Agreement. The option agreement may provide rules
different from those set forth in subsections (a) through (e), provided that, in
the absence of Cause, the option must be exercisable for at least 30 days after
termination of Service (6 months in the case of termination caused by death or
disability), but not after the expiration of the term of the option.

         10.      CHANGE IN CONTROL. In the event of (i) a merger or
consolidation in which the Corporation is not the surviving corporation or (ii)
a reverse merger in which the Corporation is the surviving corporation but the
shares of the Corporation's common stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise then to the extent permitted by applicable
law (collectively, a "Change in Control"), then (i) any surviving corporation
shall assume any options outstanding under the Plan or shall substitute similar
options for those outstanding under the Plan, or (ii) such options shall
continue in full force and effect. In the event any surviving corporation
refuses to assume or continue such options, or to substitute similar options for
those outstanding under the Plan, then such options shall be terminated if not
exercised prior to such event. In the event of a dissolution or liquidation of
the Corporation, any option outstanding under the Plan shall terminate if not
exercised prior to such event.

         11.      VESTING OF SHARES.

         (a)      Vesting. Shares shall become vested as specified in the option
agreement. Shares acquired on exercise of an option shall first be attributable
to vested Shares, then unvested Shares. Shares shall cease to vest at the time
of termination of Service.

         (b)      Unvested Share Repurchase Right. Shares acquired under the
Plan that have not vested may be repurchased by the Corporation at the original
exercise price if the Optionee's Service with the Company is terminated for any
reason or no reason, with or without Cause (as defined in Section 9(e)). The
Corporation may assign any unvested Share repurchase right it may have, whether
or not then exercisable, to such person or persons as may be selected by the
Corporation. The Corporation may require the Optionee to place certificates for
any unvested Shares in escrow under reasonable terms established by the
Administrator.

         (c)      Exercise of Unvested Share Repurchase Right. The unvested
Share repurchase right may be exercised by written notice to Optionee within 60
days after termination of Optionee's Service (or exercise of the option, if
later). If notice is not given within such 60-day period, the repurchase option
shall terminate unless the parties have extended the time for its exercise. The
repurchase right must be exercised for all unvested Shares, unless the parties
agree otherwise. Cash payment (or cancellation of purchase money indebtedness)
must be made by the thirtieth (30th) day after the date of the written notice to
Optionee of the exercise of the repurchase right.

                                      -6-

<PAGE>

         12.      SECURITIES LAW COMPLIANCE.

         (a)      General Rules. The grant of options and the issuance of Shares
upon exercise of options shall be subject to compliance with all applicable
requirements of federal, state or foreign law with respect to such securities.
Options may not be exercised if the issuance of Shares upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Shares may then be listed. In addition, no option
may be exercised unless (i) a registration statement under the Securities Act
shall at the time of exercise of the option be in effect with respect to the
Shares issuable upon exercise of the option, or (ii) in the opinion of legal
counsel to the Corporation, the Shares issuable upon exercise of the option may
be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the
Corporation to obtain from any regulatory body having jurisdiction the
authority, if any, deemed by the Corporation's legal counsel to be necessary to
the lawful issuance and sale of any shares hereunder shall relieve the
Corporation of any liability in respect of the failure to issue or sell such
shares as to which such requisite authority shall not have been obtained.

         (b)      Conditions of Exercise. As a condition to the exercise of any
option, the Corporation may require Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Corporation.

         13.      MISCELLANEOUS.

         (a)      No Right to an Option. Nothing in the Plan shall be construed
to give any person any right to be granted an option.

         (b)      No Employment Rights. Neither the Plan nor the granting of an
option nor any other action taken pursuant to the Plan shall constitute or be
evidence of any agreement or understanding, express or implied, that the Company
will utilize Optionee's services for any period of time, or in any position, or
at any particular rate of compensation.

         (c)      No Shareholders' Rights. Optionee shall have no rights as a
shareholder with respect to the Shares covered by his or her options until the
date of the issuance to him or her of a share certificate for the Shares, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date the certificate is issued.

         (d)      Claims. Any person who makes a claim for benefits under the
Plan or under any option agreement entered into pursuant to the Plan shall file
the claim in writing with the Administrator. Written notice of the disposition
of the claim shall be delivered to the claimant within 60 days after filing. If
the claim is denied, the Administrator's written decision shall set forth (i)
the specific reason or reasons for the denial, (ii) a specific reference to the
pertinent provisions of the Plan or option agreement on which the denial is
based, and (iii) a description of any additional material or information
necessary for the claimant to perfect his or her claim and an explanation of why
such material or information is necessary. No lawsuit may be filed by the
claimant until a claim is made and denied pursuant to this subsection.

                                      -7-

<PAGE>

         (e)      Attorneys' Fees. In any legal action or other proceeding
brought by either party to enforce or interpret the terms of the option
agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs.

         (f)      Confidentiality. The terms and conditions of the option
agreement, including without limitation the number of Shares for which the
option is granted, are confidential. Optionee shall not disclose the terms of
the option to any third party, except to Optionee's financial or legal advisors,
tax preparer or family members, unless disclosure is required by law.

         (g)      Corporation Free to Act. An option grant shall not affect in
any way the right or power of the Corporation or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations, or other
changes in the Corporation's capital structure or its business, or any merger or
consolidation of any member of the Company or any issue of bonds, debentures, or
preferred or preference stocks affecting the Shares or the rights thereof, or of
any rights, options, or warrants to purchase any capital stock of the
Corporation, or the dissolution or liquidation of the Corporation, any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceedings of the Corporation, whether of a similar character or
otherwise.

         (h)      Severability. If any provision of the Plan or option
agreement, or its application to any person, place, or circumstance, is held by
an arbitrator or a court of competent jurisdiction to be invalid, unenforceable,
or void, that provision shall be enforced to the greatest extent permitted by
law, and the remainder of this Plan and option agreement and of that provision
shall remain in full force and effect as applied to other persons, places, and
circumstances.

         (i) Substitution/Assumption. The Company may substitute or assume
outstanding options granted by another company by either (i) granting an option
under this Plan in substitution of such other company's option or (ii) assuming
such option as if it had been granted under this Plan if the terms of such
assumed option are consistent this Plan. Such substitution or assumption will be
permissible if the holder of the substituted or assumed option would have been
eligible to be granted an option under this Plan if the other company had
applied the rules of this Plan to such grant. In the event of an assumption
hereunder, the terms and conditions of the option will remain unchanged, except
that the exercise price and the number and nature of shares issuable upon
exercise of any such option will be adjusted appropriately in the manner
described in Code Section 424(a). If the Company substitutes a new option for
the old option, such new option may be granted with a similarly adjusted
exercise price.

         (j)      Exchange Requirements. The requirements of any stock exchange
or other established market (such as the NASDAQ), on which the Corporation's
common stock is traded, are hereby incorporated into this Plan by reference.

         (k)      Governing Law. This Plan and the option agreement shall be
governed by and construed in accordance with the laws of the State of Colorado
applicable to contracts wholly made and performed in the State of Colorado.

                                      -8-

<PAGE>

         14.      EFFECTIVE DATE OF THE PLAN. The Plan will become effective
upon adoption of the Board. Options may be granted under the Plan at any time
after the Plan's adoption and before the termination of the Plan. The Plan shall
terminate on the 10th anniversary of its adoption.

         15.      AMENDMENT OF THE PLAN. The Board may suspend or discontinue
the Plan or revise or amend it in any respect whatsoever.

         IN WITNESS WHEREOF, the undersigned Secretary of the Corporation
certifies that this Plan was adopted by the Board on January 22, 2001, and
effective as of the same date.

                                      -9-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]