EXHIBIT 10.1
EXECUTIVE CHANGE IN CONTROL AGREEMENT
This Executive Change in Control
Agreement (this “ Agreement ”), is made
as of the 29th day of March, 2008 (the “ Effective
Date ”), by and between Advanced Energy Industries,
Inc., a Delaware corporation (the “ Company
”), and Hans Georg Betz (the “ Executive
”).
Recitals
A. The Executive currently
serves as the Chief Executive Officer of the Company.
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 March 29, 2009 (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 continue to 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.
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, 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, (ii) payments pursuant
to any long-term disability insurance policy carried by the Company
with respect to the Executive.
2
(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 two
(2) times the sum of the Executive’s annual Base Salary
and 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;
(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, Restricted Stock 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 Restricted Stock and 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 Restricted Stock and
RSUs held by the Executive shall be accelerated so that all
Restricted Stock and RSUs then held by the Executive shall be fully
vested and exercisable immediately upon the Involuntary
Termination.
3
(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, Restricted Stock or RSUs then
held by the Executive, and no shares of Common Stock 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, Restricted Stock 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, Restricted Stock 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, Restricted
Stock and/or RSUs then held by the Executive shall be as set forth
in the agreements representing such Options, Restricted Stock
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.
(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
4
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:
Hans Georg
Betz
1415 Waxwing Lane
Fort Collins, CO 80524
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.
(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
5
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
| 
