Exhibit 10.8

AMERICAN SUPERCONDUCTOR CORPORATION

SECOND AMENDED AND RESTATED 1997 DIRECTOR

STOCK OPTION PLAN, AS AMENDED

1. Purpose.

The purpose of this Second Amended and Restated 1997 Director Stock Option Plan,
as amended (the “Plan”), of American Superconductor Corporation (the “Company”)
is to encourage stock ownership in the Company by outside directors of the
Company whose continued services are considered essential to the Company’s
future success and to provide them with a further incentive to remain as
directors of the Company.

2. Administration.

The Board of Directors shall supervise and administer the Plan. Grants of stock
options and stock awards under the Plan and the amount and nature of the options
and awards to be granted shall be automatic in accordance with Section 5.
However, all questions concerning interpretation of the Plan or any options or
awards granted under it shall be resolved by the Board of Directors and such
resolution shall be final and binding. No director or person acting pursuant to
the authority delegated by the Board of Directors shall be liable for any action
or determination relating to or under the Plan made in good faith.

3. Participation in the Plan.

Directors of the Company who are not full-time employees of the company or any
subsidiary of the Company (“Outside Directors”) shall be eligible to receive
options and stock awards under the Plan, except that Directors of the Company
who are representatives of an equity holder of the Company shall not be eligible
to receive options or awards under the Plan.

4. Stock Subject to the Plan.

 

  (1)

The maximum number of shares of the Company’s Common Stock, par value $.01 per
share (“Common Stock”), which may be issued under the Plan shall be 790,000
shares, subject to adjustment as provided in Section 7.

 

  (2)

If any outstanding option under the Plan for any reason expires or is terminated
without having been exercised in full, the shares covered by the unexercised
portion of such option shall again become available for issuance pursuant to the
Plan.

 

  (3)

All options granted under the Plan shall be non-statutory options not entitled
to special tax treatment under Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”).

 

  (4)

Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.

5. Terms, Conditions and Form of Options.

Each option granted under the Plan shall be evidenced by a written agreement in
such form as the President or the Executive Vice President, Corporate
Development, shall from time to time approve, which agreements shall comply with
and be subject to the following terms and conditions:

 

  (a)

Option Grants and Stock Awards.

 

  (i)

Initial Grants to Outside Directors. An option to purchase 20,000 shares of
Common Stock shall be granted automatically to each Outside Director first
elected to the Board of Directors after the date of the approval of the Plan by
the stockholders of the Company, upon the date of his or her initial election to
the Board of Directors.

 

  (ii)

Stock Awards to Outside Directors. An award of 5,000 shares of Common Stock
shall be granted automatically, on the third business day following the date of
each Annual Meeting of Stockholders of the Company, to each person serving as an
Outside Director of the Company on the date of such grant, provided that such
Outside Director has served on the Board of Directors of the Company for

 

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at least one full calendar year prior to the date of such grant. The shares of
Common Stock covered by such award shall be fully vested and not subject to any
repurchase rights or other contractual restrictions.

 

  (b)

Option Exercise Price. The option exercise price per share for each option
granted under the Plan shall be equal to the fair market value per share of
Common Stock on the date of grant, which shall be determined as follows: (i) if
the Common Stock is listed on the Nasdaq National Market or another nationally
recognized exchange or trading system as of the date on which a determination of
fair market value is to be made, the fair market value per share shall be deemed
to be the last reported sale price per share of Common Stock thereon on such
date (or, if no such price is reported on such date, such price on the nearest
preceding date on which such a price is reported); and (ii) if the Common Stock
is not listed on the Nasdaq National Market or another nationally recognized
exchange or trading system as of the date on which a determination of fair
market value is to be made, the fair market value per share shall be as
determined by the Board of Directors.

 

  (c)

Transferability of Options. Except as the Board of Directors may otherwise
determine, options shall not be sold, assigned, transferred, pledged or
otherwise encumbered by the person to whom they are granted, either voluntarily
or by operation of law, except by will or the laws of descent and distribution,
and, during the life of the optionee, shall be exercisable only by the optionee.
References to a optionee, to the extent relevant in the context, shall include
references to authorized transferees, if any.

 

  (d)

Vesting Period.

 

  (i)

General. Each option granted pursuant to Section 5(a)(i) shall become
exercisable in equal annual installments over a two year period following the
date of grant.

 

  (ii)

Acceleration Upon An Acquisition Event. Notwithstanding the foregoing, each
outstanding option granted pursuant to Section 5(a)(i) shall immediately become
exercisable in full in the event an Acquisition Event (as defined in Section 8)
of the Company occurs.

 

  (e)

Termination. Each option shall terminate, and may no longer be exercised, on the
earlier of the (i) the date ten years after the date of grant or (ii) the date
60 days after the optionee ceases to serve as a director of the Company for any
reason, whether by death, resignation, removal or otherwise.

 

  (f)

Exercise Procedure. Options may be exercised only by written notice to the
Company at its principal office accompanied by (i) payment in cash or by
certified or bank check of the full consideration for the shares as to which
they are exercised or (ii) an irrevocable undertaking, in form and substance
satisfactory to the Company, by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price or (iii) delivery of irrevocable
instructions, in form and substance satisfactory to the Company, to a broker to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price.

 

  (g)

Exercise by Representative Following Death of Director. An optionee, by written
notice to the Company, may designate one or more persons (and from time to time
change such designation), including his or her legal representative, who, by
reason of the optionee’s death, shall acquire the right to exercise all or a
portion of the option. If the person or persons so designated wish to exercise
any portion of the option, they must do so within the term of the option as
provided herein. Any exercise by a representative shall be subject to the
provisions of the Plan.

6. Limitation of Rights.

 

  (a)

No Right to Continue as a Director. 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
optionee shall be entitled to continue as a director for any period of time.

 

  (b)

No Stockholder Rights for Options. An optionee shall have no rights as a
stockholder with respect to the shares covered by his or her option until the
date of the issuance to him or her of a stock certificate therefor, and no
adjustment will be made for dividends or other rights (except as provided in
Section 7) for which the record date is prior to the date such certificate is
issued. Notwithstanding the foregoing, in the event the Company effects a split
of the Common Stock by means of a stock dividend, and the distribution date
(i.e., the date on which the closing market price of the Common Stock on a stock
exchange or trading system is adjusted to reflect the split) is subsequent to
the record date for such stock dividend, an optionee

 

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who exercises an option between the close of business on such record date and
the close of business on such distribution date shall be entitled to receive the
stock dividend with respect to the shares of Common Stock acquired upon such
option exercise, notwithstanding the fact that such shares were not outstanding
as of the close of business on such record date.

 

  (c)

Compliance with Securities Laws. Each option and stock award shall be subject to
the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject to such
option or stock award upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, or the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition to, or in connection with, the issuance or purchase
of shares thereunder, such option may not be exercised, in whole or in part, and
such stock award shall not be granted, unless such listing, registration,
qualification, consent or approval, or satisfaction of such condition shall have
been effected or obtained on conditions acceptable to the Board of Directors.

7. Adjustment to Common Stock.

In the event of any stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, combination, exchange of shares,
liquidation, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than a normal cash dividend,
(i) the number and class of security available under this Plan, (ii) the number
and class of security covered by future option grants and stock awards under
Section 5(a) and (iii) the number and class of security and exercise price per
share subject to each outstanding option shall be equitably adjusted by the
Company. No fractional shares will be issued under the Plan on account of any
such adjustments. If this Section 7 applies and Section 8 also applies to any
event, Section 8 shall be applicable to such event and this Section 7 shall not
be applicable.

8. Acquisition Events.

Upon the occurrence of an Acquisition Event (as defined below), or the execution
by the Company of any agreement with respect to an Acquisition Event, the Board
shall take any one or more of the following actions with respect to then
outstanding options: (i) provide that outstanding options shall be assumed, or
equivalent options shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof), provided that any such options
substituted for such options shall satisfy, in the determination of the Board,
the requirements of Section 424(a) of the Internal Revenue Code of 1986, as
amended; (ii) upon written notice to the optionees, provide that all then
unexercised options will become exercisable in full as of a specified time (the
“Acceleration Time”) prior to the Acquisition Event and will terminate
immediately prior to the consummation of such Acquisition Event, except to the
extent exercised by the optionees between the Acceleration Time and the
consummation of such Acquisition Event; and (iii) in the event of an Acquisition
Event under the terms of which holders of Common Stock will receive upon
consummation thereof a cash payment for each share of Common Stock surrendered
pursuant to such Acquisition Event (the “Acquisition Price”), provide that all
outstanding options shall terminate upon consummation of such Acquisition Event
and each optionee shall receive, in exchange therefor, a cash payment equal to
the amount (if any) by which (A) the Acquisition Price multiplied by the number
of shares of Common Stock subject to such outstanding options (whether or not
then exercisable), exceeds (B) the aggregate exercise price of such options.

An “Acquisition Event” shall mean: (x) any merger or consolidation which results
in the voting securities of the Company outstanding immediately prior thereto
representing immediately thereafter (either by remaining outstanding or by being
converted into voting securities of the surviving or acquiring entity) less than
50% of the combined voting power of the voting securities of the Company or such
surviving or acquiring entity outstanding immediately after such merger or
consolidation; (y) any sale of all or substantially all of the assets of the
Company; or (z) the complete liquidation of the Company.

9. Modification, Extension and Renewal of Options.

The Board of Directors shall have the power to modify or amend outstanding
options; provided, however, that no modification or amendment may (i) have the
effect of altering or impairing any rights or obligations of any option
previously granted without the consent of the optionee, or (ii) modify the
number of shares of Common Stock subject to the option (except as provided in
Section 7).

 

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10. Termination and Amendment of the Plan.

The Board of Directors may suspend, terminate or discontinue the Plan or amend
it in any respect whatsoever; provided, however, that without approval of the
stockholders of the Company, no amendment may (i) increase the number of shares
subject to the Plan (except as provided in Section 7), or (ii) effect any action
which requires approval of the stockholders pursuant to the rules or
requirements of the Nasdaq National Market or any other exchange on which the
Common Stock of the Company is listed.

11. Notice.

Any written notice to the Company required by any of the provisions of the Plan
shall be addressed to the Treasurer of the Company and shall become effective
when it is received.

12. Governing Law.

The Plan and all determinations made and actions taken pursuant hereto shall be
governed by the laws of the State of Delaware.

13. Stockholder Approval.

The Plan is conditional upon stockholder approval of the Plan within one year
from its date of adoption by the Board of Directors, and no option may be
granted under the Plan until such stockholder approval is obtained.

 

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