Exhibit 10.3

 

AMERICAN SUPERCONDUCTOR CORPORATION

 

Restricted Stock Agreement

 

AGREEMENT made this              day of             , 2004, between American
Superconductor Corporation, a Delaware corporation (the “Company”), and (the
“Employee”).

 

For valuable consideration, receipt of which is acknowledged, the parties hereto
agree as follows:

 

1. Purchase of Shares.

 

The Company shall issue and sell to the Employee, and the Employee shall
purchase from the Company, subject to the terms and conditions set forth in this
Agreement and in the Company’s 2004 Stock Incentive Plan (the “Plan”),
            shares (the “Shares”) of common stock, $.01 par value, of the
company (“Common Stock”), at a purchase price of $.01 per share. The aggregate
purchase price for the Shares shall be paid by the Employee by check payable to
the order of the company or such other method as may be acceptable to the
Company. Upon receipt by the Company of payment for the Shares, the company
shall issue to the Employee one or more certificates in the name of the Employee
for that number of Shares purchased by the Employee. The Employee agrees that
the Shares shall be subject to the purchase options set forth in Section 2 of
this Agreement and the restrictions on transfer set forth in Section 4 of this
Agreement.

 

2. Purchase Option.

 

(a) The Shares shall vest upon the earliest of (i) [insert financial targets];
(ii) a Change in Control of the Company (as defined below); or (iii)
[            ]. The Shares shall be “Unvested Shares” until vested as provided
in the preceding sentence.

 

For purposes of the Agreement, a “Change in Control” shall be deemed to have
occurred upon the occurrence of the following events: (i) any “person”, as such
term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or
any corporation owned directly or indirectly by the stockholders of the Company
in substantially the same proportion as their ownership of stock of the
Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities; (ii) during any period of two consecutive years ending
during the term of this Agreement, individuals who at the beginning of such
period constitute the Board of Directors of the Company, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect any

 

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transaction described in clause (i), (iii) or (iv) of this Section 2) whose
election by the Board of Directors or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who were either directors at the beginning of the period or
whose election or whose nomination for election was previously so approved
(collectively, the “Disinterested Directors”), cease for any reason to
constitute a majority of the Board of Directors; (iii) the consummation of a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or (iv) the stockholders of the Company approve a
plan of complete liquidation of the Company or there occurs the sale or
disposition by the Company of all or substantially all of the Company’s assets.

 

(b) In the event that the Employee ceases to be employed by the Company for any
reason or no reason, with or without cause, prior to the occurrence of one of
the events stated in clauses (i), (ii) or (iii) of paragraph (a) above, the
Company shall have the right and option (the “Purchase Option”) to purchase from
the Employee, for a sum of $.01 per share (the “Option Price”), some or all of
the Unvested Shares.

 

(c) For purposes of the Agreement, employment with the Company shall include
employment with a parent or subsidiary of the Company.

 

3. Exercise of Purchase Option and Closing.

 

(a) The Company may exercise the Purchase Option by delivering or mailing to the
Employee (or his estate), within 60 days after the termination of the employment
of the Employee with the Company, a written notice of exercise of the Purchase
Option. Such notice shall specify the number of Shares to be purchased. If and
to the extent the Purchase Option is not so exercised by the giving of such a
notice within such 60-day period, the Purchase Option shall automatically expire
and terminate effective upon the expiration of such 60-day period.

 

(b) Within 10 days after delivery to the Employee of the Company’s notice of the
exercise of the Purchase Option pursuant to subsection (a) above, the Employee
(or his estate) shall, pursuant to the provisions of the Joint Escrow
Instructions referred to in Section 5, tender to the Company at its principal
offices the certificate or certificates representing the Shares which the
Company has elected to purchase in accordance with the terms of this Agreement,
duly endorsed in blank or with duly endorsed stock powers attached thereto, all
in form suitable for the transfer of such Shares to the Company. Promptly
following its receipt of such certificate or certificates, the Company shall pay
to the Employee the aggregate Option Price for such Shares (provided that any
delay in making such payment shall not invalidate the Company’s exercise of the
Purchase Option with respect to such Shares).

 

(c) After the time at which any Shares are required to be delivered to the
Company for transfer to the Company pursuant to subsection (b) above, the
Company shall not pay any dividend to the Employee on account of such Shares or
permit the Employee to exercise any of the privileges or rights of a stockholder
with respect to such Shares, but shall, in so far as permitted by law, treat the
Company as the owner of such Shares.

 

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(d) The Option Price may be payable, at the option of the Company, in
cancellation of all or a portion of any outstanding indebtedness of the Employee
to the Company or in cash (by check) or both.

 

(e) The Company shall not purchase any fraction of a Share upon exercise of the
Purchase Option, and any fraction of a Share resulting from a computation made
pursuant to Section 2 of this Agreement shall be rounded to the nearest whole
Share (with any one-half Share being rounded upward).

 

(f) The Company may assign its Purchase Option to one or more persons or
entities.

 

4. Restrictions on Transfer.

 

The Employee shall not sell, assign, transfer, pledge, hypothecate or otherwise
dispose of, by operation of law or otherwise (collectively “transfer”) any
Shares, or any interest therein, that are subject to the Purchase Option, except
that the Employee may transfer such Shares (i) to or for the benefit of any
spouse, child or grandchild of the Employee, or to a trust for their benefit,
provided that such Shares shall remain subject to this Agreement (including
without limitation the restrictions on transfer set forth in this Section 4 and
the Purchase Option) and such permitted transferee shall, as a condition to such
transfer, deliver to the Company a written instrument confirming that such
transferee shall be bound by all of the terms and conditions of this Agreement
or (ii) as a part of the sale of all or substantially all of the shares of
capital stock of the Company (including pursuant to a merger or consolidation),
provided that, in accordance with Section 9 of the Plan, the securities or other
property received by the Employee in connection with such transaction shall
remain subject to this Agreement.

 

5. Escrow.

 

The Employee shall, upon the execution of this Agreement, execute Joint Escrow
Instructions in the form attached to this Agreement as Exhibit A. The Joint
Escrow Instructions shall be delivered to the Controller of the company, as
escrow agent thereunder. The Employee shall deliver to such escrow agent a stock
assignment duly endorsed in blank, in the form attached to this Agreement as
Exhibit B, and hereby instructs the Company to deliver to such escrow agent, on
behalf of the Employee, the certificates(s) evidencing the Shares issued
hereunder. Such materials shall be held by such escrow agent pursuant to the
terms of such Joint Escrow Instructions.

 

6. Restrictive Legends.

 

All certificates representing Shares shall have affixed thereto a legend in
substantially the following form, in addition to any other legends that may be
required under federal or state securities law:

 

“The shares of stock represented by this certificate are subject to restrictions
on transfer and an option to purchase set forth in a certain Restricted Stock
Agreement between the corporation and the registered owner of these shares (or
his predecessor in interest), and such Agreement is available for inspection
without charge at the office of the Secretary of the corporation.”

 

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7. Withholding Taxes; Section 83(b) Election.

 

(a) The Employee acknowledges and agrees that the Company has the right to
deduct from payments of any kind otherwise due to the Employee any federal,
state or local taxes of any kind required by law to be withheld with respect to
the purchase of the Shares by the Employee or the lapse of the Purchase Option.

 

(b) The Employee acknowledges that he has been informed of the availability of
making an election in accordance with Section 83(b) of the Internal Revenue Code
of 1986, as amended; that such election must be filed with the Internal Revenue
Service within 30 days of the transfer of shares to the Employee; and that the
Employee is solely responsible for evaluating the tax implications to the
Employee or his or her purchase of the shares under this Agreement and for
making such election if he or she so chooses.

 

8. No Rights To Employment.

 

Nothing contained in this Agreement shall be construed as giving the Employee
any right to be retained, in any position, as an employee of the Company. The
Employee further acknowledges and agrees that the transactions contemplated
hereunder and the vesting provisions set forth herein do not constitute an
express or implied process of continued engagement as an employee until the
Shares vest, for any period of time, or at all.

 

9. Provisions of the Plan.

 

This Agreement is subject to the provisions of the Plan, a copy of which has
been furnished to the Employee.

 

10. Severability.

 

The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable to
the extent permitted by law.

 

11. Waiver.

 

Any provision for the benefit of the Company contained in this Agreement may be
waived, either generally or in any particular instance, by the Board of
Directors of the Company.

 

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12. Binding Effect.

 

This Agreement shall be binding upon and inure to the benefit of the Company and
the Employee and their respective heirs, executors, administrators, legal
representatives, successors and assigns, subject to the restrictions on transfer
set forth in Section 4 of this Agreement.

 

13. Notice.

 

All notices required or permitted hereunder shall be in writing and deemed
effectively given upon personal delivery or five days after deposit in the
United States Post Office, by registered or certified mail, postage prepaid,
addressed to the other party hereto at the address shown beneath his or its
respective signature to this Agreement, or at such other address or addresses as
either party shall designate to the other in accordance with this Section 13.

 

14. Pronouns.

 

Whenever the context may require, any pronouns used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
forms of nouns and pronouns shall include the plural, vice versa.

 

15. Entire Agreement.

 

This Agreement and the Plan constitute the entire agreement between the parties,
and supersede all prior agreements and understandings, relating to the subject
matter of this Agreement.

 

16. Amendment.

 

This Agreement may be amended or modified only by a written instrument executed
by both the Company and the Employee.

 

17. Governing Law.

 

This Agreement shall be construed, interpreted and enforced in accordance with
the internal laws of the State of Delaware without regard to any applicable
conflicts of law.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

AMERICAN SUPERCONDUCTOR CORPORATION By:  

 

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    Thomas Rosa Title:   Vice President, Finance and Accounting Address:   Two
Technology Drive     Westborough, MA 01581

 

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The Employee has reviewed the provisions of this Agreement, has had an
opportunity to obtain the advice of the Employee’s own tax and legal advisors
prior to executing this Agreement and fully understands and agrees to the
provisions hereof. The Employee understands that the law firm of Wilmer Cutler
Pickering Hale and Dorr LLP is acting as counsel to the Company in connection
with the transactions contemplated by this Agreement and is not acting as
counsel to the Employee.

 

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Address:  

 

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Exhibit A

 

AMERICAN SUPERCONDUCTOR CORPORATION

 

Joint Escrow Instructions

 

______, 2004

 

Mr. Thomas M. Rosa

Vice President, Finance and Accounting

American Superconductor Corporation

Two Technology Drive

Westborough, MA 01581

 

Dear Sir:

 

As Escrow Agent for the American Superconductor Corporation, a Delaware
corporation (the “Company”), and the undersigned person (“Holder”), you are
hereby authorized and directed to hold the documents delivered to you pursuant
to the terms of that certain Restricted Stock Agreement (the “Agreement”) of
even date herewith, to which a copy of these Joint Escrow Instructions is
attached, in accordance with the following instructions:

 

1. Appointment. Holder irrevocably authorizes the company to deposit with you
any certificates evidencing Shares (as defined in the Agreement) to be held by
you hereunder and any additions and substitutions to said Shares. For purposes
of these Joint Escrow Instructions, “Shares” shall be deemed to include any
additional or substitute property. Holder does hereby irrevocably constitute and
appoint you as his attorney-in-fact and agent for the term of this escrow to
execute with respect to such Shares all documents necessary or appropriate to
make such Shares negotiable and to complete any transaction here contemplated.
Subject to the provisions of this paragraph 1 and the terms of the Agreement,
Holder shall exercise all rights and privileges of a stockholder of the Company
while the Shares are held by you.

 

2. Closing of Purchase.

 

(a) Upon any purchase by the company of the Shares pursuant to the Agreement,
the Company shall give to Holder and you a written notice specifying the
purchase price for the Shares, as determined pursuant to the Agreement, and the
time for a closing hereunder (the “Closing”) at the principal office of the
Company. Holder and the Company hereby irrevocably authorize and direct you to
close the transaction contemplated by such notice in accordance with the terms
of said notice.

 

  (b) At the Closing, you are directed (a) to date the stock assignment form or
forms necessary for the transfer of the Shares, (b) to fill in on such form or
forms the number of Shares being transferred, and (c) to deliver the same,
together with the

 

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certificate or certificates evidencing the Shares to be transferred, to the
Company against the simultaneous delivery to you of the purchase price for the
Shares being purchased pursuant to the Agreement.

 

3. Withdrawal. The Holder shall have the right to withdraw from this escrow any
Shares as to which the Purchase Option (as defined in the Agreement) has
terminated or expired.

 

  4. Duties of Escrow Agent.

 

(a) Your duties hereunder may be altered, amended, modified or revoked only by a
writing signed by all of the parties hereto.

 

(b) You shall be obligated only for the performance of such duties as are
specifically set forth herein and may relay and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact of Holder while acting in good faith and in
the exercise of your own good judgment, and any act done or omitted by you
pursuant to the advice of your own attorneys shall be conclusive evidence of
such good faith.

 

(c) You are hereby expressly authorized to disregard any and all warnings given
by any of the parties hereto or by any other person or Company, excepting only
orders or process of courts of law, and are hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court. In case you obey
or comply with any such order, judgment or decree of any court, you shall not be
liable to any of the parties hereto or to any other person, firm or Company by
reason of such compliance, notwithstanding any such order, judgment or decree
being subsequently reversed, modified, annulled, set aside, vacated or found to
have been entered without jurisdiction.

 

(d) You shall not be liable in any respect on account of the identity, authority
or rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for
hereunder.

 

(e) You shall be entitled to employ such legal counsel and other experts as you
may deem necessary properly to advise you in connection with your obligations
hereunder and may rely upon the advice of such counsel.

 

(f) Your rights and responsibilities as Escrow Agent hereunder shall terminate
if (i) you cease to be Controller of the Company or (ii) you resign by written
notice to each party. In the event of a termination under clause (i), your
successor as Controller shall become Escrow Agent hereunder; in the event of a
termination under clause (ii), the Company shall appoint a successor Escrow
Agent hereunder.

 

(g) If you reasonably require other or further instruments in connection with
these Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

 

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(h) It is understood and agreed that should any dispute arise with respect to
the delivery and/or ownership or right of possession of the securities held by
you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
dispute shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but you shall be under no duty whatsoever to institute or defend any
such proceedings.

 

(i) These Joint Escrow Instructions set forth your sole duties with respect to
any and all matters pertinent hereto and no implied duties or obligations shall
be read into these Joint Escrow Instructions against you.

 

(j) The Company shall indemnify you and hold you harmless against any and all
damages, losses, liabilities, costs, and expenses, including attorney’s fees and
disbursements, for anything done or omitted to be done by you as Escrow Agent in
connection with this Agreement or the performance of your duties hereunder,
except such as shall result from your gross negligence or willful misconduct.

 

5. Notice. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses, or at such other addresses as a party may designate by ten
days’ advance written notice to each of the other parties hereto.

 

COMPANY:      American Superconductor Corporation        Two Technology Drive  
     Westborough, MA 01581 HOLDER:      Notices to Holder shall be sent to the
address set forth        below Holder’s signature below. ESCROW AGENT:     
American Superconductor Corporation        Two Technology Drive       
Westborough, MA 01581        Attn: Vice President, Finance and Accounting

 

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6. Miscellaneous.

 

(a) By signing these Joint Escrow Instructions, you become a party hereto only
for the purpose of said Joint Escrow Instructions, and you do not become a party
to the Agreement.

 

(b) This instrument shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

 

Very truly yours,

AMERICAN SUPERCONDUCTOR CORPORATION

By:  

 

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    Thomas Rosa Title:   Vice President, Finance and Accounting HOLDER:

 

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(Signature)

 

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Print Name

Address:

 

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Date Signed:  

 

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ESCROW AGENT:

 

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Vice President, Finance and Accounting

 

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Exhibit B

 

Stock Assignment

 

FOR VALUE RECEIVED, I hereby sell, assign and transfer unto                     
(            ) shares of Common Stock, $[0.01] par value per share, of
                     (the “Corporation”) standing in my name on the books of the
Corporation represented by Certificate(s) Number              herewith, and do
hereby irrevocably constitute and appoint                      attorney to
transfer the said stock on the books of the Corporation with full power of
substitution in the premises.

 

    Dated:   _____________ IN PRESENCE OF  

 

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NOTICE: The signature(s) to this assignment must correspond with the name as
written upon the face of the certificate, in every particular, without
alteration, enlargement, or any change whatever and must be guaranteed by a
commercial bank, trust company or member firm of the Boston, New York or Midwest
Stock Exchange.

 

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