exv10w32






Exhibit 10.32




AMERICAN SUPERCONDUCTOR CORPORATION




Executive Severance Agreement



     THIS EXECUTIVE SEVERANCE AGREEMENT by and between American Superconductor Corporation, a
Delaware corporation (the “Company”), and John R. Collett (the “Executive”) is made as of May 18,
2010 (the “Effective Date”).



     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that appropriate
steps should be taken to reinforce and encourage the continued employment and dedication of the
Executive and to minimize the distraction from the possibility of an unwarranted termination of
employment.



     WHEREAS, the Company and the Executive acknowledge and agree that the benefits described in
this Agreement are not intended to, and shall not, constitute a severance plan, and shall confer no
benefit on anyone other than the parties hereto.



     NOW, THEREFORE, as an inducement for and in consideration of the Executive remaining in its
employ, the Company agrees that the Executive shall receive the severance benefits set forth in
this Agreement in the event the Executive’s employment with the Company is terminated under the
specific circumstances described below.



     1. Key Definitions.



     As used herein, the following terms shall have the following respective meanings:



          1.1 “Change in Control” means an event or occurrence set forth in any one or more of
subsections (a) through (c) below:




               (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more
of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the
Company, or (ii) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; or



               (b) the Continuing Directors (as defined below) no longer constituting a majority of the Board
(or, if applicable, the Board of Directors of a successor corporation to the Company), where the
term “Continuing Director” means at any date a member of the Board (i)



 









 




who was a member of the Board on the date of the execution of this Agreement or (ii) who was
nominated or elected subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who were Continuing Directors at
the time of such nomination or election; provided, however, that there shall be
excluded from this clause (ii) any individual whose initial assumption of office occurred as a
result of an actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a
person other than the Board; or




               (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory
share exchange involving the Company or a sale or other disposition of all or substantially all of
the assets of the Company in one or a series of related transactions (a “Business Combination”),
other than a Business Combination in which all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially own, directly or
indirectly, immediately following such Business Combination, more than 50% of the then-outstanding
shares of common stock and the combined voting power of the then-outstanding securities entitled to
vote generally in the election of directors, respectively, of the resulting or acquiring
corporation in such Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, respectively.



          1.2 “Change in Control Date” means the first date during the Term (as defined in
Section 2) on which a Change in Control occurs.




          1.3 “Cause” means:




               (a) the Executive’s failure to perform his reasonable assigned duties to the standards
reasonably required by the Company (other than any such failure resulting from incapacity due to
physical or mental illness), which failure is not cured within 30 days after a written notice is
received by the Executive from the Company describing in reasonable detail the manner in which the
Board of Directors believes the Executive has not performed the Executive’s duties to the standards
reasonably required by the Company; or



               (b) the Executive’s willful engagement in illegal conduct or gross misconduct that is
materially injurious to the Company. For purposes of this Section 1.3(b), no act or failure to act
by the Executive shall be considered “willful” unless it is done intentionally and without
reasonable belief that the Executive’s action was in the best interests of the Company.



          1.4 “Good Reason” means the occurrence, without the Executive’s written consent, of
any of the following events or circumstances:







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               (a) a material diminution in the Executive’s base compensation; or



               (b) a material diminution in the Executive’s authority, duties, or responsibilities; or



               (c) a material change in the geographic location at which the Executive must perform his
duties; or



               (d) any other action or inaction of the Company which constitutes a material breach by the
Company of this Agreement.



     Any termination by the Executive for Good Reason shall be communicated by means of a written
notice delivered by the Executive to the Company within 90 days of the initial existence of the
occurrence or condition on which the Executive bases his claim for Good Reason. If the condition
is capable of being corrected, the Company shall have 30 days during which it may remedy the
condition (the “Cure Period”). Notwithstanding the occurrence of any such event or
circumstance, such occurrence shall not be deemed to constitute Good Reason if such event or
circumstance has been fully corrected within the Cure Period and the Executive has been reasonably
compensated for any losses or damages resulting therefrom. If the condition is not corrected, the
Executive must leave employment within one (1) year after the Company fails to cure the condition
giving rise to the Executive’s claim for Good Reason during the Cure Period.



          1.5 “Disability” means the Executive’s absence from the full-time performance of the
Executive’s duties with the Company for 180 consecutive calendar days as a result of incapacity due
to mental or physical illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the Executive’s legal
representative.




          1.6 “Severance Period” shall mean the period of 18 months immediately following the
Date of Termination (as defined in Section 3.2(a) below).




     2. Term of Agreement. This Agreement, and all rights and obligations of the parties
hereunder, shall take effect upon the Effective Date and shall expire upon the first to occur of
(a) the expiration of the Term (as defined below) if neither a termination of employment covered by
Section 4.1(a) below nor a Change in Control occurred during the Term, or (b) the fulfillment by
the Company of all of its obligations under Section 4 following a termination of the Executive’s
employment with the Company. “Term” shall mean the period commencing as of the Effective Date and
continuing in effect through March 31, 2011; provided, however, that commencing on April 1,
2011 and each April 1 thereafter (each hereinafter referred to as a “Renewal Date”), the Term shall
be automatically extended for one additional year so as to terminate one year from such Renewal
Date, unless at least 90 days prior to such Renewal Date, the Company shall have given the
Executive written notice that the Term will not be extended.



     3. Employment Status; Termination Following Change in Control.



          3.1 Not an Employment Contract. The Executive acknowledges that this Agreement does
not constitute a contract of employment or impose on the Company any obligation to retain the
Executive as an employee and that this Agreement does not prevent the






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Company or the Executive from terminating his employment at any time, before or after a Change
in Control.




          3.2 Termination of Employment.




               (a) Any termination of the Executive’s employment by the Company at any time during the Term
or at any time after the Change in Control Date, or by the Executive within 12 months following the
Change in Control Date (other than due to the death of the Executive) shall be communicated by a
written notice to the other party hereto (the “Notice of Termination”), given in accordance with
Section 6.2. Any Notice of Termination shall: (i) indicate (in the case of a termination by the
Company) whether such termination is for Cause and (in the case of a termination by the Executive
within 12 months following the Change in Control Date) whether such termination is for Good Reason,
(ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment for Cause or for Good Reason and
(iii) specify the Date of Termination (as defined below). The effective date of an employment
termination (the “Date of Termination”) shall be the close of business on the date specified in the
Notice of Termination (which date may not be less than 15 days or more than 120 days after the date
of delivery of such Notice of Termination), in the case of a termination other than one due to the
Executive’s death, or the date of the Executive’s death, as the case may be.



               (b) The failure by the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting any such fact or circumstance in enforcing the Executive’s or
the Company’s rights hereunder.



               (c) Any Notice of Termination for Cause given by the Company must be given within 90 days of
the occurrence of the event(s) or circumstance(s) that constitute(s) Cause.



               (d) Any Notice of Termination for Good Reason given by the Executive must be given within 90
days of the occurrence of the event(s) or circumstance(s) that constitute(s) Good Reason.



     4. Benefits to Executive.



          4.1 Termination Prior to Change in Control Date.




               (a) Termination Without Cause. If, prior to a Change in Control Date (including a
situation in which a Change in Control Date never occurs), the Company terminates the Executive’s
employment other than for Cause, Disability or death, then the Executive shall be entitled to the
following benefits, the distribution of which shall be subject to the provisions of Sections 4.4
and 4.7:



                    (i) the Company shall pay to the Executive, in a lump sum in cash on the Date of Termination,
the sum of the following amounts: (1) the Executive’s base salary through the Date of Termination,
(2) any compensation previously deferred by the



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Executive (together with any accrued interest or earnings thereon) and (3) any accrued
vacation pay, in each case to the extent not previously paid (the sum of the amounts described in
clauses (1) through (3) shall be hereinafter referred to as the “Accrued Obligations”);




                    (ii) during the Severance Period, the Company shall continue to pay to the Executive, in
accordance with the Company’s regular payroll practices, the Executive’s highest annual base salary
during the two-year period prior to the Date of Termination; and



                    (iii) during the Severance Period, the Company shall continue to provide to the Executive and
the Executive’s family those benefits which would have been provided to them if the Executive’s
employment had not been terminated, in accordance with the applicable Benefit Plans in effect on
the Date of Termination (to the extent such benefits can be provided to non-employees, or to the
extent such health insurance benefits cannot be provided to non-employees, then the cash equivalent
thereof, based on the cost thereof to the Company, which cash amount shall be paid proportionately
over the Severance Period, monthly in advance); provided, however: (1) that if the
Executive becomes reemployed with another employer and is eligible to receive a particular type of
benefits (e.g., health insurance benefits) from such employer on terms at least as favorable to the
Executive and his family as those being provided by the Company, then the Company shall no longer
be required to provide those particular benefits to the Executive and his family; and (2) to the
extent that such payments are taxable to the Executive and/or extend beyond the COBRA continuation
period, then such payments shall be made monthly in advance.



               (b) Other Terminations. If, prior to the Change in Control Date, the Executive’s
employment with the Company is terminated other than under the circumstances described in Section
4.1(a), then the Company shall (i) pay the Executive (or his estate, if applicable), in a lump sum
in cash on the Date of Termination, the Accrued Obligations and (ii) to the extent not previously
paid or provided, timely pay or provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive following the Executive’s
termination of employment under any plan, program, policy, practice, contract or agreement of the
Company and its subsidiaries (such other amounts and benefits shall be hereinafter referred to as
the “Other Benefits”), the distribution of which shall be subject to the provisions of Section 4.7.



          4.2 Termination Following Change in Control Date.




               (a) Termination within 12 Months Following Change in Control Date. If the Company
terminates the Executive’s employment other than for Cause, Disability or death within 12 months
following the Change in Control Date, or if the Executive terminates his employment for Good Reason
within 12 months following the Change in Control Date, then the Executive shall be entitled to the
following benefits, the distribution of which shall be subject to the provisions of Sections 4.4
and 4.7:



                    (i) the Company shall pay to the Executive, in a lump sum in cash on the Date of Termination,
(A) the Accrued Obligations and (B) the product of (x) the annual target bonus payable to the
Executive for the fiscal year in which the Date of Termination



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occurs and (y) a fraction, the numerator of which is the number of days in the then-current
fiscal year through the Date of Termination, and the denominator of which is 365, less any portion
of such bonus previously paid to the Executive;




                    (ii) during the Severance Period, the Company shall continue to pay to the Executive, in
accordance with the Company’s regular payroll practices, the Executive’s highest annual base salary
during the two-year period prior to the Date of Termination; and



                    (iii) during the Severance Period, the Company shall continue to provide to the Executive and
the Executive’s family those benefits which would have been provided to them if the Executive’s
employment had not been terminated, in accordance with the applicable Benefit Plans in effect on
the Date of Termination (to the extent such benefits can be provided to non-employees, or to the
extent such health benefits cannot be provided to non-employees, then the cash equivalent thereof,
based on the cost thereof to the Company, which cash amount shall be paid proportionately over the
Severance Period, monthly in advance); provided, however: (1) that if the Executive becomes
reemployed with another employer and is eligible to receive a particular type of benefits (e.g.,
health insurance benefits) from such employer on terms at least as favorable to the Executive and
his family as those being provided by the Company, then the Company shall no longer be required to
provide those particular benefits to the Executive and his family; and (2) to the extent that such
payments are taxable to the Executive and/or extend beyond the COBRA continuation period, then such
payments shall be made monthly in advance.



               (b) Termination More Than 12 Months Following Change in Control Date. If the Company
terminates the Executive’s employment other than for Cause, Disability or death more than 12 months
following the Change in Control Date, then the Executive shall be entitled to the following
benefits, the distribution of which shall be subject to the provisions of Sections 4.4 and 4.7:



                    (i) the Company shall pay to the Executive, in a lump sum in cash on the Date of Termination,
the Accrued Obligations;



                    (ii) during the Severance Period, the Company shall continue to pay to the Executive, in
accordance with the Company’s regular payroll practices, the Executive’s highest annual base salary
during the two-year period prior to the Date of Termination; and



                    (iii) during the Severance Period, the Company shall continue to provide to the Executive and
the Executive’s family those benefits which would have been provided to them if the Executive’s
employment had not been terminated, in accordance with the applicable Benefit Plans in effect on
the Date of Termination (to the extent such health benefits can be provided to non-employees, or to
the extent such benefits cannot be provided to non-employees, then the cash equivalent thereof,
based on the cost thereof to the Company, which cash amount shall be paid proportionately over the
Severance Period, monthly in advance); provided, however: (1) that if the Executive becomes
reemployed with another employer and is eligible to receive a particular type of benefits (e.g.,
health insurance benefits) from such



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employer on terms at least as favorable to the Executive and his family as those being
provided by the Company, then the Company shall no longer be required to provide those particular
benefits to the Executive and his family; and (2) to the extent that such payments are taxable to
the Executive and/or extend beyond the COBRA continuation period, then such payments shall be made
monthly in advance.




               (c) Other Terminations. If, following the Change in Control Date, the Executive’s
employment with the Company is terminated other than under the circumstances described in Section
4.2(a) or Section 4.2(b), then the Company shall (i) pay the Executive (or his estate, if
applicable), in a lump sum in cash on the Date of Termination, the Accrued Obligations and (ii) to
the extent not previously paid or provided, timely pay or provide to the Executive the Other
Benefits, the distribution of which shall be subject to the provisions of Section 4.7.



               (d) Expenses. Subject to Section 4.7, the Company agrees to reimburse the Executive
for all legal and other fees and expenses that the Executive reasonably incurs as a result of any
claim or dispute regarding the benefits due to the Executive pursuant to this Section 4.2 if the
Executive prevails in such claim or dispute.



          4.3 Section 280G Provisions.




               (a) Notwithstanding any other provision of this Agreement, in the event that the Company
undergoes a Change in Ownership or Control (as defined below), the Company shall not be obligated
to provide to the Executive a portion of any Contingent Compensation Payments (as defined below)
that the Executive would otherwise be entitled to receive to the extent necessary to eliminate
Excess Parachute Payments (as defined below) for the Executive, except as set forth in Section
4.3(b). For purposes of this Section 4.3, the Contingent Compensation Payments so eliminated shall
be referred to as the “Eliminated Payments” and the aggregate amount (determined in accordance with
Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Contingent
Compensation Payments so eliminated shall be referred to as the “Eliminated Amount.”



               (b) Notwithstanding the provisions of Section 4.3(a), no such reduction in Contingent
Compensation Payments shall be made if (i) the Eliminated Amount (computed without regard to this
sentence) exceeds (ii) 110% of the aggregate present value (determined in accordance with Treasury
Regulation Section 1.280G-1, Q/A-31, Q/A-32, Q/A-33 or any successor provisions) of the amount of
any additional taxes that would be incurred by the Executive if the Eliminated Payments (determined
without regard to this sentence) were paid to him (including, state and federal income taxes on the
Eliminated Payments, the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”, which term shall include applicable Treasury Regulations), payable with
respect to all of the Contingent Compensation Payments in excess of the Executive’s “base amount”
(as defined in Section 280G(b)(3) of the Code), and any withholding taxes). The override of such
reduction in Contingent Compensation Payments pursuant to this Section 4.3(b) shall be referred to
as a “Section 4.3(b) Override.” For purposes of this paragraph, if any federal, state or local
income taxes would be attributable to the receipt of any Eliminated Payment, the amount of such
taxes



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shall be computed by multiplying the amount of the Eliminated Payment by the maximum combined
federal, state and local income tax rate provided by law.




               (c) For purposes of this Section 4.3 the following terms shall have the following respective
meanings:



                    (i) “Change in Ownership or Control” shall mean a change in the ownership or effective control
of the Company or in the ownership of a substantial portion of the assets of the Company determined
in accordance with Section 280G(b)(2) of the Code.



                    (ii) “Contingent Compensation Payment” shall mean any payment (or benefit) in the nature of
compensation that is made or made available (under this Agreement or otherwise) to a “disqualified
individual” (as defined in Section 280G(c) of the Code) and that is contingent (within the meaning
of Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the Company.



                    (iii) “Excess Parachute Payment” shall mean a payment described in Section 280G(b)(1) of the
Code.



               (d) Any payments or other benefits otherwise due to the Executive following a Change in
Ownership or Control that could reasonably be characterized (as determined by the Company) as
Contingent Compensation Payments (the “Potential Payments”) shall not be made until the dates
provided for in this Section 4.3(d).



                    (i) In the event that the Company undergoes a Change in Ownership or Control, and the
Executive becomes entitled to receive Contingent Compensation Payments relating to such Change in
Ownership or Control, the Company shall (A) determine at such time or times as may be necessary to
comply with the requirements under Section 280G of the Code whether such Contingent Compensation
Payments constitute in whole or in part Excess Parachute Payments and (B) in the event the Company
determines that such Contingent Compensation Payments constitute in whole or in part Excess
Parachute Payments, notify the Executive (within 30 days after each such determination and with
reasonable detail regarding the basis for its determinations) of the following: (1) which Potential
Payments constitute Contingent Compensation Payments, (2) the Eliminated Amount and (3) whether the
Section 4.3(b) Override is applicable.



                    (ii) Within 30 days after delivery of such notice to the Executive, the Executive shall
deliver a response to the Company (the “Executive Response”) stating either (A) that he agrees with
the Company’s determination pursuant to the preceding sentence, or (B) that he disagrees with such
determination, in which case he shall set forth (1) which Potential Payments should be
characterized as Contingent Compensation Payments, (2) the Eliminated Amount, or (3) whether the
Section 4.3(b) Override is applicable.



                    (iii) If and to the extent that any Contingent Compensation Payments are required to be
treated as Eliminated Payments pursuant to this Section 4.3, then the Payments shall be reduced or
eliminated, as determined by the Company, in the following order: (A) any cash payments, (B) any
taxable benefits, (C) any nontaxable benefits, and (D) any vesting of equity awards, in each case
in reverse order beginning with payments or benefits that



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are to be paid the farthest in time from the date that triggers the applicability of the
excise tax, to the extent necessary to maximize the Eliminated Payments.




                    (iv) If the Executive fails to deliver an Executive Response on or before the required date,
the Company’s initial determinations shall be final, and the Company shall make the Potential
Payments (other than the Eliminated Payments) to the Executive within 10 business days following
the due date for delivery to the Company of the Executive Response (except for any Potential
Payments which are not due to be made until after such date, which Potential Payments shall be made
on the date on which they are due).



                    (v) If the Executive states in the Executive Response that he agrees with the Company’s
determinations, the Company’s initial determinations shall be final, the Contingent Compensation
Payments that shall be treated as Eliminated Payments shall be as set forth in the Executive
Response, and the Company shall make the Potential Payments (other than the Eliminated Payments) to
the Executive within 10 business days following delivery to the Company of the Executive Response
(except for any Potential Payments which are not due to be made until after such date, which
Potential Payments shall be made on the date on which they are due).



                    (vi) If the Executive states in the Executive Response that he disagrees with the Company’s
determinations, then, for a period of 60 days following delivery of the Executive Response, the
Executive and the Company shall use good faith efforts to resolve such dispute. If such dispute is
not resolved within such 60-day period, such dispute shall be settled exclusively by arbitration in
Boston, Massachusetts, in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The
Company shall, within 10 business days following delivery to the Company of the Executive Response,
make to the Executive those Potential Payments as to which there is no dispute between the Company
and the Executive regarding whether they should be made (except for any such Potential Payments
which are not due to be made until after such date, which Potential Payments shall be made on the
date on which they are due). The balance of the Potential Payments (other than Eliminated
Payments) shall be made within 10 business days following the resolution of such dispute.



                    (vii) Subject to the limitations contained in Sections 4.3(a) and (b) hereof, the amount of
any payments to be made to the Executive following the resolution of such dispute shall be
increased by amount of the accrued interest thereon computed at the prime rate announced from time
to time by Bank of America, compounded monthly from the date that such payments originally were
due.



                    (viii) In the event the Company is required to perform a redetermination in accordance with
Treas. Reg. 1.280G-1 Q/A-33(b) with respect to any Contingent Compensation Payments, this Section
4.3(d) shall apply with respect to such redetermination and the parties shall make such adjustments
as may be necessary as a result of such redetermination including, if appropriate, the payment by
the Company of Contingent Compensation Payments previously treated as Eliminated Payments if the
Section 4.3(b) Override applies as a result of such redetermination.



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               (e) The provisions of this Section 4.3 are intended to apply to any and all payments or
benefits available to the Executive under this Agreement or any other agreement or plan of the
Company under which the Executive receives Contingent Compensation Payments.



          4.4 Release. The obligation of the Company to make the payments and provide the
benefits to the Executive under Section 4.1(a), Section 4.2(a) or Section 4.2(b) is conditioned
upon the Executive signing a release of claims in the form attached hereto as Exhibit A, or
such other form as may be agreed to by the Company and the Executive (the “Employee Release”),
within 21 days (the “Release Period”) following the Date of Termination and upon the Executive not
revoking the Employee Release in a timely manner thereafter. Provided that the Employee Release
has become binding, the payments to the Executive under Section 4.1(a), Section 4.2(a) or Section
4.2(b) shall be payable or shall commence on the 30th day following the Date of
Termination. Notwithstanding the foregoing, the provisions of benefits under Section 4.1(a)(iii),
Section 4.2(a)(iii) or Section 4.2(b)(iii) shall continue during the Release Period and any
applicable revocation period.




          4.5 Exclusive Severance Benefits. The making of the payments and the provision of the
benefits by the Company to the Executive under Section 4.1(a), Section 4.2(a) or Section 4.2(b)
shall constitute the entire obligation of the Company to the Executive as a result of the
termination of his employment under the circumstances set forth in such Sections, and the Executive
shall not be entitled to additional payments or benefits under any other plan, program, policy,
practice, contract or agreement of the Company or its subsidiaries.




          4.6 Mitigation. The Executive shall not be required to mitigate the amount of any
payment or benefits provided for in Section 4.1(a), Section 4.2(a) or Section 4.2(b) by seeking
other employment or otherwise. Further, except as provided in Section 4.1(a)(iii), Section
4.2(a)(iii) or Section 4.2(b)(iii), the amount of any payment or benefits provided for in Section
4.1(a), Section 4.2(a) or Section 4.2(b) shall not be reduced by any compensation earned or
benefits received by the Executive as a result of employment by another employer.




          4.7 Section 409A. Subject to this Section 4.7, any severance payments or benefits
under this Agreement shall begin only upon the date of the Executive’s “separation from service”
(as determined below), which occurs on or after the date of the Executive’s termination. The
following rules shall apply with respect to distribution of the payments and benefits, if any, to
be provided to the Executive under Sections 4.1 or 4.2, as applicable:




               (a) It is intended that each installment of the payments and benefits provided under Sections
4.1 and 4.2 shall be treated as a separate “payment” for purposes of Section 409A of the U.S.
Internal Revenue Code of 1986, as amended, and the guidance issued thereunder (“Section 409A”).
Neither the Company nor the Executive shall have the right to accelerate or defer the delivery of
any such payments or benefits except to the extent specifically permitted or required by Section
409A;



               (b) If, as of the date of the “separation from service” of the Executive from the Company
(within the meaning of Section 4.7(d) below), the Executive is not a “specified employee” (within
the meaning of Section 409A), then each installment of the



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payments and benefits shall be made on the dates and terms set forth in Sections 4.1 or 4.2,
as applicable; and




          (c) If, as of the date of the separation from service of the Executive from the Company, the
Executive is a specified employee, then:




               (i) Each installment of the payments and benefits due under Sections 4.1 or 4.2 that, in
accordance with the dates and terms set forth herein, will in all circumstances, regardless of when
the separation from service occurs, be paid within the short-term deferral period (as defined under
Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation
Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A; and



               (ii) Each installment of the payments and benefits due under Sections 4.1 or 4.2 that is not
described in Section 4.7(c)(i), above, and that would, absent this subsection, be paid within the
six-month period following the separation from service of the Executive from the Company shall not
be paid until the date that is six months and one day after such separation from service (or, if
earlier, the Executive’s death), with any such installments that are required to be delayed being
accumulated during the six-month period and paid in a lump sum on the date that is six months and
one day following the Executive’s separation from service and any subsequent installments, if any,
being paid in accordance with the dates and terms set forth herein; provided,
however, that the preceding provisions of this sentence shall not apply to any installment
of payments and benefits if and to the maximum extent that that such installment is deemed to be
paid under a separation pay plan that does not provide for a deferral of compensation by reason of
the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an
involuntary separation from service). Any installments that qualify for the exception under
Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of the
Executive’s second taxable year following his taxable year in which the separation from service
occurs.



          (d) The determination of whether and when a separation from service from the Company has
occurred shall be made and in a manner consistent with and based on the presumptions set forth in,
Treasury Regulation Section 1.409A-1(h). Solely for purposes of this Section 4.7(d), “Company”
shall include all persons with whom the Company would be considered a single employer as determined
under Treasury Regulation Section 1.409A-1(h)(3).




          (e) All reimbursements and in-kind benefits provided under the Agreement shall be made or
provided in accordance with the requirements of Section 409A to the extent that such reimbursements
or in-kind benefits are subject to Section 409A, including, where applicable, the requirement that
(i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter
period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement
during a calendar year may not affect the expenses eligible for reimbursement in any other calendar
year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the
calendar year following the year in which the expense is incurred and (iv) the right to
reimbursement is not subject to set off or liquidation or exchange for any other benefit.







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               (f) The Company makes no representation or warranty and shall have no liability to the
Executive or any other person if any provisions of this Agreement are determined to constitute
deferred compensation subject to Section 409A and do not satisfy an exemption from, or the
conditions of, Section 409A.



     5. Settlement of Disputes; Arbitration. All claims by the Executive for benefits
under this Agreement shall be directed to the Board and shall be in writing. Any denial by the
Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing
and shall set forth the reasons for the denial and the provisions of this Agreement relied upon.
Any further dispute or controversy arising under or in connection with this Agreement shall be
settled exclusively by arbitration in Boston, Massachusetts, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award
in any court having jurisdiction.



     6. Miscellaneous.



          6.1 Successors. This Agreement shall be binding upon the Company and its successors
and assigns. This Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amount would still be payable to the
Executive or his family hereunder if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive’s estate.




          6.2 Notice. All notices, instructions and other communications given hereunder or in
connection herewith shall be in writing. Any such notice, instruction or communication shall be
sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii)
prepaid via a reputable nationwide overnight courier service, in each case addressed to the
Company, at 64 Jackson Road, Devens, Massachusetts 01434, and to the Executive at the Executive’s
address indicated on the signature page of this Agreement (or to such other address as either the
Company or the Executive may have furnished to the other in writing in accordance herewith). Any
such notice, instruction or communication shall be deemed to have been delivered five business days
after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one
business day after it is sent via a reputable nationwide overnight courier service. Either party
may give any notice, instruction or other communication hereunder using any other means, but no
such notice, instruction or other communication shall be deemed to have been duly delivered unless
and until it actually is received by the party for whom it is intended.




          6.3 Employment by Subsidiary. For purposes of this Agreement, the Executive’s
employment with the Company shall not be deemed to have terminated solely as a result of the
Executive continuing to be employed by a wholly-owned subsidiary of the Company.




          6.4 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,
which shall remain in full force and effect.







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          6.5 Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without
regard to conflicts of law principles.




          6.6 Waivers. No waiver by the Executive at any time of any breach of, or compliance
with, any provision of this Agreement to be performed by the Company shall be deemed a waiver of
that or any other provision at any subsequent time.




          6.7 Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original but both of which together shall constitute one and the same
instrument.




          6.8 Tax Withholding. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.




          6.9 Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in respect of the subject
matter contained herein; and any prior agreement of the parties hereto in respect of the subject
matter contained herein is hereby terminated and cancelled. Notwithstanding the foregoing, the
provisions of any stock option agreements between the Company and the Executive (including any
terms thereof relating to acceleration of vesting) shall not be superseded by or modified by the
terms of this Agreement.




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




          6.11 Executive’s Acknowledgements. The Executive acknowledges that he: (a) has read
this Agreement; (b) has been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of the Executive’s own choice or has voluntarily declined to seek such
counsel; (c) understands the terms and consequences of this Agreement; and (d) 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 for
the Executive.







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     IN WITNESS WHEREOF, the parties hereto have executed this Executive Severance Agreement as of
the day and year first set forth above.



	 	 	 	 	 
	 	AMERICAN SUPERCONDUCTOR CORPORATION



 	 
	 	Signature:  	/s/ Gregory J. Yurek
 	 
	 	 	Print name:             Gregory J. Yurek 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	EXECUTIVE



 	 
	 	Signature:  	/s/ John R. Collett
 	 
	 	 	Print name:             John R. Collett 	 
	 	 	 	 
	 	Address: 


c/o American Superconductor Corporation

64 Jackson Road

Devens, MA 01434-4020
	 
	 














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Exhibit A




RELEASE





     In consideration of the payment to me of the severance benefits pursuant to Section 4.1(a),
4.2(a) or 4.2(b) of my Executive Severance Agreement with American Superconductor Corporation (the
“Company”) dated May ___, 2010 (the “Agreement”), I hereby agree as follows:


1. I, on behalf of myself and my representatives, agents, estate, heirs, successors and assigns,
hereby irrevocably and unconditionally release, remise and discharge the Company, its officers,
directors, stockholders, affiliates (within the meaning of the Securities Act of 1933), attorneys,
agents and employees, and their respective predecessors, successors and assigns (collectively, the
“Company Releasees”), from any and all actions or causes of action, suits, claims, complaints,
liabilities, contracts, torts, debts, damages, controversies, rights and demands, whether existing
or contingent, known or unknown, arising up to and through the date of this Release out of my
employment, or the termination of my employment, with the Company, including, but not limited to,
all employment discrimination claims under the Age Discrimination in Employment Act, 29 U.S.C. §621
et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans With
Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Family and Medical Leave Act, 29 U.S.C. §
2601 et seq., the Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et
seq., the Massachusetts Fair Employment Practices Act, M.G.L. c.151B, § 1 et seq., the
Massachusetts Civil Rights Act, M.G.L. c.12, §§ 11H and 11I, the Massachusetts Equal Rights Act,
M.G.L. c.93, § 102 and M.G.L. c.214, § 1C, the Massachusetts Labor and Industries Act, M.G.L.
c.149, § 1 et seq., and the Massachusetts Privacy Act, M.G.L. c.214, § 1B, all as amended, and all
claims arising out of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. and the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., all as amended; and all
claims to any non-vested ownership interest in the Company, contractual or otherwise, including,
but not limited to, claims to stock or stock options. Notwithstanding the foregoing, (a) nothing
in this Release prevents me from filing, cooperating with, or participating in any proceeding
before the EEOC or a state Fair Employment Practices Agency (except that I acknowledge that I may
not recover any monetary benefits in connection with any such claim, charge or proceeding), (b)
this Release does not extend to any rights I have that arise after the date hereof under the
Agreement and (c) this Release does not extend to any rights I may have to indemnification as an
officer or director of the Company under the provisions of the Company’s By-laws or applicable law.



2. I have been advised by the Company to consult with counsel before signing this Release, and have
been given the opportunity to consult with my own counsel prior to signing this Release.



3. I have been given up to twenty-one (21) days from the receipt of this Release to consider
whether to execute this Release.



4. I have been advised that even after I sign this Release, I may revoke it within seven (7) days
of the date of my signing by delivering a signed revocation notice to the Secretary of the Company.
Delivery by ordinary mail will effectively revoke my assent to this Release if it is postmarked no
later than seven days after I sign this Release.







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5. This Release shall not become effective and in force until eight days after I sign, provided I
have not timely revoked my acceptance.



6. I acknowledge and reaffirm my obligations under the American Superconductor Corporation Employee
Nondisclosure and Developments Agreement.



7. No representation, promise or inducement has been offered or made to induce me to enter into
this Release, and I am competent to execute this Release and accept full responsibility therefor.




	 	 	 	 	 

	 

	 	 Name:

	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Signature:

	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date of execution:	 	 
	 

	 	 	 	 






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