**Exhibit 10.2**

 

**A123 SYSTEMS, INC.**

 

**Restricted Stock Unit Agreement**

 

1.                                       Grant of RSUs.

 

This Agreement evidences thegrant by A123 Systems, Inc., a Delaware corporation (the “Company”), on           ,20    ****(the “GrantDate”) to****[                  ](the “Participant”) of restricted stock units (“RSUs”) providing the Participant withthe right to receive [      ] shares of commonstock (“Common Stock”), $.001 par value, of the Company (the “Shares”).  The grant is subject to the terms andconditions set forth in this Agreement and in the Company’s 2009 StockIncentive Plan, as amended (the “Plan”).

 

2.                                       Vesting and Forfeiture.

 

(a)                                  While theParticipant remains an employee or officer of, or consultant or advisor to, theCompany or any parent or subsidiary of the Company as defined in Section 424(e) or(f) of the Code (an “Eligible Participant”), except as provided in Section 2(c) and2(d) below, the RSUs will vest in accordance with the following vestingschedule:  25% of the original number ofShares shall vest on the first anniversary of the Grant Date and an additional6.25% of the original number of Shares shall vest at the end of each successive****three-month****periodfollowing the first anniversary of the Grant Date until the fourth anniversaryof the Grant Date, at which time all remaining unvested Shares shall vest.  The number of Shares that vest on any dateshall be rounded down to the nearest whole number of Shares.

 

(b)                                 If the Participantceases to be an Eligible Participant for any reason or no reason, then theParticipant will immediately and automatically forfeit all rights to any of theRSUs that otherwise would vest after the date the Participant’s employment orother service providing relationship ends.

 

(c)                                  Immediately before aChange in Control (as defined below), 50% of the number of unvested RSUs shallvest and the remaining unvested RSUs will continue to vest in accordance withthe vesting schedule set forth in Section 2(a) (subject to Section 2(d)),except that the number of Shares vesting on each subsequent vesting date shallbe reduced by 50%.  A “Change in Control”means the sale of all or substantiallyall of the capital stock, assets or business of the Company, by merger,consolidation, sale of assets or otherwise (other than a transaction in whichall or substantially all of the individuals and entities who were beneficialowners of the Common Stock immediately prior to such transaction beneficiallyown, directly or indirectly, more than 50% of the outstanding securitiesentitled to vote generally in the election of directors of the resulting,surviving or acquiring corporation in such transaction).

 

(d)                                 If within 24 monthsfollowing the Change in Control, the Participant’s employment with the Companyis terminated (i) by the Company for any reason other than Cause, death ordisability or (ii) by the Participant for Good Reason, then all unvestedRSUs shall become vested in full on the date of such termination of employmentor other service providing relationship.

 

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(i)                                     “Cause” means (a) a goodfaith finding by a majority of the Board of Directors (the “Board”) (excludingthe vote of the Participant, if then a member of the Board) that (1) theParticipant has failed to perform his or her reasonably assigned materialduties for the Company; (2) the Participant has engaged in grossnegligence or willful misconduct, which has or is expected to have a materialdetrimental effect on the Company, (3) the Participant has engaged infraud, embezzlement or other material dishonesty, (4) the Participant hasengaged in any conduct which would constitute grounds for termination forviolation of the Company’s policies in effect at that time; or (5) theParticipant has breached any material provision of any nondisclosure, inventionassignment, non-competition or other similar agreement between the Participantand the Company and, if amenable to cure, has not cured such breach afterreasonable notice from the Company; or (b) theconviction by the Participant of,or the entry of a pleading of guilty or *nolocontendere* by the Participant to, any crime involving moral turpitude or any felony.

 

(ii)                                  “Good Reason” means theoccurrence, without the Participant’s written consent, of any of the events orcircumstances set forth in clauses (a) through (d) below.

 

(a)                                  the assignment to the Participant of duties that involve materially lessauthority and responsibility for the Participant and are materiallyinconsistent with the Participant’s position, authority or responsibilities ineffect immediately prior to the earliest to occur of (i) the Change inControl, (ii) the date of the execution by the Company of the initialwritten agreement or instrument providing for the Change in Control or(iii) the date of the adoption by the Board of a resolution providing forthe Change in Control;

 

(b)                                 the relocation of the Participant’s primary place of business to alocation that results in an increase in the Participant’s daily one way commuteof at least 30 miles;

 

(c)                                  the material reduction of the Participant’s annual base salary withoutthe Participant’s prior consent (other than in connection with, andsubstantially proportionate to, reductions by the Company of the annual basesalary of more than 75% of its employees); or

 

(d)                                 the failure of the Company to obtain the agreement from any successor tothe Company to assume and agree to perform the Participant’s RetentionAgreement, if required by such Retention Agreement.

 

Notwithstandingthe occurrence of any of the foregoing events or circumstances, such occurrenceshall not be deemed to constitute Good Reason unless (x) the Participantgives the Company a notice of termination no more than 90 days after theinitial existence of such event or circumstance and (y) such event orcircumstance has not been fully corrected and the Participant has not beenreasonably compensated for any losses or damages resulting therefrom within 30days of the Company’s receipt of the notice of termination.

 

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3.                                       Issuance of Shares.

 

Subject to the terms andconditions of this Agreement (including any withholding tax obligations),within 30 days after any date on which RSUs vests, the Company will issue tothe Participant or his or her estate, if applicable, one or more certificatesrepresenting the Shares underlying such vested RSUs; provided that if thedelivery of the Shares is subject to the execution of a release under Section 4.6of the Participant’s Retention Agreement, the Shares will be delivered within 5day of the effectiveness of the release. Until the RSUs vest, the Participant shall have no rights to any Sharesor any rights associated with such Shares, including without limitationdividend or voting rights.

 

4.                                       Transferability.

 

TheRSUs and Shares they represent may not be sold, assigned, transferred, pledged,hypothecated or otherwise disposed of (whether by operation of law orotherwise) (collectively, a “transfer”), except that this Agreement may be transferred by thelaws of descent and distribution or as otherwise permitted under the Plan.  The Participant may only transfer the Sharesthat have vested under the terms of this Agreement.

 

5.                                       Withholding Taxes.

 

TheParticipant acknowledges and agrees that the Company has the right to deductfrom payments of any kind otherwise due to the Participant any federal, state,local or other taxes of any kind required by law to be withheld with respect tothe vesting of the RSUs in the manner permitted under Section 10(e) ofthe Plan.

 

6.                                       Consequences of Reorganization Events.

 

(a)                                  In connection with aReorganization Event (as defined in Section 9(b)(1) of the Plan), theBoard may take any one or more of the actions described in Section 9(b)(2) ofthe Plan with respect to the RSUs granted under this Agreement and Section 9(b)(3) shallnot apply.

 

(b)                                 For purposes of Section 9(b)(2)(i),an RSU shall be considered assumed if, following consummation of theReorganization Event, such RSU confers the right to receive pursuant to theterms of such RSU, for each share of Common Stock subject to the RSU immediatelyprior to the consummation of the Reorganization Event, the consideration(whether cash, securities or other property) received as a result of theReorganization Event by holders of Common Stock for each share of Common Stockheld immediately prior to the consummation of the Reorganization Event (and ifholders were offered a choice of consideration, the type of considerationchosen by the holders of a majority of the outstanding shares of Common Stock);provided, however, that if the consideration received as a result of theReorganization Event is not solely common stock of the acquiring or succeedingcorporation (or an affiliate thereof), the Company may, with the consent of theacquiring or succeeding corporation, provide for the consideration to bereceived upon the settlement of the RSU to consist solely of such number ofshares of common stock of the acquiring or succeeding corporation (or anaffiliate thereof) that the Board determined to be equivalent in value (as ofthe date of such determination or another date specified by the Board) to theper share consideration received by holders of outstanding shares of CommonStock as a result of the Reorganization Event.

 

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7.                                       Acceleration/ Deferral.

 

(a)                                  Acceleration.  In no event may the Company deliver theShares to the Participant earlier than the date specified in Section 3 ofthis Agreement, unless specifically permitted or required by Section 409Aof the Internal Revenue Code of 1986, as amended (“Section 409A”).

 

(b)                                 Deferral.  In no event may the Company or theParticipant defer the delivery of the Shares beyond the date specified in Section 3of this Agreement, unless such deferral complies in all respects with Section 409A.

 

8.                                       Provisions of the Plan.

 

ThisAgreement is subject to the provisions of the Plan, a copy of which isfurnished to you with this Agreement. Any capitalized terms used in this Agreement but not defined in theAgreement shall have the same meaning as in the Plan.

 

9.                                       Section 409A.

 

(a)                                  This Agreement andthe RSUs granted hereunder are intended to comply with the short-term deferral rule setforth in Treasury Regulation Section 1.409A-1(b)(4) and accordinglybe exempt from Section 409A and shall be construed consistently therewith.

 

(b)                                 Each RSU grantedunder this Agreement shall be represented by a separate payment for one sharefor purposes of Section 409A.

 

(c)                                  Notwithstanding Section 9(a),if any portion of the RSUs granted under this Agreement is not exempt from Section 409A,any payment provided to the Participant in connection with his or hertermination of employment is determined to constitute “nonqualified deferredcompensation” (within the meaning of Section 409A), and the Participant isa “specified employee” (within the meaning of Section 409A), as determinedby the Company in accordance with its procedures, then any payment that wouldotherwise be made upon the date of the Participant’s “separation from service”(as determined under Section 409A) or within the first six monthsthereafter will not be made on the originally scheduled date(s) and willinstead be paid in a lump sum on the date that is six months and one dayafter the date of the separation from service, with the balance of the paymentthereafter in accordance with the original schedule.

 

(d)                                 The Company makes norepresentations or warranty and will have no liability to the Participant orany other person, other than with respect to payments made by the Company inviolation of the provisions of this Agreement, if any provisions of or paymentsunder this Agreement are determined to constitute deferred compensation subjectto Section 409A but not to satisfy the conditions of that section.

 

10.                                 Miscellaneous.

 

(a)                                  No Rights toContinued Service Relationship.  The Participant acknowledges and agrees thatthe vesting of the RSUs pursuant to Section 2 hereof is earned only bycontinuing service at the will of the Company (not through the act of beinghired or 

 

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acquiring shares hereunder).  TheParticipant further acknowledges and agrees that the transactions contemplatedhereunder and the vesting schedule set forth herein do not constitute anexpress or implied promise of continued engagement with the Company for thevesting period, for any period, or at all. The Participant acknowledges that for all purposes of the Plan hisservice to the Company will cease on his last day of active relationship withthe Company which shall not include any period of statutory or reasonablenotice or any period of deemed service or salary continuation.

 

(b)                                 Governing Law.  This Agreement shall be construed,interpreted and enforced in accordance with the internal laws of the State ofDelaware without regard to any applicable conflicts of laws.

 

(c)                                  Participant’sAcknowledgments.  TheParticipant acknowledges that he or she has read this Agreement, has receivedand read the Plan, and understands the terms and conditions of this Agreementand Plan.  The Participant furtheracknowledges that the law firm of WilmerHale is acting as counsel to theCompany in connection with this Agreement and not as counsel to theParticipant.

 

INWITNESS WHEREOF, the parties hereto have executed this Agreement.

 
| ** ** | **A123  Systems, Inc.** |
|------------|------------------------------|
|       |                         |
|       |                         |
|       | By:                          |   |
|       |                         |   |   |
|       |                         | Name: |   |
|       |                         | Title: |   |

 

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PARTICIPANT’S ACCEPTANCE

 

The Participanthereby accepts the foregoing grant and agree to the terms and conditionsthereof and acknowledge receipt of a copy of the Company’s 2009 Stock IncentivePlan, as amended.

 
|   | PARTICIPANT: |
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|   | Address:     |   |
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