Exhibit 10.3
AMERICAN SUPERCONDUCTOR
CORPORATION
INCENTIVE STOCK OPTION
AGREEMENT
1. Grant of Option . American
Superconductor Corporation, a Delaware corporation (the
“Company”), hereby grants on this
day
of
,
to
(the “Optionee”), an option, pursuant to the
Company’s 1996 Stock Incentive Plan (the “Plan”),
to purchase an aggregate of
shares
of Common Stock (“Common Stock”) of the Company at a
price of
$
per share, purchasable as set forth in and subject to the terms and
conditions of this option and the Plan. Except where the context
otherwise requires, the term “Company” shall include
the parent and all present and future subsidiaries of the Company
as defined in Sections 424(e) and 424(f) of the Internal Revenue
Code of 1986, as amended or replaced from time to time (the
“Code”).
2. Incentive Stock Option .
This option is intended to qualify as an incentive stock option
(“Incentive Stock Option”) within the meaning of
Section 422 of the Code.
3. Exercise of Option and
Provisions for Termination .
(a) Vesting Schedule . Except
as otherwise provided in this Agreement, this option may be
exercised prior to the tenth anniversary of the date of grant
(hereinafter the “Expiration Date”) as to not more than
the number of shares set forth in the table below during the
respective periods set forth in the table below.
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Percentage of Shares as to which
Option is Exercisable
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Less than one
year from (fill in option date here) (the “Vesting
Date”)
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At least one
year but less than two years from the Vesting Date
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At least two
years but less than three years from the Vesting Date
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At least three
years but less than four years from the Vesting Date
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At least four
years but less than five years from the Vesting Date
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At least five
years from the Vesting Date
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b) Exercise Procedure .
Subject to the conditions set forth in this Agreement, this option
shall be exercised by the Optionee’s delivery of written
notice of exercise to the Treasurer of the Company, specifying the
number of shares to be purchased and the purchase price to be paid
therefor and accompanied by payment in full in accordance with
Section 4. Such exercise shall be effective upon receipt by
the Treasurer of the Company of such written notice together with
the required payment. The Optionee may purchase less than the
number of shares covered hereby, provided that no partial exercise
of this option may be for any fractional share or for fewer than
ten whole shares. An example of an option exercise notice is
attached to this Agreement as Exhibit A.
(c) Continuous Employment
Required . Except as otherwise provided in this Section 3,
this option may not be exercised unless the Optionee, at the time
he or she exercises this option, is, and has been at all times
since the date of grant of this option, an employee of the Company.
For all purposes of this option, (i) “employment”
shall be defined in accordance with the provisions of
Section 1.421-7(h) of the Income Tax Regulations or any
successor regulations, and (ii) if this option shall be
assumed or a new option substituted therefor in a transaction to
which Section 424(a) of the Code applies, employment by such
assuming or substituting corporation (hereinafter called the
“Successor Corporation”) shall be considered for all
purposes of this option to be employment by the Company.
(d) Exercise Period Upon
Termination of Employment . If the Optionee ceases to be
employed by the Company for any reason, then, except as provided in
paragraphs (e) and (f) below, the right to exercise this
option shall terminate 60 days after such cessation (but in no
event after the Expiration Date), provided that this option shall
be exercisable only to the extent that the Optionee was entitled to
exercise this option on the date of such cessation. The
Company’s obligation to deliver shares upon the exercise of
this option shall be subject to the satisfaction of all applicable
federal, state and local income and employment tax withholding
requirements, arising by reason of this option being treated as a
non-statutory option or otherwise. Notwithstanding the foregoing,
if the Optionee, prior to the Expiration Date, materially violates
the non-competition or confidentiality provisions of any employment
contract, confidentiality and nondisclosure agreement or other
agreement between the Optionee and the Company, the right to
exercise this option shall terminate immediately upon written
notice to the Optionee from the Company describing such
violation.
(e) Exercise Period Upon Death or
Disability . If the Optionee dies or becomes disabled (within
the meaning of Section 22(e)(3) of the Code) prior to the
Expiration Date while he or she is an employee of the Company, this
option shall be exercisable, within the period of 180 days
following the date of death or disability of the Optionee (but in
no event after the Expiration Date), by the Optionee or by the
person to whom this option is transferred by will or the laws of
descent and distribution, provided that this option shall be
exercisable only to the extent that this option was exercisable by
the Optionee on the date of his or her death or disability. Except
as otherwise indicated by the context, the term
“Optionee”, as used in this option, shall be deemed to
include the estate of the Optionee or any person who acquires the
right to exercise this option by bequest or inheritance or
otherwise by reason of the death of the Optionee.
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(f) Discharge for Cause . If
the Optionee, prior to the Expiration Date, ceases his or her
relationship with the Company because such relationship is
terminated by the Company for “cause” (as defined
below), the right to exercise this option shall terminate
immediately upon such cessation. “Cause” shall mean
willful misconduct by the Optionee in connection with the
Optionee’s employment or willful failure to perform his or
her employment responsibilities in the best interests of the
Company (including, without limitation, breach by the Optionee of
any provision of any employment, nondisclosure, non-competition or
other similar agreement between the Optionee and the Company), as
determined by the Company, which determination shall be conclusive.
If the Optionee resigns and within 30 days thereafter the Company
determines that the Optionee’s conduct prior to his or her
resignation warranted a discharge for “cause,” such
resignation shall be deemed to be discharge for
“cause.”
4. Payment of Purchase Price
.
(a) Method of Payment .
Payment of the purchase price for shares purchased upon exercise of
this option shall be made (i) by delivery to the Company of
cash or a check to the order of the Company in an amount equal to
the purchase price of such shares, and/or (ii) by any other
means (such as delivery to the Company of shares of Common Stock of
the Company then owned by the Optionee having
