Exhibit 10.1
AMERICAN SUPERCONDUCTOR
CORPORATION
Amended and Restated Executive
Severance Agreement
THIS AMENDED AND RESTATED
EXECUTIVE SEVERANCE AGREEMENT by and between American
Superconductor Corporation, a Delaware corporation (the
“Company”), and Gregory J. Yurek (the
“Executive”) is made as of December 23, 2008 (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.
WHEREAS, the Company and the
Executive originally entered into this Executive Severance
Agreement on October 14, 2004, amended and restated it on
January 24, 2008 to reflect certain developments in the tax
law, and now desire to amend and restate it further to reflect
certain developments in the tax law.
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
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(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.
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1.4 “ Good Reason
” means the occurrence, without the Executive’s written
consent, of any of the following events or
circumstances:
(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 36 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 four years 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.
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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 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 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”);
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(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 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;
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(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
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cash amount shall be paid proportionately over
the Severance Period, monthly in advance); provided ,
however: (1)&nbs
