|
Exhibit
10.37
AMERICAN SUPERCONDUCTOR
CORPORATION
Executive Severance
Agreement
THIS EXECUTIVE SEVERANCE
AGREEMENT by and between American Superconductor Corporation, a
Delaware corporation (the “Company”), and Timothy D.
Poor (the “Executive”) is made as of May 14, 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.
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 events or
circumstances set forth in clauses (a) through (e) below.
Notwithstanding the occurrence of any such event or circumstance,
such occurrence shall not be deemed to constitute Good Reason if,
prior to the Date of Termination specified in the Notice of
Termination (each as defined in Section 3.2(a)) given by the
Executive in respect thereof, such
2
event or circumstance has been fully
corrected and the Executive has been reasonably compensated for any
losses or damages resulting therefrom (provided that such right of
correction by the Company shall only apply to the first Notice of
Termination for Good Reason given by the Executive).
(a) the assignment to the
Executive of significant duties inconsistent in any material
respect with the Executive’s position (including status,
offices, titles and reporting requirements), authority or
responsibilities in effect immediately prior to the earliest to
occur of (i) the Change in Control Date, (ii) the date of
the execution by the Company of the initial written agreement or
instrument providing for the Change in Control or (iii) the
date of the adoption by the Board of Directors of a resolution
providing for the Change in Control (with the earliest to occur of
such dates referred to herein as the “Measurement
Date”), or any other action or omission by the Company which
results in a material diminution in such position, authority or
responsibilities; or
(b) a reduction in the
Executive’s annual base salary as in effect on the
Measurement Date, as the same may be increased thereafter from time
to time; or
(c) the failure by the
Company to (i) continue in effect any material compensation or
benefit plan or program (including without limitation any life
insurance, medical, health and accident or disability plan and any
vacation or automobile program or policy) (a “Benefit
Plan”) in which the Executive participates or which is
applicable to the Executive immediately prior to the Measurement
Date, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such
plan or program or (ii) continue the Executive’s
participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the
amount of benefits provided and the level of the Executive’s
participation relative to other participants, than the basis
existing immediately prior to the Measurement Date; or
(d) a change by the Company
in the location at which the Executive performs his principal
duties for the Company to a new location that is more than 30 miles
from the location at which the Executive performed his principal
duties for the Company immediately prior to the Measurement Date
(unless such new location is closer to the Executive’s
residence than the prior location); or
(e) any material breach by
the Company of this Agreement or any employment agreement with the
Executive.
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 12 months immediately
following the Date of Termination (as defined in
Section 3.2(a) below).
3
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.
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.
4
(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:
(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”);
(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, 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.
(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”).
5
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:
(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;
(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, 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.
(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:
(i) the Company shall pay to
the Executive, in a lump sum in cash on the Date of Termination,
the Accrue
| 
