2007/2009 PERFORMANCE SHARE AGREEMENT
This 2007/2009 Performance Share Agreement
("Agreement") is effective as of July 23, 2007, by and
between AMR Corporation, a Delaware corporation (the
"Corporation"), and [FIRST NAME LAST NAME], employee number
[EMPLOYEE NUMBER] (the "Employee" or the "Recipient"), an
officer or key employee of one of the Corporation's
Subsidiaries.
WHEREAS, pursuant to the 2007/2009 Performance Share
Plan for Officers and Key Employees (the "Plan"), as adopted
by the Board of Directors of the Corporation (the "Board"),
the Compensation Committee of the Board (the "Committee")
has determined to make an award to the Employee (subject to
the terms of the Plan and this Agreement), as an inducement
for the Employee to remain an employee of one of the
Corporation's Subsidiaries during the time frame of 2007 -
2009 and to retain and motivate such Employee during such
employment.
This Agreement sets forth the terms and conditions
attendant to the Award under the Plan.
1. Grant of Award. Subject to the terms and
conditions of this Agreement, the Plan and the AMR
Corporation 1998 Long Term Incentive Plan, as amended (the
"LTIP"), the Recipient is hereby granted an Award effective
as of July 23, 2007 (the "Grant Date"), in respect to
[NUMBER] of shares of the Corporation's Common Stock
("Common Stock"). The Award shall vest, if at all, in
accordance with Section 2 of this Agreement. On or about
the date the Award vests (if at all), the Recipient will
receive a payment from the Corporation of a combination of
cash and/or Common Stock. The Committee will determine the
amount of the Award to be paid in cash, if any (the "Cash
Award"), and the amount of the Award to be settled in shares
of Common Stock (the "Stock Distribution"). Any such Cash
Award will be paid on or about April 30, 2010 (such Cash
Award will be made pursuant to the Annual Incentive Plan).
The Stock Distribution will be paid on or about April 22,
2010 (such Stock Distribution will be made from shares
available for issuance under the LTIP and/or another
shareholder-approved equity compensation plan). The sum of
the Cash Award and the Stock Distribution will equal the
product of: (a) the Fair Market Value of the Common Stock on
April 21, 2010, and (b) the number of shares of Common Stock
comprising the Award.
2. Vesting and Distribution.
(a) The Award will vest, if at all, in accordance with
Schedule A, attached hereto and made a part of this
Agreement.
(b) In the event the Employee's employment with one of
the Corporation's Subsidiaries is terminated prior to the
end of the measurement period set forth in Schedule A (the
"Measurement Period") due to his or her death, Disability
(as defined in Section 409A(a)(2)(C) of the Internal Revenue
Code of 1986, as amended (the "Code")), Retirement (subject
to the second paragraph of Section 4) or termination not for
Cause (each an "Early Termination"), the Award will vest, if
at all, on a pro-rata basis and will be paid to the Employee
(or, in the event of the Employee's death, the Employee's
designated beneficiary for purposes of the Award, or in the
absence of an effective beneficiary designation, the
Employee's estate). The pro-rata basis will be a percentage
where: (i) the denominator of which is 36, and (ii) the
numerator of which is the number of months from January 1,
2007 through the month of Early Termination, inclusive. The
cash and/or Common Stock subject to this pro-rata Award will
be paid to the Recipient at the same time as Cash Awards and
Stock Distributions under the Plan are paid to then current
employees who have Awards under the Plan, subject to Section
2(f) of this Agreement. Notwithstanding the foregoing, in
no event will a payment be provided to the Employee unless
and until the Employee's Retirement or termination not for
Cause constitutes a "separation from service" for purposes
of Treasury Regulation 1.409A-1(h) or successor guidance
thereto.
(c) In the event the Recipient's employment with one
of the Corporation's Subsidiaries is terminated for Cause,
or if the Recipient terminates such employment with such
Subsidiary prior to his or her Retirement, each occurring
prior to April 21, 2010, the Award shall be forfeited in its
entirety.
(d) If, prior to April 21, 2010, the Recipient becomes an
employee of a Subsidiary that is not wholly-owned, directly
or indirectly, by the Corporation, or if the Recipient
begins a leave of absence without reinstatement rights, then
in each case the Award shall be forfeited in its entirety.
(e) In the event of a Change in Control of the Corporation
prior to the payment of the cash and/or Common Stock subject
to the Award, such payment will be made within 60 days of
the date of the Change in Control. In such event, the
vesting date will be the date of the Change in Control. The
term "Change in Control" is defined for purposes of this
Agreement in Section 7.
(f) Notwithstanding the third sentence of Section 2(b)
above, if the Employee is a "specified employee" pursuant to
Treasury Regulation 1.409A-1(i) or successor guidance
thereto, any payment on account of his or her Retirement or
termination not for Cause shall not be paid until the
earlier of: (i) the sixth month anniversary of the date of
separation from employment due to Retirement or termination
not for Cause or (ii) the date of the Employee's death.
(g) To the extent the Cash Award and/or Stock Distribution
subject to the Award is otherwise payable pursuant to this
Agreement and except as otherwise provided herein, such Cash
Award and/or Stock Distribution will be paid on the
applicable dates and events specified herein (each a
"Payment Date"); provided, however, in no event shall any
such payment be made later than the 15th day of the third
month of the calendar year immediately following the
calendar year in which the Payment Date occurs.
3. Transfer Restrictions. This Award is non-
transferable, other than by will or by the laws of descent
and distribution, and may not otherwise be assigned, pledged
or hypothecated and shall not be subject to execution,
attachment or similar process. Upon any attempt by the
Recipient (or the Recipient's successor in interest after
the Recipient's death) to effect any such disposition, or
upon the levy of any such process, the Award may immediately
become null and void and of no further validity, at the
discretion of the Committee.
4. Miscellaneous. This Agreement (a) shall be binding upon
and inure to the benefit of any successor of the
Corporation, (b) shall be governed by the laws of the State
of Texas and any applicable laws of the United States, and
(c) may not be amended without the written consent of both
the Corporation and the Employee. Notwithstanding the
foregoing, this Agreement may be amended from time to time
without the written consent of the Employee pursuant to
Section 8 below and as permitted by the Plan or the LTIP (or
its successor). No contract or right of employment shall be
implied by this Agreement.
In the event the Employee's employment is
terminated by reason of Early or Normal Retirement and the
Employee is subsequently employed by a competitor (as
determined in the Board's discretion) of the Corporation or
any of its Subsidiaries prior to the complete payment of the
cash and/or Common Stock subject to the Award, the
Corporation reserves the right, upon notice to the Employee,
to declare the Award forfeited and of no further validity.
In consideration of the Employee's privilege to
participate in the Plan and receive the Award under this
Agreement, the Employee agrees: (i) not to disclose any
trade secrets of, or other confidential or restricted
information of the Corporation or any of its Subsidiaries to
any unauthorized party; (ii) not to make any unauthorized
use of such trade secrets or confidential or restricted
information during or after his or her employment with any
Subsidiary of the Corporation; and (iii) not to solicit any
then current employees of any Subsidiary of the Corporation
to join the employee at his or her new place of employment
after such employment has terminated. The failure by the
employee to abide by the foregoing obligations shall result
in his or her award being forfeited in its entirety.
The Employee shall not have the right to defer any
payment of the Cash Award or the Stock Distribution. Except
as provided in this Agreement, the Committee and Corporation
shall not accelerate the payment of any Cash Award or the
Stock Distribution.
Any Cash Award will be net of applicable
withholding and social security taxes. The Employee will pay
to the Corporation timely any and all such taxes on account
of the Stock Distribution. The failure by the Employee to
pay timely such taxes will result in a withholding from any
and all payments from the Corporation or any Subsidiary to
the Employee in order to satisfy such taxes.
Notwithstanding anything in this Agreement or the
Plan to the contrary, the Committee may elect, at any time
and from time to time, in lieu of issuing all or any portion
of the Common Stock comprising the Stock Distribution, to
make substitutions for such Common Stock, all to the effect
that the employee will receive cash or other marketable
property of a value equivalent to what the Employee would
have received in a Stock Distribution. Additionally,
notwithstanding anything to the contrary contained in this
Agreement or the Plan, (i) any obligation of the Corporation
to pay or distribute any shares under this Agreement or the
Plan is subject to and conditioned upon the Corporation
having sufficient stock in the LTIP or another shareholder-
approved equity compensation plan to satisfy all payments or
distributions under the Plan and the LTIP, and (ii) any
obligation of the Corporation to pay or distribute cash or
any other property under this Agreement or the Plan is
subject to and conditioned upon the Corporation having the
right to do so without violating the terms of any covenant
or agreement of the Corporation or any of its Subsidiaries.
To the extent the Award is forfeited, any and all
rights of the Employee under this Agreement shall cease and
terminate with respect to such forfeited Award, or portion
thereof, without any further obligation on the part of the
Corporation.
5. [Intentionally Omitted]
6. Adjustments in Awards. In the event of a stock
dividend, stock split, merger, consolidation, re-
organization, re-capitalization or other change in the
corporate structure of the Corporation, appropriate
adjustments shall be made by the Board of Directors to the
Award.
7. Incorporation of the Provisions of the Plan and
LTIP. Capitalized terms not otherwise defined herein shall
have the meanings set forth for such terms in the Plan and
the LTIP (or its successor). For purposes of Section 2(e),
the term "Change in Control" will mean a "change in
ownership" or "change in effective control" or "change in
ownership of the assets" of the Corporation, as determined
pursuant to Treasury Regulation 1.409A-3(i)(5) or successor
guidance thereto.
8. Section 409A Compliance. This Agreement is
intended to avoid, and not otherwise be subject to, the
income inclusion requirements, interest and penalty taxes of
Section 409A of the Code and the regulations and other
guidance issued thereunder, and shall be interpreted in a
manner consistent with that intent. Notwithstanding the
foregoing, in the event there is a failure to comply with
Section 409A of the Code, the Board shall have the
discretion to accelerate the time of payment of a Stock
Distribution or Cash Award, but only to the extent of the
amount required to be included in income as a result of such
failure. In addition to amendments permitted by Section 4
above, amendments to this Agreement, the Plan and/or the
LTIP (or its successor) may be made by the Corporation,
without the Employee's consent, in order to ensure
compliance with Section 409A of the Code and the regulations
and other guidance issued thereunder.
9. Securities Law Requirements. Notwithstanding any
provision in this Agreement or the Plan to the contrary, the
Corporation shall not be required to make any Stock
Distribution pursuant to this Award during such period that
the Corporation reasonably anticipates that such Stock
Distribution will violate federal securities laws or other
applicable law. The Corporation may require the Recipient
to furnish to the Corporation, prior to the issuance of any
shares of Common Stock hereunder, an agreement, in such form
as the Corporation may from time to time deem appropriate,
in which the Recipient represents that the shares acquired
by him or her upon such exercise are being acquired for
investment and not with a view to the sale or distribution
thereof.
IN WITNESS HEREOF, this Performance Share
Agreement is entered into as of the date first above
written.
Employee AMR CORPORATION
_________________________ _____________________
Xxxxxxx X. Xxxxxxxx
Corporate Secretary
Schedule A
2007/2009 PERFORMANCE SHARE PLAN
FOR OFFICERS AND KEY EMPLOYEES
Purpose
The purpose of the 2007/2009 Performance Share Plan for
Officers and Key Employees, as amended (the "Plan"), is to
provide greater incentive to officers and key employees of
the subsidiaries and affiliates of AMR Corporation ("AMR" or
the "Corporation") to achieve the highest level of
individual performance and to meet or exceed specified goals
during the time frame 2007 - 2009, which will contribute to
the success of the Corporation.
Definitions
For purposes of the Plan, the following definitions will
control:
"Affiliate" is defined as a subsidiary of AMR or any entity
that is designated by the Committee as a participating
employer under the Plan, provided that AMR directly or
indirectly owns at least 20% of the combined voting power of
all classes of stock of such entity.
"Board" is defined as the Board of Directors of the
Corporation.
"Committee" is defined as the Compensation Committee, or its
successor, of the Board.
"Comparator Group" is defined as the following seven U.S.
based carriers including, Alaska Air Group, Inc., AMR
Corporation, Continental Airlines, Inc., JetBlue Airways
Corporation, Southwest Airlines Co., US Airways Group, Inc.
and UAL Corporation.
"Corporate Objectives" is defined as being the objectives
established by the Committee at the beginning of each fiscal
year during the Measurement Period.
"Daily Closing Stock Price" is defined as the stock price at
the close of trading (4:00 PM EST) of the National Exchange
on which the stock is traded.
"Measurement Period" is defined as the three-year period
beginning January 1, 2007 and ending December 31, 2009.
"National Exchange" is defined as the New York Stock
Exchange (NYSE), the National Association of Securities
Dealers Automated Quotations (NASDAQ), or the American Stock
Exchange (AMEX).
"Total Shareholder Return" or "TSR" is defined as the rate
of return reflecting stock price appreciation plus
reinvestment of dividends over the Measurement Period. The
average Daily Closing Stock Price (adjusted for splits and
dividends) for the three months prior to the beginning and
ending points of the Measurement Period will be used to
smooth out market fluctuations.
Accumulation of Shares
Any distribution under the Plan will be determined by (i)
the Corporation's TSR rank within the Comparator Group
and/or (ii) the Corporation's attainment of the Corporate
Objectives during each year of the Measurement Period and
(iii) the terms and conditions of the award agreement (the
"Agreement") between the Corporation and the employee. The
distribution percentage of shares pursuant to the TSR metric
and based on rank is specified below. In the event that a
carrier (or carriers) in the Comparator Group ceases to
trade on a National Exchange at any point in the Measurement
Period, the following distribution percentage of shares
originally awarded, based on rank and the number of
remaining carriers within the Comparator Group, will be used
accordingly:
Percent of Original Award (Based on Rank)
Number of
Carriers Rank
in
Comparator
Group
7 6 5 4 3 2 1
7 0% 25% 50% 75% 100% 135% 175%
6 - 0% 50% 75% 100% 135% 175%
5 - - 50% 75% 100% 135% 175%
4 - - - 75% 100% 135% 175%
3 - - - - 100% 135% 175%
At the end of each fiscal year during the Measurement
Period, the Committee will determine whether the Corporate
Objectives have been achieved. At the end of the
Measurement Period the Committee will determine the
distribution percentage of an award based upon the TSR
metric and, with respect to senior officer awards, the
Corporate Objectives. The size of the award that may vest
will range from 0% to 175% of the original award.
Administration
The Committee shall have authority to administer and
interpret the Plan and any Agreements thereunder, establish,
amend and rescind administrative rules, approve eligible
participants, and take any other action necessary for the
proper and efficient operation of the Plan and any
Agreements thereunder. The TSR metric will be determined
based on an audit of AMR's TSR rank by the General Auditor
of American Airlines, Inc. A summary of awards under the
Plan shall be provided to the Board at its first regular
meeting following determination of any such awards. The
awards will be paid on or about April 21, 2010, or such date
in 2010 that the award is approved for distribution by the
Committee, but in no event later than March 15, 2011.
The distribution of any shares under this Plan and any
Agreements thereunder is subject to the Corporation having
sufficient shares of stock in a stock plan to make such a
distribution. In the event the Corporation does not have
sufficient shares of stock in such a stock plan for the
distribution contemplated by this Plan, the Committee will
have the authority and discretion to make substitutions for
such shares, all to the effect that the employee will
receive cash or other marketable property of a value
equivalent to what the employee would have received in a
stock distribution. Notwithstanding anything to the
contrary contained in this Plan or any Agreement hereunder,
(i) any obligation of the Corporation to pay or distribute
any shares under this Plan and any Agreement hereunder is
subject to and conditioned upon the Corporation having
sufficient stock in the Corporation's 1998 Long Term
Incentive Plan, as amended (the "LTIP") or another
shareholder-approved equity compensation plan to satisfy all
payments or distributions contemplated by the LTIP, and (ii)
any obligation of the Corporation to pay or distribute cash
or any other property under this Plan or any Agreements
hereunder is subject to and conditioned upon the Corporation
having the right to do so without violating the terms of any
covenant or agreement of the Corporation or any of its
Subsidiaries.
Corporate Objectives will be used as a metric for
determining the distribution of shares only for senior
officers of the Corporation (or a Subsidiary thereof) unless
the Committee determines otherwise.
General
Neither this Plan nor any action taken hereunder shall be
construed as giving any employee or participant the right to
be retained in the employ of the Corporation or any
Subsidiary of the Corporation or to receive any proprietary
interest in the Corporation.
Nothing in the Plan shall be deemed to give any employee any
right, contractually or otherwise, to participate in the
Plan or in any benefits hereunder, other than the right to
receive an award as may have been expressly awarded by the
Committee subject to the terms and conditions of the
Agreement between the Corporation and the employee and the
Plan. Until an employee receives payment of cash and/or
shares subject to his or her award, title to and beneficial
ownership of all benefits described in the Plan and any
Agreement thereunder shall at all times remain with the
Corporation.
In the event of any act of God, war, natural disaster,
aircraft grounding, revocation of operating certificate,
terrorism, strike, lockout, labor dispute, work stoppage,
fire, epidemic or quarantine restriction, act of government,
critical materials shortage, or any other act beyond the
control of the Corporation, whether similar or dissimilar
(each a "Force Majeure Event"), which Force Majeure Event
affects the Corporation or its Subsidiaries or its
Affiliates, the Committee, in its sole discretion, may (i)
terminate or (ii) suspend, delay, defer (for such period of
time as the Committee may deem necessary), or substitute any
awards due currently or in the future under the Plan,
including, but not limited to, any awards that have accrued
to the benefit of participants but have not yet been paid,
in any case to the extent permitted under Treasury
Regulation 1.409A-3(d) or successor guidance thereto.
In consideration of the employee's privilege to participate
in the Plan, the employee agrees: (i) not to disclose any
trade secrets of, or other confidential or restricted
information of the Corporation or any of its Subsidiaries to
any unauthorized party; (ii) not to make any unauthorized
use of such trade secrets or confidential or restricted
information during or after his or her employment with any
Subsidiary of the Corporation; and (iii) not to solicit any
then current employees of any Subsidiary of the Corporation
to join the employee at his or her new place of employment
after such employment has terminated. The failure by the
employee to abide by the foregoing obligations shall result
in his or her award being forfeited in its entirety.
The Committee may amend, suspend, or terminate the Plan at
any time.
Grant of Performance
Shares
July 23, 2007
# of
Performance
Shares
Officer Name Granted
X. X. Xxxxx 95,000
X. X. Xxxxxx 52,000
X. X. Xxxxxx 52,000
X. X. Xxxxxxx 29,600
X. X. Xxxxxx 29,600
