EXHIBIT 99.5
2004 - 2006 PERFORMANCE SHARE AGREEMENT
AS AMENDED AND RESTATED AS OF MARCH 29, 2006
This performance share agreement ("Agreement") is amended and
restated as of March 29, 2006, by and between AMR Corporation, a
Delaware corporation (the "Corporation"), and an officer or key
employee of one of the Corporation's Subsidiaries (the "Employee"
or the "Recipient") as identified in the e-mail or mail
notification sent to the Employee on April __, 2006 (the
"Notification").
WHEREAS, pursuant to the 2004 - 2006 Performance Share Plan
for Officers and Key Employees, as amended and restated as of
March 29, 2006 (the "Plan") and 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 (the "Award", as set forth in the Notification) 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 2004 - 2006
and to retain and motivate such Employee during his/her
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 Recipient is hereby granted an Award as of the
"Grant Date" set forth in the Notification. The Award shall vest,
if at all, in accordance with Section 2 of this Agreement. On the
date the Award vests (if at all), Recipient will receive a
combination of cash and the Corporation's Common Stock. The
Committee will determine the amount of the Award to be paid in
cash (the "Cash Award") and the amount of the Award to be settled
in shares of the Corporation's Common Stock (the "Stock
Distribution"). The Cash Award will be paid on April 30, 2006
(such Cash Award will be made pursuant to the Annual Incentive
Plan). The Stock Distribution will occur on April 19, 2007 (such
Stock Distribution will be made from and pursuant to the 1998 Long
Term Incentive Plan, as amended (the "LTIP")). 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 18, 2007, and (b)
the number of shares of Common Stock comprising the Award.
2. Vesting.
(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 Recipient's employment with one of the
Corporation's Subsidiaries is terminated prior to the end of the
three year measurement period set forth in Schedule A (the
"Measurement Period") due to the Recipient's death, Disability (as
defined in section 409A(a)(2)(C) of the Internal Revenue Code of
1986, as amended, (the "Code")), Retirement (subject to 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
the denominator is 36 and the numerator is the number of months
from January 1, 2004 through the month of Early Termination,
inclusive. This pro-rata basis will be paid to the Recipient at
the same time as Cash Awards and Stock Distributions are made to
then current employees who have Awards under the Plan, subject to
Section 2(f) of this Agreement.
(c) In the event Recipient's employment with one of the
Corporation's Subsidiaries is terminated for Cause, or if the
Recipient terminates his/her employment with such Subsidiary, each
occurring prior to April 19, 2007, the Award shall be forfeited in
its entirety.
(d) If prior to April 19, 2007, 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 distribution of the Award, the Award will be paid
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 provisions of Section 2(b), if the
Employee is a person subject to section 409A(a)(2)(B)(i) of the
Code, any payment on account of Retirement or termination not for
Cause of the Employee shall be delayed until the sixth month
anniversary of the date of separation from employment due to
Retirement or termination not for Cause.
3. Transfer Restrictions. This Award is non-transferable
otherwise 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, 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
Recipient. 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 of the Corporation, the
Corporation serves 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, the Employee agrees (i) not to disclose
any trade secrets of, or other confidential/restricted information
of, American Airlines, Inc. ("American") or its Affiliates to any
unauthorized party and (ii) not to make any unauthorized use of
such trade secrets or confidential or restricted information
during his or her employment with American or its Affiliates or
after such employment is terminated, and (iii) not to solicit any
then current employees of American or any other Subsidiaries of
the Corporation to join the Employee at his or her new place of
employment after his or her employment with American or its
Affiliates is terminated. The failure by the Employee to abide by
the foregoing obligations shall result in the Award being
forfeited in its entirety.
The Employee shall not have the right to defer any of
the Cash Payment or the Stock Distribution. Except as provided in
this Agreement, the Committee and Corporation shall not accelerate
the Cash Payment 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.
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 may be made by the Board of
Directors to the Award.
7. Incorporation of LTIP Provisions. Capitalized terms not
otherwise defined herein (inclusive of Schedule A) shall have the
meanings set forth for such terms in the LTIP. 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 Internal Revenue Service Notice 2005-1 (or successor
guidance thereto under section 409A of the Code).
8. American Jobs Creation Act. Amendments to this
Agreement may be made by the Corporation, without the Employee's
consent, in order to ensure compliance with the American Jobs
Creation Act of 2004.
9. Prior 2004/2006 Performance Unit Agreement
In consideration of this amended and restated Agreement, the
Employee irrevocably agrees that any prior award granted to the
Employee under the 2004/2006 Performance Unit Plan, as hereby
amended and restated, is hereby forfeited in its entirety and will
hereafter be of no further effect and such prior award is replaced
in its entirety with the Award granted under this Agreement.
IN WITNESS HEREOF, the Recipient and the Corporation
have executed this Performance Share Agreement as of the day,
month and year set forth above.
RECIPIENT AMR CORPORATION
_____________________________ _____________________
Xxxxxxx X. XxxXxxx
Corporate Secretary
Xxxxxx Xxxxx - 236,250
Xxxxxx Xxxxxx - 120,750
Xxxxxx Xxxxxx - 120,750
Xxxx Xxxxxxx - 89,250
Xxxxxxx XxxXxxx - 26,250
2004 - 2006 PERFORMANCE SHARE PLAN
FOR OFFICERS AND KEY EMPLOYEES, AS AMENDED AND RESTATED
AS OF MARCH 29, 2006
Purpose
The purpose of the 2004 - 2006 AMR Corporation Performance Share
Plan ("Plan") for Officers and Key Employees 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 2004 to 2006 which
will contribute to the success of the Corporation.
The Plan is adopted under the 1998 Long Term Incentive Plan (the
"LTIP") as amended.
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.
"Committee" is defined as the Compensation Committee, or its
successor, of the AMR Board of Directors (the "Board").
"Comparator Group" is defined as the seven U.S. based carriers
including AMR Corporation, Continental Airlines, Inc., Delta Air
Lines, Inc., JetBlue Airways, Northwest Airlines Corp., Southwest
Airlines Co., and US Airways Group, Inc.
"Corporate Objectives" is defined as being the objectives
established by the Committee at the beginning of each fiscal year
during the Measurement Period.
"Measurement Period" is defined as the three year period beginning
January 1, 2004, and ending December 31, 2006.
"Total Shareholder Return (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.
"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.
"National Exchange" is defined as one of the New York Stock
Exchange (NYSE), the National Association of Stock Dealers and
Quotes (NASDAQ), or the American Stock Exchange (AMEX).
Accumulation of Award
Any distribution under the Plan will be determined by (i) the
Corporation's TSR rank within the Comparator Group, (ii) (for
senior officers of American Airlines, Inc. "American") the
Corporation's attainment of the Corporate Objectives and (iii) the
terms and conditions of the award agreement between the
Corporation and the employee. The distribution percentage of a
target award pursuant to the TSR metric and based on rank, is
specified below:
Granted Target Award - Percent of Target Based on Rank
Rank 7 6 5 4 3 2 1
Payout % 0% 25% 50% 75% 100% 135% 175%
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 a
target award, based on rank and the number of remaining
comparators, will be used accordingly.
6 Comparators
Granted Target Award - Percent of Target Based on Rank
Rank 6 5 4 3 2 1
Payout % 0% 50% 75% 100% 135% 175%
5 Comparators
Granted Target Award - Percent of Target Based on Rank
Rank 5 4 3 2 1
Payout % 50% 75% 100% 135% 175%
4 Comparators
Granted Target Award - Percent of Target Based on Rank
Rank 4 3 2 1
Payout % 75% 100% 135% 175%
3 Comparators
Granted Target Award - Percent of Target Based on Rank
Rank 3 2 1
Payout % 50% 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 of an Award based upon the TSR
metric and, with respect to senior officer awards, the Corporate
Objectives.
Administration
The Committee shall have authority to administer and interpret the
Plan, establish administrative rules, approve eligible
participants, and take any other action necessary for the proper
and efficient operation of the Plan. The distribution percentage
of a target award, if any, will be determined based on an audit of
AMR's TSR rank by the General Auditor of American. A summary of
awards under the Plan shall be provided to the Board at the first
regular meeting following determination of the awards. Awards, if
any, will be distributed in cash and stock. The Committee will
determine the precise allocation between cash and stock on April
18, 2007. The cash payment will be made on April 30, 2007, and any
such payment will be based upon the Fair Market Value of the
Corporation's Common Stock on April 18, 2007, or such date the
award is approved for payment by the Committee. Stock to be
distributed under this Plan will be distributed on April 19, 2007,
or on the business day that immediately follows the date on which
the Committee approves the distribution of an award.
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 American or an Affiliate.
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 award agreement between the
Corporation and the employee.
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 Proposed Treasury Regulation
1.409A-3(d) and/or 1.409A-3(e), 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/restricted information of, American or
its Affiliates to any unauthorized party and, (ii) not to make any
unauthorized use of such trade secrets or confidential or
restricted information during his or her employment with American
or its Affiliates or after such employment is terminated, and
(iii) not to solicit any then current employees of American or any
other Subsidiaries of the Corporation to join the employee at his
or her new place of employment after his or her employment with
American or its Affiliates is terminated. The failure by the
employee to abide by the foregoing obligations shall result in the
award being forfeited in its entirety.
The Committee may amend, suspend, or terminate the Plan at any
time.
