STOCK APPRECIATION RIGHT AGREEMENT
STOCK
APPRECIATION RIGHT AGREEMENT (this “Agreement”) is granted effective as of May
20, 2008, by AMR Corporation, a Delaware corporation (the “Corporation”), to
[FIRST NAME LAST NAME], employee number [EMPLOYEE NUMBER], an employee of the
Corporation or one of its Subsidiaries or Affiliates (the
“Grantee”).
W I T N E
S S E T H:
WHEREAS,
the stockholders of the Corporation approved the AMR Corporation 1998 Long Term
Incentive Plan at the Corporation’s annual meeting held on May 20, 1998 (such
plan, as may be amended from time to time, to be referenced the “1998
Plan”);
WHEREAS,
the 1998 Plan provides for the grant of stock appreciation rights in respect of
shares of the Corporation’s Common Stock (as later defined) to those individuals
selected by the Compensation Committee of the Board (as later defined) or, in
lieu thereof, the Board of Directors of the Corporation (the “Board”);
and
WHEREAS,
the Board has determined that it is to the advantage and interest of the
Corporation to grant the stock appreciation right provided for herein to the
Grantee as an incentive for Grantee to remain in the employ of the Corporation
or one of its Subsidiaries or Affiliates, and to provide Grantee an incentive to
increase the value of the Corporation’s Common Stock, $1 par value (the “Common
Stock”).
NOW,
THEREFORE:
1. Stock
Appreciation Right Grant. The Corporation hereby grants to the
Grantee effective the date of this Agreement (the “Grant Date”) a stock
appreciation right, subject to the terms and conditions hereinafter set forth,
in respect of an aggregate of [NUMBER] shares of Common Stock. The
base price (“Base Price”) of each such stock appreciation right is $8.20 per
share (which is the Fair Market Value of the Common Stock on the date
hereof). The stock appreciation right granted hereby is exercisable
in approximately equal installments on and after the following dates and with
respect to the following number of shares of Common Stock:
|
Exercisable On and After
|
Aggregate Number of
Shares
|
|
First
Anniversary of Grant Date
|
20%
of total award
|
|
Second
Anniversary of Grant Date
|
40%
of total award
|
|
Third
Anniversary of Grant Date
|
60%
of total award
|
|
Fourth
Anniversary of Grant Date
|
80%
of total award
|
|
Fifth
Anniversary of Grant Date
|
100%
of total award
|
provided,
that in no event shall this stock appreciation right be exercisable in whole or
in part ten years from the Grant Date. The right to exercise this
stock appreciation right and to purchase the number of shares comprising each
such installment shall be cumulative, and once such right has become exercisable
it may be exercised in whole at any time and in part from time to time until the
date of termination of the Grantee’s rights hereunder.
2. Restriction
on Exercise. Notwithstanding any other provision hereof, this stock
appreciation right shall not be exercised if at such time such exercise or the
delivery of certificates representing shares of Common Stock purchased pursuant
hereto shall constitute a violation of any rule of the Corporation, any
provision of any applicable federal or state statute, rule or regulation, or any
rule or regulation of any securities exchange on which the Common Stock may be
listed.
3. Exercise. This
stock appreciation right may be exercised with respect to all or any part of the
shares of Common Stock then subject to such exercise in accordance with Section
1 pursuant to whatever procedures may be adopted from time to time by the
Corporation. Upon the exercise of this stock appreciation
right, in whole or in part, the Grantee shall be entitled to receive from the
Corporation a number of shares of Common Stock equal in value to the excess of
the Fair Market Value (on the date of exercise) of one share of Common Stock
over the Base Price, multiplied by the number of shares in respect of which the
stock appreciation right is being exercised. The number of shares to
be issued shall be calculated on the basis of the Fair Market Value of the
shares on the date of exercise. Notwithstanding the foregoing, the
Committee may elect, at any time and from time to time, in lieu of issuing all
or any portion of the shares of Common Stock otherwise issuable upon any
exercise of any portion of this stock appreciation right, to pay the Grantee an
amount in cash or other marketable property of a value equivalent to the
aggregate Fair Market Value on the date of exercise of the number of shares of
Common Stock that the Committee is electing to settle in cash or other
marketable property. Additionally, notwithstanding anything to the
contrary contained in this Agreement, (i) any obligation of the Corporation to
pay or distribute any shares under this Agreement is subject to and conditioned
upon the Corporation having sufficient stock in the 1998 Plan or another
shareholder-approved equity compensation plan to satisfy all payments or
distributions under this Agreement and the 1998 Plan, and (ii) any obligation of
the Corporation to pay or distribute cash or any other property under this
Agreement 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. The amount of such cash,
property, and/or shares of Common Stock shall be reduced by the aggregate amount
of federal, state and local income taxes and payroll taxes that are required to
be withheld in connection with the payment of such cash, property, and/or shares
of Common Stock.
4. Termination
of Stock Appreciation Right. This stock appreciation right shall
terminate and may no longer be exercised if (i) the Grantee ceases to be an
employee of the Corporation or one of its Subsidiaries or Affiliates; (ii) the
Grantee becomes an employee of a Subsidiary that is not wholly owned, directly
or indirectly, by the Corporation; or (iii) the Grantee takes a leave of absence
without reinstatement rights, unless otherwise agreed in writing between the
Corporation (or one of its Subsidiaries or Affiliates) and the Grantee; except
that
(a) If
the Grantee’s employment by the Corporation (or any Subsidiary or Affiliate)
terminates by reason of death, the vesting of the stock appreciation right will
be accelerated and the stock appreciation right will remain exercisable until
its expiration;
(b) If
the Grantee’s employment by the Corporation (or any Subsidiary or Affiliate)
terminates by reason of Disability, the stock appreciation right will continue
to vest in accordance with its terms and may be exercised until its expiration;
provided, however, that if the Grantee dies after such Disability the vesting of
the stock appreciation right will be accelerated and the stock appreciation
right will remain exercisable until its expiration;
(c) Subject
to Section 7(c), if the Grantee’s employment by the Corporation (or any
Subsidiary or Affiliate) terminates by reason of Normal or Early Retirement, the
stock appreciation right will continue to vest in accordance with its terms and
may be exercised until its expiration; provided, however, that if the Grantee
dies after Retirement the vesting of the stock appreciation right will be
accelerated and the stock appreciation right will remain exercisable until its
expiration;
(d) If
the Grantee’s employment by the Corporation (or any Subsidiary or Affiliate) is
involuntarily terminated by the Corporation or a Subsidiary or Affiliate (as the
case may be) without Cause, the stock appreciation right may thereafter be
exercised, to the extent it was exercisable at the time of termination, for a
period of three months from the date of such termination of employment or until
the stated term of such stock appreciation right, whichever period is shorter;
and
(e) In
the event of a Change in Control or a Potential Change in Control of the
Corporation, this stock appreciation right shall become exercisable in
accordance with the 1998 Plan, or its successor.
5. Adjustments
in Common Stock. 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 in the number of shares, class or classes of securities and the base
price per share applicable in respect to the stock appreciation rights subject
to this Agreement.
6. Non-Transferability
of Stock Appreciation Right. Unless the Board shall permit (on such
terms and conditions as it shall establish), a stock appreciation right may not
be transferred except by will or the laws of descent and distribution to the
extent provided herein. During the lifetime of the Grantee this stock
appreciation right may be exercised only by him or her (unless otherwise
determined by the Board).
7. Miscellaneous.
(a) This
stock appreciation right (i) shall be binding upon and inure to the benefit of
any successor of the Corporation, (ii) shall be governed by the laws of the
State of Texas, and any applicable laws of the United States, and (iii) may not
be amended without the written consent of both the Corporation and the
Grantee. Notwithstanding the foregoing, this Agreement may be amended
from time to time without the written consent of the Grantee pursuant to Section
10 below and as permitted by the 1998 Plan (or its successor). No
contract or right of employment shall be implied by this stock appreciation
right.
(b) If
this stock appreciation right is assumed or a new stock appreciation right is
substituted therefor in any corporate reorganization (including, but not limited
to, any transaction of the type referred to in Section 424(a) of the Internal
Revenue Code of 1986, as amended (the “Code”)), employment by such assuming or
substituting corporation or by a parent corporation or a subsidiary thereof
shall be considered for all purposes of this stock appreciation right to be
employment by the Corporation.
(c) In
the event the Grantee’s employment is terminated by reason of Early or Normal
Retirement and the Grantee subsequently is employed by a competitor of the
Corporation, the Corporation reserves the right, upon notice to the Grantee, to
declare the stock appreciation right forfeited and of no further
validity.
(d) In
consideration of the Grantee’s privilege to participate in the 1998 Plan and to
receive this stock appreciation right award, the Grantee 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.
(e) To
the extent the stock appreciation right award is forfeited, any and all rights
of the Grantee 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.
8. Securities
Law Requirements. Notwithstanding any provision in the Agreement to
the contrary, the Corporation shall not be required to issue shares upon the
exercise of this stock appreciation right during such period that the
Corporation reasonably anticipates that issuing the shares will violate federal
securities laws or other applicable law. The Corporation may require
the Grantee to furnish to the Corporation, prior to the issuance of any shares
in connection with the exercise of this stock appreciation right, an agreement,
in such form as the Corporation may from time to time deem appropriate, in which
the Grantee 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.
9. Stock
Appreciation Right Subject to 1998 Plan. This stock appreciation
right shall be subject to all the terms and provisions of the 1998 Plan (or its
successor) and the Grantee shall abide by and be bound by all rules, regulations
and determinations of the Board now or hereafter made in connection with the
administration of the 1998 Plan (or its successor). Capitalized terms
not otherwise defined herein shall have the meanings set forth for such terms in
the 1998 Plan (or its successor, as applicable).
10. 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 this stock appreciation right award is not intended to
constitute a deferral of compensation within the meaning of Treasury Regulation
1.409A-1(b) or successor guidance thereto. This Agreement shall be
interpreted in a manner consistent with that intent described
above. In addition to amendments permitted by Section 7(a) above,
amendments to this Agreement and/or the 1998 Plan (or its successor) may be made
by the Corporation, without the Grantee’s consent, in order to ensure compliance
with Section 409A of the Code and the regulations and other guidance issued
thereunder.
IN
WITNESS WHEREOF, this stock appreciation right agreement is entered into as of
the date first above written.
Grantee AMR
Corporation
--------------------------- ----------------------------
[Name] Xxxxxxx X.
Xxxxxxxx
Corporate
Secretary
|
Grant
of
|
||
|
Stock
Appreciation Rights
|
||
|
Number
of
|
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|
Stock
Appreciation
|
||
|
Rights
|
||
|
Officer
Name
|
Granted
|
|
|
X.X.
Xxxxx
|
286,000
|
|
|
X.X.
Xxxxxx
|
110,550
|
|
|
X.X.
Xxxxxx
|
110,550
|
|
|
X.X.
Xxxxxx
|
110,550
|
|
|
X.X.
Xxxxxxx
|
62,950
|
|
