DEFERRED SHARE AWARD AGREEMENT
This
Deferred Share Award Agreement (the “Agreement”) is effective as of May 20 2008,
by and between AMR Corporation, a Delaware corporation (the “Corporation”), and
[FIRST NAME LAST NAME], employee number [EMPLOYEE NUMBER] (the “Employee”), an
officer or key employee of one of the Corporation’s Subsidiaries.
WHEREAS,
pursuant to the AMR Corporation 1998 Long Term Incentive Plan, as amended (the
“LTIP”), and as adopted by the Board of Directors of the Corporation (the
“Board”), the Compensation Committee of the Board (the “Committee”) has
determined that the Employee is an officer or key employee and has further
determined to make an award of deferred stock from and pursuant to the LTIP (the
“Award”) to the Employee as an inducement for the Employee to remain an employee
of one of the Corporation’s Subsidiaries.
NOW,
THEREFORE, the Corporation and the Employee hereby agree as
follows:
1. Grant of
Award.
Subject
to the terms and conditions of this Agreement, the Employee is hereby granted
the Award effective as of May 20, 2008 (the “Grant Date”), in respect to
[NUMBER] shares of the Corporation’s Common Stock (the
“Shares”). Subject to the terms and conditions of this Agreement, the
Shares covered by the Award will vest, if at all, in accordance with Section 2
hereof, on May 20, 2011 (such date hereby established as the “Vesting Date” of
the Award).
2. Distribution of
Award.
Distribution
with respect to the Award will occur, if at all, in accordance with the
following terms and conditions:
(a) If
the Employee is on the payroll of a Subsidiary that is wholly-owned, directly or
indirectly, by the Corporation as of the Vesting Date, the Shares covered by the
Award will be paid by the Corporation to the Employee on or about the Vesting
Date.
(b) In
the event the Employee’s employment with a Subsidiary of the Corporation is
terminated prior to the Vesting Date due to the Employee’s death, Disability (as
defined in Section 409A(a)(2)(C) of the Internal Revenue Code of 1986, as
amended (the “Code”)), Retirement or termination not for Cause (each an “Early
Termination”), the Shares covered by the Award will vest 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 the 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 the Grant Date through the month of Early Termination,
inclusive. The Shares comprising the pro-rata Award will be paid by
the Corporation to the Employee (or, in the event of the Employee’s death, the
Employee’s designated beneficiary for the purposes of the Award, or in the
absence of an effective beneficiary designation, the Employee’s estate) on or
about the Vesting Date, subject to Section 2(e) 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 of a Change in Control of the Corporation prior to the payment of the
Shares 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
(d) Notwithstanding
the terms of Sections 2(a), 2(b) and 2(c), the Award will be forfeited in its
entirety if prior to the Vesting Date:
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(i)
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the
Employee’s employment with a Subsidiary of the Corporation is terminated
for Cause, or if the Employee terminates such employment prior to his or
her Retirement;
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(ii)
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the
Employee becomes an employee of a Subsidiary that is not wholly-owned,
directly or indirectly, by the Corporation;
or
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(iii)
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the
Employee takes a leave of absence without reinstatement rights, unless
otherwise agreed in writing between the Corporation (or a Subsidiary or
Affiliate thereof) and the
Employee.
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(e) 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 be delayed until following 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.
(f) To the
extent the Shares covered by the
Award are otherwise payable pursuant to this Agreement and except as otherwise
provided herein, such Shares 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.
(g) The
amount of the Shares paid hereunder shall be reduced by the aggregate amount of
federal, state, and local income and payroll taxes that are required to be
withheld in connection with the payment of such Shares.
3. Transfer
Restrictions.
Unless
otherwise permitted by the Committee, this award is non-transferable, other than
by will or by the laws of descent and distribution, and may not be assigned,
pledged or hypothecated and will not be subject to execution, attachment or
similar process. Upon any attempt by the Employee (or the Employee’s
successor in the interest after the Employee’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. [Intentionally
omitted]
5. Miscellaneous.
This
Agreement (a) will be binding upon and inure to the benefit of any successor of
the Corporation, (b) will 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 7 below and as permitted by the LTIP (or its
successor). No contract or right of employment will be implied by
this Agreement.
In consideration of the Employee’s
privilege to 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.
For purposes of Section 2(c), 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) and the LTIP.
The
Employee shall not have the right to defer any payment of the Shares covered by
the Award. Except as provided in this Agreement, the Committee and
Corporation will not accelerate the payment of any of the Shares covered by the
Award.
Notwithstanding
anything in this Agreement 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 Shares, 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 upon a payment of Shares. 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 LTIP or another shareholder-approved equity compensation plan to
satisfy all payments or distributions under this Agreement and the LTIP, 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.
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.
Capitalized
terms not otherwise defined herein shall have the meanings set forth for such
terms in the LTIP (or its successor).
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. 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 Corporation and the Committee shall have the discretion to
accelerate the time of payment of the Shares covered by the Award, but only to
the extent of the amount required to be included in income as a result of such
failure. Amendments to this Agreement 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.
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8.
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Securities Law
Requirements.
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Notwithstanding
any provision in this Agreement to the contrary, the Corporation shall not be
required to make any distribution of Shares pursuant to this Award during such
period that the Corporation reasonably anticipates that such distribution will
violate federal securities laws or other applicable law. The
Corporation may require the Employee to furnish to the Corporation, prior to the
issuance of any Shares hereunder, an agreement, in such form as the Corporation
may from time to time deem appropriate, in which the Employee represents that
the Shares acquired by him or her hereunder are being acquired for investment
and not with a view to the sale or distribution thereof.
IN
WITNESS HEREOF, this Agreement is entered into as of the date first above
written.
Employee AMR CORPORATION
______________________________ __________________________
[NAME] Xxxxxxx X. Xxxxxxxx
Corporate
Secretary
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Grant
of
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Deferred
Shares
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Number
of
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Deferred
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Shares
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Officer
Name
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Granted
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X.X.
Xxxxx
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116,000
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X.X.
Xxxxxx
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44,850
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X.X.
Xxxxxx
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54,590
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X.X.
Xxxxxx
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44,850
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X.X.
Xxxxxxx
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25,550
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