1 Exhibit 10.11
2002 - 2004 PERFORMANCE SHARE PROGRAM
DEFERRED STOCK AWARD AGREEMENT
This AGREEMENT made as of Date, by and between AMR
Corporation, a Delaware corporation (the "Corporation"), and First
Last (the "Employee"), employee number 999999.
WHEREAS, the stockholders of the Corporation approved the
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"); and
WHEREAS, pursuant to the Performance Share Program (the
"Program") adopted by the Board of Directors of the Corporation
(the "Board"), the Board has determined to make a Program grant to
the Employee of Deferred Stock (subject to the terms of the 1998
Plan and this Agreement), as an inducement for the Employee to
remain an employee of the Corporation (or a Subsidiary or
Affiliate thereof), and to retain and motivate such Employee
during such employment.
NOW, THEREFORE, the Corporation and the Employee hereby agree
as follows:
1. Grant of Award. The Employee is hereby granted as of
Date, (the "Grant Date") a Deferred Stock Award (the "Award"),
subject to the terms and conditions hereinafter set forth, with
respect to shares shares of Common Stock, $1.00 par value, of the
Corporation ("Stock"). The shares of Stock covered by the Award
shall vest, if at all, in accordance with Section 2.
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 of the termination of Employee's employment
with the Corporation (or a Subsidiary or Affiliate thereof) prior
to the end of three year measurement period set forth in Schedule
A (the "Measurement Period") due to the Employee's death,
Disability, Retirement or termination not for Cause (each an
"Early Termination") the Award will vest, if at all, on a prorata
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) as soon as
practicable after the end of the Measurement Period. The prorata
share will be a percentage where the denominator is 36 and the
numerator is the number of months from January 1, 2002 through the
month of the Early Termination, inclusive.
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(c) In the event of the termination of Employee's employment
with the Corporation (or any Subsidiary or Affiliate thereof) for
Cause, or if the Employee terminates his/her employment with the
Corporation (or any Subsidiary or Affiliate thereof) prior to the
distribution of any Award hereunder, the Award shall be forfeited
in its entirety.
(d) In the event of a Change in Control or Potential Change
in Control of the Corporation, the Award shall vest in accordance
with the 1998 Plan, or its successor.
(e) If prior to the distribution of any Award hereunder, the
Employee becomes an employee of a Subsidiary that is not wholly
owned, directly or indirectly, by the Corporation, then the Award
shall be forfeited in its entirety.
(f) If prior to the distribution of any Award hereunder, the
Employee takes a leave of absence without reinstatement rights,
and unless otherwise agreed in writing between the Corporation and
the Employee, then the Award shall be forfeited in its entirety.
3. Payment in Cash. Upon a determination by the Board, an
Award may be paid in cash or other consideration in accordance
with a formula as adopted by the Board.
4. Elective Deferrals. At any time at least 12 months
prior to the end of the Measurement Period, the Employee may elect
in writing, subject to approval by the Corporation, to voluntarily
defer the receipt of the Stock for a specified additional period
beyond the end of the Measurement Period (the "Elective Deferral
Period"). Any Stock deferred pursuant to this Section 4 shall be
issued to the Employee within 60 days after the end of the
Elective Deferral Period. In the event of the death of the
Employee during the Elective Deferral Period, the Stock so
deferred shall be issued to the Employee's designated Beneficiary
(or to the Employee's estate, in the absence of an effective
beneficiary designation) within 60 days after the Corporation
receives written notification of death.
5. 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 Employee (or the Employee's successor in
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 Board.
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6. 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. No contract or right of employment shall be implied by
this Agreement. In the event Employee does not forward to the
Corporation, within the applicable period, required taxes with
respect to any Award distributed pursuant to this Agreement, the
Corporation may withhold from any payments to be made to the
Employee by the Corporation (or any Subsidiary or Affiliate
thereof), an amount(s) equal to such taxes.
7. Securities Law Requirements. The Corporation shall not
be required to issue Stock pursuant to this Award unless and until
(a) such shares have been duly listed upon each stock exchange on
which the Corporation's Stock is then registered and (b) a
registration statement under the Securities Act of 1933 with
respect to such shares is then effective.
The Board may require the Employee to furnish to the
Corporation, prior to the issuance of the Stock in connection with
this Award, an agreement, in such form as the Board may from time
to time deem appropriate, in which the Employee represents that
the shares acquired under the Award are being acquired for
investment and not with a view to the sale or distribution
thereof.
8. Incorporation of 1998 Plan Provisions. This Agreement
is made pursuant to the 1998 Plan and is subject to all of the
terms and provisions of the 1998 Plan as if the same were fully
set forth herein. Capitalized terms not otherwise defined herein
(inclusive of Schedule A) shall have the meanings set forth for
such terms in the 1998 Plan.
IN WITNESS HEREOF, the Corporation has executed this
Performance Share Grant as of the day and year first above
written.
EMPLOYEE AMR CORPORATION
_____________________________ _____________________
Xxxxxxx X. XxxXxxx
Corporate Secretary
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Schedule A
2002 - 2004 PERFORMANCE SHARE PLAN
FOR OFFICERS AND KEY EMPLOYEES
Purpose
The purpose of the 2002 - 2004 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 which will contribute to the success of the
Corporation. This Plan is adopted pursuant to the 1998 Long Term
Incentive Plan, as amended ("LTIP").
Definitions
Capitalized terms not otherwise defined in the Plan or the award
agreement for performance shares between the Corporation and the
employee, will have the meanings set forth in the LTIP.
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 / Nominating Committee,
or its successor, of the AMR Board of Directors.
"Comparator Group" is defined as the seven major U.S. based
carriers including AMR Corporation, Continental Airlines, Inc.,
Delta Air Lines, Inc., Northwest Airlines Corp., Southwest
Airlines Co., UAL Corporation, and US Airways Group, Inc.
"Measurement Period" is defined as the three year period beginning
January 1, 2002 and ending December 31, 2004.
"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.
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"National Exchange" is defined as either the New York Stock
Exchange (NYSE), the National Association of Stock Dealers and
Quotes (NASDAQ), or the American Stock Exchange (AMEX).
Accumulation of Shares
The number of shares under the Plan to be distributed to
individual participants is determined by (i) the Corporation's TSR
rank within the Comparator Group and (ii) the terms and conditions
of the award agreement between the Corporation and the employee.
The distribution percentage of target shares, based on rank, is
specified below:
Granted Shares - 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
target shares, based on rank and the number of remaining
comparators, will be used accordingly.
6 Comparators
Granted Shares - Percent of Target Based on Rank
Rank 6 5 4 3 2 1
Payout% 0% 50% 75% 100% 135% 175%
5 Comparators
Granted Shares - Percent of Target Based on Rank
Rank 5 4 3 2 1
Payout% 50% 75% 100% 135% 175%
4 Comparators
Granted Shares - Percent of Target Based on Rank
Rank 4 3 2 1
Payout% 75% 100% 135% 175%
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3 Comparators
Granted Shares - Percent of Target Based on Rank
Rank 3 2 1
Payout% 50% 135% 175%
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 shares, if any, 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 of
Directors at the first regular meeting following determination of
the awards. The Committee may determine to pay a cash equivalent
in lieu of the stock 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 Airlines, Inc. 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 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. 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 Airlines, Inc. or its Affiliates or after
such employment is terminated, and (iii) not to solicit any
current employees of American Airlines, Inc. or any subsidiaries
of AMR to join the employee at his or her new place of employment
after his or her employment with American Airlines, Inc. is
terminated.
The Committee may amend, suspend, or terminate the Plan at any
time.
