Exhibit 99.3
2005 - 2007 PERFORMANCE SHARE AGREEMENT
AS AMENDED AND RESTATED AS OF JANUARY 16, 2007
This 2005/2007 Performance Share Agreement
("Agreement") is amended and restated as of January 16,
2007, 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 notification sent the
Employee described below (the "Notification").
WHEREAS, pursuant to the 2005/2007 Performance Share
Plan for Officers and Key Employees, as amended and restated
as of January 16, 2007 (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 2005-2007 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 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), the Recipient will receive a
combination of cash and the Corporation's Common Stock. The
Committee will determine the amount of the Award to be
distributed in cash, if any (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 distributed on April 30, 2008 (such Cash
Award will be made pursuant to the Annual Incentive Plan).
The Stock Distribution will occur on or about April 17, 2008
(such Stock Distribution will be made from and pursuant to
the AMR Corporation 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 16, 2008, 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 part of this Agreement.
(b) In the event Employee'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 Employee'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 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
distributed 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,
2005 through the month of Early Termination, inclusive.
This pro-rata Award will be distributed to the Employee 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 the Employee's employment with one of
the Corporation's Subsidiaries is terminated for Cause, or
if the Employee terminates his/her employment with such
Subsidiary, each occurring prior to April 16, 2008, the
Award shall be forfeited in its entirety.
(d) If prior to April 16, 2008 the Employee becomes an
employee of a Subsidiary that is not wholly owned, directly
or indirectly, by the Corporation, or if the Employee 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 shall 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 Employee (or the Employee's successor in interest
after the Employee's death) to effect any such disposition,
or upon the commencement 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 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 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
subsequently is employed by a competitor of the Corporation
prior to complete payment of 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, 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 will not have the right to defer any of
the Cash Award or the Stock Distribution. Except as
provided in this Agreement, the Committee and Corporation
will not accelerate the 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 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 stock
comprising the Stock Distribution, to make substitutions for
such 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.
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 in 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" shall 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 2005/2007 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 2005/2007 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 Employee and the Corporation
have executed this Performance Share Agreement as of the
day, month and year set forth above.
EMPLOYEE AMR CORPORATION
_____________________________
Xxxxxxx X. Xxxxxxxx
Corporate Secretary
Name of Executive Number of 2005/2007 Performance
Shares Granted
X.X.Xxxxx 140,000
X.X.Xxxxxx 77,600
X. X. Xxxxxx 77,600
X.X. Xxxxxxx 57,000
X.X. Xxxxxx 57,000
SCHEDULE A
2005 - 2007 PERFORMANCE SHARE PLAN
FOR OFFICERS AND KEY EMPLOYEES, AS AMENDED AND RESTATED
AS OF JANUARY 16, 2007
Purpose
The purpose of the 2005 - 2007 AMR Corporation
Performance Share Plan for Officers and Key Employees, as
amended and restated as of January 16, 2007 ("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 2005 to 2007, 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.
"Committee" is defined as the Compensation Committee,
or its successor, of the AMR Board of Directors.
"Comparator Group" is defined as the following six U.S.
based carriers: AMR Corporation, Continental Airlines, Inc.,
Delta Air Lines, Inc., JetBlue Airways, Northwest Airlines
Corp. and Southwest Airlines Co.
"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, 2005 and ending December 31,
2007.
"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 either 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
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
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 Shares - Percent of Target Based on Rank
Rank 6 5 4 3 2 1
Payout % 0% 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 award, based on rank and
the number of remaining comparators, will be used
accordingly.
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%
3 Comparators
Granted Shares - Percent of Target
Based on Rank
Rank 3 2 1
Payout % 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 of an
award based upon the TSR metric and, with respect to senior
officer awards, the Corporate Objectives. The number of
shares that may vest will range from 0% to 175% of the
target award.
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 TSR
metric 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 of
Directors at the first regular meeting following
determination of the awards. Awards, if any, will be
distributed on or about April 17, 2008, or such date in 2008
the award is approved for distribution by the Committee.
The distribution of any shares under this Plan is
subject to the Corporation having sufficient 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.
Corporate Objectives will be used as a metric for
determining the distribution of awards 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 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 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 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 then current employees of American Airlines,
Inc. or any other Subsidiaries of AMR to join the employee
at his or her new place of employment after his or her
employment with American Airlines, Inc. 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.
