Exhibit 10.3
DEFERRED SHARE AWARD AGREEMENT
This Deferred Share Award Agreement (this "Agreement")
is effective as of July 24, 2006, and is by and between AMR
Corporation, a Delaware corporation (the "Corporation") and
an officer or a key employee of one of the Corporation's
Subsidiaries (the "Employee") as identified in the
notification sent to the Employee described below (the
"Notification").
WHEREAS, pursuant to the AMR Corporation 1998 Long Term
Incentive Plan, as amended (the "LTIP"), the Compensation
Committee of the Board of Directors (the "Committee") has
determined that the Employee is an officer or key employee
and has further determined to make an award of Deferred
Shares from and pursuant to the LTIP to the Employee as an
inducement for the Employee to remain with one of the
Corporation's Subsidiaries and to motivate the Employee
during such employment.
NOW, THEREFORE, the Corporation and the Employee hereby
agree as follows:
1. Grant of Award.
The Employee is hereby granted effective as of July 24,
2006 (the "Grant Date") a deferred share award (the
"Award"), subject to the terms and conditions of this
Agreement, with respect to the number of shares of Common
Stock set forth in the Notification (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 July 24, 2009 (such date hereby
established as the "Vesting Date" of the Award).
2. Distribution of Award.
Distribution with respect to the Award, on the Vesting
Date, 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 by the Corporation as of the Vesting
Date, the Shares will be distributed to the Employee on July
24, 2009.
(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-
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rata basis will be a percentage where the denominator is 36
and the numerator is the number of months from the Grant
Date through the month of Early Termination, inclusive. The
pro-rata Award will be paid (subject to Section 2(e) hereof)
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) within 60 days after the
Employee's death, Disability, Retirement or termination not
for Cause.
(c) In the event of a Change in Control of the
Corporation (as defined in Section 5 hereof) after the
Vesting Date but prior to the distribution of the Award, the
Award will be distributed in accordance with the terms of
the LTIP.
(d) Notwithstanding the terms of Section 2(a), (b) and
(c), the Award will be forfeited in its entirety if prior to
the Vesting Date:
(i) The Employee's employment with the
Corporation (or a Subsidiary or Affiliate
thereof) is terminated for Cause, or if the
Employee terminates his/her employment with a
Subsidiary of the Corporation;
(ii) The Employee becomes an employee of a
Subsidiary that is not wholly owned by the
Corporation; or
(iii) The Employee takes a leave of absence without
reinstatement rights, unless otherwise agreed in writing
between the Corporation and the Employee.
(e) Notwithstanding the provisions of Section 2(b) hereof,
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.
Unless otherwise permitted by the Corporation, the
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 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
Corporation.
4. [Intentionally omitted]
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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 Grantee 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
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 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 immediately forfeited in its entirety.
For purposes of Section 2(c) hereof, 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).
The Employee will not have the right to defer
distribution of the Award. Except as provided in this
Agreement, the Committee and the Corporation will not
accelerate distribution of 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 in a stock distribution.
Capitalized terms not otherwise defined herein
shall have the meanings set forth for such terms in the
LTIP.
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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 in the number of Shares awarded.
7. American Jobs Creation Act.
In addition to amendments permitted by Section 5
above, 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.
IN WITNESS HEREOF, the Employee and the Corporation
have executed this Agreement as of the day and year first
above written.
Employee AMR CORPORATION
______________________________ __________________________
Xxxxxxx X. Xxxxxxxx
Corporate Secretary
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Grant of Deferred Shares
July 24, 2006
# Deferred
Shares
Officer Name Granted
X. X. Xxxxx 20,000
X.X. Xxxxxx 11,950
X.X. Xxxxxx 8,400
X.X. Xxxxxxx 4,700
X.X. Xxxxxx 4,700
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