EXHIBIT 10.60
2003 - 2005 PERFORMANCE UNIT AGREEMENT
This performance unit agreement ("Agreement") is made this ____ day of
____ 2003, by and between AMR Corporation, a Delaware corporation (the
"Corporation"), and _____________ (the "Employee" or "Recipient"), employee
number ________.
WHEREAS, pursuant to the Performance Unit 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 performance units
(subject to the terms of the 2003 Performance Unit Plan (the "2003 Unit Plan")
and this Agreement), as an inducement for the Employee to remain an employee of
the Corporation (or a Subsidiary of Affiliate thereof), and to retain and
motivate such Employee during such employment.
This Agreement sets forth the terms and conditions attendant to the
performance units granted under the 2003 Unit Plan.
1. Grant of Award. The Recipient is hereby granted as of ______, (the
"Grant Date") performance units (the "Award"), subject to the terms and
conditions of this Agreement with respect to _____ performance units
(collectively, the "Units"). The Units covered by the Award shall vest, if at
all, in accordance with Section 2. On the date the Units vest (if at all),
Recipient will receive, net of applicable withholding or applicable social
security taxes, a payment representing the product of (i) the number of vested
Units and (ii) the average of the high and low price of the Corporation's Common
Stock, $1.00 par value per share, on a date chosen by the Board, which date
shall be as soon as practicable after the end of the Measurement Period (as
defined below).
2. Vesting.
(a) The Units will vest, if at all, in accordance with Schedule A,
attached hereto and made a part of this Agreement.
(b) In the event Recipient's employment with the Corporation (or a
Subsidiary or Affiliate thereof) is terminated prior to the end of the three
year measurement period set forth in Schedule A (the "Measurement Period") due
to the Recipient'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). The prorata
shares will be a percentage where the denominator is 36 and the numerator is the
number of months from January 1, 2003 through the month of Early Termination,
inclusive. The Award will be paid to the Recipient at or around the same time as
payments are made to then current employees who have been granted Units under
the 2003 Unit Plan.
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(c) In the event Recipient's employment with the Corporation (or any
Subsidiary or Affiliate thereof) is terminated for Cause, or if the Recipient
terminates his/her employment with the Corporation (or any Subsidiary or
Affiliate thereof), each occurring prior to the payment contemplated by this
Agreement, the Award shall be forfeited in its entirety.
(d) If prior to the payment contemplated by this Agreement, the
Recipient becomes an employee of a Subsidiary that is not wholly owned, directly
or indirectly, by the Corporation, or if the Recipient 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 or Potential Change in Control
of the Corporation, the Award shall vest in accordance with the 2003 Unit Plan,
or its successor.
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 Recipient (or the
Recipient's successor in interest after the Recipient'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.
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
Recipient. No contract or right of employment shall 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 new
place of employment after his or her employment with American or its Affiliates
is terminated.
5. 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.
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6. Incorporation of 1998 Plan Provisions. Capitalized terms not
otherwise defined herein (inclusive of Schedule A) shall have the meanings set
forth for such terms in the Corporation's 1998 Long Term Incentive Plan, as
amended.
IN WITNESS HEREOF, the Recipient and the Corporation have
executed this Performance Unit Agreement as of the day, month and year set forth
above.
RECIPIENT AMR CORPORATION
----------------------------- -----------------------------
Xxxxxxx X. XxxXxxx
Corporate Secretary
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2003 - 2005 PERFORMANCE UNIT PLAN
FOR OFFICERS AND KEY EMPLOYEES
Purpose
The purpose of the 2003 - 2005 AMR Corporation Performance Unit 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.
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 six major U.S. based carriers including AMR
Corporation, Continental Airlines, Inc., Delta Air Lines, Inc., Northwest
Airlines Corp., Southwest Airlines Co., and UAL Corporation.
"Measurement Period" is defined as the three year period beginning January 1,
2003 and ending December 31, 2005.
"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).
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Accumulation of Units
Any payment under the Plan will be 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 units, 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 units, based on rank and the number
of remaining comparators, will be used accordingly.
5 Comparators
Granted Units - Percent of Target Based on Rank
----------------- -------------- --------------- -------------- -------------- -------------
Rank 5 4 3 2 1
Payout % 50% 75% 100% 135% 175%
4 Comparators
Granted Units - Percent of Target Based on Rank
----------------- -------------- --------------- -------------- ------------
Rank 4 3 2 1
Payout % 75% 100% 135% 175%
3 Comparators
Granted Units - Percent of Target Based on Rank
-------------------- ----------------- ----------------- ----------------
Rank 3 2 1
Payout % 50% 135% 175%
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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 units, 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 AWARDS WILL BE PAID
IN CASH.
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 then current employees of
American Airlines, Inc. 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 Airlines, Inc. or its Affiliates is terminated.
The Committee may amend, suspend, or terminate the Plan at any time.
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