Exhibit 10.1
2005 - 2007
PERFORMANCE UNIT AGREEMENT
This performance unit agreement (this "Agreement") is
made as of this date, July 25, 2005, by and between AMR
Corporation, a Delaware corporation (the "Corporation"), and
FNAME LNAME (the "Employee"), employee number 000000.
WHEREAS, pursuant to the 2005/2007 Performance Unit
Plan for Officers and Key Employees (the "2005 Unit Plan")
attached to this Agreement as Schedule A and incorporated
herein, and the Performance Unit Program (the "Program")
adopted by the Board of Directors of the Corporation (the
"Board"), the Compensation Committee of the Board (the
"Committee") has determined to make a Program grant to the
Employee of performance units (subject to the terms of the
Program 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.
This Agreement sets forth the terms and conditions
attendant to the performance units granted under the 2005
Unit Plan.
1. Grant of Award. The Employee is hereby granted as
of July 25, 2005, (the "Grant Date") performance units (the
"Award"), subject to the terms and conditions of this
Agreement with respect to 0,000 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), the Employee 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, as of the date the Units vest (payment shall be made
as defined below).
2. Vesting.
(a) The Units will vest and be paid, if at all, in
accordance with the terms of the Program attached as
Schedule A, which is made a part of this Agreement.
(b) In the event Employee'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 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 Award will vest, if
at all, 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 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 paid to
the Employee at the same time as payments are made to then
current employees who have been granted Units under the 2005
Unit Plan, subject to Section 2(f) of this Agreement.
(c) In the event 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 the Corporation (or a 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 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 complete 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 6.
(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. 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 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 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. No contract or right of
employment shall be implied by this Agreement.
In the event the Employee's employment is terminated by
reason of 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 Employee
shall not have the right to defer payment of the Award.
Except as provided in this Agreement, the Committee and
Corporation shall not accelerate payment of the Award.
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 Units awarded.
6. Definitions. Capitalized terms not otherwise defined
in this Agreement shall have the meanings set forth for such
terms in the Corporation's 2003 Employee Stock Incentive
Plan. 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).
7. 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.
IN WITNESS HEREOF, the Employee and the Corporation
have executed this Performance Unit Agreement as of the day,
month and year set forth above.
EMPLOYEE AMR CORPORATION
_____________________________
Charles D. MarLett
Corporate Secretary
Grant of Performance Units
July 25, 2005
Officer # of Performance
Name Units Granted
Gerard Arpey 140,000
James Beer 77,600
Daniel Garton 77,600
Gary Kennedy 57,000
Charles Marlett 17,800
SCHEDULE A
2005 - 2007 PERFORMANCE UNIT PLAN
FOR OFFICERS AND KEY EMPLOYEES
Purpose
The purpose of the 2005 - 2007 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 following six U.S.
based carriers including 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 Units
Any payment under the Plan with respect to the units
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 units 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 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 % 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
units based upon the TSR metric and, with respect to senior
officer awards, the Corporate Objectives. The number of
units 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 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, within five days after the end of the Measurement
Period.
Corporate Objectives will be used as a metric for
determining the distribution of units 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 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 Committee may amend, suspend, or terminate the Plan
at any time.