Exhibit 10.5
AMR CORPORATION
2004 DIRECTORS UNIT INCENTIVE PLAN
1. Purposes
The purposes of this AMR Corporation 2004 Directors
Unit Incentive Plan (the "Plan") are to enable AMR
Corporation (the "Company") to attract, retain and motivate
the best qualified directors and to enhance a long-term
mutuality of interest between the directors and stockholders
of the Company by providing the directors with an interest
in the economic well-being of the Company as evidenced by
the price of the Companys Common Stock.
2. Definitions
Unless the context requires otherwise, the following
words as used in the Plan shall have the meanings ascribed
to each below, it being understood that masculine, feminine
and neuter pronouns are used interchangeably, and that each
comprehends the other.
(a) "Award" shall mean any Unit awarded under the
Plan.
(b) "Board" shall mean the Board of Directors of the
Company.
(c) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(d) "Common Stock" shall mean the common stock of the
Company, par value $1.00, any common stock into which such
common stock may be changed, and any common stock resulting
from any reclassification of such common stock.
(e) "Unit" shall mean a contractual right to receive a
cash payment equal to the Fair Market Value of one Share at
the time and subject to the conditions set forth in Section
6.
(f) "Eligible Director" shall mean a director of the
Company who is not an officer or employee of the Company or
any of its subsidiaries and who has been elected a director
of the Company at its most recent annual meeting of
stockholders.
(g) "Fair Market Value" as of any given date shall
mean the mean between the highest and lowest quoted selling
prices, regular way, of a Share on the New York Stock
Exchange on such date or, if no Shares are sold on such
date, on the last preceding business day on which any such
sale was reported.
(h) "Share" shall mean a share of Common Stock.
3. Effective Date
The effective date of the Plan shall be May 20, 2004.
4. Administration
(a) Powers of the Board. This Plan shall be admini-
stered by the Nominating/Corporate Governance Committee, a
standing committee of the Board, or its successor (the
Committee). These administrative duties include, by way of
example: the full authority to interpret this Plan; to estab-
lish, amend and rescind rules for carrying out this Plan; to
administer this Plan; and to make all other determinations
and to take such steps in connection with this Plan as the
Committee, in its discretion, deems necessary or desirable.
Notwithstanding the first sentence of this Section 4(a), at
any time the Board may, by a majority vote of its members,
assume the foregoing administrative duties as to the Plan.
In the event the Board determines to so assume the
administrative duties as to the Plan, references in this
Plan to the Committee, shall thereafter be read as
references to the Board.
(b) Delegation. The Corporate Secretary of the
Company and any other officer designated by the Chief
Executive Officer will assist the Committee in the
administration of this Plan.
(c) Agents and Indemnification. The Committee may
employ such legal counsel, consultants and agents as it may
deem desirable for the administration of this Plan, and may
rely upon any opinion received from any such counsel or
consultant or agent. No member or former member of the
Committee or the Corporate Secretary or any other officer
designated pursuant to Section 4(b) shall be liable for any
action or determination made in good faith with respect to
this Plan. To the maximum extent permitted by applicable
law and the Company's Certificate of Incorporation and By-
Laws, each member or former member of the Committee or the
Corporate Secretary or any other officer designated pursuant
to Section 4(b) shall be indemnified and held harmless by
the Company against any cost or expense (including counsel
fees) or liability (including any sum paid in settlement of
a claim with the approval of the Company) arising from any
act or omission to act in connection with this Plan, unless
arising from such person's own fraud or bad faith. Such
indemnification shall be in addition to any rights of indem
nification the person may have as a director or officer
under the Company's Certificate of Incorporation or By-Laws.
Expenses incurred by the Committee in the engagement of any
such counsel, consultant or agent shall be paid by the
Company.
5. Units; Adjustment Upon Certain Events
(a) Units Available. The aggregate number of Units
that may be issued under this Plan shall not exceed 500,000
Units, except as provided in Section 5(c).
(b) No Limit on Corporate Action. The existence of
this Plan and the Units granted hereunder shall not affect
in any way the right or power of the Board or the
stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change
in the Company's capital structure or its business, any
merger or consolidation of the Company, any issue of bonds,
debentures, preferred or prior preference stocks ahead of or
affecting Common Stock, the dissolution or liquidation of
the Company or any sale or transfer of all or part of its
assets or business, or any other corporate act or
proceeding.
(c) Recapitalization and Similar Events. The Units
awarded pursuant to the Plan derive their value by reference
to Shares of Common Stock as presently constituted, but if
and whenever the Company shall effect a subdivision,
recapitalization or consolidation of Shares or the payment
of a stock dividend on Shares without receipt of
consideration, the number and kind of Units to be awarded
under Section 6 and the aggregate number of Units previously
awarded but not yet paid in cash shall be proportionately
adjusted.
(d) No Adjustment If Value Received. Except as here
inbefore expressly provided, the issuance by the Company of
shares of stock of any class of securities convertible into
shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares
or other securities, and in any case whether or not for fair
value, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of Units to be
awarded to a Participant pursuant to Section 6.
6. Unit Awards
(a) Awards to Eligible Directors. Each Eligible
Director shall receive an award of Units as follows: For
Eligible Directors first elected to the Board prior to May
15, 1996, 2610 Units. For Eligible Directors first elected
to the Board after May 15, 1996, 3320 Units. The date of
such awards will be the same date on which the Company makes
its annual award of stock-based compensation to its
executive officers. If such awards to executive officers
have not occurred on or before July 31 of any calendar year
during the term of this Plan, the Committee will determine
the grant date for the Units for such year.
(b) Distribution of Shares. An Eligible Director
who ceases to be a member of the Board (or, in the case of a
deceased Eligible Director, the beneficiary or beneficiaries
of the Eligible Director) shall receive a cash payment equal
to the Fair Market Value of one Share for each of the
Eligible Director's Units held by him or her on the date he
or she ceased to be a member of the Board. The Fair Market
Value shall be determined as of the date the Eligible
Director separates from service as a member of the Board and
the cash payment contemplated by this Section 6(b) will be
made on or after the sixth month anniversary of the
Directors separation from service on the Board.
7. Non-transferability of Awards
No Award shall be transferable by the Eligible Director
otherwise than by will or under the applicable laws of
descent and distribution prior to the time the cash payment
is made under Section 6(b). During the period prior to such
payment, such Award shall not be sold, assigned, negotiated,
pledged or hypothecated in any way (whether by operation of
law or otherwise) and shall not be subject to execution,
attachment or similar process. Upon any attempt to sell,
assign, negotiate, pledge or hypothecate any Award, or in
the event of any levy upon any Award by reason of any
attachment or similar process, in either case contrary to
the provisions hereof, such Award shall immediately become
null and void.
8. Rights as a Stockholder
An Eligible Director shall have no rights as a stock
holder with respect to any Units.
9. Determinations
Each determination, interpretation or other action made
or taken pursuant to the provisions of this Plan by the
Committee shall be final and binding for all purposes and
upon all persons, including, without limitation, the
Company, the directors, officers and other employees of the
Company, the Eligible Director and their respective heirs,
executors, administrators, personal representatives and
other successors in interest.
10. Termination, Amendment and Modification
(a) Termination and Amendment. This Plan shall
terminate at the close of business on May 20, 2024, unless
sooner terminated by action of the stockholders of the
Company, and no Awards shall be granted under this Plan
thereafter.
(b) No Effect on Existing Rights. Except as required
by law, no termination, amendment or modification of this
Plan may, without the consent of an Eligible Director or the
permitted transferee of an Award, alter or impair the rights
and obligations arising under any then outstanding Award.
11. Non-Exclusivity
The adoption of this Plan by the Board shall not be
construed as creating any limitations on the power of the
Board to adopt such other compensatory arrangements as it
may, in its discretion, deem desirable.
12. General Provisions
(a) No Right to Serve as a Director. This Plan shall
not impose any obligations on the Company to retain any
Eligible Director as a director nor shall it impose any
obligation on the part of any Eligible Director to remain as
a director of the Company, provided that each Eligible
Director by accepting each Award shall represent to the
Company that it is his/her good faith intention to continue
to serve as a director of the Company until the next annual
meeting of stockholders and that he/she intends to do so
unless a change in circumstances arises.
(b) No Right to Particular Assets. Nothing contained
in this Plan and no action taken pursuant to this Plan shall
create or be construed to create a trust of any kind or any
fiduciary relationship between the Company and any Eligible
Director, the executor, administrator or other personal
representative or designated beneficiary of such Eligible
Director, or any other persons. Any reserves that may be
established by the Company in connection with this Plan
shall continue to be part of the general funds of the
Company, and no individual or entity other than the Company
shall have any interest in such funds until paid to an
Eligible Director. To the extent that any Eligible Director
or his executor, administrator, or other personal represen
tative, as the case may be, acquires a right to receive any
payment from the Company pursuant to this Plan, such right
shall be no greater than the right of an unsecured general
creditor of the Company.
(c) Notices. Each Eligible Director shall be respon
sible for furnishing the Corporate Secretary with the
current and proper address for the mailing of notices and
payments in respect of Units. Any notices required or
permitted to be given shall be deemed given if directed to
the person to whom addressed at such address and mailed by
regular United States mail, first-class and prepaid. If any
item mailed to such address is returned as undeliverable to
the addressee, mailing will be suspended until the Eligible
Director furnishes the proper address.
(d) Severability of Provisions. If any provision of
this Plan shall be held invalid or unenforceable, such
invalidity or un-enforceability shall not affect any other
provisions hereof, and this Plan shall be construed and
enforced as if such provision had not been included.
(e) Incapacity. Any benefit payable to or for the
benefit of an incompetent person or other person incapable
of acknowledging such benefit shall be deemed paid when paid
to such person's guardian or to the party providing or
reasonably appearing to provide for the care of such person,
and such payment shall fully discharge the Board, the
Company and other parties with respect thereto.
(f) Headings and Captions. The headings and captions
herein are provided for reference and convenience only,
shall not be considered part of this Plan, and shall not be
employed in the construction of this Plan.
(g) Controlling Law. This Plan shall be construed and
enforced according to the laws of the State of Texas.
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Unit Awards
July 25, 2005
For David L. Boren, Edward A. Brennan, Armando M. Codina,
Earl G. Graves, Ann M. Korologos and Joe M. Rodgers: 2,610
Units
For John W. Bachmann, Michael A. Miles, Philip J. Purcell,
Judith Rodin, Matthew K. Rose and Roger T. Staubach: 3,320
Units