Exhibit 99.4
2004 - 2006
PERFORMANCE UNIT AGREEMENT, AS AMENDED AND RESTATED
This performance unit agreement ("Agreement") is amended and
restated as of November 16, 2005, by and between AMR Corporation,
a Delaware corporation (the "Corporation"), and First Last (the
"Employee"), employee number 000000.
WHEREAS, pursuant to the Performance Unit Program (the
"Program") adopted by the Board of Directors of the Corporation
(the "Board"), the Compensation Committee of the Board has
determined to make a Program grant to the Employee of performance
units (subject to the terms of the 2004/2006 Performance Unit Plan
for Officers and Key Employees (the "2004 Unit Plan") 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 2004 Unit Plan.
1. Grant of Award. The Employee is hereby granted as of
Date, (the "Grant Date") performance units (the "Award"), subject
to the terms and conditions of this Agreement with respect to
units 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), 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, on April 18, 2007, or such date the award is approved for
payment by the Committee.
2. Vesting.
(a) The Units will vest and be paid, if at all, in
accordance with Schedule A, attached hereto and 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, 2004
through the month of Early Termination, inclusive. This pro-rata
basis 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 2004 Unit Plan, subject to Section 2(f) of this
Agreement.
(c) In the event Employee's employment with the Corporation
(or any Subsidiary or Affiliate thereof) is terminated for Cause,
or if the Employee 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 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. 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 the levy 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. 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 is
subsequently is employed by a competitor of the Company, the
Company 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 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 in
the number of Units awarded.
6. Incorporation of 2003 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 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
/s/ /s/ Charles D. MarLett
Charles D. MarLett
Corporate Secretary
SCHEDULE A
2004 - 2006 PERFORMANCE UNIT PLAN
FOR OFFICERS AND KEY EMPLOYEES, AS AMENDED AND RESTATED NOVEMBER
16, 2005
Purpose
The purpose of the 2004 - 2006 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 seven U.S. based
carriers including AMR Corporation, Continental Airlines, Inc.,
Delta Air Lines, Inc., JetBlue Airways, Northwest Airlines Corp.,
Southwest Airlines Co. and US Airways Group, Inc.
"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, 2004 and ending December 31, 2006.
"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 7 6 5 4 3 2 1
Payout % 0% 25% 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.
6 Comparators
Granted Shares - Percent of Target Based on Rank
Rank 6 5 4 3 2 1
Payout % 0% 50% 75% 100% 135% 175%
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 on April 30, 2007, and any such payments will
be based upon the Fair Market Value of the Corporation's Common
Stock on April 18, 2007, or such date the award is approved for
payment by the Committee.
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 any
case to the extent permitted under Proposed Treasury Regulation
1.409A-e(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.