EXHIBIT 99.3
2003 - 2005 PERFORMANCE SHARE AGREEMENT
AS AMENDED AND RESTATED AS OF MARCH 29, 2006
This performance share agreement ("Agreement") is amended and
restated as of March 29, 2006, by and between AMR Corporation, a
Delaware corporation (the "Corporation"), and an officer or key
employee of one of the Corporation's Subsidiaries (the "Employee"
or the "Recipient") as identified in the e-mail or mail
notification sent to the Employee on April _, 2006 (the
"Notification").
WHEREAS, pursuant to the 2003 - 2005 Performance Share Plan
for Officers and Key Employees, as amended and restated as of
March 29, 2006 (the "Plan") and as adopted by the Board of
Directors of the Corporation (the "Board"), the Compensation
Committee of the Board (the "Committee") has determined to make an
award (the "Award" as set forth in the Notification) to the
Employee (subject to the terms of the Plan and this Agreement),
as an inducement for the Employee to remain an employee of one of
the Corporation's Subsidiaries during the time frame of 2003 -
2005 and to retain and motivate such Employee during such
employment.
This Agreement sets forth the terms and conditions attendant
to the Award under the Plan.
1. Grant of Award. Subject to the terms and conditions of
this Agreement, the Recipient is hereby granted an Award as of the
"Grant Date" set forth in the Notification. The Award will vest,
if at all, in accordance with Section 2 of this Agreement. On the
date the Award vests (if at all), Recipient will receive a
combination of cash and the Corporation's Common Stock. The
Committee will determine the amount of the Award to be paid in
cash (the "Cash Award") and the amount of the Award to be settled
in shares of the Corporation's Common Stock (the "Stock
Distribution"). The Cash Award will be paid on April 28, 2006
(such Cash Award will be made pursuant to the Annual Incentive
Plan). The Stock Distribution will occur on April 20, 2006 (such
Stock Distribution will be made from and pursuant to the 2003
Employee Stock Incentive Plan, the "ESIP"). The sum of the Cash
Award and the Stock Distribution will equal the product of (a)
the Fair Market Value of the Common Stock on April 19, 2006 and
(b) the number of shares of Common Stock comprising the Award.
2. Vesting.
(a) The Award 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 one of the
Corporation's Subsidiaries 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 (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, 2003
through the month of Early Termination, inclusive. The pro-rata
basis will be paid to the Recipient at the same time as Cash
Awards and Stock Distributions are made to then current employees
who have Awards under the Plan, subject to Section 2(f) of this
Agreement.
(c) In the event Recipient's employment with one of the
Corporation's Subsidiaries is terminated for Cause, or if the
Recipient terminates his/her employment with such Subsidiary, each
occurring prior to April 20, 2006, the Award will be forfeited in
its entirety.
(d) If prior to April 20, 2006, 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 will be forfeited in its entirety.
(e) [Intentionally omitted]
(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 will 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
otherwise than by will or by the laws of descent and distribution,
and may not otherwise be assigned, pledged or hypothecated and
will 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
Committee.
4. 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
Recipient. 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 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 will result in the Award being forfeited
in its entirety.
The Employee will not have the right to defer any of the
Cash Payment or the Stock Distribution. Except as provided in
this Agreement, the Committee and Corporation will not accelerate
the Cash Payment or the Stock Distribution.
Any Cash Award will be net of applicable withholding and
social security taxes. The Employee will pay to the Corporation
timely any and all such taxes on account of the Stock
Distribution. The failure by the Employee to pay timely such taxes
will result in a withholding from any and all payments from the
Corporation or any Subsidiary to the Employee in order to satisfy
such taxes.
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 to the Award.
7. Incorporation of ESIP Provisions. Capitalized terms not
otherwise defined herein (inclusive of Schedule A) will have the
meanings set forth for such terms in the ESIP.
8. 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.
9. Prior 2003/2005 Performance Unit Agreement
In consideration of this amended and restated Agreement, the
Employee irrevocably agrees that any prior award granted to the
Employee under the 2003/2005 Performance Unit Plan, as hereby
amended and restated, is hereby forfeited in its entirety and will
hereafter be of no further effect and such prior award is replaced
in its entirety with the Award granted under this Agreement.
IN WITNESS HEREOF, the Recipient and the Corporation
have executed this Performance Share Agreement as of the day,
month and year set forth above.
RECIPIENT AMR CORPORATION
_____________________________ _____________________
Charles D. MarLett
Corporate Secretary
Daniel Garton - 77,000 shares
Gary Kennedy - 63,000 shares
Charles MarLett - 33,250 shares
2003 - 2005 PERFORMANCE SHARE PLAN
FOR OFFICERS AND KEY EMPLOYEES, AS AMENDED AND RESTATED
AS OF MARCH 29, 2006
Purpose
The purpose of the 2003 - 2005 AMR Corporation Performance Share
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.
The Plan is adopted under the 2003 Employee Stock Incentive Plan
(the "ESIP").
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 (the "Board").
"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 one of the New York Stock
Exchange (NYSE), the National Association of Stock Dealers and
Quotes (NASDAQ), or the American Stock Exchange (AMEX).
Accumulation of Award
Any distribution 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 a
target award, based on rank, is specified below:
Granted Target Award - 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 a
target award, based on rank and the number of remaining
comparators, will be used accordingly.
5 Comparators
Granted Target Award - Percent of Target Based on Rank
Rank 5 4 3 2 1
Payout % 50% 75% 100% 135% 175%
4 Comparators
Granted Target Award - Percent of Target Based on Rank
Rank 4 3 2 1
Payout % 75% 100% 135% 175%
3 Comparators
Granted Target Award - Percent of Target Based on Rank
Rank 3 2 1
Payout % 50% 135% 175%
Administration
The Committee will 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 a target award, if any, will be determined based on an audit of
AMR's TSR rank by the General Auditor of American Airlines, Inc.
("American"). A summary of awards under the Plan will be provided
to the Board at the first regular meeting following determination
of the awards. Awards, if any, will be distributed in cash and
stock. The Committee will determine the precise allocation between
cash and stock on April 19, 2006. The Cash Payment will be made on
April 28, 2006, and any such payment will be based upon the Fair
Market Value of the Corporation's Common Stock on April 19, 2006,
or such date the award is approved for payment by the Committee.
The Stock Distribution under this Plan will be distributed on
April 20, 2006, or on the business day that immediately follows
the date on which the Committee approves the distribution of an
award.
General
Neither this Plan nor any action taken hereunder will be construed
as giving any employee or participant the right to be retained in
the employ of American or an Affiliate.
Nothing in the Plan will 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-3(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 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 its
Affiliates 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 will result in the award being forfeited
in its entirety.
The Committee may amend, suspend, or terminate the Plan at any
time.