ex109.htm


    
      

      

    


    AMENDMENT
TO

     

    EXECUTIVE
TERMINATION BENEFITS AGREEMENT

     

    THIS
AMENDMENT TO EXECUTIVE TERMINATION BENEFITS AGREEMENT (the “Amendment”), dated
as of the 17th day of November, 2008, is by and between AMR CORPORATION, a
Delaware corporation, AMERICAN AIRLINES, INC., a Delaware corporation
(collectively, and either of, the “Company”), and  (the
“Executive”).

     

    W I T N E
S S E T H:

     

    WHEREAS,
the Company and the Executive have heretofore entered into an Executive
Termination Benefits Agreement, including any amendments thereto (the
“Agreement”), addressing issues related to possible Change in Control;
and

     

    WHEREAS,
subsequent to the execution of the Agreement, section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), has been enacted and requires
amendment of the Agreement, which is intended to be accomplished through the
execution of this Amendment, which is effective as of January 1,
2005;

     

    NOW
THEREFORE, the Company and the Executive agree that the Agreement is hereby
amended as follows:

     

    1.          Section
1 of the Agreement is hereby amended by the addition of the following language,
at the end thereof:

     

    Notwithstanding
the above, a Change in Control shall be deemed to have occurred only if the
event is also a change in ownership of the Company, or change in effective
control of the Company, or change in ownership of a substantial portion of the
Company’s assets, in each case as defined in Treasury Regulation 1.409A-3(i)(5)
or successor guidance thereto.  For such purpose the specified
percentages in Treasury Regulation 1.409A-3(i)(5)(v), (vi) and (vii) or
successor guidance thereto shall be utilized, rather than any elective
percentage.

     

    2.          Section
3 of the Agreement is hereby amended by the addition of the following sentence,
at the end thereof:

     

    “No
termination of employment shall be deemed to have occurred under this Agreement
unless and until such termination of employment or separation from employment
constitutes a “separation from service” under Treasury Regulation 1.409A-1(h) or
successor guidance thereto.”

     

    3.          Section
4(a) of the Agreement is hereby amended by the addition of the following
sentence, at the end thereof:

     

    “This
payment is subject to section 409A of the Code and to the payment delay
provision of Section 4(j), with respect to a “specified employee” as described
in section 409A(a)(2)(B)(i) of the Code and Treasury Regulation 1.409A-1(i) or
successor guidance thereto.”

     

    4.           Section
4(b) of the Agreement is hereby amended by the deletion of all language
following the first sentence thereof and substituting in lieu thereof the
following language:

     

    “The
Employee Benefits subject to this Section 4(b) are governed by terms of the
applicable Employee Benefit plans not in conflict with this Section 4(b), may
not be liquidated or exchanged for any other benefit, and the amount of any such
benefits provided in one taxable year of the Executive shall not affect the
amount payable in any subsequent taxable year of the Executive.  The
Company will pay the cost of such Employee Benefits, some portion or all of
which may be taxable to the Executive, together with an additional amount such
that after payment by the Executive, or his dependents or beneficiaries, as the
case may be, of all taxes that may be imposed on the recipient of such Employee
Benefits, the recipient retains an amount equal to such taxes.  Any
amount paid as a cash reimbursement shall be paid not later than the last day of
the taxable year of the Executive following the taxable year of the Executive in
which the expense was incurred.  Any tax reimbursement under this
Section 4(b) must be paid not later than the end of the taxable year of the
Executive following the taxable year of the Executive in which the Executive
paid the relevant taxes.  The benefits or cost thereof payable under
the applicable Employee Benefit plans will be reduced to the extent comparable
welfare benefits are actually received by the Executive from another employer
during the Continuation Period (i.e. Company coverage shall be “secondary”) and
any such benefits actually received by the Executive shall be reported by the
Executive to the Company.”

     

    5.          Section
4(c) of the Agreement is hereby amended and restated in the entirety, to provide
as follows:

     

    “Retirement
Benefits

     

    If the
Executive is not completely vested in the Executive's currently accrued benefits
under the Company's applicable Retirement Benefit Plan and Supplemental
Executive Retirement Plan (“SERP”) in effect as of the date of Change in Control
(collectively, the “Plans”), regardless of the Executive’s actual vesting
service credit thereunder, an amount shall be payable under this Section
4(c).  In addition to such amount, the Executive shall be deemed to
earn service credit for benefit calculation purposes under the SERP for the
Continuation Period described in Section 4(b).  The benefits to be
paid pursuant to the SERP shall be calculated as though the Executive's
compensation rate for each of the 5 years immediately preceding his retirement
equaled the sum of Base Pay plus Incentive Pay. Any benefits payable pursuant to
this Section 4(c) that are not payable out of the Plans for any reason
(including but not limited to any applicable benefit limitations under the
Employee Retirement Income Security Act of 1974, as amended, or any restrictions
relating to the qualification of the Company's applicable Retirement Benefit
Plan under section 401(a) of the Code), shall be paid directly by the Company
out of its general assets.  Any amount payable under this Section 4(c)
that is not paid under the Plans due to the fact the Participant is not fully
vested will be calculated as required under the SERP for payment of SERP
benefits (including calculation, time and form of payment).  If the
Executive is a “specified employee”, as defined in Treasury Regulation
1.409A-1(i) or successor guidance thereto, on the date of the Executive’s
separation from employment, payment of the amount described in this Section 4(c)
shall be subject to Section 4(j).”

     

    6.          Section
4(d) of the Agreement is hereby amended by the by the addition of the following
two sentences, at the end thereof:

     

    “Payment
under this Section 4(d) for expenses shall be made not later than the last day
of the taxable year of the Executive following the taxable year of the Executive
in which the expenses were incurred.  Payments for tax reimbursement
shall be made not later than the end of the first taxable year of the Executive
following the year in which the tax payment was made.”

     

    7.          Section
4(e) of the Agreement is hereby amended by the addition of the following
sentence, at the end thereof:

     

    “Payment
for such services will be made not later than the end of the taxable year of the
Executive following the taxable year of the Executive in which the expenses were
incurred.”

     

    8.          Section
4(f)(ii) of the Agreement is hereby amended by the insertion of the words “or
the Company’s 2003 Employee Stock Incentive Plan (or any successor plan)”
following the reference to the “Company’s 1998 Long-Term Incentive Plan (or any
successor plan).”

     

    9.          Section
4(h)(i) is hereby amended by the addition of the following language, at the end
thereof:

     

    “The
flight privileges subject to this Section 4(h)(i) are governed by the terms of
the applicable flight privilege rules of the Company not in conflict with this
Section 4(h)(i), may not be liquidated or exchanged for any other benefit, and
the amount of any such benefits provided in one taxable year of the Executive
shall not affect the amount payable in any subsequent taxable year of the
Executive.  Any amount paid as a cash reimbursement shall be paid not
later than the last day of the taxable year of the Executive following the
taxable year of the Executive in which the expense was incurred.”

     

    10.          Section
4(h)(iii) is amended by the addition of the following sentence, at the end
thereof:

     

    “Such
payment shall be made within 75 days of the date of employment separation,
subject to Section 4(j) to the extent applicable.”

     

    11.          Section
4(i) of the Agreement is amended by the addition of the following sentence, at
the end thereof:

     

    “Payments
under this Section 4(i) must be made within 75 days of the end of the calendar
year in which the Executive’s termination of employment occurred, subject to
Section 4(j) to the extent applicable; provided that this Section 4(i) shall not
be effective to the extent it would result in impermissible acceleration of any
amounts subject to section 409A of the Code.”

     

    12.          Section
4(j) is hereby amended and restated in the entirety, to provide as
follows:

     

    “(j)           Time of Payment of Certain
Benefits.

     

    Payment
of amounts under Sections 4(a), 4(c), 4(h)(iii), and 4(i) shall be made in a
single lump sum within 75 days following the Executive’s separation from
employment, and in any event not later than 75 days after the end of the taxable
year of the Executive in which the separation from employment shall occur;
provided that if the Executive is a “specified employee”, as defined in Treasury
Regulation 1.409A-1(i) or successor guidance thereto, as of the date of
termination from employment, any such payments to the extent subject to section
409A(a)(2)(B)(i) of the Code, shall not be made until the first business day
following the date of the 6-month anniversary of the Executive’s separation from
employment.”

     

    13.          The
third sentence of Section 5(b) of the Agreement is hereby amended by deletion of
the period at the end thereof and insertion of the following language, at the
end thereof:

     

    “and in
any event not later than the end of the taxable year of the Executive following
the taxable year of the Executive in which payment of the relevant tax is
made.”

     

    14.          Section
5(e) of the Agreement is hereby amended by deletion of the period at the end
thereof and insertion of the following language, at the end
thereof:

     

    “and in
any event not later than the end of the taxable year of the Executive following
the taxable year of the Executive in which payment of the relevant tax is
made.”

     

    15.          The
final three sentences of Section 5(h) of the Agreement are hereby deleted in
their entirety and are replaced by the following two sentences:

     

    “In the
event that any payment or benefit intended to be provided under this Agreement
or otherwise is required to be reduced pursuant to this Section 5(h), the
severance payment under Section 4(a) shall be the payment subject to such
deduction.  If further reduction is required, stock based compensation
payments shall be subject to such reduction.”

     

    16.          Section
7(b) of the Agreement is hereby amended by the addition of the following
language, at the end thereof:

     

    “In the
event the Executive’s employment is terminated, any payment by the Company or
any such trust shall be made pursuant to this Section 7(b) within 75 days
following the date of the Executive’s separation from employment.  No
such transfer to a trust shall be made to the extent it shall trigger the excise
tax under section 409A(b)(3) or (4) of the Code.”

     

    17.          Section
8 of the Agreement is amended by the addition of a new Section 8(c), at the end
thereof:

     

    “(c)           The
Executive and the Company shall cooperate to assure that payments made under
this Agreement do not trigger the excise tax penalties of section 409A of the
Code, and, notwithstanding anything to the contrary in this Agreement, if any
payment under this Agreement to a “specified employee”, as described in Treasury
Regulation 1.409A-1(k) or successor guidance thereto shall constitute “deferred
compensation” as defined in Treasury Regulation 1.409A-1(b) or successor
guidance thereto, as determined by counsel to the Company, such payment shall be
deferred until the first day after the 6 month anniversary of the date of the
Executive’s separation from employment, except for payments described in Section
4(b), 4(d), 4(e) and 4(h)(i).”

     

    18.          Section
17 of the Agreement is hereby amended by the addition of the following sentence,
at the end thereof:

     

    “The
provisions of this Agreement specifying payment dates that differ from
applicable dates in the Agreement prior to its amendment shall be deemed to
constitute a change in time of payment and/or method of payment as permitted
under Internal Revenue Service 2006-79 as revised by Internal Revenue Service
Notice 2007-86 and shall be interpreted consistently with such guidance,
including the requirement that it is not applicable to a payment due in the
current taxable year of such change.”

     

    19.          Except
as amended hereby, the Agreement shall remain in full force and
effect.  This Amendment is effective as of January 1,
2005.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the parties have caused this Amendment be executed and
delivered as of the day and year first above set forth.

     

    AMR
CORPORATION

     

    By:           

    Its:           

     

    


     

    AMERICAN
AIRLINES, INC.

     

    By:           

    Its:           

     

    


    Executive