Document:

EX-10.8

 Exhibit 10.8 

AMERICAN AIRLINES GROUP INC. 

Short-term Incentive Program 

(Established Effective January 22, 2014) 

SECTION I. PURPOSE 

The purpose of the American Airlines Group Inc. 2014 Short-term Incentive Program (the “Program”) is to: 

 

	 	 •
	 	 Motivate executives and other key management to increase shareholder value, and 

 

	 	 •
	 	 Encourage strategic decision-making by rewarding the achievement of certain financial and operational goals. 

The Program sets forth the terms and conditions for cash Performance Awards (“Awards”) to be paid for the Performance Period
commencing on January 1 of each year and ending on December 31 of each year (each, a “Plan Year”) under the American Airlines Group Inc. 2013 Incentive Award Plan (the “Plan”) to individuals employed in eligible
positions. Capitalized terms not defined herein have the meanings as set forth in the Plan. 
 SECTION II.
ELIGIBILITY CRITERIA 
 Employees of American Airlines Group Inc. (the “Company”) or an Affiliate
who meet the criteria established by the Committee in writing or, with respect to Participants who are not executive officers, delegated to management at the time of its approval of this Program are eligible to participate in the Program based on
the principles so established by the Committee or management, as applicable. 
 SECTION III. AWARD
LEVELS 
 Participants have the opportunity to earn Performance Awards under the Program for the Plan Year based on the
achievement of certain financial and operational targets as described in the Plan and as adopted by the Committee in writing at the time of its approval of this Program. 

The Committee may, in its discretion, increase or decrease the amount of a Participant’s Award based on individual performance; a
Participant’s Award may be increased by up to 50% or decreased to zero. The aggregate effect of the individual performance modifier for all Participants may not result in an increase to the aggregate Program incentive amount. Further, in no
event shall an individual payout exceed 200% of the applicable target. 

 Minimum, threshold, target, and maximum Award Levels shall be as established by the Committee at
the time of its approval of this Program. 
 All Award Levels are expressed as a percentage of the employee’s base salary as in effect
on the last day of the Plan Year, except that: if the employee is promoted or demoted during the Plan Year as described in Section II, the last base salary in effect for such employee at the eligible position prior to the demotion or promotion will
be used to determine any pro rata Award attributable to such eligible position, and the base salary in effect for such employee on the last day of the Plan Year will be used to determine the portion of the Award attributable to the employee’s
last eligible position during the Plan Year. 
 If a Participant is continuously and actively employed during the entire Plan Year, but
forfeits his or her Award because the Participant did not satisfy the continuous active employment requirements set forth in Section IV below through the date of payment of the Award, then the CEO or his or her designee is hereby authorized to
reallocate the value of such Award among other Participants who have qualified for Awards under the Program and whose individual performances, in the opinion of the CEO or his or her designee, warrant increased Award amounts. An Award will be
increased only to the extent that it does not exceed any dollar or percentage limits set by the Committee at the time of approval of the Program, and to the extent it will be credited to an executive officer, only if the Committee approves the
increased amount. 
 SECTION IV. AWARD PAYMENT TIMING, EARLY
PAYMENT AND SEPARATION 
 All Awards shall be paid in cash as soon as possible after the
close of the Plan Year, but no later than March 15, 2015, or as soon thereafter if such payment was administratively impracticable to make by such date and such impracticability was unforeseeable as of the date upon which the legally binding
right to such payment arose (as determined under Treasury Regulation Section 1.409A-1(b)(4)(ii)). Payments will be subject to all required federal, state, and local tax withholding. 

To receive an Award, an employee must be in continuous active employment with the Company (or an Affiliate) through the date of payment of the
Award, unless otherwise prohibited by law, subject to the following special rules: 
  

	 	 •
	 	 If the employee is on a leave of absence on the date of payment of the award, but is otherwise eligible for such Award, the employee will receive
payment for any portion of the Award they have earned on such date. 

  

	 	 •
	 	 If the employee separates from service with the Company (and all Affiliates) while actively employed in an eligible position due to death or
disability prior to the payment of the Award, but is otherwise eligible for such Award, the employee will be treated as having been actively employed on the date of payment of the Award. 

  
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 For purposes of this Program, “disability” shall mean a “permanent and total
disability” within the meaning of Section 22(e)(3) of the Code. 
 If the employee separates from service with the Company (and
all Affiliates) for any reason other than death or disability (whether such separation is voluntary or involuntary or during active employment or a leave of absence), no unpaid Award will be due under the Program, unless otherwise required by law.

 SECTION V. PROGRAM ADMINISTRATION 

The Program will be administered by the Committee in accordance with the Plan and, where an Award is intended by the Committee to qualify as a
Performance Award under the Plan, in a manner that satisfies the requirements of Section 162(m) of the Internal Revenue Code for qualified “performance-based” compensation. 

Awards generally are calculated and distributed as provided in Sections III and IV above; provided, however, that no Award payments
will be made unless the Committee certifies in writing with respect to each officer (a) that all material terms of the Program have been satisfied and (b) that payments to the employee in stated amounts are appropriate under the Program.

 SECTION VI. ABSENCE OF PROGRAM FUNDING; NO
EQUITY INTEREST 
 Benefits under the Program shall be paid from the general funds of the Company (or the
Affiliate), and an employee (or the employee’s estate in the event of death) shall be no more than an unsecured general creditor of the Company (or the Affiliate) with no special or prior right to any assets of the Company (or the Affiliate).

 Nothing contained in the Program shall be deemed to give any employee any equity or other interest in the assets, business or affairs of
the Company or any Affiliate. It is not intended that an employee’s interest in the Program shall constitute a security or equity interest within the meaning of any state or federal securities laws. 

SECTION VII. NO TRANSFERABILITY 

An employee shall not have any right to transfer, sell, alienate, assign, pledge, mortgage, collateralize or otherwise encumber any of the
payments provided by this Program. 
 SECTION VIII. NO EMPLOYMENT RIGHTS

 This Program is not intended to be a contract of employment. Both the employee and the Company (and all Affiliates) have the right to
end their employment with or without cause or notice. 

  
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 SECTION IX. INTERPRETATION, AMENDMENT
AND TERMINATION 
 The Committee shall have the power to interpret all provisions of the Program, which
interpretations shall be final and binding on all persons. The provisions of this document shall supersede all provisions of any and all such prior documents relating to the Program and its subject matter. However, if the provisions of this document
conflict with any provision of the Plan, the provisions set forth in the Plan shall govern in all cases. The laws of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of the Program, without
regard to such state’s conflict of laws rules. 
 The Committee reserves the right to amend or terminate the Program at any time, with
or without prior notice; provided, however, that all amendments to the Program shall preserve the qualification of Performance Awards made under the Program as “performance-based” compensation under Section 162(m) of the
Internal Revenue Code. Notwithstanding the foregoing, the Committee may not amend the Program in a way that would materially impair the rights of an employee with respect to a previously-granted Award, except to the extent necessary to preserve the
qualification of Performance Awards as “performance-based” compensation under Section 162(m) of the Internal Revenue Code or unless such employee has consented in writing to such amendment. 

Notwithstanding the foregoing, 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 Company, whether similar or dissimilar (each a “Force
Majeure Event”), which Force Majeure Event affects the Company or its Affiliates, the Committee, in its sole discretion, may terminate or 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 Program, including, but not limited to, any Awards that have accrued to the benefit of employees but have not yet been paid, subject to Section 409A of the Internal Revenue Code and the
regulations and guidance promulgated thereunder. 

  
 Page 4ptp20140630_exhibit10-1.htm

Exhibit 10.1

 

INVESTMENT MANAGEMENT AGREEMENT

 

THIS INVESTMENT MANAGEMENT AGREEMENT (“Agreement”) made as of the 22nd day of September, 2008 (“Commencement Date”) between Platinum Underwriters Holdings, Ltd. (the “Client”) and Hyperion Brookfield Asset Management, Inc. (“Hyperion”).

 

WITNESSETH:

 

WHEREAS, the Client desires to appoint Hyperion as the investment manager of the portion of the assets of the Client constituting the Investment Account (as defined in Section 4).

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.           Appointment and Status as Investment Manager.  The Client hereby appoints Hyperion as the investment manager with respect to the Investment Account, and Hyperion hereby accepts this appointment, on the terms and conditions set forth herein.

 

2.           Management of Account.  Hyperion represents that it is a federally registered investment adviser under the Investment Advisers Act of 1940, as amended, and acknowledges that, in acting as investment manager under this Agreement, it will be acting as a fiduciary with respect to the Investment Account.  Hyperion agrees to supervise and direct, with full authority and at its discretion, on the Client’s behalf and at the Client’s risk, the investment of the assets contained in the Investment Account in such manner as Hyperion may deem advisable in accordance with written investment restrictions and guidelines delivered to Hyperion by the Client and attached as Exhibit A (the “Investment Guidelines”).  The Client may from time to time amend the Investment Guidelines.  Hyperion will not be bound to follow any amendment to the Investment Guidelines, however, until it has received written notice of the amendment from the Client.  The Client will incorporate into the Investment Guidelines any restrictions on investments, provided that it shall be Hyperion’s responsibility to abide by any and all laws and regulations affecting or governing its activities as a registered investment adviser, whether or not any investment restrictions resulting from such laws and regulations are incorporated by the Client into the Investment Guidelines.

 

3.           Brokerage. Hyperion may place orders for the execution of transactions for the Investment Account with or through any brokers, dealers or banks that Hyperion may select without prior notice to the Client and in accordance with Hyperion’s policy with respect to allocation of brokerage and brokerage commissions as set forth in Part II of its Form ADV, as amended from time to time.  Hyperion will at all times seek the best possible execution for a given securities transaction.  To the extent permitted by law, the Client authorizes Hyperion to bunch or aggregate its orders with orders of its other clients.  Hyperion will not effect securities transactions for the Investment Account through any broker-dealer that may be deemed to be affiliated with Hyperion.

 

4.           Investment Account. The “Investment Account” shall initially consist of the cash and assets of the Client listed in the schedule of assets separately furnished in writing to Hyperion by the Client plus all investments, reinvestments and proceeds of the sale thereof, including, without limitation, all dividends and interest on investments, and all appreciation thereof, net of withdrawals therefrom.   The Client may from time to time in its sole discretion make additions to, or withdrawals from, the Investment Account and the Client will promptly notify Hyperion thereof.  The Client represents that the Client is the beneficial owner of all assets contained in the Investment Account and that no restrictions exist on the transfer, sale or public distribution of any of those assets; provided, however, assets in trust accounts may have certain restrictions.

 

5.           Custody.  The cash and assets of the Investment Account shall be held by a Custodian, duly appointed by the Client (the “Custodian”) in the custody accounts identified in Exhibit C.  Hyperion represents that the Custodian has no affiliation with Hyperion and the Client represents that the Custodian has agreed to act as sole custodian for the Investment Account in accordance with Hyperion’s instructions.  Hyperion shall at no time have custody, possession or direct control of the assets and cash in the Investment Account and nothing in this Agreement shall be deemed to authorize Hyperion to take or receive physical possession of any of the assets.  In addition, Hyperion shall not be liable for any act or omission of the Custodian.  Hyperion shall give instructions to the Custodian in writing (via an approved signatory list that is updated on a regular basis) or orally, but if instructions are given orally, Hyperion shall confirm them in writing or by facsimile as soon as practicable thereafter.  The Client shall instruct the Custodian to provide Hyperion with such periodic reports concerning the status of the Investment Account as Hyperion may reasonably request from time to time.  The Client will not change the Custodian without giving Hyperion reasonable prior notice of its intention to do so together with the name of, and other relevant information with respect to, the new Custodian.

 

6.           Limitations on Liability; Indemnity.  The Client agrees to indemnify and hold Hyperion harmless from any and all expenses, damages, costs and fees, including reasonable attorney’s fees, which may be incurred by reason of the Client’s negligence, willful misconduct, malfeasance, material breach of this Agreement or violation of applicable law.

 

Hyperion agrees to indemnify and hold the Client harmless from any and all expenses, damages, costs and fees, including reasonable attorney’s fees, which may be incurred by reason of Hyperion’s negligence, willful misconduct, malfeasance, material breach of this Agreement or violation of applicable law.

 

Nothing in this Agreement shall in any way constitute a waiver or limitation of any rights that the Client may have under Federal or State securities laws.

 

  

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7.         Representations and Warranties of the Client.  The Client represents and warrants to Hyperion that (a) this Agreement has been duly authorized, executed and delivered by the Client and constitutes its valid and binding obligation, enforceable in accordance with its terms; (b) no governmental authorizations, approvals, consents or filings are required in connection with the execution, delivery or performance of this Agreement by the Client;  (c) the execution, delivery and performance of this Agreement by the Client will not violate or result in any default under the Client’s charter or by-laws (or equivalent constituent documents), any material contract or agreement to which the Client is a party or by which it or its assets (including the Investment Account) may be bound or in the best of it’s knowledge any statute or any rule, regulation or order of any government agency or body.

 

8.           Directions to Hyperion.   All directions by or on behalf of the Client to Hyperion shall be in writing signed either (a) by a trustee or authorized officer of the Client (refer to Exhibit D), or (b) by a duly authorized agent of the Client.  Hyperion shall be fully protected in relying upon any direction signed by a person whose authority to do so has been previously certified by the Client to Hyperion. Hyperion shall also be fully protected when acting upon any instrument, certificate or paper Hyperion reasonably believes to be genuine and to be signed or presented by the proper person or persons.

 

9.           Reports and Communication.  Hyperion shall provide the Client with reports containing the status of the Investment Account, including a statement of compliance, on a monthly basis and at any other times as the Client may reasonably request.  Further, Hyperion shall also reconcile such reports with custodian reports and communicate and resolve any material discrepancies with the Custodian.  Further, Hyperion shall provide trade order information, including but not limited to, to the Custodian, accountant and other third parties as requested in writing by Client.

 

10.           Auditing.  Client shall have the reasonable right to audit all Hyperion’s books and records directly pertaining to the performance of investment management under this agreement, and to obtain copies of such books and records as its auditors may reasonably request in connection with such audit, provided that Client gives reasonable notice of the audit, and reviews the books and records during Hyperion’s normal business hours, and promptly reimburses Hyperion for any costs of photocopying such books and records.

 

Hyperion furthermore agrees, at its sole cost and expense, to provide Client with a Type II SAS 70 Report (the “Report”) concerning Hyperion’s internal controls with respect to design and operating effectiveness of the controls over investment management.   The Report should cover the most recent calendar year period (if a Report is performed on other then a calendar year basis, then the Report must at least cover the calendar year period through November 30th).  Each quarter end when Hyperion does not provide the Report, Hyperion will provide Client with a letter certifying that the internal control environment has not changed during that quarter or, if there have been material changes to the internal control environment, Hyperion will explain the nature of the changes, including the design effectiveness of such changes.   Both the Report and any interim period letter on internal controls are required to be delivered to Client within 30 days of the period covered by the report and each quarterly letter, respectively.  In addition, Hyperion is required to promptly advise Client of any material changes in their internal control environment, or the identification of any material weaknesses or deficiencies in the controls governing investment management once Hyperion becomes aware of any such circumstances.  If Hyperion identifies a material weakness or significant deficiency in internal control that relates to or affects the Client or the services provided to the Client, Hyperion will promptly communicate the nature of the material weakness or significant deficiency identified, the planned corrective action, the timing to complete remediation, and confirmation of control remediation upon completion of the corrective action.

 

To the extent Hyperion does not remediate any material weakness or significant deficiency, within a reasonable cure period, not to exceed thirty (30) days, then the Client shall have the right to immediately terminate this agreement.

 

11.           Proxies, Tender Offers, Class Actions, Etc.  Unless specifically reserved to the Trustee of the Client or a named fiduciary of the Client and subject to any other written instructions of the Client, Hyperion is hereby appointed the Client’s agent and attorney-in-fact in its discretion to vote, tender or convert any securities in the Investment Account; to execute proxies, waivers, consents and other instruments with respect to such securities; to endorse, transfer or deliver such securities and to participate in or consent to any class action, plan of reorganization, merger, combination, consolidation, liquidation or similar plan with reference to such securities; and Hyperion shall not incur any liability to the Client by reason of any exercise of, or failure to exercise, such discretion.  Notwithstanding the foregoing provisions of this Section 11, if Hyperion, or any of its affiliates has an adverse or potentially adverse interest with respect to the vote or other requested action, Hyperion shall so inform the Client, which shall thereupon become responsible for the determination on such vote or other action.

 

12.           Confidential Relationship.  All information and advice furnished by either party to this Agreement shall be treated as confidential and shall not be disclosed to third parties except as required by applicable law or regulation. In addition, Hyperion, without the prior written consent of the Client,  will not disclose to any third party (other than its attorneys, accountants, representatives and consultants with a business need to know) the existence or purpose of this Agreement, the terms and conditions hereof, except as may be required by applicable law or regulation.

 

13.           Services to Other Clients.  Hyperion acts as adviser to other clients and may give advice, and take action, with respect to any of those clients that may differ from the advice given, or the time or the nature of action taken with respect to the Investment Account.  Hyperion is not to favor or disfavor consistently or consciously any client or class of clients in the allocation of investment opportunities and that, to the extent practical, such opportunities are allocated among clients over a period of time on a fair and equitable basis.  Hyperion shall have no obligation to purchase or sell for the Investment Account, or to recommend for purchase or sale by the Investment Account, any security that Hyperion, its principals, affiliates or employees may purchase for themselves or for any other clients; provided always, however, that Hyperion shall use its best efforts to maximize the gains for the Investment Account and that no transaction shall violate any applicable law or regulation, or be engaged in with the knowledge that such transaction may reasonably be expected to result in harm to the Client.

 

14.           Relationship with Affiliated Broker-Dealers.  Hyperion will not use any affiliated broker-dealer for the execution of the Client’s securities transactions.

 

  

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15.           Non-Assignability.   No assignment (as that term is defined in the Investment Advisers Act of 1940, as amended) of this Agreement may be made by Hyperion without the prior written consent of the Client.

 

16.           Termination.  This Agreement may be terminated by the Client at any time without notice and by Hyperion at any time upon thirty (30) days’ written notice.  Upon termination, fees will be prorated to the date of termination; any accrued portion of unpaid fees will be paid by the Client to Hyperion; and any unearned portion of prepaid fees will be refunded by Hyperion.

 

17.           Notices.  All notices and instructions with respect to securities transactions or any other matters contemplated by this Agreement shall be deemed duly given when delivered in writing to the addresses below or when deposited by first-class mail addressed as follows:

 

(a)           To the Custodian:

 

State Street Bank and Trust Company

801 Pennsylvania Avenue

Kansas City, MO 64105

 

Attention: Vice President, Insurance Services

 

 (b)           To the Client:

 

Platinum Underwriters Holdings, Ltd.

The Belvedere Building

69 Pitts Bay Road, 2nd Floor

Pembroke, HM 08

Bermuda

Attention: Treasurer

 

(c)           To Hyperion:

 

Hyperion Brookfield Asset Management, Inc.

Three World Financial Center

200 Vesey Street, 10th Floor

New York, N.Y. 10281-1010

Attention: General Counsel

 

18.           Fees.  Hyperion’s fees for services provided under this Agreement shall be payable by the Client at the end of each calendar quarter for the preceding three months, in accordance with the schedule of fees attached hereto as Exhibit B.

 

19.          Written Disclosure Statement. Client acknowledges receipt of Advisor’s Disclosure Statement at least 48 hours prior to, but not later than, the date of execution of this agreement.  Accordingly, Client shall have the option to terminate this agreement without penalty within five business days after the date of execution; provided, however, that any investment action taken by Advisor with respect to the Account prior to the effective date of such termination shall be at Client’s risk.

 

20.           Entire Agreement; Amendment.  This Agreement states the entire agreement of the parties with respect to management of the Investment Account and may not be amended except by a writing signed by the parties.

 

21.           Governing Law.  This Agreement shall be governed by, and construed in accordance with the law of the State of New York, without regard to the laws of conflict of laws.

 

22.           Effective Date.  This Agreement shall become effective on the day and year first written above.

 

23.           No Waiver.  Nothing in this Agreement shall in any way constitute a waiver or limitation of any rights which Client may have under federal or state securities laws.

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on their behalf by their duly authorized officers as of the day, month and year first above written.

 

 

Platinum Underwriters Holdings, Ltd.

 

Address:                The Belvedere Building

69 Pitts Bay Road, 2nd Floor

Pembroke, HM 08

Bermuda

 

 

By:/s/ James A. Krantz

Name:   James A. Krantz

Title:Executive Vice President and Chief Financial Officer

 

 

 

Hyperion Brookfield Asset Management, Inc.

Address:              Three World Financial Center

200 Vesey Street. 10th Floor

New York, New York  10281-1010

 

 

By:/s/ John J. Feeney, Jr.

Name:    John J. Feeney, Jr.

Title:President and Chief Executive Officer

 

 

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