Document:

Exhibit 10.32

 

STOCK OPTION

 

STOCK OPTION granted «Gdate»,
by AMR Corporation, a Delaware corporation (the “Corporation”), and «First» «Last»,
employee number «ID», an employee of the Corporation or one of its
Subsidiaries or Affiliates (the “Optionee”).

 

W I T N E S S E T
H:

 

WHEREAS, the stockholders
of the Corporation approved the 1998 Long Term Incentive Plan at the
Corporation’s annual meeting held on May 20, 1998 (such plan, as may be amended
from time to time, to be referenced the “1998 Plan”);

 

WHEREAS, the 1998 Plan
provides for the grant of an option to purchase shares of the Corporation’s
Common Stock to those individuals selected by the Committee or, in lieu
thereof, the Board of Directors of AMR Corporation (the “Board”); and

 

WHEREAS, the Board has
determined that the Optionee is eligible under the Plan and that it is to the
advantage and interest of the Corporation to grant the option provided for
herein to the Optionee as an incentive for Optionee to remain in the employ of
the Corporation or one of its Subsidiaries or Affiliates, and to encourage
ownership by the Optionee of the Corporation’s Common Stock, $1 par value (the
“Common Stock”).

 

NOW, THEREFORE:

 

1.                                       Option
Grant.  The Corporation hereby
grants to the Optionee a non-qualified stock option, subject to the terms and
conditions hereinafter set forth, to purchase all or any part of an aggregate
of «Shares»
shares of Common Stock at a price of $«Price» per share (being the fair market
value of the Common Stock on the date hereof), exercisable in approximately
equal installments on and after the following dates and with respect to the
following number of shares of Common Stock:

 

	
  Exercisable On and After

  	
   

  	
  Number of
  Shares

  	
   

  
	
  «Vdate1»

  	
   

  	
  «Shares1»

  	
   

  
	
  «Vdate2»

  	
   

  	
  «Shares2»

  	
   

  
	
  «Vdate3»

  	
   

  	
  «Shares3»

  	
   

  
	
  «Vdate4»

  	
   

  	
  «Shares4»

  	
   

  
	
  «Vdate5»

  	
   

  	
  «Shares5»

  	
   

  

 

1

 

provided,
that in no event shall this option be exercisable in whole or in part ten years
from the date hereof and that the Corporation shall in no event be obligated to
issue fractional shares.  The right to
exercise this option and to purchase the number of shares comprising each such
installment shall be cumulative, and once such right has become exercisable it
may be exercised in whole at any time and in part from time to time until the
date of termination of the Optionee’s rights hereunder.

 

2.                                       Restriction
on Exercise. 
Notwithstanding any other provision hereof, this option shall not be
exercised if at such time such exercise or the delivery of certificates
representing shares of Common Stock purchased pursuant hereto shall constitute
a violation of any rule of the Corporation, any provision of any applicable
Federal or State statute, rule or regulation, or any rule or regulation of any
securities exchange on which the Common Stock may be listed.

 

3.                                       Manner of
Exercise.  This option may be
exercised with respect to all or any part of the shares of Common Stock then
subject to such exercise pursuant to whatever procedures may be adopted by the
Corporation.  In the event that at the
time of such exercise the shares of Common Stock as to which this option is
exercisable have not been registered under the Securities Act of 1933, the
Optionee will make a representation that he is acquiring the shares of Common Stock
for investment only and not with a view to distribution. Subject to compliance
by the Optionee with all the terms and conditions hereof, the Corporation or
its agent shall promptly thereafter deliver to the Optionee a certificate or
certificates for such shares with all requisite transfer stamps attached.  (In the event of a cashless exercise, the
Corporation or its agent will pay to the Optionee the appropriate cash amount,
less required withholdings.)

 

4.                                       Termination
of Option. 
This option shall terminate and may no longer be exercised if (i) the
Optionee ceases to be an employee of the Corporation or one of its Subsidiaries
or Affiliates; or (ii) the Optionee becomes an employee of a Subsidiary that is
not wholly owned, directly or indirectly, by the Corporation; or (iii) the
Optionee takes a leave of absence without reinstatement rights, unless
otherwise agreed in writing between the Corporation and the Optionee; except
that

 

(a)                                  If the
Optionee’s employment by the Corporation (and any Subsidiary or Affiliate)
terminates by reason of death, the vesting of the option will be accelerated
and the option will remain exerciseable until its expiration;

 

2

 

(b)                                 If the
Optionee’s employment by the Corporation (and any Subsidiary or Affiliate)
terminates by reason of Disability, the option will continue to vest in
accordance with its terms and may be exercised until its expiration; provided,
however, that if the Optionee dies after such Disability the vesting of the
option will be accelerated and the option will remain exerciseable until its
expiration;

 

(c)                                  Subject
to Section 7(c), if the Optionee’s employment by the Corporation (and any
Subsidiary or Affiliate) terminates by reason of Normal or Early Retirement, the
option will continue to vest in accordance with its terms and may be exercised
until its expiration; provided, however, that if the Optionee dies after
Retirement the vesting of the option will be accelerated and the option will
remain exerciseable until its expiration;

 

(d)                                 If
the Optionee’s employment by the Corporation (and any Subsidiary or Affiliate)
is involuntarily terminated by the Corporation or a Subsidiary or Affiliate (as
the case may be) without Cause, the option may thereafter be exercised, to the
extent it was exercisable at the time of termination, for a period of three
months from the date of such termination of employment or until the stated term
of such option, whichever period is shorter; and

 

(e)                                  In the event
of a Change in Control or a Potential Change in Control of the Corporation,
this option shall become exercisable in accordance with the 1998 Plan, or its
successor.

 

5.                                     Adjustments
in Common Stock. 
In the event of any stock dividend, stock split, merger, consolidation,
reorganization, recapitalization or other change in the corporate structure,
appropriate adjustments may be made by the Board in the number of shares, class
or classes of securities and the price per share.

 

6.                                     Non-Transferability
of Option. 
Unless the Committee shall permit (on such terms and conditions as it
shall establish), an option may not be transferred except by will or the laws
of descent and distribu­tion to the extent provided herein. During the lifetime
of the Optionee this option may be exercised only by him or her (unless
otherwise determined by the Committee).

 

7.                                       Miscellaneous.

 

(a)                                  This
option (i) shall be binding upon and inure to the benefit of any successor of
the Corporation, (ii) shall be governed by the laws of the State of Texas, and
any applicable laws of the United States, and (iii) may not be amended except
in writing.  No contract or right of
employment shall be implied by this option.

 

3

 

(b)                                 If this
option is assumed or a new option is substituted therefore in any corporate
reorganization (including, but not limited to, any transaction of the type
referred to in Section 425(a) of the Internal Revenue Code of 1986, as
amended), employment by such assuming or substituting corporation or by a
parent corporation or a subsidiary thereof shall be considered for all purposes
of this option to be employment by the Corporation.

 

(c)                                  In the event
the Optionee’s employment is terminated by reason of Early or Normal Retirement
and the Optionee subsequently is employed by a competitor of the Corporation,
the Corporation reserves the right, upon notice to the Optionee, to declare the
option forfeited and of no further validity.

 

8.                                       Securities
Law Requirements. 
The Corporation shall not be required to issue shares upon the exercise
of this option unless and until (a) such shares have been duly listed upon each
stock exchange on which the Corporation’s Stock is then registered; and (b) a
registration statement under the Securities Act of 1933 with respect to such
shares is then effective.

 

The Board may require
the Optionee to furnish to the Corporation, prior to the issuance of any shares
of Stock in connection with the exercise of this option, an agreement, in such
form as the Board may from time to time deem appropri­ate, in which the
Optionee represents that the shares acquired by him upon such exercise are
being acquired for investment and not with a view to the sale or distribution
thereof.

 

9.                                       Option
Subject to 1998 Plan. 
This option shall be subject to all the terms and provisions of the 1998
Plan and the Optionee shall abide by and be bound by all rules, regulations and
determinations of the Board now or hereafter made in connection with the
administration of the 1998 Plan. 
Capitalized terms not otherwise defined herein shall have the meanings
set forth for such terms in the 1998 Plan.

 

IN WITNESS WHEREOF, the
Corporation has executed this Stock Option as of the day and year first above
written.

 

 

	
   

  	
  AMR Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Charles D. MarLett

  	
   

  
	
  Optionee

  	
  Charles D. MarLett

  
	
   

  	
  Corporate Secretary

  
				

 

4Exhibit
10.41

 

2003 - 2005
PERFORMANCE UNIT PLAN

FOR OFFICERS AND
KEY EMPLOYEES

 

Purpose

 

The purpose of the 2003 -
2005 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 / Nominating Committee, or its successor, of the AMR Board of
Directors.

 

“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 either the New York Stock Exchange (NYSE), the National Association
of Stock Dealers and Quotes (NASDAQ), or the American Stock Exchange (AMEX).

 

1

 

Accumulation of Units 

 

Any payment 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 target units, based on rank, is specified
below:

 

Granted Shares –
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 target units, based on rank and the number of remaining
comparators, will be used accordingly.

 

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%

  	
   

  	
  50

  	
  %

  	
  135

  	
  %

  	
  175

  	
  %

  

 

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 distribution percentage of units, if 

 

2

 

any, 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 in cash.

 

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 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 current employees of American Airlines, Inc. or any subsidiaries of
AMR to join the employee at his or her new place of employment after his or her
employment with American Airlines, Inc. is terminated.

 

The Committee may amend,
suspend, or terminate the Plan at any time.

 

3

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