Employment Agreement - American Airlines Inc. and Thomas W. Horton
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT among AMR Corporation, a
Delaware corporation ("AMR"), American Airlines, Inc., a Delaware
corporation ("American") and Thomas W. Horton (the "Executive")
is dated as of the 29th day of March, 2006 (the "Agreement").
IT IS HEREBY AGREED AS FOLLOWS:
1. Effective Date. The "Effective Date" shall mean the date
hereof.
2. Employment Period. American hereby agrees to employ the
Executive, and the Executive hereby agrees to serve American and
AMR, subject to the terms and conditions of this Agreement, for
the period commencing on the Effective Date and ending on the
third anniversary thereof (the "Employment Period").
3. Terms of Employment. (a) Position and Duties. (i) During
the Employment Period, the Executive shall serve as the Executive
Vice President, Finance and Planning and Chief Financial Officer
of American and AMR with such duties and responsibilities as are
customarily assigned to such positions, provided that the
Executive shall have responsibility for planning, strategy and
pricing issues. The Executive shall report directly and
exclusively to the Chairman and Chief Executive of AMR and
American.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote substantially all of his business
attention and time to the business and affairs of American and/or
AMR and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities.
(b) Compensation. (i) Base Salary. During the
Employment Period, the Executive shall receive an annual base
salary ("Annual Base Salary") at a rate of not less than
$600,000 payable in accordance with American's normal payroll
policies. The Executive's Annual Base Salary shall be reviewed
at least annually by the Compensation Committee of the AMR Board
of Directors ("Compensation Committee") pursuant to its normal
performance review policies for senior executives. Annual Base
Salary shall not be reduced after any increase and the term
Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased.
(ii) Annual Bonus. With respect to each fiscal year ending
during the Employment Period, the Executive shall be eligible to
receive an annual bonus ("Annual Bonus") with a target of 108% of
the Executive's Annual Base Salary (the "Reference Bonus"). The
actual Annual Bonus, which could be higher or lower (including
zero) than the Reference Bonus, shall be based on the attainment
of performance objectives as determined by the Compensation
Committee and shall be paid, subject to any effective deferral
elections that may be made by the Executive pursuant to any
deferred compensation plans that American may maintain, within
two and a half months following the end of the fiscal year for
which the Annual Bonus is earned. The Executive understands that
an Annual Bonus may not be paid with respect to any fiscal year
in the event the performance criteria established under the
applicable bonus plan are not satisfied (as determined by the
Compensation Committee).
(iii) Equity-Based Grants. On the Effective Date,
AMR shall grant the Executive (A) 33,000 deferred shares ("DSs"), which
shall vest on the first anniversary of the Effective Date, except
as otherwise provided herein, (B) 59,200 stock options with a
fair market value exercise price as of the Effective Date and a
ten year term, which shall vest in five equal annual
installments, except as otherwise provided herein, (C) 69,000
units under AMR's 2004-2006 Performance Unit Plan (or its
successor plan), with a projected distribution in April 2007, and
(D) 77,600 units under AMR's 2005-2007 Performance Unit Plan (or
its successor plan), with a projected distribution in April 2008.
With respect to the performance plans referenced in clauses (C)
and (D), the Executive understands that there may be no
distribution under such plans in the event the performance
criteria established thereunder are not satisfied (as determined
by the Compensation Committee).
(iv) Other Employee Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be,
shall be eligible for participation in and shall receive all
benefits under savings and retirement plans that are
tax-qualified under Section 401(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), in plans that are supplemental
to any such tax-qualified plans, and welfare benefit plans,
practices, policies and programs provided by American or AMR
(including, without limitation, medical, prescription, dental,
vision, disability, salary continuance, group life and
supplemental group life, accidental death, travel accident
insurance, sick leave and vacation plans, practices, policies and
programs), on a basis that is no less favorable than those
generally applicable or made available to other senior executives
of American . The Executive shall be eligible for participation
in fringe benefits and perquisite plans, practices, policies and
programs (including, without limitation, expense reimbursement
plans, practices, policies and programs) on a basis that is no
less favorable than those generally applicable or made available
to other senior executives of American. The Executive shall be
provided with one and one/third additional years of age and
service credit for each year worked during the Employment Period
(for up to a maximum 3.9 years of additional age and service
credit) for all purposes of American's Supplemental Executive
Retirement Program (the "SERP") all with the effect that
Executive shall be deemed to have served continuously with
American since August 1985. The additional age and service credit
under the SERP shall not be provided if the Executive's
employment is terminated by American for Cause or by the
Executive without Good Reason during the Employment Period. The
Executive shall also be provided with reasonable relocation
benefits, consistent with those provided by American to its
senior staff as of the Effective Date, which shall include,
without limitation, the purchase by American of the Executive's
primary residence at appraised value. Executive shall also
receive an annual perquisite allowance of at least $27,000, such
allowance shall be subject to adjustment by the Compensation
Committee in a manner that is consistent with adjustments made to
the perquisite allowance for other senior staff employed by
American. Upon the Effective Date, the Executive's entry-on-duty
date for purposes of determining seniority and all other benefits
normally accruing for members of American's senior staff shall be
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August 19, 1985 (except as provided in Section 5(d) of this
Agreement).
4. Termination of Employment. (a) Death or Disability.
The Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period. If American
determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition
of Disability set forth below), it may provide the Executive with
written notice in accordance with Section 10(b) of this Agreement
of its intention to terminate the Executive's employment. In
such event, the Executive's employment with American shall
terminate effective on the 30th day after receipt of such notice
by the Executive (the "Disability Effective Date"); provided
that, within the 30 days after such receipt, the Executive shall
not have returned to full-time performance of the Executive's
duties. For purposes of this Agreement, "Disability" shall mean
the absence of the Executive from the Executive's duties with
American on a full-time basis for 180 consecutive days as a
result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by
American or its insurers and acceptable to the Executive or the
Executive's legal representative.
(b) Cause. American may terminate the Executive's employment
during the Employment Period either with or without Cause. For
purposes of this Agreement, "Cause" shall mean:
(i) the Executive is convicted of, or pleads guilty or nolo
contendere to a charge of commission of, a felony; or
(ii) the Executive has engaged in willful gross neglect or
willful gross misconduct in carrying out his duties, which results
in material economic harm to AMR or American or in reputational harm
causing quantifiable material injury to AMR or American.
For purposes of this provision, no act or failure to act, on the
part of the Executive, shall be considered "willful" unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive's action or omission
was in the best interests of AMR or American. Any act, or
failure to act, based upon authority given pursuant to a
resolution duly adopted by the AMR Board of Directors (the
"Board") or upon the instructions of the Board or the Chairman of
AMR or based upon the advice of counsel for AMR or American
shall be conclusively presumed to be done, or omitted to be done,
by the Executive in good faith and in the best interests of AMR
or American. The cessation of employment of the Executive shall
not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than two-thirds of
the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is
provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in clause (ii)
above, and specifying the particulars thereof in detail.
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(c) Good Reason. The Executive's employment may be terminated
by the Executive with or without Good Reason. For purposes of
this Agreement, "Good Reason" shall mean in the absence of a
written consent of the Executive:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 3(a) of this
Agreement, or any other action by AMR or American which results
in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial or inadvertent action not taken in bad faith and
which is remedied by AMR or American, as the case may be, within
30 days after receipt of notice thereof given by the Executive;
(ii) any failure by AMR or American to comply with
any of the provisions of Section 3(b) of this Agreement (including
but not limited to, a failure to honor an equity award that is due
and payable), other than (A) an isolated, insubstantial or
inadvertent failure not occurring in bad faith and which is
remedied by AMR or American, as the case may be, within 30 days
after receipt of notice thereof given by the Executive or (B) an
instance where an equity award is settled in marketable property
having equivalent value;
(iii) any requirement by AMR or American that the
Executive's services be rendered primarily at a location or locations
other than DFW, Texas; or
(iv) any failure by AMR or American to comply with
Section 9(c) of this Agreement.
(d) Notice of Termination. Any termination by American for
Cause, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in
accordance with Section 10(b) of this Agreement. For purposes of
this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth
in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment
under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt
of such notice, specifies the termination date (which date shall
be not more than 30 days after the giving of such notice). The
failure by the Executive or American to set forth in the Notice
of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the
Executive or American, respectively, hereunder or preclude the
Executive or American, respectively, from asserting such fact or
circumstance in enforcing the Executive's or American's rights
hereunder.
(e) Date of Termination. "Date of Termination" means
(i) if the Executive's employment is terminated by American for Cause,
or by the Executive with or without Good Reason, the date of receipt
of the Notice of Termination or any later date specified therein
within 30 days of such notice, as the case may be, (ii) if the
Executive's employment is terminated by American other than for
Cause or Disability, the Date of Termination shall be the date on
which American notifies the Executive of such termination and
(iii) if the Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the
case may be.
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(f) Resignation. Upon termination of the Executive's
employment for any reason, the Executive agrees to resign, as of
the Date of Termination, to the extent applicable, from any positions
that the Executive holds with AMR and American and their affiliated
companies, the Board (and any committees thereof) and the Board
of Directors (and any committees thereof) of any of their
affiliated companies.
5. Obligations of the Company upon Termination. (a) Good
Reason; Other Than for Cause, Death or Disability. If, during
the Employment Period, American shall terminate the Executive's
employment other than for Cause, death or Disability or the
Executive shall terminate employment for Good Reason:
(i) American shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination (except for
subparagraph B. hereof) the aggregate of the following amounts:
A. the sum of (1) the Executive's accrued Annual Base Salary
and any accrued vacation pay through the Date of Termination,
(2) the Executive's business expenses that have not been
reimbursed by the Company as of the Date of Termination that were
incurred by the Executive prior to the Date of Termination in
accordance with the applicable policy at American, and (3) the
Executive's Annual Bonus earned for the fiscal year immediately
preceding the fiscal year in which the Date of Termination occurs
if such bonus has been determined but not paid as of the Date of
Termination (the sum of the amounts described in clauses (1)
through (3), shall be hereinafter referred to as the "Accrued
Obligations"); and
B. the product of (1) the Reference Bonus, and (2) a fraction,
the numerator of which is the number of days in the fiscal year
in which the Date of Termination occurs (the "Termination Year")
through the Date of Termination, and the denominator of which is
365 (the "Pro Rata Bonus") if the Compensation Committee
determines that the applicable performance criteria under the
annual bonus plan for the Termination Year have been satisfied.
The Pro Rata Bonus shall be paid to the Executive at the same
time annual bonus payments for the Termination Year are paid to
the senior staff of American; and
C. the amount equal to the product of (1) two and (2) the
sum of (x) the Executive's Annual Base Salary and (y) the Reference
Bonus; and
(ii) the Executive shall receive age and service credit under all
retirement and welfare benefit plans, programs, agreements and
arrangements of American from the Date of Termination through
the third anniversary of the Effective Date (the "Continuation
Period") as if Executive had remained employed for such period;
and
(iii) any equity-based awards, DSs and performance units
granted to the Executive shall vest and become free of
restrictions immediately, and any stock options granted to the
Executive shall be exercisable for the remainder of their ten
year term, without regard to any provisions relating to earlier
termination of the stock options based on termination of
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employment. With respect to performance units granted to the
Executive, they shall be distributed (in accordance with the
terms of the applicable grant agreement) when they become due in
the normal course based on a determination of the Compensation
Committee that the performance criteria established under the
applicable performance unit plan have been satisfied; and
(iv) American shall pay the costs of providing to the Executive
and his eligible dependents COBRA coverage for medical and dental
benefits for the maximum period then allowed under American's
health and welfare plans (collectively "Welfare Benefits"); and
(v) to the extent not theretofore paid or provided, American
shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive
is eligible to receive under any plan, program, policy or
practice or contract or agreement of the Company and its
affiliated companies through the Date of Termination (such other
amounts and benefits shall be hereinafter referred to as the
"Other Benefits"). As used in this Agreement, the term
"affiliated companies" shall include any company controlled by,
controlling or under common control with AMR.
Notwithstanding the foregoing provisions of this Section 5(a), to
the extent required in order to comply with Section 409A of the
Code, cash amounts that would otherwise be payable under this
Section 5(a) during the six-month period immediately following
the Date of Termination shall instead be paid, with interest on
any delayed payment at the applicable federal rate provided for
in Section 7872(f)(2)(A) of the Code ("Interest"), on the first
business day after the date that is six months following the
Executive's "separation from service" within the meaning of
Section 409A.
(b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period,
this Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other
than for (i) payment of Accrued Obligations, (ii) the timely
payment or provision of Other Benefits (as qualified hereafter)
and (iii) payment of the Pro Rata Bonus,. Accrued Obligations
shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of
Termination and the Pro Rata Bonus shall be paid to the
Executive's estate or beneficiary, as applicable, on the date
specified in Section 5(a)(i)(B). With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this
Section 5(b) shall be those death benefits as in effect on the
date of the Executive's death which American customarily pays or
provides in the event of the death of a member of its senior
staff. American shall pay the costs of providing to the
Executive's eligible dependents (as of the date of death) COBRA
coverage for medical and dental benefits for the maximum period
then allowed under American's health and welfare plans. Stock
options, DSs and performance units previously granted to the
Executive shall be exercisable, vested and/or distributed, as the
case may be, in accordance with the terms of the applicable grant
agreement for a termination due to the Executive's death. With
respect to performance units granted to the Executive, they shall
be distributed (in accordance with the terms of the applicable
grant agreement) when they become due in the normal course based
on a determination of the Compensation Committee that the
performance criteria established under the applicable performance
unit plan have been satisfied
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(c) Disability. If the Executive's employment is terminated by
American by reason of the Executive's Disability during the
Employment Period, this Agreement shall terminate without further
obligations to the Executive, other than for (i) payment of
Accrued Obligations, (ii) the timely payment or provision of
Other Benefits (as qualified hereafter) and (iii) payment of the
Pro Rata Bonus; provided, that to the extent required in order to
comply with Section 409A of the Code, amounts and benefits to be
paid or provided under this Section 5(c) shall be paid, with
Interest, or provided to the Executive on the first business day
after the date that is six months following the Executive's
"separation from service" within the meaning of Section 409A.
Accrued Obligations shall be paid to the Executive or Executive's
legal representative, as applicable, in a lump sum in cash within
30 days of the Date of Termination and the Pro Rata Bonus shall
be paid to the Executive or Executive's legal representative, as
applicable, on the date specified in Section 5(a)(i)(B). With
respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 5(c) shall be those
disability benefits as in effect on the date of the Executive's
Disability which American customarily pays or provides in the
event of the Disability of a member of its senior staff. American
shall pay the costs of providing to the Executive's eligible
dependents (as of the date of Disability) COBRA coverage for
medical and dental benefits for the maximum period then allowed
under American's health and welfare plans. Stock options, DSs and
performance units previously granted to the Executive shall be
exercisable, vested and/or distributed, as the case may be, in
accordance with the terms of the applicable grant agreement for a
termination due to the Executive's Disability. With respect to
performance units granted to the Executive, they shall be
distributed (in accordance with the terms of the applicable
grant agreement) when they become due in the normal course based
on a determination of the Compensation Committee that the
performance criteria established under the applicable performance
unit plan have been satisfied.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated by American for Cause or the
Executive terminates his employment without Good Reason during
the Employment Period, this Agreement shall terminate without
further obligations to the Executive other than the obligation to
pay to the Executive (i) the Accrued Obligations through the Date
of Termination and (ii) Other Benefits, in each case to the
extent theretofore unpaid. Accrued Obligations shall be paid to
the Executive in a lump sum in cash within 30 days of the Date of
Termination, provided, that to the extent required in order to
comply with Section 409A of the Code, amounts and benefits to be
paid or provided under this sentence of Section 5(d) shall be
paid, with Interest, or provided to the Executive on the first
business day after the date that is six months following the
Executive's "separation from service" within the meaning of
Section 409A. For purposes of determining years of age or service
credit under any retirement or health or welfare plans maintained
by American (including retiree medical and travel plans), upon a
termination of Executive's employment by American for Cause or
the Executive without Good Reason, during the Employment Period,
(i) no additional years of age or service credit shall be accrued
in whole or in part pursuant to Section 3(b)(iv) and (ii) the
Executive's employment period with American will be deemed to be
from August 19,1985 until June 12, 2002, and any accrual of
credited age or service for Executive's employment during the
Employment Period shall be determined in accordance with
American's then existing policies regarding the accrual of such
service after a break-in-service.
6. Full Settlement. American's obligation to make the
payments provided for in this Agreement and otherwise to perform
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its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action
which American or AMR may have against the Executive or others;
provided, American may withhold applicable taxes from any such
payments. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of
the amounts payable to the Executive under any of the provisions
of this Agreement and, such amounts shall not be reduced whether
or not the Executive obtains other employment. American agrees
to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur
as a result of any contest by AMR or American, any of their
affiliates or their respective predecessors, successors or
assigns, the Executive, his estate, beneficiaries or their
respective successors and assigns of the validity or
enforceability of, or liability under, any provision of this
Agreement (including as a result of any contest by the Executive
about the amount of any payment pursuant to this Agreement);
provided, that the Executive prevails on at least one material
claim.
7. Change in Control; Tax Reimbursement. AMR and American
shall enter into with Executive as of the Effective Date a change
in control agreement (the "CIC Agreement"). The CIC Agreement
shall have terms and conditions similar to those contained in
similar agreements with other members of American's senior staff.
Among other things, there will be provisions in the CIC Agreement
for (i) the payment of (2 X the Executive's Annual Base Salary
and Reference Bonus) and (ii) the reimbursement of any excise
taxes paid by Executive as a result of a change in control of AMR.
8. Confidential Information; Non-Solicit of Employees;
Non-Compete. (a) The Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, which
shall have been obtained by the Executive during the Executive's
employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company
and those designated by it or as may be required by applicable
law, court order, a regulatory body or arbitrator or other
mediator.
(b) In consideration of the Company's obligations hereunder:
(i) During the one-year period following the
Executive's termination of employment during the Employment
Period for any reason (the "Restricted Period"), the Executive
will not, directly or indirectly, on behalf of the Executive or
any other person, become associated with, whether as a principal,
partner, employee, consultant or shareholder (other than as a
holder of 5% or less of the outstanding voting shares of any
publicly traded company), a Competitor. For purposes of this
Section 8(b) a "Competitor" shall mean any entity (A) that is
engaged in the commercial airline business or (B) that controls
another entity that is engaged in the commercial airlines
business.
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(ii)During the Restricted Period, the Executive shall
not, directly or indirectly, solicit or encourage any person to
leave his or her employment with the Company or assist in any way
with the hiring of any Company employee by any other business.
(c) The Executive acknowledges that the Company would
be irreparably injured by a violation of this Section 8 and the
Executive or the Company, as applicable, agrees that the Company
or the Executive, as applicable, in addition to any other
remedies available to it for such breach or threatened breach,
shall be entitled, without posting a bond, to a preliminary
injunction, temporary restraining order, or other equivalent
relief, restraining the Executive or the Company (including its
executive officers and directors), as applicable, from any actual
or threatened breach of this Section 8.
9. Successors. (a) This Agreement is personal to the
Executive and without the prior written consent of the Company
shall not be assignable by the Executive. This Agreement shall
inure to the benefit of and be enforceable by the Executive's
legal representatives, heirs or legatees.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company
to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As
used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
10. Miscellaneous. (a) This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas and
venue shall be in the State District Court for Tarrant County,
Texas (or, if jurisdiction is under the federal court system, the
U. S. District Court for the Northern District of Texas, Fort
Worth Division), without reference to principles of conflict of
laws. If, under any such law, any portion of this Agreement is
at any time deemed to be in conflict with any applicable statute,
rule, regulation or ordinance, such portion shall be deemed to be
modified or altered to conform thereto. The captions of this
Agreement are not part of the provisions hereof and shall have no
force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties
hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other parties
or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: At the most recent address on file at the Company.
If to the Company: AMR Corporation/ American Airlines, Inc.
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4333 Amon Carter Blvd. MD 5618
Fort Worth, TX 76155
Attention: General Counsel
Or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes
as shall be required to be withheld pursuant to any applicable
law or regulation.
(e) The Executive's or the Company's failure to insist
upon strict compliance with any provision of this Agreement or
the failure to assert any right the Executive or the Company may
have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to
Section 4(c)(i)-(v) of this Agreement, shall not be deemed to be
a waiver of such provision or right or any other provision or
right of this Agreement, except as set forth in Section 4(c).
(f) Except as otherwise expressly provided herein,
from and after the Effective Time, this Agreement shall supersede
any other employment, severance or change of control agreement
between the parties and between the Executive with respect to the
subject matter hereof . Any provision of this Agreement that by
its terms continues after the expiration of the Employment Period
or the termination of the Executive's employment shall survive in
accordance with its terms
(g) If any compensation or benefits provided by this
Agreement may result in the application of Section 409A of the
Code, the Company shall, in consultation with the Executive,
modify the Agreement in the least restrictive manner necessary in
order to exclude such compensation from the definition of
"deferred compensation" within the meaning of such Section 409A
or in order to comply with the provisions of Section 409A, other
applicable provision(s) of the Code and/or any rules, regulations
or other regulatory guidance issued under such statutory
provisions and without any diminution in the value of the
payments to the Executive.
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IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from the
Boards of Directors of AMR and American, each has caused these
presents to be executed in its name on its behalf, all as of the
day and year first above written.
THOMAS W. HORTON
/s/ Thomas W. Horton
AMR CORPORATION
By /s/ Gerard J. Arpey
Name: Gerard J. Arpey
Title: Chairman, President and CEO
AMERICAN AIRLINES, INC.
By /s/ Gerard J. Arpey
Name: Gerard J. Arpey
Title: Chairman, President and CEO