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AAMRQ > SEC Filings for AAMRQ > Form 8-K on 9-Dec-2013All Recent SEC Filings

Show all filings for AMERICAN AIRLINES GROUP INC. | Request a Trial to NEW EDGAR Online Pro

Form 8-K for AMERICAN AIRLINES GROUP INC.


9-Dec-2013

Entry into a Material Definitive Agreement, Termination of a Materia


Item 1.01. Entry into a Material Definitive Agreement.

Pursuant to and in accordance with the Plan and the Merger Agreement, the Company and American entered into the following agreements:

• The Company and American entered into a joinder to loan agreement, dated as of December 9, 2013 (the "Loan Agreement Joinder"), to the $1,600,000,000 Loan Agreement, dated as of May 23, 2013 (the "Loan Agreement"), among US Airways, Inc. ("US Airways"), US Airways Group and certain affiliates of US Airways party thereto from time to time, the lenders party thereto and Citicorp North America, Inc., as administrative agent for the lenders (the "Administrative Agent");

• The Company and American entered into a second supplemental indenture, dated as of December 9, 2013 (the "6.125% Notes Second Supplemental Indenture"), with Wilmington Trust, National Association, as trustee, US Airways Group and US Airways to the indenture governing US Airways Group's 6.125% Senior Notes due 2018 (the "6.125% Notes"); and

• The Company entered into a second supplemental indenture, dated as of December 9, 2013 (the "Convertible Notes Second Supplemental Indenture"), with The Bank of New York Mellon Trust Company, N.A., as trustee, and US Airways Group to Convertible Notes Indenture (as defined below) governing US Airways Group's 7.25% Senior Convertible Notes due 2014 (the "Convertible Notes").

Loan Agreement

Pursuant to the Loan Agreement Joinder, the Company and American each became an obligor (together with the other obligors thereto, the "Obligors") under the Loan Agreement. The Loan Agreement consists of $1.0 billion of tranche B-1 term loans ("Tranche B-1") and $600 million of tranche B-2 term loans ("Tranche B-2"). Borrowings under the Loan Agreement bear interest at an index rate plus an applicable index margin or, at US Airways' option, LIBOR (subject to a floor) plus an applicable LIBOR margin for interest periods of one, two, three or six months. Upon the consummation of the Merger, the applicable LIBOR margin decreased by 0.25%. Tranche B-1 matures on May 23, 2019, and Tranche B-2 matures on November 23, 2016, and each tranche is repayable in annual installments, to be paid on each anniversary of the closing date of the respective tranche, in an amount equal to 1% of the initial aggregate principal amount of the loans of such tranche with any unpaid balance due on the maturity date of the respective tranche. The obligations of US Airways and the Obligors under the Loan Agreement are secured by liens on (a) certain route authorities to operate between Philadelphia and London, England, (b) certain take-off and landing rights at London's Heathrow airport and LaGuardia and Ronald Reagan Washington National airports, (c) accounts receivable, (d) certain aircraft, (e) certain engines,
(f) spare parts and ground service equipment, (g) certain flight simulators,
(h) certain leasehold real estate assets and (i) cash and cash equivalents . . .



Item 1.02. Termination of a Material Definitive Agreement.

Pursuant to the Plan, at the Effective Date all of the unsecured indebtedness of the Company, American and the other Debtors was discharged and all related agreements terminated.



Item 2.03. Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 of this Current Report on Form 8-K with respect to the Loan Agreement Joinder, 6.125% Notes Second Supplemental Indenture and the Convertible Notes Second Supplemental Indenture is incorporated in this Item 2.03 by reference.



Item 3.02. Unregistered Sales of Equity Securities.

Pursuant to the Plan, and in accordance with the Merger Agreement, on the Effective Date (i) all existing shares of the Company's old common stock formerly traded under the symbol "AAMRQ" (CUSIP 001765106) were cancelled and
(ii) the Company is authorized to issue up to approximately 544 million shares of Company Common Stock by operation of the Plan. In connection with the Effective Date, the Company issued approximately (A) 53 million shares of Company Common Stock to the Company's old equity holders and certain of the Debtors' employees and (B) 168 million shares of new Series A Convertible Preferred Stock, par value $0.01 (the "Company Preferred Stock") (CUSIP 02376R201), which is mandatorily convertible into new Company Common Stock during the 120-day period after the Effective Date, to certain creditors and employees of the Debtors (including shares deposited in the Disputed Claims Reserve (as defined in the Plan)).

The shares of Company Common Stock and Company Preferred Stock described in this Item 3.02 that were not registered under the Securities Act of 1933, as amended (the "Securities Act"), are and will be exempt from the registration requirements of the Securities Act in reliance on Section 1145 of the Bankruptcy Code. A description of the material terms of the Company Common Stock and Company Preferred Stock, including the terms of conversion of Company Preferred Stock under the Company's Restated Certificate of


Incorporation, is included under the captions "The Plan of Reorganization-AAG Convertible Preferred Stock," "Description of Capital Stock of AAG" and "Comparison of Stockholder Rights and Corporate Governance Matters" in the Company's registration statement on Form S-4 filed with the SEC on June 10, 2013 (the "Form S-4"), which description is incorporated herein by reference.



Item 3.03. Material Modifications to Rights of Security Holders.

The information provided in Items 1.02 and 5.03 of this Current Report on Form 8-K regarding the discharge of unsecured indebtedness and the termination of all related agreements and the Restated Certificate of Incorporation and Amended and Restated Bylaws are incorporated by reference into this Item 3.03.



Item 5.02. Departure of Directors or Certain Officers, Election of Directors, Appointment of Certain Officers, Compensatory Arrangements of Certain Officers.

Departure of Directors

On the Effective Date and pursuant to the Plan and the Merger Agreement, the following persons ceased to be Directors of the Company and American: John W. Bachmann, Stephen M. Bennett, Armando M. Codina, Ann M. Korologos, Philip J. Purcell, Judith Rodin, Matthew K. Rose and Roger T. Staubach. In addition, Alberto Ibargüen and Ray M. Robinson ceased to be directors of American.

Election of Directors

Pursuant to the Plan and in accordance with the terms of the Merger Agreement, immediately following the consummation of the reorganization of the Company pursuant to the Plan, the board of directors of the Company consists of 12 members: James F. Albaugh, Jeffrey D. Benjamin, John T. Cahill, Michael J. Embler, Matthew J. Hart, Thomas W. Horton, Alberto Ibargüen, Richard C. Kraemer, Denise M. O'Leary, W. Douglas Parker, Ray M. Robinson and Richard P. Schifter.

Five of the directors were designated by the Search Committee appointed by the Debtors' Official Committee of Unsecured Creditors in the Chapter 11 Cases and certain creditors: James F. Albaugh, Jeffrey D. Benjamin, John T. Cahill, Michael J. Embler, and Richard P. Schifter; two of the directors were designated by the Company prior to the Effective Date and were determined to be reasonably acceptable to the Search Committee: Alberto Ibargüen and Ray M. Robinson; three of the directors were designated by US Airways Group prior to the Effective Date: Matthew J. Hart, Richard C. Kraemer, and Denise M. O'Leary; and the two remaining directors are Thomas W. Horton, the chairman of the board and former chief executive officer of the Company; and W. Douglas Parker, the current chief executive officer of the Company. Mr. Cahill has been chosen to serve as lead independent director. Except as set forth below or otherwise provided for in the Company's Restated Certificate of Incorporation, each of these individuals will serve until the Company's next annual meeting.

Pursuant to the Merger Agreement and as provided in the Company's Amended and Restated Bylaws, Mr. Horton will serve as chairman of the board of directors of the Company until the earliest of:

• the date that is the first anniversary of the Effective Date;

• the day prior to the date of the first annual meeting of stockholders of the Company following the Effective Date (which will not occur prior to May 1, 2014); and

• the election of a new chairman by the affirmative vote of at least 75% of the members of the board of directors (rounded up to the next full director), which must include at least one director who was designated as a director of AAG by the Company prior to the closing of the Merger pursuant to the terms of the Merger Agreement.

In addition, W. Douglas Parker, Thomas W. Horton and Stephen L. Johnson were appointed as directors of substantially all of the Company's subsidiaries following the completion of the Merger, including American, US Airways Group, and US Airways.

Committee Memberships

The standing committees of the Company's board of directors consist of an Audit Committee, Compensation Committee and Governance and Nominating Committee.

As of the Effective Date, John T. Cahill, Michael J. Embler, Matthew J. Hart and Alberto Ibargüen were appointed to the Audit Committee, James F. Albaugh, Jeffrey D. Benjamin, Alberto Ibargüen and Richard C. Kraemer were appointed to the Compensation Committee, and John T. Cahill, Denise M. O'Leary, Ray M. Robinson and Richard P. Schifter were appointed to the Governance and Nominating Committee.

Departure of Certain Officers

On the Effective Date, the following persons ceased to be executive officers of the Company and American: Thomas W. Horton (formerly president and chief executive officer), Daniel P. Garton (formerly executive vice president), Isabella D. Goren (formerly senior vice president and chief financial officer), Gary F. Kennedy (formerly senior vice president, general counsel, and chief compliance officer) and James B. Ream (formerly senior vice president of operations).


In recognition of Mr. Horton's role in the financial performance of the Company during 2013, the success and completion of AMR Corporation's financial restructuring and emergence from bankruptcy, and the completion of the Merger, as well as compensatory arrangements with other Company executives, on December 9, 2013 the Company entered into a transition agreement with Mr. Horton (the "Transition Agreement") providing for certain payments and benefits as Mr. Horton transitions from his role as president and chief executive officer to serving solely as the chairman of the Company's board of directors. Pursuant to the Transition Agreement, Mr. Horton will receive (i) a cash payment equal to $5,411,772, (ii) an "alignment award" that, consistent with similar awards provided to Company executives, is intended to approximate the unvested in-the-money equity value and cash long term incentive plan expectation of a similarly-situated US Airways executive, payable in cash equal to $6,510,150 and
(iii) eligibility to receive a performance bonus under the Company's 2013 Short-Term Incentive Plan in an amount targeted at $795,849, with a maximum . . .


Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Pursuant to the Plan and in accordance with the Merger Agreement, the Company's certificate of incorporation and bylaws were amended and restated in their entirety, and an Amended and Restated Certificate of Incorporation and a Certificate of Designations with respect to the Company Preferred Stock was filed with the Secretary of State of the State of Delaware immediately prior to the Effective Time. Upon issuance of the shares pursuant to the Plan and the Merger Agreement, the Company filed a Certificate of Amendment with Secretary of State of the State of Delaware solely to change its name to American Airlines Group Inc. Thereafter, the Company filed a Restated Certificate of Incorporation, which integrated the Amended and Restated Certificate of Incorporation (including the Certificate of Designations) and the Certificate of Amendment, with the Secretary of State of the State of Delaware. The foregoing organizational documents of the Company became effective on the Effective Date.

A description of the key provisions of the Restated Certificate of Incorporation (including the Certificate of Designations) and the Amended and Restated Bylaws is included under the captions "Description of Capital Stock of AAG," "Comparison of Stockholder Rights and Corporate Governance Matters" and "The Plan of Reorganization-AAG Convertible Preferred Stock" in the Form S-4, which description is incorporated herein by reference. This description is qualified in its entirely by reference to the full text of these documents, which are filed as Exhibits 3.1 and 3.2 to this Current Report on Form 8-K and incorporated into this Item 5.03 by reference.




Item 5.05. Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics.

On December 9, 2013 in connection with the completion of the Merger, the Board approved amendments to the Company's Standards of Business Conduct (as amended, the "Code of Ethics"). As amended, the Code of Ethics applies to all officers and employees of the Company and its subsidiaries, except for the employees, officers and members of the Board of Directors of US Airways Group and its wholly owned subsidiaries, who are governed by the US Airways Group Code of Business Conduct and Ethics. The Code of Ethics, as amended, also provides that waivers for executive officers may be made only by the Board, rather than by the Board or a committee of the Board. The Code of Ethics, as amended, is intended to remain in place pending the Company's adoption of a new code of business conduct and ethics following the closing of the Merger, which will apply to the Company and all of its wholly owned subsidiaries, including American and US Airways Group.

The foregoing description of amendments to the Code of Ethics is qualified in its entirety by reference to the full text of the Code of Ethics, a copy of which is filed hereto as Exhibit 14.1 and is incorporated into this Item 5.05 by reference.



Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The audited financial statements of US Airways Group required by Item 9.01(a) of Form 8-K will be filed as part of an amendment to this report not later than 71 calendar days after the date this report is required to be filed.

(b) Pro Forma Financial Information.

Unaudited pro forma condensed combined financial statements and notes related thereto, relating to the completion of the Merger will be filed as part of an amendment to this report not later than 71 calendar days after the date this report is required to be filed.

Exhibit
  No.                                     Description

3.1          Restated Certificate of Incorporation of American Airlines Group Inc.
             (the Certificate of Designations, Powers, Preferences and Rights of
             the American Airlines Group Inc. Series A Convertible Preferred Stock
             is attached as Annex I thereto).

3.2          Amended and Restated Bylaws of American Airlines Group Inc.

4.1          Second Supplemental Indenture with Wilmington Trust, National
             Association, as trustee, to the indenture governing US Airways, Inc.'s
             6.125% Senior Notes due 2018.

4.2          Second Supplemental Indenture with The Bank of New York Mellon Trust
             Company, N.A., as trustee, to the indenture governing US Airways
             Inc.'s 7.25% Senior Convertible Notes due 2014.

4.3          First Supplemental Indenture, dated as of December 9, 2013, by US
             Airways Group, Inc. in favor of U.S. Bank National Association, as
             trustee, guaranteeing the obligations of American Airlines Group Inc.
             and American Airlines, Inc. under the Indenture, dated as of March 15,
             2011, by and among American Airlines Group Inc. (f/k/a AMR
             Corporation), American Airlines, Inc., U.S. Bank National Association,
             as trustee and Wilmington Trust Company, as collateral trustee.

4.4          America West 2002 Incentive Equity Plan (incorporated by reference to
             Exhibit 10.1 to US Airways Group, Inc. Quarterly Report on Form 10-Q
             for the quarter ended June 30, 2006).

4.5          US Airways Group, Inc. 2005 Equity Incentive Plan (incorporated by
             reference to Exhibit 10.2 to US Airways Group, Inc. Quarterly Report
             on Form 10-Q for the quarter ended March 31, 2007).

4.6          US Airways Group, Inc. 2008 Equity Incentive Plan (incorporated by
             reference to Exhibit 4.1 to US Airways Group, Inc. Registration on
             Form S-8 filed with the SEC on June 30, 2008).

4.7          US Airways Group, Inc. 2011 Incentive Award Plan (incorporated by
             reference to Exhibit 4.1 to US Airways Group, Inc. Registration on
             Form S-8 filed with the SEC on July 1, 2011).

10.1         Joinder to Loan Agreement, dated as of December 9, 2013, by American
             Airlines Group Inc. and American Airlines, Inc. to the $1,600,000,000
             Loan Agreement, dated as of May 23, 2013, among US Airways, Inc., US
             Airways Group, Inc. and certain affiliates of US Airways, Inc. party
             thereto from time to time, the lenders party thereto and Citicorp
             North America, Inc., as administrative agent for the lenders.

10.2         Instrument of Assumption and Joinder, dated as of December 9, 2013, by
             and among US Airways Group, Inc. and US Airways, Inc. in favor of
             Deutsche Bank AG New York Branch as administrative agent for the
             Lenders under that certain Credit and Guaranty Agreement, dated as of
             June 27, 2013, any and among American Airlines Group Inc. (f/k/a AMR
             Corporation), American Airlines, Inc. and certain other parties from
             time to time party thereto.


--------------------------------------------------------------------------------
10.3    Transition Agreement, dated as of December 9, 2013, by and between Thomas
        W. Horton and American Airlines Group Inc.

10.4    Form of American Severance Agreement.

10.5    Letter Agreement, dated as of December 9, 2013, by and between W. Douglas
        Parker and American Airlines Group Inc.

10.6    Form of Waiver of Change in Control Agreement.

10.7    Form of letter agreement regarding equity awards by and between US Airways
        Group, Inc. and each executive officer of US Airways Group, Inc.
        (incorporated by reference to Exhibit 10.1 to US Airways Group, Inc.'s
        Quarterly Report on Form 10-Q filed on April 23, 2013).

10.8    Form of American Airlines Group Inc. 2013 Incentive Award Plan
        (incorporated by reference to Exhibit 4.1 of American Airline Group Inc.'s
        (f/k/a AMR Corporation) Form S-8 Registration Statement, filed on December
        4, 2013).

10.9    Form of Indemnification Agreement.

14.1    Code of Ethics.


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