To: U.S.-Based Legacy American Managers
Subject: Certain U.S.-Based Legacy American Employees to Receive Second Equity Distribution
Summary:
As previously communicated, the majority of U.S.-based legacy American employees are eligible to receive 23.6 percent of the shares of common stock in the new company (AAL) distributed to holders of allowed unsecured claims. The initial distribution of equity occurred on Dec. 9 with approximately 25 million shares of new common stock granted to eligible employees. We’re excited to share that there will be a second distribution for the Day 30 mark – approximately 1.3 million shares of new common stock distributed to certain U.S.-based legacy American employees. We expect these shares to be distributed as soon as is administratively practical on or after Jan. 8. Once the shares are distributed, employees have the option of holding, selling or transferring their shares as they wish.
As a reminder, these shares will be available to eligible employees in their Computershare account, which is available by first logging into their retireonline.com account with J.P. Morgan.
Key Points
- In total, eligible U.S.-based legacy American employees will receive new American common stock equal to 23.6 percent of the shares distributed to holders of allowed unsecured claims. That process began on Dec. 9 with the distribution of approximately 25 million shares of new common stock.
- We expect the second distribution to eligible employees to total approximately 1.3 million shares of new common stock. It’s important to note that because this is a small distribution, not all employees will receive shares and for those that do, the distribution will be smaller than the initial distribution. It’s important to note that we will not know the final total number of shares until after the shares are distributed to eligible employees.
- As with the initial distribution, each person’s individual allocation of shares will be based on the eligibility requirements and allocation methodology established for their employee group. For union-represented groups, the unions determined the eligibility criteria and allocation method and calculated each employee’s allocation. For non-union employees, the company established the eligibility requirements and allocation methodology.
- For non-union employees who believe their payroll data, eligibility determination or the number of shares allotted is incorrect, they may request a review of their equity calculation. Details of the review process are available on theEquity Hub.
- Do keep in mind that these shares are considered wages for purposes of federal and state income taxes and FICA, and are subject to required withholding of taxes. With that in mind, American will withhold enough shares to cover necessary taxes and will distribute the remainder to eligible employees. It’s important that employees complete their W-9, if they have not already done so, prior to selling their shares.
- It is not possible to say how many shares of new common stock will ultimately be distributed until the process is complete because the number will vary depending on the trading price of the new common stock during this 120-day period. However, the Day 120 distribution will ensure eligible U.S.-based legacy American employees have received 23.6 percent of the total shares of new common stock distributed to unsecured creditors.
- There is a possibility there could be additional small distributions of new common stock on Days 60 and 90, but any such distributions are, for the most part, dependent on the trading price of the new common stock, and for various reasons, are less likely than a Day 120 distribution. In addition, there could be small distributions of new common stock post Day 120 depending upon the resolution of the Disputed Claims Reserve.
- Visit the Equity Hub on Jetnet to ensure you and your people have the information and tools you need related to these shares.
Subject Matter Expert: The Equity Team, equity.hub@aa.com
Jetwire Blurb
American to Distribute Approximately 1.3 Million Shares to U.S.-based Legacy American Employees
As previously communicated, the majority of U.S.-based legacy American employees are eligible to receive 23.6 percent of the shares of common stock in the new company (AAL) distributed to holders of allowed unsecured claims. The initial distribution of equity occurred on Dec. 9 with approximately 25 million shares of new common stock granted to eligible employees. We’re excited to share that there will be a second distribution for the Day 30 mark – approximately 1.3 million shares of new common stock distributed to certain U.S.-based legacy American employees. It’s important to note that we will not know the final total number of shares until after the shares are distributed to eligible employees.
We expect these shares to be distributed as soon as is administratively practical on or after Jan. 8. Once the shares are distributed, employees have the option of holding, selling or transferring their shares as they wish.
Visit the Equity Hub on Jetnet to ensure you have the information and tools you need related to these shares.
Email to all American employees that mirrors the Jetwire
Subject: American to Distribute Approximately 1.3 Million Shares to U.S.-based Legacy American
Employees
Body:
As previously communicated, the majority of U.S.-based legacy American employees are eligible to receive 23.6 percent of the shares of common stock in the new company (AAL) distributed to holders of unsecured claims. The initial distribution of equity occurred on Dec. 9 with approximately 25 million shares of new common stock granted to eligible employees. We’re excited to share that there will be a second distribution for the Day 30 mark – approximately 1.3 million shares of new common stock distributed to certain U.S.-based legacy American employees. It’s important to note that we will not know the final total number of shares until after the shares are distributed to eligible employees.
We expect these shares to be distributed as soon as is administratively practical on or after Jan. 8. Once the shares are distributed, employees have the option of holding, selling or transferring their shares as they wish.
Visit the Equity Hub on Jetnet to ensure you have the information and tools you need related to these shares.
Questions & Answers
Legacy American
- Why are we receiving an equity distribution on Day 30?
Under the Plan of Reorganization (POR), certain creditors could elect to be treated as old AMR equity holders. Many made that election, which reduced the size of the unsecured claims pool. While U.S.-based legacy American employee groups are entitled to receive 23.6 percent of the total shares of new common stock distributed to holders of allowed unsecured claims (including Labor), the POR ensures legacy U.S.-based American’s employee groups will not be disadvantaged by these elections. American’s employee groups’ allocation will be calculated as if the elections were never made. As a result, a distribution will be made to legacy U.S.-based American employee groups on Day 30 to account for the elections and resulting reduction in the claims pool. This same mechanism will come into play on Days 60, 90 and 120.
- Does this mean that there will also be distributions on Days 60 and 90?
There is a possibility there could be additional small distributions of new common stock on Days 60 and 90, but any such distributions are, for the most part, dependent on the trading price of the new common stock, and for various reasons, are less likely than a Day 120 distribution. In addition, there could be small distributions post Day 120 depending upon the resolution of the Disputed Claims Reserve.
- When will we receive our shares?
Eligible employees can expect to receive their shares as soon as is administratively practical on or after Jan. 8.
- Why aren’t all employees eligible for the equity distribution receiving shares for the Day 30 distribution?
While we will not know the final total number of shares until after the shares are distributed to eligible employees, we expect the second distribution to eligible employees to total approximately 1.3 million shares, which is significantly less than the initial distribution of approximately 25 million shares. It’s important to note that because this is a small distribution, not all employees will receive shares and for those that do, the distribution will be smaller than the initial distribution.
- How can I access my shares?
As was the case with the initial distribution, your shares will be distributed into your Computershare account, which is accessible by first logging into your retireonline.com account with J.P. Morgan.
- How will the Day 30 distribution be taxed?
These shares are considered wages for purposes of federal and state income taxes and FICA, and are subject to required withholding of taxes. With that in mind, American will withhold enough shares to cover necessary taxes and distribute the remainder to eligible employees.
- Are legacy US Airways employees eligible for the equity distribution now that the merger has closed?
No. The equity distribution applies only to eligible U.S.-based legacy American employees.
American Eagle
1. Why are the American Eagle unions not receiving a distribution on Day 30?
This provision in the POR applies only to the new common stock distribution for American’s employee groups, as their distribution is dependent on the amount of shares that all unsecured creditors get. The claim for American Eagle’s unions is a fixed value and notaffected by the creditors’ elections.