SEC Info - American Airlines Group Inc., et al. - ‘10-Q’ for 6/30/22

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American Airlines Group Inc., et al. – ‘10-Q’ for 6/30/22 – ‘EX-10.3’

On: Thursday, 7/21/22, at 7:02am ET · For: 6/30/22 · Accession #: 6201-22-71 · File #s: 1-02691, 1-08400

  As Of               Filer                 Filing    For·On·As Docs:Size

 7/21/22  American Airlines Group Inc.      10-Q        6/30/22   81:12M
          American Airlines, Inc.

Quarterly Report — Form 10-Q

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        10-Q Q2'22 06.30.22                                 HTML   3.17M 
 2: EX-10.1     Material Contract                                   HTML    588K 
 3: EX-10.2     Material Contract                                   HTML    534K 
 4: EX-10.3     Material Contract                                   HTML     64K 
 5: EX-31.1     Certification -- §302 - SOA'02                      HTML     27K 
 6: EX-31.2     Certification -- §302 - SOA'02                      HTML     27K 
 7: EX-31.3     Certification -- §302 - SOA'02                      HTML     27K 
 8: EX-31.4     Certification -- §302 - SOA'02                      HTML     27K 
 9: EX-32.1     Certification -- §906 - SOA'02                      HTML     25K 
10: EX-32.2     Certification -- §906 - SOA'02                      HTML     25K 
16: R1          Cover                                               HTML     87K 
17: R2          Condensed Consolidated Statements of Operations -   HTML    119K 
                American Airlines Group Inc.                                     
18: R3          Condensed Consolidated Statements of Operations -   HTML    109K 
                American Airlines, Inc.                                          
19: R4          Condensed Consolidated Statements of Comprehensive  HTML     50K 
                Income (Loss) - American Airlines Group Inc.                     
20: R5          Condensed Consolidated Statements of Comprehensive  HTML     52K 
                Income (Loss) - American Airlines, Inc.                          
21: R6          Condensed Consolidated Balance Sheets - American    HTML    169K 
                Airlines Group Inc.                                              
22: R7          Condensed Consolidated Balance Sheets - American    HTML     33K 
                Airlines Group Inc. (Parenthetical)                              
23: R8          Condensed Consolidated Balance Sheets - American    HTML    187K 
                Airlines, Inc.                                                   
24: R9          Condensed Consolidated Balance Sheets - American    HTML     35K 
                Airlines, Inc. (Parenthetical)                                   
25: R10         Condensed Consolidated Statements of Cash Flows -   HTML     92K 
                American Airlines Group Inc.                                     
26: R11         Condensed Consolidated Statements of Cash Flows -   HTML     36K 
                American Airlines Group Inc. (Parenthetical)                     
27: R12         Condensed Consolidated Statements of Cash Flows -   HTML    103K 
                American Airlines, Inc.                                          
28: R13         Condensed Consolidated Statements of Cash Flows -   HTML     42K 
                American Airlines, Inc. (Parenthetical)                          
29: R14         Condensed Consolidated Statements of Stockholders'  HTML     85K 
                Deficit - American Airlines Group Inc.                           
30: R15         Condensed Consolidated Statements of Stockholders'  HTML     28K 
                Deficit - American Airlines Group Inc.                           
                (Parenthetical)                                                  
31: R16         Condensed Consolidated Statements of Stockholders'  HTML     66K 
                Equity - American Airlines, Inc.                                 
32: R17         Basis of Presentation                               HTML     35K 
33: R18         Special Items, Net                                  HTML     99K 
34: R19         Earnings (Loss) Per Common Share                    HTML     72K 
35: R20         Revenue Recognition                                 HTML    130K 
36: R21         Debt                                                HTML    106K 
37: R22         Income Taxes                                        HTML     33K 
38: R23         Fair Value Measurements and Other Investments       HTML     94K 
39: R24         Employee Benefit Plans                              HTML    104K 
40: R25         Accumulated Other Comprehensive Loss                HTML     84K 
41: R26         Regional Expenses                                   HTML     29K 
42: R27         Transactions with Related Parties                   HTML     34K 
43: R28         Legal Proceedings                                   HTML     38K 
44: R29         Basis of Presentation (Policies)                    HTML     30K 
45: R30         Special Items, Net (Tables)                         HTML     98K 
46: R31         Earnings (Loss) Per Common Share (Tables)           HTML     74K 
47: R32         Revenue Recognition (Tables)                        HTML    123K 
48: R33         Debt (Tables)                                       HTML     95K 
49: R34         Fair Value Measurements and Other Investments       HTML     88K 
                (Tables)                                                         
50: R35         Employee Benefit Plans (Tables)                     HTML     97K 
51: R36         Accumulated Other Comprehensive Loss (Tables)       HTML     86K 
52: R37         Transactions with Related Parties (Tables)          HTML     33K 
53: R38         Basis of Presentation (Details)                     HTML     31K 
54: R39         Special Items, Net (Details)                        HTML     61K 
55: R40         Earnings (Loss) per Common Share - Computation of   HTML     80K 
                Basic and Diluted (Details)                                      
56: R41         Earnings (Loss) per Common Share - Anti-Dilutive    HTML     53K 
                Securities Excluded From Calculation of Diluted                  
                EPS (Details)                                                    
57: R42         Revenue Recognition - Significant Categories of     HTML     60K 
                Reported Operating Revenues (Details)                            
58: R43         Revenue Recognition - Passenger Revenue by          HTML     48K 
                Geographic Region (Details)                                      
59: R44         Revenue Recognition - Significant Contract          HTML     33K 
                Liabilities (Details)                                            
60: R45         Revenue Recognition - Changes in Loyalty Program    HTML     43K 
                Liability (Details)                                              
61: R46         Revenue Recognition - Narrative (Details)           HTML     31K 
62: R47         Debt - Components of Long-Term Debt (Details)       HTML    122K 
63: R48         Debt - Schedule of Line of Credit (Details)         HTML     40K 
64: R49         Debt - Narrative (Details)                          HTML     69K 
65: R50         Debt - EETCs - Certain Information (Details)        HTML     36K 
66: R51         Income Taxes (Details)                              HTML     50K 
67: R52         Fair Value Measurements and Other Investments -     HTML     97K 
                Summary of Assets Measured at Fair Value on                      
                Recurring Basis (Details)                                        
68: R53         Fair Value Measurements and Other Investments -     HTML     53K 
                Narrative (Details)                                              
69: R54         Fair Value Measurements and Other Investments -     HTML     33K 
                Schedule of Carrying Value and Estimated Fair                    
                Value of Long-Term Debt, Including Current                       
                Maturities (Details)                                             
70: R55         Employee Benefit Plans (Details)                    HTML     63K 
71: R56         Accumulated Other Comprehensive Loss - Components   HTML     85K 
                of AOCI (Details)                                                
72: R57         Accumulated Other Comprehensive Loss -              HTML     54K 
                Reclassifications out of AOCI (Details)                          
73: R58         Regional Expenses (Details)                         HTML     44K 
74: R59         Transactions with Related Parties (Details)         HTML     30K 
75: R60         Legal Proceedings (Details)                         HTML     28K 
76: R9999       Uncategorized Items - aal-20220630.htm              HTML     42K 
79: XML         IDEA XML File -- Filing Summary                      XML    138K 
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78: EXCEL       IDEA Workbook of Financial Reports                  XLSX    152K 
12: EX-101.CAL  XBRL Calculations -- aal-20220630_cal                XML    191K 
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80: JSON        XBRL Instance as JSON Data -- MetaLinks              385±   577K 
81: ZIP         XBRL Zipped Folder -- 0000006201-22-000071-xbrl      Zip    673K

‘EX-10.3’ — Material Contract

This Exhibit is an HTML Document rendered as filed. [ Alternative Formats ]

<! C: C:

Document

Exhibit 10.3


Certain information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) is the type that the registrant treats as private or confidential.

AMERICAN AIRLINES GROUP INC.

AMENDMENT

PROMISSORY NOTES AND WARRANTS TO PURCHASE COMMON STOCK

This Amendment, dated as of June 30, 2022 (this “Amendment”), amends the Promissory Notes and the Warrants issued by AMERICAN AIRLINES GROUP INC., a corporation organized under the laws of Delaware (the “Company”), to the UNITED STATES DEPARTMENT OF THE TREASURY (“Treasury”). Certain defined terms used in this Amendment are found in Annex A attached hereto.

WHEREAS, certain wholly owned subsidiaries of the Company (the “Recipients”) applied to Treasury for financial assistance under Subtitle B of Title IV of Division A of the CARES Act, Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021, and Subtitle C of Title VII of the American Rescue Plan Act of 2021, and Treasury provided such financial assistance on the terms and conditions set forth in the PSP Agreements;

WHEREAS, as appropriate compensation to the Federal Government of the United States of America for the provision of financial assistance under each of the PSP Agreements, the Company issued the Promissory Notes in favor of Treasury and the Company entered into the Warrant Agreements under which the Company issued the Warrants to Treasury;

WHEREAS, the Principal Amount (as such term is defined in the applicable Promissory Note) of each Promissory Note was determined and adjusted based on the payments disbursed to the Recipients under each of the PSP Agreements, and the number of shares of Common Stock underlying each Warrant (the “Warrant Shares”) was determined based on the Principal Amount of the related Promissory Note;

WHEREAS, American Airlines, Envoy Air Inc., Piedmont Airlines, Inc. and PSA Airlines, Inc. guaranteed the Promissory Notes;

WHEREAS, Treasury is the sole holder of the Promissory Notes and the Warrants;

WHEREAS, Piedmont Airlines, Inc. (“Piedmont”) is a wholly owned subsidiary of the Company and a Recipient of funds under each of the PSP Agreements;

WHEREAS, [****] Treasury determined that the awardable amount for Piedmont as initially calculated exceeded the amount to which Piedmont was entitled by $24,891,279.76 in PSP1, $16,838,218.58 in PSP2, and $15,705,006.47 in PSP3;

WHEREAS, [****] Treasury had made five disbursements to the Recipients totaling $5,982,831,389.33 for PSP1; three disbursements to the Recipients totaling $3,549,766,770.18 for PSP2; and one disbursement to the Recipients in the amount of $1,655,433,733.27 for PSP3, [****];

WHEREAS, Treasury intended to make a second and final disbursement to the Recipients under PSP3 in the amount of $1,655,433,733.30, but reduced this disbursement by $57,434,504.81 to account for the reductions made to Piedmont’s PSP1, PSP2, and PSP3 awardable amounts, as a result of which Treasury paid the Recipients $1,597,999,228.49 for the second and final PSP3 disbursement;

WHEREAS, following the reductions in Piedmont’s awardable amounts under PSP1, PSP2, and PSP3 and the application of an updated formula that incorporates such reductions, Treasury determined that the payments disbursed to the Recipients under PSP1 and PSP2 and the first payment disbursed under PSP3 were in amounts greater than they should have been, and the second and final payment disbursed under PSP3 was less than it should have been if all of the previous payments had been correctly calculated;

WHEREAS, Treasury and the Company accordingly wish to amend the Promissory Notes and the Warrants to reflect corrected disbursed amounts, such that the Principal Amounts of the PSP1 April 20

Promissory Note and the PSP2 January 15 Promissory Note are decreased and the Principal Amount of the PSP3 April 23 Promissory Note is increased, and the corresponding number of Warrant Shares issuable under the PSP1 Warrants and the PSP2 Warrants is decreased and the number of Warrant Shares issuable under the PSP3 Warrants is increased.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Amendment hereby agree as follows:

1. Amendment of the Promissory Notes. Each Promissory Note is hereby amended to adjust the Principal Amount of such Promissory Note as follows:

(a)PSP1 April 20 Promissory Note. The aggregate Principal Amount of the PSP1 April 20 Promissory Note is reduced from $1,764,849,416.80 to $1,757,382,032.88.

(b)PSP2 January 15 Promissory Note. The aggregate Principal Amount of the PSP2 January 15 Promissory Note is reduced from $1,034,930,031.05 to $1,029,878,565.48.

(c)PSP3 April 23 Promissory Note. The aggregate Principal Amount of the PSP3 April 23 Promissory Note is increased from $946,029,888.53 to $958,548,738.02.

2. Amendment of the Warrants. Each Warrant is hereby amended to adjust the current number of Warrant Shares issuable under such Warrant (as reflected on the cover page of, and Schedule A to, such Warrant) to the following number of Warrant Shares:

(a)PSP1 April 20 Warrant. The shares of Common Stock issuable under the PSP1 April 20 Warrant are reduced from 6,732,034 to 6,703,550;

(b)PSP1 May 29 Warrant. The shares of Common Stock issuable under the PSP1 May 29 Warrant are reduced from 2,788,737 to 2,776,937;

(c)PSP1 June 30 Warrant. The shares of Common Stock issuable under the PSP1 June 30 Warrant are reduced from 2,788,737 to 2,776,937;

(d)PSP1 July 30 Warrant. The shares of Common Stock issuable under the PSP1 July 30 Warrant are reduced from 1,394,368 to 1,388,469;

(e)PSP1 September 30 Warrant. The shares of Common Stock issuable under the PSP1 September 30 Warrant are reduced from 403,633 to 401,925;

(f)PSP2 January 15 Warrant. The shares of Common Stock issuable under the PSP2 January 15 Warrant are reduced from 2,765,090 to 2,751,594;

(g)PSP2 March 17 Warrant. The shares of Common Stock issuable under the PSP2 March 17 Warrant are reduced from 2,956,661 to 2,942,229;

(h)PSP2 April 22 Warrant. The shares of Common Stock issuable under the PSP2 April 22 Warrant are reduced from 886,998 to 882,669;

(i)PSP3 April 23 Warrant. The shares of Common Stock issuable under the PSP3 April 23 Warrant are increased from 2,145,426 to 2,173,817; and

(j)PSP3 June 24 Warrant. The shares of Common Stock issuable under the PSP3 June 24 Warrant are increased from 2,204,137 to 2,233,304.

3. All Other Terms Unchanged. Except as expressly provided in this Amendment, all of the provisions, terms and conditions of each Promissory Note and Warrant remain in full force and effect.

4. Additional Documentation. Concurrent with the execution of this Amendment, the Company shall provide opinions and certificates equivalent to those delivered at initial issuance of the Promissory Notes and the Warrants, mutatis mutandis. Upon the request of the Company, subsequent to the effective date hereof, Treasury shall make commercially reasonable efforts to cooperate with the Company should the Company determine that its record-keeping and related internal documentation would be enhanced by producing amended and restated Promissory Notes and Warrants that reflect the terms of this Amendment on the face thereof.

5. Governing Law. This Amendment will be governed by and construed in accordance with the federal law of the United States if and to the extent such law is applicable, and otherwise in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State. Each of the Company and Treasury agrees to submit to the exclusive jurisdiction and venue of the United States District Court for the District of Columbia for any civil action, suit or proceeding arising out of or relating to this Amendment. To the extent permitted by applicable law, each of the Company and Treasury hereby unconditionally waives trial by jury in any civil legal action or proceeding relating to this Amendment.

6. Conflicting Provisions. Should any of the provisions of this Amendment conflict with any of the provisions of the Promissory Notes or the Warrants, the provisions of this Amendment shall apply.

7. Counterparts. This Amendment may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same instrument.

8. Effectiveness. This Amendment shall be deemed effective as of the date hereof.

[Signature page follows.]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers, hereunto duly authorized, as of the date first above written.



			THE UNITED STATES DEPARTMENT OF THE TREASURY

			By: /s/ *Victoria Collin*
			Name: Victoria Collin
			Title: Chief Compliance and Finance Officer Office of Recovery Programs U.S. Department of Treasury



			AMERICAN AIRLINES GROUP INC.


			By: /s/ *Meghan B. Montana*
			Name: Meghan B. Montana
			Title: Vice President and Treasurer

			AMERICAN AIRLINES, INC.


			By: /s/ *Meghan B. Montana*
			Name: Meghan B. Montana
			Title: Vice President and Treasurer

			ENVOY AIR INC.


			By: /s/ *Meghan B. Montana*
			Name: Meghan B. Montana
			Title: Treasurer

			PIEDMONT AIRLINES, INC.


			By: /s/ *Eric H. Morgan*
			Name: Eric H. Morgan
			Title: Chief Executive Officer and President

			PSA AIRLINES, INC.


			By: /s/ *Dion J. Flannery*
			Name: Dion J. Flannery
			Title: President

ANNEX A

DEFINITIONS

“American Airlines” means American Airlines, Inc.

“American Rescue Plan Act of 2021” means the American Rescue Plan Act of 2021, Pub. L. 117-2 (March 11, 2021), as the same may be amended from time to time.

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136 (March 27, 2020), as the same may be amended from time to time.

“Common Stock” means the common stock of the Company with a par value of $0.01 per share.

“Consolidated Appropriations Act, 2021” means the Consolidated Appropriations Act, 2021, Pub. L. 116-260 (December 27, 2020), as the same may be amended from time to time.

“Promissory Notes” means the PSP1 April 20 Promissory Note, the PSP2 January 15 Promissory Note and the PSP3 April 23 Promissory Note.

“PSP Agreements” means the PSP1 Agreement, the PSP2 Agreement, and the PSP3 Agreement.

“PSP1” means the Payroll Support Program authorized by Subtitle B of Title IV of Division A of the CARES Act.

“PSP1 Agreement” means the Payroll Support Program Agreement, dated as of April 20, 2020, between American Airlines and Treasury.

“PSP1 April 20 Promissory Note” means that certain Promissory Note, dated as of April 20, 2020, with an initial Principal Amount of $842,177,466.00 and aggregate Principal Amount as of the date immediately preceding this Amendment of $1,764,849,416.80, as amended on the date hereof.

“PSP1 April 20 Warrant” means that certain Warrant to Purchase Common Stock, dated as of April 20, 2020, for 6,732,034 shares of Common Stock, as amended on the date hereof.

“PSP1 July 30 Warrant” means that certain Warrant to Purchase Common Stock, dated as of July 30, 2020, for 1,394,368 shares of Common Stock, as amended on the date hereof.

“PSP1 June 30 Warrant” means that certain Warrant to Purchase Common Stock, dated as of June 30, 2020, for 2,788,737 shares of Common Stock, as amended on the date hereof.

“PSP1 May 29 Warrant” means that certain Warrant to Purchase Common Stock, dated as of May 29, 2020, for 2,788,737 shares of Common Stock, as amended on the date hereof.

“PSP1 September 30 Warrant” means that certain Warrant to Purchase Common Stock, dated as of September 30, 2020, for 403,633 shares of Common Stock, as amended on the date hereof.

“PSP1 Warrants” means the PSP1 April 20 Warrant, the PSP1 May 29 Warrant, the PSP1 June 30 Warrant, the PSP1 July 30 Warrant, and the PSP1 September 30 Warrant.

“PSP2” means the Payroll Support Program authorized by Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021.

“PSP2 Agreement” means the Payroll Support Program Extension Agreement, dated as of January 15, 2021, between American Airlines and Treasury.

“PSP2 January 15 Promissory Note” means that certain Promissory Note, dated as of January 15, 2021, with an initial Principal Amount of $433,013,057.00 and aggregate Principal Amount as of the date immediately preceding this Amendment of $1,034,930,031.05, as amended on the date hereof.

“PSP2 April 22 Warrant” means that certain Warrant to Purchase Common Stock, dated as of April 22, 2021, for 886,998 shares of Common Stock, as amended on the date hereof.

“PSP2 January 15 Warrant” means that certain Warrant to Purchase Common Stock, dated as of January 15, 2021, for 2,765,090 shares of Common Stock, as amended on the date hereof.

“PSP2 March 17 Warrant” means that certain Warrant to Purchase Common Stock, dated as of March 17, 2021, for 2,956,661 shares of Common Stock, as amended on the date hereof.

“PSP2 Warrants” means the PSP2 January 15 Warrant, the PSP2 March 17 Warrant, and the PSP2 April 22 Warrant.

“PSP3” means the Payroll Support Program authorized by Subtitle C of Title VII of the American Rescue Plan Act of 2021.

“PSP3 Agreement” means the Payroll Support Program 3 Agreement, dated as of April 23, 2021, between American Airlines and Treasury.

“PSP3 April 23 Promissory Note” means that certain Promissory Note, dated as of April 23, 2021, with an initial Principal Amount of $466,630,119.98 and aggregate Principal Amount as of the date immediately preceding this Amendment of $946,029,888.53, as amended on the date hereof.

“PSP3 April 23 Warrant” means that certain Warrant to Purchase Common Stock, dated as of April 23, 2021, for 2,145,426 shares of Common Stock, as amended on the date hereof.

“PSP3 June 24 Warrant” means that certain Warrant to Purchase Common Stock, dated as of June 24, 2021, for 2,204,137 shares of Common Stock, as amended on the date hereof.

“PSP3 Warrants” means the PSP3 April 23 Warrant and the PSP3 June 24 Warrant.

“Warrant Agreements” means the warrant agreement, dated as of April 20, 2020, between the Company and Treasury; the warrant agreement, dated as of January 15, 2021, between the Company and Treasury; and the warrant agreement, dated as of April 23, 2021, between the Company and Treasury.

“Warrants” means the PSP1 Warrants, the PSP2 Warrants, and the PSP3 Warrants.

Dates Referenced Herein and Documents Incorporated by Reference

This ‘10-Q’ Filing	Date	Other Filings

Filed on:	7/21/22	8-K
For Period end:	6/30/22
	6/24/21	8-K
	4/23/21	8-K
	4/22/21	10-Q, 8-K
	3/17/21	8-K
	3/11/21
	1/15/21	8-K
	12/27/20
	9/30/20	10-Q, 8-K
	7/30/20
	6/30/20	10-Q, 8-K
	5/29/20
	4/20/20	8-K
	3/27/20	8-K, 8-K/A
		List all Filings

3 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/21/24  American Airlines Group Inc.      10-K       12/31/23  147:24M
 2/22/23  American Airlines Group Inc.      10-K       12/31/22  141:46M
 7/28/22  American Airlines Group Inc.      424B7                  2:447K                                   Donnelley … Solutions/FA

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Filing Submission 0000006201-22-000071 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)