American Airlines 2012 Annual Report Download - page 13

having to make significant changes to the structure, terms or conditions of the Merger to obtain such approvals, may result in a material delay in, or the
abandonment of, the Merger.
Any delay in completing the Merger may reduce or eliminate the benefits expected to be achieved thereunder.
In addition to the required regulatory clearances and approvals discussed above, the Merger is subject to a number of other conditions beyond our control that
may prevent, delay or otherwise materially and adversely affect its completion. We cannot predict when or if these other conditions will be satisfied.
Furthermore, the requirements for obtaining the required clearances and approvals could delay the completion of the Merger for a significant period of time or
prevent it from occurring. In addition, it is possible that actions by third parties, such as requests resulting in the appointment of additional formal committees
in the Chapter 11 Cases, could delay completion of the merger. Any delay in completing the Merger could cause AMR as the surviving parent to fail to realize
some or all of the synergies and other benefits that we anticipate if the Merger is successfully completed within its expected time frame.
Uncertainties associated with the Merger may cause a loss of our management personnel and other key employees, which could materially and
adversely affect the future business, financial condition and results of operations of AMR as the surviving parent following the Merger, or of
AMR if the Merger fails to occur.
The survivingparent will be dependent on the experience and industry knowledge of its officers and other key employees to execute its business plan; therefore,
the surviving parent's success after the Merger will depend in part upon its ability to retain key management personnel and other key employees. Our current
and prospective employees may experience uncertainty about their roles within the company surviving the merger, which may have a material and adverse
effect on our ability to retain key management and other key personnel. Likewise, if the Merger is not consummated, we will be dependent on our existing
officers and other key employees to develop and execute our business plan. There can be no assurance that such officers and key employees can be retained.
Failure to complete the Merger could materially and adversely affect both our and AMR's future business, financial condition, results of
operations and prospects.
If the Merger is not completed, our ongoing business may be materially and adversely affected, and we will be subject to several risks, including the following:
•AMR may be required to pay termination fees of $135 or $195 million under certain circumstances provided in the Merger Agreement;
•AMR and its debtor subsidiaries would likely not be able to emerge from the Chapter 11 Cases for an extended period of time if the Merger is not
consummated, because AMR would be required to formulate a new plan of reorganization and could be subject to alternative plans of reorganization
proposed by third parties if AMR is no longer within the exclusivity period;
•unless and until it is terminated, AMR will be prohibited by the Merger Agreement from seeking certain strategic alternatives, such as transactions
with third parties other than US Airways and developing an independent emergence plan, and could therefore miss attractive alternatives to the
Merger;
•our operations will be restricted by the terms of the Merger Agreement, which may cause us to forego otherwise attractive business opportunities;
•AMR will be required to pay certain costs relating to the Merger, whether or not it is consummated, such as legal, accounting, financial advisor and
printing fees, which costs could be substantial; and
•our management will have focused its attention on negotiating and preparing for the Merger instead of on pursuing other opportunities that could have
been beneficial to us.
If the Merger is not completed, there can be no assurance that these risks will not materialize and will not materially and adversely affect our and AMR's
business, financial condition, results of operations and prospects.
The Merger Agreement contains customary restrictions on our ability to seek other strategic alternatives.
The Merger Agreement contains “no shop” provisions that restrict AMR's and our ability to initiate, solicit, or knowingly encourage or facilitate competing
third-party proposals for any business combination transaction involving a merger of AMR with another entity or the acquisition of a significant portion of
AMR's stock or assets, although AMR may consider competing, unsolicited proposals and enter into discussions or negotiations regarding such proposals if
its board of directors determines that any such
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