Will Google slap me for this display URL?

I have to have a directory on my domain called "AM" (MyDomain/AM/) and I want to show the keyword in the Display URL as well, so the destination URL will become:
- MyDomain.com/AM/keyword

Can I have a display URL without showing the directory "am"? Example:
MyDomain.com/keyword

I saw video somewhere where they mentioned that Google will slap you with a penalty if they find that you a certain directory doesn't exist or a 404 page is encountered.

 

so long as the base domain is the same this is not a problem.

I do this allthe time

For instance display url is:
productdomain.com/my-product

destination url is:
productdomain.com/products/page.php?id=my-product

the adwords bot only checks 2 things... 1: ensure the destination URL works... and 2: make sure the domain on the display URL matches the destination URL domain

 

millworx is right as I have done just what you are attempting to do with my own campaigns.

 

The video was wrong. See : http://adwords.blogspot.com/2008/02/update-to-display-url-policy.html

 

Here's the video:
www(dot)robdogg(dot)com/wordpress/2008/03/16/adwords-video-tutorial-google-campaign-structuring-and-keyword-clustering/

go to 11:05 minutes into it. That's where he shows this. Let me know your thoughts after you see it.

 

The video's wrong. It does not matter if your display url 404's...just don't let your destination url 404

ps - I didn't watch the video but Rob and I and others have had a discussion about this topic in this forum in the past.