Exhibit 10.3

Execution Copy

TRANSITION AGREEMENT

This Transition Agreement (the “Agreement”) by and between Thomas W. Horton
(“Executive”) and American Airlines Group Inc., a Delaware corporation (the
“Company”), is made effective as of the date Executive signs this Agreement (the
“Effective Date”) with reference to the following facts:

WHEREAS, Executive has served as the Chairman of the Board of Directors (the
“Board”) of the Company and its President and Chief Executive Officer since
November 2011;

WHEREAS, prior to Executive becoming the Company’s President and Chief Executive
Officer, the Company filed for bankruptcy protection;

WHEREAS, as a direct result of Executive’s efforts and under Executive’s
leadership as President and Chief Executive Officer, the Company’s financial
performance significantly improved during 2013, which benefited the stockholders
of the Company;

WHEREAS, as a direct result of Executive’s efforts and under Executive’s
leadership as President and Chief Executive Officer, the Company successfully
completed a financial reorganization and emerged from bankruptcy;

WHEREAS, as a direct result of Executive’s efforts and under Executive’s
leadership as President and Chief Executive Officer, the Company successfully
completed a business combination with US Airways Group, Inc. and its
subsidiaries (the “Merger”);

WHEREAS, at the closing of the Merger, which occurred on December 9, 2013 (the
“Closing Date” or “Transition Date”), Executive transitioned from his role as
Chairman of the Board, President and Chief Executive Officer to solely serving
as the Chairman of the Board;

WHEREAS, on the Closing Date and in connection with the Merger, the Company’s
similarly-situated executives received substantial cash and equity awards from
the Company; and

WHEREAS, in recognition of Executive’s efforts and successful leadership, which
the Board has determined has substantially benefited the shareholders of the
Company and in order to clear up any ambiguity that may exist with respect to
Executive’s entitlements in connection with Executive’s transition, the Board
has approved the benefits described herein in exchange for Executive’s execution
and non-revocation of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

1. Transition Date. Executive acknowledges and agrees that Executive’s status as
an officer and employee of the Company ended with his transition to his role as
Chairman of the Board effective as of the Closing Date, and Executive shall
continue to serve as Chairman of the Board through the date set forth in the
Company’s amended and restated bylaws.

2. Accrued Obligations and Expenses.

(a) Accrued Obligations. The Company has paid, or will within the time period
required by applicable law pay, Executive (i) all accrued but unpaid base salary
through the Transition Date and (ii) all accrued and unused vacation earned
through the

 

1

--------------------------------------------------------------------------------

Execution Copy

 

Transition Date, subject in each case to appropriate payroll deductions and
withholdings. In addition, Executive has received, or shall be entitled to
receive, any accrued benefits provided under the Company’s employee benefit
plans, in accordance with the terms contained therein. Executive is entitled to
these payments regardless of whether Executive executes this Agreement.

(b) Business Expenses. The Company shall reimburse Executive for all outstanding
business expenses incurred prior to the Transition Date which are consistent
with the Company’s policies in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the Company’s requirements
with respect to reporting and documenting such business expenses. The Company
will reimburse such expenses irrespective of whether Executive executes this
Agreement.

3. Separation Payments and Benefits. Without admission of any liability, fact or
claim, the Company hereby agrees to provide Executive:

(a) Cash Payment. Executive shall receive an amount equal to the sum of
$5,411,772, payable in a cash lump sum on the Effective Date.

(b) 2013 Bonus. Executive shall remain eligible to receive a cash performance
bonus (the “2013 Bonus”) with respect to calendar year 2013 targeted at
$795,849, assuming performance at the target level, and a maximum 2013 Bonus
opportunity of $1,273,358, assuming performance at the maximum level. The actual
amount of the 2013 Bonus shall be determined by reference to the attainment of
applicable performance metrics and/or individual performance objectives, in each
case, as determined by the Company’s Compensation Committee. The 2013 Bonus, if
any, shall be paid on or before March 15, 2014.

(c) Alignment Award. The Company shall pay Executive 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 equal to
$6,510,150, payable in a cash lump sum on the Effective Date.

(d) RSU Award. On the Transition Date, the Company shall grant to Executive a
restricted stock unit award (the “RSU Award”) covering 170,722 shares of the
Company’s common stock. The RSU Award shall be vested in full as of the
Transition Date. The terms and conditions of the RSU Award shall be set forth in
a separate award agreement in a form prescribed by the Company, to be entered
into by the Company and Executive, which shall evidence the grant of the RSU
Award.

(e) Flight Privileges.

(i) Subject to Section 3(e)(ii) below, Executive shall receive the right to top
priority, first class, positive space travel privileges for Executive, his wife
and eligible dependents, pursuant to the terms and conditions of the Company’s
travel policy for officers as amended from time to time. Travel privileges will
be provided by the Company for the lifetimes of Executive and his wife and, with
respect to Executive’s eligible dependents, so long as they remain eligible
dependents.

 

2

--------------------------------------------------------------------------------

Execution Copy

 

(ii) The travel privileges provided in Section 3(e)(i) shall commence on the
first day of the seventh month following the Transition Date if Executive is a
“specified employee” within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) on the Transition Date, or upon
Executive’s death, if earlier.

(f) Administrative Support. For two (2) years following the Transition Date,
Executive shall be provided with off-site office and administrative support
commensurate with Executive’s position at a location to be selected by
Executive, subject to the approval of the Company (such approval not to be
unreasonably withheld).

The payments and benefits described in the preceding Sections 3(a) - (f) are
referred to herein as the “Transition Benefits”. Executive’s (or Executive’s
legal representative, if applicable) right to receive the Transition Benefits
shall be subject to (A) Executive’s execution of this Agreement and
(B) Executive’s performance of his continuing obligations pursuant to this
Agreement.

4. Taxes.

(a) Executive understands and agrees that all payments and benefits under this
Agreement will be subject to appropriate tax withholding and other deductions.

(b) To the extent applicable, this Agreement shall be interpreted in accordance
with Section 409A of the Code and Department of Treasury regulations and other
interpretive guidance issued thereunder (together, “Section 409A”).
Notwithstanding any provision of this Agreement to the contrary, if the Company
determines that any compensation or benefits payable under this Agreement may be
subject to Section 409A, the Company shall work in good faith with Executive to
adopt such amendments to this Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take
any other actions, that the Company determines are necessary or appropriate to
avoid the imposition of taxes under Section 409A, including without limitation,
actions intended to (i) exempt the compensation and benefits payable under this
Agreement from Section 409A, and/or (ii) comply with the requirements of
Section 409A; provided, however, that this 4(b) shall not create an obligation
on the part of the Company to adopt any such amendment, policy or procedure or
take any such other action, nor shall the Company have any liability for failing
to do so.

(c) To the extent that any reimbursements payable pursuant to this Agreement are
subject to the provisions of Section 409A, such reimbursements shall be paid to
Executive no later than December 31 of the year following the year in which the
expense was incurred, the amount of expenses reimbursed in one year shall not
affect the amount eligible for reimbursement in any subsequent year, and
Executive’s right to reimbursement under this Agreement will not be subject to
liquidation or exchange for another benefit.

(d) The Company will not provide any tax gross-up payments to Executive for
taxes payable on travel. The amount of travel privileges used by Executive in
one year will not affect the amount of travel privileges Executive is entitled
to use in any other year. The right to travel privileges provided in this
Agreement is not subject to liquidation, cashout, or exchange for any other
taxable or nontaxable benefit.

 

3

--------------------------------------------------------------------------------

Execution Copy

 

5. Executive’s Release of the Company.

(a) Except as otherwise set forth in this Agreement, Executive hereby releases,
acquits and forever discharges the Company, its parents, subsidiaries and
affiliates, and their officers, directors, agents, servants, employees,
shareholders, predecessors, successors and assigns, of and from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys’
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed (other than any claim for indemnification Executive may have as
a result of any third party action against Executive based on Executive’s
employment with the Company), arising out of or in any way related to
agreements, events, acts or conduct at any time prior to and including the date
Executive executes this Agreement, including, but not limited to: all such
claims and demands directly or indirectly arising out of or in any way connected
with Executive’s employment with the Company (and/or any parent, subsidiary,
affiliate, predecessor, successors and assigns) or the termination of that
employment, including but not limited to, claims of intentional and negligent
infliction of emotional distress, any and all tort claims for personal injury,
claims or demands related to salary, bonuses, commissions, stock, stock options,
or any other equity or ownership interests in the Company, vacation pay, fringe
benefits, expense reimbursements, severance pay, or any other form of equity or
compensation; claims pursuant to any federal, state or local law or cause of
action including, but not limited to, the federal Civil Rights Act of 1964, as
amended; the federal Employee Retirement Income Security Act of 1974, as
amended; the federal Americans with Disabilities Act of 1990; the Texas Fair
Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; fraud; defamation; emotional distress; and breach of
the implied covenant of good faith and fair dealing.

(b) Notwithstanding the foregoing, this Agreement shall not operate to release
any rights or claims of Executive (i) to accrued or vested benefits the
undersigned may have, if any, as of the date hereof under any applicable plan,
policy, practice, program, contract or agreement with the Company, (ii) to
obligations to indemnify Executive respecting acts or omissions in connection
with Executive’s service as a director, officer or employee of AMR Corporation,
American Airlines, Inc. and US Airways, Inc. (the “Affiliated Entities”) and the
Company (including under Section 4.12 of that certain Agreement and Plan of
Merger, dated as of February 13, 2013, among AMR Corporation, AMR Merger Sub,
Inc. and US Airways Group, Inc. (the “Merger Agreement”)); (iii) to obligations
with respect to insurance coverage under any of the Company’s or the Affiliated
Entities’ (or any of their respective successors) directors’ and officers’
liability insurance policies (including under Section 4.12 of the Merger
Agreement); (iv) to obtain contribution in the event of the entry of judgment
against Executive as a result of any act or failure to act for which both
Executive and any of the Affiliated Entities are jointly responsible; or (v) to
any claims which cannot be waived by an employee under applicable law.

6. Governing Law. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the laws of the State
of Texas or, where applicable, United States federal law, in each case, without
regard to any conflicts of laws provisions or those of any state other than
Texas.

7. Successors. This Agreement is personal to Executive and, without the prior
written consent of the Company, shall not be assignable by Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by Executive’s legal representatives. The
Company shall assign its rights and obligations under this Agreement to any
successor to all or substantially all of the business or the assets of the
Company (by merger or otherwise). This Agreement shall be binding upon and inure
to the benefit of the Company and its successors, assigns, personnel and legal
representatives.

 

4

--------------------------------------------------------------------------------

Execution Copy

 

8. Miscellaneous.

(a) Executive acknowledges that this Agreement shall supersede each agreement
entered into between Executive and the Company regarding Executive’s employment
or termination of employment, except as explicitly set forth herein. Executive
acknowledges that there are no other agreements, written, oral or implied, and
that Executive may not rely on any prior negotiations, discussions,
representations or agreements.

(b) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.

(c) No amendment or other modification of this Agreement shall be effective
unless made in writing and signed by the parties hereto.

(d) This Agreement must be executed and delivered by each party on or after the
Closing Date and not later than December 31, 2013.

(e) This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and all of which taken together constitute one and the
same agreement.

(Signature page(s) follow)

 

5

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned have caused this Transition Agreement to be
duly executed and delivered as of the date indicated next to their respective
signatures below.

DATED: December 9, 2013

 

   

/s/ Thomas W. Horton

   

Thomas W. Horton

   

AMERICAN AIRLINES GROUP INC.

DATED: December 9, 2013

          By:  

/s/ W. Douglas Parker

   

Name:

 

W. Douglas Parker

   

Title:

 

Chief Executive Officer

Signature Page to Transition Agreement