Exhibit 10.60

 

 

THE

SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM (SERP) FOR OFFICERS

OF

AMERICAN AIRLINES, INC.

 

AND THE

 

SERP SUMMARY PLAN DESCRIPTION

 

ORIGINALLY EFFECTIVE JANUARY 1, 1985

 

 

Amended and Restated Effective October 15, 2002

 

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THE

SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM (SERP) FOR OFFICERS

OF

AMERICAN AIRLINES, INC.

 

AND THE

 

SERP SUMMARY PLAN DESCRIPTION

 

ORIGINALLY EFFECTIVE JANUARY 1, 1985

 

TABLE OF CONTENTS

 

ARTICLE I

NAME AND PURPOSE OF THE PLAN

 

 

ARTICLE II

DEFINITIONS

 

 

ARTICLE III

ELIGIBILITY AND PARTICIPATION

 

 

ARTICLE IV

BENEFITS IN CONNECTION WITH THE BASE DEFINED BENEFIT PLAN

 

 

ARTICLE V

CONTRIBUTIONS AND EARNINGS CREDITS IN CONNECTION WITH THE $UPER $AVER PLUS PLAN

 

 

ARTICLE VI

PAYMENT OF BENEFITS

 

 

ARTICLE VII

AMENDMENT AND TERMINATION

 

 

ARTICLE VIII

GENERAL CONDITIONS

 

 

ARTICLE IX

FUNDING

 

 

ARTICLE X

TRUST

 

 

ARTICLE XI

ERISA RIGHTS

 

 

ARTICLE XII

CLAIMS PROCEDURES

 

 

ARTICLE XIII

FINALITY OF DECISIONS OR ACTS

 

 

ARTICLE XIV

GENERAL INFORMATION ABOUT YOUR PLAN

 

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ARTICLE I
NAME AND PURPOSE OF THE PLAN

 

Section 1.1                                      Name and Purpose of the Plan

 

This Supplemental Executive Retirement Program for Officers of American
Airlines, Inc. (the “Plan”) provides supplemental retirement benefits to
selected officers of American Airlines, Inc.  A separate Supplemental Executive
Retirement Program (For Non-Officers) provides certain supplemental retirement
benefits to other key employees as designated by the Board of Directors or the
Chairman of AMR.

 

Prior to January 1, 2001, the supplemental benefits provided under this Plan
consisted only of supplemental retirement benefits in excess of the maximum
pension benefits payable under a Participant’s Base Defined Benefit Plan and a
supplemental retirement benefit based on a Participant’s Incentive Compensation
and Performance Returns.  These continuing benefits are described in Article IV
of the Plan.

 

Effective January 1, 2001, certain Participants, who participate in the $uper
$aver Plus Plan, either because they elected to forego participation in a Base
Defined Benefit Plan, or because they were not eligible to elect to participate
in a Base Defined Benefit Plan, shall be eligible to receive benefits under
Article V of the Plan, as set forth in this amended and restated Plan.

 

ARTICLE II
DEFINITIONS

 

Section 2.1                                      Account.  A bookkeeping entry
maintained for each Active Funding Participant to reflect the amount of Funded
Accrued Benefit contributed to the trust on account of such Active Funding
Participant.

 

Section 2.2                                    Act.  The Employee Retirement
Income Security Act of 1974, as amended.

 

Section 2.3                                      Active Funding Participant.  A
Participant who currently performs active duties of employment while a
Participant pursuant to Section 3.1 and who is vested in a benefit under Article
IV of this Plan, as of October 1, 2002.

 

Section 2.4                                      AMR .  AMR Corporation

 

Section 2.5                                      Annual Defined Benefit
Retirement Benefit.  The amount determined by subtracting the Base Defined
Benefit Plan Benefit from the greatest of (i) the Base Plan Social Security
Offset Benefit, (ii) the Final Average Earnings Benefit, or (iii) the Basic
Benefit.  If the Base Defined Benefit Plan of a Participant is the American
Airlines, Inc. Pilot Retirement Benefit Program, the Annual Defined Benefit
Retirement Benefit shall be the amount determined by subtracting the Base
Defined Benefit Plan Benefit from the amount that would have been payable under
the Base Defined Benefit Plan in the absence of the Base Defined Benefit Plan
limits on compensation and benefits under the Code, plus the Supplemental
Incentive Compensation Retirement Benefit and the Supplemental Performance
Return Retirement Benefit (for such purposes variable benefits shall be
disregarded).

 

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Section 2.6                                      Average Incentive
Compensation.  An amount calculated as follows:

 

(A)                                  THE SUM OF A PARTICIPANT’S FOUR HIGHEST
ANNUAL INCENTIVE COMPENSATION AWARDS (OR THE SUM OF ALL SUCH AWARDS IF THE
PARTICIPANT HAS FEWER THAN FOUR SUCH AWARDS) PAID TO A PARTICIPANT DURING THE
TIME PERIOD BEGINNING ON OR AFTER JANUARY 1, 1985, AND ENDING ON THE FIRST TO
OCCUR OF:

 

(1)                                  THE PARTICIPANT’S ACTUAL RETIREMENT UNDER
THE BASE DEFINED BENEFIT PLAN, OR UNDER $UPER $AVER IF THE PARTICIPANT IS NOT
PARTICIPATING IN A BASE DEFINED BENEFIT PLAN,

 

(2)                                  THE DATE OF THE PARTICIPANT’S DEATH, OR

 

(3)                                  THE DATE OF THE PARTICIPANT’S RETIREMENT.

 

IF A PARTICIPANT IS CREDITED WITH LESS THAN A FULL YEAR OF CREDITED SERVICE AS A
PARTICIPANT IN ANY YEAR IN WHICH INCENTIVE COMPENSATION IS PAID, THAT PORTION OF
THE PARTICIPANT’S INCENTIVE COMPENSATION THAT IS TAKEN INTO ACCOUNT WILL BE
PRORATED BASED ON THE CREDITED SERVICE EARNED BY THE PARTICIPANT FOR SUCH YEAR.

 

(B)                                 DIVIDE THE SUM DETERMINED IN (A), ABOVE, BY 
FOUR (OR BY THE NUMBER OF SUCH AWARDS IF THE PARTICIPANT HAS FEWER THAN  FOUR
SUCH AWARDS).

 

Section 2.7                                      Average Performance Return.  An
amount calculated as follows:

 

(C)                                  THE SUM OF A PARTICIPANT’S FOUR HIGHEST
ANNUAL PERFORMANCE RETURN AWARDS (OR THE SUM OF ALL SUCH AWARDS IF THE
PARTICIPANT HAS FEWER THAN FOUR SUCH AWARDS) PAID TO THE PARTICIPANT DURING THE
PARTICIPANT’S CAREER AND ENDING ON THE FIRST TO OCCUR OF:

 

(1)                                  THE PARTICIPANT’S ACTUAL RETIREMENT UNDER
THE BASE DEFINED BENEFIT PLAN, OR UNDER $UPER $AVER IF THE PARTICIPANT IS NOT
PARTICIPATING IN A BASE DEFINED BENEFIT PLAN,

 

(2)                                  THE DATE OF THE PARTICIPANT’S DEATH, OR

 

(3)                                  THE DATE OF THE PARTICIPANT’S RETIREMENT.

 

(D)                                 DIVIDE THE SUM DETERMINED IN (A), ABOVE, BY
FOUR (OR BY THE NUMBER OF SUCH AWARDS IF THE PARTICIPANT HAS FEWER THAN FOUR
SUCH AWARDS).

 

Section 2.8                                      Base Defined Benefit Plan.  The
defined benefit retirement benefit plan (or plans) of the Company which
qualifies under section 401 of the Code and under which certain Participants
covered under this Plan are eligible to receive benefits.

 

Section 2.9                                      Base Defined Benefit Plan
Benefit.  The annual benefit a Participant or Beneficiary is entitled to receive
from the Base Defined Benefit Plan upon retirement, disability,

 

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death or termination of employment, subject to the Base Defined Benefit Plan
provisions which limit such benefit to the maximum amount permitted by the Code.

 

Section 2.10                                Base Plan Social Security Offset
Benefit.  The annual amount of a Participant’s or Beneficiary’s benefit under
any “Social Security Offset Benefit,” as defined in the Base Defined Benefit
Plan, computed without regard to the Base Defined Benefit Plan limits on
compensation and benefits under the Code, plus the Supplemental Incentive
Compensation and Performance Return Retirement Benefit.

 

Section 2.11                                Basic Benefit.  The annual amount of
a Participant’s or Beneficiary’s benefit under any “Basic Benefit,” as defined
in the Base Defined Benefit Plan, computed without regard to the Base Defined
Benefit Plan limits on compensation and benefits under the Code, plus the
Supplemental Incentive Compensation and Performance Return Retirement Benefit.

 

Section 2.12                                Beneficiary.  A person designated by
a Participant who, as permitted under the terms of the Plan, is or may be
entitled to a benefit under the Plan in the event of the death of the
Participant.  If no Beneficiary is designated, or if the designated Beneficiary
is not then living, benefits will be paid pursuant to Section 6.5.

 

Section 2.13                                Board of Directors.  The Board of
Directors of AMR.

 

Section 2.14                                Code.  The Internal Revenue Code of
1986, as amended.

 

Section 2.15                                Committee.  The administrative
committee appointed by the Board of Directors to manage and administer this
Plan.

 

Section 2.16                                Company.  Any subsidiary of American
Airlines, Inc. or any subsidiary of AMR, which is designated for inclusion as a
participating employer in the Plan, as determined by the Board of Directors.

 

Section 2.17                                Credited Service.  The term
“Credited Service” under this Plan has the same meaning for purposes of this
Plan as it has in the applicable Base Defined Benefit Plan.

 

Section 2.18                                Executive Deferral Plan.  The AMR
Corporation 1987 Executive Deferral Plan, as amended.

 

Section 2.19                                Final Average Earnings Benefit.  The
annual amount of a Participant’s or Beneficiary’s benefit under any “Final
Average Earnings Benefit,” as defined in the Base Defined Benefit Plan, computed
without regard to the Base Defined Benefit Plan limits on compensation and
benefits under the Code, plus the Supplemental Incentive Compensation and
Performance Return Retirement Benefit.

 

Section 2.20                                Funded Accrued Benefit.  The 
portion of the present value of the benefit under Article IV represented by a
credit to a bookkeeping account of an Active Funding Participant as a Funded
Accrued Benefit in the Trust, at  the discretion of the Committee. 

 

 

Section 2.21                                Incentive Compensation. 
Compensation paid to a Participant on or after January 1, 1985, in accordance
with one of the incentive compensation plans adopted by the Board of Directors
or the Board of Directors of American Airlines, Inc., whether paid currently or
deferred. 

 

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For purposes of this definition, long-term, multi-year incentive compensation
plans shall not be considered to be incentive compensation plans.

 

Section 2.22                                Non-Active Funding Participant.  A
Participant who is not yet vested in a benefit under this Plan, or who is on a
Management Leave of Absence under the AMR Mangement Leave of Absence Policy or
who is retired or otherwise separated from employment.

 

Section 2.23                                Non-Funded Accrued Benefit.  The
portion of the benefit under Article IV or under Article V not represented by a
credit to the Account of a Participant as a Funded Accrued Benefit.

 

Section 2.24                                Non-Officer SERP.  The Supplemental
Executive Retirement Program for Non-Officers of American Airlines, Inc.

 

Section 2.25                                Participant.  An individual who is
participating in the Plan on October 15, 2002 shall be a Participant.  An
elected officer of American Airlines, Inc., who is a participant in a Base
Defined Benefit Plan or the $uper $aver Plus Plan shall be a Participant.  An
individual who is an appointed officer of American Airlines, Inc. or a
designated officer of another Company may be a Participant only if (i) he or she
is a participant in a Base Defined Benefit Plan or the $uper $aver Plus Plan and
(ii) is designated as a Participant by the Board of Directors or under a writing
signed by the Chairman of AMR.

 

Section 2.26                                Performance Return.  Compensation
paid to a Participant pursuant to a specified portion of career equity shares
granted to the Participant, as determined by the Board of Directors.

 

Section 2.27                                Plan.  The Supplemental Executive
Retirement Program of American Airlines, Inc., as amended.  The Plan may also be
referred to herein as the “SERP”.  There is a separate, but related,
Supplemental Executive Retirement Program for Non-Officers of American Airlines,
Inc., for key employees who are not officers.  This Plan features a supplement
to defined benefit plan benefits as described in Article IV and a supplement to
$uper $aver Plus Plan benefits, as described in Article V.

 

Section 2.28                                $uper $aver.  $uper $aver, a 401(k)
Capital Accumulation Plan for Employees of Participating AMR Corporation
Subsidiaries, which qualifies under sections 401(a) and 401(k) of the Code, and
under which certain Participants are eligible to receive benefits.

 

Section 2.29                                $uper $aver Plus Plan.  $uper $aver
Plus, a Supplement to $uper $aver, which describes a program of employer
contribution-provided benefits in addition to those available under the regular
provisions of $uper $aver.

 

Section 2.30                                $uper $aver Plus Plan Accout.  A
bookkeeping entry maintained for each Participant to record the deemed
contributions and earnings credited under the name of the Particpant pursuant to
Article V.

 

Section 2.31                                $uper Saver Plus Plan Excess
Contribution.  A contribution credited to the Participant’s $uper $aver Plus
Plan Account that is equal to the total employer contributions (exclusive of
cash or deferred contributions under sections 401(k) and 402(g) of the Code)
that would have been credited under the Participant’s accounts in the $uper
$aver Plus Plan, based upon the Participant’s elections under the $uper $aver
Plus Plan, but for the provisions of sections 401(a)(17),

 

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415 and 402(g) of the Code (or any Code sections replacing such sections with
comparable limitations).  Additionally, the credited $uper $aver Plus Plan
Excess Contribution shall include the amount that would have been credited to
the Participant’s account under the $uper $aver Plus Plan based on the
Participant’s contribution rate election under $uper $aver if Incentive
Compensation had constituted compensation subject to deferral under $uper $aver
and the $uper $aver Plus Plan.

 

Section 2.32                                Supplemental Incentive Compensation
Retirement Benefit.  The amount determined by multiplying the Average Incentive
Compensation by two percent for each year of Credited Service.

 

Section 2.33                                Supplemental Incentive Compensation
and Performance Return Retirement Benefit.  The difference between the benefits
calculated under any “Social Security Offset Benefit” formula as defined in the
Base Defined Benefit Plan, including and excluding Average Incentive
Compensation and Average Performance Return, in each case computed without
regard to the Base Defined Benefit Plan limits on compensation and benefits
under the Code.

 

Section 2.34                                Supplemental Performance Return
Retirement Benefit.  The amount determined by multiplying the Average
Performance Return by two percent for each year of Credited Service.

 

Section 2.35                                Trust.  The Trust Agreement Under
Supplemental Retirement Program for Officers of American Airlines, Inc. entered
into between American Airlines, Inc. and Wachovia Bank National Association.

 

Section 2.36                                Trustee.  Wachovia Bank National
Association.

 

ARTICLE III
ELIGIBILITY AND PARTICIPATION

 

Section 3.1                                      An individual who is
participating in the Plan on October 15, 2002.  An elected officer of American
Airlines, Inc. who  is participating  in a Base Defined Benefit Plan or the
$uper $aver Plus Plan is a Participant in the Plan.  An appointed officer of
American Airlines, Inc. or an officer of another Company may be a Participant
only if he or she is a participant in a Base Defined Benefit Plan or the $uper
$aver Plus Plan and is designated as a Participant by the Board of Directors or
under a writing signed by the Chairman of AMR.  As provided in Section 8.5 with
respect to Active Funding Participants, this Plan is an “employee pension
benefit plan” (as defined in  section 3(2) of the Act) that is an “individual
account plan” and “defined contribution plan” (as defined in  section 3(34) of
the Act), and as to all other benefits, the Plan is a plan described in sections
201(2), 301(a)(3) and 401(a)(1) of the Act.  The Plan is exempt from Part 3 of
Subtitle B of Title I of the Act pursuant to  section 301(a)(8) of the Act.

 

Section 3.2                                      Any Participant in this Plan
who was a Participant prior to January 1, 2001, and who ceased to continue to
accrue service for benefits under the Base Defined Benefit Plan as of such date
pursuant to an election to participate in the $uper $aver Plus Plan shall remain
eligible for the benefits accrued under Article IV of the Plan for service prior
to such date.  No further accruals of service for benefits under Article IV of
the Plan shall occur, however, after the effective date of the Participant’s
election to forego participation in the Base Defined Benefit Plan.  Such
Participants who forego participation in the Base Defined Benefit Plan shall be
eligible to receive benefits determined under Article IV with respect to service
for periods prior to January 1, 2001, and/or under Article V of the Plan, for
periods commencing on and after January 1, 2001.

 

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Section 3.3                                      Participants who continue to
accrue service for benefits in the Base Defined Benefit Plan after January 1,
2001, or who commence participation thereafter and who do not accrue benefits
under Article V of the Plan, shall continue to accrue benefits as provided
herein only under Article IV of the Plan.

 

Section 3.4                                      A Participant who is elected as
an officer and later becomes a non-officer will have any SERP benefit pursuant
to Article V as an officer frozen (subject to adjustment pursuant to Section 5.2
in the case of benefits under Article V) as of the last date the Participant
serves as an officer, but such Account shall remain payable under this Plan.  In
the event that the Participant is not thereafter designated for participation in
the Non-Officer SERP, any benefit of the Participant subject to Article IV shall
be frozen as of the last date the Participant serves as an officer, but shall
remain payable under this Plan.  In the event that a Participant who is elected
as an officer and later becomes a non-officer is designated for participation in
the Non-Officer SERP, any accrued benefit under Article IV that is based on
Incentive Compensation or Performance Return shall be frozen as of the last date
of the Participant serves as an officer, but shall remain payable under this
Plan, and the remaining accrued benefit under Article IV shall be transferred to
the Non-Officer SERP and shall be a part of the accrued benefit under Article IV
thereunder, without causing duplication of benefits.

 

ARTICLE IV
BENEFITS IN CONNECTION WITH THE BASE DEFINED BENEFIT PLAN

 

Section 4.1                                      The Plan will pay an Annual
Defined Benefit Retirement Benefit to a Participant who earned benefits under
this Plan while participating in the Base Defined Benefit Plan.  The  portion of
any such Annual Defined Benefit Retirement Benefit that is satisfied on an after
tax basis by a credit to the Account for an Active Funding Participant shall be
paid from, and credited against, the Participant’s Account and paid through the
Trust.

 

Section 4.2                                      If no benefit is payable under
the Base Defined Benefit Plan, then no benefit will be payable under Article IV
of the Plan.

 

ARTICLE V
CONTRIBUTIONS AND EARNINGS CREDITS
IN CONNECTION WITH THE $UPER $AVER PLUS PLAN

 

Section 5.1                                      If a Participant in this Plan
is participating in the $uper $aver Plus Plan, the Committee shall credit
annually to the Participant’s $uper $aver Plus Plan Account a $uper $aver Plus
Plan Excess Contribution, at the discretion of the Committee.

 

Section 5.2                                      In addition to the $uper $aver
Plus Plan Excess Contribution provided for under this Article V pursuant to
Section 5.1, the Committee shall periodically, at such times as shall be
determined in its sole discretion, credit or debit, as the case may be, to a
Participant’s $uper $aver Plus Plan Account, the earnings or losses that would
have accrued to such $uper $aver Plus Plan Account if such $uper $aver Plus Plan
Account were invested in the investment funds elected by the Participant for the
investment of amounts credited to his or her accounts in the Executive Deferral
Plan during the relevant computation period.  If the Participant for whom a
$uper $aver Plus Plan Excess Contribution under this Article V is credited is
not a participant in the Executive Deferral

 

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Plan, the Participant will be required to designate investment funds (as
available under the Executive Deferral Plan) for the purpose of determining such
credits and debits to the $uper $aver Plus Plan Account.  If no such election is
made, until the election is made the $uper $aver Plus Plan Account will be
credited or debited as determined by the Committee, in its sole discretion.  The
Committee will promulgate procedures for changing such elections from time to
time as it shall determine, in its sole and absolute discretion.

 

Section 5.3                                      If no benefit is payable under
the $uper $aver Plus Plan, then no benefit will be payable under Article V of
the Plan.  In making such determination, benefits attributable to contributions
under $uper $aver, other than under the $uper $aver Plus Plan, shall be
disregarded.  The amount of any Funded Accrued Benefit contribution under this
Article V shall be paid to the Trust, net of taxes, and credited to the
Participant’s Account.  Amounts paid to a Participant on account of this Article
V from an Account shall be charged against the Participant’s $uper $aver Plus
Plan Account.

 

ARTICLE VI
PAYMENT OF BENEFITS

 

Section 6.1                                      Except as otherwise provided in
this Article VI and in Sections 7.3 and 8.2, benefits under Article IV shall be
payable at the same time and in the same manner hereunder as under the Base
Defined Benefit Plan.  Any benefit payable under Article IV on account of the
death of the Participant shall be payable pursuant to the Participant’s benefit
elections pursuant to Section 6.2; provided, however, that if the Participant
has elected a Lump-Sum Payment under Section 6.4 and such election was made and
filed with the Committee or its delegate (at least twelve months prior to death,
in the case of any Non-Funded Accrued Benefits) in the event of the
Participant’s death prior to being paid any benefits hereunder, notwithstanding
anything to the contrary in Section 4.2, the Participant’s Beneficiary shall
receive the Lump-Sum Payment within sixty days of the date on which the
Participant would have been entitled to commence receipt of benefits, had he or
she survived.  For such purpose, the Participant may designate a Beneficiary for
the Lump-Sum Payment, subject to the designation procedures specified in Section
6.3.  Funded Accrued Benefits shall be paid from the Trust.

 

Section 6.2                                      All provisions of the Base
Defined Benefit Plan and the Super $aver Plus Plan consistent with this Plan
will apply in determining the amount of benefits hereunder, including, but not
limited to, social security offset provisions, early retirement reductions,
optional forms of benefit, pre-retirement surviving spouse’s annuity, and
spousal consent requirements.

 

Section 6.3                                      Except as provided in Sections
6.1, 6.4 and 6.6, Annual Defined Benefit Retirement Benefits under Article IV
under this Plan will be paid in monthly installments only, unless the Committee
in its sole discretion directs payment in another form.  The portion of the
Annual Defined Benefit Retirement Benefit and/or amounts credited under Article
V that were satisfied by amounts credited to the Account of an Active Funding
Participant shall be paid from amounts credited to such Participant’s Account
through the Trust.  A Participant entitled to benefits under Article IV may
elect any of the standard forms of monthly payments provided under the Base
Defined Benefit Plan, subject to Section 6.4, provided that if a lump-sum under
Section 6.4 or Section 6.6 is not payable, the method selected must be the same
as that selected under the Base Defined Benefit Plan, unless the Committee
directs otherwise.

 

Section 6.4                                      In lieu of monthly payments
pursuant to 6.3, a Participant may elect to claim a lump-sum, one-time payment
equal to the present value of any Annual Defined Benefit Retirement Benefits to
be paid pursuant to Article IV of the Plan (the “Lump-Sum Payment”).  Such claim
shall:

 

(A)                                  BE IN WRITING,

 

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(B)                                 BE IN THE FORM PRESCRIBED BY THE COMPANY,

 

(C)                                  BE ADDRESSED TO THE COMPANY’S VICE
PRESIDENT, HUMAN RESOURCES, OR SUCCESSOR, AND

 

(D)                                 SHALL BE MADE BY A PARTICIPANT WITH RESPECT
TO ANY NON-FUNDED ACCRUED BENEFIT AT LEAST TWELVE MONTHS (OR SUCH LESSER PERIOD
AS THE COMMITTEE MAY PERMIT, IN ITS SOLE DISCRETION) BEFORE HE OR SHE COMMENCES
PAYMENTS, OR ONE YEAR BEFORE AGE SIXTY-FIVE, WHICHEVER IS THE FIRST TO OCCUR.  A
LUMP-SUM ELECTION MAY BE MADE WITH RESPECT TO FUNDED ACCRUED BENEFITS AT ANY
TIME BEFORE RETIREMENT.

 

In addition to the foregoing, the Participant must execute a general release and
provide consent of spouse, if married.  In calculating the Lump-Sum Payment, the
interest rate shall be equal to the applicable interest rate promulgated by the
Internal Revenue Service under section 417(e)(3) of the Code for the third month
preceding the Participant’s retirement date.  The mortality rate shall be the
1983 GAM male table for male Participants, and the 1983 GAM female table for
female Participants.  A lump-sum election may be revoked if the Company is
notified in writing (at least twelve months prior to commencement of benefits,
in the case of Non-Funded Accrued Benefits).  No later election of a Lump-Sum
Payment may be made after such revocation.  Upon acceptance of the lump-sum
claim, the Lump-Sum Payment will be paid to the Participant within thirty days
of the Participant’s first receipt of benefits under the Base Defined Benefit
Plan.

 

Section 6.5                                      Benefits under Article V shall
be paid in a lump-sum equal to the $uper $aver Plus Plan Account balance, net of
taxes.  Benefits under Article V paid to a Particpant from the Trust as a result
of a credit to an Account shall be credited against amount payable from the
$uper $aver Plus Plan Account.  Notwithstanding Section 6.1, a Participant’s
election under the $uper $aver Plus Plan to receive payment of $uper $aver Plus
Plan benefits in any form other than a lump-sum cash payment shall be
ineffective with respect to accrued benefits under Article V of this Plan. 
Payment of benefits pursuant to Article V shall be made in a lump-sum cash
payment as of the date on which any post-separation benefit commences under the
$uper $aver Plus Plan.  A Participant may designate a Beneficiary or
Beneficiaries to receive benefits under Article V payable in the event of the
Participant’s death, if any.  Any such designation shall be made in the manner
required by the Committee or its delegate.  If, for any reason, there is no
surviving designated Beneficiary, benefits will be payable to the parties who
would be entitled to receive such amounts if they were paid under $uper $aver on
account of the Participant’s death.  Such amounts will be paid in a lump-sum
within sixty days following the date of the Participant’s death.

 

Section 6.6                                      Upon a Change in Control or
Potential Change in Control (each as defined in the 1998 Long-Term Incentive
Plan of AMR, or its successor plan) with respect to AMR, a Participant will
receive a lump-sum, one-time payment equal to the present value of the remaining
Annual Defined Benefit Retirement Benefit to be paid pursuant to Article IV of
the Plan (and the entire amount credited to his or her Account pursuant to
Article V, if applicable) (the “Change in Control Payment”), unless the
Participant elects to continue to receive previously elected monthly payments. 
Such an election shall:

 

(A)                                  BE IN WRITING,

 

(B)                                 BE IN A FORM PRESCRIBED BY THE COMPANY,

 

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(C)                                  BE ADDRESSED TO THE COMPANY’S VICE
PRESIDENT, HUMAN RESOURCES, OR SUCCESSOR, AND

 

(D)                                 SHALL BE MADE BY THE PARTICIPANT WITHIN
THIRTY DAYS FOLLOWING THE CHANGE IN CONTROL OR THE POTENTIAL CHANGE IN CONTROL.

 

The Change in Control Payment shall be computed by assuming that payments under
the Base Defined Benefit Plan would commence at the earliest possible retirement
age for the Participant, assuming that the Participant separated from employment
as of the Change in Control or Potential Change in Control.  In the event a
Participant is not vested in benefits under the Base Defined Benefit Plan, he
shall nevertheless be deemed to have satisfied the vesting requirements of the
Base Defined Benefit Plan (and of the $uper $aver Plus Plan) for purposes of
computing the amount of the Change in Control Payment.

 

Section 6.7                                      Prior to receiving the Change
in Control Payment attributable to the Annual Defined Benefit Retirement
Benefit, the Participant may be required to execute a general release and to
provide consent of spouse, if married.  In calculating the portion of a Change
in Control Payment attributable to an Annual Defined Benefit Retirement Benefit,
the interest rate shall be equal to the applicable interest rate promulgated by
the Internal Revenue Service under section 417(e)(3) of the Code for the third
month preceding the Change in Control or Potential Change in Control.  The
mortality table used shall be the 1983 GAM male table for male Participants, and
the 1983 GAM female table for female Participants.  The Change in Control
Payments will be paid to the Participant within sixty days following the Change
in Control or the Potential Change in Control.

 

Section 6.8                                      In the event the Participant
has any outstanding debt with the Company, such as for payment of taxes, the
Company or the Committee may withhold or deduct from any payments to be made to
the Participant under this Plan an amount(s) equal to such outstanding debt.

 

ARTICLE VII
AMENDMENT AND TERMINATION

 

Section 7.1                                      The Board of Directors, or such
person or persons, including the Committee, as may be authorized in writing by
the Board of Directors, may amend or terminate the Plan at any time.

 

Section 7.2                                      No such amendment or
termination pursuant to Section 7.1 shall adversely affect a benefit payable
under this Plan with respect to a Participant’s employment by the Company prior
to the date of such amendment or termination unless such benefit is or becomes
payable under a successor plan or practice adopted by the Board of Directors or
its designee.

 

Section 7.3                                      Notwithstanding Sections 7.1
and 7.2 of the Plan, no changes or amendments (including pertaining to
termination) to the Plan will be permitted after a Change in Control or
Potential Change in Control, as each of these terms is defined in the 1998 Long
Term Incentive Plan of AMR, or its successor plan.

 

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ARTICLE VIII
GENERAL CONDITIONS

 

Section 8.1                                      The right to receive benefits
under the Plan may not be anticipated, alienated, sold, transferred, assigned,
pledged, encumbered or subjected to any charge or legal process, and if any
attempt is made to do so or a person eligible for any benefit becomes bankrupt,
the interest under the Plan of the person affected may be terminated by the
Committee and the Committee may in its sole discretion cause the same to be held
or applied for the benefit of one or more of the dependents of such person.

 

Section 8.2                                      Notwithstanding the provisions
in Section 8.1, upon receipt by the Plan of a “domestic relations order” (as
defined in section 206(d)(3)(B)(ii) of the Act) purporting to be a “qualified
domestic relations order” (as defined in section 206(d)(3)(B)(i) of the Act),
the Committee shall review such order using the domestic relations order review
procedures in effect under the Base Defined Benefit Plan or $uper $aver, as
applicable to benefits under Article IV or Article V respectively.  Upon the
determination that a domestic relations order meets the Plan’s requirements to
be a qualified domestic relations order, the “alternate payee” (as defined in
section 206(d)(3)(K) of the Act) shall be eligible to receive benefits payable
under the terms of the qualified domestic relations order.  Notwithstanding the
foregoing, however, an alternate payee under a domestic relations order shall
only be eligible to receive benefits from the Plan when the Participant begins
receiving benefits from the Base Defined Benefit Plan (or the $uper $aver Plus
Plan, as applicable).

 

Section 8.3                                      All questions pertaining to the
construction, validity and effect of the Plan shall be determined in accordance
with the laws of the United States and the State of Texas.

 

Section 8.4                                      In the event of any act of God,
war, natural disaster, aircraft grounding, revocation of operating certificate,
terrorism, strike, lockout, labor dispute, work stoppage, fire, epidemic or
quarantine restriction, act of government, critical materials shortage, or any
other act, whether similar or dissimilar, beyond the control of the Company
(each, a “Force Majeure Event”), which Force Majeure Event affects the Company
or its Subsidiaries or its Affiliates, the Board of Directors, at its sole
discretion, may suspend, delay, defer or substitute (for such period of time as
the Board of Directors may deem necessary) any payments due currently or in the
future under the Plan, including, but not limited to, any payments that have
accrued to the benefit of a Participant but have not yet been paid.

 

Section 8.5                                      With respect to Non-Funded
Accrued Benefits, this non-qualified plan shall be, and is intended to be, a
plan that is unfunded and maintained by the Company to provide deferred
compensation to a select group of management or highly-compensated employees,
pursuant to sections 201(2), 301(a)(3), and 401(a)(1) of the Act.  With respect
to Funded Accrued Benefits, this Plan is an “employee pension benefit plan”
described in section 3(2) of the Act that is an “individual account plan” and
“defined contribution” plan as described in section 3(34) of the Act that is not
subject to Part 3 of Subtitle B of Title I of the Act, pursuant to section
301(a)(8) of the Act.

 

Section 8.6                                      American Airlines, Inc., is the
sponsor of the Plan and the Committee or its delegate shall be the Plan
Administrator, and shall have authority to manage the operation and
administration of the Plan.  The Committee may designate one or more individuals
to carry out any of its administrative responsibilities in connection with the
Plan.  The Company may employ one or more persons to render advice to any
director, officer or employee of the Company with respect to such individual’s
responsibilities under the Plan.  The Committee may act by majority vote of its
members at a meeting or by a signed writing.  The Committee may engage agents to
assist it and may

 

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engage legal counsel who may be legal counsel for the Company.  All reasonable
expenses incurred by the Committee.  In administering the Plan, the Committee
may conclusively rely upon the Company’s payroll and personnel records and
employee benefit plan records maintained in the ordinary course of business. 
The Board of Directors may remove any member of a Committee at any time and a
member may resign by written notice to the Board of Directors.  The Committee
shall have the exclusive discretionary authority to interpret and construe the
terms of the Plan and the exclusive discretionary authority to determine
eligibility for, and the amount of, all benefits hereunder.  Any such
determinations or interpretations of the Plan adopted by the Committee shall be
final and conclusive and shall bind all parties.

 

ARTICLE IX
FUNDING

 

Section 9.1                                      The Company will pay the entire
cost of the Plan, through the Trust, directly or under Section 10.2 as
applicable.  Amounts payable to an Active Funding Participant will first be paid
from the Trust through amounts credited to such Participant’s Account.  Any
remaining amounts payable, and all amounts payable to Non-Active Funding
Participants shall be paid as they become payable from the Company’s general
assets or through a trust established pursuant to Section 10.2.

 

ARTICLE X
TRUST

 

Section 10.1                                The Company established the Trust,
an irrevocable trust effective October  15, 2002, pursuant to the Trust
Agreement Under Supplemental Retirement Program for Officers of American
Airlines, Inc., to fund the anticipated after-tax distributions of Funded
Accrued Benefits under the Plan, as determined by the Committee as of October 1,
2002. Wachovia Bank National Association will serve as the initial Trustee of
the Trust and will hold the Trust assets for the purpose of accumulating funds
to pay benefits under the Plan as they become due and payable.  The Trust is a
so-called “secular trust” for Federal income tax purposes.  The assets of the
Trust are not subject to the claims of creditors of the Company or any of its
corporate affiliates.  Moreover, the contributions to the Trust and the Trust’s
earnings will generally be taxable income to Participants, although subsequent
distributions from the already taxed amounts will be made to Participants free
of Federal income tax.

 

Section 10.2                                To assist in the payment of
Non-Funded Accrued Benefits following a Change in Control or Potential Change in
Control (each as defined in the 1998 Long-Term Incentive Plan of AMR, or its
successor plan) with respect to AMR, the Board of Directors or the Company’s
General Counsel or the Company’s Corporate Secretary may establish a trust or
utilize a trust heretofore established, to fund Non-Funded Accrued Benefits
under the Plan.

 

Section 10.3                                The trust which may be established
or otherwise utilized pursuant to Section 10.2 will be maintained:

 

(A)                                  WITH A NATIONALLY RECOGNIZED BANKING
INSTITUTION WITH EXPERIENCE IN SERVING AS A TRUSTEE FOR SUCH MATTERS,

 

(B)                                 PURSUANT TO SUCH DOCUMENTATION AS
RECOMMENDED BY OUTSIDE COUNSEL TO THE COMPANY, AND

 

(C)                                  FUNDED SO AS TO ENABLE THE TRUST TO PAY
SOME OR ALL OF THE NON-FUNDED ACCRUED BENEFITS CONTEMPLATED UNDER THE PLAN, AS
MAY BE DETERMINED BY THE COMPANY’S INDEPENDENT COMPENSATION CONSULTANT, SELECTED
BY THE COMPANY, IN ITS SOLE AND ABSOLUTE DISCRETION.

 

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Section 10.4                                In addition, the Board of Directors,
the Company’s General Counsel or the Company’s Corporate Secretary may take
those additional actions deemed reasonably necessary to accomplish the stated
purpose of Section 10.2.

 

ARTICLE XI
ERISA RIGHTS

 

Section 11.1                                As a Participant in any Funded
Accrued Benefits under the Plan, you are entitled to certain rights and
protections under ERISA. ERISA provides that all Plan Participants shall be
entitled to:

 

•                  Examine, without charge, at the Plan Administrator’s office,
all Plan documents, including copies of all documents filed with the U.S.
Department of Labor, such as Summary Annual Reports (SARs) and a copy of the
latest Form 5500 annual report filed by the Plan with the U.S. Department of
Labor and available at the Public Disclosure Room of the Pension and Welfare
Benefit Administration.

 

•                  Obtain copies of all Plan documents and other Plan
information including copies of the latest Form 5500 annual report and current
Summary Plan Description (SPD) upon written request to the Plan Administrator.
The Plan Administrator may charge a reasonable amount for the copies.

 

•                  Receive a summary of the Plan’s annual financial report
(SAR). The Plan Administrator is required by law to furnish each Participant
with a SAR.

 

•                  Obtain a statement telling you whether you have a right to
receive a pension at Normal Retirement Age under the Plan and, if so, what the
benefit amount would be at Normal Retirement Age if you were to stop working
now. This statement must be requested in writing and is not required to be given
more often than once a year. This statement must be provided free of charge.

 

In addition to creating rights for Plan Participants, ERISA imposes duties upon
the people responsible for the Plan’s operation. The people who supervise the
Plan’s operation, called “Fiduciaries,” have a duty to do their jobs prudently
and solely in the interest of you and other Plan Participants and
beneficiaries.  Fiduciaries who violate ERISA may be removed and required to
make good any losses they have caused the Plan.

 

If a claim for a benefit is denied or ignored in whole or in part, you must
receive a written explanation of the reason for the denial. You have the right
to have the Plan Administrator review and reconsider the claim.  No one,
including an employer or any other person, may fire you or discriminate against
you in any way to prevent you from obtaining a benefit from the Plan or
exercising your rights under ERISA.

 

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from  the Plan Administrator and do not
receive them within 30 days, you may sue in federal court. The court may require
the Plan Administrator to provide the materials and pay you up to $110 a day
until you receive the materials — unless the materials were not sent because of
reasons beyond the Plan Administrator’s control.  If you have a claim for
benefits that is denied or ignored, in whole or in part, you may file suit in a
state or federal court.  In addition, if you disagree with the Plan’s decision
or lack thereof concerning the qualified status of a domestic relations order,
you may file suit in federal court.

 

If the Plan’s Fiduciaries misuse the Plan’s money, or if you are discriminated
against for asserting your rights, you may seek assistance from the U.S.
Department of Labor, or  you may file suit in a federal court. The court will
decide who should pay court costs and legal fees. If you are successful, the
court may order the person you have sued to pay those costs and fees. If you
lose (i.e., if the court finds your claim frivolous), the court may order you to
pay these costs and fees.

 

If you have any questions about the Plan, contact the Plan Administrator.  If
there are  any questions about this section or about your rights under ERISA,
you should contact  the nearest office of the Pension and Welfare

 

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Benefits Administration of the U.S. Department of Labor listed in your telephone
directory or the Division of Technical Assistance and Inquiries, Pension and
Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution
Avenue, N.W. Washington, D.C 20210. You may also obtain certain publications
about your rights and responsibilities under ERISA by calling the publications
hotline of the Pension and Welfare Benefits Administration.

 

ARTICLE XII
CLAIMS PROCEDURES

 

Section 12.1                                A claim for retirement benefits
under the Plan must be submitted to the Plan Administrator at the time and in
the manner prescribed by the Plan Administrator.

 

If the Plan Administrator determines that you are not entitled to receive all or
part of the benefits you claim, a notice will be provided to you within a
reasonable period of time, but no later than 90 days from the day your claim was
received by the Plan Administrator.  This notice (which will be provided to you
in writing by mail or hand delivery, or through email) will describe:

 

•                  The Plan Administrator’s determination;

 

•                  The basis for the determination (along with appropriate
references to pertinent Plan provisions on which the denial is based);

 

•                  A description of any additional material or information
necessary to perfect the claim and an explanation of why such material is
necessary, and

 

•                  The procedure you must follow to obtain a review of the
determination, including a description of the appeals procedure and your right
to bring a cause of action for benefits under section 502(a) of ERISA. This
notice will also, if appropriate, explain how you may properly complete your
claim and why the submission of additional information may be necessary.

 

In certain instances, the Plan Administrator may not be able to make a
determination within 90 days from the day your claim for benefits was submitted.
In such situations, the Plan Administrator, in its sole and absolute discretion,
may extend the 90-day period for up to 180 days, as long as the Plan
Administrator provides you with a written notice

within the initial 90-day period that explains:

 

•                  The reason for the extension, and

 

•                  The date on which a decision is expected.

 

Section 12.2                                If your claim for benefits is
denied, either in whole or in part, you may appeal the Plan Administrator’s
denial by requesting a review of your claim by the Committee (or its delegate). 
Your written request for an appeal must be received by the Plan Administrator
within 60 days of the date you received your notice that the Plan Administrator
denied your claim.

 

As part of your appeal, you may submit written comments, documents, records and
other information relating to your claim for benefits. You may also request
reasonable access to, and copies of, all documents, records, and other
information relevant to your claim. You will not be charged for this
information. The Committee’s (or its delegate’s) review of the Plan
Administrator’s adverse determination will take into account all comments,
documents, records and other information you submitted, without regard to
whether such information was submitted and considered in the Plan
Administrator’s initial determination of your claim.

 

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If, after reviewing your appeal and any further information that you have
submitted, the Committee (or its delegate) denies your claim, either in whole or
in part, a notice (which will be provided to you in writing by mail or hand
delivery, or through email) will be provided to you within a reasonable period
of time, but not later than 60 days from the day your request for a review was
received by the Plan Administrator. In the event that an  extension of time for
processing is required, you will be provided a written notice of the extension
not later than 60 days from the day your request for a review was received by
the Plan Administrator.  In such situations, the Committee (or its delegate), in
its sole and absolute discretion, may extend the 60-day period for up to 120
days, as long as the Committee (or its delegate) provides you with a written
notice within the initial 60-day period that explains:

 

•                  The reason for the extension, and

•                  The date on which a decision is expected.

 

The notice describing the Committee’s (or its delegate’s) decision will
describe:

 

•                  The specific reason or reasons for its decision, including
any adverse determinations;

 

•                  References to the specific Plan or Base Defined Benefit Plan
or $uper $aver Plus Plan provisions on which the Committee (or its delegate) 
based its determination;

 

•                  Your right to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to your claim;

 

•                  A description of any voluntary appeals procedures, if any,
and your right to obtain information about such procedures, and

 

•                  Your right to bring a cause of action for benefits under
section 502(a) of ERISA.

 

ARTICLE XIII
FINALITY OF DECISIONS OR ACTS

 

Section 13.1                                The Committee has the express
authority to elect the actuarial assumptions to be used in funding any benefits
payable under the Plan, to interpret any provision of this Plan and to
determine, at its sole discretion, the meaning and application of any such
provision as to each Paricipant or Beneficiary under the Plan, in accordance
with the facts and circumstances of each particular claim.  Except for the right
of a Participant or Beneficiary to appeal the denial of a claim, any decision or
action of the Committee, within their scope of authority, shall be final and
binding on all persons claiming a right to benefits under the Plan.  No benefit
shall be payable that the Committee does not deem is payable under the terms of
the Plan.

 

ARTICLE XIV
GENERAL INFORMATION ABOUT YOUR PLAN

 

Plan Name:

 

The Supplemental Executive Retirement Program (SERP) for Officers of American
Airlines, Inc.

 

 

 

Plan Sponsor:

 

American Airlines, Inc.

 

 

4333 Amon Carter Blvd.

 

 

MD 5146

 

 

Fort Worth, TX  76155

 

 

 

Employer ID No.:

 

13-1502798

 

 

 

Plan Number:

 

888

 

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Type of Plan:

 

As described in Section 8.5

 

 

 

Plan Administrator:

 

American Airlines, Inc.

 

 

4333 Amon Carter Blvd.

 

 

MD 5112

 

 

Fort Worth, TX 76155

 

 

Telephone:  817-967-3558

 

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Legal Agent:

 

C T Corporation System

 

 

Registered Office

 

 

350 North St. Paul Street

 

 

Dallas, TX  75201

 

 

 

Trustee:

Wachovia Bank National Association

 

 

 

Trustee(s) Address:

 

Wachovia Bank National Association

 

 

Attn:  Executive Services

 

 

One West Fourth Street

 

 

Winston-Salem, NC  27150

 

 

 

Funding Arrangement:

Company Assets for Non-Funded Accrued Benefits

 

 

Trust for Funded Accrued Benefits

 

 

 

Plan Year:

 

January 1 to December 31

 

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AS AMENDED AND RESTATED EFFECTIVE OCTOBER 15, 2002.

 

 

American Airlines, Inc.

 

 

 

By:

 

 

Name & Title:

Charles D. MarLett, Corporate Secretary

 

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