<PAGE>
                                                                   EXHIBIT 10.71


                              AMENDED AND RESTATED
                    EXECUTIVE TERMINATION BENEFITS AGREEMENT


         THIS AMENDED AND RESTATED EXECUTIVE TERMINATION BENEFITS AGREEMENT
(this "Agreement"), dated as of the 20th day of May, 2003 is among AMR
CORPORATION, a Delaware corporation, AMERICAN AIRLINES, INC., a Delaware
corporation (collectively the "Company"), and ROBERT W. REDING (the
"Executive").

                                   WITNESSETH:

         WHEREAS, the Company considers it essential to the best interests of
the Company and its stockholders that its management be encouraged to remain
with the Company and to continue to devote full attention to the Company's
business in the event an effort is made to obtain control of the Company through
a tender offer or otherwise;

         WHEREAS, the Company recognizes that the possibility of a change in
control and the uncertainty and questions which it may raise among management
may result in the departure or distraction of management personnel to the
detriment of the Company and its stockholders;

         WHEREAS, the Company's Board of Directors (the "Board") has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company's management to their
assigned duties without distraction in the face of the potentially disturbing
circumstances arising from the possibility of a change in control of the
Company;

         WHEREAS, the Executive is a key Executive of the Company;
<PAGE>


         WHEREAS, the Company believes the Executive has made valuable
contributions to the productivity and profitability of the Company;

         WHEREAS, should the Company receive any proposal from a third person
concerning a possible business combination with or acquisition of equity
securities of the Company, the Board believes it imperative that the Company and
the Board be able to rely upon the Executive to continue in his position, and
that the Company be able to receive and rely upon his advice as to the best
interests of the Company and its stockholders without concern that he might be
distracted by the personal uncertainties and risks created by such a proposal;
and

         WHEREAS, should the Company receive any such proposals, in addition to
the Executive's regular duties, he may be called upon to assist in the
assessment of such proposals, advise management and the Board as to whether such
proposals would be in the best interests of the Company and its stockholders,
and to take such other actions as the Board might determine to be appropriate.

         NOW, THEREFORE, to assure the Company that it will have the continued
undivided attention and services of the Executive and the availability of his
advice and counsel notwithstanding the possibility, threat or occurrence of a
bid to take over control of the Company, and to induce the Executive to remain
in the employ of the Company, and for other good and valuable consideration, the
Company and the Executive agree as follows:

         1. Change in Control

         For purposes of this Agreement, a Change in Control of the Company
shall be deemed to have taken place if:

                  (a) any person as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended from time to time (the "Exchange Act"), and as
used in Sections 13(d) and


                                       2
<PAGE>

14(d) thereof, including a "group" as defined in Section 13(d) of the Exchange
Act (a "Person"), but excluding the Company, any subsidiary of the Company and
any employee benefit plan sponsored or maintained by the Company or any
subsidiary of the Company (including any trustee of such plan acting as
trustee), directly or indirectly, becomes the "beneficial owner" (as defined in
Rule 13(d)-3 under the Exchange Act, as amended from time to time) of securities
of the Company representing 15% or more of the combined voting power of the
Company's then outstanding securities; or

                  (b) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

                  (c) consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of the assets of another corporation (a "Business
Combination"), in each case, unless, following such Business Combination, (i)
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the then outstanding shares of common stock of the
Company and the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors
immediately prior to such Business Combination


                                       3
<PAGE>

beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries), (ii) no Person
(excluding any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 15% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Incumbent Board, providing for
such Business Combination; or

                  (d) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

         2. Circumstances Triggering Receipt of Severance Benefits

                  (a) Subject to Section 2(c), the Company will provide the
Executive with the benefits set forth in Section 4 upon any termination of the
Executive's employment:

                           (i) by the Company at any time within the first 24
                  months after a Change in Control;


                                       4
<PAGE>

                           (ii) by the Executive for "Good Reason" (as defined
                  in Section 2(b) below) at any time within the first 24 months
                  after a Change in Control;

                           (iii) by the Executive pursuant to Section 2(d); or

                           (iv) by the Company or the Executive pursuant to
                  Section 2(e).

                  (b) In the event of the occurrence of a Change in Control, the
Executive may terminate employment with the Company and/or any subsidiary for
"Good Reason" with the right to benefits set forth in Section 4 upon the
occurrence of one or more of the following events (regardless of whether any
other reason, other than Cause as provided below, for such termination exists or
has occurred, including without limitation other employment):

                           (i) Failure to elect or reelect or otherwise to
                  maintain the Executive in the office or the position, or a
                  substantially equivalent office or position, of or with the
                  Company and/or a subsidiary, as the case may be, which the
                  Executive held immediately prior to a Change in Control, or
                  the removal of the Executive as a director of the Company
                  and/or a subsidiary (or any successor thereto) if the
                  Executive shall have been a director of the Company and/or a
                  subsidiary immediately prior to the Change in Control;

                           (ii) (A) A significant adverse change in the nature
                  or scope of the authorities, powers, functions,
                  responsibilities or duties attached to the position with the
                  Company and/or any subsidiary which the Executive held
                  immediately prior to the Change in Control, (B) a reduction in
                  the aggregate of the Executive's annual base salary rate and
                  annual incentive compensation target to be received from the
                  Company and/or any subsidiary, or (C) the termination or
                  denial of the Executive's rights to Employee Benefits (as
                  defined below) or a reduction in the


                                       5
<PAGE>

                  scope or value thereof, any of which is not remedied by the
                  Company within 10 calendar days after receipt by the Company
                  of written notice from the Executive of such change, reduction
                  or termination, as the case may be;

                           (iii) A determination by the Executive (which
                  determination will be conclusive and binding upon the parties
                  hereto provided it has been made in good faith and in all
                  events will be presumed to have been made in good faith unless
                  otherwise shown by the Company by clear and convincing
                  evidence) that a change in circumstances has occurred
                  following a Change in Control, including, without limitation,
                  a change in the scope of the business or other activities for
                  which the Executive was responsible immediately prior to the
                  Change in Control, which has rendered the Executive
                  substantially unable to carry out, has substantially hindered
                  Executive's performance of, or has caused the Executive to
                  suffer a substantial reduction in, any of the authorities,
                  powers, functions, responsibilities or duties attached to the
                  position held by the Executive immediately prior to the Change
                  in Control, which situation is not remedied within 10 calendar
                  days after written notice to the Company from the Executive of
                  such determination;

                           (iv) The liquidation, dissolution, merger,
                  consolidation or reorganization of the Company or transfer of
                  all or substantially all of its business and/or assets, unless
                  the successor or successors (by liquidation, merger,
                  consolidation, reorganization, transfer or otherwise) to which
                  all or substantially all of its business and/or assets have
                  been transferred (directly or by operation of


                                       6
<PAGE>

                  law) assumed all duties and obligations of the Company under
                  this Agreement pursuant to Section 9(a);

                           (v) The Company relocates its principal executive
                  offices, or requires the Executive to have his principal
                  location of work changed, to any location that is in excess of
                  50 miles from the location thereof immediately prior to the
                  Change in Control, or requires the Executive to travel away
                  from his office in the course of discharging his
                  responsibilities or duties hereunder at least 20% more (in
                  terms of aggregate days in any calendar year or in any
                  calendar quarter when annualized for purposes of comparison to
                  any prior year) than was required of Executive in any of the
                  three full years immediately prior to the Change in Control
                  without, in either case, his prior written consent; or

                           (vi) Without limiting the generality or effect of the
                  foregoing, any material breach of this Agreement by the
                  Company or any successor thereto, which breach is not remedied
                  within 10 calendar days after written notice to the Company
                  from the Executive describing the nature of such breach.

                  (c) Notwithstanding Sections 2(a) and (b) above, no benefits
shall be payable by reason of this Agreement in the event of:

                           (i) Termination of the Executive's employment with
                  the Company and its subsidiaries by reason of the Executive's
                  death or Disability, provided that the Executive has not
                  previously given a valid "Notice of Termination" pursuant to
                  Section 3. For purposes hereof, "Disability" shall be defined
                  as the inability of Executive due to illness, accident or
                  other physical or mental disability to perform his duties for
                  any period of six consecutive months or for any period of
                  eight


                                       7
<PAGE>

                  months out of any 12-month period, as determined by an
                  independent physician selected by the Company and reasonably
                  acceptable to the Executive (or his legal representative),
                  provided that the Executive does not return to work on
                  substantially a full-time basis within 30 days after written
                  notice from the Company, pursuant to Section 3, of an intent
                  to terminate the Executive's employment due to Disability;

                           (ii) Termination of the Executive's employment with
                  the Company and its subsidiaries on account of the Executive's
                  retirement at or after age 65, pursuant to the Company's
                  Retirement Benefit Plan; or

                           (iii) Termination of the Executive's employment with
                  the Company and its subsidiaries for Cause. For the purposes
                  hereof, "Cause" shall be defined as a felony conviction of the
                  Executive or the failure of the Executive to contest
                  prosecution for a felony, or the Executive's wilful misconduct
                  or dishonesty, any of which is directly and materially harmful
                  to the business or reputation of the Company or any subsidiary
                  or affiliate. Notwithstanding the foregoing, the Executive
                  shall not be deemed to have been terminated for "Cause"
                  hereunder unless and until there shall have been delivered to
                  the Executive a copy of a resolution duly adopted by the
                  affirmative vote of not less than three quarters of the Board
                  then in office at a meeting of the Board called and held for
                  such purpose, after reasonable notice to the Executive and an
                  opportunity for the Executive, together with his counsel (if
                  the Executive chooses to have counsel present at such
                  meeting), to be heard before the Board, finding that, in the
                  good faith opinion of the Board, the Executive had committed
                  an act constituting


                                       8
<PAGE>

                  "Cause" as herein defined and specifying the particulars
                  thereof in detail. Nothing herein will limit the right of the
                  Executive or his beneficiaries to contest the validity or
                  propriety of any such determination.

         This Section 2(c) shall not preclude the payment of any amounts
otherwise payable to the Executive under any of the Company's employee benefit
plans, stock plans, programs and arrangements and/or under any Employment
Agreement.

                  (d) Notwithstanding anything contained in this Agreement to
the contrary, in the event of a Change in Control, the Executive may terminate
employment with the Company and any subsidiary for any reason, or without
reason, by providing Notice of Termination pursuant to Section 3 during the
30-day period immediately following the first anniversary of the first
occurrence of a Change in Control with the right to the benefits set forth in
Section 4.

                  (e) Any termination of employment of the Executive, including
a termination for "Good Reason," but excluding a termination for "Cause," or the
removal of the Executive from the office or position in the Company or any
subsidiary that occurs (i) not more than 180 days prior to the date on which a
Change in Control occurs and (ii) following the commencement of any discussion
with a third person that ultimately results in a Change in Control shall be
deemed to be a termination or removal of the Executive after a Change in Control
for purposes of this Agreement.

         3. Notice of Termination

         Any termination of the Executive's employment with the Company and its
subsidiaries as contemplated by Section 2 shall be communicated by written
"Notice of Termination" to the other party hereto. Any "Notice of Termination"
shall indicate the effective date of termination which shall not be less than 30
days or more than 60 days after the date the Notice of


                                       9
<PAGE>

Termination is delivered (the "Termination Date"), the specific provision in
this Agreement relied upon, and, except for a termination pursuant to Section
2(d), will set forth in reasonable detail the facts and circumstances claimed to
provide a basis for such termination including, if applicable, the failure after
provision of written notice by the Executive to effect a remedy pursuant to the
final clause of Section 2(b)(ii), 2(b)(iii) or 2(b)(vi).

         4. Termination Benefits

         Subject to the conditions set forth in Section 2, the following
benefits shall be paid or provided to the Executive:

                  (a) Compensation

                  The Company shall pay to the Executive three times the sum of
(i) "Base Pay", which shall be an amount equal to the greater of (A) the
Executive's effective annual base salary at the Termination Date or (B) the
Executive's effective annual base salary immediately prior to the Change in
Control, plus (ii) "Incentive Pay" equal to the greater of (x) the target annual
bonus payable to the Executive under the Company's Incentive Compensation Plan
or any other annual bonus plan for the fiscal year of the Company in which the
Change in Control occurred or (y) the highest annual bonus earned by the
Executive under the Company's Incentive Compensation Plan or any other annual
bonus plan (whether paid currently or on a deferred basis) with respect to any
12 consecutive month period during the three fiscal years of the Company
immediately preceding the fiscal year of the Company in which the Change in
Control occurred, plus (iii) "Performance Returns" equal to the highest annual
payment of performance returns paid to the Executive with respect to any 12
consecutive month period during the three fiscal years of the Company
immediately preceding the fiscal year of the Company in which the Change in
Control occurred.

                                       10
<PAGE>

                  (b) Welfare Benefits

                  For a period of 36 months following the Termination Date (the
"Continuation Period"), the Company shall arrange to provide the Executive with
benefits, including travel accident, major medical, dental, vision care and
other welfare benefit programs in effect immediately prior to the Change in
Control ("Employee Benefits") substantially similar to those that the Executive
was receiving or entitled to receive immediately prior to the Termination Date
(or, if greater, immediately prior to the reduction, termination, or denial
described in Section 2(b)(ii)(C)). If and to the extent that any benefit
described in this Section 4(b) is not or cannot be paid or provided under any
policy, plan, program or arrangement of the Company or any subsidiary, as the
case may be, then the Company will itself pay or provide for the payment to the
Executive, his dependents and beneficiaries, of such Employee Benefits along
with, in the case of any benefit which is subject to tax because it is not or
cannot be paid or provided under any such policy, plan, program or arrangement
of the Company or any subsidiary, an additional amount such that after payment
by the Executive, or his dependents or beneficiaries, as the case may be, of all
taxes so imposed, the recipient retains an amount equal to such taxes. Employee
Benefits otherwise receivable by the Executive pursuant to this Section 4(b)
will be reduced to the extent comparable welfare benefits are actually received
by the Executive from another employer during the Continuation Period, and any
such benefits actually received by the Executive shall be reported by the
Executive to the Company.

                  (c) Retirement Benefits

                  The Executive shall be deemed to be completely vested in
Executive's currently accrued benefits under the Company's Retirement Benefit
Plan and Supplemental Executive Retirement Plan ("SERP") in effect as of the
date of Change in Control (collectively, the


                                       11
<PAGE>

"Plans"), regardless of his actual vesting service credit thereunder. In
addition, the Executive shall be deemed to earn service credit for benefit
calculation purposes thereunder for the Continuation Period. Benefits under the
Plans will become payable at any time designated by the Executive following
termination of the Executive's employment with the Company and its subsidiaries
after the Executive reaches age 55, subject to the terms of the Plans regarding
the actuarial adjustment of benefit payments commencing prior to normal
retirement age. The benefits to be paid pursuant to the Plans shall be
calculated as though the Executive's compensation rate for each of the five
years immediately preceding his retirement equaled the sum of Base Pay plus
Incentive Pay plus Performance Returns. Any benefits payable pursuant to this
Section 4(c) that are not payable out of the Plans for any reason (including but
not limited to any applicable benefit limitations under the Employee Retirement
Income Security Act of 1974, as amended, or any restrictions relating to the
qualification of the Company's Retirement Benefit Plan under Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code")) shall be paid
directly by the Company out of its general assets.

                  (d) Relocation Benefits

                  If the Executive moves his residence in order to pursue other
business or employment opportunities during the Continuation Period and requests
in writing that the Company provide relocation services, he will be reimbursed
for any expenses incurred in that initial relocation (including taxes payable on
the reimbursement) which are not reimbursed by another employer. Benefits under
this provision will include assistance in selling the Executive's home and all
other assistance and benefits which were customarily provided by the Company to
transferred executives prior to the Change in Control.

                                       12
<PAGE>

                  (e) Executive Outplacement Counseling

                  At the request of the Executive made in writing during the
Continuation Period, the Company shall engage an outplacement counseling service
of national reputation to assist the Executive in obtaining employment.

                  (f) Stock Based Compensation Plans

                           (i) Any issued and outstanding Stock Options (to the
                  extent they have not already become exercisable) shall become
                  exercisable as of the date on which the Change in Control
                  occurs, unless otherwise specifically provided at the time
                  such options are granted.

                           (ii) The Company's right to rescind any award of
                  stock to the Executive under the Company's 1988 Long Term
                  Incentive Plan or the Company's 1998 Long Term Incentive Plan
                  (or any successor plan) shall terminate upon a Change in
                  Control, and all restrictions on the sale, pledge,
                  hypothecation or other disposition of shares of stock awarded
                  pursuant to such plan shall be removed at the Termination
                  Date, unless otherwise specifically provided at the time such
                  award(s) are made.

                           (iii) The Executive's rights under any other stock
                  based compensation plan shall vest (to the extent they have
                  not already vested) and any performance criteria shall be
                  deemed met at target as of the date on which a Change in
                  Control occurs, unless otherwise specifically provided at the
                  time such right(s) are granted.

                  (g) Split Dollar Life Insurance

                  The Company shall pay to the Executive a lump sum equal to the
cost on the Termination Date of purchasing, at standard independent insurance
premium rates, an individual


                                       13
<PAGE>

paid up insurance policy providing benefits equal to the benefits provided by
the Company's Split Dollar Life Insurance coverage immediately prior to the date
of the Change in Control.

                  (h) Other Benefits

                           (i) The Executive shall have all flight privileges
                  provided by the Company to Directors as of the date of Change
                  in Control until the Executive reaches age 55, at which time
                  he shall have all flight privileges provided by the Company to
                  its retirees who held the same or similar position as the
                  Executive immediately prior to the Change in Control.

                           (ii) The Executive, at the Executive's option, shall
                  be entitled to continue the use of the Executive's
                  Company-provided automobile during the Continuation Period
                  under the same terms that applied to the automobile
                  immediately prior to the Change in Control, or to purchase the
                  automobile at its book value as of the Termination Date.

                           (iii) The Company shall pay to the Executive an
                  amount equal to the cost to the Company of providing any other
                  perquisites and benefits of the Company in effect immediately
                  prior to the Change in Control, calculated as if such benefits
                  were continued during the Continuation Period.

                  (i) Accrued Amounts

                  The Company shall pay to the Executive all other amounts
accrued or earned by the Executive through the Termination Date and amounts
otherwise owing under the then existing plans and policies of the Company,
including but not limited to all amounts of compensation previously deferred by
the Executive (together with any accrued interest thereon) and not yet paid by
the Company, and any accrued vacation pay not yet paid by the Company.

                                       14
<PAGE>

                  (j) The Company shall pay to the Executive the amounts due
pursuant to Sections 4(a), 4(g) and 4(h)(iii) in a lump sum on the first
business day of the month following the Termination Date. The Company shall pay
to the Executive the amounts due pursuant to Section 4(i) in accordance with the
terms and conditions of the existing plans and policies of the Company.

         5. Certain Additional Payments by the Company.

                  (a) Anything in this Agreement to the contrary
notwithstanding, but subject to Section 5(h), in the event that this Agreement
shall become operative and it shall be determined (as hereafter provided) that
any payment (other than the Gross-Up payments provided for in this Section 5) or
distribution by the Company or any of its subsidiaries to or for the benefit of
the Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise pursuant to or by reason of any
other agreement, policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or similar right,
restricted stock, deferred stock or the lapse or termination of any restriction
on, deferral period or the vesting or exercisability of any of the foregoing (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of the
Code (or any successor provision thereto) by reason of being considered
"contingent on a change in ownership or control" of the Company, within the
meaning of Section 280G of the Code (or any successor provision thereto) or to
any similar tax imposed by state or local law, or any interest or penalties with
respect to such tax (such tax or taxes, together with any such interest and
penalties, being hereafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment or payments
(collectively, a "Gross-Up Payment"). The Gross-Up Payment shall be in an amount
such that, after payment by the Executive of all taxes (including any interest
or


                                       15
<PAGE>

penalties imposed with respect to such taxes), including any Excise Tax and any
income tax imposed upon the Gross-Up Payment, the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.

                  (b) Subject to the provisions of Section 5(f), all
determinations required to be made under this Section 5, including whether an
Excise Tax is payable by the Executive and the amount of such Excise Tax and
whether a Gross-Up Payment is required to be paid by the Company to the
Executive and the amount of such Gross-Up Payment, if any, shall be made by a
nationally recognized accounting firm (the "Accounting Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting Firm
to submit its determination and detailed supporting calculations to both the
Company and the Executive within 30 calendar days after the Change in Control
Date, the Termination Date, if applicable, and any such other time or times as
may be requested by the Company or the Executive. If the Accounting Firm
determines that any Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive within five business days
after receipt of such determination and calculations with respect to any Payment
to the Executive. If the Accounting Firm determines that no Excise Tax is
payable by the Executive, it shall, at the same time as it makes such
determination, furnish the Company and the Executive an opinion that the
Executive has substantial authority not to report any Excise Tax on his federal,
state or local income or other tax return. As a result of the uncertainty in the
application of Section 4999 of the Code (or any successor provision thereto) and
the possibility of similar uncertainty regarding applicable state or local tax
law at the time of any determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (an "Underpayment"), consistent with the calculations
required to be made hereunder. In the


                                       16
<PAGE>

event that the Company exhausts or fails to pursue its remedies pursuant to
Section 5(f) and the Executive thereafter is required to make a payment of any
Excise Tax, the Executive shall direct the Accounting Firm to determine the
amount of the Underpayment that has occurred and to submit its determination and
detailed supporting calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be promptly paid by the
Company to, or for the benefit of, the Executive within five business days after
receipt of such determination and calculations.

                  (c) The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of the Company or the Executive, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determinations and
calculations contemplated by Section 5(b). Any determination by the Accounting
Firm as to the amount of the Gross-Up Payment shall be binding upon the Company
and the Executive.

                  (d) The federal, state and local income or other tax returns
filed by the Executive shall be prepared and filed on a consistent basis with
the determination of the Accounting Firm with respect to the Excise Tax payable
by the Executive. The Executive shall make proper payment of the amount of any
Excise Payment, and at the request of the Company, provide to the Company true
and correct copies (with any amendments) of his federal income tax return as
filed with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such payment. If
prior to the filing of the Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting


                                       17
<PAGE>

Firm determines that the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company the amount of such
reduction.

                  (e) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and calculations contemplated by
Section 5(b) shall be borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company shall reimburse the Executive the
full amount of such fees and expenses within five business days after receipt
from the Executive of a statement therefor and reasonable evidence of his
payment thereof.

                  (f) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by the Company of a Gross-Up Payment or
any additional Gross-Up Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the Executive actually
receives notice of such claim and the Executive shall further apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by the Executive). The
Executive shall not pay such claim prior to the earlier of (x) the expiration of
the 30-calendar-day period following the date on which he gives such notice to
the Company and (y) the date that any payment of amount with respect to such
claim is due. If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

                           (i) provide the Company with any written records or
                  documents in his possession relating to such claim reasonably
                  requested by the Company;

                           (ii) take such action in connection with contesting
                  such claim as the Company shall reasonably request in writing
                  from time to time, including without


                                       18
<PAGE>

                  limitation accepting legal representation with respect to such
                  claim by an attorney competent in respect of the subject
                  matter and reasonably selected by the Company;

                           (iii) cooperate with the Company in good faith in
                  order effectively to contest such claim; and

                           (iv) permit the Company to participate in any
                  proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and hold harmless the Executive, on an after-tax
basis, for and against any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such contest and payment
of costs and expenses. Without limiting the foregoing provisions of this Section
5(f), the Company shall control all proceedings taken in connection with the
contest of any claim contemplated by this Section 5(f) and, at its sole option,
may pursue or forego any and all administrative appeals, proceedings, hearings
and conferences with the taxing authority in respect of such claim (provided,
however, that the Executive may participate therein at his own cost and expense)
and may, at its option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay the tax claimed and sue for a refund, the
Company shall advance the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any


                                       19
<PAGE>

Excise Tax or income or other tax, including interest or penalties with respect
thereto, imposed with respect to such advance; and provided further, however,
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which the contested amount
is claimed to be due is limited solely to such contested amount. Furthermore,
the Company's control of any such contested claim shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

                  (g) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 5(f), the Executive receives any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 5(f)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
any taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 5(f), a determination is made
that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial or refund prior to the expiration of 30 calendar days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of any such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid by the
Company to the Executive pursuant to this Section 5.

                  (h) Notwithstanding any provision of this Agreement to the
contrary, if (i) but for this sentence, the Company would be obligated to make a
Gross-Up Payment to the Executive, (ii) the aggregate "present value" of the
"parachute payments" to be paid or provided


                                       20
<PAGE>

to the Executive under this Agreement or otherwise does not exceed 1.15
multiplied by three times the Executive's "base amount," and (iii) but for this
sentence, the net after-tax benefit to the Executive of the Gross-Up Payment
would not exceed $50,000 (taking into account both income taxes and any Excise
Tax), then the payments and benefits to be paid or provided under this Agreement
(including any stock based compensation pursuant to Section 4(f)) will be
reduced to the minimum extent necessary (but in no event to less than zero) so
that no portion of any payment or benefit to the Executive, as so reduced,
constitutes an "excess parachute payment." For purposes of this Section 5(h),
the terms "excess parachute payment," "present value," "parachute payment," and
"base amount" will have the meanings assigned to them by Section 280G of the
Code. The determination of whether any reduction in such payments or benefits to
be provided under this Agreement is required pursuant to the preceding sentence
will be made at the expense of the Company, if requested by the Executive or the
Company, by the Accounting Firm. The fact that the Executive's right to payments
or benefits may be reduced by reason of the limitations contained in this
Section 5(h) will not of itself limit or otherwise affect any other rights of
the Executive other than pursuant to this Agreement. In the event that any
payment or benefit intended to be provided under this Agreement or otherwise is
required to be reduced pursuant to this Section 5(h), the Executive will be
entitled to designate the payments and/or benefits to be so reduced in order to
give effect to this Section 5(h). The Company will provide the Executive with
all information reasonably requested by the Executive to permit the Executive to
make such designation. In the event that the Executive fails to make such
designation within 10 business days of the Termination Date, the Company may
effect such reduction in any manner it deems appropriate.

                                       21
<PAGE>

         6. No Mitigation Obligation. The Company hereby acknowledges that it
will be difficult and may be impossible for the Executive to find reasonably
comparable employment following the Termination Date. Accordingly, the payment
of the severance compensation by the Company to the Executive in accordance with
the terms of this Agreement is hereby acknowledged by the Company to be
reasonable, and the Executive will not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor will any profits, income, earnings or other benefits from any source
whatsoever create any mitigation, offset, reduction or any other obligation on
the part of the Executive hereunder or otherwise, except as expressly provided
in the last sentence of Section 4(b).

         7. Legal Fees and Expenses.

                  (a) It is the intent of the Company that the Executive not be
required to incur legal fees and the related expenses associated with the
interpretation, enforcement or defense of Executive's rights under this
Agreement by litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to the Executive
hereunder. Accordingly, if it should appear to the Executive that the Company
has failed to comply with any of its obligations under this Agreement or in the
event that the Company or any other person takes or threatens to take any action
to declare this Agreement void or unenforceable, or institutes any litigation or
other action or proceeding designed to deny, or to recover from, the Executive
any or all of the benefits provided or intended to be provided to the Executive
hereunder, the Company irrevocably authorizes the Executive from time to time to
retain counsel of Executive's choice, at the expense of the Company as hereafter
provided, to advise and represent the Executive in connection with any such
interpretation, enforcement or


                                       22
<PAGE>

defense, including without limitation the initiation or defense of any
litigation or other legal action, whether by or against the Company or any
director, officer, stockholder or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably
consents to the Executive's entering into an attorney-client relationship with
such counsel, and in that connection the Company and the Executive agree that a
confidential relationship shall exist between the Executive and such counsel.
Without respect to whether the Executive prevails, in whole or in part, in
connection with any of the foregoing, the Company will pay and be solely
financially responsible for any and all attorneys' and related fees and expenses
incurred by the Executive in connection with any of the foregoing.

                  (b) Without limiting the obligations of the Company pursuant
to Section 7(a) hereof, in the event a Change in Control occurs, the performance
of the Company's obligations under this Section 7 shall be secured by amounts
deposited or to be deposited in trust pursuant to certain trust agreements to
which the Company shall be a party, which amounts deposited shall in the
aggregate be not less than $2,000,000, providing that the fees and expenses of
counsel selected from time to time by the Executive pursuant to Section 7(a)
shall be paid, or reimbursed to the Executive if paid by the Executive, either
in accordance with the terms of such trust agreements, or, if not so provided,
on a regular, periodic basis upon presentation by the Executive to the trustee
of a statement or statements prepared by such counsel in accordance with its
customary practices. Any failure by the Company to satisfy any of its
obligations under this Section 7(b) shall not limit the rights of the Executive
hereunder. Subject to the foregoing, the Executive shall have the status of a
general unsecured creditor of the Company and shall have no right to, or
security interest in, any assets of the Company or any subsidiary.

                                       23
<PAGE>

         8. Continuing Obligations

                  (a) The Executive hereby agrees that all documents, records,
techniques, business secrets and other information which have come into his
possession from time to time during his employment with the Company shall be
deemed to be confidential and proprietary to the Company and, except for
personal documents and records of the Executive, shall be returned to the
Company. The Executive further agrees to retain in confidence any confidential
information known to him concerning the Company and its subsidiaries and their
respective businesses so long as such information is not publicly disclosed,
except that Executive may disclose any such information required to be disclosed
in the normal course of his employment with the Company or pursuant to any court
order or other legal process.

                  (b) The Executive hereby agrees that during the Continuation
Period, he will not directly or indirectly solicit any employee of the Company
or any of its subsidiaries or affiliated companies to join the employ of any
entity that competes with the Company or any of its subsidiaries or affiliated
companies.

         9. Successors

                  (a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of such successor entity to enter into such agreement prior to the
effective date of any such succession (or, if later, within three business days
after first receiving a written request for such agreement) shall constitute a
breach of this Agreement and shall entitle the Executive to


                                       24
<PAGE>

terminate his employment pursuant to Section 2(a)(ii) and to receive the
payments and benefits provided under Section 4. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
Agreement provided for in this Section 9 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.

                  (b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive dies while any amounts are payable to him hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to his devisee, legatee or other designee or, if there is no such
designee, to his estate.

         10. Notices

         For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or
permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three business days after having been
sent by a nationally recognized overnight courier service such as FedEx, UPS, or
Purolator, addressed to the Company (to the attention of the Secretary of the
Company, with a copy to the General Counsel of the Company) at its principal
executive office and to the Executive at his principal residence, or to such
other address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

                                       25
<PAGE>

         11. Governing Law

         THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.

         12. Miscellaneous

         No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
the Executive and the Company. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement (or in any
employment or other written agreement relating to the Executive).
Notwithstanding any provision of this Agreement to the contrary, the parties'
respective rights and obligations under Sections 4, 5 and 7 will survive any
termination or expiration of this Agreement or the termination of the
Executive's employment following a Change in Control for any reason whatsoever.
Nothing expressed or implied in this Agreement will create any right or duty on
the part of the Company or the Executive to have the Executive remain in the
employment of the Company or any subsidiary prior to or following any Change in
Control. The Company may withhold from any amounts payable under this Agreement
all federal, state, city or other taxes as the Company is required to withhold
pursuant to any law or government regulation or ruling. In the event that the
Company refuses or otherwise fails to make a payment when due and it is
ultimately decided that the Executive is entitled to such


                                       26
<PAGE>

payment, such payment shall be increased to reflect an interest factor,
compounded annually, equal to the prime rate in effect as of the date the
payment was first due plus two points. For this purpose, the prime rate shall be
based on the rate identified by Chase Manhattan Bank as its prime rate.

         13. Separability

         The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

         14. Non-assignability

         This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder, except as provided in Section 9. Without
limiting the foregoing, the Executive's right to receive payments hereunder
shall not be assignable or transferable, whether by pledge, creation of a
security interest or otherwise, other than a transfer by his will or by the laws
of descent or distribution, and in the event of any attempted assignment or
transfer by Executive contrary to this Section 14 the Company shall have no
liability to pay any amount so attempted to be assigned or transferred to any
person other than the Executive or, in the event of his death, his designated
beneficiary or, in the absence of an effective beneficiary designation, the
Executive's estate.

         15. Effectiveness; Term

         This Agreement will be effective and binding as of the date first above
written immediately upon its execution, but, anything in this Agreement to the
contrary notwithstanding, this Agreement will not be operative unless and until
a Change in Control occurs. Upon the


                                       27
<PAGE>

occurrence of a Change in Control at any time during the Term (as defined
below), without further action, this Agreement shall become immediately
operative. For purposes of this Agreement, "Term" means the period commencing as
of the date first above written and expiring as of the later of (i) the fifth
anniversary of the date first above written or (ii) the second anniversary of
the first occurrence of a Change in Control; provided, however, that (A)
commencing on the fifth anniversary of the date first above written and each
fifth anniversary date thereafter, the Term of this Agreement will automatically
be extended for an additional five years unless, not later than 180 days
preceding each such fifth anniversary date, the Company or the Executive shall
have given notice that it or the Executive, as the case may be, does not wish to
have the Term extended and (B) subject to Section 2(e), if, prior to a Change in
Control, the Executive ceases for any reason to be an employee of the Company
and any subsidiary, thereupon without further action the Term shall be deemed to
have expired and this Agreement will immediately terminate and be of no further
effect. For purposes of this Section 15, the Executive shall not be deemed to
have ceased to be an employee of the Company and any subsidiary by reason of the
transfer of Executive's employment between the Company and any subsidiary, or
among any subsidiaries.

         16 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same agreement.

         17 Prior Agreement. This Agreement supersedes and terminates any and
all prior Executive Termination Benefits Agreements by and among Company and the
Executive.

                                       28
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above set forth, thereby
mutually and voluntarily agreeing that this Agreement supersedes and replaces
any prior similar agreements for such termination benefits.

                                                AMR CORPORATION



                                                By: /s/ Gerard J. Arpey
                                                    ----------------------------


                                                AMERICAN AIRLINES, INC.



                                                By: /s/ Susan M. Oliver
                                                    ----------------------------


                                                ROBERT W. REDING



                                                /s/ Robert W. Reding
                                                --------------------------------


                                       29