Exhibit
10.56


 


August
9, 2002


 


Robert
W. Baker


 


Effective upon your retirement of May 1, 2002, a
special Severance Package will be made available to you by American, including
the following items:


 


•                  Payroll
Status


 


You will remain on active
payroll through April 30, 2002.


 


On May 1, 2002, you will
retire with all applicable benefits and privileges then in effect.


 


•                  Stock Awards


 


i.                  Stock Options


 


You may continue to exercise any stock options that
are vested.  All unvested options will
continue to vest into retirement according to their original vesting
schedule.  You may continue to exercise
these options through the original ten-year term of each grant.


 


ii.               Performance Shares


 


Vesting of your shares in the 1999-2001, 2000-2002,
and 2001-2003 Performance Share Plans will discontinue as of April 30,
2002.  In accordance with the terms of
these plans, and contingent upon AMR Corporation meeting its specified
performance objectives, you will receive a pro-rata portion of the shares
previously granted to you.  Shares will
be awarded in April following the end of the measurement period.


 


iii.            Career Equity


 


Vesting of your career equity shares will be
accelerated and you will receive 100% of the shares originally granted to
you.  These shares will become immediately
payable upon retirement.


 


iv.           Brokerage Commissions


 


American will pay the brokerage commissions on any
stock options you exercise through American’s preferred broker (currently
Deutsche Banc Alex. Brown) through April 30, 2003.  After that time you will be responsible for paying commissions on
any options exercised.


 


v.              Stock Transactions


 


Please confer with Chuck Marlett regarding any planned
stock transactions.  He will be able to
give you further information as to any constraints or disclosure requirements
surrounding any such transactions.


 


1

















 


•                  Incentive
Compensation


 


You will be eligible to receive an award under the
2002 American Airlines Incentive Compensation Plan.  This award will be based on your 2002 eligible earnings through
April 30, 2002.


 


•                  Pension
Benefit


 


Your pension benefits will be payable from two sources
— the Retirement Benefit Plan (RPB) and the Supplemental Executive Retirement
Program (SERP).  The RPB will be
calculated with an unreduced benefit at age 60 and a four-year Final Average of
Earnings. Additionally, on your retirement date of May 1, 2002, you will
receive a grant of one additional year of age and two additional years of
credited service.  These considerations
will be funded through the SERP lump sum payment due to qualified plan
limitations.


 


•                  Deferred
Compensation


 


Your balance in the Executive Deferral Plan will be
paid in accordance with the schedules you elected.  Distribution of any deferred compensation balances elected for
immediate distribution will be paid on May 31, 2002.


 


•                    Special
Payments


 


You will receive a severance payment of $638,600 on
May 31, 2002.  Additionally, you will
receive a payment of $55,263 which is the cash equivalent of 4.5 weeks of vacation.  This will also be paid on May 31, 2002.  The 7.5 days of vacation that you accrued
for 2003 will be paid to you on June 28, 2002 in the amount of $18,421.


 


•                  Travel


 


At retirement, you will be issued retiree A2 travel
privileges for you and your spouse, a lifetime Admirals Club membership, and a
UATP card that can be used only for personal travel on AA, TWA, or American
Eagle.


 


Travel purchased with the UATP card will be imputed
income.  In January of each year the
Company will send you a 1099-MISC that reflects as “income” the value of the
travel purchased in the prior year. 
Along with the 1099-MISC American will send you a check to pay the taxes
on the travel.


 


Additionally, if you participate in the following
activities on American’s behalf, American will reimburse you for your expenses:
Embry-Riddle, Wings Club, CRAF, GWU Advisory, MITRE, Conquistadors, and
government-related activities (including, but not limited to, FAA, DOT,
Homeland Security).


 


All travel is covered by current and future policies
regarding American’s  Employee Travel
Program including the TRIP Book and subsequent revisions.  By signing this Agreement, you acknowledge
that you understand and agree to American’s policy which prohibits you from
retaining travel privileges if you work for a competitor as defined in the fact
sheet or do not comply with the rules governing the Employee Travel Program.


 


2

















 


•                  Benefits


 


Beginning May 1, 2002, you will be eligible for
retiree group life and health coverage in accordance with American’s policy.


 


American will provide you a policy through a third
party vendor will preserve your medical limit at its current level of $1.5MM
(which includes Supplemental Medical) through to age 65.  Since the Retiree Medical and Supplemental
Plans provide a medical maximum up to $800K, AA will provide the additional
$700K coverage.


 


•                  Split Dollar
Life Insurance


 


The Company will coordinate with BSC to provide
detailed outlines of the options available to release the policies to you.


 


If you decide to leave the policies in place, you
agree to authorize that policy dividends be used to pay premiums in accordance
with policy provisions and current practice. 
Upon death or reaching 65, whichever occurs first, the Company will
recover the amount of premiums previously paid in your behalf and release the
policy to you or your beneficiary.


 


•                  Automobile


 


You have the option to purchase the vehicle on or
before May 1, 2002.  In the event you
elect not to purchase the automobile, it must be returned to American on or
before May 1, 2002.


 


•                  Equipment


 


You will be able to keep the office equipment (i.e.
fax and pc) in your home for personal use. 
The phone must be returned to American on or before April 1, 2002.


 


•                  Annual Physicals


 


American will pay for one physical in 2002.


 


•                  Financial
and Tax Planning Allowance


 


American will pay for your financial and tax planning
services for 2002.


 


3

















 


II.                                     In
return for the benefits listed in this Agreement, I agree to release American
as follows:


 


I agree, on behalf of myself and all of my heirs or
personal representatives, to release American, its parent AMR Corporation, all
subsidiaries of either, and all of their present or former officers, directors,
agents, employees, employee benefit plans and the trustees, administrators,
fiduciaries and insurers of such plans, from any and all claims for relief of
any kind, whether known to me or unknown, which in anyway arise from or related
to my employment or the termination of my employment at American and which
concern events occurring at any time up to the date of this Agreement,
including, but not limited to, the Age Discrimination in Employment Act, Title
VII of the Civil Rights Act of 1964, Americans with Disabilities Act, Worker
Adjustment and Retraining Notification Act, Equal Pay Act, Older Workers
Benefit Protection Act, and Employee Retirement Income Security Act or under
any other applicable federal, state or local laws or ordinances.


 


III.                                 While
I understand that I have had the following obligations since I began my
employment with American, I confirm that I shall not disclose any trade secret
or confidential or restricted information of American or any other AMR
Corporation subsidiary and shall not make use of such trade secrets or
confidential or restricted information in any fashion at any time.  I agree not to solicit current employees of
the Company or of other subsidiaries of AMR Corporation to join me at any place
of employment after my employment with the Company ceases.


 


I agree to cooperate fully in the defense of any
claims made against American or any other AMR Corporation subsidiary where I
have knowledge, including meetings, depositions and trial.


 


Further I agree not to testify against the Company
except were required by law.  I
understand that while I am receiving any benefit or privilege from the Company
I am bound by the conflict of interest provisions of American’s regulations as
amended.


 


IV.                                 This
agreement does not constitute an admission of any kind by American, but is
simply an accommodation which offers certain extra benefits to which I would
not otherwise be entitled in return for my agreeing to and abiding by this
document.  I further understand and
agree that if I do not comply with a material term or condition of this
agreement, I automatically forfeit all these extra benefits.  If I breach this Agreement, including
bringing suit for claims accruing prior to the execution of the Agreement,
after receiving any of these benefits, I agree that I immediately will return
those benefits to American.  In any
action brought to enforce any provision of this Agreement, if American is the
prevailing party, it shall recover its reasonable costs of enforcement
including, but without limitation to, costs and reasonable attorney fees
incurred, in addition to any other relief granted.


 


4

















 


I understand that the terms of this Agreement may be
temporarily suspended in the event of a Force Majeure affecting American or any
of its subsidiaries (including its parent, AMR Corporation).  Such events may include but are not limited
to an act of God, war or civil disorder, labor dispute, lockout strike, work
stoppage or the grounding of all or a substantial portion of the Company’s
fleet.  For purposes of this paragraph
it is agreed that this Agreement will be temporarily suspended only upon such a
suspension being enacted with regard to similar benefits being paid to other
executives (current or retired, as applicable) at the Company.


 


I understand that I have 21 days from the date of this
document to consider this Agreement and have been advised by American to
consult with an attorney and/or tax consultant if I so desire.  I further agree not to voluntarily make the
terms and conditions or the circumstances surrounding this Agreement known to
anyone other than the attorney and/or tax consultant from whom I receive
counseling, as referred to above, or if I am married to my spouse.  However, before disclosing such information
to these individuals, I will first obtain their agreement not to disclose such
information.  If any provision is
breached, I understand that I will be required to return to the Company the
consideration given to me.


 


I understand that once I sign this Agreement, I will then have seven
days to cancel it in writing if I so choose. 
However, if I elect to cancel this Agreement, I understand I will not be
entitled to any of these benefits.  I
realized this agreement is not effective or enforceable until the seven-day
period expires.


 


I agree that any changes to this Agreement, whether material or
immaterial, will not restart the 21 days I have to consider this
Agreement.  I understand that this
agreement is governed by the laws of the State of Texas.


 


I agree that I will not file a claim, demand or suit against American
subsequent to my execution of this Agreement, except to enforce this Agreement
in accordance with its terms.


 


5

















 


I am entering into this Agreement freely and voluntarily and I am
satisfied that I have been given sufficient opportunity to consider it.  I have carefully read and understand all of
the provisions of this agreement.  I
understand that it sets forth the entire Agreement between American and me, and
I represent that no other statements, promises, or commitments of any kind,
written or oral have been made to me by American to cause me to accept it.  I acknowledge acceptance of this Agreement
by my signature below:


 


 


	
   

  	
   

  	
   

  	
   

  
	
  Robert W. Baker

  	
  Date

  



 


 


Agreed to and accepted on behalf of American Airlines, Inc.:


 


 


	
   

  	
   

  	
   

  	
   

  
	
  Sue Oliver

  	
  Date

  
	
  Sr. Vice President – Global Human Resources

  	
   

  
	
  American Airlines, Inc.

  	
   

  



 


6