Document:

Exhibit
10.59

 

RETENTION AWARD AGREEMENT

 

This Retention Award Agreement (“Agreement”) is made
as of [insert date], 2002, between [insert officer’s name] (“Officer”) and
American Airlines, Inc., a Delaware corporation (the “Corporation”).

 

WHEREAS, the Board of Directors of the Corporation has
approved the payment of a Cash Retention Bonus (as later defined in this
Agreement) to certain officers of the Corporation, including the Officer, in
consideration of the Officer’s continued employment with the Corporation.

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Corporation
and the Officer hereby agree as follows:

 

1.           Cash Retention Bonus.
In consideration of the Officer remaining an employee of the Corporation from
March 1, 2002, through and including January 31, 2005 (the “Retention Period”),
the Corporation will pay to the Officer a Cash Retention Bonus.  The Cash Retention Bonus is detailed in Schedule
A, attached to, and made a part of, this Agreement.  Payment of the Cash Retention Bonus will be made in accordance
with Sections 2, 3, or 4, as applicable, of this Agreement.

 

2.           Payment.   Provided the Officer meets the requirements
of Section 3(a) of this Agreement, the Cash Retention Bonus will be paid to the
Officer as follows: (a) 50% on January 30, 2004 (the “First Payment”), and (b)
50% on January 31, 2005 (the “Second Payment”).  Each of January 30, 2004, and January 31, 2005, is a “Payment Date”.

 

3.           Requirements for
Payment.

 

(a)      In order to receive either
payment contemplated under Section 2 of this Agreement, the Officer must be an
officer of the Corporation on the applicable Payment Date.

(b)     For purposes of this
Agreement, an officer of the Corporation is an Officer:  who has been duly elected by the Board of
Directors of the Corporation; who is on the active payroll of the Corporation
on a Payment Date; and, who is not on a management leave of any type
whatsoever.

 

4.           Change in Control.  In the event of a Change in Control or Potential
Change in Control of the Corporation, 100% of the Cash Retention Bonus (less
any amount of such bonus previously paid) will be paid on a date established by
the Board of Directors of the Corporation.

 

5.           Elective Deferrals.   The Officer may elect to defer the receipt
of First Payment and/or the Second Payment pursuant to the AMR Corporation
Executive Deferral Plan (or its successor).

 

1

 

6.           Transfer
Restrictions.  The Cash Retention
Bonus is non-transferable other than by will or by the laws of descent and
distribution, and may not be assigned, pledged or hypothe­cated and will not be
subject to execution, attachment or similar process.  Upon any attempt by the Officer to effect any such disposition,
or upon the levy of any such pro­cess, this Agreement will be null and void.

 

7.           Miscellaneous.  This Agreement will be binding upon and
inure to the benefit of any successor of the Corpora­tion.  The laws of the State of Texas will govern
this Agreement.  The Corporation and the
Officer each submits to the exclusive jurisdiction of the appropriate state
court for Tarrant County, Texas, or the United States District Court for the
Northern District of Texas (Fort Worth Division) for any legal proceedings that
relate to this Agreement.  This
Agreement may not be amended without the written consent of both the
Corporation and the Officer.  This
Agreement does not grant nor imply any right by the Officer to remain in the
employ of the Corporation.  The Officer agrees
that Corporation may withhold applicable taxes from any payment made under this
Agreement.

 

8.           Definitions.  Capitalized terms not otherwise defined
shall have the meanings set forth for such terms in the l998 Long Term
Incentive Plan, as amended.

 

The Officer and Corporation hereby set forth their signatures to this
Agreement as of the date first written above.

 

 

	
  OFFICER

  	
   

  	
  AMERICAN AIRLINES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

2

 

Schedule A

 

Cash Retention Bonus

 

Cash Retention Bonus:   
$[insert]

 

3

 

The Cash Retention Bonus detailed in Schedule A is two times base
salary for the following officers:

 

Donald J. Carty

Gerard J. Arpey

Daniel P. Garton

Jeffrey C. Campbell

Gary F. Kennedy

William K. Ris, Jr.

 

The Cash Retention Bonus detailed in Schedule A is 1.5 times base
salary for the following officer:

 

Charles D. MarLett

 

4Exhibit 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

 

 

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

  

 

i

 

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).

 

1

 

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, 

 

2

 

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.  

 

3

 

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), 

 

4

 

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.

 

5

 

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 

 

6

 

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,

 

7

 

(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,

 

8

 

(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.

 

9

 

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 

 

10

 

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.

 

11

 

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 

 

12

 

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.

 

13

 

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

  

 

14

 

	
  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

  

 

15

 

	
  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

  

 

16

 

AS AMENDED AND RESTATED
EFFECTIVE OCTOBER 15, 2002.

 

	
   

  	
  American
  Airlines, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name &
  Title:

  	
  Charles D.
  MarLett, Corporate Secretary

  

 

17

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