Executive Termination Benefits Agreement

AMENDED AND RESTATED
EXECUTIVE TERMINATION BENEFITS AGREEMENT


THIS AMENDED AND RESTATED EXECUTIVE TERMINATION BENEFITS


AGREEMENT (this "Agreement"), dated as of the 1st day of April,


2004, is among AMR CORPORATION, a Delaware corporation, AMERICAN


AIRLINES, INC., a Delaware corporation (collectively the


"Company"), and JEFFREY J. BRUNDAGE (the "Executive").


W I T N E S S E T H:


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;


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


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(the "Exchange Act"), and as used in Sections 13(d) and 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 beneficially own,


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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;


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(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


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Benefits (as defined below) or a reduction in the 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 law) assumed all duties


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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


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eight 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 "Cause"


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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


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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 two 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

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