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Amend/Restated Executive Termination Benefits

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THIS AMENDED AND RESTATED EXECUTIVE TERMINATION BENEFITS AGREEMENT (this "Agreement"), dated as of the 20th day of October, 1999 is among AMR CORPORATION, a Delaware corporation, AMERICAN AIRLINES, INC., a Delaware corporation (collectively the "Company"), and WILLIAM K. RIS, JR. (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;


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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


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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


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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;


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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 Benefits (as
defined below) or a reduction in the


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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


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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


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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


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"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


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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 followin
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