Stock Option Plan – Fact Sheet

This is only a summary. In all cases, you should reference the stock option agreement to determine your rights and responsibilities.

Eligibility: American Airlines non-management and level 1-8 management employees on U.S. payroll

Overview: Stock options representing nearly 25 percent — or between 37 and 38 million — of the company’s outstanding common shares will be granted to eligible employees.

Stock Option Definition: A stock option is the right, but not the obligation, to obtain a specified number of shares of stock from the Company at a stated (“strike” or grant) price within a certain timeframe. If the market price rises above the strike price, the holder of the option can realize a gain by exercising and selling any of his/her vested options.

Strike or Grant Price: $5.00 per share

Grant Date: April 17, 2003

Vesting Schedule: The vesting period (the period of time before an employee is able to use their stock options) for the stock options is 3 years — 33% per year — from the grant date. Odd numbers of shares, not divisible by 3, will vest in the first or second years.

Example: If an employee is granted 152 stock options effective 4/17/2003, then s/he can exercise those options according to the schedule below:

Shares Vested & Exercisable Date

• 51: 4/17/04
• 51: 4/17/05
• 50: 4/17/06

Distribution: A “pool” of stock options will be allocated to each workgroup based on the level of cost restructuring accomplished and the percentage each group represents of overall labor costs.

Individual grant sizes are being finalized with each workgroup and individual grant notifications will be distributed accordingly.

Expiration: April 17, 2013

Stock options expire ten years from the grant date. Options must be exercised by 4/17/2013, or will automatically expire.

Exercise Methods:

Cashless Exercise

Requires no cash outlay and should be used if you simply want to sell the shares of stock and obtain the proceeds.

Taxes and brokerage fees related to the income resulting from the stock exercise will be deducted from your gross proceeds.

Exercise and Hold

Stock purchased must be paid for using the grant price ($5.00) along with applicable taxes. Stock will then be held for investment purposes and SEC and brokerage fees will be assessed when the stock is sold.

Sell Enough to Cover

If you wish to hold the stock for investment purposes, but do not wish to outlay any cash, the broker can be instructed to sell enough shares to cover the option cost, applicable taxes and fees. The remaining shares are then held in your account.

Broker Arrangements: To be determined. Individual grant notifications will distributed to each eligible employee when the details are finalized.