AMERICAN AIRLINES INC
AMERICAN AIRLINES, INC. EXBIBIT 10.2
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<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exhibit101.txt
<DESCRIPTION>AMERICAN AIRLINES, INC. EXBIBIT 10.2
<TEXT>
                                                Exhibit 10.1


AMENDMENT OF STOCK OPTION AGREEMENTS UNDER THE 1998 LONG
    TERM INCENTIVE PLAN TO ADD STOCK APPRECIATION RIGHTS


     AMENDMENT OF STOCK OPTION AGREEMENTS (this "SAR
Amendment") between AMR Corporation, a Delaware corporation
(the "Corporation"), and ______________________, employee
number 000000, an employee of the Corporation or one of its
Subsidiaries or Affiliates (the "Optionee"), dated as
of_____________________.


                    W I T N E S S E T H:


     WHEREAS, Optionee has previously been granted stock
options, without a tandem stock appreciation right, under
the AMR Corporation 1998 Long Term Incentive Plan (such
plan, as may be amended from time to time, to be referenced
the "1998 Plan");


     WHEREAS, Optionee may have also previously been granted
stock options, without a tandem stock appreciation right,
under the AMR Corporation 1988 Long Term Incentive Plan
(such plan, as may be amended from time to time, to be
referenced the "1988 Plan"), which options (if any) are now
governed by the terms of the 1998 Plan;


     WHEREAS, the 1998 Plan permits the Compensation
Committee or, in lieu thereof, the Board of Directors of the
Corporation (the "Board") to provide for the grant of stock
appreciation rights in connection with an option to purchase
shares of the Corporation's Common Stock, $1 par value (the
"Common Stock"), whether at or after the grant of such
option;


     WHEREAS, the grant of a stock appreciation right
entitles the grantee of an option a mechanism to receive the
same economic value as would be conveyed upon exercise of a
stock option;


     WHEREAS, the use of such stock appreciation rights
allows a corporation to provide employees essentially the
same economic benefit as an option exercise, but at the same
time achieve a more effective and efficient use of the
number of shares authorized by stockholders for issuance
under the corporation's equity compensation plans; and


     WHEREAS, based on the foregoing, the Committee has
determined that it is to the advantage and interest of the
Corporation and its stockholders and its employees eligible
for such awards to grant the stock appreciation rights
provided for herein in tandem with the stock options
previously granted to the Optionee.


     NOW, THEREFORE:


     1.   Stock Appreciation Right Grant.  The Corporation hereby
grants to the Optionee, effective as of the date, and
subject to the terms and conditions, of this SAR Amendment,
a stock appreciation right (each, a "SAR") in respect of the
number of shares of Common Stock that are, as of the date
hereof, outstanding in respect of each stock option
previously granted to the Optionee under the 1998 Plan
and/or the 1988 Plan and outstanding on the date hereof
(each, an "Outstanding Option").  The SAR shall be
exercisable at the same time as the corresponding portion of
the corresponding Outstanding Option is exercisable in
accordance with the agreement governing such Outstanding
Option.

     2.   Restriction on Exercise. Notwithstanding any other
provision hereof, no Outstanding Option nor any SAR shall be
exercised if at such time such exercise or the delivery of
certificates representing shares of Common Stock pursuant
hereto shall constitute a violation of any rule of the
Corporation, any provision of any applicable Federal or
State statute, rule or regulation, or any rule or regulation
of any securities exchange on which the Common Stock may be
listed.

     3.   Manner of Exercise.  Each SAR may be exercised with
respect to all or any part of the shares of Common Stock in
respect of which the related Outstanding Option is
exercisable.  Any such exercise shall be effected pursuant
to such procedures as may be adopted by the Corporation from
time to time in its sole discretion; provided that, a
corresponding portion of any SAR shall lapse to the extent
that any portion of the related Outstanding Option is
exercised, and a corresponding portion of the related
Outstanding Option shall lapse to the extent that any
portion of any SAR is exercised.  For purposes of the
foregoing sentence of this SAR Amendment, the corresponding
portion of any SAR or the related Outstanding Option
pertains to the number of shares of Stock as to which the
related Outstanding Option or such SAR is being exercised,
and not to the net number of shares of Stock being issued.
Upon the exercise of any portion of any SAR, the Optionee
shall be entitled to receive from the Corporation a number
of shares of Stock equal in value to the product of

     (i)  the excess of


          (A)  the Fair Market Value on the date of exercise of one
               share of Stock over

(B)  the exercise price with respect to a share of Common
Stock subject to related Outstanding Option in respect of
which the SAR was granted and is being exercised, multiplied
by

     (ii) the number of shares in respect of which the SAR is
          being exercised.


The number of shares to be issued upon the exercise of any
portion of any SAR shall be calculated on the basis of the
Fair Market Value of a share of Common Stock on the date of
exercise, with any fractional share being payable in cash
based on the Fair Market Value on the date of exercise.
Notwithstanding the foregoing, the Committee may elect, at
any time and from time to time, in lieu of issuing all or
any portion of the shares of Stock otherwise issuable upon
any exercise of any portion of any SAR, to pay the Optionee
an amount in cash or other marketable property of a value
equivalent to the aggregate Fair Market Value on the date of
exercise of the number of shares of Stock that the Committee
is electing to settle in cash or other marketable property.
Subject to compliance by the Optionee with all the terms and
conditions hereof, following exercise of any Outstanding
Option or the SAR related thereto (other than in any
circumstance where the SAR is being settled for a payment in
cash), the Corporation or its agent shall promptly
thereafter deliver to the Optionee a certificate or
certificates for such shares with all requisite transfer
stamps attached.


     4.   Termination of Each SAR.  Each SAR shall terminate and
may no longer be exercised if (i) the Optionee ceases to be
an employee of the Corporation or one of its Subsidiaries or
Affiliates; or (ii) the Optionee becomes an employee of a
Subsidiary that is not wholly owned, directly or indirectly,
by the Corporation; or (iii) the Optionee takes a leave of
absence without reinstatement rights, unless otherwise
agreed in writing between the Corporation (or one of its
Subsidiaries or Affiliates) and the Optionee; except that


          (a)  If the Optionee's employment by the Corporation (or any
     Subsidiary or Affiliate) terminates by reason of death, the
     vesting of each SAR will be accelerated on the same terms
     and conditions as the related Outstanding Option, and such
     Outstanding Option and SAR will remain exercisable in
     accordance with the provisions of the agreement pertaining
     to the Outstanding Option until the expiration of such
     Outstanding Option;

          (b)  If the Optionee's employment by the Corporation (or any
     Subsidiary or Affiliate) terminates by reason of Disability,
     each SAR will continue to vest on the same terms and
     conditions as apply to the related Outstanding Option, and
     such Outstanding Option and SAR may be exercised in
     accordance with the provisions of the agreement pertaining
     to the Outstanding Option until the expiration of such
     Outstanding Option; provided, however, that if the Optionee
     dies after such Disability, vesting of the related
     Outstanding Option and the corresponding SAR will be
     accelerated in accordance with the terms of the agreement
     governing the Outstanding Option, and each of the related
     Outstanding Option and the SAR will remain exercisable in
     accordance with the provisions hereof until the expiration
     of such Outstanding Option;

          (c)  Subject to Section 7(c), if the Optionee's employment
     by the Corporation (or any Subsidiary or Affiliate)
     terminates by reason of Normal or Early Retirement, each SAR
     will continue to vest on the same terms and conditions as
     the related Outstanding Option, and such Outstanding Option
     and SAR may be exercised in accordance with the provisions
     of the agreement pertaining to the Outstanding Option until
     the expiration of such Outstanding Option; provided,
     however, that if the Optionee dies after Retirement vesting
     of the related Outstanding Option and the corresponding SAR
     will be accelerated in accordance with the terms of the
     agreement governing the Outstanding Option, and each of the
     related Outstanding Option and the SAR will remain
     exercisable in accordance with the provisions hereof until
     the expiration of such Outstanding Option;

          (d)  If the Optionee's employment by the Corporation (or any
     Subsidiary or Affiliate) is involuntarily terminated by the
     Corporation or a Subsidiary or Affiliate (as the case may
     be) without Cause, each SAR may thereafter be exercised, to
     the extent the related Outstanding Option is exercisable at
     the time of termination, for a period of three months from
     the date of such termination of employment or until the
     stated term of such Outstanding Option, whichever period is
     shorter; and

          (e)  In the event of a Change in Control or a Potential
     Change in Control of the Corporation, the vesting of each
     SAR will be accelerated on the same terms and conditions as
     the related Outstanding Option in accordance with the 1998
     Plan, or its successor.

     5.   Adjustments in Common Stock.  In the event of a Stock
dividend, Stock split, merger, consolidation,
reorganization, recapitalization or other change in the
corporate structure, the Board shall adjust the number of
shares, class or classes of securities subject to each SAR
and each Outstanding Option and the exercise price of each
Outstanding Option (including to the extent used to
determine the amount payable in respect of each SAR), in
such manner as the Board shall determine to be necessary or
appropriate to avoid any diminution or enlargement of the
rights conveyed in respect of each Outstanding Option and
each SAR by reason of the occurrence of any such
transaction, distribution or other event.


     6.   Non-Transferability of SARs. Unless the Board or
Committee shall permit (on such terms and conditions as it
shall establish), no SAR may be transferred except by will
or the laws of descent and distribution to the extent
provided herein. During the lifetime of the Optionee, each
SAR may be exercised only by him or her (unless otherwise
determined by the Board or the Committee).

     7.   Miscellaneous.

          (a)  Except as otherwise expressly provided below
     or in accordance with the terms and conditions of the
     1998 Plan, this SAR Amendment (i) shall be binding upon
     and inure to the benefit of any successor of the
     Corporation, (ii) shall be governed by the laws of the
     State of Texas, and any applicable laws of the United
     States, and (iii) may not be amended without the
     written consent of both the Corporation and the
     Optionee.  No contract or right of employment shall be
     implied by this SAR Amendment.


          (b)  If the related Outstanding Option and any SAR are
     assumed or a new stock option and stock appreciation right
     are substituted therefor in any corporate reorganization
     (including, but not limited to, any transaction of the type
     referred to in Section 424(a) of the Internal Revenue Code
     of 1986, as amended), employment by such assuming or
     substituting corporation or by a parent corporation or a
     subsidiary thereof shall be considered for all purposes of
     this SAR Amendment to be employment by the Corporation.


          (c)  In the event the Optionee's employment is terminated by
     reason of Early or Normal Retirement and the Optionee
     subsequently is employed by a competitor of the Corporation,
     the Corporation reserves the right, upon notice to the
     Optionee, to declare the Outstanding Option and the SAR
     forfeited and of no further validity.

          (d)  In consideration of the Optionee's privilege to
     participate in the 1998 Plan and to receive the grant of
     each Outstanding Option, the Optionee agreed (i) not to
     disclose any trade secrets of, or other
     confidential/restricted information of, American Airlines,
     Inc. ("American") or its Affiliates to any unauthorized
     party and (ii) not to make any unauthorized use of such
     trade secrets or confidential or restricted information
     during his or her employment with American or its Affiliates
     or after such employment is terminated, and (iii) not to
     solicit any then current employees of American or any other
     subsidiaries of the Corporation to join the Optionee at his
     or her new place of employment after his or her employment
     with American or its Affiliates is terminated.  Nothing in
     this SAR Amendment shall be interpreted or construed to
     modify, limit or reduce in any way Optionee's obligations
     with respect to such covenants.

     8.   Securities Law Requirements. The Corporation shall not
be required to issue shares upon the exercise of any
Outstanding Option or any SAR unless and until (a) such
shares have been duly listed upon each stock exchange on
which the Corporation's Stock is then registered and (b) a
registration statement under the Securities Act of 1933 with
respect to such shares is then effective. The Board or the
Committee may require the Optionee to furnish to the
Corporation, prior to the issuance of any shares of Stock in
connection with the exercise of any Outstanding Option or
any SAR, an agreement, in such form as the Board or the
Committee may from time to time deem appropriate, in which
the Optionee represents that the shares acquired by him upon
such exercise are being acquired for investment and not with
a view to the sale or distribution thereof.

     9.   Outstanding Option and SAR Subject to 1998 Plan. The
Outstanding Option and the SAR shall be subject to all the
terms and provisions of the 1998 Plan and the Optionee shall
abide by and be bound by all rules, regulations and
determinations of the Board or Committee now or hereafter
made in connection with the administration of the 1998 Plan.
Capitalized terms not otherwise defined herein shall have
the meanings set forth for such terms in the 1998 Plan.

    10.  American Jobs Creation Act.  In addition to amendments
permitted by Section 7(a) above, amendments to this SAR
Amendment and to any of the option agreements underlying
each Outstanding Option may be made by the Corporation,
without the Optionee's consent, in order to ensure
compliance with the American Jobs Creation Act of 2004.
And, further, amendments may be made to the 1998 Plan to
ensure such compliance, which amendments may impact this SAR
Amendment.

     IN WITNESS WHEREOF, the Corporation has executed this
SAR Amendment as of the day and year first above written.


                              AMR Corporation






                                    By:________________
                                    Kenneth W. Wimberly
                                    Corporate Secretary

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