American Airlines 2003 Annual Report Download - page 69

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67
9. Stock Awards and Options (Continued)
Under the 1998 Long Term Incentive Plan, as amended, officers and key employees of AMR and its subsidiaries
may be granted stock options, stock appreciation rights (SARs), restricted stock, deferred stock, stock purchase
rights, other stock-based awards and/or performance-related awards, including cash bonuses. The total number
of common shares authorized for distribution under the 1998 Long Term Incentive Plan is 23,700,000 shares. The
1998 Long Term Incentive Plan, the successor to the 1988 Long Term Incentive Plan, will terminate no later than
May 21, 2008.
Options granted under the 1988 and 1998 Long Term Incentive Plans (collectively, the LTIP Plans) and the 2003
Plan are awarded with an exercise price equal to the fair market value of the stock on date of grant, become
exercisable in equal annual installments over periods ranging from two to five years following the date of grant and
expire no later than ten years from the date of grant. As of December 31, 2003, approximately 7.1 million shares
were available for future grant under the LTIP Plans and the 2003 Plan.
In May 1997, in conjunction with a labor agreement reached between American and members of the Allied Pilots
Association (APA), the Company established the Pilots Stock Option Plan (The Pilot Plan). The Pilot Plan granted
members of the APA the option to purchase 11.5 million shares of AMR stock at $41.69 per share, $5 less than
the average fair market value of the stock on the date of grant. These shares were exercisable immediately. In
conjunction with the Sabre spin-off, the exercise price was adjusted to $17.59 per share.
Stock option activity under the LTIP Plans, the Pilot Plan and the 2003 Plan was:
Year Ended December 31,
2003 2002 2001
Weighted
Average
Weighted
Average
Weighted
Average
Options
Exercise
Price Options
Exercise
Price Options
Exercise
Price
Outstanding at January 30,842,767 $ 23.66 29,327,611 $ 23.49 27,559,097 $ 22.30
Granted 40,751,272 5.39 2,495,500 25.86 4,180,595 28.35
Exercised (112,432) 13.28 (197,393) 23.63 (2,126,056) 26.87
Canceled (2,597,898) 17.92 (782,951) 24.90 (286,025) 23.04
Outstanding at
December 31 68,883,709 $ 13.08 30,842,767 $ 23.66 29,327,611 $ 23.49
Exercisable at
December 31 22,912,273 $ 22.36 20,557,681 $ 21.31 16,976,671 $ 19.85
The following table summarizes information about the stock options outstanding at December 31, 2003:
Range of
Exercise
Prices
Number of
Options
Outstanding
Weighted
Average
Remaining
Life (years)
Weighted
Average
Exercise
Price
Number of
Options
Exercisable
Weighted
Average
Exercise
Price
$1-$5 37,223,406 9.29 $ 5.00 7,900 $ 4.42
$5-$20 14,189,954 4.34 16.04 11,547,184 17.27
$20-$30 10,945,642 6.31 24.63 7,154,448 24.41
Over $30 6,524,707 6.48 33.42 4,202,741 32.89
68,883,709 7.53 $ 13.08 22,912,273 $ 22.36