American Airlines 2004 Annual Report Download - page 70

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67
9. Stock Awards and Options (Continued)
The weighted-average grant date fair value per share (calculated using a Black-Scholes option pricing model) of
all stock option awards granted during 2004, 2003 and 2002 was $4.23, $2.32 and $11.42, respectively.
Shares of deferred stock were awarded at no cost to officers and key employees under the LTIP Plans’ Career
Equity Program and will be issued upon the individual's retirement from AMR or, in certain circumstances, will vest
on a pro rata basis. Deferred stock activity was:
Year Ended December 31,
2004 2003 2002
Outstanding at January 1 2,463,061 3,596,508 4,785,712
Issued (213,092) (858,262) (1,091,149)
Canceled (49,305) (275,185) (98,055)
Outstanding at December 31 2,200,664 2,463,061 3,596,508
A performance share plan was implemented in 1993 under the terms of which shares of deferred stock are
awarded at no cost to officers and key employees under the LTIP Plans and, beginning in 2003, under the 2003
Plan. The fair value of the performance shares granted is equal to the market price of the Company’s stock at the
date of grant. The shares vest over a three-year performance period based upon certain specified financial
measures of the Company. Performance share activity was:
Year Ended December 31,
2004 2003 2002
Outstanding at January 1 1,570,498 1,230,104 2,486,802
Granted 550 512,885 507,350
Issued (153,549) - (178,596)
Awards settled in cash (540,749) - (495,897)
Canceled (46,616) (172,491) (1,089,555)
Outstanding at December 31 830,134 1,570,498 1,230,104
The weighted-average grant date fair value per share of performance share awards granted during 2004, 2003
and 2002 was $16.36, $10.50 and $25.98, respectively.
In 2004, 2003 and 2002, the total charge for stock compensation expense included in wages, salaries and benefits
expense, primarily related to the Company’s performance share plan, was $21 million, $20 million and $9 million,
respectively. No compensation expense was recognized for stock option grants under the LTIP Plans or the 2003
Plan, since the exercise price was equal to the fair market value of the underlying stock on the date of grant.