American Airlines 2005 Annual Report Download - page 73

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70
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 2005, 2004 and 2003 was $6.28, $4.23 and $2.32, 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,
2005 2004 2003
Outstanding at January 1 2,200,664 2,463,061 3,596,508
Granted 83,000 - -
Issued (74,609) (213,092) (858,262)
Canceled (42,527) (49,305) (275,185)
Outstanding at December 31 2,166,528 2,200,664 2,463,061
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,
2005 2004 2003
Outstanding at January 1 830,134 1,570,498 1,230,104
Granted - 550 512,885
Issued (53,955) (153,549) -
Awards settled in cash (561,313) (540,749) -
Canceled (214,866) (46,616) (172,491)
Outstanding at December 31 - 830,134 1,570,498
The weighted-average grant date fair value per share of performance share awards granted during 2004 and
2003 was $16.36 and $10.50, respectively. No performance share awards were granted during 2005.
In 2005, 2004 and 2003, the total charge for stock-based compensation expense included in wages, salaries and
benefits expense, primarily related to the Company’s performance unit and share plans (of which there are three
active plans at any given point in time), was $132 million, $21 million and $20 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.