American Airlines 2010 Annual Report Download - page 79

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76
9. Share Based Compensation (Continued)
The aggregate intrinsic value represents the Company’s current estimate of the number of shares (9,290,446
shares at December 31, 2010) that will ultimately be distributed for outstanding awards computed using the
market value of the Company’s common stock at December 31, 2010. The weighted-average grant date fair
value per share of performance share awards granted during 2010, 2009, and 2008 was $7.01, $4.53 and $8.20,
respectively. The total fair value of equity awards settled during the year ended December 31, 2010 was $2
million. As of December 31, 2010, there was $23 million of total unrecognized compensation cost related to
performance share awards that is expected to be recognized over a period of 1.7 years.
Deferred Share Awards The distribution of deferred share awards granted under the LTIP Plans is based solely
on a requisite service period (generally 36 months). Career equity awards granted to certain employees of the
Company vest upon the retirement of those individuals. The fair value of each deferred award is based on AMR’s
stock price on the measurement date.
Activity during 2010 for deferred awards accounted for as equity awards was:
Weighted
Average
Shares
Remaining
Contractual
Term
Aggregate
Intrinsic Value
Outstanding at January 1
6,887,268
Granted
2,722,330
Settled
(628,270)
Forfeited or Expired
(256,769)
Outstanding at December 31
8,724,559
2.2
$67,964,316
The weighted-average grant date fair value per share of deferred awards granted during 2010, 2009 and 2008
was $7.05, $4.57 and $8.23, respectively. The total fair value of awards settled during the years ended
December 31, 2010, 2009 and 2008 was $3 million, $3 million and $6 million, respectively. As of December 31,
2010, there was $27 million of total unrecognized compensation cost related to deferred awards that is expected
to be recognized over a weighted average period of 2.6 years.
Other Awards As of December 31, 2010, certain performance share agreements and deferred share award
agreements were accounted for as a liability, or as equity, as appropriate, in the consolidated balance sheet as
the plans only permit settlement in cash or the awards required that the employee meet certain performance
conditions which were not subject to market measurement. As a result, awards under these agreements are
marked to current market value. As of December 31, 2010, the aggregate intrinsic value of these awards was $4
million and the weighted average remaining contractual term of these awards was 2.8 years. The total fair value
of awards settled during the years ended December 31, 2010, 2009 and 2008 was $2 million, $1 million, and $24
million respectively. As of December 31, 2010, there was $2 million of total unrecognized compensation cost
related to other awards that is expected to be recognized over a weighted average period of 3.5 years.
10. Retirement Benefits
All employees of the Company may participate in pension plans if they meet the plans’ eligibility requirements.
The defined benefit plans provide benefits for participating employees based on years of service and average
compensation for a specified period of time before retirement. The Company uses a December 31 measurement
date for all of its defined benefit plans. American’s pilots also participate in a defined contribution plan for which
Company contributions are determined as a percentage (11 percent) of participant compensation. Certain non-
contract employees (including all new non-contract employees) participate in a defined contribution plan in which
the Company will match the employees’ before-tax contribution on a dollar-for-dollar basis, up to 5.5 percent of
their pensionable pay.