<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 19, 1996
REGISTRATION NO. 33-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
AMR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 75-1825172
(I.R.S. EMPLOYER IDENTIFICATION NO.)
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
P.O. BOX 619616
DALLAS/FORT WORTH AIRPORT, TEXAS 75261-9616
(817) 963-1234
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENTS FOR SERVICE)
ANNE H. MCNAMARA, JOHN B. BRADY, JR., ESQ. COPY TO:
ESQ. DEBEVOISE & PLIMPTON ROHAN S. WEERASINGHE,
SENIOR VICE PRESIDENT 875 THIRD AVENUE ESQ.
AND GENERAL COUNSEL NEW YORK, NEW YORK 10022 SHEARMAN & STERLING
AMR CORPORATION (212) 909-6000 599 LEXINGTON AVENUE
P.O. BOX 619616 NEW YORK, NEW YORK 10022
DALLAS/FORT WORTH (212) 848-4000
AIRPORT, TEXAS 75261-
9616
(817) 963-1234 ---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS TO BE OFFERING PRICE AGGREGATE AMOUNT
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 12,915,899
$1 per share........... shares(2) $87.57 $1,131,045,275 $390,020
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the average high and low sales prices
reported on the New York Stock Exchange on April 15, 1996.
(2) Maximum number of shares issuable upon conversion of $1,020,356,000
principal amount of the Registrant's 6 1/8% Convertible Subordinated
Quarterly Income Capital Securities due 2024.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
12,915,899 SHARES
AMR CORPORATION
COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
This Prospectus covers the issuance and sale of 12,915,899 shares of Common
Stock of AMR Corporation (the "Company") issuable to holders of the Company's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to Goldman, Sachs & Co., CS First Boston Corporation, Merrill Lynch &
Co., J.P. Morgan Securities Inc. and Salomon Brothers Inc (collectively, the
"Purchasers") under the standby arrangements described herein, and the resale
to the public by the Purchasers of any such shares of Common Stock.
The Company is calling for redemption on May 20, 1996 (the "Redemption
Date"), all of its outstanding Debentures at a redemption price of 104.2% of
the principal amount of Debentures (the "Redemption Price"), plus accrued
interest from May 1, 1996 to the Redemption Date. The Debentures (or any
portion thereof which is $1,000 or an integral multiple thereof) may be
converted into the Common Stock of the Company at a conversion price of $79.00
of principal amount of Debentures per share of Common Stock (equivalent to
12.658 shares of Common Stock for each $1,000 principal amount of Debentures)
at any time prior to 5:00 p.m. Eastern Daylight Time on May 17, 1996 (the
"Expiration Time"). Cash will be paid in lieu of any fractional shares of
Common Stock issuable upon conversion of the Debentures. No payment or
adjustment to the conversion price will be made on account of interest on the
Debentures accruing after May 1, 1996, and holders that convert Debentures
prior to May 1, 1996, must submit with the Debentures being converted an
amount equal to the interest payable on such Debentures on May 1, 1996. See
"Redemption of Debentures and Alternatives to Redemption". ANY DEBENTURES NOT
SO SURRENDERED FOR CONVERSION PRIOR TO THE EXPIRATION TIME WILL BE REDEEMED
FOR CASH ON THE REDEMPTION DATE.
The Company has made arrangements with the Purchasers pursuant to which the
Purchasers have agreed to purchase from the Company, at the option of the
Company, up to the number of shares of Common Stock equal to the number of
shares of Common Stock that would have been issuable upon conversion of the
Debentures that are either (i) duly surrendered for redemption on or prior to
the Redemption Date or (ii) not duly surrendered for conversion on or prior to
the Expiration Date or for redemption on or prior to the Redemption Date by
persons other than the Purchasers ("Sleeper Debentures"). The purchase price
for such shares of Common Stock (the "Purchased Shares") will be an amount
equal to a price per share of (i) $81.54, if there are fewer than 2,583,180
Purchased Shares, (ii) $81.33, if there are from 2,583,180 to 5,166,359
Purchased Shares, (iii) $81.12, if there are from 5,166,360 to 7,749,539
Purchased Shares, (iv) $80.91, if there are from 7,749,540 to 10,332,719
Purchased Shares and (v) $80.71, if there are 10,332,720 or more Purchased
Shares. The Purchasers have agreed to remit to the Company 50% of the amount,
if any, by which the aggregate proceeds received by the Purchasers upon resale
of the shares of Common Stock that otherwise would have been issued upon
conversion of Sleeper Debentures ("Sleeper Shares") exceeds either (x) if the
last closing price of the Common Stock on the NYSE on the Expiration Date is
equal to or greater than $86.00 per share, the aggregate purchase price paid
by the Purchasers for such Sleeper Shares or (y) if the last closing price of
the Common Stock on the NYSE on the Expiration Date is less than $86.00 per
share, $82.57 multiplied by the number of Sleeper Shares purchased. The
Purchasers may also purchase Debentures in the open market or otherwise prior
to the Expiration Time and have agreed to surrender for conversion all
Debentures so purchased by them and any additional Debentures beneficially
owned by them. See "Standby Arrangements" for a description of the Purchasers'
compensation and indemnification arrangements with the Company.
On April 18, 1996, the closing price of the Common Stock as reported on the
New York Stock Exchange Composite Tape was $93.375 per share. Based on the
closing price of $93.375 per share, if a holder of $1,000 principal amount of
Debentures on that date had converted such principal amount, such holder would
have received Common Stock (and cash in lieu of a fractional share) having a
market value equal to $1,181.94. The market price of the Common Stock received
upon conversion is subject to fluctuation, and the holder may incur various
transaction costs if the Common Stock is sold. So long as the market price of
the Common Stock is greater than $82.57 per share at the time of conversion, a
holder of Debentures who exercises such holder's conversion rights will
receive Common Stock, plus cash in lieu of any fractional share, with a market
value greater than the amount of cash the holder would otherwise be entitled
to receive upon the redemption of the Debentures (before deducting any taxes,
commissions and other costs which would likely be incurred on sale of the
Common Stock received upon conversion of the Debentures).
(Continued on next page)
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------
GOLDMAN, SACHS & CO.
CS FIRST BOSTON CORPORATION
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES, INC.
SALOMON BROTHERS INC
--------------
The date of this Prospectus is April 19, 1996.
<PAGE>
(Continued from previous page)
Prior to, on or after the Redemption Date, the Purchasers may offer shares
of Common Stock pursuant to this Prospectus directly to the public, at prices
set from time to time by the Purchasers, including shares acquired through
conversion of Debentures acquired by the Purchasers. Prior to the Redemption
Date, each such price when set will not exceed the greater of the last sale or
current asked price of the Common Stock on the New York Stock Exchange plus
the amounts of any concession to dealers, and an offering price on any
calendar day will not be increased more than once during such day. In
effecting such transactions, the Purchasers may realize profits or losses
independent of the compensation referred to under "Standby Arrangements." The
Purchasers may also make sales to dealers at prices which represent
concessions from the prices at which such shares are then being offered to the
public. The amount of such concessions will be determined from time to time by
the Purchasers. Any Common Stock so offered is offered subject to prior sale,
when, as and if received by the Purchasers, and subject to the Purchasers'
right to reject orders in whole or in part. This Prospectus does not
constitute an offer to sell any securities other than the Common Stock offered
by the Purchasers.
The outstanding shares of Common Stock and any shares acquired through
conversion of Debentures are listed, and application will be made for listing
of the Purchased Shares, on the New York Stock Exchange.
IN CONNECTION WITH THIS OFFERING, THE PURCHASERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES OR
THE COMMON STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE,
IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
DURING THIS OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR
THE ACCOUNTS OF OTHERS IN THE DEBENTURES, COMMON STOCK OR OTHER SECURITIES OF
THE COMPANY PURSUANT TO EXEMPTIONS FROM RULES 10B-6, 10B-7, AND 10B-8 UNDER
THE SECURITIES EXCHANGE ACT OF 1934.
AVAILABLE INFORMATION
AMR Corporation (the "Company") is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act"), and, in accordance therewith,
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed with the Commission can be inspected and copied at the
Commission's public reference facilities at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, Room 1024; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such material can be obtained by mail from the
Commission's Public Reference Section at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Such reports, proxy statements and other
information also can be inspected at the offices of the New York Stock
Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, referred to as the "Registration
Statement") filed by the Company with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the securities
offered hereby. This Prospectus does not contain all of the information
included in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Statements
contained herein concerning the provisions of any document do not purport to
be complete and, in each instance, are qualified in all respects by reference
to the copy of
2
<PAGE>
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is subject to and qualified in
its entirety by such reference. Reference is made to such Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated by reference in this Prospectus:
1. Annual Report on Form 10-K for the year ended December 31, 1995.
2. Current Report on Form 8-K dated April 17, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the shares of Common Stock hereby shall be
deemed to be incorporated herein by reference and to be a part hereof from the
respective dates of filing of such documents.
Any statement contained in a document incorporated or deemed incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus and the Registration Statement of which it is a part to the
extent that a statement contained herein or in any other subsequently filed
document which is also incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or such Registration Statement.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. The Company will provide without charge to each
person, including a beneficial owner, to whom a copy of this Prospectus is
delivered, upon the written or oral request of any such person, a copy of any
or all of the documents which are incorporated herein by reference, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests should be directed to the Corporate
Secretary of the Company at P.O. Box 619616, Mail Drop 5675, Dallas/Fort Worth
Airport, Texas 75261-9616 (Telephone: (817) 963-1234).
THE COMPANY
The Company was incorporated in October 1982. Its principal subsidiary,
American Airlines, Inc. ("American"), was founded in 1934. For financial
reporting purposes, the Company's operations fall within three major lines of
business: the Airline Group, The SABRE Group and the Management Services Group.
More detailed descriptions of the Company's three business units, and their
recent operating results, are included in the Company's Annual Report on Form
10-K for the year ended December 31, 1995.
AIRLINE GROUP
The Airline Group consists primarily of American's Passenger and Cargo
divisions, as well as AMR Eagle, Inc. and AMR Leasing Corporation, which are
subsidiaries of the Company.
American's Passenger Division is one of the largest scheduled passenger
airlines in the world. At the end of 1995, American provided scheduled jet
service to more than 160 destinations, primarily throughout North America, the
Caribbean, Latin America, Europe and the Pacific.
American's Cargo Division is one of the largest scheduled air freight
carriers in the world. The Cargo Division provides a full range of freight and
mail services to shippers throughout the airline's system. In addition, through
cooperative agreements with other carriers, it has the ability to transport
shipments to virtually any country in the world.
AMR Eagle, Inc. owns the four regional airlines which operate as "American
Eagle"--Flagship Airlines, Inc., Simmons Airlines, Inc., Executive Airlines,
Inc. and Wings West Airlines, Inc. The
3
<PAGE>
American Eagle carriers provide connecting turboprop service from seven of
American's high-traffic cities to smaller markets throughout the United
States, Canada, the Bahamas and the Caribbean.
AMR Leasing Corporation is a financing subsidiary which leases regional
aircraft to subsidiaries of AMR Eagle.
THE SABRE GROUP
The Company formed The SABRE Group in 1993 to capitalize on the synergies of
combining its information technology businesses under common management. The
SABRE Group consists primarily of four business units--SABRE Travel
Information Network ("STIN"), SABRE Computer Services ("SCS"), SABRE Decision
Technologies ("SDT") and SABRE Interactive.
STIN markets SABRE--one of the largest privately owned, real-time computer
systems in the world--which provides travel distribution and information
services to nearly 30,000 travel agencies in 74 countries on six continents.
SCS manages and maintains the Company's technology infrastructure. This
includes the planning, installation and operation of the Company's data
centers, as well as technology and architectural planning for the Company's
other units and for external customers. SCS also provides voice and data
communication services to the Company, but is currently in negotiations with a
third party to outsource this function.
SDT provides decision support systems, application software packages,
systems development and consulting services to other units of the Company and
to external companies in the transportation, travel and other industries
worldwide.
SABRE Interactive is a distribution strategy division formed by The SABRE
Group in 1995 to develop opportunities for consumer-direct travel distribution
via personal computer, CD-ROM, interactive television, cable television and
other media.
MANAGEMENT SERVICES GROUP
The Management Services Group consists of four subsidiaries of the Company--
AMR Services Corporation, Americas Ground Services, Inc. ("AGS"), AMR
Investment Services, Inc. and Airline Management Services, Inc. ("AMS").
AMR Services Corporation has six operating divisions: Airline Services, AMR
Combs, AMR Distribution Systems, TeleService Resources ("TSR"), Data
Management Services ("DMS") and AMR Training Group. The Airline Services
division's main lines of business include airline passenger, ramp and cargo
handling, cabin service and an array of other air transportation-related
services for carriers around the world. AMR Combs is a premier corporate
aviation services network of 13 facilities in major business centers in the
United States and Mexico. It also is involved in a number of other related
businesses, including parts and aircraft sales and operation of one of the
world's largest executive charter services. AMR Distribution Systems serves
the logistics marketplace and specializes in contract warehousing, trucking
and multi-modal freight forwarding services. TSR provides comprehensive
telemarketing and reservation services for a wide range of clients. DMS
provides data capture and document management services to American and to
companies in the insurance, financial services and transportation industries.
AMR Training Group provides a wide variety of training services and operates
the American Airlines Training & Conference Center, which hosts a multitude of
training activities of the Company, and markets its capabilities to other
companies.
AGS provides airline ground and cabin service handling at 11 locations in
eight countries in the Caribbean and Central and South America.
4
<PAGE>
AMR Investment Services, Inc. serves as an investment advisor to the Company
and other institutional investors. It also manages the American AAdvantage
Funds, which have both institutional shareholders, including pension funds and
bank and trust companies, and individual shareholders. As of December 31,
1995, AMR Investment Services was responsible for management of approximately
$13.7 billion in assets, including direct management of approximately $4.5
billion in short-term investments.
AMS was formed in 1994 to manage the Company's service contracts with other
airlines such as the agreement to provide a variety of management, technical
and administrative services to Canadian Airlines International, Ltd. which the
Company signed in 1994.
The postal address for the Company's principal executive offices is P.O. Box
619616, Dallas/Fort Worth Airport, Texas 75261-9616 (Telephone: 817-963-1234).
USE OF PROCEEDS
The net proceeds from the sale of the Common Stock to the Purchasers
pursuant to the arrangements described under "Standby Arrangements" will be
used to redeem any Debentures not surrendered for conversion. Any other
amounts received by the Company from the Purchasers pursuant to the profit-
sharing arrangement described herein will be used for general corporate
purposes. The amount of the proceeds to be received by the Company from the
Purchasers is not determinable at this time, because neither the number of
shares, if any, that will be sold to the Purchasers nor the amount of profit
that the Purchasers will realize upon resale of such shares can be determined
at this time.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is listed on the NYSE. The following table sets
forth, for each period shown, the range of high and low sale prices of the
Common Stock on the NYSE:
<TABLE>
<CAPTION>
COMMON STOCK
PRICE RANGE
---------------
HIGH LOW
------- -------
<S> <C> <C>
1994
1st Quarter.................................................... $71 3/4 $56 1/2
2nd Quarter.................................................... 60 3/4 52 1/4
3rd Quarter.................................................... 62 7/8 50 3/4
4th Quarter.................................................... 55 1/4 48 1/8
1995
1st Quarter.................................................... $65 3/4 $54 7/8
2nd Quarter.................................................... 76 1/4 64
3rd Quarter.................................................... 79 3/4 68 1/8
4th Quarter.................................................... 78 64 3/8
1996
1st Quarter.................................................... $93 3/8 $68
2nd Quarter (through April 18, 1996)........................... 93 5/8 86 1/8
</TABLE>
On April 18, 1996, the last reported sale price for the Company's Common
Stock on the NYSE was $93 3/8 per share.
5
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at March 31, 1996 and as adjusted to give effect to the assumed
conversion of all of the Debentures into approximately 12.9 million shares of
Common Stock. (The table does not reflect (a) the pre-tax loss on Debentures
that are redeemed rather than converted arising from the excess of the
redemption price for such Debentures over their carrying value, which excess
as of March 31, 1996 equaled approximately $231 for each $1,000 principal
amount of Debentures or (b) the possible conversion of Preferred Stock
(defined below) into approximately 1 million shares of Common Stock or the
redemption of such Preferred Stock, pursuant to a notice of redemption dated
April 19, 1996. See "Description of Capital Stock--Preferred Stock.") The
financial data at March 31, 1996 in the following table are derived from the
Company's unaudited financial statements for the quarter ended March 31, 1996.
<TABLE>
<CAPTION>
MARCH 31, AS
1996 ADJUSTED
------------- -------------
(IN MILLIONS) (IN MILLIONS)
<S> <C> <C>
Indebtedness(1)
Current maturities of long-term debt............. $ 148 $ 148
Current obligations under capital leases......... 146 146
Long-term debt, less current maturities.......... 3,896 3,896
Obligations under capital leases, less current
obligations..................................... 1,990 1,990
Debentures....................................... 834 --
------- -------
Total Indebtedness............................. 7,014 6,180
------- -------
Stockholders' Equity(1)(2)
Series A Cumulative Convertible Preferred Stock--
approximately 159,000 shares issued and
outstanding..................................... 78 78
Common Stock--approximately 77 million and 90
million shares issued and outstanding,
respectively.................................... 77 90
Additional paid-in capital....................... 2,263 3,075
Retained earnings................................ 1,478 1,478
------- -------
Total Stockholders' Equity..................... 3,896 4,721
------- -------
Total Capitalization............................. $10,910 $10,901
======= =======
</TABLE>
- --------
(1) For additional information regarding obligations under capital leases,
long-term debt (including repayment requirements), Preferred Stock, Common
Stock and retained earnings, see notes 3, 4, 5, 6, 8 and 9 to the audited
consolidated financial statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995. See "Incorporation of
Certain Documents by Reference."
(2) As of December 31, 1995, 12.9 million shares of Common Stock were reserved
for the conversion of the Debentures and 8.1 million shares of Common
Stock were reserved for the issuance of stock upon the conversion of
convertible preferred stock, the exercise of stock options, and the
issuance of restricted stock and deferred stock.
6
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data in the table below for each of the
five years in the period ended December 31, 1995 have been derived from
audited consolidated financial statements of the Company previously filed with
the Commission. The selected consolidated financial data in the table below as
of March 31, 1996 and for the three months ended March 31, 1995 and 1996 are
unaudited but in the opinion of management include all adjustments necessary
for a fair presentation. The following information should be read in
conjunction with the consolidated financial statements and related notes of
the Company included, or incorporated by reference, in its reports filed under
the Exchange Act that are incorporated by reference herein. See "Incorporation
of Certain Documents by Reference."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31 MARCH 31
------------------------------------------ -------------------
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ------- --------- ---------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED CONSOLIDATED
OPERATING DATA(1)(4)
Total operating
revenues............... $12,887 $14,396 $15,816 $16,137 $16,910 $ 3,970 $ 4,308
Total operating
expenses............... 12,882 14,421 15,126 15,131 15,895 3,718 3,907
Operating income
(loss)(2).............. 5 (25) 690 1,006 1,015 252 401
Earnings (loss) before
extraordinary loss and
cumulative effect of
accounting changes..... (240) (475) (96) 228 196 37 157
Earnings (loss) before
cumulative effect of
accounting changes..... (240) (475) (110) 228 167 37 157
Net earnings (loss)..... (240) (935) (110) 228 167 37 157
Earnings (loss) per
common share before
extraordinary loss,
cumulative effect of
accounting changes, and
effect of preferred
stock exchange(3)
Primary................ (3.54) (6.35) (2.05) 2.26 2.48 0.48 2.02
Fully Diluted.......... (3.54) (6.35) (2.05) 2.26 2.48 0.48 1.84
Net earnings (loss) per
common share
Primary................ (3.54) (12.49) (2.23) 4.51 2.11 0.48 2.02
Fully Diluted.......... (3.54) (12.49) (2.23) 4.51 2.11 0.48 1.84
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
--------------------------------------- --------
1991 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
SELECTED CONSOLIDATED BALANCE
SHEET DATA(1)(4)
Total assets................. $16,208 $18,706 $19,326 $19,486 $19,556 $19,481
Long-term debt less current
maturities.................. 3,951 5,643 5,431 5,603 4,983 4,730
Obligations under capital
leases, less current
obligations................. 1,928 2,195 2,123 2,275 2,069 1,990
Obligation for postretirement
benefits.................... -- 1,006 1,090 1,254 1,439 1,475
Preferred stock.............. -- -- 1,081 78 78 78
Common stock and other
stockholders' equity........ 3,794 3,349 3,195 3,302 3,642 3,818
Common shares outstanding at
end of period............... 68 75 76 76 76 77
Book value per common share.. 55.50 44.41 42.17 43.50 47.67 49.72
</TABLE>
- --------
(1) No dividends were declared on common shares during any of the periods
above.
(2) Operating income (loss) for 1994 and 1995 includes restructuring costs of
$278 million and $533 million, respectively.
(3) Information on the adjustment to the earnings per share computation for
the year ended December 31, 1994, for the effect of the preferred stock
exchange is included in Note 5 to the consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995. See "Incorporation of Certain Documents by Reference."
(4) Effective January 1, 1992, the Company adopted Statements of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," and No. 109, "Accounting for Income Taxes."
7
<PAGE>
RECENT OPERATING RESULTS AND DEVELOPMENTS
RECENT OPERATING RESULTS
The Company recorded net earnings for the three months ended March 31, 1996,
of $157 million, or $2.02 per common share ($1.84 fully diluted). This compares
to net earnings of $37 million, or $0.48 per common share (both primary and
fully diluted) for the first quarter of 1995. The Company's operating income
improved 59.1 percent, or $149 million, to $401 million for the three months
ended March 31, 1996.
The Company's improved results for the first quarter reflect better
performance by each of the Company's three business units--the Airline Group;
The SABRE Group; and the Management Services Group.
AIRLINE GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1996 1995
------- -------
(UNAUDITED)
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C>
Revenues
Passenger--American Airlines, Inc. ................... $ 3,287 $ 3,090
--AMR Eagle, Inc................................. 267 208
Cargo................................................. 163 158
Other................................................. 187 155
------- -------
3,904 3,611
Expenses
Wages, salaries and benefits.......................... 1,301 1,240
Aircraft fuel......................................... 441 378
Commission to agents.................................. 315 320
Depreciation and amortization......................... 252 266
Other operating expenses.............................. 1,348 1,291
------- -------
Total operating expenses............................ 3,657 3,495
------- -------
Operating Income........................................ 247 116
Other Income (Expenses)................................. (134) (171)
------- -------
Earnings (Loss) Before Income Taxes..................... $ 113 $ (55)
======= =======
</TABLE>
The Airline Group's revenues for the quarter ended March 31, 1996 increased
$293 million or 8.1 percent over 1995 first quarter revenues. American's
passenger revenues increased by 6.4 percent, or $197 million. American's yield
(the average amount one passenger pays to fly one mile) for the quarter ended
March 31, 1996, of 13.34 cents increased by 2.9 percent compared to the same
period in 1995. American's traffic or revenue passenger miles (RPMs) increased
3.3 percent to 24.6 billion miles for the quarter ended March 31, 1996 compared
to the 1995 first quarter. American's capacity or available seat miles
increased 0.4 percent to 37.6 billion miles in the first quarter of 1996. AMR
Eagle passenger revenues increased 28.4 percent, or $59 million, due
principally to an increase in traffic of 28.2 percent to 636 million RPMs. The
increase in AMR Eagle traffic was due in large part to the Federal Aviation
Administration's temporary restrictions on the operation of ATR aircraft during
the first quarter of 1995. Other revenues increased 20.6 percent, $32 million.
The Airline Group's operating expenses increased 4.6 percent, $162 million.
Wages, salaries and benefits rose 4.9 percent, $61 million, due primarily to
contractual wage rate and seniority increases
8
<PAGE>
that are built into the Company's labor contracts and an increase in the
provision for profit sharing. Aircraft fuel expense increased 16.7 percent, or
$63 million, due to a 9.1 cent increase in American's average price per
gallon, which includes the impact of the October 1995 expiration of the fuel
tax exemption for the airline industry. Other operating expenses, consisting
of maintenance costs, aircraft rentals, other rentals and landing fees, food
service costs, and miscellaneous operating expenses increased 4.4 percent, or
$57 million. Other Income (Expense) decreased 21.6 percent or $37 million.
THE SABRE GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1996 1995
---------- ----------
(UNAUDITED)
(DOLLARS IN MILLIONS)
<S> <C> <C>
Revenues................................................ $ 449 $ 399
Expenses
Wages, salaries and benefits.......................... 119 103
Depreciation and amortization......................... 43 45
Other operating expenses.............................. 156 132
---------- ----------
Total operating expenses............................ 318 280
---------- ----------
Operating Income........................................ 131 119
Other Income (Expenses)................................. (1) (9)
---------- ----------
Earnings Before Income Taxes............................ $ 130 $ 110
========== ==========
</TABLE>
Revenues for The SABRE Group for the quarter ended March 31, 1996, increased
12.5 percent, or $50 million, over the 1995 first quarter, primarily due to
higher booking fee prices and increased volumes. Wages, salaries and benefits
increased 15.5 percent, or $16 million, due primarily to an 8.2 percent
increase in the average number of equivalent employees. Other operating
expenses increased 18.2 percent, $24 million.
MANAGEMENT SERVICES GROUP
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1996 1995
---------- ----------
(UNAUDITED)
(DOLLARS IN MILLIONS)
<S> <C> <C>
Revenues................................................ $ 157 $ 143
Expenses
Wages, salaries and benefits.......................... 67 62
Other operating expenses.............................. 67 64
---------- ----------
Total operating expenses............................ 134 126
---------- ----------
Operating Income........................................ 23 17
Other Income (Expenses)................................. (1) --
---------- ----------
Earnings Before Income Taxes............................ $ 22 $ 17
========== ==========
</TABLE>
Revenues for the Management Services Group increased 9.8 percent, or $14
million. Wages, salaries and benefits increased 8.1 percent, $5 million.
9
<PAGE>
RECENT DEVELOPMENTS
The Boards of Directors of the Company and American have approved a
reorganization of The SABRE Group as a separate, wholly owned subsidiary of
the Company, subject to the receipt of a favorable tax ruling and certain
other conditions. This reorganization will involve the dividend of American's
SABRE Travel Information Network, SABRE Computer Services, SABRE Development
Services and SABRE Interactive divisions to the Company. It is anticipated
that upon completion of the reorganization approximately $850 million of
American's debt to the Company will be replaced by an equivalent amount of
debt owed to AMR by The SABRE Group. The reorganization should be completed
sometime during the third quarter.
The Company also continues to study, as it has in the past, other
transactions which may involve The SABRE Group, such as strategic partnerships
or an initial public offering of a portion of The SABRE Group's stock. No
decisions have been made as to these other transactions, however, and the
Company could determine that conducting the business activities of The SABRE
Group within its new, reorganized structure is in the best interests of the
Company's stockholders.
REDEMPTION OF DEBENTURES AND ALTERNATIVES TO REDEMPTION
The Company is calling for redemption on May 20, 1996 (the "Redemption
Date"), all of the Company's outstanding Debentures. As of April 18,
$1,020,356,000 principal amount of Debentures was outstanding.
The following alternatives are available to holders of Debentures:
1. Conversion into Common Stock. Holders may convert Debentures (or any
portion thereof which is $1,000 or an integral multiple thereof) into the
Common Stock of the Company at a conversion price of $79.00 of principal
amount of Debentures per share of Common Stock (equivalent to 12.658 shares of
Common Stock for each $1,000 principal amount of Debentures). No fractional
Shares of Common Stock will be issued upon conversion of Debentures. Instead
of issuing any fractional share of Common Stock that would otherwise be
issuable upon conversion of any Debenture, the Company will pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
of the last reported sale price per share of Common Stock, regular way, at the
close of business on the Trading Day (defined below) immediately preceding the
day of conversion or, if no such sale takes place on such day, the average of
the reported closing bid and asked prices, regular way, on the NYSE. "Trading
Day" means a day on which the NYSE is open for business. The Debentures will
not be convertible after 5:00 P.M., Eastern Daylight Time, on May 17, 1996.
Holders of Debentures that convert their Debentures will not be entitled to
any payment of interest on such Debentures accruing after May 1, 1996. Holders
of Debentures of record on April 15, 1996, will be entitled to receive the
payment of interest due on the Debentures on May 1, 1996. Any holder that
converts Debentures prior to May 1, 1996, must submit with the Debentures
being converted an amount, in New York Clearing House funds or other funds
acceptable to the Company, equal to the interest payable on such Debentures on
May 1, 1996, and such holder therefore will not receive the economic benefit
of such interest payment.
Debentures may be held in book-entry form through the facilities of The
Depository Trust Company (the "Depository"). Accordingly, in order for a
beneficial owner of an interest in a Debenture to exercise conversion rights,
such beneficial owner must comply with the procedures of the Depository, if a
participant in the Depository (a "participant"), or if such beneficial owner
is not a participant in the Depository, through the procedures of the
participant through which such beneficial owner owns its interest in the
Debentures, to effect a conversion.
10
<PAGE>
The Company will decide, in its sole discretion, all questions as to the form
of documents and the validity, eligibility (including time of receipt) and
acceptance for conversion by the Company of any Debentures. Any defect or
irregularity in the surrender or delivery of any document in connection with
the conversion of Debentures may result in such Debentures not being converted
into Common Stock and, therefore, being redeemed on the Redemption Date.
SINCE IT IS THE TIME OF ACTUAL RECEIPT THAT DETERMINES WHETHER DEBENTURES
HAVE BEEN PROPERLY PRESENTED FOR CONVERSION, SUFFICIENT TIME SHOULD BE ALLOWED
FOR A BOOK-ENTRY TRANSFER TO BE MADE, PRIOR TO 5:00 P.M., EASTERN DAYLIGHT
TIME, ON MAY 17, 1996. DEBENTURES NOT ACTUALLY RECEIVED FOR CONVERSION BY A
BOOK-ENTRY TRANSFER PRIOR TO SUCH TIME WILL BE REDEEMED AS SET FORTH BELOW.
2. Sale in Open Market. Holders may sell the Debentures in the open market.
Holders of Debentures who wish to sell their Debentures in the open market
should consult with their own advisors regarding if and when they should sell
their Debentures and the tax consequences thereof. Holders may incur various
fees and expenses in connection with any such sale.
3. Redemption. Holders may allow the Debentures to be redeemed on May 20,
1996. Pursuant to the terms of the Indenture between the Company and the First
National Bank of Chicago, as Trustee, dated as of November 1, 1994, holders of
the Debentures will be entitled to receive upon redemption 104.2% of the
principal amount of Debentures (the "Redemption Price"), plus accrued interest
from May 1, 1996 to the Redemption Date. The holder of $1,000 principal amount
of Debentures redeemed at the Redemption Price plus accrued interest would
receive $1,045.23 in cash. Payment of the Redemption Price plus accrued
interest will be made by the First Chicago Trust Company of New York, as paying
and conversion agent (the "Paying and Conversion Agent") upon surrender of
Debentures to the Paying and Conversion Agent by holders of Debentures. On and
after the Redemption Date, interest will cease to accrue and holders of
Debentures will not have any rights as such holders other than the right to
receive the Redemption Price, plus accrued interest from May 1 to the
Redemption Date, upon such surrender for redemption.
On April 18, 1996, the closing price of the Common Stock as reported on the
New York Stock Exchange Composite Tape was $93 3/8 per share. Based on the
closing price of $93 3/8 per share, if a holder of $1,000 principal amount of
Debentures on that date had converted such principal amount, such holder would
have received Common Stock (and cash in lieu of a fractional share) having a
market value equal to $1,181.94, which amount is higher than the amount
($1,045.23) to be received upon redemption. The market price of the Common
Stock received upon conversion, however, is subject to fluctuation, and the
holder may incur various transaction costs if such Common Stock is sold.
Holders of Debentures are urged to obtain current market quotations for the
Common Stock.
SO LONG AS THE MARKET PRICE OF THE COMMON STOCK IS GREATER THAN $82.57 PER
SHARE AT THE TIME OF CONVERSION, A HOLDER OF DEBENTURES WHO EXERCISES SUCH
HOLDER'S CONVERSION RIGHTS WILL RECEIVE COMMON STOCK, PLUS CASH IN LIEU OF ANY
FRACTIONAL SHARE (DETERMINED AS SET FORTH ABOVE), WITH A MARKET VALUE GREATER
THAN THE AMOUNT OF CASH THE HOLDER WOULD OTHERWISE BE ENTITLED TO RECEIVE UPON
THE REDEMPTION OF THE DEBENTURES (BEFORE DEDUCTING ANY TAXES, COMMISSIONS AND
OTHER COSTS WHICH WOULD LIKELY BE INCURRED ON SALE OF THE COMMON STOCK RECEIVED
UPON CONVERSION OF THE DEBENTURES).
For a discussion of certain United States federal income tax considerations,
see "Certain Federal Income Tax Considerations".
11
<PAGE>
PAYING AND CONVERSION AGENT AND INFORMATION AGENT
First Chicago Trust Company of New York has been appointed as Paying and
Conversion Agent for the redemption and conversion of the Debentures.
The Paying and Conversion Agent:
By Hand or Overnight Courier: By Mail:
First Chicago Trust Company of New (registered or certified mail
York recommended)
Tenders & Exchanges First Chicago Trust Company of New
Suite 4680--AMR York
14 Wall Street, 8th Floor Tenders & Exchanges
New York, NY 10005 P.O. Box 2559, Mail Suite 4660
Jersey City, NJ 07303-2559
D.F. King & Co., Inc. has been retained by the Company as Information Agent
to assist in connection with the redemption of the Debentures. Questions and
requests for assistance regarding the redemption or the conversion of the
Debentures, requests for additional copies of this Prospectus or of the Letter
of Transmittal and requests for Notice of Guaranteed Delivery may be directed
to the Information Agent at 77 Water Street, New York, New York 10005,
telephone (800) 848-3405.
The Company will pay the Paying and Conversion Agent and the Information
Agent their reasonable and customary fees for their services and will
reimburse them for all their reasonable out-of-pocket expenses in connection
therewith.
DESCRIPTION OF CAPITAL STOCK
The following statements with respect to the capital stock of the Company
are summaries and are subject to the detailed provisions of the Company's
certificate of incorporation, as amended (the "Certificate of Incorporation"),
and by-laws, as amended (the "By-Laws"). These statements do not purport to be
complete, or to give full effect to the provisions of statutory or common law,
and are subject to, and are qualified in their entirety by reference to, the
terms of the Certificate of Incorporation and the By-Laws, copies of which are
filed as exhibits to the Registration Statement and are incorporated by
reference into this Prospectus.
GENERAL
The Certificate of Incorporation authorizes the issuance of 170,000,000
shares of all classes of stock, of which 20,000,000 may be shares of preferred
stock, without par value, and 150,000,000 may be shares of Common Stock. On
March 31, 1996, approximately 77 million shares of Common Stock were
outstanding. The Certificate of Incorporation provides that the Company's
Board of Directors (the "Board of Directors") is authorized to provide for the
issuance of shares of preferred stock, from time to time, in one or more
series, and to fix any voting powers, full or limited, and the designations,
preferences and relative, participating, optional or other special rights,
applicable to the shares to be included in any such series and any
qualifications, limitations or restrictions thereon. No shares of preferred
stock of the Company (other than the Preferred Stock (defined below), which
has been called for redemption) are outstanding as of the date hereof.
VOTING RIGHTS
Each holder of Common Stock is entitled to one vote for each share
registered in his name on the books of the Company on all matters submitted to
a vote of shareholders. Except as otherwise provided by law, the holders of
Common Stock vote as one class. The shares of Common Stock do
12
<PAGE>
not have cumulative voting rights. As a result, subject to the voting rights,
if any, of the holders of any shares of the Company's preferred stock which
may at the time be outstanding, the holders of Common Stock entitled to
exercise more than 50% of the voting rights in an election of directors can
elect 100% of the directors to be elected if they choose to do so. In such
event, the holders of the remaining Common Stock voting for the election of
directors will not be able to elect any persons to the Board of Directors.
DIVIDEND RIGHTS
Subject to the rights of the holders of any shares of the Company's
preferred stock which may at the time be outstanding, holders of Common Stock
are entitled to such dividends as the Board of Directors may declare out of
funds legally available therefor. Certain of the Company's debt agreements
contain restrictive covenants, including a limitation on the declaration of
dividends on shares of capital stock. At December 31, 1995, under the terms of
such agreements, all of the Company's retained earnings were available for
payment of dividends. Certain of American's debt and credit facility
agreements also contain certain restrictive covenants, including a cash flow
coverage test, a minimum net worth requirement and limitations on indebtedness
and limitations on the declaration of dividends. Certain of these restrictions
could affect the Company's ability to pay dividends. At December 31, 1995,
under the most restrictive provisions of those agreements, approximately $857
million of American's retained earnings were available for payment of
dividends to the Company.
With the exception of the dividend, on February 13, 1986, of certain
preferred stock purchase rights (the "Rights"), which have since expired, no
dividends have been paid on the Common Stock, and, prior to October 1, 1982
(the date as of which the Company became the parent of American), no dividends
had been paid on the common stock of American after the first quarter of 1980.
DELAWARE GENERAL CORPORATION LAW SECTION 203
As a corporation organized under the laws of the State of Delaware, the
Company is subject to Section 203 of the Delaware General Corporation Law (the
"DGCL") which restricts certain business combinations between the Company and
an "interested stockholder" (in general, a stockholder owning 15% or more of
the Company's outstanding voting stock) or its affiliates or associates for a
period of three years following the time that the stockholder becomes an
"interested stockholder." The restrictions do not apply if (i) prior to an
interested stockholder becoming such, the Board of Directors approved either
the business combination or the transaction which resulted in the stockholder
becoming an interested stockholder, (ii) upon consummation of the transaction
which resulted in any person becoming an interested stockholder, such
interested stockholder owns at least 85% of the voting stock of the Company
outstanding at the time the transaction commences (excluding shares owned by
certain employee stock ownership plans and persons who are both directors and
officers of the Company) or (iii) at or subsequent to the time an interested
stockholder becomes such, the business combination is both approved by the
Board of Directors and authorized at an annual or special meeting of the
Company's stockholders, not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding voting stock not owned by the interested
stockholder.
LIQUIDATION RIGHTS AND OTHER PROVISIONS
Subject to the prior rights of creditors and the holders of any preferred
stock which may be outstanding from time to time, including the Preferred
Stock, the holders of the Common Stock are entitled in the event of
liquidation, dissolution or winding up to share pro rata in the distribution
of all remaining assets.
The Common Stock is not liable to any calls or assessments and is not
convertible into any other securities. The Certificate of Incorporation
provides that the private property of the stockholders shall
13
<PAGE>
not be subject to the payment of corporate debts. There are no redemption or
sinking fund provisions applicable to the Common Stock, and the Certificate of
Incorporation provides that there shall be no preemptive rights.
The Certificate of Incorporation provides that no director of the Company
shall be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL or (iv) for any transaction from which the director derived an
improper personal benefit. Section 174 of the DGCL specifies conditions under
which directors of Delaware corporations may be liable for unlawful dividends
or unlawful stock purchases or redemptions.
PREFERRED STOCK
As of April 18, 1996, approximately 159,000 shares of the Company's Series A
Cumulative Convertible Preferred Stock of the Company (the "Preferred Stock")
were issued and outstanding, which shares are being called for redemption
pursuant to a notice of redemption dated April 19, 1996. The Company has not
entered into any standby arrangement with respect to such redemption. If none
of the outstanding shares of Preferred Stock are surrendered for conversion,
the total aggregate redemption price for the Preferred Stock will be
approximately $83,000,000. If all of the outstanding shares of Preferred Stock
are surrendered for conversion, the Company will issue approximately 1 million
shares of Common Stock. Neither the actual redemption price for the Preferred
Stock nor the actual number of shares of Common Stock that the Company will
issue upon conversion of any Preferred Stock is determinable at this time,
because the number of shares of Preferred Stock that will be surrendered for
conversion cannot be determined at this time.
TRANSFER AGENT
The Transfer Agent and Registrar for the Common Stock is First Chicago Trust
Company of New York.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain United States federal income
tax considerations relevant to the conversion, redemption or sale of
Debentures by a beneficial owner of Debentures. This summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
(including Proposed Regulations and Temporary Regulations) promulgated
thereunder, Internal Revenue Service ("IRS") rulings, official pronouncements
and judicial decisions, all as in effect on the date hereof and all of which
are subject to change, possibly with retroactive effect, or different
interpretations. This summary is applicable only to holders who are United
States persons for federal income tax purposes and who hold Debentures as
capital assets and who will hold any Common Stock received on conversion of
Debentures as capital assets.
This summary does not discuss all the tax consequences that may be relevant
to a particular holder in light of the holder's particular circumstances and
it is not intended to be applicable in all respects to all categories of
investors, some of whom--such as insurance companies, tax-exempt persons,
financial institutions, regulated investment companies, dealers in securities
or currencies, persons that the Debentures as a position in a "straddle," as
part of a "synthetic security," "hedge," "conversion transaction" or other
integrated investment or persons whose functional currency is other than
United States dollars--may be subject to different rules not discussed below.
In addition, this summary does not address any state, local or foreign tax
considerations that may be relevant to a particular holder.
14
<PAGE>
Legislative proposals have been under consideration that would reduce the
rate of federal income taxation of certain capital gains. Such legislation, if
enacted, might apply only to gain realized on dispositions occurring after a
date specified in the legislation. It cannot be predicted whether any such
legislation ultimately will be enacted and, if enacted, what its effective
date will be.
HOLDERS OF DEBENTURES ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
CONVERSION, SALE OR REDEMPTION OF THE DEBENTURES IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES.
CONVERSION OF DEBENTURES
In general, no gain or loss will be recognized on conversion of Debentures
solely into Common Stock. The tax basis for the Common Stock received upon
such conversion will be equal to the tax basis of the Debentures converted
(reduced by the portion of such basis allocable to any fractional Common Stock
interest paid in cash). The holding period for the Common Stock generally will
include the holding period of the Debentures converted. However, the holding
period for the Common Stock allocable to original issue discount accrued
during the holder's holding period for the Debentures converted may be treated
as commencing on the day after the date of the conversion. A holder generally
will recognize gain (or loss) upon a conversion to the extent that any cash
paid in lieu of a fractional share of Common Stock exceeds (or is less than)
its tax basis in such fractional share.
SALE OR REDEMPTION OF DEBENTURES
Generally, the sale or redemption of a Debenture will result in taxable gain
or loss equal to the difference between the amount realized and the holder's
adjusted tax basis in the Debentures. Except as discussed below under "Market
Discount", such gain or loss will be capital gain or loss and will be long
term gain or loss if, at the time of such disposition, the Debentures had been
held for more than one year.
MARKET DISCOUNT
Special rules will apply to Debentures acquired with market discount. A
market discount note is, generally, a note the stated redemption price at
maturity of which exceeds the holder's basis in the note immediately after
acquisition. Generally, any gain recognized on the sale or redemption of a
market discount note will be treated as ordinary income to the extent of the
accrued market discount on such note not previously included in income. Market
discount accrues either ratably or at a constant yield to maturity, at the
election of the holder. A holder of a market discount note also may elect to
take market discount into income as it accrues.
Although the matter is not free from doubt, a holder of a Debenture with
market discount should not have to recognize income on the conversion of the
Debenture, even with respect to market discount that has accrued but has not
been taken into account. Market discount not recognized on conversion will
carry over to the Common Stock acquired upon conversion thereof and will be
recognized as ordinary income to the extent of gain recognized upon the
disposition of such Common Stock, including any deemed disposition of
fractional shares of Common Stock for cash at the time of conversion.
SALE OR DISPOSITION OF COMMON STOCK
A holder will recognize gain or loss on the sale or exchange of Common Stock
received upon conversion of a Debenture equal to the difference between the
amount realized on such sale or exchange and the holder's adjusted tax basis
in the Common Stock sold or exchanged. Except as
15
<PAGE>
noted above under "Market Discount", such gain or loss would be long-term
capital gain or loss if the holder's holding period for the Common Stock were
more than one year. See "Conversion of Debentures".
BACKUP WITHHOLDING
A holder of a Debenture or Common Stock issued upon conversion of a
Debenture may be subject to backup withholding at a rate of 31% with respect
to dividends on, or the proceeds of a sale, exchange, or redemption of, such
Debenture or Common Stock, as the case may be, unless (i) such holder is a
corporation or comes within certain other exempt categories and, when
required, demonstrates this fact or (ii) provides a taxpayer identification
number, certifies as to no loss of exemption from backup withholding, and
otherwise complies with applicable backup withholding rules.
STANDBY ARRANGEMENTS
Under the terms and subject to the conditions of a Standby Agreement (the
"Standby Agreement"), the Purchasers have agreed to purchase from the Company,
at the option of the Company, up to the number of shares of Common Stock equal
to the number of shares of Common Stock that would have been issuable upon
conversion of the Debentures that are either (i) duly surrendered for
redemption on or prior to the Expiration Date or (ii) Sleeper Debentures. The
purchase price for the Purchased Shares will be equal to a price per share of
(i) $81.54, if there are fewer than 2,583,180 Purchased Shares, (ii) $81.33,
if there are from 2,583,180 to 5,166,359 Purchased Shares, (iii) $81.12, if
there are from 5,166,360 to 7,749,539 Purchased Shares, (iv) $80.91, if there
are from 7,749,540 to 10,332,719 Purchased Shares and (v) $80.71, if there are
10,332,720 or more Purchased Shares.
The Purchasers also may acquire Debentures for their own account in the open
market or otherwise on or prior to the Expiration Date in such amounts and at
such prices as the Purchasers deem advisable. For the purpose of stabilizing
the price of the Common Stock, engaging in certain hedging transactions or
otherwise, the Purchasers may make purchases and sales of Common Stock,
Debentures or other securities of the Company, in the open market or
otherwise, for long or short account, on such terms as the Purchasers deem
advisable, and may over-allot in arranging sales, all subject to applicable
provisions of the Exchange Act. Such transactions involving Debentures may
occur prior to or on the Expiration Date, and such transactions involving
Common Stock or other securities of the Company may occur prior to, on or
after the Expiration Date. The Purchasers have agreed to surrender for
conversion all Debentures so purchased by them and any additional Debentures
beneficially owned by them. The Company has agreed to pay to each Purchaser,
for each $1,000 principal amount of Debentures surrendered by such Purchaser
for conversion into shares of Common Stock prior to May 1, 1996, an amount
equal to (i) $15.31 minus (ii) the product of (x) $0.17 times (y) the number
of days from and including the date of surrender by such Purchaser of such
Debenture to but excluding May 1, 1996.
Prior to, on or after the Redemption Date, the Purchasers may offer shares
of Common Stock pursuant to this Prospectus directly to the public, at prices
set from time to time by the Purchasers, including shares acquired through
conversion of Debentures acquired by the Purchasers. Prior to the Redemption
Date, each such price when set will not exceed the greater of the last sale or
current asked price of the Common Stock on the New York Stock Exchange plus
the amounts of any concession to dealers, and an offering price on any
calendar day will not be increased more than once during such day. In
effecting such transactions, the Purchasers may realize profits or losses
independent of the compensation referred to below. The Purchasers may also
make sales to dealers at prices which represent concessions from the prices at
which such shares are then being offered to the public. The amount of such
concessions will be determined from time to time by the Purchasers. Any Common
Stock so offered is offered subject to prior sale, when, as and if received by
the Purchasers, and subject to the Purchasers' right to reject orders in whole
or in part.
16
<PAGE>
Pursuant to the Standby Agreement, the Company has agreed to pay the
Purchasers for the commitments undertaken by them under the Standby Agreement
an amount equal to $9,331,957. If the Purchasers do not purchase any Purchased
Shares, the Company has agreed to reimburse the Purchasers for all of their
out-of-pocket costs, including the reasonable fees and disbursements of their
counsel. The Purchasers have agreed to remit to the Company not less than 50%
of the amount, if any, by which the aggregate proceeds received by the
Purchasers upon resale of the Sleeper Shares exceeds either (x) if the last
closing price of the Common Stock on the NYSE on the Expiration Date is equal
to or greater than $86.00 per share, the aggregate purchase price paid by the
Purchasers for such Sleeper Shares or (y) if the last closing price of the
Common Stock on the NYSE on the Expiration Date is less than $86.00 per share,
$82.57 multiplied by the number of Sleeper Shares purchased.
During the period beginning on the date of this Prospectus and continuing to
and including the Redemption Date, and, if the Purchasers purchase any
Purchased Shares, further continuing and including the date ending 90 days
after the Redemption Date, the Company has agreed not to offer, sell, contract
to sell or otherwise dispose of, any shares of Common Stock of the Company,
any securities of the Company substantially similar to the Common Stock or any
securities convertible into or exchangeable for shares of Common Stock or any
such substantially similar security (except for any securities issued,
offered, sold or disposed of by the Company pursuant to its stock option and
other benefit plans maintained for its officers, directors and employees or
Common Stock issued or distributed in connection with the conversion of any
security of the Company outstanding on the date of the Prospectus) without the
Purchasers' prior written consent.
The Company has agreed to indemnify the Purchasers against certain
liabilities, including liabilities under the Securities Act.
The Purchasers may assist in the solicitation of conversions by holders of
Debentures but will receive no commission or other compensation therefor.
The Purchasers perform investment banking and financial advisory and other
financial services for the Company and its affiliates from time to time.
VALIDITY OF THE COMMON STOCK
The validity of the shares of Common Stock will be passed upon for the
Company by Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022,
and for the Purchasers by Shearman & Sterling, 599 Lexington Avenue, New York,
New York 10022. Shearman & Sterling from time to time represents the Company
with respect to certain legal matters.
EXPERTS
The consolidated financial statements and schedules of the Company appearing
in the Company's Annual Report (Form 10-K) for the year ended December 31,
1995 have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and schedules are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
17
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SO-
LICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 3
The Company................................................................ 3
Use of Proceeds............................................................ 5
Price Range of Common Stock................................................ 5
Capitalization............................................................. 6
Selected Consolidated Financial Data....................................... 7
Recent Operating Results and Developments.................................. 8
Redemption of Debentures and Alternatives to Redemption.................... 10
Paying and Conversion Agent and Information Agent.......................... 12
Description of Capital Stock............................................... 12
Certain Federal Income Tax Considerations.................................. 14
Standby Arrangements....................................................... 16
Validity of the Common Stock............................................... 17
Experts.................................................................... 17
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
12,915,899 SHARES
AMR CORPORATION
COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
----------------
PROSPECTUS
----------------
GOLDMAN, SACHS & CO.
CS FIRST BOSTON CORPORATION
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES, INC.
SALOMON BROTHERS INC
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the sale of the Common Stock being
registered hereby, other than underwriting discounts and commissions, are
estimated as follows:
<TABLE>
<S> <C>
Registration Fee*.................................................. $390,020
Printing and engraving............................................. 50,000
Listing Fees....................................................... 12,800
Legal fees and expenses............................................ 150,000
Accounting fees and expenses....................................... 40,000
Blue Sky qualifications and related legal fees and expenses........ 5,000
Miscellaneous...................................................... 20,000
--------
Total............................................................ $667,820
========
</TABLE>
--------
* Actual Fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended, provides in
regard to indemnification of directors and officers as follows:
(S) 145. Indemnification of officers, directors, employees and agents;
insurance
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was
II-1
<PAGE>
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by a majority vote of directors who are not parties to such action,
suit or proceeding, even though less than a quorum or (2) if there are no
such directors, or if such directors so direct, by independent legal
counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith
II-2
<PAGE>
and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees).
Article VII of the Company's By-Laws provides in regard to indemnification
of directors and officers as follows:
Section 1. Nature of Indemnity. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he is
or was or has agreed to become a director or officer of the corporation, or
is or was serving or has agreed to serve at the request of the corporation
as a director or officer, of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged to
have been taken or omitted in such capacity, and may indemnify any person
who was or is a party or is threatened to be made a party to such an action
by reason of the fact that he is or was or has agreed to become an employee
or agent of the corporation, or is or was serving or has agreed to serve at
the request of the corporation as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with such action, suit or proceeding and any appeal therefrom,
if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding had no reasonable cause to believe his
conduct was unlawful; except that in the case of an action or suit by or in
the right of the corporation to procure a judgment in its favor (1) such
indemnification shall be limited to expenses (including attorneys' fees)
actually and reasonably incurred by such person in the defense or
settlement of such action or suit, and (2) no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent
that the Delaware Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such
expenses which the Delaware Court of Chancery or such other court shall
deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
Section 2. Successful Defense. To the extent that a director, officer,
employee or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
Section 1 hereof or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith.
II-3
<PAGE>
Section 3. Determination That Indemnification Is Proper. Any
indemnification of a director or officer of the corporation under Section 1
hereof (unless ordered by a court) shall be made by the corporation unless
a determination is made that indemnification of the director or officer is
not proper in the circumstances because he has not met the applicable
standard of conduct set forth in Section 1 hereof. Any indemnification of
an employee or agent of the corporation under Section 1 hereof (unless
ordered by a court) may be made by the corporation upon a determination
that indemnification of the employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set
forth in Section 1 hereof. Any such determination shall be made (1) by a
majority vote of directors who are not parties to such action, suit or
proceeding, even if less than a quorum, or (2) if there are no such
directors, or if such directors so direct, by independent legal counsel in
a written opinion, or (3) by the stockholders.
Section 4. Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a director or officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by
the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director
or officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the corporation as authorized in
this Article. Such expenses (including attorneys' fees) incurred by other
employees and agents may be so paid upon such terms and conditions, if any,
as the board of directors deems appropriate. The board of directors may
authorize the corporation's counsel to represent a director, officer,
employee or agent in any action, suit or proceeding, whether or not the
corporation is a party to such action, suit or proceeding.
Section 5. Procedure for Indemnification of Directors or Officers. Any
indemnification of a director or officer of the corporation under Sections
1 and 2, or advance of costs, charges and expenses of a director or officer
under Section 4 of this Article, shall be made promptly, and in any event
within 60 days, upon the written request of the director or officer. If the
corporation fails to respond within 60 days, then the request for
indemnification shall be deemed to be approved. The right to
indemnification or advances as granted by this Article shall be enforceable
by the director or officer in any court of competent jurisdiction if the
corporation denies such request, in whole or in part. Such persons's costs
and expenses incurred in connection with successfully establishing his
right to indemnification, in whole or in part, in any such action shall
also be indemnified by the corporation. It shall be a defense to any such
action (other than an action brought to enforce a claim for the advance of
costs, charges and expenses under Section 4 of this Article where the
required undertaking, if any, has been received by the corporation) that
the claimant has not met the standard of conduct set forth in Section 1 of
this Article, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its board of
directors, its independent legal counsel, and its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 of this
Article, nor the fact that there has been an actual determination by the
corporation (including its board of directors, its independent legal
counsel, and its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of
conduct.
Section 6. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
corporation and each director, officer, employee and agent who serves in
such capacity at any time while these provisions as well as the relevant
provisions of the Delaware Corporation Law are in effect and any repeal or
modification thereof shall not affect any right or obligation then existing
with respect to any state of facts then or previously existing or any
action, suit, or proceeding previously or thereafter brought or threatened
based in whole or in part upon any such state of facts. Such a "contract
right" may not be modified retroactively without the consent of such
director, officer, employee or agent.
II-4
<PAGE>
The indemnification provided by this Article VII shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the heirs, executors and administrators
of such a person.
Section 7. Insurance. The corporation shall purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
director or officer of the corporation, or is or was serving at the request
of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him or on his behalf in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under the provisions of this Article, provided that such insurance is
available on acceptable terms, which determination shall be made by a vote
of a majority of the entire board of directors.
Section 8. Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each director or officer and may
indemnify each employee or agent of the corporation as to costs, charges
and expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement with respect to any action, suit or proceeding, whether
civil, criminal, administrative or investigative, including an action by or
in the right of the corporation, to the full extent permitted by any
applicable portion of this Article that shall not have been invalidated and
to the full extent permitted by applicable law.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
provides in regard to the limitation of liability of directors and officers as
follows:
(b) In addition to the matters required to be set forth in the
certificate of incorporation by subsection (a) of this section, the
certificate of incorporation may also contain any or all of the following
matters:
* * * *
(7) A provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director: (i)
for any breach of the director's duty of loyalty to the corporation or
its stockholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law;
(iii) under section 174 of this Title; or (iv) for any transaction from
which the director derived an improper personal benefit. No such
provision shall eliminate or limit the liability of a director for any
act or omission occurring prior to the date when such provision becomes
effective. All references in this paragraph to a director shall also be
deemed to refer (x) to a member of the governing body of a corporation
which is not authorized to issue capital stock, and (y) to such other
person or persons, if any, who, pursuant to a provision of the
certificate of incorporation in accordance with subsection (a) of (S)
141 of this title, exercise or perform any of the powers or duties
otherwise conferred or imposed upon the board of directors by this
title.
Article Ninth of the Company's Certificate of Incorporation provides in
regard to the limitation of liability of directors and officers as follows:
NINTH: No director of the corporation shall be liable to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its shareholders, (ii) for acts or omissions
not
II-5
<PAGE>
in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit.
The Company's directors and officers are also insured against claims arising
out of the performance of their duties in such capacities.
Reference is made to Section 8 of the Standby Agreement, filed herewith as
Exhibit 1(a) for provisions regarding the indemnification of the Company, its
directors and officers, and its controlling persons against certain
liabilities, including liabilities under the Securities Act.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
DESCRIPTION
-----------
<C> <S>
1(a) Form of Standby Agreement.
4(a) Certificate of Incorporation of the Company, as amended (incorporated by
reference to Exhibit 4(a) to the Company's Registration Statement on
Form S-4 No. 33-55191).
4(b) Certificate of Retirement of Certain Shares of Series A Cumulative
Convertible Preferred Stock of the Company, dated January 11, 1995.
4(c) By-Laws of the Company, as amended.
4(d) Form of Certificate for the Company's Common Stock, par value $1.00 per
share (incorporated by reference to Exhibit 4(c) to the Company's
Registration Statement on Form S-3 No. 33-38393).
5 Opinion of Debevoise & Plimpton.
23(a) Consent of Ernst & Young, L.L.P.
23(b) Consent of Debevoise & Plimpton (included in Exhibit 5).
24 Powers of Attorney.
99(a) Letter of Transmittal.
99(b) Form of Notice of Redemption.
99(c) Form of Information Agent Agreement.
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering Period
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than
II-6
<PAGE>
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Company pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings incorporating subsequent Exchange Act documents by reference
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Request for Acceleration of Effective Date of Filing
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions referred to in Item 15 or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in said
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF FORT WORTH, STATE OF TEXAS, ON THIS 19TH DAY OF
APRIL, 1996.
AMR CORPORATION
/s/ Anne H. McNamara
By __________________________________
ANNE H. MCNAMARA
SENIOR VICE PRESIDENT AND GENERAL
COUNSEL
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE
/s/ Robert L. Crandall Chairman of the
- ------------------------------------- Board, President
ROBERT L. CRANDALL* and Chief Executive
Officer, Director
(Principal
Executive Officer)
/s/ Gerard J. Arpey Senior Vice
- ------------------------------------- President and Chief
GERARD J. ARPEY* Financial Officer
(Principal
Financial and
Accounting Officer)
/s/ Howard P. Allen Director
- -------------------------------------
HOWARD P. ALLEN*
/s/ David L. Boren Director
- -------------------------------------
DAVID L. BOREN*
/s/ Edward A. Brennan Director
- -------------------------------------
EDWARD A. BRENNAN*
/s/ Armando M. Codina Director
- -------------------------------------
ARMANDO M. CODINA*
II-8
<PAGE>
SIGNATURE TITLE
/s/ Christopher F. Edley Director
- -------------------------------------
CHRISTOPHER F. EDLEY*
/s/ Charles T. Fisher, III Director
- -------------------------------------
CHARLES T. FISHER, III*
/s/ Earl G. Graves Director
- -------------------------------------
EARL G. GRAVES*
/s/ Dee J. Kelly Director
- -------------------------------------
DEE J. KELLY*
/s/ Ann D. McLaughlin Director
- -------------------------------------
ANN D. MCLAUGHLIN*
/s/ Charles H. Pistor, Jr. Director
- -------------------------------------
CHARLES H. PISTOR, JR.*
/s/ Joe M. Rodgers Director
- -------------------------------------
JOE M. RODGERS*
/s/ Maurice Segall Director
- -------------------------------------
MAURICE SEGALL*
/s/ Eugene F. Williams, Jr. Director
- -------------------------------------
EUGENE F. WILLIAMS, JR.*
/s/ Anne H. McNamara
*By _________________________________
ANNE H. MCNAMARA
(ATTORNEY-IN-FACT)
Date: April 19, 1996.
II-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
ITEM PAGE
NO. DESCRIPTION NO.
----- ----------- ----
<C> <S> <C>
1(a) Form of Standby Agreement.
4(a) Certificate of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 4(a) to the Company's
Registration Statement on Form S-4 No. 33-55191).
4(b) Certificate of Retirement of Certain Shares of Series A
Cumulative Convertible Preferred Stock of the Company, dated
January 11, 1995.
4(c) By-Laws of the Company, as amended.
4(d) Form of Certificate for the Company's Common Stock, par value
$1.00 per share (incorporated by reference to Exhibit 4(c) to the
Company's Registration Statement on Form S-3 No. 33-38393).
5 Opinion of Debevoise & Plimpton.
23(a) Consent of Ernst & Young, L.L.P.
23(b) Consent of Debevoise & Plimpton (included in Exhibit 5).
24 Powers of Attorney.
99(a) Letter of Transmittal.
99(b) Form of Notice of Redemption.
99(c) Form of Information Agent Agreement.
</TABLE>
<PAGE>
EXHIBIT 1A
AMR CORPORATION
COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
---------------------------------
STANDBY AGREEMENT
April __, 1996
Goldman, Sachs & Co.
CS First Boston Corporation
J.P. Morgan Securities Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Salomon Brothers Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Sirs:
AMR Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to redeem on May __, 1996
(the "Redemption Date") all of its outstanding 6 1/8% Convertible Subordinated
Quarterly Income Capital Securities due 2024 (the "Debentures"), which are
convertible into shares (the "Conversion Shares") of Common Stock, par value
$1.00 per share (the "Common Stock"), of the Company, at a redemption price of
104.2% of the principal amount of Debentures plus accrued interest thereon from
May 1, 1996 to the Redemption Date (the "Redemption Price"). The right to
convert such Debentures into Common Stock will expire at the close of business
on May __, 1996 (the "Expiration Date").
Goldman, Sachs & Co., CS First Boston Corporation, J.P. Morgan
Securities Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers Inc. (collectively, the "Purchasers") hereby
agree to purchase, severally and not jointly, from the Company up to the number
of shares of Common Stock (the "Shares") equal to the number of shares of Common
Stock that would have been issuable upon conversion of the Debentures that are
either (i) duly surrendered for redemption on or prior to the Redemption Date or
(ii) not duly surrendered for conversion on or prior to the Expiration Date or
for redemption on or prior to the Redemption Date by persons other than the
Purchasers ("Sleeper Debentures").
<PAGE>
2
1. Representations and Warranties. The Company represents and
------------------------------
warrants to, and agrees with, each Purchaser that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "1933 Act"). The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") a registration statement (File No. 333-___) on such Form with
respect to the registration under the 1933 Act of the Conversion Shares and
the Shares. Such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered to you and including all
documents incorporated by reference therein, have been declared effective
by the Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed or transmitted for filing with the Commission; no
stop orders suspending the effectiveness of such registration statement
have been issued and no proceeding for that purpose has been initiated or
threatened by the Commission. Such registration statement, including the
exhibits thereto and the documents incorporated by reference therein, each
as amended at the time such registration statement became effective, and
the final prospectus included therein, including the documents incorporated
in such prospectus by reference, is herein called the "Registration
Statement", and such final prospectus in the form contained in the
Registration Statement, including the documents incorporated by reference
therein, is herein called the "Prospectus". Any reference herein to the
terms "amendment" or "supplement" with respect to the Registration
Statement or to the Prospectus shall be deemed to refer to and include any
documents filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), after the
date hereof and incorporated therein by reference pursuant to Item 12 of
Form S-3 under the 1933 Act.
(b) At the time the Registration Statement became effective and at all
times subsequent thereto up to and including the Time of Delivery referred
to below, the Registration Statement and the Prospectus, and any amendments
thereof or supplements thereto, contained and will contain all statements
which are required to be included therein in accordance with the 1933 Act
and complied and will comply in all material respects with the applicable
requirements of the 1933 Act and the rules and regulations of the
Commission thereunder (the "1933 Act Regulations"); the Registration
Statement and any amendment or supplement thereto at their respective
effective dates did not and will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Prospectus at the time the Registration Statement became effective or the
Prospectus and the letter of transmittal included as an exhibit to the
Registration Statement (the "Letter of Transmittal"), together with any
amendments thereof or supplements thereto, as of their respective issue
dates or
<PAGE>
3
at the Time of Delivery did not and will not include an untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that this
representation and warranty does not apply to statements or omissions made
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of you expressly for use in the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto.
(c) The consolidated financial statements incorporated by reference in
the Registration Statement and Prospectus present fairly the consolidated
financial position of the Company as at the dates indicated and the
consolidated results of its operations and cash flows for the periods
specified and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved, except as indicated therein, and the supporting schedules
incorporated by reference in the Registration Statement from the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 present
fairly the information required to be stated therein.
(d) The documents incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission thereunder (the "1934 Act
Regulations").
(e) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, there has been no material adverse change
in the condition, financial or otherwise, results of operations or general
affairs of the Company and its subsidiaries taken as a whole.
(f) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware, has the
corporate power and authority under such laws to own its properties and
conduct its business as described in the Prospectus and is duly qualified
to do business as a foreign corporation in good standing in the state in
which its principal place of business is located.
(g) Each of American Airlines, Inc. ("American"), AMR Services
Corporation, AMR Leasing Corporation, and The SABRE Group, Inc. is a
corporation duly incorporated and validly existing in good standing under
the laws of its jurisdiction of incorporation, has full corporate power and
authority under such laws to own its properties and to conduct its business
as such business is described in the Prospectus and, in the case of
American, is duly qualified to do business as a
<PAGE>
4
foreign corporation in good standing in the jurisdictions in the United
States of America in which it has intrastate routes or has a principal
office or major overhaul facility and, in the case of each other
subsidiary, is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which such qualification is
required. American is an "air carrier" and a "citizen of the United
States" within the meaning of that portion of the United States Code
comprising those provisions formerly referred to as the Federal Aviation
Act of 1958, and now primarily codified in Title 49 of the United States
Code, as amended (the "Aviation Act"). All of the issued and outstanding
capital stock of each such corporation has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any liens,
encumbrances, equities or claims.
(h) The Conversion Shares and the Shares have been duly authorized by
the Company; the Conversion Shares, when issued as contemplated by the
Indenture dated as of November 1, 1994 (the "Indenture") between the
Company and First National Bank of Chicago, as Trustee (the "Trustee"), and
the Shares, when issued as contemplated by this Agreement, will be validly
issued, fully paid and non-assessable; all corporate action required to be
taken for authorization, issue and delivery of the Conversion Shares and
the Shares has been validly taken; the issuance of the Conversion Shares
and the Shares is not subject to the preemptive rights of any stockholder
of the Company; and the Conversion Shares and the Shares will conform in
all material respects to the descriptions thereof contained in the
Prospectus.
(i) At the close of business on April __, 1996, $__________ principal
amount of the Debentures was outstanding; the Company has duly authorized
the redemption of all outstanding Debentures on the Redemption Date at the
Redemption Price and the Company has taken all action required to be taken
through the date hereof under the terms of the Debentures, the Indenture
and otherwise to effect such redemption; the Debentures are, and will
continue to be, convertible into the Conversion Shares at the conversion
price of $79.00 per share of Common Stock by surrender of Debentures to the
Trustee prior to the close of business on the Expiration Date, at which
time the conversion right will expire.
(j) The redemption of the Debentures, the issuance and delivery of the
Conversion Shares upon the conversion of the Debentures and the issuance
and sale of the Shares by the Company to the Purchasers as provided herein,
the consummation by the Company of the transactions herein contemplated,
and the compliance by the Company with the terms hereof do not and will not
conflict with, or result in a breach of, any of the terms or provisions of,
or constitute a default under, the Certificate of Incorporation or By-Laws,
as amended, of the Company or American or any of their subsidiaries or any
material indenture, mortgage, or other agreement or instrument to
<PAGE>
5
which the Company or American or any of their subsidiaries is a party or by
which any of their respective properties is bound, or any applicable law,
rule, regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or American or any of their subsidiaries or any of their respective
properties; and no consent, approval, authorization or order of any
government, governmental instrumentality or court, domestic or foreign, is
required for the redemption of the Debentures, the issuance and delivery of
the Conversion Shares upon conversion of the Debentures or the issuance and
sale of the Shares by the Company to the Purchasers as provided herein, or
the consummation by the Company of the transactions contemplated by this
Agreement, except such as are required under the 1933 Act and the
securities or Blue Sky laws of the various states and the listing of the
Shares on the New York Stock Exchange ("NYSE"), which will be completed
prior to the Time of Delivery (as defined in Section 3).
(k) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and binding obligation of the
Company.
(l) Ernst & Young LLP., which reported on the annual consolidated
financial statements of the Company incorporated by reference in the
Registration Statement, are independent auditors as required by the 1933
Act and the 1933 Act Regulations.
2. Purchase and Sale. (a) Subject to the terms and conditions
-----------------
herein set forth, the Purchasers agree severally, and not jointly, in the
respective percentages of the aggregate obligation of the Purchasers set forth
in Schedule I, at the option of the Company, to purchase from the Company at the
Time of Delivery (as defined herein), such number of Shares as shall be
specified in a notice delivered by the Company to the Purchasers not later than
[6:00 p.m.], New York City time, on the Expiration Date (the "Purchased Shares")
but not in excess of the total number of Shares, at a price per share of
$[81.54], if there are fewer than 2,583,180 Purchased Shares; at a price per
share of $[81.33], if there are from 2,583,180 to 5,166,359 Purchased Shares; at
a price per share of $[81.12], if there are from 5,166,360 to 7,749,539
Purchased Shares; at a price per share of $[80.91], if there are from 7,749,540
to 10,332,719 Purchased Shares; and at a price per share of $[80.71], if there
are 10,332,720 or more Purchased Shares; and
(b) Payments of the purchase price for, and delivery of, the Shares,
shall be made, no later than 10:00 a.m., New York City time, on May ____, 1996
(such time and date being hereinafter referred to as the "Time of Delivery") at
the offices of Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022.
Payment shall be made to the Company by wire transfer of immediately available
funds against delivery to the Purchasers of certificates in definitive form for
the Shares to be purchased hereunder. Certificates for
<PAGE>
6
the Shares to be purchased by you shall be in such denominations and registered
in such names as you may request, to the extent practicable. The Certificates
for the Shares will be made available in The City of New York for examination as
soon as practicable prior to the Time of Delivery.
3. Compensation. As compensation to the Purchasers for their
------------
commitment hereunder, the Company agrees to pay the Purchasers as follows:
(a) The Company shall pay to the Purchasers, no later than the Time of
Delivery at the offices of Debevoise & Plimpton, 875 Third Avenue, New York, New
York 10022, in immediately available funds, payable by wire transferred to an
account designated by the Purchasers, [$9,331,575]; and
(b) The Company shall pay to each Purchaser, for each $1,000 principal
amount Debenture surrendered by such Purchaser for conversion into shares of
Common Stock prior to May 1, 1996, an amount equal to (i) [$15.31] minus (ii)
the product of (x) [$0.17] times (y) the number of days from and including the
date of surrender to the Company by such Purchaser of such Debenture to but
excluding May 1, 1996, which amount shall be payable in immediately available
funds to an account designated by the Purchasers on the first business day
following the date of surrender of such Debenture.
4. Agreements. The Company covenants with each Purchaser as
----------
follows:
(a) During the period when a prospectus relating to the Conversion
Shares or the Shares is required to be delivered under the 1933 Act, the
Company will promptly advise you (i) of the effectiveness of the
Registration Statement and any amendment thereto, (ii) of the mailing or
the delivery to the Commission for filing of any supplement to the
Prospectus or any document that would as a result thereof be incorporated
by reference in the Prospectus, (iii) of any request by the Commission for
any amendment of the Registration Statement or any amendment or supplement
to the Prospectus or for any additional information, (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose, and (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for sale
in any jurisdiction or the institution or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act, any event occurs as a result
of which the Prospectus as then amended or supplemented would include any
untrue statement of a material
<PAGE>
7
fact or omit to state any material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the 1933 Act or the 1933 Act Regulations, the
Company promptly will prepare and file with the Commission, subject to
paragraph (d) of this Section 4, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance.
(c) At any time when a prospectus relating to the Shares is required
to be delivered under the 1933 Act, the Company will give you notice of its
intention to file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will furnish you with copies of any such
amendment or supplement or other documents proposed to be filed within a
reasonable time in advance of filing, and will not file any such amendment
or supplement or other documents in a form to which you shall reasonably
object.
(d) The Company has furnished or will furnish to you and your counsel
without charge, conformed copies of the Registration Statement as
originally filed and of all amendments thereto, whether filed before or
after such Registration Statement originally became effective (including
exhibits thereto and the documents incorporated therein by reference), and,
so long as delivery of a prospectus by an underwriter or dealer may be
required by the 1933 Act, as many copies of the Prospectus and any
amendments thereof and supplements thereto as you may reasonably request.
(e) The Company will use its best efforts to qualify the Shares for
sale under the laws of such jurisdictions as you may reasonably request and
will maintain such qualifications in effect so long as required for the
distribution of such Shares. The Company, however, shall not be obligated
to qualify as a foreign corporation or file any general consent to service
of process under the laws of any such jurisdiction or subject itself to
taxation as doing business in any such jurisdiction.
(f) The Company, during the period when a prospectus relating to the
Shares is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13 or 14 of the 1934 Act.
(g) The Company will make generally available to its security holders,
in each case as soon as practicable, but not later than 45 days after the
end of the twelve-month period beginning at the end of the fiscal quarter
of the Company during which the effective date of the Registration
Statement occurs (90 days in case the period covered corresponds to a
fiscal year of the Company), earnings statements of
<PAGE>
8
the Company which will comply as to form with the provisions of Rule 158
under the 1933 Act covering such twelve-month period.
(h) During the period beginning from the date hereof and continuing to
and including the Time of Delivery and, if the Purchasers purchase any
Shares hereunder, further continuing to and including the date 90 days
after the Redemption Date, the Company will not offer, sell, contract to
sell or otherwise dispose of, any shares of Common Stock of the Company,
any securities of the Company substantially similar to the Common Stock or
any securities convertible into or exchangeable for Common Stock or any
substantially similar security (except for any securities issued, offered,
sold or disposed of by the Company pursuant to its stock option and other
benefit plans maintained for its officers, directors and employees or
Common Stock issued or distributed in connection with the conversion of any
security of the Company outstanding on the date of the Prospectus) without
your prior written consent.
(i) The Company will promptly after the date hereof, in the event it
has not already done so, file an application for the listing of the Shares
on the New York Stock Exchange and will use its best efforts to cause such
Shares to be duly authorized for listing thereon, subject to official
notice of issuance.
(j) The Company will cause to be given notice of redemption on the
date hereof (the "Effective Date"), such notice to be in accordance with
the requirements of Article Ten of the Indenture, and to contain the
information called for thereby, and to furnish such copies of such notice
to you as you may reasonably request; and, in addition, the Company cause
to be given notice of redemption by press release at such times as you and
the Company may mutually agree.
(k) The Company will advise you or cause you to be advised on each
business day prior to the Time of Delivery of the principal amount of the
Securities surrendered on the preceding business day for conversion into
shares of Common Stock or for redemption.
(l) The Company will file a post-effective amendment to the
Registration Statement after the Redemption Date to reflect any change in
the plan of distribution of the Purchased Shares that is required to comply
with the 1933 Act, the 1933 Act Regulations or the rules of the Commission.
5. Open Market Transactions. (a) The Purchasers may acquire
------------------------
Debentures for their own account in the open market or otherwise in such amounts
and at such prices as the Purchasers may deem advisable. All Debentures so
purchased will be converted into shares of Common Stock. The shares of Common
Stock acquired by the
<PAGE>
9
Purchasers pursuant to the provisions of this Section may be sold at any time or
from time to time by the Purchasers. It is also understood that, for the
purpose of stabilizing the price of the Common Stock, engaging in certain
hedging transactions or otherwise, the Purchasers may purchase and sell Common
Stock, Debentures or other securities of the Company, in the open market or
otherwise, for long or short account, on such terms as the Purchasers deem
advisable, and may over-allot in arranging sales of Common Stock, all subject to
the applicable provisions of the 1934 Act and the 1934 Act Regulations. Such
transactions involving Debentures may occur prior to or on the Expiration Date,
and such transactions involving Common Stock or other securities may occur prior
to, on or after the Expiration Date.
(b) The Purchasers agree to remit to the Company an amount equal to
50% of the excess, if any, of (i) the aggregate proceeds received upon the
resale by the Purchasers of the Sleeper Shares (as defined herein), over (ii)
either (a) if the Closing Price of the Common Stock on the NYSE on the
Expiration Date is equal to or greater than $86.00 per share, the aggregate
purchase price paid by the Purchasers for such Sleeper Shares hereunder or (b)
if the Closing Price of the Common Stock on the NYSE on the Expiration Date is
less than $86.00 per share, $82.57 times the number of Sleeper Shares. For
purposes of this Agreement, the term "Sleeper Shares" shall mean shares of
Common Stock that otherwise would have been issued upon conversion of any
Sleeper Debenture. On completion of the sale of all of the Sleeper Shares, the
Purchasers will furnish the Company a statement setting forth the total proceeds
received on the resale of the Sleeper Shares by the Purchasers and the Closing
Price of the Common Stock on the NYSE on the Expiration Date. Payment of any
amount due under this paragraph will be made by the Purchasers on the second
business day following the sale by the Purchasers of all the Sleeper Shares in
same-day funds drawn to the order of the Company.
6. Conditions to the Obligations of the Purchasers. The obligations
-----------------------------------------------
of the Purchasers to purchase and pay for the Purchased Shares are subject to
the accuracy of and compliance with the representations and warranties of the
Company contained herein, as of the Effective Date and the Time of Delivery, to
the accuracy of the statements of the Company and its officers made in any
certificates furnished pursuant to the provisions hereof, to the performance by
the Company in all material respects of its covenants and other obligations
hereunder theretofore to be performed and to the following additional
conditions:
(a) The Registration Statement shall have become effective; and no
stop order suspending the effectiveness of the Registration Statement shall
have been issued under the 1933 Act and no proceedings therefor shall have
been instituted or threatened by the Commission;
(b) On the Effective Date and the Time of Delivery, you shall have
received:
<PAGE>
10
(1) An opinion, dated as of the respective dates of delivery, of Debevoise
& Plimpton, as counsel for the Company, in form satisfactory to you
and your counsel, to the effect that:
(i) Each of the Company and American has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has full
corporate power and authority under such laws to own its
properties and to conduct its business as described in the
Prospectus; the Company is duly qualified to do business as a
foreign corporation in good standing in the state in which its
principal place of business is located; and American is an "air
carrier" and a "citizen of the United States" within the meaning
of the Aviation Act;
(ii) The Conversion Shares and the Shares have been duly
authorized by the Company; the Conversion Shares, when issued as
contemplated by the Indenture, and the Shares, when issued as
contemplated by this Agreement, will be validly issued, fully
paid and nonassessable; all corporate action required to be taken
for authorization, issue and delivery of the Conversion Shares
and the Shares has been validly taken; and the issuance of the
Conversion Shares and the Shares is not subject to the preemptive
rights of nay stockholder of the Company;
(iii) The Common Stock conforms in all material respects to
the description thereof contained in the Prospectus and such
description conforms in all material respects to the rights set
forth in the Certificate of Incorporation as amended, and by-
laws, as amended, of the Company;
(iv) No authorization, approval, consent or license of any
United States federal or State of New York regulatory body or
authority is required for the valid authorization, issuance and
delivery by the Company of the Conversion Shares and the Shares,
except such as have been obtained under the 1933 Act, such as may
be required under the securities or Blue Sky laws of the various
states of the United States or the securities or similar laws of
any foreign jurisdiction and, with respect to the Effective Date,
such as may be required with respect to the listing of the
Purchased Shares on the NYSE;
<PAGE>
11
(v) The Registration Statement has become effective under
the 1933 Act and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of such Registration Statement
has been issued and no proceedings for that purpose have been
instituted or threatened;
(vi) The Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (except for the financial
statements and other financial and statistical data included or
incorporated by reference therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act
Regulations; and each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus (except for the
financial statements and other financial and statistical data
included or incorporated by reference therein, as to which such
counsel need express no opinion) appeared on its face, as of its
respective filing date, to comply as to form in all material
respects with the requirements of the 1934 Act and 1934 Act
Regulations;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii) The Debentures are convertible in accordance with
their terms and pursuant to the Indenture, and the description of
the conversion rights applicable to the Debentures contained in
the Prospectus conforms in all material respects to the terms of
the Debentures and the Indenture relating to such conversion
rights;
(ix) The redemption by the Company on the Redemption Date of
all the outstanding Debentures in the manner and upon the terms
described in the Prospectus has been duly authorized by all
required corporate action and is in compliance with the terms of
the Indenture and the Debentures;
(x) The redemption of the Debentures, the issuance and
delivery of the Conversion Shares upon conversion of the
Debentures or the issuance and sale of the Shares by the Company
to the Purchasers as provided herein, the execution and delivery
by the Company of this Agreement, the consummation by the Company
of the transactions herein contemplated and in the manner herein
contemplated, and compliance by the Company with the terms of
this Agreement do not and will not conflict with, or result in a
breach of,
<PAGE>
12
any of the terms or provisions of, or constitute a default under,
the Certificate of Incorporation or By-Laws, as amended, of the
Company or American or any indenture or other agreement or
instrument known to such counsel to which the Company or American
is a party or by which the Company or American is bound or any
law, rule, regulation, judgment or order known to such counsel to
be applicable to the Company or American of any court, regulatory
body, administrative agency, government or governmental body
having jurisdiction over the Company or American, except that
such counsel need express no opinion or belief as to the accuracy
or completeness of the Registration Statement or the Prospectus
except for the opinion expressed in clauses (iii) and (viii)
above and, to the extent stated therein, the disclosure matters
referred to in the immediately following paragraph; and
(xi) The Conversion Shares are duly authorized for listing
on the NYSE, and the Shares are duly authorized for listing,
subject to official notice of issuance, on the NYSE; provided
that the opinion with respect to the Shares need be given only on
the Time of Delivery.
and to such further effect with respect to other legal matters
relating to this Agreement and the sale of the Shares hereunder as
your counsel may reasonably request.
Such counsel shall also state that (i) such counsel have not
themselves checked the accuracy or completeness of, or otherwise
verified, and are not passing upon, and assume no responsibility for,
the accuracy or completeness of the information contained in or
incorporated by reference in the Registration Statement or the
Prospectus, except with respect to the matters set forth in paragraphs
(iii) and (viii) above, but have generally reviewed and discussed such
information with certain officers and employees of the Company and
American and the auditors for the Company and American, and (ii) in
the course of such review and discussion, but without independent
check or verification, no facts have come to the attention of such
counsel which have caused them to believe (A) that the Registration
Statement or any amendment thereto at their respective effective dates
(except for the financial statements and other financial and
statistical data included or incorporated by reference therein, as to
which such counsel need express no belief), contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or (B) that the Prospectus and the Letter of
Transmittal, together with any amendments or supplements thereto, at
their respective issue dates and at the
<PAGE>
13
respective dates of the opinion (except for the financial statements
and other financial and statistical data included or incorporated by
reference therein, as to which such counsel need express no belief),
contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
The opinion of Debevoise & Plimpton shall also confirm that the
statements made in the Registration Statement and Prospectus under the
heading "Certain Federal Income Tax Considerations", to the extent
such statements purport to summarize Federal laws of the United States
referred to thereunder, fairly summarize such laws in all material
respects. In giving the opinions required by this Section 6(b)(i),
Debevoise & Plimpton may state that such opinion is limited to the
laws of the State of New York, the corporate laws of the State of
Delaware and the Federal laws of the United States, except that such
counsel expresses no opinion as to the securities laws of any state.
In giving the opinions required by this Section 6(b)(1), Debevoise &
Plimpton may rely as to the opinions expressed in paragraphs (i), (iv)
and (x), insofar as they involve matters relating to the Aviation Act,
upon the opinion referred to in Section 6(b)(2) hereof, in which case
the opinion shall state that they believe that they and you are
entitled so to rely. In rendering the opinions set forth above, such
counsel may rely upon certificates of officers of the Company and
American and of public officials as to matters of fact.
(2) An opinion, dated as of the respective dates of delivery,
from Anne H. McNamara, Esq., Senior Vice President and General Counsel
of the Company, in form satisfactory to you and your counsel, to the
effect that:
(i) American is an "air carrier" and a "citizen of the
United States" within the meaning of the Aviation Act; such
counsel has no reason to believe that the statements in the
Registration Statement and the Prospectus with respect to
statutes, administrative orders and regulations and legal and
governmental proceedings do not fairly and accurately present the
information required to be set forth therein; and there are, to
the best of such counsel's knowledge, no statutes, administrative
orders or regulations or legal or governmental proceedings
required to be described in the Registration Statement or the
Prospectus which are not described as required, nor any contracts
or documents of a character required to be described in the
Registration Statement or the Prospectus, or to be filed as
exhibits to the Registration Statement, that are not so described
or filed as required;
<PAGE>
14
(ii) The statements in the Prospectus as to the routes which
American presently operates or is authorized to operate are
correct in all material respects and the routes presently
operated are being operated pursuant to valid Certificates or
Exemption Orders issued by the Civil Aeronautics Board or its
successor, the Department of Transportation, and no such
Certificate or Exemption Order is the subject of any "show cause"
or other order of, or any proceeding before, or any investigation
by, the Civil Aeronautics Board or its successor, the Department
of Transportation (other than proceedings for the renewal of
temporary rights), which in the opinion of such counsel might
reasonably result in a final order impairing the validity of such
Certificates or Exemption Orders;
(iii) The shares of issued and outstanding Common Stock
have been duly authorized and validly issued and are fully paid
and non-assessable;
(iv) No authorization, approval, consent or license of any
U.S. Federal or State of Delaware (with respect only to the
corporate laws of such state) or Texas regulatory body or
authority is required for the redemption of the Debentures or the
valid authorization, issuance and delivery by the Company of the
Conversion Shares and the Shares, except such as have been
obtained under the 1933 Act and such as may be required under the
securities or Blue Sky laws of the various states of the United
States or the securities or similar laws of any foreign
jurisdiction;
(v) The redemption of the Debentures, the issuance and
delivery by the Company of the Conversion Shares upon conversion
of the Debentures or the issuance and sale of the Shares by the
Company to the Purchasers as provided herein, the execution and
delivery by the Company of this Agreement, the consummation by
the Company of the transactions herein contemplated and in the
manner herein contemplated and compliance by the Company with the
terms of this Agreement do not and will not conflict with, or
result in a breach of, any of the terms or provisions of, or
constitute a default under, the Certificate of Incorporation or
By-Laws, as amended, of the Company or American or any of their
subsidiaries or any indenture or other agreement or instrument
known to such counsel to which the Company or American or any of
their subsidiaries is a party or by which the Company or American
or any of their subsidiaries is bound or any law, rule,
regulation, judgment or order known to such counsel to be
applicable to
<PAGE>
15
the Company or American or any of their subsidiaries of any
court, regulatory body, administrative agency, government or
governmental body having jurisdiction over the Company or
American or any of their subsidiaries, except that such counsel
need express no opinion or belief as to the accuracy or
completeness of the Registration Statement or the Prospectus
except for the opinions expressed in clauses (i) and (ii) above;
and
(vi) Each of American, AMR Services Corporation, AMR Leasing
Corporation and The SABRE Group, Inc. has been duly incorporated
and is validly existing as a corporation in good standing under
the laws of the jurisdiction in which it is incorporated and has
full corporate power and authority under such laws to own its
properties and to conduct its business as described in the
Prospectus; and all of the issued and outstanding shares of
capital stock of each such subsidiary have been duly authorized
and validly issued and are fully paid and non-assessable and are
owned by the Company, directly or through subsidiaries, free and
clear of any liens, encumbrances, equities or claims.
In giving such opinion, Anne H. McNamara may state that such
opinion is limited to the laws of the State of Texas, the corporate
laws of the State of Delaware and the Federal laws of the United
States, except that such counsel expresses no opinion as to the
securities laws of any state.
(3) An opinion, dated as of the respective dates of delivery,
from Shearman & Sterling, your counsel, to the effect that the
opinions delivered pursuant to subsections (b)(l) and (b)(2) of this
Section 6 appear on their face to be appropriately responsive to the
requirements of this Agreement except, specifying the same, to the
extent waived by you and with respect to the issuance and sale of the
Shares, the Registration Statement, the Prospectus and such other
related matters as you may reasonably require.
(c) (1) There shall not have been, since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, any material adverse change in the condition, financial or
otherwise, of the Company and its subsidiaries considered as one
enterprise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business and you
shall have received a certificate of the President, an Executive Vice
President, a Senior Vice President or a Vice President of the Company,
dated as of the Effective Date and the Time of Delivery, to the
<PAGE>
16
effect that there has been no such material adverse change and to the
effect that the representations and warranties of the Company
contained in Section 1 hereof are true and correct with the same force
and effect as though made on the Effective Date and the Time of
Delivery.
[(2) Subsequent to the execution and delivery of this Agreement
and prior to the Time of Delivery, neither Standard & Poor's
Corporation nor Moody's Investors Service, Inc. shall have downgraded
its rating accorded to any of the Company's senior, unsecured taxable
debt securities with maturities greater than one year;]
(d) You shall have received the letter specified in Schedule II at the
Effective Date, the date of any post-effective amendment to the
Registration Statement and the Time of Delivery.
(e) The Company shall have furnished to you and your counsel, in form
and substance satisfactory to them, such other documents, certificates and
opinions as such counsel may reasonably request for the purpose of enabling
such counsel to pass upon the matters referred to in subsection (b)(3) of
this Section 6 and in order to evidence the accuracy and completeness of
any of the representations, warranties or statements, the performance of
any covenant by the Company theretofore to be performed, or the compliance
with any of the conditions herein contained.
(f) The Conversion Shares shall be listed on the NYSE, and the Shares
to be sold by the Company at the Time of Delivery shall have been duly
authorized for listing on the NYSE, subject only to official notice of
issuance.
All such opinions, certificates, letters and documents shall be deemed
to be in compliance with provisions hereof only if they are in all respects
satisfactory to you and your counsel.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, other than by reason of any
default by the Purchasers, such failure to fulfill a condition may be waived by
you, or this Agreement may be terminated by you by notice to the Company at any
time at or prior to the Time of Delivery, and such termination shall be without
liability of any party to any other party, except as provided in Sections 7, 8
and 9 hereof, which provisions shall remain in effect notwithstanding such
termination.
7. Payment of Expenses. The Company will pay or cause to be paid
-------------------
all costs and expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing, filing and distribution of
the Prospectus, the Registration Statement and any amendments thereof or
supplements thereto, (ii) the
<PAGE>
17
preparation, printing and distribution of any agreement among underwriters, this
Agreement, the Conversion Shares and the Shares, the Blue Sky survey or
publishing notice of redemption of the Debentures and related letters of
transmittal, notice of guaranteed delivery and any other documents in connection
with the redemption or conversion of the Debentures and the offering, purchase
and sale of the Conversion Shares and the Shares, (iii) the issuance and
delivery of the Shares to the Purchasers, (iv) the fees and disbursements of the
Company's counsel and accountants, (v) the expenses of qualifying the Shares
under state securities laws in accordance with Section 4(e), including filing
fees and fees and disbursements of counsel for the Purchasers in connection
therewith and in connection with the Blue Sky survey, (vi) the fees and expenses
of the Trustee, including the fees and disbursements of counsel for the Trustee,
in connection with the Indenture and the redemption of the Debentures, (vii) the
fees and expenses, if any, incurred in connection with the listing of the Shares
on the New York Stock Exchange; and (viii) if the Purchasers do not purchase any
Shares hereunder the reasonable fees and disbursements of counsel to the
Purchasers.
If this Agreement is terminated by you in accordance with the
provisions of Section 6 or clause (i) of Section 10 hereof, the Company shall
reimburse the Purchasers for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Purchasers, in connection
with the offering contemplated by this Agreement.
8. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless each Purchaser and each person who controls any Purchaser within the
meaning of the 1933 Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the 1933 Act, the 1934 Act, or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or in any amendment thereof, or in the
Prospectus, or in any amendment thereof, or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Company will not be liable in any such case to
- -------- -------
the extent that any such loss, claim, damage, or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any Purchaser
specifically for use in connection with the preparation thereof and (ii) the
Company will not be liable for any loss, liability or expense of any settlement
of any pending or threatened litigation, any pending or threatened governmental
agency investigation or proceeding if such settlement is effected without the
prior written consent of the Company.
<PAGE>
18
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Purchaser severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement, and each person who controls the Company within the
meaning of the 1933 Act, to the same extent as the foregoing indemnity from the
Company to each Purchaser, but only with reference to written information
relating to such Purchaser furnished to the Company by or on behalf of such
Purchaser specifically for use in the preparation of the documents referred to
in the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under the
Section 8, notify the indemnifying party or parties in writing of the
commencement thereof; but the omission so to notify the indemnifying party or
parties will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 8. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
or parties of the commencement thereof, the indemnifying party or parties will
be entitled to participate therein, and to the extent that it may elect, by
written notice delivered to such indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however, that if,
-------- -------
in the judgment of such indemnified party, a conflict of interest exists where
it is advisable for such indemnified party to be represented by separate
counsel, the indemnified party shall have the right to employ separate counsel
in any such action in which event the fees and expenses of such separate counsel
shall be borne by the indemnifying party or parties. Upon receipt of notice from
the indemnifying party or parties to such indemnified party of the election so
to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party or parties will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party or parties shall not be liable for the
expenses of more than one such separate counsel representing the indemnified
parties under subparagraph (a) of this Section 8 who are parties to such
action), (ii) the indemnifying party or parties shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party or parties have authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party or parties; and
except that, if clause (i) or (iii) is applicable, such liability shall be only
in respect of the counsel referred to in such clause (i) or (iii). It is
understood that all such fees
<PAGE>
19
and expenses of counsel for the indemnified party for which the indemnifying
party is liable shall be reimbursed as they are incurred. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subparagraph (a) of
this Section 8 is due in accordance with its terms but is for any reason held by
a court to be unavailable from the Company, the Company on the one hand and the
Purchasers on the other shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) to which the Company and one
or more of the Purchasers may be subject in such proportions that (i) the
Purchasers are responsible for that proportion of such losses, claims, damages
and liabilities which the total compensation received by the Purchasers pursuant
to Section 3 bears to the market value of the Common Stock issuable upon
conversion of the Debentures on the last Trading Day (as defined in Section 11)
immediately preceding the date of this Agreement (calculated based on the
Closing Price of the Common Stock) and (ii) the Company is responsible for the
balance; provided, however, that (y) in no case shall any Purchaser be
-------- -------
responsible for any amount in excess of such Purchaser's total compensation
received by the Purchasers pursuant to Section 3 and (z) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 8, each person
who controls a Purchaser within the meaning of the 1933 Act shall have the same
rights to contribution as such Purchaser, and each person who controls the
Company within the meaning of the 1933 Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clauses (y) and (z) of this subparagraph (d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this
subparagraph (d), notify such party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this
subparagraph (d).
9. Representations, Warranties, Indemnities and Agreements to
----------------------------------------------------------
Survive Delivery. All representations, warranties, indemnities and agreements
- ----------------
contained in this Agreement, or contained in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation
<PAGE>
20
made by or on behalf of the Company or any Purchaser or controlling person and
shall survive delivery of any Shares to the Purchasers.
10. Termination of Agreement. This Agreement may be terminated
------------------------
immediately upon notice from you to the Company at any time at or prior to the
Time of Delivery (i) if there has been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the condition, financial or otherwise, of the Company
and its subsidiaries considered as one enterprise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any outbreak or escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United
States of America is such as to make it, in your reasonable judgment,
impracticable to market the Purchased Shares or enforce contracts for the sale
of the Purchased Shares, or (iii) if trading in the securities of the Company
has been suspended by the Commission or a national securities exchange, or if
trading generally on the NYSE has been suspended, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by said exchange or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal or New York authorities. In the event of any such termination, the
provisions of Sections 7, 8 and 9 shall remain in effect.
11. Notices. All notices and other communications hereunder shall be
-------
in writing and effective only upon receipt, and, if sent to the Purchasers, will
be mailed or transmitted by any standard form of telecommunications to the
Purchasers as set forth in Schedule I or, if sent to the Company, will be mailed
or transmitted by any standard form of telecommunications to it at P.O. Box
619616, Dallas/Fort Worth International Airport, Texas 75261-9616, attention of
the Treasurer.
12. Certain Definitions. For purposes of this Agreement, "Trading
-------------------
Day" means a day on which the Common Stock is traded on the NYSE, and "Closing
Price" means the reported last sale price regular way per share of the Common
Stock, or in case no such reported sale take place on such day, the average of
the reported closing bid and asked prices regular way, in either case on the
NYSE.
13. Reimbursement of Out-of-Pocket Expenses. If for any reason after
---------------------------------------
the notice pursuant to Section 2(a) has been delivered, Shares included in such
notice are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Purchasers for all out-of-pocket expenses, including
fees and disbursements of counsel, reasonably incurred by the Purchasers in
making preparations for the purchase, sale and delivery of the Shares not so
delivered, but the Company shall then be under no further liability to the
Purchasers in respect of the Shares not so delivered except as provided in
Sections 5 and 8 hereof.
<PAGE>
21
14. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the Purchasers and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties hereto
and their respective successors and the controlling persons referred to in
Section 8 and their successors, heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties and
their respective successors and said controlling persons and their successors,
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Shares from any Purchaser shall be deemed to be a
successor by reason merely of such purchase.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
-------------
THE STATE OF NEW YORK.
16. Counterparts. This Agreement may be executed in one or more
------------
counterparts and when a counterpart has been executed by each party hereto all
such counterparts taken together shall constitute one and the same agreement.
<PAGE>
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and each
Purchaser in accordance with its terms.
Very truly yours,
AMR CORPORATION
By:
----------------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
GOLDMAN, SACHS & CO.
By:
-----------------------------
(Goldman, Sachs & Co.)
<PAGE>
SCHEDULE I
to
Standby
Agreement
Dated: __________, 1996
AMR CORPORATION
Percentage of
Purchasers Purchased Shares
- ---------- ----------------
Goldman, Sachs & Co.
CS First Boston Corporation
J.P. Morgan Securities Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Salomon Brothers Inc.
Address for Notices:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
Attention: Syndicate Department
<PAGE>
SCHEDULE II
to
Standby
Agreement
Dated: __________, 1996
AMR CORPORATION
Matters to be Covered by Letter or Letters of
Independent Auditors
Ernst & Young LLP shall have furnished to you the following letter,
dated the Effective Date, the date of any post-effective amendment to the
Registration Statement and the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) They are independent certified public accountants with respect to
the Company within the meaning of the Securities Act of 1933 (the "Act")
and the applicable published rules and regulations thereunder;
(ii) In their opinion, the audited consolidated financial statements
and financial statement schedules incorporated by reference in the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the Securities Exchange
Act of 1934 (the "Exchange Act") and the related published rules and
regulations thereunder;
(iii) On the basis of a reading of the unaudited consolidated
financial statements of the Company contained in the Company's most recent
Quarterly Report on Form 10-Q incorporated by reference in the Registration
Statement, if applicable, a reading of the latest unaudited consolidated
financial statements made available by the Company, a reading of the
minutes of the Board of Directors of the Company and American and any
committees thereof and the stockholders of the Company and the sole
stockholder of American, since the date of the latest audited consolidated
financial statements incorporated by reference in the Registration
Statement, inquiries of officials of the Company responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, which do not constitute an audit in accordance
with generally accepted auditing standards and which would not necessarily
reveal matters of significance with respect to the comments set forth in
such letter, nothing came to their attention that caused them to believe
that:
(A) the unaudited consolidated financial statements incorporated
by reference in the Registration Statement do not comply as to form in
all
<PAGE>
2
material respects with the applicable accounting requirements of the
Exchange Act and the rules and regulations thereunder as they apply to
Form 10-Q or any material modifications should be made to the
unaudited consolidated financial statements incorporated by reference
in the Registration Statement for them to be in conformity with
generally accepted accounting principles;
(B) as of a specified date not more than five business days prior
to the date of delivery of such letter, there has been any change in
the consolidated capital stock or consolidated long-term debt of the
Company, or any decrease in consolidated net current assets or
consolidated stockholders' equity of the Company or other items
specified by you, in each case as compared with amounts shown in the
latest consolidated balance sheet of the Company incorporated by
reference in the Registration Statement, except in each case for
changes or decreases which the Registration Statement discloses have
occurred or may occur or which are described in such letter; and
(C) for the period from the date of the latest consolidated
financial statements of the Company incorporated by reference in the
Registration Statement to a specified date not more than five business
days prior to the date of delivery of such letter, there were any
decreases in consolidated total operating revenues, consolidated
operating income or consolidated net earnings or primary or fully
diluted per common share amounts of consolidated net earnings of the
Company, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length
reasonably specified by you, except in each case for decreases which
the Registration Statement discloses have occurred or may occur or
which are described in such letter; and
(iv) They have performed certain procedures specified in their letter
for the purpose of determining whether certain amounts, percentages and
financial information with respect to the Company and its consolidated
subsidiaries appearing or incorporated by reference in the Registration
Statement and specified in said letter agrees with indicated amounts,
percentages and financial information in the applicable financial
statements or accounting records of the Company and its subsidiaries.
<PAGE>
Exhibit 4(b)
CERTIFICATE OF RETIREMENT OF CERTAIN SHARES OF
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
AMR CORPORATION
Pursuant to Section 243 of the General
Corporation Law of the State of Delaware
We, Anne H. McNamara, Senior Vice President and General Counsel, and
Charles D. MarLett, Corporate Secretary, of AMR Corporation, a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), in accordance with the provisions of Section 243
thereof, DO HEREBY CERTIFY:
FIRST: That 2,040,738 shares (the "Retired Shares") of Series A Cumulative
Convertible Preferred Stock ("Series A Convertible Preferred Stock") have been
reacquired by the Corporation and that, pursuant to the Certificate of
Designation filed with the Secretary of State of the State of Delaware on
February 3, 1993, the Retired Shares have been retired as such series and have
the status of authorized but unissued shares of the Corporation's capital stock.
SECOND: That the Certificate of Designation provides that the Retired
Shares may be reissued as the Corporation's preferred stock but prohibits
reissuance of the Retired Shares as part of the Series A Convertible Preferred
Stock.
THIRD: This Certificate shall be effective upon its filing with the
Secretary of State of the State of Delaware in accordance with Section 103 of
the General Corporation Law of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury, this 11th day of
January, 1995.
[Seal]
/s/ Anne H. McNamara
--------------------------
Anne H. McNamara
Senior Vice President and
General Counsel
ATTEST:
/s/ Charles D. MarLett
- -----------------------
Charles D. MarLett
Corporate Secretary
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EXHIBIT 4(c)
AMR CORPORATION
---------------
BYLAWS
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(As amended March 15, 1995)
ARTICLE I
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Offices
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The registered office of the corporation in the State of Delaware is to be
located in the City of Wilmington, County of New Castle. The corporation may
have other offices within and without the State of Delaware.
ARTICLE II
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Meetings of Stockholders
------------------------
Section l. Annual Meetings. An annual meeting of stockholders to elect
---------------
directors and to take action upon such other matters as may properly come before
the meeting shall be held on the third Wednesday in May of each year, or on such
other day, and at such time and at such place, within or without the State of
Delaware, as the board of directors or the chairman of the board may from time
to time fix.
Any stockholder wishing to bring a matter before an annual meeting must
notify the secretary of the corporation of such fact not less than sixty nor
more than ninety days before the date of the meeting. Such notice shall be in
writing and shall set forth the business proposed to be brought before the
<PAGE>
meeting, shall identify the stockholder and shall disclose the stockholder's
interest in the proposed business.
Section 2. Special Meetings. A special meeting of stockholders shall be
----------------
called by the secretary upon receipt of a request in writing of the board of
directors, the chairman of the board or the president. Any such meeting shall
be held at the principal business office of the corporation unless the board
shall name another place therefor, at the time specified by the body or persons
calling such meeting.
Section 3. Nominees For Election As Director. Nominations for election as
---------------------------------
director, other than those made by or at the direction of the board of
directors, must be made by timely notice to the secretary, setting forth as to
each nominee the information required to be included in a proxy statement under
the proxy rules of the Securities and Exchange Commission. If such election is
to occur at an annual meeting of stockholders, notice shall be timely if it
meets the requirements of such proxy rules for proposals of security holders to
be presented at an annual meeting. If such election is to occur at a special
meeting of stockholders, notice shall be timely if received not less than ninety
days prior to such meeting.
Section 4. Notice of Meetings. Written notice of each meeting of
------------------
stockholders shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is
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called. Unless otherwise provided by law, such notice shall be mailed, postage
prepaid, to each stockholder entitled to vote at such meeting, at his address as
it appears on the records of the corporation, not less than ten nor more than
sixty days before the date of the meeting. When a meeting is adjourned to
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken, unless the adjournment is for more than thirty days or a new record date
is fixed for the adjourned meeting, in which case a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
Section 5. Chairman and Secretary at Meetings. At any meeting of
----------------------------------
stockholders the chairman of the board, or in his absence, the president, or if
neither such person is available, then a person designated by the board of
directors, shall preside at and act as chairman of the meeting. The secretary,
or in his absence a person designated by the chairman of the meeting, shall act
as secretary of the meeting.
Section 6. Proxies. Each stockholder entitled to vote at a meeting of
-------
stockholders may authorize another person or persons to act for him by proxy,
but no such proxy shall be voted or acted upon after three years from its date,
unless the proxy provides for a longer period.
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Section 7. Quorum. At all meetings of the stockholders the holders of
------
one-third of the number of shares of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum requisite for the election of directors and the transaction
of other business, except as otherwise provided by law or by the certificate of
incorporation or by any resolution of the board of directors creating any series
of Preferred Stock.
If holders of the requisite number of shares to constitute a quorum shall
not be present in person or represented by proxy at any meeting of stockholders,
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have the power to adjourn the meeting from time to time until a
quorum shall be present or represented. At any such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 8. Voting. At any meeting of stockholders, except as otherwise
------
provided by law or by the certificate of incorporation or by any resolution of
the board of directors creating any series of Preferred Stock:
(a) Each holder of record of a share or shares of stock on the record date
for determining stockholders entitled to vote at such meeting shall be entitled
to one vote in person or by proxy for each share of stock so held.
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(b) Directors shall be elected by a plurality of the votes cast by the
holders of Common Stock, present in person or by proxy.
(c) Each other question properly presented to any meeting of stockholders
shall be decided by a majority of the votes cast on the question entitled to
vote thereon.
(d) Elections of directors shall be by ballot but the vote upon any other
question shall be by ballot only if so ordered by the chairman of the meeting or
if so requested by stockholders, present in person or represented by proxy,
entitled to vote on the question and holding at least l0% of the shares so
entitled to vote.
Section 9. Action By Written Consent. Any stockholder seeking to act by
-------------------------
written consent of stockholders shall notify the secretary in writing of such
intent and shall request the board of directors to fix a record date for
determining the stockholders entitled to vote by consent. The notice shall
specify the actions sought to be taken and, if the election of one or more
individuals as director is sought, shall include as to each nominee the
information required to be included in a proxy statement under the proxy rules
of the Securities and Exchange Commission. Such record date shall not be more
than ten (10) days after the date upon which the resolution fixing the record
date is adopted by the board of directors.
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The board of directors shall promptly, but in all events within ten (10)
days after the date on which the written request for fixing a record date was
received by the secretary, adopt a resolution fixing the record date. If no
record date has been fixed by the board of directors within ten (10) days of the
date on which such a request is received, the record date for determining
stockholders entitled to vote by consent, when no prior action by the board of
directors is required by applicable law, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be taken
was delivered to the corporation by delivery to its registered office in the
State of Delaware, its principal place of business, or any officer or agent of
the corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the board of directors and prior action by
the board of directors is required by applicable law, the record date for
determining stockholders entitled to vote by consent shall be at the close of
business on the date on which the board of directors adopts the resolution
taking such prior action.
Section l0. List of Stockholders. At least ten days before every meeting
--------------------
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alpha-
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betical order, and showing the address of each stockholder and the number of
shares registered in the name of each stockholder shall be prepared. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours for a period of at least ten days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section ll. Judges of Election. Whenever a vote at a meeting of
------------------
stockholders shall be by ballot, or whenever written consent to action is
sought, the proxies and ballots or consents shall be received and taken charge
of, and all questions touching on the qualification of voters and the validity
of proxies and consents and the acceptance and rejection of votes shall be
decided by two judges of election. In the case of a meeting of stockholders,
such judges of election shall be appointed by the board of directors before or
at the meeting, and if no such appointment shall have been made, then by the
stockholders at the meeting. In the case of a solicitation of consents, such
judges of election shall be appointed by the board of directors on or before the
record date for determining the stockholders entitled
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to vote by consent, and if no such appointment shall have been made, then by the
chairman of the board or the president. If for any reason either of the judges
of election previously appointed shall fail to attend or refuse or be unable to
serve, a judge of election in place of any so failing to attend or refusing or
unable to serve, shall be appointed by the board of directors, the stockholders
at the meeting, the chairman of the board or the president.
ARTICLE III
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Directors: Number, Election, Etc.
---------------------------------
Section l. Number. The board of directors shall consist of such number of
------
members, not less than three, as the board of directors may from time to time
determine by resolution, plus such additional persons as the holders of the
Preferred Stock may be entitled from time to time, pursuant to the provisions
of any resolution of the board of directors creating any series of Preferred
Stock, to elect to the board of directors.
Section 2. Election, Term, Vacancies. Directors shall be elected each
-------------------------
year at the annual meeting of stockholders, except as hereinafter provided, and
shall hold office until the next annual election and until their successors are
duly elected and qualified. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may
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be filled by a majority of the directors then in office, although less than a
quorum.
Section 3. Resignation. Any director may resign at any time by giving
-----------
written notice of such resignation to the board of directors, the chairman of
the board, the president or the secretary. Any such resignation shall take
effect at the time specified therein or, if no time be specified, upon the
receipt thereof by the board of directors or one of the above-named officers
and, unless specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 4. Removal. Any director may be removed from office at any time,
-------
with or without cause, by a vote of a majority of a quorum of the stockholders
entitled to vote at any regular meeting or at any special meeting called for the
purpose.
Section 5. Fees and Expenses. Directors shall receive such fees and
-----------------
expenses as the board of directors shall from time to time prescribe.
ARTICLE IV
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Meetings of Directors
---------------------
Section l. Regular Meetings. Regular meetings of the board of directors
----------------
shall be held at the principal office of the corporation, or at such other place
(within or without the State of Delaware), and at such time, as may from time to
time be prescribed by the board of directors or stockholders. A regular
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annual meeting of the board of directors for the election of officers and the
transaction of other business shall be held on the same day as the annual
meeting of the stockholders or on such other day and at such time and place as
the board of directors shall determine. No notice need be given of any regular
meeting.
Section 2. Special Meetings. Special meetings of the board of directors
----------------
may be held at such place (within or without the State of Delaware) and at such
time as may from time to time be determined by the board of directors or as may
be specified in the call and notice of any meeting. Any such meeting shall be
held at the call of the chairman of the board, the president, a vice president,
the secretary, or two or more directors. Notice of a special meeting of
directors shall be mailed to each director at least three days prior to the
meeting date, provided that in lieu thereof, notice may be given to each
director personally or by telephone, or dispatched by telegraph, at least one
day prior to the meeting date.
Section 3. Waiver of Notice. In lieu of notice of meeting, a waiver
----------------
thereof in writing, signed by the person or persons entitled to said notice
whether before or after the time stated therein, shall be deemed equivalent
thereto. Any director present in person at a meeting of the board of directors
shall be deemed to have waived notice of the time and place of meeting.
Section 4. Action Without Meeting. Unless otherwise restricted by the
----------------------
certificate of incorporation, any action
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required or permitted to be taken at any meeting of the board of directors or of
any committee thereof may be taken without a meeting if all members of the board
of directors or of such committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of the
proceedings of the board of directors or of such committee.
Section 5. Quorum. At all meetings of the board, one-third of the total
------
number of directors shall constitute a quorum for the transaction of business.
The act of a majority of the directors present at any meeting at which there is
a quorum shall be the act of the board of directors, except as may be otherwise
specifically provided by law.
If at any meeting there is less than a quorum present, a majority of those
present (or if only one be present, then that one), may adjourn the meeting from
time to time without further notice other than announced at the meeting until a
quorum is present. At such adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the meeting as
originally scheduled.
Section 6. Business Transacted. Unless otherwise indicated in the notice
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of meeting or required by law, the certificate of incorporation or bylaws of the
corporation, any and all business may be transacted at any directors' meeting.
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ARTICLE V
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Powers of the Board of Directors
--------------------------------
The management of all the property and business of the corporation and
the regulation and government of its affairs shall be vested in the board of
directors. In addition to the powers and authorities by these bylaws and the
certificate of incorporation expressly conferred on them, the board of directors
may exercise all such powers of the corporation and do all such lawful acts and
things as are not by law, or by the certificate of incorporation or by these
bylaws directed or required to be exercised or done by the stockholders.
ARTICLE VI
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Committees
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Section l. Executive Committee. The board of directors may, by
-------------------
resolution passed by a majority of the whole board, designate an executive
committee, to consist of five or more members. The chief executive officer plus
three other members of the executive committee shall constitute a quorum.
The executive committee shall have and may exercise all the powers and
authority of the board of directors in the management of the business and
affairs of the corporation, with the exception of such powers and authority as
may be specifically reserved to the board of directors by law or by resolution
adopted by the board of directors.
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Section 2. Audit Committee. The board of directors may, by
---------------
resolution passed by a majority of the whole board, designate an audit
committee, to consist of two or more members, none of the members of which shall
be employees or officers of the corporation. A majority of the members of the
audit committee shall constitute a quorum.
The audit committee shall from time to time review and make
recommendations to the board of directors with respect to the selection of
independent auditors, the fees to be paid such auditors, the adequacy of the
audit and accounting procedures of the corporation, and such other matters as
may be specifically delegated to the committee by the board of directors. In
this connection the audit committee shall, at its request, meet with
representatives of the independent auditors and with the financial officers of
the corporation separately or jointly.
Section 3. Compensation/Nominating Committee. The board of directors
---------------------------------
may, by resolution passed by a majority of the whole board, designate a
compensation/nominating committee, to consist of each member of the board of
directors, except that no member of the compensation/nominating committee may be
an employee or officer of the corporation. A majority of the members of the
compensation/nominating committee shall constitute a quorum.
The compensation/nominating committee shall from time to time review
and make recommendations to the board of directors
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with respect to the management remuneration policies of the corporation
including but not limited to salary rates and fringe benefits of elected
officers, other remuneration plans such as incentive compensation, deferred
compensation and stock option plans, directors' compensation and benefits and
such other matters as may be specifically delegated to the committee by the
board of directors.
In addition, the compensation/nominating committee shall make
recommendations to the board of directors (i) concern ing suitable candidates
for election to the board, (ii) with respect to assignments to board committees,
and (iii) with respect to promotions, changes and succession among the senior
management of the corporation, and shall perform such other duties as may be
specifically delegated to the committee by the board of directors.
Section 4. Committee Procedure, Seal.
-------------------------
(a) The executive, compensation/nominating, and audit committees shall
keep regular minutes of their meetings, which shall be reported to the board of
directors, and shall fix their own rules of procedures.
(b) The executive, compensation/nominating, and audit committees may
each authorize the seal of the corporation to be affixed to all papers which may
require it.
(c) In the absence or disqualification of a member of any committee,
the members of that committee present at any
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meeting and not disqualified from voting, whether or not constituting a quorum,
may unanimously appoint another member of the board of directors to act at the
meeting in the place of such absent or disqualified member.
Section 5. Special Committees. The board of directors may, from time
------------------
to time, by resolution passed by a majority of the whole board, designate one or
more special committees. Each such committee shall have such duties and may
exercise such powers as are granted to it in the resolution designating the
members thereof. Each such committee shall fix its own rules of procedure.
ARTICLE VII
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Indemnification
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Section l. Nature of Indemnity. The corporation shall indemnify any
-------------------
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he is or
was or has agreed to become a director or officer of the corporation, or is or
was serving or has agreed to serve at the request of the corporation as a
director or officer, of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and may indemnify any person who was or is a party
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or is threatened to be made a party to such an action by reason of the fact that
he is or was or has agreed to become an employee or agent of the corporation, or
is or was serving or has agreed to serve at the request of the corporation as an
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding had no reasonable cause to believe his
conduct was unlawful; except that in the case of an action or suit by or in the
right of the corporation to procure a judgment in its favor (l) such indemnif-
ication shall be limited to expenses (including attorneys' fees) actually and
reasonably incurred by such person in the defense or settlement of such action
or suit, and (2) no indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Delaware Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for
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such expenses which the Delaware Court of Chancery or such other court shall
deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
---- ----------
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 2. Successful Defense. To the extent that a director,
------------------
officer, employee or agent of the corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in Section
l hereof or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Section 3. Determination That Indemnification Is Proper. Any
--------------------------------------------
indemnification of a director or officer of the corporation under Section l
hereof (unless ordered by a court) shall be made by the corporation unless a
determination is made that indemnification of the director or officer is not
proper in the circumstances because he has not met the applicable standard of
conduct set forth in Section l hereof. Any indemnification of an employee or
agent of the corporation under Section l hereof
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(unless ordered by a court) may be made by the corporation upon a determination
that indemnification of the employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in Section l
hereof. Any such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
stockholders.
Section 4. Advance Payment of Expenses. Expenses (including
---------------------------
attorneys' fees) incurred by a director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall be
paid by the corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in this Article.
Such expenses (including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate. The board of directors may authorize the corporation's
counsel to represent a director, officer, employee or agent in any action, suit
or proceeding, whether or not the corporation is a party to such action, suit or
proceeding.
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Section 5. Procedure for Indemnification of Directors or Officers.
------------------------------------------------------
Any indemnification of a director or officer of the corporation under Sections l
and 2, or advance of costs, charges and expenses of a director or officer under
Section 4 of this Article, shall be made promptly, and in any event within 60
days, upon the written request of the director or officer. If the corporation
fails to respond within 60 days, then the request for indemnification shall be
deemed to be approved. The right to indemnification or advances as granted by
this Article shall be enforceable by the director or officer in any court of
competent jurisdiction if the corporation denies such request, in whole or in
part. Such person's costs and expenses incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
action shall also be indemnified by the corporation. It shall be a defense to
any such action (other than an action brought to enforce a claim for the advance
of costs, charges and expenses under Section 4 of this Article where the
required undertaking, if any, has been received by the corporation) that the
claimant has not met the standard of conduct set forth in Section l of this
Article, but the burden of proving such defense shall be on the corporation.
Neither the failure of the corporation (including its board of directors, its
independent legal counsel, and its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances
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because he has met the applicable standard of conduct set forth in Section l of
this Article, nor the fact that there has been an actual determination by the
corporation (including its board of directors, its independent legal counsel,
and its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 6. Survival; Preservation of Other Rights.
--------------------------------------
The foregoing indemnification provisions shall be deemed to be a
contract between the corporation and each director, officer, employee and agent
who serves in such capacity at any time while these provisions as well as the
relevant provisions of the Delaware Corporation Law are in effect and any
repeal or modification thereof shall not affect any right or obligation then
existing with respect to any state of facts then or previously existing or any
action, suit, or proceeding previously or thereafter brought or threatened based
in whole or in part upon any such state of facts. Such a "contract right" may
not be modified retroactively without the consent of such director, officer,
employee or agent.
The indemnification provided by this Article VII shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another
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capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
Section 7. Insurance. The corporation shall purchase and maintain
---------
insurance on behalf of any person who is or was or has agreed to become a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him or on his behalf in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Article,
provided that such insurance is available on acceptable terms, which
- --------
determination shall be made by a vote of a majority of the entire board of
directors.
Section 8. Savings Clause. If this Article or any portion hereof
--------------
shall be invalidated on any ground by any court of competent jurisdiction, then
the corporation shall nevertheless indemnify each director or officer and may
indemnify each employee or agent of the corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, includ-
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ing an action by or in the right of the corporation, to the full extent
permitted by any applicable portion of this Article that shall not have been
invalidated and to the full extent permitted by applicable law.
ARTICLE VIII
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Officers
--------
Section l. General. The officers of the corporation shall be the
-------
chairman of the board, president, one or more vice presidents (including
executive vice presidents and senior vice presidents), a secretary, a
controller, a treasurer, and such other subordinate officers as may from time to
time be designated and elected by the board of directors.
Section 2. Other Offices. The chairman of the board shall be chosen
-------------
by the board of directors from among their own number. The other officers of
the corporation may or may not be directors.
Section 3. Term. Officers of the corporation shall be elected by the
----
board of directors and shall hold their respective offices during the pleasure
of the board and any officer may be removed at any time, with or without cause,
by a vote of the majority of the directors. Each officer shall hold office from
the time of his appointment and qualification until the next annual election of
officers or until his earlier resignation or removal except that upon election
thereof a shorter term may be
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designated by the board of directors. Any officer may resign at any time upon
written notice to the corporation.
Section 4. Compensation. The compensation of officers of the
------------
corporation shall be fixed, from time to time, by the board of directors.
Section 5. Vacancy. In case any office becomes vacant by death,
-------
resignation, retirement, disqualification, removal from office, or any other
cause, the board of directors may abolish the office (except that of president,
secretary and treasurer) or elect an officer to fill such vacancy.
ARTICLE IX
----------
Duties of Officers
------------------
Section l. Chairman of the Board, President. The chairman of the
--------------------------------
board shall be the chief executive officer of the corporation. He shall have
general supervisory powers over all other officers, employees and agents of the
corporation for the proper performance of their duties and shall otherwise have
the general powers and duties of supervision and management usually vested in
the chief executive officer of a corporation. The president shall have the
general powers and duties of supervision and management of the corporation as
the chairman shall assign. The chairman of the board shall preside at and act as
chairman of all meetings of the board of directors. The president shall preside
at any meeting of the board of directors in the event of
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the absence of the chairman of the board. The offices of chairman of the board
and president may be filled by the same individual.
Section 2. Vice Presidents. Each vice president shall perform such
---------------
duties as shall be assigned to him by the board of directors, the chairman of
the board or the president.
Section 3. Secretary. The secretary shall record all proceedings of
---------
the meetings of the corporation, its stockholders and the board of directors
and shall perform such other duties as shall be assigned to him by the board of
directors, the chairman of the board, or the president. Any part or all of the
duties of the secretary may be delegated to one or more assistant secretaries.
Section 4. Controller. The controller shall perform such duties as
----------
shall be assigned to him by the chairman of the board, the president or such
vice president as may be responsible for financial matters. Any or all of the
duties of the controller may be delegated to one or more assistant controllers.
Section 5. Treasurer. The treasurer shall, under the direction of
---------
the chairman of the board, the president or such vice president as may be
responsible for financial matters, have the custody of the funds and securities
of the corporation, subject to such regulations as may be imposed by the board
of directors. He shall deposit, or have deposited, all monies and
24
<PAGE>
other valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the board of directors or as may be
designated by the appropriate officers pursuant to a resolution of the board of
directors. He shall disburse, or have disbursed, the funds of the corporation
as may be ordered by the board of directors or properly authorized officers,
taking proper vouchers therefor. If required by the board of directors he shall
give the corporation bond in such sum and in such form and with such security as
may be satisfactory to the board of directors, for the faithful performance of
the duties of his office. He shall perform such other duties as shall be
assigned to him by the board of directors, the chairman of the board, the
president or such vice president as may be responsible for financial matters.
Any or all of the duties of the treasurer may be delegated to one or more
assistant treasurers.
Section 6. Other Officers' Duties. Each other officer shall perform
----------------------
such duties and have such responsibilities as may be delegated to him by the
superior officer to whom he is made responsible by designation of the chairman
of the board or the president.
Section 7. Absence or Disability. The board of directors or the
---------------------
chairman of the board may delegate the powers and duties of any absent or
disabled officer to any other officer or to any director for the time being. In
the event of the
25
<PAGE>
absence or temporary disability of the chairman of the board, the president
shall assume his powers and duties while he is absent or so disabled.
ARTICLE X
---------
Stock
-----
Section l. Certificates. Certificates of stock of the corporation
------------
shall be signed by, or in the name of the corporation by, the chairman of the
board, the president or a vice president, and by the treasurer or an assistant
treasurer, or the secretary or an assistant secretary of the corporation. If
such certificate is countersigned, (l) by a transfer agent other than the
corporation or its employee, or (2) by a registrar other than the corporation or
its employee, then any other signature on the certificate may be a facsimile.
In case any officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent, or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if he were such
officer, transfer agent, or registrar at the date of issue.
Section 2. Transfers. Shares of stock shall be transferable on the
---------
books of the corporation by the holder of record thereof in person or by his
attorney upon surrender of such certificate with an assignment endorsed thereon
or attached
26
<PAGE>
thereto duly executed and with such proof of authenticity of signatures as the
corporation may reasonably require. The board of directors may from time to
time appoint such transfer agents or registrars as it may deem advisable and may
define their powers and duties. Any such transfer agent or registrar need not
be an employee of the corporation.
Section 3. Record Holder. The corporation may treat the holder of
-------------
record of any shares of stock as the complete owner thereof entitled to receive
dividends and vote such shares, and accordingly shall not be bound to recognize
any interest in such shares on the part of any other person, whether or not it
shall have notice thereof.
Section 4. Lost and Damaged Certificates. The corporation may issue
-----------------------------
a new certificate of stock to replace a certificate alleged to have been lost,
stolen, destroyed or mutilated upon such terms and conditions as the board of
directors may from time to time prescribe.
Section 5. Fixing Record Date. In order that the corporation may
------------------
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action,
27
<PAGE>
the board of directors may fix, in advance, a record date, which shall not be
more than sixty nor less than ten days before the date of such meeting, nor more
than sixty days prior to any other action.
ARTICLE XI
----------
Miscellaneous
-------------
Section l. Fiscal Year. The fiscal year of the corporation shall
-----------
begin upon the first day of January and terminate upon the 3lst day of
December, in each year.
Section 2. Stockholder Inspection of Books and Records. The board of
-------------------------------------------
directors from time to time shall determine whether and to what extent and at
what times and places and under what conditions and regulations the accounts and
books of the corporation, or any of them, shall be open to the inspection of a
stockholder and no stockholder shall have any right to inspect any account, book
or document of the corporation except as conferred by statute or authorized by
resolution of the board of directors.
Section 3. Seal. The corporate seal shall be circular in form and
----
have inscribed thereon the name of the corporation and the words "Corporate
Seal, Delaware."
ARTICLE XII
-----------
Amendments to Bylaws
--------------------
Subject to the provisions of any resolution of the board of directors
creating any series of Preferred Stock, the
28
<PAGE>
board of directors shall have power from time to time to make, alter or repeal
bylaws, but any bylaws made by the board of directors may be altered, amended or
repealed by the stockholders at any annual meeting of stockholders, or at any
special meeting provided that notice of such proposed alteration, amendment or
repeal is included in the notice of such special meeting.
29
<PAGE>
EXHIBIT 5
[LETTERHEAD OF DEBEVOISE & PLIMPTON]
April __, 1996
AMR Corporation
P.O. Box 619616
Dallas/Fort Worth Airport,
Texas 75261-9616
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to AMR Corporation, a Delaware corporation (the
"Company"), in connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "1933 Act"), of a Registration Statement on Form S-3 (the
"Registration Statement"), relating to the public offering by the Company of up
to 12,915,899 shares of its Common Stock, par value $1.00 per share (the
"Shares").
In so acting, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such records,
documents, certificates and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below.
Based upon the foregoing, we are of the following opinion:
1. The issuance of the Shares has been duly authorized by the Company.
2. Each of the Shares to be issued pursuant to the Registration Statement,
when issued and delivered as contemplated by the Prospectus constituting part of
the Registration Statement, will be validly issued, fully paid and non-
assessable.
Our opinion expressed above is limited to the laws of the State of New
York, the corporate laws of the State of Delaware and the Federal laws of the
United States of America.
<PAGE>
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the use of our name under the caption "Validity of
the Common Stock" in the Prospectus. In giving such consent, we do not thereby
concede that we are within the category of persons whose consent is required
under Section 7 of the 1933 Act or the Rules and Regulations of the Commission
thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
2
<PAGE>
Exhibit 23(a)
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Experts"
in this Registration Statement (Form S-3) and the related Prospectus of AMR
Corporation for the registration of 12,915,899 shares of common stock and to the
incorporation by reference of our report dated January 15, 1996, with respect to
the consolidated financial statements and schedule of AMR Corporation included
in its Annual Report (Form 10-K) for the year ended December 31, 1995, filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
April 19, 1996
<PAGE>
Exhibit 24
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Howard P. Allen
______________________________
Howard P. Allen
Witness:
/s/ Charles D. MarLett
_______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ David L. Boren
___________________
David L. Boren
Witness:
/s/ Charles D. MarLett
_______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Edward A. Brennan
______________________________
Edward A. Brennan
Witness:
/s/ Charles D. MarLett
_______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Armando M. Codina
______________________________
Armando M. Codina
Witness:
/s/ Charles D. MarLett
_______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, Chairman, President and Chief Executive Officer of
AMR Corporation, a Delaware corporation (the "Corporation"), does hereby
constitute and appoint Donald J. Carty, Anne H. McNamara, Gerard J. Arpey and
Charles D. MarLett, and each of them, as his true and lawful attorneys-in-fact
and agents, with full power of substitution, to execute and deliver in his name
and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Robert L. Crandall
______________________________
Robert L. Crandall
Witness:
/s/ Charles D. MarLett
_______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Christopher F. Edley
______________________________
Christopher F. Edley
Witness:
/s/ Charles D. MarLett
______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Charles T. Fisher, III
______________________________
Charles T. Fisher, III
Witness:
/s/ Charles D. MarLett
______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Earl G. Graves
______________________________
Earl G. Graves
Witness:
/s/ Charles D. MarLett
______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Dee J. Kelly
______________________________
Dee J. Kelly
Witness:
/s/ Charles D. MarLett
_______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as her true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in her name and on her behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as her own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Ann D. McLaughlin
______________________________
Ann D. McLaughlin
Witness:
/s/ Charles D. MarLett
______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Charles H. Pistor, Jr.
______________________________
Charles H. Pistor, Jr.
Witness:
/s/ Charles D. MarLett
______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Joe M. Rodgers
______________________________
Joe M. Rodgers
Witness:
/s/ Charles D. MarLett
______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Maurice Segall
______________________________
Maurice Segall
Witness:
/s/ Charles D. MarLett
______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, a director of AMR Corporation, a Delaware corporation
(the "Corporation"), does hereby constitute and appoint Donald J. Carty, Anne H.
McNamara, Gerard J. Arpey and Charles D. MarLett, and each of them, as his true
and lawful attorneys-in-fact and agents, with full power of substitution, to
execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Eugene F. Williams, Jr.
______________________________
Eugene F. Williams, Jr.
Witness:
/s/ Charles D. MarLett
______________________
Charles D. MarLett
<PAGE>
POWER OF ATTORNEY
-----------------
The undersigned, Senior Vice President and Chief Financial Officer of
AMR Corporation, a Delaware corporation (the "Corporation"), does hereby
constitute and appoint Donald J. Carty, Anne H. McNamara and Charles D. MarLett,
and each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution, to execute and deliver in his name and on his behalf:
(a) one or more Registration Statements of the Corporation on an
appropriate form proposed to be filed with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the Securities
Act of 1933, as amended (the "Securities Act"), 12,915,899 shares of Common
Stock of the Corporation issuable to holder of the Corporation's
outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital
Securities due 2024 (the "Debentures") upon conversion of the Debentures or
issuable to one or more investment banks, as purchasers (collectively, the
"Purchasers") under the standby arrangements to be entered into between the
Purchasers and the Corporation in connection with the call for redemption
of the Debentures by the Corporation (the "Redemption"), and the resale to
the public by the Purchasers of any such shares of Common Stock; and
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements;
and any and all other documents and instruments in connection with the
Redemption, the issuance of such Common Stock or the performance of such standby
arrangements which such attorneys-in-fact and agents, or any one of them, deem
necessary or advisable to enable the Corporation to comply with (a) the
-
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof, (b) the
-
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America and (c) the securities or similar applicable laws
-
of Canada, Mexico and any other foreign jurisdiction; and the undersigned does
hereby ratify and confirm as his own acts and deeds all that such attorneys-in-
fact and agents, and each of them, shall do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 17th day of April, 1996.
/s/ Gerard J. Arpey
______________________________
Gerard J. Arpey
Witness:
/s/ Charles D. MarLett
_______________________
Charles D. MarLett
<PAGE>
EXHIBIT 99(a)
If you wish to convert your Debentures by means of this Letter of Transmittal,
then your Debentures and this Letter of Transmittal must be RECEIVED by the
Paying and Conversion Agent listed below PRIOR TO 5:00 P.M., EASTERN DAYLIGHT
TIME, ON May 17, 1996. This Letter of Transmittal is to be used only if
Debentures are to be forwarded herewith. Debenture holders wishing to convert
their Debentures whose Debentures are not immediately available or who cannot
deliver their Debentures and all other documents required hereby to the Paying
and Conversion Agent prior to 5:00 p.m., Eastern Daylight Time, on May 17,
1996 must elect to convert their Debentures according to the instructions for
guaranteed delivery set forth in Instruction 7 hereof.
AMR CORPORATION
LETTER OF TRANSMITTAL
(TO ACCOMPANY 6 1/8% CONVERTIBLE SUBORDINATED QUARTERLY
INCOME CAPITAL SECURITIES
DUE NOVEMBER 1, 2024)
PAYING AND CONVERSION AGENT:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
BY MAIL OR BY HAND TO:
<TABLE>
<S> <C>
By Hand or Overnight Courier: By Mail:
First Chicago Trust Company of New York (registered or certified mail recommended)
Tenders & Exchanges First Chicago Trust Company of New York
Suite 4680 - AMR Tenders & Exchanges
14 Wall Street, 8th Floor P.O. Box 2559, Mail Suite 4660
New York, NY 10005 Jersey City, NJ 07303-2559
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTION VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
Enclosed herewith are 6 1/8% Convertible Subordinated Quarterly Income
Capital Securities Due November 1, 2024 (the "Debentures") of AMR Corporation
(the "Company") numbered and registered as listed below:
ITEMS A, B, E AND F OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED IN ALL
CASES.
<PAGE>
ITEM A.
(MUST BE COMPLETED BY ALL HOLDERS OF DEBENTURES)
DESCRIPTION OF DEBENTURES PRESENTED
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Name and Address of Registered Holder Debentures Transmitted
(If the name and address shown are not correct, (Please fill in numbers and amounts and attach
please indicate any changes necessary.) signed list if space below is inadequate.)
- -----------------------------------------------------------------------------------------------------------------------
Debentures Number(s) Principal Amount
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Total Principal
Amount:
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ITEM B.
(MUST BE COMPLETED BY ALL HOLDERS OF DEBENTURES)
THE ABOVE DEBENTURES ARE SURRENDERED FOR THE ACTION INDICATED BELOW.
[_] CONVERSION into shares of Common Stock of the Company ("Shares") at the
conversion price of $79.00 of principal amount of Debentures per Share
(equivalent to 12.658 Shares per $1,000 principal amount of Debentures),
with cash in lieu of fractional Shares. Such payment of cash will be in the
form of a check drawn on an account of the Paying Agent and Conversion
Agent. (See Instruction 2.) Complete Items C and E.
Holders of Debentures that convert their Debentures will not be entitled to
any payment of interest on such Debentures accruing after May 1, 1996.
Holders of Debentures of record on April 15, 1996, will be entitled to
receive the payment of interest due on the Debentures on May 1, 1996. Any
holder that converts Debentures prior to May 1, 1996, must submit with the
Debentures being converted an amount, in New York Clearing House funds or
other funds acceptable to the Company, equal to the interest payable on
such Debentures on May 1, 1996, and such holder therefore will not receive
the economic benefit of such interest payment.
SO LONG AS THE MARKET PRICE OF THE COMMON STOCK IS GREATER THAN $82.57 PER
SHARE AT THE TIME OF CONVERSION, A HOLDER OF DEBENTURES WHO EXERCISES SUCH
HOLDER'S CONVERSION RIGHTS WILL RECEIVE COMMON STOCK, PLUS CASH IN LIEU OF
ANY FRACTIONAL SHARE (DETERMINED AS SET FORTH IN INSTRUCTION 2 BELOW), WITH
A MARKET VALUE GREATER THAN THE AMOUNT OF CASH THE HOLDER WOULD OTHERWISE
BE ENTITLED TO RECEIVE UPON THE REDEMPTION OF THE DEBENTURES (BEFORE
DEDUCTING ANY TAXES, COMMISSIONS AND OTHER COSTS WHICH WOULD LIKELY BE
INCURRED ON SALE OF SHARES RECEIVED UPON CONVERSION OF THE DEBENTURES).
[_] REDEMPTION at a price of $1,042.00 per $1,000 principal amount of
Debentures, plus accrued and unpaid interest to the Redemption Date of May
20, 1996 of $3.23, for a total redemption price of $1,045.23 per
$1,000 principal amount of Debentures. (See Instruction 3.) Complete Items D
and E.
[_] PARTIAL CONVERSION/PARTIAL REDEMPTION, If this box is checked you must
indicate (1) the principal amount of Debentures you wish to convert into
Shares on Item C and (2) the principal amount of Debentures you wish to have
redeemed on Item D. If this box is checked and no additional instructions
are provided, the delivery of Debentures prior to 5:00 p.m., Eastern
Daylight Time, on May 17, 1996, will be treated by the Paying and
Conversion Agent as instructions to convert such Debentures into Shares.
Complete Items C, D and E.
[_] CHECK HERE IF DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE PAYING AND CONVERSION AGENT.
- --------------------------------------------------------------------------------
IF NO BOX IS CHECKED AND THE ABOVE DEBENTURES ARE RECEIVED BY THE PAYING AND
CONVERSION AGENT PRIOR TO 5:00 P.M., EASTERN DAYLIGHT TIME, ON MAY 17, 1996,
SUCH DEBENTURES WILL BE DEEMED SURRENDERED FOR CONVERSION INTO SHARES. IF ANY
DEBENTURES ARE RECEIVED AFTER THAT TIME, SUCH DEBENTURES WILL BE REDEEMED
REGARDLESS OF WHICH OR WHETHER ANY CHOICE IS INDICATED.
<PAGE>
ITEM C.
CONVERSION
DEBENTURE HOLDERS PLEASE COMPLETE
1. If the stock certificate(s) evidencing Shares of Common Stock and/or check
(if any) are to be issued in the name of a person other than as indicated in
Item A above, fill in this space. See Instructions 4 and 5.
ISSUE TO:
Name:
Address
Zip Code
Social Security Number or Taxpayer I.D. Number
2. If stock certificate(s) evidencing Shares of Common Stock and/or check (if
any) are to be mailed to an address other than as indicated in Item A above,
fill in this space.
MAIL TO:
Name:
Address
Zip Code
Amount of Debentures Surrendered for Conversion: $
<PAGE>
ITEM D.
REDEMPTION
DEBENTURE HOLDERS PLEASE COMPLETE
1. If the check is to be issued to a person other than as indicated in item A
above, fill in this space. See instructions 4 and 5.
ISSUE TO:
Name
Address
Zip Code
Social Security Number or Taxpayer I.D. Number
2. If the check is to be mailed to an address other than as indicated in Item A
above, fill in this space.
MAIL TO:
Name
Address
Zip Code
Amount of Debentures Surrendered for Redemption: $
<PAGE>
ITEM E.
(MUST BE COMPLETED BY ALL HOLDERS OF DEBENTURES)
REQUIRED SIGNATURE
The signature(s) on this Letter of Transmittal must correspond exactly with the
name(s) of the (1) registered owners of the Debentures surrendered, or (2)
persons to whom such Debentures have been properly assigned or transferred, in
which case evidence of transfer must accompany this letter. See Instructions 1,
4, 5 & 6 below.
Dated:
Signature:
Signature:
Telephone:
Social Security Number or Taxpayer I.D. Number:
SIGNATURE GUARANTEE
(IF APPLICABLE)
If stock certificate(s) are to be issued in a name other than that of the
registered owner of the Debentures surrendered or persons to whom such
Debentures have been properly assigned or transferred, or if a check is to be
made payable to a different name, the signature of the holder must be guaranteed
by either a bank or trust company, a broker or dealer which is a member of the
National Association of Securities Dealers, Inc., or a recognized member of a
Medallion Signature Guarantee Program who may also be a member of a national
securities exchange. See Instructions 4 and 5.
Signature Guarantee:
Dated:
(Name of Firm issuing Guarantee)
(Signature of Officer)
(Title of Officer Signing This Guarantee)
(Address of Guaranteeing Firm)
<PAGE>
ITEM F.
(MUST BE COMPLETED BY ALL HOLDERS OF DEBENTURES)
REQUIRED SIGNATURE
IMPORTANT TAX INFORMATION
- --------------------------------------------------------------------------------
COMPLETE AND SIGN SUBSTITUTE FORM W-9 IN ADDITION TO THE SIGNATURE(S) REQUIRED
IN ITEM E.
(SEE INSTRUCTION 11)
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
NAME AS SHOWN ON ACCOUNT (IF JOINT ACCOUNT, LIST FIRST AND CIRCLE NAME OF THE
PERSON OR ENTITY WHOSE NUMBER YOU ENTER IN PART 1 BELOW)
- --------------------------------------------------------------------------------
ADDRESS (IF ADDRESS IS NOT COMPLETED, SIGNATURE WILL CONSTITUTE A CERTIFICATION
THAT THE ABOVE ADDRESS IS CORRECT.)
- --------------------------------------------------------------------------------
CITY, STATE AND ZIP CODE
- --------------------------------------------------------------------------------
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PART 1 -- PLEASE PROVIDE YOUR TAXPAYER SOCIAL SECURITY NUMBER
IDENTIFICATION NUMBER IN THE BOX AT RIGHT OR
SUBSTITUTE AND CERTIFY BY SIGNING AND DATING BELOW. EMPLOYER IDENTIFICATION
NUMBER
------------------------------------------------------------------------------------------------------
FORM W-9 PART 2 -- I AM NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE (I) I AM EXEMPT FROM FOR PAYEES EXEMPT
DEPARTMENT OF THE TREASURY BACKUP WITHHOLDING, OR (II) I HAVE NOT BEEN NOTIFIED BY THE IRS THAT I AM FROM BACKUP
INTERNAL REVENUE SERVICE SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR WITHHOLDING
DIVIDENDS, OR (III) THE INTERNAL REVENUE SERVICE HAS NOTIFIED ME THAT I AM NO
PAYER'S REQUEST FOR LONGER SUBJECT TO BACKUP WITHHOLDING. (YOU MUST CROSS OUT THIS PART 2 IF YOU WRITE "EXEMPT" IF
TAXPAYER ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING OF YOU ARE EXEMPT FROM
IDENTIFICATION NUMBER INTEREST OR DIVIDENDS ON YOUR TAX RETURN.)[_] BACKUP WITHHOLDING
("TIN")
-------------------------------------------------------------------------------------------------------
CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION PART 3 --
PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
SIGNATURE ______________ DATE AWAITING TAXPAYER
IDENTIFICATION
NUMBER [_]
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
<PAGE>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office, or (b) I intend to mail
or deliver an application in the near future. I understand that, notwithstanding
that I have checked the box on Part 3 (and have completed this Certificate of
Awaiting Taxpayer Identification Number), all reportable payments made to me
prior to the time I provide the Paying Agent with a properly certified taxpayer
identification number will be subject to a 31% backup withholding tax.
SIGNATURE__________________________ DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31 PERCENT OF ANY PAYMENT MADE TO YOU. PLEASE REVIEW THE ENCLOSED
"GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
<PAGE>
INSTRUCTIONS
1. GENERAL
Please do not send Debentures directly to the Company. The Debentures,
together with the signed and completed Letter of Transmittal and any required
supporting documents (see Instruction 2 below), should be mailed in the enclosed
addressed envelope or otherwise delivered to First Chicago Trust Company of New
York, the Paying and Conversion Agent, at the address indicated on the front of
this Letter of Transmittal. The method of transmitting the Debentures and the
Letter of Transmittal is at the sole option and sole risk of the Debenture
holder but, if mail is used, it is recommended that registered mail, properly
insured, be used as a precaution against loss. Consideration should be given to
using some form of express delivery service as the conversion alternative
discussed below expires at 5:00 p.m., Eastern Daylight Time, on May 17, 1996.
ITEMS A, B, E AND F OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED IN ALL
CASES.
2. IF YOU WISH TO CONVERT YOUR DEBENTURES
If you wish to convert your Debentures into Shares of Common Stock, then
prior to 5:00 p.m., Eastern Daylight Time, on May 17, 1996 you must deposit
with the Paying and Conversion Agent (i) the Debentures, (ii) a properly
completed Letter of Transmittal and (iii) any other documents required by this
Letter of Transmittal. If your Debenture Certificates are not immediately
available, please see Instruction 7.
Holders of Debentures that convert their Debentures will not be entitled to
any payment of interest on such Debentures accruing after May 1, 1996. Holders
of Debentures of record on April 15, 1996, will be entitled to receive the
payment of interest due on the Debentures on May 1, 1996. Any holder that
converts Debentures prior to May 1, 1996, must submit with the Debentures being
converted an amount, in New York Clearing House funds or other funds acceptable
to the Company, equal to the interest payable on such Debentures on May 1, 1996
($15.31 for each $1,000 principal amount of Debentures), and such holder
therefore will not receive the economic benefit of such interest payment.
Instead of issuing any fractional share of Common Stock that would otherwise
be issuable upon conversion of any Debenture, the Company will pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
of the last reported sale price per share of Common Stock, regular way, at the
close of business on the Trading Day (defined below) immediately preceding the
day of conversion or, if no such sale takes place on such day, the average of
the reported closing bid and asked prices, regular way, on the New York Stock
Exchange. "Trading Day" means a day on which the New York Stock Exchange is
open for business. Such cash in lieu of fractional share will be in the form of
a check drawn on an account of the Paying Agent and Conversion Agent.
Debentures may be held in book-entry form through the facilities of The
Depository Trust Company or the Philadelphia Depository Trust Company (each of
the foregoing are herein referred to as a "Depository"). Accordingly, in order
for a beneficial owner of an interest in a Debenture to exercise conversion
rights, such beneficial owner must comply with the procedures of the Depository
where such beneficial owner's Debentures are held, if a participant in such
Depository (a "participant"), or if such beneficial owner is not a participant
in a Depository, through the procedures of the participant through which such
beneficial owner owns its interest in the Debentures, to effect a conversion.
<PAGE>
SINCE IT IS THE TIME OF ACTUAL RECEIPT THAT DETERMINES WHETHER DEBENTURES
HAVE BEEN PROPERLY PRESENTED FOR CONVERSION, SUFFICIENT TIME SHOULD BE ALLOWED
FOR A BOOK-ENTRY TRANSFER TO BE MADE, PRIOR TO 5:00 P.M., EASTERN DAYLIGHT TIME,
ON MAY 17, 1996. DEBENTURES NOT ACTUALLY RECEIVED FOR CONVERSION BY A BOOK-
ENTRY TRANSFER PRIOR TO SUCH TIME WILL BE REDEEMED AS SET FORTH BELOW.
SO LONG AS THE MARKET PRICE OF THE COMMON STOCK IS GREATER THAN $82.57 PER
SHARE AT THE TIME OF CONVERSION, A HOLDER OF DEBENTURES WHO EXERCISES SUCH
HOLDER'S CONVERSION RIGHTS WILL RECEIVE COMMON STOCK, PLUS CASH IN LIEU OF ANY
FRACTIONAL SHARE (DETERMINED AS SET FORTH ABOVE), WITH A MARKET VALUE GREATER
THAN THE AMOUNT OF CASH THE HOLDER WOULD OTHERWISE BE ENTITLED TO RECEIVE UPON
THE REDEMPTION OF THE DEBENTURES (BEFORE DEDUCTING ANY TAXES, COMMISSIONS AND
OTHER COSTS WHICH WOULD LIKELY BE INCURRED ON SALE OF THE SHARES RECEIVED UPON
CONVERSION OF THE DEBENTURES).
If the stock certificate(s) and cash in lieu of fractional Shares, if any,
are to be issued in the same name(s) as that in which the surrendered Debentures
are registered and mailed to the same address as given in Item A, complete Items
A, B, E and F.
If the stock certificate(s) and cash in lieu of fractional Shares, if any,
are to be issued in the name or names of a different person(s), see Instruction
4, 5 and 6 and complete Items A, B, C, E and F.
If the stock certificate(s) and cash in lieu of fractional Shares, if any,
are to be mailed to an address different from that given in Item A, complete
Items A, B, C, E and F.
If more than one Debenture is surrendered for conversion at any one time
under the same Letter of Transmittal or other notice by the same holder, the
number of Shares issuable upon conversion of such Debentures will be computed
upon the basis of the aggregate principal amount of Debentures so surrendered.
Holders are also entitled to convert fewer than all Debentures they hold,
provided that any conversions are for amounts of Debentures in integral
multiples of $1,000.
A single Common Stock certificate will be issued unless you give written
instructions to the contrary. The Common Stock certificate and cash in lieu of
fractional Shares will be mailed as soon as possible after receipt of your
Debentures.
3. IF YOU WISH TO REDEEM YOUR DEBENTURES
If you wish your Debentures to be redeemed by the Company, deliver your
Debentures and this Letter of Transmittal, properly completed, to the Paying and
Conversion Agent. A check for $1,045.23 per $1,000 principal amount of
Debentures will be sent to you when the Debentures have been received by the
Paying and Conversion Agent, but in no event earlier than the Redemption Date,
May 20, 1996.
If the check is to be issued in the same name(s) as that in which the
surrendered Debentures are registered and mailed to the same address as given in
Item A, complete Items A, B, E and F.
If the check is to be issued in a different name or names, see Instructions 4
and 5 and complete Items A, B, D, E and F.
If the check is to be mailed to an address different from that given in Item
A, complete Items A, B, D, E and F.
2
<PAGE>
4. CERTIFICATE OR CHECK TO BE ISSUED IN A DIFFERENT NAME
Unless instructions are given in Item C or D, the Shares or a check are to be
issued in the same name as that of the record holder inscribed on the
surrendered Debenture. If the Shares or a check are to be issued in a name
other than that of the record holder of the listed Debenture please be guided by
the following:
(a) Endorsement and Guarantee: The Debentures surrendered must be properly
endorsed (or accompanied by one or more appropriate powers properly
executed by the record holder of such Debentures to the person who is to
receive the Common Stock certificates). The signature of the record holder
on the endorsement or stock powers must correspond with the name as written
upon the face of the Debentures surrendered in every particular and must be
guaranteed by a recognized member of a Medallion Signature Program who may
also be a commercial bank or trust company, a broker or dealer which is a
member of the National Association of Securities Dealers, Inc. or by a
member of a national securities exchange (an "Eligible Institution").
(b) Transferee's Signature: This Letter of Transmittal must be signed by the
person to whom the transfer or assignment is made, or by his agent, and
should not be signed by the person transferring or assigning the
Debentures. The signature of such transferee, assignee, or agent must be
guaranteed as provided in Instruction 4(a).
(c) Correction of or Change in Name. For a name correction, or for a change in
name which does not involve a change of ownership, proceed as follows. For
a correction in name the listed Debentures should be endorsed for example,
"James E. Brown, incorrectly inscribed as J. E. Brown," with the
signature guaranteed as described in Instruction 4(a). For a change in
name by marriage, the surrendered Debentures should be endorsed for
example, "Mary Doe, now by marriage, Mrs. Mary Jones" with the signature
guaranteed as described in Instruction 4(a).
5. SIGNATURE BY FIDUCIARY OR OTHER THAN REGISTERED HOLDER
If this Letter of Transmittal is signed by the registered holder(s) of the
Debentures transmitted herewith, the signature(s) must correspond exactly with
the name(s) of such registered holder(s).
If the Letter of Transmittal is signed in Item E by an executor,
administrator, trustee, guardian, attorney or the like, such person should so
indicate when signing, and the Letter of Transmittal and Debentures must be
accompanied by evidence, satisfactory to the Paying and Conversion Agent and the
Company, of the authority of such person to sign the Letter of Transmittal and
the signature(s) must be properly guaranteed by an Eligible Institution.
If the Letter of Transmittal is signed in Item E by a person other than the
registered holder, who is not a person described in the preceding paragraph, the
Debentures must be properly endorsed or be accompanied by appropriate stock
powers, properly executed by the registered holder(s), so that such endorsement
or powers are signed exactly as the name(s) of the registered holder(s) appears
on the Debentures and the signatures to the endorsement or on the stock power
must be properly guaranteed by an Eligible Institution.
If the Debentures are endorsed by, or accompanied by stock powers signed by,
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or other persons acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper
3
<PAGE>
evidence satisfactory to the Company of their authority so to act must be
submitted, and the signature(s) must be properly guaranteed by an Eligible
Institution.
If you have completed Item C or D regarding special issuance instructions,
the signature on this Letter of Transmittal must be guaranteed, in the space
provided in Item E on the front hereof, by an Eligible Institution.
6. JOINT HOLDERS OR DEBENTURES REGISTERED IN DIFFERENT NAMES
If Debentures are tendered by joint holders or owners, all such persons must
sign the Letter of Transmittal in Item E. If Debentures are registered in
different names or forms of ownership, separate Letters of Transmittal must be
completed, signed and returned for each different registration. See Instruction
5 above.
7. NOTICE OF GUARANTEED DELIVERY
Debenture holders wishing to convert their Debentures whose Debentures are
not immediately available or who cannot deliver their Debentures and all other
documents required hereby to the Paying and Conversion Agent on or prior to 5:00
p.m., Eastern Daylight Time, on May 17, 1996 may elect to convert their
Debentures pursuant to the following procedures: (i) such election to convert
must be made by or through a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office, branch or agency in the
United States, (ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company must be received by
the Paying and Conversion Agent on or prior to 5:00 p.m., Eastern Daylight Time,
on May 17, 1996, and (iii) the Debentures in proper form for transfer,
together with a properly completed and duly executed Letter of Transmittal or
facsimile thereof and all other documents required by this Letter of
Transmittal, must be received by the Paying and Conversion Agent within five
business days after the date such Notice of Guaranteed Delivery is received by
the Paying and Conversion Agent. Notwithstanding the foregoing, Shares will be
issued in respect of Debentures surrendered for conversion only after timely
receipt by the Paying and Conversion Agent of the Debentures, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and any
other documents required by the Letter of Transmittal.
8. TRANSFER TAXES
It is not anticipated that any transfer taxes will be payable in connection
with the issuance of certificates evidencing Shares upon conversion of the
Debentures. If, however, it should develop that in certain circumstances such
taxes may be payable, conversion of Debentures will be effected without charge
to the converting holder for any such stock transfer tax, except in the
following cases. If stock certificates issued upon conversion are to be
registered in the name of any person other than the registered owner of
Debentures, the amount of any stock transfer taxes (whether imposed on the
registered owner(s) of the certificate(s) transmitted herewith or such
person(s)) payable on account of the transfer to such person(s) must accompany
this Letter of Transmittal or evidence must be submitted as to the payment of
such taxes, or exemption therefrom. The Company will not be required to issue
or deliver stock certificates in any such case until such person(s) has made
payment or submitted such evidence.
9. LOST OR DESTROYED DEBENTURES
If your Debentures have been either lost or destroyed, notify the Trustee of
this fact immediately by telephone at 1-800-524-9472 or by mail at The First
National Bank of Chicago, 1 North State St., 9th Floor, Attn. Investor
Relations, Chicago, IL 60602. In order to retain your rights to convert your
4
<PAGE>
Debentures which have been lost or destroyed, the procedures set forth in Item
7(i) and (ii) of these instructions must be followed. You will then be
instructed as to the steps you must take in order to convert or have redeemed
the Debentures that you own. This form and related documents cannot be
processed until the missing Debentures have been replaced. You must act
immediately if you wish to safeguard your rights.
10. QUESTIONS AND ADDITIONAL COPIES
All questions regarding appropriate procedures for converting Debentures and
requests for additional copies of the Notice of Redemption, Letter of
Transmittal and Notice of Guaranteed Delivery should be directed to D. F. King &
Co., as Information Agent, at 77 Water Street, New York, New York 10005, Tel.
(800) 848-3405.
11. SUBSTITUTE FORM W-9
Each Debenture holder is required to provide the Paying and Conversion Agent
with a correct taxpayer identification number ("TIN") on Substitute Form W-9
which is provided under Item F, and to indicate that the Debenture holder is not
subject to backup withholding by checking the box in Part 2 of the form.
Failure to provide the information on the form may subject the Debenture holder
to 31 percent (31%) backup withholding on the payments made to the Debenture
holder or other payee with respect to Debentures redeemed or amounts paid for
fractional Shares. The box in Part 3 of the form may be checked if the
Debenture holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 3 is checked and the
Paying and Conversion Agent is not provided with a TIN within sixty (60) days,
the Paying and Conversion Agent will withhold 31 percent (31%) on all such
payments until a TIN is provided.
IMPORTANT TAX INFORMATION
Under federal income tax law, a Debenture holder whose Debentures are
redeemed or who receives cash for fractional shares is required by law to
provide the Paying and Conversion Agent with such Debenture holder's correct TIN
on Substitute Form W-9. If such Debenture holder is an individual, the TIN is
his or her social security number. If the Paying and Conversion Agent is not
provided with the correct TIN, the Debenture holder or other payee may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition
payments that are made to such Debenture holder or other payee with respect to
Debentures redeemed or with respect to amounts paid for fractional shares may be
subject to backup withholding.
Certain Debenture holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that Debenture holder must submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Paying and Conversion Agent.
If backup withholding applies, the Paying and Conversion Agent is required to
withhold 31 percent (31%) of any such payments made to the Debenture holder or
other payee. Backup withholding is not an additional tax. Rather, the tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund
may be obtained.
5
<PAGE>
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made to a Debenture holder or other
payee, the Debenture holder is required to notify the Paying and Conversion
Agent of the Debenture holder's correct TIN by completing the form, certifying
that the TIN provided on Substitute Form W-9 is correct or that such Debenture
holder is awaiting a TIN and that (1) the Debenture holder has not been notified
by the Internal Revenue Service that the Debenture holder is subject to backup
withholding as a result of failure to report all interest or dividends or (2)
the Internal Revenue Service has notified the Debenture holder that the
Debenture holder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE PAYING AND CONVERSION AGENT
The Debenture holder is required to give the Paying and Conversion Agent the
TIN (e.g., social security number or employer identification number) of the
registered holder of the Debentures. If the Debentures are in more than one
name or are not in the name of the actual owner, consult the enclosed guildlines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report.
HOLDERS OF DEBENTURES ARE ADVISED TO READ THE PROSPECTUS AND TO CONSULT THEIR
OWN TAX ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES OF THE CONVERSION OR REDEMPTION OF THE DEBENTURES IN LIGHT OF THEIR
OWN PARTICULAR CIRCUMSTANCES.
6
<PAGE>
EXHIBIT 99(b)
NOTICE OF REDEMPTION
TO THE HOLDERS OF
AMR CORPORATION
6 1/8% CONVERTIBLE SUBORDINATED QUARTERLY INCOME
CAPITAL SECURITIES DUE 2024
CUSIP 001765 AY 2/*/
REDEMPTION DATE: MAY 20, 1996
CONVERSION RIGHT EXPIRES 5 P.M.,
EASTERN DAYLIGHT TIME, MAY 17, 1996
NOTICE IS HEREBY GIVEN that in accordance with Article 10 of the Indenture,
dated as of November 1, 1994 (the "Indenture"), between AMR Corporation (the
"Company") and The First National Bank of Chicago, as Trustee (the "Trustee"),
the Company has elected to redeem all of the Company's 6 1/8% Convertible
Subordinated Quarterly Income Capital Securities due 2024 (the "Debentures") on
May 20, 1996 (the "Redemption Date"). Capitalized terms used herein and not
defined are used as defined in the Indenture.
The Debentures will be redeemed at a redemption price of $1,042 per $1,000
principal amount of Debentures (the "Redemption Price"), plus accrued interest
of $3.23 per $1,000 principal amount of Debentures from May 1, 1996 to the
Redemption Date. On the Redemption Date, the Redemption Price will become due
and payable upon each Debenture, or portion thereof, to be redeemed and interest
will cease to accrue on and after such date.
Debentures (or any portion thereof which is $1,000 or an integral multiple
thereof) may be converted into Common Stock of the Company at a conversion price
of $79.00 principal amount of Debentures per share of Common Stock (equivalent
to 12.658 shares of Common Stock for each $1,000 principal amount of
Debentures). THE COMPANY WILL DELIVER CASH IN LIEU OF ANY FRACTIONAL SHARE OF
COMMON STOCK. THE DEBENTURES WILL NOT BE CONVERTIBLE AFTER 5:00 P.M., EASTERN
DAYLIGHT TIME, ON MAY 17, 1996.
- -------------------
/*/ The CUSIP number referenced above has been assigned by Standard & Poor's
Corporation and is included solely for the convenience of holders of the
Debentures. Neither the Company nor The First National Bank of Chicago
shall be responsible for the selection or use of this CUSIP number, nor
is any representation made as to its correctness on the Debentures or as
indicated in any redemption notice.
<PAGE>
Debentures must be surrendered to the First Chicago Trust Company of
New York, as Paying and Conversion Agent (the "Paying Agent"), to collect the
Redemption Price, plus accrued interest, or to convert the Debentures. A
Letter of Transmittal must be used in connection with the surrender of
Debentures for conversion. Debentures are to be surrendered for conversion or
redemption at the office of the Paying Agent shown below:
<TABLE>
<S> <C>
By Hand or Overnight Courier: By Mail:
First Chicago Trust Company of New York (registered or certified mail recommended)
Tenders & Exchanges First Chicago Trust Company of New York
Suite 4680 - AMR Tenders & Exchanges
14 Wall Street, 8th Floor P.O. Box 2559, Mail Suite 4660
New York, NY 10005 Jersey City, NJ 07303-2559
</TABLE>
This Notice of Redemption, a Letter of Transmittal and a prospectus
have been sent to each holder of record of Debentures. Debenture holders should
read the prospectus and Instructions to the Letter of Transmittal carefully.
If any holder requires assistance, has questions or would like to
obtain copies of the redemption materials, please contact D.F. King & Co., as
Information Agent, at 77 Water Street, New York, New York 10005, Tel. (800) 848-
3405.
AMR CORPORATION
Dated: April 19, 1996
2
<PAGE>
EXHIBIT 99(c)
April [18], 1996
AMR Corporation
4333 Amon Carter Blvd. - MD 5662
Fort Worth, TX 76155
Ladies and Gentlemen:
This Letter Agreement sets forth the terms and conditions pursuant to which
AMR Corporation (the "Company") has retained D. F. King & Co., Inc. ("King") in
connection with a proposed redemption.
The Company proposes to redeem all its outstanding 6 1/8% Convertible
Subordinated Quarterly Income Capital Securities due 2024 (the "Debentures"),
subject to the terms and conditions set forth in the Prospectus referred to
below. Such redemption of the Debentures is herein referred to as the
"Redemption".
On any date prior to the Redemption, each Debenture holder may convert the
Debentures into shares of the Company's Common Stock, par value $1.00 per share,
by remitting a Letter of Transmittal. Such conversion of the Debentures is
herein referred to as the "Conversion" and, collectively with the Redemption, is
herein referred to as the "Transaction".
1. The Company hereby retains King as Information Agent for advisory and
consulting services in connection with the Transaction and requests and
authorizes King to contact, and to provide information with respect to the
Transaction to holders of the Debentures. For this purpose, King is authorized
to use, and will be supplied by the Company with as many copies as King may
reasonably request of, the following materials filed with the Securities and Ex-
change Commission (the "Commission") or publicly released (or to be filed or
publicly released) by the Company in connection with the Transaction
(collectively, the "Transaction Materials"): (i) a Prospectus; (ii) the Letter
- --
of Transmittal; (iii) Notice of Guaranteed Delivery; (iv) a Notice of
--- --
Redemption; (v) press releases and newspaper advertisements, if any; (vi) letter
- --
to securities dealers, banks and trust companies, and letter from securities
dealers, banks and trust companies to their customers, if any; and (vii) any and
---
all amendments or supplements to any of the foregoing.
<PAGE>
AMR Corporation
April [18], 1996
Page 2
2. The Company agrees to pay King as compensation for its services a fee
of $5,000, plus $3.00 per telephone call received from each Debenture holder
regarding the transaction, which is due upon the completion, expiration or
termination of the Transaction. The Company further agrees to reimburse King
for all out-of-pocket expenses incurred by King in retention hereunder. The
Company further agrees and acknowledges that its obligation under this paragraph
2 is not in any way conditional upon the successful consummation of the
Transaction.
3. The Company agrees that King shall have the right to pass upon and
approve any and all references to King in the Transaction Materials. The
Company shall not file with the Commission, any other governmental or regula-
tory authority or body or any court, or otherwise make public, any document
containing any reference to King unless and until King shall have approved such
reference. King hereby confirms its approval of the references to King in the
Transaction Materials included in the Company's Registration Statement on Form
S-3 filed with the Securities and Exchange Commission on April 19, 1996 and
the exhibits thereto and to any further references in the Transaction Materials
consistent with such references.
4. The Company represents and warrants to King that:
(i) this letter agreement is a valid and binding agreement on the
Company's part;
(ii) all necessary corporate action will be duly taken by the Company
prior to the commencement of the Transaction to authorize the Transaction;
(iii) all Transaction Materials will comply, in all material respects,
with the Securities Act of 1933, as amended, and the rules and regulations of
the Commission thereunder, and none of the Transaction Materials, taken as a
whole, will contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading;
2
<PAGE>
AMR Corporation
April [18], 1996
Page 3
(iv) any action by the Company in connection with the Transaction will
comply, in all material respects, with all applicable requirements of law
including the applicable rules or regulations of any governmental or regulatory
authority or body, and no material consent or approval of, or filing with, any
governmental or regulatory authority or body is required in connection with any
such action (or, if any such material consent, approval or filing is required it
will be duly obtained or made); and
(v) the Transaction and the execution, delivery and performance of this
letter agreement, will not conflict with or result in a breach of or constitute
a default under the Company's certificate of incorporation or by-laws, or any
material agreement, indenture, mortgage, note or other instrument by which the
Company is bound.
5. King represents and warrants that this letter agreement is a valid and
binding agreement on King's part and agrees that all actions taken by King in
connection with the Transaction will comply, in all material respects, with all
applicable requirements of law including the applicable rules or regulations of
any governmental or regulatory authority or body. King agrees that it will not
provide to any person any information in connection with the Transaction in
addition to or inconsistent with the information contained in the Transaction
Materials. In no event will King make any recommendation to anyone regarding
whether to convert or redeem the Debentures. If such advice is requested, King
will respond that it is not authorized to give such advice and shall recommend
to the person requesting such advice that such person consult with his or her
financial advisor or broker.
6. The Company will advise King promptly of the occurrence of any event
which causes it not to proceed with, or to withdraw or abandon, the Transaction.
The Company will also advise King promptly of any amendment or supplement to
any of the Transaction Materials.
7. The Company hereby agrees to indemnify and hold harmless King, King's
controlling persons, officers, directors, employees, agents and representatives
(collectively, the "Indemnified Persons") from and against any and all losses,
claims, damages, liabilities and expenses what-
3
<PAGE>
AMR Corporation
April [18], 1996
Page 4
soever (including but not limited to, all reasonable counsel fees, disbursements
and other out-of-pocket expenses) incurred by such Indemnified Persons in
investigating, preparing to defend or defending (or appearing or preparing for
appearance as a witness in connection with) any claim, litigation, proceeding,
investigation, or governmental or stock exchange inquiry, commenced or
threatened arising out of or based upon facts or circumstances constituting
violation of, or in conflict with, any of the representations and warranties
set forth in paragraph 4 above, except to the extent such loss, claim, damage,
liability or expense results from any Indemnified Person's willful misconduct or
gross negligence or a violation of any representation, warranty, or covenant
set forth in paragraph 5 above. The Company shall reimburse such Indemnified
Persons for such counsel fees and disbursements and other out-of-pocket expenses
at such time as they are paid or incurred by such Indemnified Persons. The
foregoing indemnity shall be in addition to any liability which the Company
might otherwise have to the Indemnified Persons.
8. King agrees to notify the Company promptly of the assertion of any
claim against any of the Indemnified Persons in connection with the Transaction
and in respect of which a claim for indemnity is to be made hereunder. At the
Company's election, unless there is a conflict of interest, the defense of the
Indemnified Persons shall be conducted by the Company's counsel.
Notwithstanding the Company's election to assume the defense of such action or
proceeding, an Indemnified Person may employ separate counsel to represent it or
defend it in such action or proceeding and the Company will pay the reasonable
fees and expenses of such counsel as set forth above if such Indemnified Person
reasonably determines that there are defenses available to such Indemnified
Person which are different from, or in addition to, those available to the
Company, or if a conflict of interest exists which makes representation by
counsel chosen by the Company not advisable; provided however, unless there are
actual or potential conflicts of interest among the Indemnified Persons, the
Company will not be required to pay the fees and expenses of more than one
separate counsel for all Indemnified Persons in any jurisdiction in any single
action or proceeding. In any action or proceeding the defense of which the
Company assumes, the Indemnified Persons shall nevertheless be entitled to
participate in such action or
4
<PAGE>
AMR Corporation
April [18], 1996
Page 5
proceeding and retain its own counsel at such Indemnified Person's own expense.
The Company shall not settle or compromise any such action or proceeding
without the Indemnified Person's prior written consent, unless the terms of the
settlement or compromise include an unconditional release of any such
Indemnified Person from all liability or loss arising out of such action or
proceeding.
9. The representations and warranties contained in paragraphs 4 and 5
above and the indemnity agreement contained in paragraphs 7 and 8 above shall
remain operative and in full force and effect regardless of: (i) the
-
termination or consummation of the Transaction; and (ii) any investigation made
--
by or on behalf of any party.
10. This agreement shall be construed and enforced in accordance with the
laws of the State of New York. It is agreed that any action, suit or proceeding
arising out of or based upon this agreement shall be brought in the United
States District Court for the Southern District of New York or any court of the
State of New York of competent jurisdiction located in such District, and the
parties hereto hereby consent to the in personam jurisdiction and venue of any
-- --------
such court and to service of process by certified mail, return receipt
requested.
If any provision of this agreement shall be held illegal or invalid by any
court, this agreement shall be construed and enforced as if such provision had
not been contained herein and shall be deemed an agreement between the parties
hereto to the fullest extent permitted by law.
If the foregoing correctly sets forth the understanding between the
Company and King, please indicate acceptance thereof in the space provided
below for the purpose, whereupon this letter and the Company's acceptance
5
<PAGE>
AMR Corporation
April [18], 1996
Page 6
shall constitute a binding agreement between the parties hereto.
D. F. KING & CO., INC.
By: ___________________________
Name:
Title:
Accepted as of the date first above written:
AMR Corporation
By: ___________________________
Title: Corporate Secretary
6
