American Airlines 1998 Annual Report Download - page 52

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50 In May 1997, in conjunction with the labor agree-
ment reached between American and members of the APA,
the Company established the Pilots Stock Option Plan (The
Pilot Plan). The Pilot Plan granted members of the APA the
option to purchase 11.5 million shares of AMR stock at
$41.69 per share, $5 less than the average fair market value
of the stock on the date of grant, May 5, 1997. These shares
were exercisable immediately.
Pilot Plan option activity was:
Year Ended December 31,
1998 1997
Outstanding at January 1 7,438,220 -
Granted -11,500,000
Exercised (1,646,839) (4,061,780)
Outstanding at December 31 5,791,381 7,438,220
The weighted-average grant date fair value of all stock
option awards granted during 1998, 1997 and 1996 was
$21.15, $11.00 and $12.90, respectively.
Shares of deferred stock are awarded at no cost to
officers and key employees under the Plans’ Career Equity
Program and will be issued upon the individual’s retirement
from AMR or, in certain circumstances, will vest on a pro
rata basis. Deferred stock activity was:
Year Ended December 31,
1998 1997 1996
Outstanding at January 1 2,457,190 2,394,662 2,848,116
Granted 185,812 175,500 205,300
Issued (190,911) (67,340) (109,448)
Canceled1(50,559) (45,632) (549,306)
Outstanding at December 31 2,401,532 2,457,190 2,394,662
1Includes 420,800 shares canceled upon conversion to The Sabre Group stock options and
awards for 1996.
The weighted-average grant date fair value of career
equity awards granted during 1998, 1997 and 1996 was
$57.77, $54.98 and $39.64, respectively.
A performance share plan was implemented in
1993 under the terms of which shares of deferred stock are
awarded at no cost to officers and key employees under the
Plans. The fair value of the performance shares granted is
Stock option activity was:
Year Ended December 31,
1998 1997 1996
Weighted-Average Weighted-Average Weighted-Average
Options Exercise Price Options Exercise Price Options Exercise Price
Outstanding at January 1 3,506,774 $ 38.77 3,663,590 $ 33.59 4,645,560 $ 31.42
Granted 1,216,720 63.01 895,480 52.28 784,950 39.21
Exercised (470,810) 31.82 (985,776) 32.17 (1,161,600) 29.70
Canceled1(105,560) 42.34 (66,520) 33.82 (605,320) 31.48
Outstanding at December 31 4,147,124 $ 46.60 3,506,774 $ 38.77 3,663,590 $ 33.59
1Includes 471,900 options canceled upon conversion to The Sabre Group stock options for 1996.
The following table summarizes information about the stock options outstanding at December 31, 1998:
Weighted-Average
Range of Number of Remaining Weighted-Average Number of Weighted-Average
Exercise Prices Options Outstanding Life (years) Exercise Price Options Exercisable Exercise Price
$22-$33 842,424 4.24 $ 30.11 731,564 $ 30.45
$34-$42 1,251,060 6.94 37.81 603,810 37.66
$43-$52 1,072,080 9.19 50.61 182,760 48.67
$58-$73 981,560 9.27 67.58 68,840 58.11
4,147,124 7.50 $ 46.60 1,586,974 $ 36.49