ATTACHMENT 47.1
From: James B. Weel
To: James C. Little
Re: Incentive
Whereas, American Airlines, Inc. ("American†or "Companyâ€) and the Transport Workers Union of America, AFL-CIO ("TWUâ€) have agreed to resolve all disputes which exist or could exist between them related to the negotiation, ratification, and final effectiveness of the Restructuring Agreement, dated April 15, 2003("Restructuring Agreement"), and Whereas, American and the TWU (the "Parties") have each agreed that it is in their mutual interest to permit the Restructuring Agreement to become binding and effective. Now therefore, it is this 24th day of April 2003, hereby agreed that the following shall supplement, and, to the extent inconsistent, modify the Restructuring Agreement
A. Duration of the Agreement. Contingent on approval of this Letter of Agreement by the AMR Board of Directors and the TWU and without further ratification, the Restructuring Agreement will be effective beginning April 15, 2003, and shall remain in effect for a period of five (5) years and become amendable April 30, 2008.
B. Early Reopener. Either the American or the TWU may elect to reopen the Restructuring Agreement by the service of notices pursuant to 45 USC Sec. 156, on or after April 30, 2006.
C. Special Procedure for Change.
1. For a period not to exceed thirty (30) days beginning on written notice by the TWU no later than May 15, 2003, the Parties will meet and discuss the deletion or modification of a single item in the Restructuring Agreements, (the "Original Provision"), such as, the change to Article 34(d) of the Mechanic and related agreement regarding payment of Sick Leave for the first 16 hours at 50% and the substitution of one or more alternative items (the "Offset Modification(s)") such that the net economic result of the deletion or modification and substitution provides cost savings to the Company equal to the cost savings originally projected by the Company for the Original Provision (i.e. $7.0 million per year).
2.If the parties cannot reach agreement during the thirty (30) day period on the Offset Modification(s) having the appropriate aggregate value described in, above, they will select a neutral arbitrator in accordance with the System Board procedure in the Restructuring Agreement. Said arbitrator must be available to hear the matter with seven (7) days of selection and shall issue a decision within 21 days of selection.
3. The arbitrator shall conduct a hearing of no more than one day in duration. American and the TWU will each have a maximum of one-half day for its presentation, with appropriate procedural rules to be set by the arbitrator.
4. At the hearing, the TWU will identify one or more Offset Modification(s), the aggregate value of which must achieve the result described in C.1., above. For example, if the proposed modification to the Original Provision has a cost of $7 million and the arbitrator values the Offset Modification(s) at $6 million, the Union must identify some additional Offset Modification(s) with a value of $1 million.
5. The Parties’ original valuation of the Restructuring Agreement will determine the value of the Original Provision. The arbitrator will determine the value of the all changes to less than all of the Original Provision, as well as the value of all Offset Modification(s). If the arbitrator determines that the value of the Offset Modification(s) is less in aggregate value to the Company than the cost of the modifications or deletions to the Original Provision, unless the TWU selects some additional Offset Modification(s) which achieves the result described in C.1., above, the arbitrator will further modify the Original Provision so that the changes to the Original Provision compared to the aggregate value of the Offset Modifications(s) achieves the result described in C.1., above.
6. The decision of the arbitrator will be final and binding on the TWU and the Company.
D. Annual Incentive Program.
The Company will establish an Annual Incentive Program ("Programâ€), as set forth in Attachment A, that shall substitute for and replace the Variable Wage Adjustment Program included in the Restructuring Agreement.
E. Authority and Effective Date. Execution of this Letter of Agreement shall constitute a representation by each party that the terms of this Letter of Agreement and of the Restructuring Agreement have been approved. This Letter of Agreement will become final upon execution on this 24th day of April 2003.
(signed original on file)
But we filed an un-grievable grievance. 
