ARTICLE 29 -SYSTEM BOARD OF ADJUSTMENT

A. STATEMENT OF PURPOSE

In compliance with Section 204, Title II, of the Railway Labor Act, as amended, there is hereby established a System Board of Adjustment for the purpose of adjusting and deciding disputes which may arise under the terms of this Agreement and which are properly submitted to it, which Board shall be known as the American Airlines Flight Attendant System Board of Adjustment, hereinafter referred to as the System Board.

B. JURISDICTION OF THE SYSTEM BOARD

1. General a. Scope. The System Board as constituted in accordance with the provisions of this Article shall have jurisdiction over disputes between any employee covered by this Agreement and the Company growing out of grievances or out of interpretation or application of any of the terms of this Agreement. The jurisdiction of the System Board shall not extend to proposed changes in hours of employment, rates of compensation, or working conditions covered by existing agreements between the parties hereto. b. Definitions. As used in the Article: (1) Arbitration Hearing is defined as a meeting of the System Board held for the purpose of adjusting and deciding disputes which may arise under the terms of this Agreement. (2) Session is defined as a series of arbitration hearings held for the purpose of adjusting and deciding Individual, Group and Base disputes pending before the Quarterly System Board as defined in 2.a. below. (3) Executive Session is defined as any meeting of the System Board wherein the participants are limited to the members of the System Board. 2. System Board Consideration of a Dispute a. Individual, Group and Base Disputes. The System Board shall consider and have jurisdiction over any Individual, Group or Base dispute, as defined in Article 28 of this Agreement, properly submitted to it by the President of the APFA in accordance with the terms provided for in this Agreement. Regular sessions of the System Board shall be scheduled once each quarter for the purpose of considering all Individual, Group and Base disputes properly submitted to the System Board when such disputes have not been previously settled in accordance with the terms provided for in this Agreement. Such regularly scheduled sessions, hereinafter referred to as the Quarterly System Board, shall take place once each quarter provided that there are such disputes filed with the System Board for consideration. The Quarterly System Board shall continue in session until all such disputes before it have been considered unless otherwise mutually agreed upon. b. Other Disputes. The System Board shall consider any other dispute properly submitted to it by the President of the APFA or by the Company when such dispute has not been previously settled in accordance with the terms provided for in this Agreement.

C. AUTHORITY OF THE SYSTEM BOARD

1. Decisions. Decisions of the System Board in all disputes properly referable to it shall be final and binding upon the parties thereto.

2. Majority Vote. A majority vote of all members of a System Board shall be competent to make a decision.

3. All Judgments Rendered Without Prejudice. It is understood and agreed that each and every System Board Member shall be free to discharge his/her duty in an independent manner, without fear that his/her relations with the Company or with the employees may be affected in any manner by any action taken by him/her in good faith in his/her capacity as a System Board Member.

D. ADMINISTRATIVE OFFICERS OF THE SYSTEM BOARD

1. Commissioner and Deputy Commissioner. There is hereby established the position of Commissioner of the System Board and the position of Deputy Commissioner of the System Board. The Commissioner and the Deputy Commissioner are hereby deemed the Administrative Officers of the System Board.

2. Terms of Office. The Vice President of the APFA and the Vice President of Employee Relations, or their respective designees, shall act as the Commissioner or the Deputy Commissioner of the System Board. The Commissioner and the Deputy Commissioner once designated shall serve for one (1) year or until a successor has been duly appointed and designated. The office of Commissioner shall be filled and held alternately by the APFA and by the Company. When the APFA is acting as the Commissioner, the Company shall act as the Deputy Commissioner for the System Board, and vice versa.

3. Duties and Authority a. Administrative Duties. The Commissioner and the Deputy Commissioner shall be charged with coordinating the administrative functions of the System Board, including the appointment of arbitrators and the scheduling of arbitration hearing dates. The Commissioner and Deputy Commissioner shall have the right to delegate some or all of their responsibilities or duties to a designee, provided such delegation is promptly communicated to the other party. b. Record Keeping. The Commissioner and the Deputy Commissioner shall maintain a complete record of all disputes submitted to the System Board for its consideration and of all findings and decisions made by it. c. Expenses of the System Board. The Commissioner and the Deputy Commissioner, acting jointly, shall have the authority to incur such expenses, as in their judgment, may be deemed necessary for the proper conduct of the business of the System Board, and such expenses shall be borne one-half (1/2) by each of the parties hereto.

E. COMPOSITION OF THE SYSTEM BOARD

1. Appointment of Three (3) Member System Board. The System Board, in a given dispute(s) shall consist of three (3) members; one (1) of whom shall be appointed by APFA; one (1) of whom shall be appointed by the Company, and one (1) of whom shall be an arbitrator appointed in accordance with the provisions of this Article. Such appointees shall be known as System Board Members.

2. Invocation of Five (5) Member System Board. If either the APFA or the Company desires in a given dispute(s) a System Board comprised of two (2) Company members, two (2) APFA members, and the appointed arbitrator, such party shall invoke such System Board upon ten (10) days written notification to the opposing party. The invocation of a five (5) member System Board from time to time on a case by case basis shall not constitute cause for dispensing with the provisions of 1. above in any other dispute(s).

F. CHAIRPERSON OF THE SYSTEM BOARD

In a dispute properly submitted to the System Board, it shall be the duty of the Commissioner and the Deputy Commissioner to endeavor to reach agreement on the appointment of an arbitrator to sit as a member of the System Board and to serve as its Chairperson for the purpose of reaching a final decision on the dispute(s) pending before the System Board. The Chairperson shall preside at all arbitration hearings and Executive Sessions of the System Board involving such dispute(s) and shall have a vote in connection with all actions taken by the System Board on that dispute(s).

G. APFA AND COMPANY SYSTEM BOARD MEMBERS

1. Leaves of Absence and Travel. APFA and Company System Board Members who are employees of the Company shall be granted necessary leaves of absence for the performance of their duties as System Board Members. So far as space is available, System Board Members shall be furnished free transportation over the lines of the Company for the purpose of attending arbitration hearings and Executive Sessions of the System Board, to the extent permitted by law.

2. Disposition of System Board Member Expenses. Each of the parties hereto will assume the compensation, travel expense and other expenses of the System Board Members appointed by it.

3. Notification. The Commissioner and the Deputy Commissioner shall each notify the other of the individual(s) appointed to serve as System Board Members for a given dispute(s).

H. TERMS OF OFFICE - SYSTEM BOARD MEMBERS

1. Quarterly System Board. The Quarterly System Board Members shall serve for one (1) year from the date of their appointment or until their successors have been duly appointed. Quarterly System Board Member vacancies shall be filled in the same manner as provided herein for the appointment of the original Quarterly System Board Members.

2. Discharge and Presidential Grievances. The System Board Members charged with deciding Discharge and Presidential Grievances shall serve on an ad hoc, case by case, basis.

I. SUBMISSION OF DISPUTES

1. Content of Submissions. All disputes properly referred to the System Board for consideration shall be addressed to the Commissioner. Five (5) copies of each petition, including all papers and exhibits in connection therewith, shall be forwarded to the Commissioner who shall promptly transmit one (1) copy thereof to the Deputy Commissioner and each member of the System Board. Each submission shall include:

a. Individual, Group and Base Disputes (1) A formal and specific grievance statement, including: (a) Question or questions at issue. (b) Statement of facts. (c) Remedy sought. (2) Copies of all documents exchanged between the parties to date. (3) Notice of Dispute.

b. Discharge and Presidential Grievances (1) Question or questions at issue. (2) Statement of facts. (3) Position of employee, employees or the APFA. (4) Position of the Company. (5) Copies of all documents exchanged between the parties to date.

2. Joint and Separate Submissions. When possible, joint submissions should be made, but if the parties are unable to agree upon a joint submission, then either party may submit the dispute and its position to the System Board, provided however, that such separate submissions must be made within thirty (30) days from the date of the Commissioner=s receipt of the original submission. No dispute shall be considered by the System Board which has not first been handled in accordance with the provisions of this Agreement, including, as applicable, the rendering of a decision or the issuing of a recommendation by the Company.

3. Company Petition. Notwithstanding the foregoing paragraph, in no way shall the Company=s right to file a petition to the System Board be affected.

J. PANEL OF ARBITRATORS

1. Panel. The Commissioner and the Deputy Commissioner shall endeavor to maintain at all times a panel of eleven (11) arbitrators that are mutually acceptable to act as the Chairperson of the System Board and from whom dates of availability are routinely obtained. Appointment of an arbitrator as a System Board Member will be based upon mutual agreement, rotation and availability.

2. Vacancy/Termination. If a vacancy occurs on this panel, the Commissioner and Deputy Commissioner will endeavor to agree upon an arbitrator to fill such vacancy within thirty (30) days. Each arbitrator shall serve as a member of this panel for an indefinite term; either the Commissioner or Deputy Commissioner may cause the services of an arbitrator to be terminated (except as to disputes already submitted to him/her) by giving written notice to the other party and to the arbitrator.

3. Appointment of Ad Hoc Arbitrator. In the appointment of an arbitrator, the Commissioner and Deputy Commissioner should attempt to reach agreement from among members of this panel, however, nothing in this Article shall prohibit the Commissioner and Deputy Commissioner from agreeing to utilize an ad hoc arbitrator for a particular dispute(s).

K. APPOINTMENT OF ARBITRATOR, LOCATION AND NOTICE OF HEARINGS

a. Chairperson/Standing Arbitrator (1) Appointment of Standing Arbitrator. The appointment of a standing arbitrator to chair the Quarterly System Boards for the succeeding calendar year must be made no later than forty-five (45) days prior to the end of the present calendar year. (2) Termination. Either the Commissioner or the Deputy Commissioner may terminate the services of a standing arbitrator after the first Quarterly System Board or any Quarterly Session thereafter so long as such termination is made no later than sixty (60) days prior to the next scheduled session of the Quarterly System Board. In such event, the Commissioner and the Deputy Commissioner will promptly agree upon the appointment of another arbitrator, either from the panel of arbitrators or an ad hoc arbitrator, to Chair the Quarterly System Boards. Should the parties fail to reach agreement within fifteen (15) days, the provisions prescribed herein will be utilized to retain the services of an arbitrator for the remainder of the calendar year. The newly appointed standing arbitrator will chair the next session of the Quarterly System Board, or if unavailable, the succeeding Quarterly System Board. If such arbitrator is unavailable for part or all of that initial session of the Quarterly System Board, during such period of unavailability, the parties will mutually agree upon an arbitrator to temporarily chair that part of the Quarterly System Board for which the newly appointed arbitrator is unavailable.

b. Location of Arbitration Hearings. The Quarterly System Board shall meet in the city where the General Offices of American Airlines, Inc. are maintained, unless a different location is agreed upon by the Commissioner and the Deputy Commissioner.

c. Notice of Arbitration Hearings/Docket. Upon receipt of notice of the submission of a dispute, the Commissioner shall set a date for the arbitration hearing, which shall be at the time of the next regular session of the Quarterly System Board and such dispute shall be considered docketed for hearing. If the President of the APFA or the Vice President of Employee Relations consider the dispute of sufficient urgency and importance, and the dispute has been docketed but not heard due to time constraints during at least one (1) prior session of the Quarterly System Board, either party may request an arbitration hearing at an earlier date. Such earlier date shall be at such a time and place agreed upon by the Commissioner and Deputy Commissioner, but not more than fifteen (15) days after such request for an arbitration hearing is made. The Commissioner shall give the necessary notices, in writing, of such arbitration hearing to the System Board Members and to the parties to the dispute.

d. Pre-Arbitration Conference. Prior to each session of the Quarterly System Board, representatives from Headquarters Flight Service, Employee Relations and the APFA will confer by phone, or in person if mutually agreed upon, to review all grievances submitted to date. All parties will use their best efforts to facilitate and expedite the processing of disputes before the System Board.

e. Conversion to Presidential Grievance (1) If, at any time prior to submission to the System Board, the APFA elects to convert a particular Individual, Group or Base Dispute to a Presidential Grievance, the procedures in Article 28 governing Presidential Grievances shall apply. (2) If, after submission to the System Board, the APFA elects to convert a particular Individual, Group or Base grievance to a Presidential Grievance, the grievance shall, within forty-five (45) days of notice of conversion to the Company, be scheduled for a Pre-Arbitration conference. Should the Company desire to file a separate submission to the System Board, such submission shall be filed within thirty (30) days following the date of the Pre-Arbitration Conference.

2. Discharge Grievances

a. Appointment of Arbitrator/Hearing Date. The Commissioner and the Deputy Commissioner shall, within forty-five (45) days from the date of APFA=s submission, agree on the appointment of an arbitrator to chair the System Board and schedule the arbitration hearing date of a Discharge grievance. The scheduled hearing date may be outside this forty-five (45) day time limit.

b. Exception: Underlying Dispute. For a discharge grievance arising from an underlying policy or contractual dispute which is currently pending between the Company and the APFA, the arbitration hearing on the discharge may be held in abeyance until the policy or contractual dispute between the Company and the APFA has been resolved in accordance with this Agreement.

c. Location of Arbitration Hearing. In discharge disputes, the System Board shall meet in the city where the discharged employee was based, unless otherwise agreed to by the Commissioner and the Deputy Commissioner.

d. Notice of Arbitration Hearing/Docket. Discharge grievances shall be scheduled for arbitration hearing at such place and time agreed upon by the Commissioner and the Deputy Commissioner. The Commissioner shall distribute the necessary dockets, in writing, with the time and place of such arbitration hearing, to the System Board Members and to the parties to the dispute.

3. Presidential Grievances

a. Headquarters Pre-Arbitration Conference. Within forty-five (45) days of APFA=s submission of a Presidential Grievance to the System Board, a Headquarters Pre-Arbitration Conference shall be held with the President of the APFA or his/her designee(s) and the Vice President of Employee Relations, or his/her designee(s). At such conference, the parties shall exchange all documents known to the parties at the time which are used in support of their respective positions. For confidentiality purposes, and, at the option of either party, all names and other identifying information may be expunged from any such documents exchanged.

b. Appointment of Arbitrator/Hearing Date. The Commissioner and the Deputy Commissioner shall, within forty-five (45) days from the date of APFA=s request for arbitration, agree on the appointment of an arbitrator to chair the System Board and schedule the arbitration hearing date of the Presidential Grievance. The scheduled hearing date may be outside this forty-five (45) day time limit.

c. Location of Arbitration Hearing. The System Board shall meet in the city where the General Offices of American Airlines, Inc. are maintained, unless a different location is agreed upon by the Commissioner and the Deputy.

d. Notice of Arbitration Hearing/Docket. Presidential Grievances shall be scheduled for an arbitration hearing at such place and time agreed upon by the Commissioner and the Deputy Commissioner. The Commissioner shall distribute the necessary dockets, in writing, with the time and place of such hearing, to the System Board Members and to the parties to the dispute.

L. PROCEDURE FOR BREAKING DEADLOCK IN THE APPOINTMENT OF AN ARBITRATOR

Should the Commissioner and the Deputy Commissioner fail to reach agreement on the appointment of an arbitrator to chair an arbitration hearing(s) of the System Board as provided in K.1.a. (1), K.2.a. and K.3.b. above, the Vice President of Employee Relations and the President of the APFA, or their respective designees, shall, within ten (10) days of the expiration of the time limits as provided in K.1.a. (1), K.2.a. and K.3.b. above, meet to review the reasons for the failure of the parties to reach agreement on the appointment of the arbitrator, and to make a final attempt to reach agreement prior to petitioning the National Mediation Board.

1. Petition to National Mediation Board. If, within ten (10) days of the meeting described above, the Vice President of Employee Relations and the President of the APFA have failed to reach agreement on the appointment of an arbitrator, the Commissioner shall petition the National Mediation Board for a list of seven (7) arbitrators who, in addition to other credentials, are members of the National Academy of Arbitrators. The Commissioner and the Deputy Commissioner will have thirty (30) days from receipt of this list to appoint an arbitrator and schedule the hearing date.

2. Appointment of Arbitrator. Through the process of elimination, with the Commissioner and the Deputy Commissioner alternately striking an equal number of the arbitrators from the list supplied by the NMB, an arbitrator will be appointed and the case set for hearing at the earliest possible date.

M. SCHEDULING AND POSTPONEMENTS OF ARBITRATION HEARINGS

The Commissioner and the Deputy Commissioner agree to use their best efforts to schedule arbitration hearings at the earliest practical date and to avoid and/or limit, whenever possible, the number of postponements. Any delay in scheduling or postponement should be for good cause, i.e., System Board Member, grievant, witness or presenter unavailability due to sickness, injury, and/or vacation; presenter staffing considerations; or delays pending the resolution of an outside hearing or resolution of a substantially identical dispute, etc.

N. STENOGRAPHIC REPORTS

When the Commissioner and the Deputy Commissioner mutually agree that a stenographic report is to be taken of a hearing of the System Board, in whole or in part, the cost will be borne equally by both parties to the dispute. In the event it is not mutually agreed that a stenographic report of the proceedings shall be taken, any written record available taken of such System Board hearing shall be furnished to the other party to the dispute upon request, provided that the cost of such written record so requested shall be borne equally by the parties to the dispute.

O. REPRESENTATION AND SUMMONING OF WITNESSES

1. Representation. Employees covered by this Agreement may be represented at System Board hearings by such person or persons as they may choose and designate, and the Company may be represented by such person or persons as it may choose and designate.

2. Witnesses

a. Summoning of Witnesses (1) On request of individual members of the System Board, the System Board may, by a majority vote, or shall at the request of either the APFA representative(s) or the Company representative(s) thereon, summon any witnesses who are employed by the Company and who may be deemed necessary by the parties in the dispute, or by either party, or by the System Board itself, or by either group of representatives constituting the Board. (2) The number of witnesses summoned at any one time shall not be greater than the number which can be spared from the operation without interference with the services of the Company.

b. Disposition of System Board Witness Expenses. Each of the parties hereto will assume the compensation, travel expense and other expenses of the witnesses called or summoned by it. So far as space is available, witnesses who are employees of the Company shall receive free transportation over the lines of the Company from the point of duty or assignment to the point at which they must appear as witnesses, and return, to the extent permitted by law.

3. Leaves of Absence for Representatives/Witnesses