The paper presents performance and robustness analysis of the modified reference model MRAC (model reference adaptive control) or M-MRAC in short, which differs from the conventional MRAC systems by feeding back the tracking error to the reference model. The tracking error feedback gain in concert with the adaptation rate provides an additional capability to regulate not only the transient performance of the tracking error, but also the transient performance of the control signal. This differs from the conventional MRAC systems, in which we have only the adaptation rate as a tool to regulate just the transient performance of the tracking error. It is shown that the selection of the feedback gain and the adaptation rate resolves the tradeoff between the robustness and performance in the sense that the increase in the feedback gain improves the behavior of the adaptive control signal, hence improves the systems robustness to time delays (or unmodeled dynamics), while increasing the adaptation rate improves the tracking performance or systems robustness to parametric uncertainties and external disturbances.