Exhibit 10.1
AMENDMENT OF
AMERICAN EXPRESS SENIOR EXECUTIVE SEVERANCE PLAN
RESOLVED, that pursuant to Section 7.1 thereof, effective as of the
date hereof the American Express Senior Executive Severance Plan (the "Plan")
is amended as follows:
1. Article One of the Plan is amended by (i) the deletion of Section
1.10 and the new definition for Committee set forth below shall be
used throughout the Plan wherever the term "CBN Committee" had
been used previously, and (ii) the addition of the following new
sections thereto to appear in the appropriate alphabetical order
with all current numbering of sections within this Article One and
in cross references in the Plan to be renumbered accordingly, as
follows:
"1.6 "Change in Control" means the happening of any of the
following:
(a) Any individual, entity or group (a "Person") (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) becomes the
beneficial owner (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of either (i) the then
outstanding common shares of the Company (the "Outstanding Company
Common Shares") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that such beneficial
ownership shall not constitute a Change in Control if it occurs as
a result of any of the following acquisitions of securities: (i)
any acquisition directly from the Company, (ii) any acquisition by
the Company or any corporation, partnership, trust or other entity
controlled by the Company (a "Subsidiary"), (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary or (iv) any
acquisition by any corporation pursuant to a reorganization,
merger or consolidation, if, following such reorganization, merger
or consolidation, the conditions described in clauses (i), (ii)
and (iii) of subsection (c) of this Section 1.6 are satisfied.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any Person (the "Subject Person")
became the beneficial owner of 25% or more of the Outstanding
Company Common Shares or Outstanding Company Voting Securities as
a result of the acquisition of Outstanding Company Common Shares
or Outstanding Company Voting Securities by the Company which, by
reducing the number of Outstanding Company Common Shares or
Outstanding Company Voting Securities, increases the proportional
number of shares beneficially owned by the Subject Person;
provided, that if a Change in Control would be deemed to have
occurred (but for the operation of this sentence) as a result of
the acquisition of Outstanding Company Common Shares or
Outstanding Company Voting Securities by the Company, and after
such share acquisition by the Company, the Subject Person becomes
the beneficial owner of any additional Outstanding Company Common
Shares or Outstanding Company Voting Securities which increases
the percentage of the Outstanding Company Common Shares or
Outstanding Company Voting Securities beneficially owned by the
Subject Person, then a Change in Control shall then be deemed to
have occurred; or
(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board, including by reason of agreement intended to
avoid or settle any such actual or threatened contest or
solicitation; or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (i) more
than 60% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Shares and
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation, (ii) no Person (excluding
the Company, any employee benefit plan (or related trust) of the
Company, a Subsidiary or such corporation resulting from such
reorganization, merger or consolidation or any subsidiary thereof,
and any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
25% or more of the Outstanding Company Common Shares or
Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 25% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally
in the election of directors and (iii) at least a majority of the
members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger or
consolidation; or
(d) Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the
sale, lease, exchange or other disposition of all or substantially
all of the assets of the Company, other than to a corporation,
with respect to which following such sale, lease, exchange or
other disposition (A) more than 60% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company
Common Shares and Outstanding Company Voting Securities
immediately prior to such sale, lease, exchange or other
disposition, (B) no Person (excluding the Company and any
employee benefit plan (or related trust) of the Company or a
Subsidiary or such corporation or a subsidiary thereof and any
Person beneficially owning, immediately prior to such sale, lease,
exchange or other disposition, directly or indirectly, 25% or more
of the Outstanding Company Common Shares or Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly
or indirectly, 25% or more of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board
of directors of such corporation were members of the Incumbent
Board at the time of the execution of the initial agreement or
action of the Board providing for such sale, lease, exchange or
other disposition of assets of the Company.
1.8 "Committee" means the Compensation and Benefits Committee of
the Board of Directors or any successor committee appointed by the
Board of Directors.
1.12 "Constructive Termination" means resignation or other
employment termination by an Employee from an Employing Company as
a result of one or more of the following without the Employee's
written consent:
a. a reduction in Base Salary, except for across-the-board
reductions in the Base Salary that similarly affect all
Employees included in the Plan,
b. the Employing Company's requirement that the Employee be
based more than 50 miles from the location at which the
Employee was based immediately prior to the Change in
Control and which location is more than 35 miles from the
Employee's residence,
c. the assignment to the Employee of any duties that are
materially inconsistent with the Employee's duties prior to
the Change in Control, or
d. a significant reduction in the Employee's position,
duties, or responsibilities from those in effect prior to
the Change in Control.
1.13 "Defined Termination" means a termination of employment by
an Employee within two years after a Change in Control that occurs
as a result of either:
a. an Involuntary Termination, or
b. a Constructive Termination.
1.18 "Good Cause" means a discontinuance of an Employee's
employment by an Employing Company upon one of the following:
a. an Employee's Willful and continued failure to adequately
perform substantially all of the Employee's duties with an
Employing Company,
b. an Employee's Willful engagement in conduct which is
demonstrably and materially injurious to an Employing
Company or an affiliate thereof, monetarily or otherwise, or
c. conviction of a felony by the Employee.
1.19 "Involuntary Termination" means any involuntary
discontinuance of an Employee's employment by an Employing Company
for reasons other than Good Cause.
1.27 "Willful" means that an act or failure to act on an
Employee's part is done, or omitted to be done, by the Employee in
a manner that is not in good faith, and that is without reasonable
belief that such action or omission was in the best interests of
an Employing Company."
2. Article Two of the Plan is amended by deleting subsections 2.1.7
and 2.1.8 and adding the following in place thereof:
"2.1.7 Transfer to unsuitable position;
2.1.8 Relocation, provided Employee continues at work through the
transition period; or
2.1.9 If the Employee has a Defined Termination."
3. Article Three of the Plan is amended by deleting the period at the
end of Section 3.5 and adding the following to the end thereof:
"; provided, however, that in the event the Employee has a Defined
Termination, such restrictive covenants shall: (a) be reasonable
under the applicable facts and circumstances; (b) include the
following: (i) non-solicitation of customers and employees; (ii)
confidentiality of business data; (iii) full release of claims;
and (iv) non-denigration of the Company and its affiliates, and
their officers, directors and agents; and (c) not include any non-
competition limitations."
4. Article Three of the Plan is amended by adding the following new
Section 3.6 to the end thereof:
"3.6 Notwithstanding any other provision of this Plan to the
contrary, if all or any portion of the payments or benefits to
which the Employee will be entitled under this Plan, either alone
or together with other payments or benefits which the Employee
receives or is entitled to receive directly or indirectly from the
Company or any of its subsidiaries or any other person or entity
that would be treated as a payor of parachute payments as
hereinafter defined, under any other plan, agreement or
arrangement, would constitute a "parachute payment" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code") or any successor provision thereto and the
regulations thereunder (except that "2.95" shall be used instead
of "3" under Section 280G(b)(2)(A)(ii) of the Code or any
successor provision thereto), such payment or benefits provided to
the Employee under this Plan, and any other payments or benefits
which the Employee receives or is entitled to receive directly or
indirectly from the Company or any of its subsidiaries or any
other person or entity that would be treated as a payor of
parachute payments as hereinafter defined, under any other plan,
agreement or arrangement which would constitute a parachute
payment, shall be reduced (but not below zero) as described below
to the extent necessary so that no portion thereof would
constitute such a parachute payment as previously defined (except
that "2.95" shall be used instead of "3" under Section
280G(b)(2)(A)(ii) of the Code or any successor provision thereto).
Whether payments or benefits to the Employee are to be reduced
pursuant to the first sentence of this paragraph, and the extent
to which they are to be so reduced, will be determined by the firm
serving, immediately prior to the Change in Control, as the
Company's independent auditors, or if that firm refuses to serve,
by another qualified firm, whether or not serving as independent
auditors, designated by the Administration Committee under the
American Express Senior Executive Severance Plan (the "Firm").
The Firm will be paid reasonable compensation by the Company for
such services. If the Firm concludes that its determination is
inconsistent with a final determination of a court or the Internal
Revenue Service, the Firm shall, based on such final
determination, redetermine whether the amount payable to the
Employee should have been reduced and, if applicable, the amount
of any such reduction. If the Firm determines that a lesser
payment should have been made to the Employee, then an amount
equal to the amount of the excess of the earlier payment over the
redetermined amount (the "Excess Amount") will be deemed for all
purposes to be a loan to the Employee made on the date of the
Employee's receipt of such Excess Amount, which the Employee will
have an obligation to repay to the Company on the fifth business
day after demand, together with interest on such amount at the
lowest applicable Federal rate (as defined in Section 1274(d) of
the Code or any successor provision thereto), compounded
semi-annually (the "Section 1274 Rate") from the date of the
Employee's receipt of such Excess Amount until the date of such
repayment (or such lesser rate (including zero) as may be
designated by the Firm such that the Excess Amount and such
interest will not be treated as a parachute payment as previously
defined). If the Firm determines that a greater payment should
have been made to the Employee, within five business days of such
determination, the Company will pay to the Employee the amount of
the deficiency, together with interest thereon from the date such
amount should have been paid to the date of such payment, at the
Section 1274 Rate (or such lesser rate (including zero) as may be
designated by the Firm such that the amount of such deficiency and
such interest will not be treated as a parachute payment as
previously defined).
If a reduction is to be made pursuant to this paragraph, the Firm
will have the right to determine which payments and benefits will
be reduced as described below based on the following hierarchy
from the first to be reduced to the last (or on such other
hierarchy chosen by the Firm in its sole discretion), either those
under this Plan alone or such other payments or benefits which the
Employee receives or is entitled to receive directly or indirectly
from the Company or any of its subsidiaries or any other person or
entity that would be treated as a payor of parachute payments as
previously defined, under any other plan, agreement or
arrangement:
(I) nonqualified stock option awards;
(II) restricted stock awards, awards in lieu of restricted
stock awards, and restricted stock units;
(III) amounts payable under deferred compensation
(including, but not limited to, base salary, cash
bonus or annual incentive awards, and long-term
incentive awards) programs;
(IV) any other awards or amounts not described in (I), (II)
or (III) above that would be payable or provided upon
a Change in Control;
(V) amounts payable under severance benefit plans;
(VI) amounts payable under annual incentive (e.g., cash
bonus) plans;
(VII) portfolio grant awards and performance grant awards;
(VIII) amounts payable under employee welfare benefit plans,
such as life insurance plans (including, but not
limited to, the American Express Key Executive Life
Insurance Plan);
(IX) amounts payable under nonqualified employee pension
benefit plans; and
(X) any other awards or amounts not described in (V),
(VI), (VII), (VIII) or (IX) above that would be
payable or provided upon Defined Termination.
The payments and benefits subject to reduction pursuant to this
paragraph include one or more attributes thereof, including, but
not limited to, acceleration of the time for the vesting or
payment thereof and the crediting of additional interest
equivalents thereunder. Such reduction may be effected by the
reduction or elimination, in whole or in part, of any such payment
or benefit (including any or all attributes thereof). If a
payment or benefit (including any or all attributes thereof) is
reduced in part, the remaining portion of the payment or benefit
(including any or all attributes thereof) will continue in full
force and effect under the provisions of such payment or benefit
(including any or all attributes thereof) as if the Change in
Control did not occur and without regard to such reduction or
elimination. Nothing in the preceding three sentences of this
paragraph is intended or should be interpreted to change the
calculated reduction amounts and procedure of this paragraph."
5. Article Four of the Plan is amended by deleting the period at the
end of Section 4.1 and adding the following to the end thereof:
"; provided, however, that in the event the Employee has a
Defined Termination, the severance benefit under the Plan will be
paid within five days after the date of such Change in Control."
6. Sections 7.1 and 7.2 of Article Seven of the Plan are each amended
by adding the following to the end thereof:
"The foregoing sentence to the contrary notwithstanding, neither
the Board of Directors nor the Committee may terminate this Plan
or amend this Plan in a manner that is detrimental to the rights
of any participant of the Plan without his written consent (i)
with respect to the provisions of the Plan which become applicable
upon a Change in Control, and (ii) with respect to all provisions
of the Plan for a period of two years and one day after the date
of a Change in Control."