Exhibit 10.2
AMENDMENT OF
AMERICAN EXPRESS COMPANY
EXECUTIVES' INCENTIVE COMPENSATION PLAN
RESOLVED, that pursuant to Paragraph (b) of Article IX thereof, the American
Express Company Executives' Incentive Compensation Plan (the "Plan") is
amended effective as of the date hereof, as follows:
1. Paragraph (a) of Article V of the Plan is amended by
deleting the period at the end thereof and adding the following:
"; provided, however, that if, within two years following the occurrence
of a Change in Control (as defined below in Article VI), a participant
under the Plan experiences a termination of employment that would
otherwise entitle him to receive the payment of severance benefits under
the provisions of the severance plan that are in effect and that he
participates in as of the date of such Change in Control, and is at Job
Band 50 or higher on the date of such termination of employment, then
such participant in the Plan shall be paid, within five days after the
date of such termination of employment, a prorata award under the Plan
equal to (i) (A) the average award paid or payable to such participant
under the Plan (or any other annual incentive award program of the
Company or one of its subsidiaries at the time of such prior payment)
for the two years prior to the Change in Control, or (B) if such
participant has not received two such awards, the most recent award paid
or payable (or target amount so payable, if such participant has not
previously received any such award) to such participant under the Plan
(or any other annual incentive award program of the Company or one of
its subsidiaries at the time of such prior payment), multiplied by (ii)
the number of full or partial months that have elapsed during the
performance year under the Plan at the time of such termination of
employment divided by 12, provided, further, that in the event such
termination of employment occurs after the end of the performance year
under the Plan but before the payment date under the Plan, then such
participant shall also be paid, within five days after such termination
of employment, an award under the Plan equal to (X) the average award
paid or payable to such participant under the Plan (or any other annual
incentive award program of the Company or one of its subsidiaries at the
time of such prior payment) for the two years prior to the Change in
Control, or (Y) if such participant has not received two such awards,
the most recent award paid or payable (or target amount so payable, if
such participant has not previously received any such award) to such
participant under the Plan (or any other annual incentive award program
of the Company or one of its subsidiaries at the time of such prior
payment)."
2. Article VI of the Plan is amended by the addition of new
paragraphs (f), (g) and (h) thereto, to read as follows:
"(f) Notwithstanding anything to the contrary contained in this Plan
(except for Paragraph VI(h)), upon the occurrence of a Change in Control
(as defined below), the value of any incentive award, the payment of
which has been deferred as of the date of such Change in Control
(including any earnings equivalents accrued thereon, plus additional
interest equivalents for a period of 24 months from the date of the
Change in Control, based on the deferral rate in effect for the plan
year prior to the date of the Change in Control), shall be paid to the
participant within five days following the date of such Change in
Control. For purposes of the preceding sentence, any participant whose
incentive award is deferred in whole or in part shall be deemed to have
had such portion of his account credited with interest equivalents from
the date of deferral to the date of the Change in Control at the higher
of the deferral rates (applicable to the alternative chosen by the
participant) in effect during such deferral period (but not less than
zero)."
(g) For purposes of this Plan, "Change in Control" means the happening
of any of the following:
(i) 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 (A) the then outstanding common shares of the
Company (the "Outstanding Company Common Shares") or (B) 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:
(W) any acquisition directly from the Company, (X) any acquisition by
the Company or any corporation, partnership, trust or other entity
controlled by the Company (a "Subsidiary"), (Y) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary or (Z) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the conditions described
in clauses (A), (B) and (C) of subsection (iii) of this Section (g) 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
(ii) 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
(iii) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, (A) 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, (B) 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 (C) 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
(iv) Approval by the shareholders of the Company of (A) a
complete liquidation or dissolution of the Company or (B) 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 (X) 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, (Y) 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
(Z) 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.
(h) Notwithstanding any other provision of this Plan to the contrary,
if all or any portion of the payments or benefits to which the
participant will be entitled under this Plan, either alone or together
with other payments or benefits which the participant 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 participant under
this Plan, and any other payments or benefits which the participant
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 participant 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 participant 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 participant, 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 participant made on the date of the
participant's receipt of such Excess Amount, which the participant 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 participant'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 participant, within five business days of such
determination, the Company will pay to the participant 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 participant 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 a termination of employment
that occurs within two years after a Change in Control
as described in Paragraph V(a) above.
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."
3. Paragraph (b) of Article IX of the Plan is amended in its
entirety, to read as follows:
"The Board of Directors of the Company may amend this Plan in whole or
in part from time to time, and may terminate it at any time. The
foregoing sentence to the contrary notwithstanding, the Board of
Directors of the Company may not amend or terminate this Plan in a
manner that is detrimental to the rights of any participant with respect
to the provisions which are applicable upon a Change in Control, without
his written consent. The Board of Directors of the Company shall cause
all companies that are or have been Participating Companies to be
notified promptly of any amendment or termination. No amendment or
termination shall deprive any participant, former participant,
beneficiary or legal representatives of a former participant of any
right under this Plan as such right exists at the time of such amendment
or termination, nor increase the obligations of any company that is or
has been a Participating Company without its consent."