Exhibit 10.4
AMENDMENT OF
AMERICAN EXPRESS
SALARY/BONUS DEFERRAL PLAN
RESOLVED, that pursuant to Section 7.1 thereof, the American Express
Salary/Bonus Deferral Plan (the "Plan") is amended effective as of the date
hereof, as follows:
1. Article I of the Plan is amended by adding new Section 1.22
thereto, to read as follows:
"1.22 '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 1.22
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."
2. Section 6.5 of the Plan is renumbered Section 6.7 and new Sec-
tions 6.5 and 6.6 are added, to read as follows:
"6.5 Notwithstanding anything to the contrary contained in the Plan
(except for Section 6.6), upon the occurrence of a Change in
Control, the amounts credited to a Participant's Deferred
Compensation Account 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 follow-
ing the date of such Change in Control. For purposes of the
preceding sentence, any Deferred Compensation Account shall be
deemed to have been 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)."
"6.6 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 (i) upon a Defined Termination, or
(ii) upon a termination of employment within two years
after a Change in Control if the Participant is in a
job classified as Job Band 50, and if such termination
of employment 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, as the case may be.
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. Section 7.1 of the Plan is amended in its entirety, to read as
follows:
"7.1 The Committee may at any time and from time to time modify
or amend any or all of the provisions of the Plan
(including, but not limited to, acceleration of payment(s))
or may at any time terminate the Plan; provided that no such
action shall materially adversely affect the rights of any
Participant hereunder without his consent thereto, as
determined by the Committee in its sole discretion. The
foregoing sentence to the contrary notwithstanding, the
Board of Directors, the Committee or any other person may
not amend or terminate this Plan in a manner that is
detrimental to the rights of any Participant of the Plan
with respect to the provisions which become applicable upon
a Change in Control, without his written consent."