EXHIBIT 10.1
THE AMERICAN EXPRESS COMPANY SUPPLEMENTAL RETIREMENT PLAN
Amended and Restated Effective March 1, 1995
I. HISTORY OF THE PLAN
On November 26, 1973, the Board of Directors of American Express
Company (the "Company") authorized and approved the adoption of the
American Express Supplementary Pension Plan to supplement retirement
benefits provided under the American Express Retirement Plan (sometimes
referred to as the American Express Funded Pension Plan) and other
retirement and savings plans sponsored by the Company, its subsidiaries and
Affiliates, through payment of benefits to Participants in such plans and
their surviving spouses and Beneficiaries, to whom benefits otherwise
payable under such plans are restricted in accordance with Section 3(36) of
the Employee Retirement Income Security Act of 1974 (ERISA). The American
Express Supplementary Pension Plan has remained in effect since its
adoption and has been construed and operated as an "excess benefit plan" as
defined under ERISA Section 3(36).
On July 1, 1994, the Board of Directors of the Company authorized
and directed the amendment and restatement of the American Express
Supplementary Pension Plan pursuant to the provisions of Section 9 thereof.
Such plan is amended and restated generally effective March 1, 1995 as the
American Express Company Supplemental Retirement Plan.
II. DEFINITIONS
As used in the Plan, the following terms have the meanings
indicated below:
A. "Administrator" means the Employee Benefits Administration Committee
or such other individual(s) authorized by the Company's
Board or its Compensation and Benefits Committee.
B. "Affiliate" means any corporation or other trade or business under
common control with the Company, as further defined in the
Company's Qualified Retirement Plans.
C. "Beneficiary" means the individual or entity entitled to receive
benefits under the Plan.
D. "Code" means the Internal Revenue Code of 1986, as may be amended from
time to time.
E. "Company" means American Express Company, it subsidiaries and
Affiliates.
F. "Compensation" shall mean, with respect to excess benefits calculated
with reference to a particular Qualified Retirement Plan,
"Compensation" as defined in the applicable Qualified Retirement Plan,
as the context implies.
G. "DVP Retirement Plan" means the IDS DVP Retirement Plan.
H. "Employee" means an elected or appointed officer of the Company or
any other individual the Administrator considers to be a key
employee of the Company or an Affiliate, and whose compensation is
reported on a Form W-2, regardless of whether the use of such form
is subsequently determined to be erroneous.
I. "Insiders" means such Plan Participants who are or may be required
to file reports under Section 16(a) of the Securities Exchange Act
of 1934, as amended, with respect to equity securities of the Company.
J. "ISP" means the American Express Company Incentive Savings Plan, as
amended from time to time, and any successor plan.
K. "Participant" means an eligible Employee who accrues benefits under
the Plan.
L. "Plan" means this American Express Company Supplemental Retirement Plan.
M. "Plan Year" means the calendar year with reference to which benefits are
determined under the Plan.
N. "Qualified Retirement Plan" means the Retirement Plan, the ISP, or the
DVP Retirement Plan, as the context may imply.
O. "Retirement Plan" means the American Express Retirement Plan, as amended
from time to time, and any successor plan.
P. "Section 401(a)(17) Limitation" refers to the limitation on the
dollar amount of Compensation which may be taken into account
under the Qualified Retirement Plans under Section 401(a)(17) of
the Code or any other successor provision.
Q. "Section 415 Limitations" refer to the limitations on benefits for
defined benefit pension plans, defined contribution plans and the
limitations on benefits and contributions for combinations of
plans which are imposed by Section 415(b), 415(c) and 415(e),
respectively, of the Code, including any successor provisions.
III. ADMINISTRATION
The Plan shall be administered by the Administrator. The
Administrator shall have full power, authority and discretion to interpret,
construe and administer the Plan, consistent with the intent and the terms
of the Plan, and such interpretation and construction thereof and actions
taken thereunder shall be binding on all persons for the purposes so stated
by the Administrator; provided that any such interpretation shall be
consistent with Section VI(D) hereof.
The Administrator may correct any defect, supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent the
Administrator deems desirable to carry the Plan into effect. Any decision
of the Administrator in the administration of the Plan shall be final and
conclusive and binding upon all Participants in the Plan.
IV. ELIGIBILITY TO PARTICIPATE IN THE PLAN
(A) Subject to the discretion of the Administrator, an Employee of the
Company (including such subsidiaries or Affiliates as may be
approved by the Company) who satisfies each of the following
requirements for the relevant Plan Year shall be eligible to
participate in this Plan and to accrue benefits described herein.
(1) For the relevant Plan Year, the Employee is:
(a) Other than an Employee described in (b) or (c)
below and is a participant under a "Qualified
Retirement Plan" maintained by the Company.
Participation by an Employee in a Qualified
Retirement Plan shall be determined pursuant to
and in accordance with the eligibility criteria
applicable under such Qualified Retirement Plan;
or
(b) Effective January 1, 1995, the Employee serves
in the capacity of a Group Vice President
pursuant to a written employment agreement, is a
participant under the DVP Retirement Plan or its
successor plan, and satisfies the requirements
of Section (2)(a) below for the relevant Plan
Year; or
(c) Effective January 1, 1996, the Employee serves
in the capacity of Division Vice President or
Field Vice President pursuant to a written
employment agreement, is a participant under the
DVP Retirement Plan or its successor plan, and
satisfies the requirements of Section (2)(a)
below for the relevant Plan Year.
(2) For the relevant Plan Year, the Employee is:
(a) credited with "Compensation" earned from the
Company, its subsidiaries or Affiliates in an
amount in excess of the applicable Code Section
401 (a)(17) Limitation; or
(b) classified as a level "Grade Band 50" personnel
or greater, as such classification is defined by
the Administrator.
(B) Notwithstanding the provisions of Section IV(A) above,
participation in this Plan shall be limited to such Employees of
the Company, its subsidiaries and Affiliates, who are designated
by the Administrator, on a case-by-case basis, as eligible to
participate in this Plan; provided, all Insiders who satisfy the
eligibility requirements under Section IV(A)(1) and (2) shall be
deemed eligible to participate in this Plan without any action by
the Administrator.
(C) The Administrator shall approve and execute deferred compensation
agreements, including amendments thereto as may be necessary or
desirable, with Employees eligible to participate in the Plan.
(D) Employees who satisfy the eligibility requirements of Section
IV(A) as a result of promotion or new employment during the Plan
Year may request participation in the Plan; provided, however,
such request must be in writing and received by the Administrator
no later than thirty (30) days following receipt by the Employee
of written notification of eligibility to participate in the Plan.
(E) Prior to August 11, 1999, benefits available under the Plan to an
employee who satisfies the eligibility criteria of either Sections
IV(A)(1)(b) or (c), shall be restricted to the benefits described
in Section V(A). Effective August 11, 1999 such employees shall be
eligible for other benefits under the Plan as determined by the
Administrator.
V. BENEFITS UNDER THE PLAN
Effective March 17, 1995, and retroactive for benefits calculated
with respect to Compensation earned by a Participant during the period
beginning on or after July 1, 1994, benefits hereunder shall be determined
under the following provisions.
(A) BENEFITS UNDER THE AMERICAN EXPRESS RETIREMENT PLAN AND IDS DVP
RETIREMENT PLAN
For purposes of this Section V(A), capitalized terms not otherwise defined
herein shall have the same meaning set forth in the Retirement Plan, or the
DVP Retirement Plan, as the context implies.
(1) BENEFITS IN EXCESS OF LIMITS UNDER THE AMERICAN EXPRESS RETIREMENT PLAN
(a) If an Employee who is a participant under the Retirement Plan
retires, becomes disabled, dies or otherwise terminates
employment before July 1, 1995, such that the Employee (or his or
her Beneficiary) becomes entitled to benefits under the
Retirement Plan, and if any benefit was not accrued for such
Employee under the terms of the Retirement Plan because of the
Section 401(a)(17) Limitation or the Section 415 Limitations, the
Company shall pay to such Employee (or his or her Beneficiary) an
amount, if any, equal to the difference between the benefit
payable to such Employee under the Retirement Plan, but for
application of the Section 401(a)(17) Limitation or the Section
415 Limitations and the actual benefit paid such Employee under
the Retirement Plan.
(b) Each Employee who is otherwise entitled to receive benefits
hereunder commencing on or after July 1, 1994 and before July 1,
1995, shall be entitled to such additional benefit hereunder, if
any, as would have been payable to such Employee under the
Retirement Plan if such Employee had not elected to defer receipt
of compensation through voluntary non-qualified deferrals
pursuant to the American Express Salary Deferral Plan or any
similar plan of deferred compensation sponsored by the Company,
its subsidiaries or Affiliates.
(c) Effective July 1, 1995, if an Employee is a participant under the
Retirement Plan, other than a terminated participant, the Company
shall establish a book reserve account to which the following
shall be credited
(i) INITIAL BOOK RESERVE ACCOUNT BALANCE. A Participant's
initial book -reserve account balance shall be zero unless
the Participant was also a Participant in this Plan or the
IDS Supplemental Retirement Plan on June 30, 1995. In the
case of a Participant who was a Participant in this Plan on
June 30, 1995, the Participant's initial book reserve
account balance on July 1, 1995 shall be equal to the
"actuarially equivalent present value" of the Participant's
benefit under Section V(A)(1)(a) on June 30, 1995. In the
case of a Participant who was a Participant in the IDS
Supplemental Retirement Plan on June 30, 1995, such
Participant's initial book reserve account balance on July
1, 1995 shall be equal to the "actuarially equivalent
present value" of the pension-related portion of a
Participant's benefit under the IDS Supplemental Retirement
Plan on June 30, 1995. For purposes of this Section, the
"actuarially equivalent present value" of a Participant's
accrued benefit shall be determined by applying an interest
rate of six percent (6%) and the 1984 Unisex Pensioner
Mortality Table.
(ii) CONTRIBUTION CREDITS. Commencing with the first payroll
period ending on or after July 1, 1995, an amount equal to
the Contribution Credits that would have been credited to a
Participant's Defined Benefit Account Balance under the
Retirement Plan but for application of the Section
401(a)(17) Limitation or the Section 415 Limitations for the
applicable Plan Year. In the event a participant terminates
from service as a result of a disability, as determined
under the Retirement Plan, this Section V(A)(1)(c)(ii) will
apply as if the Section 401(a)(17) Limitation and Section
415 Limitations applied to the deemed Compensation
considered by the Retirement Plan.
(d) Commencing with the first payroll period ending on or after July
1, 1995, a Participant's book reserve account shall be credited
with an amount equal to the Contribution Credits that could have
been credited to a Participant's Defined Benefit Account Balance
under the Retirement Plan that would have been credited to such
Defined Benefit Account Balance if the Participant had not
elected to defer receipt of compensation through voluntary
non-qualified deferrals pursuant to the American Express Salary
Deferral Plan or any similar plan of deferred compensation
sponsored by the Company, its subsidiaries or Affiliates.
(e) Certain participants, as determined by the Company, who are
credited with five Years of Service under the Retirement Plan
shall be deemed to have rendered five additional Years of Service
under this Plan for which benefits will be credited. Commencing
with the first payroll period ending on or after the date an
Employee is designated eligible for benefits under the Plan
pursuant to Section IV(B) hereof, an amount equal to the
Contribution Credits that would have been credited to the
Participant's Defined Benefit Account Balance under the
Retirement Plan had the Participant rendered five (5) additional
Years of Service under the Retirement Plan shall be credited to a
book reserve account established and maintained for the
Participant.
The formula of the benefits for a Plan Year under this
Section V(A)(1)(e) shall be determined by the Company and
applied in a uniform manner for all similarly situated
employees.
(2) BENEFITS UPON A CHANGE IN CONTROL
(a) If a Participant experiences a "Defined Termination," as
defined in the Company's Senior Executive Severance Plan
(provided that such Participant is eligible under such
plan), during the first year following a Change in Control,
such Participant shall be deemed to have rendered two (2)
additional Years of Service and to have attained two (2)
additional years of age for all purposes under the Plan
determined as of the date of such Participant's Defined
Termination. In this event, such Participant shall be
credited with additional Contribution Credits and Imputed
Earnings Credits equivalent to the benefit that would have
accrued under the Retirement Plan if the Participant had
rendered such two (2) additional Years of Service and had
attained two (2) additional years of age under the
Retirement Plan.
If a Participant eligible for the Company's Senior
Executive Severance Plan experiences a Defined Termination
during the second year following a Change in Control, such
Participant shall be deemed to have rendered one (1)
additional Year of Service and to have attained one (1)
additional year of age for all purposes under the Plan and
the Retirement Plan. In this event, such Participant shall
be credited with additional Contribution Credits and Imputed
Earnings Credits equivalent to the benefit that would have
accrued under the Retirement Plan if the Participant had
rendered such one (1) additional Year of Service and had
attained one (1) additional year of age under the Retirement
Plan.
(b) Amounts described in this Section V(2) shall be credited to
a book reserve account established for a Plan Participant at
the time Contribution Credits are allocated by the Company
to such Plan Participant under the Retirement Plan.
(3) BENEFITS IN EXCESS OF LIMITS UNDER THE DVP RETIREMENT PLAN
For Plan Years prior to January 1, 1997, if a participant under
the DVP Retirement Plan is a Participant in this Plan, the Company
shall establish a book reserve account to which the following
shall be credited:
EMPLOYER CONTRIBUTION ALLOCATION. An amount equal to ten percent
(10%) of such Participant's Credited Earnings (as defined under
the DVP Retirement Plan) that would have been contributed and
allocated as an Employer Contribution to the account of the
Participant in the DVP Retirement Plan for 1995 and subsequent
Plan Years but for the Section 401(a)(17) Limitation; provided,
however, that the maximum amount that may be credited under this
Section V(A)(3) for any Plan Year shall be limited on a per
Participant basis to Fifteen Thousand Dollars ($15,000.00).
(4) BENEFITS RESTRICTED TO VESTED PORTION
The benefits credited under this Section V(A) at the time of
distribution to a Participant shall be restricted to a
Participant's vested portion. A Participant's vested portion shall
be determined under the vesting service crediting provisions of
the Retirement Plan, or the DVP Retirement Plan, as applicable;
provided, however, a Participant shall not be 100% vested in the
benefit provided under Section V(A)(1)(e) solely as a result of
becoming disabled. Any non-vested portion of amounts credited to a
Participant hereunder shall be forfeited.
(5) ADDITIONAL ACCOUNTS
The Administrator may, in its discretion, establish additional
book reserve accounts from time to time. The procedures to reflect
and credit increases, decreases, interest, dividends, and other
income, gains and losses shall be determined by the Administrator
in its discretion.
(B) BENEFITS IN EXCESS OF LIMITS UNDER AMERICAN EXPRESS THE INCENTIVE
SAVINGS PLAN (THE "ISP").
For purposes of this Section V(B), capitalized terms not otherwise
defined herein shall have the same meaning set forth in the ISP.
If an Employee is a participant in the ISP, the Company shall
establish book reserve accounts under this Plan on behalf of such
Employee to which the following amounts shall be credited when
earned or otherwise payable:
(1) COMPANY STOCK CONTRIBUTION ALLOCATION. Commencing with the first
payroll period ending on or after March 31, 1995, and with
respect to each payroll period thereafter, an amount equal to
one-percent (1%) of (a) a Participant's Base Salary, minus such
amount allocated as a Company Stock Contribution to the Account
of the Participant under the ISP, to the extent such contribution
is limited by the Section 401(a)(17) Limitation or Section 415
Limitations, and (b) that portion of a Participant's Compensation
deferred during such Plan Year pursuant to the American Express
Salary Deferral Plan, or any similar plan of deferred
compensation sponsored by the Company, its subsidiaries or
Affiliates. For purposes of this Section V(B)(1), the Section
401(a)(17) Limitation shall be deemed to apply pro rationally to
each regularly scheduled pay period for each Plan Year.
(2) COMPANY PROFIT-SHARING CONTRIBUTION ALLOCATION. An amount equal
to that portion of the Company Profit-Sharing Contribution that
would have been contributed and allocated to the Account of a
Participant under the ISP for 1994 and later Plan Years,
consisting of a percentage of (a) a Participant's Base Salary, but
for application of the Section 401(a)(17) Limitation or the
Section 415 Limitations, and (b) that portion of a Participant's
Compensation deferred during such Plan Year pursuant to the
American Express Salary Deferral Plan, or any similar plan of
deferred compensation sponsored by the Company, its subsidiaries
or Affiliates. Benefits credited under this Section V(B)(2) at
the time of distribution shall be restricted to a Participant's
vested portion as determined under the applicable provisions of
the ISP. Any non-vested portion of such deferred compensation to
be paid shall be forfeited.
(3) COMPANY MATCHING CONTRIBUTION ALLOCATION. Commencing with the
first payroll period ending after March 31, 1995, and with
respect to each payroll period thereafter, an amount equal to
that portion of the Company Matching Contribution that would have
been contributed and allocated to the Account of a Participant by
the Company as a Matching Contribution on behalf of a
Participant, (a) to the extent such contribution is limited by
the Section 401(a)(17) Limitation or Section 415 Limitations,
minus such amount allocated as a Matching Contribution to the
Account of the Participant under the ISP, and (b) with respect to
that portion of a Participant's Compensation deferred pursuant to
the American Express Salary Deferral Plan, or any similar plan of
deferred compensation sponsored by the Company, its subsidiaries
or Affiliates, and assuming (i) such portion had not been
deferred and (ii) the Participant had elected to make Elective
Contributions under the ISP equal to three percent (3%) (or such
lesser amount if actually elected by the Participant under the
ISP) of such Participant's compensation deferred under such
deferred compensation plan.
(4) On March 31, 1995, the Company shall credit the applicable book
reserve account of each Participant, in a single sum, with the
aggregate amounts that would have been allocated under Sections
V(B)(1), (2) and (3) above with respect to a Participant's
Compensation paid by the Company had such allocations been made
with respect to the first payroll period ending on or after July
1, 1994, through the payroll period beginning on or before March
17, 1995. The credited amount shall be equal to the aggregate
value of all allocations plus the equivalent of the investment
gain or loss that would have occurred had such aggregate value
been invested in units of the ISP Income Fund on July 1, 1994 and
held continuously thereunder through March 17, 1995.
(5) The Administrator may, in its discretion, establish additional
book reserve accounts from time to time. The procedures to
reflect and credit increases, decreases, interest, dividends, and
other income, gains and losses shall be determined by the
Administrator in its discretion.
(C) CREDITING OF ACCOUNTS
(1) Amounts described in Section V(A)(1)(c)(ii) shall be credited to
a book reserve account established for a Plan Participant at the
time Contribution Credits are allocated by the Company to such
Plan Participant under the Retirement Plan except for amounts
credited to an account for Section 415 Limitations which shall be
credited upon the commencement of the benefit payment under the
Retirement Plan.
(2) Amounts described in Section V(A)(3) shall be credited in a lump
sum to a book reserve account established for a Plan Participant
not later than the time prescribed by law for filing the federal
income tax return of American Express Financial Advisors, Inc.
for the fiscal year, including extensions thereof; provided,
however, if American Express Financial Advisors, Inc. joins with
the Company in filing a consolidated federal income tax return,
the time for filing the consolidated return shall govern.
(3) Amounts described in Section V(B)(1) shall be credited to a book
reserve account established for a Plan Participant on each
payroll date or on the 4th day following each payroll date. Such
book reserve account shall be denominated in units ("Units"). For
purposes of this Plan, the price and value of Unit on any given
day is equal to the number of American Express Common Shares held
by the ISP American Express Stock Fund (the "Stock Fund") on a
given day, multiplied by the previous day's closing price of one
American Express Common Share on the New York Stock Exchange,
plus the face value of all cash equivalents held by the Stock
Fund plus the fair market value of all other assets held by the
Stock Fund on such day divided by the number of Stock Fund units
outstanding on such day. This paragraph shall apply to credits
under Section V(B)(4) to the extent such credits are made with
respect to Company Stock Contributions.
(4) Except as provided in Subsection (3) above, amounts described in
Section V(B)(2) - (4) shall be credited to a book reserve account
established for a Plan Participant within a reasonable time
following the Company Profit Sharing Contributions and Company
Matching Contributions, respectively, are allocated by the
Company to such Plan Participant under the ISP. Such book reserve
account shall contain various subaccounts, representing the
various investment funds available to a Participant under the ISP
as provided for in this Plan.
(D) PAYMENT OF BENEFITS
(1) Any benefits payable under the Plan shall be paid in cash from
the general assets of the Company in the form elected by the
Participant at the time the Participant makes his or her initial
distribution election under the Plan, subject to the following:
(a) A Participant may elect to receive his or her benefits in a
single lump-sum payment or in annual installments payable
over a period of five (5), ten (10) or fifteen (15)
consecutive calendar years; provided, however, that if any
benefit payable under this Section V(D) is less than Fifty
Thousand Dollars ($50,000.00) at the time of the
Participant's termination of employment for any reason, such
amount may be paid in a single lump-sum payment at the
discretion of the Administrator. Except as provided in
Section V(D)(1)(c) below, a Participant may not revoke or
modify his or her initial distribution election described in
the preceding sentence. Such election shall apply to the
payment of all benefits under the Plan.
Effective July 1, 1995, if a Participant fails to make a valid
distribution election within one (1) year of becoming a
Participant in the Plan, such Participant's benefits shall
be paid in a single lump sum; provided, however, that the
Participant may elect to lengthen the period of payments as
provided in Section V(D)(1)(c) below. No reduction in
amounts payable from the Plan shall apply with respect to a
modification lengthening the period over which payments are
made.
Effective July 1, 1997, if a Participant does not have a valid
election on file with American Express Trust Company, such
Participant's benefits shall be paid in a single lump sum.
Payment of benefits shall begin on April 1 of the calendar year
following a Participant's termination of employment for any
reason with Company, its subsidiaries or Affiliates, or as
soon thereafter as administratively feasible.
(b) The following provisions shall apply to Participants who
terminate employment for any reason before July 1, 1997:
(i) If a Participant's distribution election has been in
effect for at least one (1) year, such Participant's
benefits shall be paid in the form elected by the
Participant.
(ii) If a Participant has not made an election before July
1, 1996, or the Participant's election was not received
by American Express Trust Company at least one (1) year
before the Participant's termination of employment for
any reason, such Participant's benefits shall be paid
in equal annual installments over a period of fifteen
(15) consecutive calendar years; provided, however,
that a Participant may elect to accelerate the period
of payments as provided in Section V(D)(1)(c) below.
Any modification by a Participant of an initial
distribution election that results in an acceleration
of payments shall be subject to a ten percent (10%)
reduction, determined as of the date of modification.
(c) Change in Payment Procedures. A Participant may make a one
(1) time modification to his or her initial distribution
election to elect a payment form that lengthens or
accelerates the period over which payments from the Plan
shall be made. To be effective, such a modification shall be
made by filing a written notice of modification with
American Express Trust Company in such form as the
Administrator may prescribe; provided, however, that a
modification to lengthen the period of time over which
payments are made must be on file with American Express
Trust Company for a period of one (1) year prior to the date
payments are to begin pursuant to (a) above. A Participant
may not change the payment method once payments have
commenced.
(2) Upon a Participant's death, benefits under the Plan shall be
payable in cash to a Participant's Beneficiary designated
pursuant to V(D)(3) below. If a Participant dies while still
actively employed by Company, its subsidiaries or Affiliates,
such payment(s) shall be made pursuant to the Participant's
elected payment method or as an immediate single lump-sum
payment, as elected by the Participant's Beneficiary, on such
form as the Administrator may prescribe; provided, however, if
the Beneficiary is the Participant's estate, such amount shall be
paid in a single lump-sum payment.
A Beneficiary's written election shall be returned to American
Express Trust Company within ninety (90) days of the date
payments are scheduled to commence pursuant to the method
described under V(D)(1)(a) above. A Beneficiary may not change
the payment method subsequent to commencement of benefits. If a
Participant elects annual installment payments and dies after
such installment payments have commenced, any remaining
installment payments shall continue to be made in the installment
method elected, provided the Participant's Beneficiary is an
individual(s) or trust.
(3) A Participant shall designate his or her Beneficiary or
Beneficiaries entitled to receive benefits under the Plan by
filing written notice of such designation with the Administrator
in such form as the Administrator may prescribe. A Participant
may revoke or modify such designation at any time by a further
written designation in such form as the Administrator may
prescribe. A Participant's Beneficiary designation shall be
deemed automatically revoked in the event of the death of the
Beneficiary or, if the Beneficiary is the Participant's spouse,
in the event of dissolution of marriage. If no designation is in
effect at the time benefits payable under the Plan become due,
the provisions of the Retirement Plan concerning the
determination of Beneficiary or Beneficiaries shall apply for
purposes of distributions from this Plan.
(4) Upon the request of a Participant (or Beneficiary) and based on a
showing of an unanticipated emergency caused by an event beyond
the control of the Participant (or Beneficiary) that would result
in severe financial hardship to the Participant (or Beneficiary)
if early withdrawal were not permitted, the Administrator may, in
its sole discretion, vary the manner and time of making the
distributions provided in this Section V(D). No reduction in
benefits credited under this Plan shall apply to such early
withdrawal solely as a result of the Administrator's variation of
the time and manner of the distribution.
(E) SUBACCOUNTS, INVESTMENT PERFORMANCE AND TRANSFERS
(1) For each Participant, the book reserve account established
pursuant to Section V(A)(1)(c) and Section V(A)(2) shall be
increased by the Imputed Earnings Credit (as such term is defined
in the Retirement Plan) on the last day of each Plan Year. Such
earnings shall be credited at the same interest rate and computed
in a similar manner (to the extent administratively feasible) as
Imputed Earnings Credits are computed under the Retirement Plan
for each Plan Year. In the event a Participant terminates
employment for any reason and receives a benefit which commences
during the year, the Imputed Earnings Credit shall be prorated in
as similar a manner as may be administratively feasible as under
the Retirement Plan.
(2) Subject to Section V(E)(4) below, the performance of the book
reserve account established for each Participant pursuant to
Section V(C)(3) shall reflect the performance of the American
Express Stock Fund. Such book reserve account shall reflect such
increases or decreases in value from time to time, whether from
dividends, gains, losses or otherwise, as may be experienced by
the American Express Stock Fund. Credits to the book reserve
account established pursuant to Section V(C)(3) may not be
transferred to any other account or subaccount under or any other
plan; provided, that subject to Section VI hereof, upon
attainment of age fifty-five (55), a Participant may elect to
transfer credits from such account to one or more subaccounts
established pursuant to Section V(C)(4).
Notwithstanding the above, effective immediately upon a Change in
Control, as defined in Section VIII below, to the extent a Book
Reserve Account established on behalf of a Participant reflects,
or by the terms of this Plan should in the future reflect, the
performance of the American Express Stock Fund, it shall
thereafter reflect the performance of the ISP Income Fund.
(3) For each Participant, credits to the book reserve account
established pursuant to Section V(C)(4) shall be made to such
subaccounts thereunder as directed by such Participant. If more
than one subaccount is selected, a Participant must designate, on
a form or other medium acceptable to the Administrator, in one
percent (1%) increments, the amounts to be credited to each
subaccount. A Participant shall be allowed to amend such
designation consistent with the frequency of investment changes
offered the Participant under rules governing the ISP for a given
Plan Year.
Subject to Section V(E)(4) below, for each Participant, the
performance of such subaccounts shall reflect the performance of
the investment fund under the ISP that such subaccount
represents. Each such subaccount shall reflect such increases or
decreases in value from time to time, whether from dividends,
gains, losses or otherwise, as that experienced by the related
investment fund under the ISP. Subject to Section VI hereof,
credits to such subaccounts may be transferred to any other
subaccount under this Plan on such terms and at such times as
permitted with respect to the related investment funds under the
ISP. If a Participant fails to affirmatively designate one or
more subaccounts pursuant to this Section V(E)(3), subject to
rules established by the Administrator, such Participant shall be
deemed to have selected the subaccount(s) that relate to the
Participant's investment direction under the ISP; provided,
however, to the extent an Insider has directed ISP amounts to the
Stock Fund, such Insider shall be deemed to have selected the
subaccount relating to the ISP Income Fund.
(4) The subaccounts as described hereinabove and established for a
Participant shall reflect, in as similar manner as
administratively feasible, the investment experience realized by
a Participant with respect to such Participant's investment
elections under the ISP.
Subject to Section V(C)(3), the subaccounts shall be valued subject
to such reasonable rules and procedures as the Administrator may
adopt and apply to all Participants similarly situated with an
effort to value such subaccounts as if amounts designated were
invested in at similar times and in manners, subject to
administrative convenience, as amounts are invested, and subject
to the same market fluctuation factors used in valuing such
investments in the ISP.
VI. SPECIAL RESTRICTIONS
(A) The provisions of this Section VI shall apply to Insiders. Such
provisions shall apply during all periods that Insiders are subject to
reporting under Section 16(a), including any period following
cessation of Insider status during which such Insiders are required to
report transactions pursuant to Rule 16a-2(b) (or its successor) under
the Exchange Act.
At such time as any Insider ceases to be subject to Section 16(a)
reporting (and any period contemplated by Rule 16a-2(b) has expired),
this Section VI shall cease to be applicable to such Participant.
(B) This Section VI shall be automatically applicable to any person who,
on and after the date hereof, becomes an Insider. For purposes of the
foregoing, the effective date of this Section shall be the date the
person becomes an Insider.
(C) Notwithstanding anything in this Plan to the contrary, (i) credits to
the account of an Insider pursuant to Section V(C)(4) may not be made
to any subaccount that reflects the performance of the American
Express Stock Fund, (ii) credits made pursuant to Section V(C)(4) to
the account of an Insider at any time may not be transferred to any
book reserve account or subaccount that reflects the performance of
the Stock Fund and (iii) credits made to an Insider's book reserve
account pursuant to Section V(C)(3) at any time and credits to the
account of an Insider pursuant to Section V(C)(4) that were made to a
subaccount that reflects the performance of the American Express Stock
Fund (which credits could only have been made when such individual as
not an Insider) may not be transferred, withdrawn, paid out or
otherwise changed, other than (a) pursuant to Section V(D)(1) or (2)
(but only at such time as such person is no longer an Insider) or (b)
pursuant to the forfeiture provisions contained in the last sentence
of Section V(B)(2).
(D) It is intended that the crediting of amounts to the accounts of
Insiders that represents the performance of the American Express Stock
Fund is intended to qualify for exemption from Section 16 under Rule
16b-3(d) under the Exchange Act. The Administrator shall, with respect
to Insiders, administer and interpret all Plan provisions in a manner
consistent with such exclusion.
VII. GENERAL PROVISIONS
(A) Nothing in this Plan shall create, or be construed to create, a trust
of any kind or fiduciary relationship between the Company and the
Participant, his or her designated Beneficiary, or any other person.
Any funds deferred under the provisions of this Plan shall be
construed for all purposes as a part of the general funds of the
Company, and any right to receive payments from the Company under this
Plan shall be no greater than the right of any unsecured general
creditor. The Company may, but need not, purchase any securities or
instruments as a means of hedging its obligations to any Participant
under this Plan.
(B) The right of any Participant, or other person, to the payment of
deferred compensation under this Plan shall not be assigned,
transferred, pledged or encumbered except by the laws of descent and
distribution.
(C) Participation in the Plan shall not be construed as conferring upon
the Participant the right to continue in the employ of the Company as
an executive or any other capacity. The Company expressly reserves the
right to dismiss any employee at any time without liability for the
effect such dismissal might have upon him or her hereunder.
(D) Any deferred compensation payable under this Plan shall not be deemed
salary or other compensation to the Participant for the purpose of
computing the benefits under any qualified pension or profit sharing
plan, or life insurance benefit, or disability plan.
(E) The Company makes no representations or warranties and assumes no
responsibility as to the tax consequences to any Participant who
enters into a deferred compensation agreement with the Company
pursuant to this Plan. Further, payment by the Company to Participant
(or to a Participant's Beneficiary or Beneficiaries) in accordance
with the written designation of Beneficiary on file with the
Administrator at the time of Participant's death, shall be binding on
all interested parties and persons, including Participant's heirs,
executors, administrators and assigns, and shall discharge the
Company, its directors, officers and employees from all claims,
demands, actions or causes of action of every kind arising out of or
on account of Participant's participation in this Plan, known or
unknown, for himself or herself, his or her heirs, executors,
administrators and assigns. Any agreement executed pursuant to this
Plan shall be deemed to include the above provision of this Section
VII(E).
(F) The Board of Directors or its delegate may, at any time, amend or
terminate the Plan, provided that the Board may not reduce or modify
the amount of any benefit payable to a Participant or any Beneficiary
receiving benefit payments at the time the Plan is amended or
terminated.
(G) The Administrator may prescribe a form of agreement to be used by a
Participant and the Company, to the extent deemed necessary, to defer
compensation under the Plan.
(H) This Plan and all actions taken hereunder shall be governed by and
construed in accordance with the laws of the state of New York.
(I) Notwithstanding the above and any other provision herein to the
contrary, effective immediately upon a Change of Control, as defined
in Section VIII below, the entire value of each Participant's book
reserve accounts under the Plan shall be maintained in a trust (the
"Trust") established by the Company for this purpose and Company shall
transfer to the Trust amount sufficient to fund the entire value of
each participant's book reserve accounts. The Trust is intended to be
classified for federal income tax purposes as a "grantor trust" within
the meaning of Subpart E, Part I, Subchapter J, Chapter 1, Subtitle A
of the Code.
(J) Notwithstanding anything in this Plan, the Retirement Plan, the ISP or
the DVP Retirement Plan to the contrary, any amount otherwise due or
payable under the Plan may be forfeited, or its payment suspended, at
the discretion of the Administrator, to apply toward or recover any
claim the Company may have against the Participant, including but not
limited to, for the enforcement of the Company's Detrimental Conduct
provisions under its long-term incentive award plan, to recover a debt
to the Company or to recover a benefit overpayment under a Company
benefit plan or program.
VIII. CHANGE IN CONTROL
(A) A "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 Change in Control Section 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) The consummation 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
in substantially the same proportions as their ownership
immediately prior to such reorganization, merger or consolidation
of such Outstanding Company Common Shares and Outstanding Company
Voting Shares, as the case may be, (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 or action of the Board
providing for such reorganization, merger or consolidation; or
(d) The consummation of the sale, lease, exchange or other
disposition of all or substantially all of the assets of the
Company, unless such assets have been sold, leased, exchanged or
disposed of 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 in substantially the same proportions as their
ownership immediately prior to such sale, lease, exchange or
other disposition of such Outstanding Company Common Shares and
Outstanding Company Voting Shares, as the case may be, (B) no
Person (excluding the Company and any employee benefit plan (or
related trust)) of the Company or a Subsidiary of 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; or
(e) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(B) 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, plan 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, plan 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, plan 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-arm 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 the Change in Control provision 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.