EXHIBIT 10.7

AMERICAN EXPRESS COMPANY

1998 INCENTIVE COMPENSATION PLAN

PERFORMANCE GRANT

(ALSO KNOWN AS THE 20     INCENTIVE AWARD)

TO

 

 

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Name of Employee

 

                         , 20    

  

December 31, 20    

Award Date    Expiration Date of Performance Period    (See Paragraphs 2,4,5,6,
et. al. for    payment and vesting date)

We are pleased to inform you that, pursuant to the Company’s 1998 Incentive
Compensation Plan, as amended (the “Plan”), the Compensation and Benefits
Committee (the “Committee”) of the Board of Directors (the “Board”) of American
Express Company (the “Company”), made an award of a performance grant (also
known as the 20     Incentive Award) to you as hereinafter set forth (the
“Award”) under the Plan as of the award date specified above (the “Award Date”).

1. General. You have been granted the Award subject to the provisions of the
Plan and the terms, conditions and restrictions set forth in this agreement
(this “Agreement”). The period beginning on the first day of the fiscal year of
the Company in which the Award Date occurs and ending on the Expiration Date
specified above being the “Award Period.” The Schedule A Value (as that term is
defined below in Subparagraph 3(b)), if any, will be determined as specified in
Paragraph 3.

2. Requirement of Employment. Your rights to the Cash Value and the Number of
Restricted Shares or Letters of Intent, if any (as those terms are defined
below) under Subparagraph 4(b) hereof, shall be provisional and shall be
canceled if your continuous employment with the Company and its Affiliates or
your Related Employment (as defined in the Plan) (as that term is defined in the
Plan) (hereinafter collectively referred to as “employment with the American
Express companies”), terminates for any reason on or before the payment date as
set forth in Subparagraph 4(b). Whether and as of what date your employment with
the American Express companies shall terminate if you are granted a leave of
absence or commence any other break in employment intended by the Company to be
temporary, shall be determined by the Committee.

 

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3. Determination of the Schedule A Value, Cash Value and the Number of
Restricted Shares or Letters of Intent.

(a) Except as otherwise provided below in this Paragraph 3 and in Paragraphs 2
and 5 hereof, there shall be paid to you in accordance with Paragraph 4 hereof,
the Schedule A Value (the “Schedule A Value”) as of the last day of the Award
Period, if any, as provided in Subparagraph 3(b).

(b) Schedule A Value.

(i) Except as otherwise provided in this Paragraph 3, the Schedule A Value as of
the last day of the Award Period will be equal to the amount, if any, determined
by the Committee based on the performance (i.e., 20     Return on Equity, and
20     Earnings Per Share) of the Company, pursuant to Schedule A to this
Agreement. However, in no event will the Schedule A Value be greater than the
maximum value as set forth in Schedule A to this Agreement.

(ii) In the application of Schedule A to this Agreement after the end of the
Award Period for purposes of determining the Schedule A Value pursuant to this
Subparagraph 3(b), (A) if the 20     Return on Equity or the 20     Earnings Per
Share is less than the level needed to have some Schedule A Value, there shall
be no Schedule A Value, and (B) if the 20     Return on Equity and the 2006
Earnings Per Share are equal to or greater than those levels needed to have some
Schedule A Value and less than or equal to the maximum specified levels and are
not represented on the table, the Schedule A Value shall be determined by
straight-line interpolation from the amounts specified in such table immediately
less than and greater than the amounts actually attained.

(iii) The Committee shall determine in its own discretion what portion of the
Schedule A Value, if any (as adjusted in accordance with Subparagraph 3(c)
below), shall be payable in cash (the “Cash Value”), and what portion shall be
denominated in restricted shares or letters of intent of the Company (“the RSA”
or “the LOI”), in accordance with Paragraph 4 below. The RSA or the LOI shall
have the terms substantially as set forth in the form of restricted stock or
letter of intent award granted generally under the Plan, or its successor,
except that the RSA or the LOI shall vest pursuant to a period determined in the
Committee’s discretion, except that such vesting period shall not be less than
one year from date of grant, and (B) be forfeitable only if your employment with
the American Express companies terminates by reason of voluntary resignation or
terminates for cause (that is, violation of the Code of Conduct as in effect
from time to time) prior to the applicable vesting dates. The number of
restricted shares or letters of intent of the Company comprising the RSA or the
LOI (the “Number of Restricted Shares” or the “Number of Letters of Intent”)
shall be determined by dividing such portion of the Schedule A value so
designated by the Committee, if any, by the average of the high and low market
value of the shares on                          , 20     or such other date that
the Committee approves payout of the Awards, and shall be payable in the form of
an RSA or an LOI in accordance with Paragraph 4 below.

 

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(iv) For purposes of this Award, all accounting terms are defined in accordance
with generally accepted accounting principles as set forth in the Company’s
annual audited financial statements, except as otherwise provided below (which
will take into account, in each case, the expenses and other financial effect
for the applicable year(s) of performance grants under the Plan):

(A) “Net Income” means, for any given year, the after-tax net income (or loss)
of the Company or of a segment or other part of the Company, as the case may be,
for such year as adjusted below, as determined by the Company in accordance with
generally accepted accounting principles applied on a basis comparable to that
used for the purpose of reporting industry segment data in the Company’s annual
audited financial statements. The calculation of Net Income, for any given year,
will be adjusted to exclude:

 

  •   reported cumulative effect of accounting changes,

 

  •   reported income and losses from discontinued operations, and

 

  •   reported extraordinary gains and losses as determined under generally
accepted accounting principles.

(B) “Average Annual Shareholders’ Equity” means, for any given year, the sum of
the total shareholders’ equity of the Company or of a segment or other part of
the Company, as the case may be, as of the first day of such year and as of the
end of each month during such period (each as determined by the Company in
accordance with generally accepted accounting principles but excluding the
effect of Statement of Financial Accounting Standards Nos. 115 and 133 (relating
to mark-to-market treatment of certain investments and accounting for
derivatives, respectively) and adjustments made to Net Income pursuant to
Subparagraph 3(b)(iv)(A)), divided by 13.

(C) “Return on Equity” means, for any given year, the Net Income for such year
divided by the Average Annual Shareholders’ Equity for such year.

(D) “Earnings Per Share” means, for any given year, the diluted earnings (or
loss) per share of the Company for such year, as determined by the Company in
accordance with generally accepted accounting principles for inclusion in the
Company’s annual audited financial statements. The calculation of Earnings Per
Share, for any given year, will be adjusted in the same fashion as Net Income
for such year.

(v) To the extent permissible for purposes of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “Code”), in the event of any change in

 

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the corporate capitalization of the Company, such as by reason of any stock
split, or a material corporate transaction, such as any merger of the Company
into another corporation, any consolidation of the Company and one or more
corporations into another corporation, any separation of the Company (including
a spin-off or other distribution of stock or property by the Company), any
reorganization of the Company (whether or not such reorganization comes within
the definition of such term in Section 368 of the Code), or any partial or
complete liquidation by the Company, other than a normal cash dividend, if the
Committee shall determine that such a change equitably requires an adjustment in
the calculation or terms of Return on Equity and/or Earnings Per Share, on the
grounds that any such change would produce an unreasonable value, such equitable
adjustment will be made by the Committee. Any such determination by the
Committee to reflect such change under this subparagraph 3(b)(v) shall be final,
binding and conclusive.

(c) As soon as practicable after the last day of the Award Period, the Committee
may determine, in its sole discretion, that the Schedule A Value, if any (as
determined above in Subparagraph 3(b)), may be adjusted downward, but in no
event upward, by a percentage from 0-100% (that is, to a value of zero). In no
event may the Committee amend any provision hereof so as to increase or
otherwise adjust upward the Schedule A Value. In exercising its discretion to
make a downward adjustment, the Committee may take into account factors such as
the increase in shareholder value (as indicated, for example, by shareholder
return, earnings growth and return on equity), customer satisfaction (as
indicated, for example, by customer satisfaction measures, client retention and
growth in products and services), employee satisfaction (as indicated, for
example, by the employee values survey results), implementation of AEQL
initiatives (as indicated, for example, by process changes that achieve
significant results), achievement of reengineering initiatives (as indicated,
for example, by cost savings), and such other factors deemed relevant by the
Committee; provided that any such determination by the Committee need not be
made in a uniform manner and may be made selectively among holders of awards of
performance grants, whether or not such award holders are similarly situated.

(d) The Committee’s determinations as to the Schedule A Value, the Cash Value
and the Number of Restricted Shares or the Number of Letters of Intent pursuant
to this Agreement shall be final, binding and conclusive upon you and all
persons claiming under or through you.

4. Payment of Award.

(a) As soon as practicable after the last day of the Award Period, the Committee
shall determine whether the conditions of Paragraphs 2 and 3 hereof have been
met and, if so, shall ascertain the Schedule A Value (and any negative
adjustment thereto), Cash Value and the Number of Restricted Shares or the
Number of Letters of Intent, if any, in accordance with Paragraph 3 hereof.

(b) If the Committee determines that there is no Schedule A Value, this Award
will be canceled. If the Committee determines that there is some Schedule A
Value, however, the Cash Value as determined pursuant to Paragraph 3 hereof
shall become payable to you in cash, and the

 

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Number of Restricted Shares or the Number of Letters of Intent shall be issued
to you in the form of a restricted stock or letter of intent award under the
Plan, within fifteen business days following the regularly scheduled payroll
payment date of the applicable pay period beginning after January 31 of the year
following the Award Period (or at such other time or times as the Committee
shall determine as provided in Paragraph 6 below).

5. Termination of Employment after the Award Period but on or before the Payment
Date. If, after the last day of the Award Period and on or before the date
specified above in Subparagraph 4(b), but during a period when you have been in
continuous employment with the American Express companies since the Award Date,
you terminate your employment with the American Express companies for any
reason, then you and all others claiming under or through you shall not be
entitled to receive any amounts or awards under this Award, except as otherwise
determined by the Committee in its sole discretion.

6. Deferral or Acceleration of Payment of Award. Any payments to be made under
this Award may be deferred or accelerated in such manner as the Committee shall
determine; provided, however, that any such deferral or acceleration must comply
with the applicable requirements of Section 409A of the Code. As to such a
deferral of payment, any such payment in excess of the amount that was
originally payable to you under this Agreement will be based on a reasonable
interest rate or on one or more predetermined actual investments (whether or not
assets associated with the amount are actually invested therein) as determined
by the Committee, and as to such an acceleration of payment to you under this
Agreement, any such payment will be discounted to reasonably reflect the time
value of money as determined by the Committee.

7. Change in Control. Notwithstanding anything in this Award to the contrary, if
you have not received payment under this Award as discussed in Subparagraph 4(b)
above, and within two years following a Change in Control, as that term is
defined in the Company’s Senior Executive Severance Plan, you experience a
termination of employment that would otherwise entitle you to receive the
payment of severance benefits under the provisions of the severance plan that
you participate in as of the date of such termination of employment, then you
shall be paid under this Award, within five days after the date of such
termination of employment, a cash payment under this Award equal to the value of
(i) (A) the average award paid or payable to you under the 20     and 20    
Annual Incentive Award or such other annual incentive award program of the
Company or one of its subsidiaries that you participated in at the time of such
prior payment for the two years prior to the Change in Control, or (B) if you
have not received two such awards, the most recent award paid or payable (or
guideline amount payable, if you have not previously received any such award) to
you under the applicable 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 Award Period at
the time of such termination of employment divided by 12.

The Committee reserves the right to amend or delete this Paragraph 7 in whole or
in part at any time and from time to time; provided, that upon and following the
occurrence of a Change in Control, the Committee may not amend this Paragraph 7
in a manner that is detrimental to your rights without your express written
consent. Any amendment of the definition of “Change in Control” in the Senior
Executive Severance Plan will be deemed to be an amendment permitted under this
Paragraph.

 

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8. Tax Withholding and Furnishing of Information. There shall be withheld from
any payment of cash or vesting of any restricted shares or letters of intent
under this Award, such amount, if any, as the Company determines is required by
law, including, but not limited to, U.S. federal, state, local or foreign
income, employment or other taxes incurred by reason of making of the Award or
of such payment. It shall be a condition precedent to the obligation of the
Company to make payments under this Award that you (or those claiming under or
through you) promptly provide the Company with all forms, documents or other
information reasonably required by the Company in connection with the Award.

9. Rights Not Assignable. Your rights and interests under the Award and the Plan
may not be sold, assigned, transferred, or otherwise disposed of, or made
subject to any encumbrance, pledge, hypothecation or charge of any nature,
except that you may designate a beneficiary pursuant to Paragraph 10 hereof. If
you (or those claiming under or through you) attempt to violate this Paragraph
9, such attempted violation shall be null and void and without effect, and the
Company’s obligation to make any further payments to you (or those claiming
under or through you) hereunder shall terminate.

10. Beneficiary Designation. Subject to the provisions of the Plan, you may, by
completing a form acceptable to the Company and returning it to the Corporate
Secretary’s Office, at 200 Vesey Street, New York, New York 10285, name a
beneficiary or beneficiaries to receive any payment to which you may become
entitled under this Agreement in the event of your death. You may change your
beneficiary or beneficiaries from time to time by submitting a new form to the
Corporate Secretary’s Office at the same address. If you do not designate a
beneficiary, or if no designated beneficiary is living on the date any amount or
award becomes payable under this Agreement, such payment will be made to the
legal representatives of your estate, which will be deemed to be your designated
beneficiary under this Agreement.

11. Administration. Any action taken or decision made by the Company, the Board
or the Committee or its delegates arising out of or in connection with the
construction, administration, interpretation or effect of the Plan or this
Agreement shall lie within its sole and absolute discretion, as the case may be,
and shall be final, conclusive and binding upon you and all persons claiming
under or through you. By accepting this Award or other benefit under the Plan,
you and each person claiming under or through you shall be conclusively deemed
to have indicated acceptance and ratification of, and consent to, any action
taken or decision made under the Plan by the Company, the Board or the Committee
or its delegates.

12. Major Transaction. This Paragraph shall apply in the event of a Major
Transaction (as defined in the American Express Senior Executive Severance Plan,
as amended from time to time).

If all or any portion of the payments or benefits to which the Participant will
be entitled under the 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

 

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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
Code or any successor provision thereto and regulations or other guidance
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
would constitute a “parachute payment”, whether such payments or benefits 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 Major Transaction, 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, 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.

 

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13. Change in Control Payments. This Paragraph shall apply in the event of
Change in Control (as defined in the American Express Senior Executive Severance
Plan, as amended from time to time).

(a) In the event that any payment or benefit received or to be received by you
hereunder in connection with a Change in Control or termination of your
employment (such payments and benefits, excluding Gross-Up Payment (as
hereinafter defined), being hereinafter referred to collectively as the
“Payments”), will be subject to the excise tax referred to in Section 4999 of
the Code (the “Excise Tax”), then (i) if you are classified in Band 70 (or its
equivalent) or above immediately prior to such Change in Control (a “Tier 1
Employee”), the Company shall pay to such Tier 1 Employee, within five days
after receipt by such Tier 1 Employee of the written statement referred to in
Subparagraph (e) below, an additional amount (the “Gross-Up Payment”) such that
the net amount retained by such Tier 1 Employee, after deduction of any Excise
Tax on the Payments and any federal, state and local income and employment taxes
and Excise Tax upon the Gross-Up Payment, shall be equal to the Payments and
(ii) is you are other than a Tier 1 Employee, the Payments shall be reduced to
the extent necessary so that no portion of the Payments is subject to the Excise
Tax but only if (A) the net amount of all Total Payments (as hereinafter
defined), as so reduced (and after subtracting the net amount of federal, state
and local income and employment taxes on such reduced Total Payments), is
greater than or equal to (B) the net amount of such Total Payments without any
such reduction (but after subtracting the net amount of federal, state and local
income and employment taxes on such Total Payments and the amount of Excise Tax
to which you would be subject in respect of such unreduced Total Payments);
provided, however, that you may elect in writing to have other components of
your Total Payments reduced prior to any reduction in the Payments hereunder.

(b) For purposes of determining whether the Payments will be subject to the
Excise Tax, the amount of such Excise Tax and whether any Payments are to be
reduced hereunder: (i) all payments and benefits received or to be received by
you in connection with such Change in Control or the termination of your
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person (as such term is defined
in the Company’s Senior Executive Severance Plan) whose actions result in such
Change in Control or any Person affiliated with the Company or such Person (all
such payments and benefits, excluding the Gross-Up Payment and any similar
gross-up payment to which a Tier 1 Employee may be entitled under any such other
plan, arrangement or agreement, being hereinafter referred to as the “Total
Payments”), shall be treated as “parachute payments” (within the meaning of
Section 280G(b)(2) of the Code) unless, in the opinion of the Firm, such
payments or benefits (in whole or in part) do not constitute parachute payments,
including by reason of Section 280G(b)(2)(A) or Section 280G(b)(4)(A) of the
Code; (ii) no portion of the Total Payments the receipt or enjoyment of which
you shall have waived at such time and in such manner as not to constitute a
“payment” within the meaning of Section 280G(b) of the Code shall be taken into
account; (iii) all “excess parachute payments” within the meaning of
Section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax
unless, in the opinion of the Firm, such excess parachute payments (in whole or
in part) represent reasonable compensation for services actually rendered
(within the meaning of Section 280G(b)(4)(B) of the Code) in excess of the Base
Amount (within the meaning of Section 280G(b)(3) of the Code) allocable to such
reasonable compensation, or are otherwise not subject to the Excise Tax; and
(iv) the value

 

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of any noncash benefits or any deferred payment or benefit shall be determined
by the Firm in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code and regulations or other guidance thereunder. For purposes of
determining the amount of the Gross-Up Payment in respect of a Tier 1 Employee
and whether any Payments in respect of a Participant (other than a Tier 1
Employee) shall be reduced, shall be deemed to pay federal income tax at the
highest marginal rate of federal income taxation (and state and local income
taxes at the highest marginal rate of taxation in the state and locality of your
residence, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes) in the calendar year in
which the Gross-Up Payment is to be made (in the case of a Tier 1 Employee) or
in which the Payments are made (if you are other than a Tier 1 Employee). The
Firm will be paid reasonable compensation by the Company for its services.

(c) In the event that the Excise Tax is finally determined to be less than the
amount taken into account hereunder in calculating the Gross-Up Payment, 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 Tier 1 Employee made on the date of the Tier 1 Employee’s receipt
of such Excess Amount, which the Tier 1 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 Section 1274 Rate from the date of the Tier 1
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). In the event that the Excise Tax is finally determined to
exceed the amount taken into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), within five business
days of such determination, the Company will pay to the Tier 1 Employee an
additional amount, together with interest thereon from the date such additional
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). The Tier 1 Employee and the Company
shall each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the amount of any Gross-Up
Payment.

(d) As soon as practicable following a Change in Control, the Company shall
provide to each Tier 1 Employee and to each other Participant with respect to
whom it is proposed that Payments be reduced, a written statement setting forth
the manner in which the Total Payments in respect of such Tier 1 Employee or
other Participant were calculated and the basis for such calculations,
including, without limitation, any opinions or other advice the Company has
received from the Firm or other advisors or consultants (and any such opinions
or advice which are in writing shall be attached to the statement).

14. Miscellaneous. Neither you nor any person claiming under or through you
shall have any right or interest, whether vested or otherwise, in the Plan or
the Award, unless and until all of the terms, conditions and provisions of the
Plan and this Agreement shall have been complied with. In addition, neither the
adoption of the Plan nor the execution of this Agreement shall in any way affect
the rights and powers of any person to dismiss or discharge you at any time from

 

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employment with the American Express companies. Notwithstanding anything herein
to the contrary, neither the Company nor any of its Affiliates (as that term is
defined in the Plan) nor their respective officers, directors, employees or
agents shall have any liability to you (or those claiming under or through you)
under the Plan, this Agreement or otherwise on account of any action taken, or
decision not to take any action made, by any of the foregoing persons with
respect to the business or operations of the Company or any of its Affiliates
(as that term is defined in the Plan), despite the fact that any such action or
decision may adversely affect in any way whatsoever Average Annual Shareholders’
Equity, Earnings Per Share, Net Income or other financial measures or amounts
which are accrued or payable or any of your other rights or interests under this
Agreement.

15. Governing Law. The validity, construction, interpretation, administration
and effect of this Agreement shall be governed by the substantive laws, but not
the choice of law rules, of the State of New York.

 

AMERICAN EXPRESS COMPANY

By the Compensation and Benefits

Committee of the Board of Directors:

By

   

 

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SCHEDULE A

20     Incentive Awards: Proposed AXP Earnings Per Share/Return on Equity Grid

for Determining Maximum Award Value

(subject to award agreement and discretionary downward adjustment)

 

     

 

20     AXP Earnings Per Share (diluted)

 

20     AXP

Return on Equity

 

  

Less Than $        

 

   $        

 

   $        

 

   $        

 

   $        

 

  

$         or More

 

  

Value

 

   Max. Value    

 

   Max. Value    

 

   Max. Value    

 

   Max. Value    

 

  

 

Max. Value

 

    % Or More

 

  

$0

 

   $

 

   $

 

   $

 

   $

 

  

$

 

    %

 

  

0

 

   $

 

   $

 

   $

 

   $

 

  

$

 

    %

 

  

0

 

   $

 

   $

 

   $

 

   $

 

  

$

 

    %

 

  

0

 

   $

 

   $

 

   $

 

   $

 

  

$

 

    %

 

  

0

 

   $

 

   $

 

   $

 

   $

 

  

$

 

Less

Than     %

 

  

0

 

   0

 

   0

 

   0

 

   0

 

  

0

 

Note: Straight-line interpolation would apply for any actual performance level
that falls between two performance levels shown on the grid.