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                                                                    EXHIBIT 10.7

                       [LOGO OF AMERICAN EXPRESS COMPANY]

                            AMERICAN EXPRESS COMPANY

                        1998 INCENTIVE COMPENSATION PLAN

                                MASTER AGREEMENT

                             DATED JANUARY 22, 2007
                 (for awards made on or after January 22, 2007)

                 ---------------------------------------------

         Nonqualified Stock Options, Restricted Stock Awards, UK Stock Options
and Letter of Intent Awards ("Awards") are issued pursuant to the 1998 Incentive
Compensation Plan, as amended (the "Plan") of American Express Company (the
"Company") at the discretion and subject to the administration of the
Compensation and Benefits Committee, or its successor (the "Committee") of the
Board of Directors of the Company (the "Board"). Awards issued on or after
January 22, 2007 shall contain the general terms set forth in the applicable
provisions of this Master Agreement. The specific terms of individual Awards
will be contained in the Award Schedule(s) delivered to participants in the Plan
(the "Participants"). All Awards shall be subject to the Plan, the Plan being
incorporated into this Master Agreement by reference and made a part hereof. As
used herein, the term "shares" refers to the common shares of the Company having
a par value of $.60 per share, or the shares of any other stock of any other
class into which such shares may thereafter be changed.

SECTION I

                    MASTER AGREEMENT PROVISIONS RELATING TO
                      A GRANT OF NONQUALIFIED STOCK OPTION

         1. Sections I and V of this Master Agreement, together with an Award
Schedule referring to Section I of this Master Agreement, shall contain the
terms of a specific Nonqualified Stock Option ("Option") issued to a
Participant. Each Award Schedule shall specify the number of shares subject to
the Option, the Option Date of Grant, the Option Exercise Date(s), the Option
Exercise Price and any additional terms applicable to the Option. Such
additional terms may address any matter deemed appropriate by the Committee or
its delegate and may include terms not contained in this Master Agreement and/or
may delete terms contained in this Master Agreement. A stock appreciation right
is included herein only if specifically approved by the Committee and reflected
in an Award Schedule.

         2. Unless otherwise determined by the Committee and subject to the
provisions of this Master Agreement and the applicable provisions of the Plan, a
Participant may exercise this Option as follows:

                  (a) No part of this Option may be exercised before the first
         Option Exercise Date listed in the Award Schedule or after the
         expiration of ten years from the Date of Grant set forth in the Award
         Schedule;

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                  (b) At any time or times on or after the first Option Exercise
         Date listed in the Award Schedule, a Participant may exercise this
         Option as to any number of shares which, when added to the number of
         shares as to which a Participant has theretofore exercised this Option,
         if any, will not exceed 25% of the total number of shares covered
         hereby;

                  (c) At any time or times on or after the second Option
         Exercise Date listed in the Award Schedule, a Participant may exercise
         this Option as to any number of shares which, when added to the number
         of shares as to which a Participant has theretofore exercised this
         Option, if any, will not exceed 50% of the total number of shares
         covered hereby;

                  (d) At any time or times on or after the third Option Exercise
         Date listed in the Award Schedule, a Participant may exercise this
         Option as to any number of shares which, when added to the number of
         shares as to which a Participant has theretofore exercised this Option,
         if any, will not exceed 75% of the total number of shares covered
         hereby; and

                  (e) At any time or times on or after the fourth Option
         Exercise Date listed in the Award Schedule and thereafter through the
         expiration date of this Option, a Participant may exercise this Option
         as to any number of shares which, when added to the number of shares as
         to which the Participant has theretofore exercised this Option, if any,
         will not exceed the total number of shares covered hereby.

This Option may not be exercised for a fraction of a share.

         3. A Participant may not exercise this Option and, if applicable, any
stock appreciation right included herein, unless all of the following conditions
are met:

                  (a) Legal counsel for the Company must be satisfied at the
         time of exercise that the issuance of shares upon exercise will be in
         compliance with the Securities Act of 1933, as amended, and applicable
         United States federal, state, local and foreign laws;

                  (b) The Participant must pay at the time of exercise the full
         purchase price for the shares being acquired hereunder, by (i) paying
         in cash in United States dollars (which may be in the form of a check),
         (ii) tendering shares owned by the Participant which have a fair market
         value equal to the full purchase price for the shares being acquired,
         such fair market value to be determined in such reasonable manner as
         may be provided from time to time by the Committee or as may be
         required in order to comply with the requirements of any applicable
         laws or regulations, or (iii) if permitted by the Committee, by
         authorizing a third party to sell, on behalf of the Participant, the
         appropriate number of shares otherwise issuable to the Participant upon
         the exercise of this Option and to remit to the Company a sufficient
         portion of the sale proceeds to pay the entire exercise price and any
         tax withholding resulting from such exercise, or (iv) tendering a
         combination of the forms of payment provided for in this Subparagraph
         3(b); and

                  (c) The Participant must, at all times during the period
         beginning with the Date of Grant of this Option and ending on the date
         of such exercise, have been employed by the Company or an

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         Affiliate (as defined in the Plan) or have been engaged in a period of
         Related Employment (as defined in the Plan). However, if the
         Participant ceases to be so employed or terminates a period of Related
         Employment by reason of the Participant's disability or retirement (as
         such terms are defined in the Plan and interpreted and administered by
         the Committee) while holding this Option which has not expired and has
         not been fully exercised, the Participant may, at any time within five
         years of the date of the onset of such disability (but in no event
         after the expiration of this Option under Paragraph 2(a) above with
         respect to ten years from the Date of Grant) or in the case of
         retirement until the expiration of the Option under Paragraph 2(a)
         above, exercise this Option with respect to the number of shares, after
         giving full effect to the gradual vesting provisions of Paragraph 2
         above, as to which the Participant could have exercised this Option on
         the date of the onset of such disability or retirement, or with respect
         to such greater number of shares as determined by the Committee in its
         sole discretion, and any remaining portion of this Option shall be
         canceled by the Company. In the event the Participant's employment by
         the Company and its Affiliates or Related Employment terminates for
         reasons other than disability or retirement as described in this
         Subparagraph 3(c) or death as described in Paragraph 4 below, this
         Option shall be canceled by the Company; provided, however, if within
         two years following a Change in Control (as defined in Section V of
         this Master Agreement), a Participant is terminated under circumstances
         that would entitle the Participant to severance under an applicable
         U.S. severance plan (other than Constructive Termination, as defined in
         the applicable plan), the Participant may, at any time within 90 days
         following such termination (but in no event after the expiration of
         this Option under Paragraph 2(a) above with respect to ten years from
         the Date of Grant), exercise this Option with respect to the number of
         shares as to which the Participant could have exercised this Option on
         the date of such termination. For any other Participant not covered by
         a U.S. severance plan, the 90-day extension period shall apply if the
         Participant is terminated within two years following a Change in
         Control and the Participant would have been entitled to severance under
         the applicable U.S. severance plan had the Participant been a U.S.
         employee.

         4. Except as otherwise determined by the Committee, a Participant may
not assign, transfer, pledge, hypothecate or otherwise dispose of this Option
(and any stock appreciation right included herein), except by will or the laws
of descent and distribution, and this Option is exercisable during the
Participant's lifetime only by the Participant. If the Participant or anyone
claiming under or through the Participant attempts to violate this Paragraph 4,
such attempted violation shall be null and void and without effect, and the
Company's obligation to make any further payments (stock or cash) hereunder
shall terminate. If at the time of the Participant's death this Option has not
been fully exercised, the Participant's estate or any person who acquires the
right to exercise this Option by bequest or inheritance or by reason of the
Participant's death may, at any time within five years after the date of the
Participant's death (but in no event after the expiration of this Option under
Paragraph 2(a) above with respect to ten years from the Date of Grant or the
time period described in Paragraph 3(c) above with respect to disability),
exercise this Option with respect to the number of shares, after giving full
effect to the gradual vesting provisions of Paragraph 2 above, as to which the
Participant could have exercised this Option at the time of the Participant's
death, or with respect to such greater number of shares as determined by the
Committee in its sole discretion. The Committee may, in its discretion,

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provide the Participant's estate, or any person acquiring the right to exercise
this Option upon the Participant's death, a minimum of six months to exercise
this Option without regard to the expiration of this Option under Paragraph 2(a)
above. The applicable requirements of Paragraph 3 above must be satisfied at the
time of such exercise.

         5. In the event of any change in the outstanding shares of the Company
by reason of any stock split, stock dividend, split-up, split-off, spin-off,
recapitalization, merger, consolidation, rights offering, reorganization,
combination, subdivision or exchange of shares, sale by the Company of all or
part of its assets, distribution to shareholders other than a normal cash
dividend, or other extraordinary or unusual event occurring after the Date of
Grant specified in the Award Schedule and prior to its exercise in full, the
Committee shall make such adjustment in the number and kind of shares for which
this Option may then be exercised and the Option Exercise Price per share as may
be determined to be appropriate by the Committee, in its sole discretion, so as
to reflect such change, and such adjustments shall be final, conclusive and
binding for all purposes of the Plan, this Master Agreement and any Award
Schedule. In the event that the Company or any of its Affiliates is a
participant in a corporate merger, consolidation or other similar transaction,
neither the Company nor such Affiliate shall be obligated to cause any other
participant in such transaction to assume this Option or to substitute a new
option for this Option.

         6. (a) If approved by the Committee and subject to the conditions
specified in Paragraph 6(b) below, within such time or times as this Option
shall be exercisable in whole or in part and to the extent that it shall then be
exercisable in accordance with Paragraph 2 above, the Participant (or any person
acting under Paragraph 4 above) may surrender unexercised this Option or any
portion thereof which is then exercisable to the Company and receive from the
Company in exchange therefor that number of shares having an aggregate value
equal to 100% of the excess of the value of one share over the Option Exercise
Price per share heretofore specified times the lesser of (i) the number of
shares as to which this Option then is exercisable or (ii) the number of shares
as to which this Option is surrendered to the Company. This right to surrender
unexercised this Option or any portion thereof which is then exercisable is
referred to herein as a "stock appreciation right." No fractional shares shall
be delivered, but in lieu thereof a cash adjustment shall be made.

            (b) If granted by the Committee, the stock appreciation right may be
exercised only if, and to the extent that,

                           (A) this Option is at the time exercisable, and

                           (B) on the date of exercise (1) this Option will, in
                  accordance with Paragraph 2(a) above, expire within 30 days,
                  or (2) the Participant has ceased to be an employee of the
                  Company or an Affiliate thereof or terminated a period of
                  Related Employment by reason of the Participant's disability
                  or retirement (as defined in the Plan), or (3) the Participant
                  has died.

         Notwithstanding Paragraph 6(b)(ii) above, but subject to the conditions
         of Paragraph 6(b)(i) above, (1) the ability to exercise a stock
         appreciation right may be further limited to the extent determined by
         the Committee as necessary or desirable to comply with applicable
         provisions of United States federal, state, local or foreign law or
         regulation, and (2) if the Participant is on the date

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         of exercise an executive officer of the Company as that term is defined
         in the Securities Exchange Act of 1934, as amended, and the rules
         thereunder (an "Insider"), the stock appreciation right may be
         exercised only with respect to a maximum of 50% of the shares subject
         to this Option granted hereunder, unless otherwise determined by the
         Committee.

            (c) The Committee may elect from time to time in its sole discretion
         to settle the obligation arising out of the exercise of the stock
         appreciation right, by the payment of cash equal to the aggregate value
         of the shares it otherwise would be obligated to deliver or partly by
         the payment of cash and partly by the delivery of shares.

            (d) For all purposes under this Paragraph 6, the value of a share
         shall be the fair market value thereof, as determined by the Committee,
         on the last business day preceding the date of the election to exercise
         the stock appreciation right, provided that if notice of such election
         is received by the Committee more than three business days after the
         date of such election (as such date of election is stated in the notice
         of election), the Committee may, but need not, determine the value of a
         share as of the day preceding the date on which the notice of election
         is received.

         7. It shall be a condition to the obligation of the Company to furnish
shares upon exercise of this Option or settlement of a stock appreciation right
by delivery of shares and/or cash (a) that the Participant (or any person acting
under Paragraph 4 above) pay to the Company or its designee, upon its demand, in
accordance with Paragraph 18(f) of the Plan, such amount as may be demanded for
the purpose of satisfying its obligation or the obligation of any of its
Affiliates or other person to withhold United States federal, state, local or
foreign income, employment or other taxes incurred by reason of the exercise of
this Option or the settlement of the stock appreciation right or the transfer of
shares thereupon, (b) whether the settlement of the stock appreciation right is
to be made by delivery of shares or by the payment of cash, that the Participant
(or any person acting under Paragraph 4 above) execute such forms as the
Committee shall prescribe for the purpose of evidencing the surrender of this
Option in whole or in part, as the case may be, and (c) that the Participant (or
any person acting under Paragraph 4 above) provide the Company with any forms,
documents or other information reasonably required by the Company in connection
with the grant. The Company shall have the right to deduct or cause to be
deducted from any payment made in settlement of a stock appreciation right any
United States federal, state, local or foreign income, employment or other taxes
that it determines are required by law to be withheld with respect to such
payment. If the amount requested for the purpose of satisfying the withholding
obligation is not paid, the Company may refuse to furnish shares upon exercise
of this Option or shares and/or cash upon settlement of the stock appreciation
right.

SECTION II

                    MASTER AGREEMENT PROVISIONS RELATING TO
                           AWARDS OF RESTRICTED STOCK

         1. Sections II and V of this Master Agreement, together with an Award
Schedule referring to Section II of this Master Agreement, shall contain the
terms of a specific Restricted Stock Award ("RSA") issued to a Participant. Each
Award Schedule shall specify the number of shares awarded, the Award Date, the
Expiration Date and any additional terms applicable to the Award. Such
additional terms may address any matter deemed appropriate by the

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Committee or its delegate and may include terms not contained in this Master
Agreement and/or may delete terms contained in this Master Agreement.

         2. An RSA consists of the number of shares specified in an Award
Schedule and is subject to the provisions of the Plan. In addition, the
following terms, conditions and restrictions apply to RSAs issued under the
Plan:

                  (a) Except as otherwise determined by the Committee, such
         shares cannot be sold, assigned, transferred, pledged, hypothecated or
         otherwise disposed of (except that Participants may designate a
         beneficiary as provided herein) on or before the Expiration Date and
         prior to the subsequent issuance to a Participant (or, in the event of
         a Participant's death, the Participant's designated beneficiary) of a
         certificate for such shares free of any legend or other transfer
         restriction relating to the terms, conditions and restrictions provided
         for in the Award Schedule or this Master Agreement. If a Participant or
         anyone claiming under or through such Participant attempts to violate
         this Subparagraph 2(a), such attempted violation shall be null and void
         and without effect, and the Company's obligation to make any further
         payments or deliveries (in stock or cash) hereunder shall terminate.

                  (b) An RSA shall be evidenced by a share certificate or an
         uncertificated book entry memo position maintained by the Company's
         transfer agent and registrar.

                  (c) If (i) a Participant's continuous employment with the
         Company and its Affiliates (as defined in the Plan) shall terminate for
         any reason on or before the Expiration Date, except for a period of
         Related Employment (as defined in the Plan), and except as provided in
         Paragraph 2(d) below or (ii) within the period following the Expiration
         Date as determined by the Committee, a Participant (or such
         Participant's designated beneficiary) has not paid to the Company or
         such Affiliate or other person an amount equal to any United States
         federal, state, local or foreign income, employment or other taxes
         which the Company determines is required to be withheld in respect of
         such shares, or fails to provide such information as is described in
         Paragraph 4 below, then, unless the Committee determines otherwise, the
         Participant's RSA or portion thereof shall be automatically terminated,
         cancelled, and rendered null and void as of the Expiration Date without
         any action on the part of the Company, and the Company shall be deemed
         to have exercised its repurchase option without the requirement of any
         payment, and shall be entitled to the return from such Participant (or
         the Participant's designated beneficiary or the Secretary of the
         Company) of any share certificate(s) issued in respect of the Award or
         the cancellation of any book entry memo position maintained by the
         Company's transfer agent and registrar with respect to a Participant's
         RSA.

                  (d) On or before the Expiration Date, the Committee shall have
         the authority, in its sole discretion, to determine whether and to what
         extent, the termination provisions of Paragraph 2(c) shall cease to be
         effective with respect to a Participant's Award in the following
         situations:

                           (i) a Participant shall die or have a termination of
                  employment or Related Employment by reason of disability or
                  retirement (as such terms are defined in the Plan and
                  interpreted and administered by the Committee); or

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                           (ii) in such circumstances as the Committee, in its
                  sole discretion, shall deem appropriate if, since the Award
                  Date, a Participant has been in the continuous employment of
                  the Company or an Affiliate or has undertaken Related
                  Employment.

                  (e) The share certificate, if any, issued in respect of a RSA
         shall be held in escrow by the Secretary of the Company during the
         period up to and including the date determined by the Committee
         pursuant to Paragraph 2(c) above, unless otherwise determined by the
         Committee.

         3. In the event of any change in the outstanding shares of the Company
by reason of any stock split, stock dividend, split-up, split-off, spin-off,
recapitalization, merger, consolidation, rights offering, reorganization,
combination, subdivision or exchange of shares, sale by the Company of all or
part of its assets, distribution to shareholders other than a normal cash
dividend, or other extraordinary or unusual event, or in the event a Participant
(or the Participant's designated beneficiary) receives any shares, securities or
other property in respect of the shares which have been awarded to a Participant
(including, but not limited to, by way of a dividend or other distribution on
such shares), any such shares, securities or other property received by a
Participant (or a Participant's designated beneficiary) in respect of the shares
awarded to such Participant shall, other than upon a Change In Control as
defined in Article V, be subject to the Company's right to receive or cancel
such shares, securities or other property from such Participant (or such
Participant's designated beneficiary) as provided in Paragraph 2(c) above and
the other terms, conditions and restrictions specified herein to the extent
that, and in such manner as, the Committee shall determine, and if the Committee
shall determine, in its sole discretion, that such a change equitably requires
an adjustment in the terms of this Award, such adjustment may be made by the
Committee. Any such determination by the Committee under this Paragraph 3 shall
be final, binding and conclusive.

         4. If the Company, in its sole discretion, shall determine that the
Company or an Affiliate or other person has incurred or will incur any
obligation to withhold any United States federal, state, local or foreign
income, employment or other taxes by reason of making of the Award to a
Participant, the transfer of shares to a Participant (or the Participant's
designated beneficiary) pursuant thereto or the lapse or release of the
termination provisions contained in Paragraph 2(c) above with respect to a
Participant's Award or any other restrictions upon such shares, such Participant
(or such Participant's designated beneficiary) will, promptly upon demand
therefor by the Company, pay to the Company or such Affiliate or other person
any amount demanded by it for the purpose of satisfying such liability. If the
amount so demanded is not promptly paid or if such Participant (or such
Participant's designated beneficiary) shall fail to promptly provide the Company
with any and all forms, documents or other information reasonably required by
the Company in connection with the Award, the Company or its designee may refuse
to permit the transfer of such shares and may, without further consent by or
notice to such Participant (or such Participant's designated beneficiary),
cancel the Award and the shares otherwise issuable under the Award.

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SECTION III

                    MASTER AGREEMENT PROVISIONS RELATING TO
                         A GRANT OF A STOCK OPTION UNDER
                         THE 1989 UK STOCK OPTION SCHEME
              (AND NOT QUALIFYING AS AN INCENTIVE STOCK UK OPTION)

         1. Sections III and V of this Master Agreement, together with an Award
Schedule referring to Section III of this Master Agreement, and applicable
provisions of the 1989 UK Stock Option Scheme (the "Scheme"), shall contain all
the terms of a specific UK Stock Option ("UK Option(s)") issued to a
Participant. Each Award Schedule shall specify the number of shares subject to
the UK Option, the UK Option Date of Grant, the UK Option Exercise Date(s), the
UK Option Exercise Price and any additional terms applicable to the UK Option.
Such additional terms may address any matter deemed appropriate by the Committee
or its delegate and may include terms not contained in this Master Agreement
and/or may delete terms contained in this Master Agreement.

         2. Subject to the provisions of this Master Agreement and the
applicable provisions of the Plan, a Participant may exercise this UK Option as
follows:

                  (a) Unless otherwise determined by the Committee no part of
         this UK Option may be exercised before the first option Exercise Date
         listed in the Award Schedule or after the expiration of ten years from
         the Date of Grant set forth in the Award Schedule;

                  (b) At any time or times on or after the first option Exercise
         Date listed in the Award Schedule, a Participant may exercise this UK
         Option as to any number of shares which, when added to the number of
         shares as to which a Participant has theretofore exercised this UK
         Option, if any, will not exceed 25% of the total number of shares
         covered hereby;

                  (c) At any time or times on or after the second Option
         Exercise Date listed above, a Participant may exercise this UK Option
         as to any number of shares which, when added to the number of shares as
         to which a Participant has theretofore exercised this UK Option, if
         any, will not exceed 50% of the total number of shares covered hereby;

                  (d) At any time or times on or after the third Option Exercise
         Date listed above, a Participant may exercise this UK Option as to any
         number of shares which, when added to the number of shares as to which
         a Participant has theretofore exercised this UK Option, if any, will
         not exceed 75% of the total number of shares covered hereby; and

                  (e) At any time or times after the fourth Option Exercise Date
         listed above and thereafter through the tenth year after the Date of
         Grant hereof, a Participant may exercise this UK Option as to any
         number of shares which, when added to the number of shares as to which
         a Participant has theretofore exercised this UK Option, if any, will
         not exceed the total number of shares covered hereby.

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This UK Option may not be exercised for a fraction of a share.

         3. This UK Option may not be exercised by a Participant unless all of
the following conditions are met:

                  (a) Legal counsel for the Company must be satisfied at the
         time of exercise that the issuance of shares upon exercise will be in
         compliance with the Securities Act of 1933, as amended, and applicable
         United States federal, state, local and foreign laws;

                  (b) The Participant must pay at the time of exercise the full
         subscription price for the shares being acquired hereunder, by (i)
         paying in cash in United States dollars (which may be in the form of a
         check); (ii) tendering shares owned by the Participant which have a
         fair market value equal to the full subscription price for the shares
         being acquired, such fair market value to be determined in such
         reasonable manner as may be provided from time to time by the Committee
         or as may be required in order to comply with the requirements of any
         applicable laws or regulations; (iii) if permitted by the Committee, by
         authorizing a third party to sell, on behalf of the Participant, the
         appropriate number of shares otherwise issuable to the Participant upon
         the exercise of the UK Option and to remit to the Company a sufficient
         portion of the sale proceeds to pay the entire exercise price and any
         tax withholding resulting from such exercise; or (iv) tendering a
         combination of the forms of payment provided for in this Subparagraph;
         and

                  (c) The Participant must, at all times during the period
         beginning with the Date of Grant and ending on the date of such
         exercise, have been employed by the Company or an Affiliate (as defined
         in the Scheme) or have been engaged in a period of Related Employment
         (as defined in the Scheme). However, if a Participant ceases to be so
         employed or terminates a period of Related Employment by reason of a
         Participant's disability or retirement (as such terms are defined in
         the Scheme and interpreted and administered by the Committee) while
         holding this UK Option which has not expired and has not been fully
         exercised, a Participant may, at any time within five years of the date
         of the onset of such disability (but in no event after the expiration
         of this UK Option under Paragraph 2(a) above with respect to ten years
         from the Date of Grant), or in the case of retirement until the
         expiration of this UK Option under Paragraph 2(a), exercise this UK
         Option with respect to the number of shares, after giving full effect
         to the gradual vesting provisions of Paragraph 2 above, as to which a
         Participant could have exercised the UK Option on the date of the onset
         of such disability or retirement, or with respect to such number of
         shares adjusted pursuant to Clause 8 of the Scheme, and any remaining
         portion of this UK Option shall be canceled by the Company. In the
         event a Participant's employment by the Company and its Affiliates or a
         Participant's Related Employment terminates for reasons other than
         disability or retirement as described in this Subparagraph 3(c) or
         death as described in Paragraph 4 below, this UK Option shall be
         canceled by the Company.

         4. Except as otherwise determined by the Committee, a Participant may
not sell, assign, transfer, pledge, hypothecate or otherwise dispose of this UK
Option, except by will or the laws of descent and distribution and is
exercisable during the Participant's lifetime only by a Participant. If a
Participant or anyone claiming under or through a Participant attempts to
violate this Paragraph 4, such attempted violation shall be null and void and

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without effect, and the Company's obligation to make any further payments
hereunder shall terminate. If at the time of the Participant's death this UK
Option has not been fully exercised, the Participant's estate or any person who
acquires the right to exercise this UK Option by bequest or inheritance or by
reason of the Participant's death may, at any time within five years after the
date of the Participant's death (but in no event after the expiration of this UK
Option under Paragraph 2(a) above with respect to ten years from the Date of
Grant or expiration under the time periods described in Paragraph 3(c) above
with respect to disability or retirement), exercise this UK Option with respect
to the number of shares, after giving full effect to the gradual vesting
provisions of Paragraph 2 above, as to which a Participant could have exercised
this UK Option at the time of the Participant's death, or such number of shares
adjusted pursuant to Clause 8 of the Scheme, and any remaining portion of this
UK Option shall be canceled by the Company. The Committee may, in its
discretion, provide the Participant's estate, or any person acquiring the right
to exercise this Option upon the Participant's death, a minimum of six months to
exercise this Option without regard to the expiration of this Option under
Paragraph 3(a) above. The applicable requirements of Paragraph 3 above must be
satisfied at the time of such exercise.

         5. In the event of any change in the outstanding shares of the Company
by reason of any stock split, stock dividend, split-up, recapitalization,
merger, consolidation, rights offering, reorganization, combination, subdivision
or exchange of shares, sale by the Company of all or part of its assets,
distribution to shareholders other than a normal cash dividend or other
extraordinary or unusual event occurring after the Date of Grant specified above
and prior to its exercise in full, the Committee shall make such adjustment in
the number and kind of shares for which this UK Option may then be exercised and
the subscription price per share as may be determined to be appropriate by the
Committee, in its sole discretion, subject to the prior approval of the Inland
Revenue in writing, so as to reflect such change, and such adjustments shall be
final, conclusive and binding for all purposes of the Plan, this Master
Agreement and any Award Schedule. In the event that the Company or any of its
Affiliates is a participant in a corporate merger, consolidation or other
similar transaction, neither the Company nor such Affiliate shall be obligated
to cause any other participant in such transaction to assume this UK Option or
to substitute a new option for this UK Option.

         6. It shall be a condition to the obligation of the Company to furnish
shares upon exercise of this UK Option (a) that a Participant (or any person
acting under Paragraph 4 above) pay to the Company or its designee, upon its
demand, in accordance with Clause 5(b) of the Scheme, such amount as may be
demanded for the purpose of satisfying its obligation or the obligation of any
of its Affiliates or other person to withhold United Kingdom taxes, United
States federal, state, local or foreign income, employment or other taxes
incurred by reason of the exercise of this UK Option or the transfer of shares
thereupon and (b) that a Participant (or any person acting under Paragraph 4
above) provide the Company with any forms, documents or other information
reasonably required by the Company in connection with the grant. If the amount
requested for the purpose of satisfying the withholding obligation is not paid,
the Company may refuse to furnish shares upon exercise of this UK Option.

         7. It is hereby certified that this instrument falls within category L
in the Schedule to the Stamp Duty (Exempt Instruments) Regulations 1987.

                                      -10-

<PAGE>

         8. The terms of this UK Option are subject to the terms of the Scheme,
which provides that the Committee may at any time alter or add to the terms of
any UK Option granted under the Scheme, and if such an alteration or amendment
is made at a time when the Scheme is approved by the Inland Revenue under
Schedule 9 to the Taxes Act 1988, the approval will not thereafter have effect
unless the Inland Revenue has approved the alteration or addition; provided that
no alteration or addition to the terms of any UK Option granted under the Scheme
(other than one which causes the Scheme to cease to hold Inland Revenue approval
under Schedule 9) shall adversely affect in a material manner any right of a
Participant with respect to any UK Option granted hereunder without a
Participant's written consent, unless the Committee determines in its sole
discretion that there have occurred or are about to occur significant changes in
a Participant's position, duties or responsibilities, or significant changes in
economic, legislative, regulatory, tax, accounting or cost/benefit conditions
which are determined by the Committee in its sole discretion to have or to be
expected to have a substantial effect on the performance of the Company, or any
subsidiary, Affiliate, division or department thereof, on the Plan, the Scheme
or on this UK Option. The Committee reserves the right to make amendments which
will result in the Inland Revenue approval not having effect if it in its sole
discretion considers that this is in the interests of the Company or any of its
Affiliates.

SECTION IV

                    MASTER AGREEMENT PROVISIONS RELATING TO
                          AWARDS OF A LETTER OF INTENT

         1. Sections IV and V of this Master Agreement, together with an Award
Schedule referring to Section IV of this Master Agreement, shall contain the
terms of a specific Letter of Intent ("LOI") issued to a Participant. Each Award
Schedule shall specify the number of shares to be awarded, the LOI Date, the
Expiration Date and any additional terms applicable to the Award. Such
additional terms may address any matter deemed appropriate by the Committee or
its delegate and may include terms not contained in this Master Agreement and/or
may delete terms contained in this Master Agreement.

         2. Subject to the provisions of the Plan and the following terms,
conditions and restrictions herein set forth, the Company will issue to a
Participant a certificate for the number of shares specified in an Award
Schedule as promptly as practicable after the last day of a period of four years
from the LOI Date (the "Restricted Period"):

                  (a) Except as otherwise determined by the Committee, rights
         under this LOI may not be sold, assigned, transferred, pledged,
         hypothecated or otherwise disposed of, except by will or the laws of
         descent and distribution, on or before the last day of the Restricted
         Period and prior to the subsequent issuance to a Participant (or, in
         the event of a Participant's death, the Participant's designated
         beneficiary) of a certificate for such shares free of any legend or
         other transfer restriction relating to the terms, conditions and
         restrictions provided for in this Master Agreement. If a Participant or
         anyone claiming under or through a Participant attempts to violate this
         Subparagraph 2(a), such attempted violation shall be null and void and
         without effect, and the Company's obligations hereunder shall
         terminate.

                                      -11-

<PAGE>

                  (b) If (i) a Participant's continuous employment with the
         Company and its Affiliates (as defined in the Plan) shall terminate for
         any reason on or before the last day of the Restricted Period, except
         for a period of Related Employment (as defined in the Plan), and except
         as provided in Paragraph 2(c) below, or (ii) within the period
         following the last day of the Restricted Period as determined by the
         Committee, a Participant (or such Participant's designated beneficiary)
         has not paid to the Company or such Affiliate or other person an amount
         equal to any United States federal, state, local or foreign income,
         employment or other taxes which the Company determines is required to
         be withheld in respect of such shares, or fails to provide such
         information as is described in Paragraph 4 below, then, unless the
         Committee determines otherwise, this LOI or portion thereof shall be
         automatically terminated, cancelled, and rendered null and void as of
         the last day of the Restricted Period without any action on the part of
         the Company.

                  (c) If a Participant shall, on or before the last day of the
         Restricted Period, die or have a termination of employment or Related
         Employment by reason of disability or retirement (as such terms are
         defined in the Plan and interpreted and administered by the Committee),
         or by reason of such other circumstances as the Committee, in its sole
         discretion, shall deem appropriate, after a Participant have been,
         since the LOI Date, in the continuous employment of the Company or an
         Affiliate or have undertaken Related Employment, the Committee, in its
         sole discretion, shall determine whether and to what extent, if any,
         the Company's right as specified in Paragraph 2(b) above (and in any
         and all other terms, conditions and restrictions imposed hereby) shall
         lapse and cease to be effective. The Company's right specified in
         Paragraph 2(b) above shall be exercisable at such time as to the
         remaining shares, if any.

                  (d) From time to time during the Restricted Period, the
         Company shall pay to a Participant an amount of cash equal to the
         regular quarterly cash dividend paid by the Company on a number of
         shares equal to the number of shares remaining to be issued to a
         Participant hereunder less any applicable United States federal, state,
         local or foreign income, employment or other taxes that the Company
         determines are required to be withheld therefrom. The Company's
         obligation to make such payment shall cease with respect to any shares
         at such time as the Company's right becomes exercisable with respect
         thereto pursuant to Paragraph 2(b) or 2(c) above.

         2. In the event of any change in the outstanding shares of the Company
by reason of any stock split, stock dividend, split-up, split-off, spin-off,
recapitalization, merger, consolidation, rights offering, reorganization,
combination, subdivision or exchange of shares, sale by the Company of all or
part of its assets, distribution to shareholders other than a normal cash
dividend, or other extraordinary or unusual event occurring after the LOI Date
and on or before the last day of the Restricted Period and prior to the issuance
of a share certificate to a Participant, the Committee shall make such
adjustment in the number and kind of shares to be awarded as may be determined
to be appropriate by the Committee, in its sole discretion, so as to reflect
such change, and such adjustments shall be final, conclusive and binding for all
purposes of the Plan, this Master Agreement and any Award Schedule.

         3. If the Company, in its sole discretion, shall determine that the
Company or an Affiliate or other person has incurred or will incur any
obligation to withhold any United States federal, state, local or foreign
income, employment or other taxes by reason of the issuance or operation of

                                      -12-

<PAGE>

this LOI, a Participant (or, in the event of a Participant's death, the legal
representatives of a Participant's estate) will, promptly upon demand therefor
by the Company, pay to the Company or such Affiliate or other person, in
accordance with Subparagraph 18(f) of the Plan, any amount demanded by it for
the purpose of satisfying such obligation. If the amount so demanded is not
promptly paid or if a Participant (or, in the event of a Participant's death,
the legal representatives of a Participant's estate) shall fail to promptly
provide the Company with any and all forms, documents or other information
reasonably required by the Company in connection with this LOI, the Company or
its designee may refuse to permit the transfer of any shares and the
distribution of any proceeds and may, without further consent by or notice to a
Participant (or, in the event of a Participant's death, the legal
representatives of a Participant's estate) cancel its agreement to issue to a
Participant any shares and cancel any shares otherwise issuable hereunder.

SECTION V

                MASTER AGREEMENT COMMON PROVISIONS RELATING TO
                           MORE THAN ONE FORM OF AWARD

         1. Notwithstanding anything in this Master Agreement to the contrary
(but subject to those provisions in Paragraph 3 or 4 below which could reduce
payments hereunder as a result of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code")), upon a Change in Control (as applicable to a
particular award), the awardholder shall immediately be:

                  (a) with respect to any Option or UK Option issued pursuant to
         the Option or UK Option provisions of this Master Agreement, 100%
         vested in the total number of shares covered thereby such that they
         shall be fully exercisable;

                  (b) with respect to any RSA issued pursuant to the RSA
         provisions of this Master Agreement, 100% vested in the total number of
         shares covered thereby such that they shall no longer be subject to any
         transfer restrictions imposed by this Master Agreement; and

                  (c) with respect to any LOI issued pursuant to the LOI
         provisions of this Master Agreement, entitled to receive the total
         number of shares covered thereby such that they shall no longer be
         subject to any restrictions on issuance imposed by this Master
         Agreement.

The Committee may not amend or delete this Section V of this Master Agreement in
a manner that is detrimental to the awardholder, without his written consent.

         2. A "Change in Control" means the happening of any of the following:

                  (a) Any individual, entity or group (within the meaning of
         Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
         amended (the "Exchange Act")) (a "Person") 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:
         (A) any acquisition directly

                                      -13-

<PAGE>

         from the Company; (B) any acquisition by the Company or any
         corporation, partnership, trust or other entity controlled by the
         Company (a "Subsidiary"); (C) any acquisition by any employee benefit
         plan (or related trust) sponsored or maintained by the Company or any
         Subsidiary; (D) any acquisition by an underwriter temporarily holding
         Company securities pursuant to an offering of such securities; (E) any
         acquisition by an individual, entity or group that is permitted to, and
         actually does, report its beneficial ownership on Schedule 13-G (or any
         successor schedule), provided that, if any such individual, entity or
         group subsequently becomes required to or does report its beneficial
         ownership on Schedule 13D (or any successor schedule), then, for
         purposes of this subsection, such individual, entity or group shall be
         deemed to have first acquired, on the first date on which such
         individual, entity or group becomes required to or does so report,
         beneficial ownership of all of the Outstanding Company Common Stock and
         Outstanding Company Voting Securities beneficially owned by it on such
         date; or (F) 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 Paragraph 2(c) 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

                                      -14-

<PAGE>

                  (c) The consummation of a reorganization, merger, statutory
         share exchange, consolidation, or similar corporate transaction
         involving the Company or any of its direct or indirect Subsidiaries
         (each a "Business Combination"), in each case, unless, following such
         Business Combination, (i) the Outstanding Company Common Shares and the
         Outstanding Company Voting Securities immediately prior to such
         Business Combination, continue to represent (either by remaining
         outstanding or being converted into voting securities of the resulting
         or surviving entity or any parent thereof) more than 50% of the
         then-outstanding shares of common stock and the combined voting power
         of the then-outstanding voting securities entitled to vote generally in
         the election of directors, as the case may be, of the corporation
         resulting from Business Combination (including, without limitation, a
         corporation that, as a result of such transaction, owns the Company or
         all or substantially all of the Company's assets either directly or
         through one or more subsidiaries), (ii) no Person (excluding the
         Company, any employee benefit plan (or related trust) of the Company, a
         Subsidiary or such corporation resulting from such Business Combination
         or any parent or subsidiary thereof, and any Person beneficially
         owning, immediately prior to such Business Combination, 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 Business Combination (or any parent thereof) 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 Business Combination (or any parent
         thereof) were members of the Incumbent Board at the time of the
         execution of the initial agreement or action of the Board providing for
         such Business Combination; 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 (i) more than 50% 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 (or any parent thereof) 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, (ii) no Person (excluding the Company and any employee
         benefit plan (or related trust)) of the Company or a Subsidiary or 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 (or any parent thereof) and the combined voting power of
         the then outstanding voting securities of such corporation (or any
         parent thereof) entitled to vote generally in the election of directors
         and (iii) at least a

                                      -15-

<PAGE>

         majority of the members of the board of directors of such corporation
         (or any parent thereof) 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.

         3. This Paragraph 3 shall apply in the event of a Change in Control.

                  (a) In the event that any payment or benefit received or to be
         received by a Participant hereunder in connection with a Change in
         Control or termination of such Participant's 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) in the case of a Participant who is 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 paragraph (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) in the case of a Participant 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 the Participant would be
         subject in respect of such unreduced Total Payments); provided,
         however, that the Participant may elect in writing to have other
         components of his or her 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 the Participant in connection with such
         Change in Control or the termination of such Participant's employment,
         whether pursuant to the terms of this Master Agreement or any other
         plan, arrangement or agreement with the Company, any Person (as such
         term is defined in Paragraph 2(a) above) 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
         the Participant 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

                                      -16-

<PAGE>

         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 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, a Participant 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 such Participant's 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 (in the case of a Participant 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 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 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

                                      -17-

<PAGE>

         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).

         4. The terms of any RSA, Option or LOI (including terms under this
Master Agreement or any Award Schedule) may be amended from time to time by the
Committee in its sole discretion in any manner that it deems appropriate
(including, but not limited to, acceleration of the date of payments
thereunder); provided, however, that no such amendment shall adversely affect in
a material manner any right of a Participant under such RSA, Option or LOI
without the written consent of such Participant, unless the Committee determines
in its sole discretion that there have occurred or are about to occur
significant changes in such Participant's position, duties or responsibilities,
or significant changes in economic, legislative, regulatory, tax, accounting or
cost/benefit conditions which are determined by the Committee in its sole
discretion to have or to be expected to have a substantial effect on the
performance of the Company, or any subsidiary, affiliate, division, or
department thereof, on the Plan or on a RSA, Option or LOI under the Plan;
provided, further, however, that the Committee shall not have the authority to
amend any Option held by any executive officer of the Company as defined in Rule
3(b)(7) under the Securities Exchange Act of 1934, as amended, so that the
amount of compensation an executive officer could receive is not based solely on
an increase in the value of shares, or to otherwise amend any Award issued to
such executive officer if the amendment would cause compensation payable
thereunder to be nondeductible under Section 162(m) of the Code (or any
successor provision) or regulations thereunder assuming such executive officer
is a covered employee for purposes of such Section.

         5. Subject to the provisions of the Plan, a Participant may, by
completing a form acceptable to the Company and returning it to the Corporate
Secretary's Office in New York City, name a beneficiary or beneficiaries to
receive any payment or exercise any rights to which such Participant may become
entitled under an Award in the event of such Participant's death. A Participant
may change his or her designated beneficiary or beneficiaries from time to time
by submitting a new form to the Corporate Secretary's Office in New York City,
to the extent permitted by law (for example, unless such Participant has made a
prior irrevocable designation). If a Participant does not designate a
beneficiary, or if no designated beneficiary is living on the date any amount
becomes payable under an Award, such payment will be made to the legal
representatives of such Participant's estate, which will be deemed to be the
Participant's designated beneficiary under the Award.

         6. If the Company, in its sole discretion, shall determine that the
listing upon any securities exchange or registration or qualification under any
United States federal, state, local or foreign law of any shares to be delivered
pursuant to an Award is necessary or desirable, delivery of such shares shall
not be made in shares until such listing, registration or

                                      -18-

<PAGE>

qualification shall have been completed. Until a certificate for some or all of
the shares subject to an LOI is issued to a Participant, a Participant shall
have no rights as a shareholder of the Company and, in particular, shall not be
entitled to vote such shares or to receive any dividend or other distribution
paid in respect thereof.

         7. Notwithstanding anything to the contrary contained herein, the
Committee, in its sole discretion, may approve and the Company may issue RSAs,
Options, UK Options, or LOIs that are not governed by the provisions contained
in this Master Agreement.

         8. 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 any provision of the
Plan, the Scheme or this Master Agreement shall lie within its sole and absolute
discretion, as the case may be, and shall be final, conclusive and binding on
the Participant and all persons claiming under or through the Participant. By
receipt of such Awards or other benefit under the Plan, the Participant and each
person claiming under or through the Participant shall be conclusively deemed to
have indicated acceptance and ratification of, and consent to, any action taken
under the Plan or the Scheme, by the Company, the Board or the Committee or its
delegates.

         9. The validity, construction, interpretation, administration and
effect of the Plan or the Scheme and of its rules and regulations, and rights
relating to the Plan or the Scheme, and to any Award issued under this Master
Agreement, shall be governed by the substantive laws, but not the choice of law
rules, of the State of New York, in the United States of America.

         10. The Committee may rescind, without further notice to the
Participant, any Award issued to the Participant under the Plan in duplicate, or
in error, as determined in the sole discretion of the Committee.

         11. Any Award issued under this Master Agreement is subject to the
terms of the Detrimental Conduct Provisions established by the Committee, and as
from time to time amended.

                                      -19-<PAGE>
                                                                    EXHIBIT 10.8

                            AMERICAN EXPRESS COMPANY
                        1998 INCENTIVE COMPENSATION PLAN
                                PERFORMANCE GRANT
                    (ALSO KNOWN AS THE 20__ INCENTIVE AWARD)

                                       TO

                        ------------------------------
                                Name of Employee

                    , 20__                          DECEMBER 31, 20__
          ----------------                          -----------------
             Award Date                      Expiration Date of Award Period

         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").
This Award is subject to the Detrimental Conduct Provisions established by the
Committee, and as from time to time amended.

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.

                                      -1-

<PAGE>

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 20__ 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 January 22, 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.

   (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

                                      -2-

<PAGE>

         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 reported by the Company. The calculation of Net Income, for any
             given year, will be adjusted to exclude:

                o reported cumulative effect of accounting changes;

                o reported income and losses from discontinued operations; and

                o 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 reported by the Company), 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
             reported by the Company. 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 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

                                       -3-

<PAGE>

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 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

                                       -4-

<PAGE>

(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.

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.

                                       -5-

<PAGE>

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. 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) if 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)

                                       -6-

<PAGE>

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 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

                                       -7-

<PAGE>

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).

13. 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
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.

14. 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
                                                ----------------------------

                                      -8-
<PAGE>
                                                                      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)

<Table>
<Caption>
                                              20__ AXP EARNINGS PER SHARE (DILUTED)
   20__ AXP         LESS THAN $____      $____         $____         $____         $____       $____ OR MORE
RETURN ON EQUITY        Value          Max. Value    Max. Value    Max. Value    Max. Value      Max. Value
<S>                 <C>                <C>           <C>           <C>           <C>           <C>
  __% OR MORE             $0                $            $             $             $               $
        %                  0                $            $             $             $               $
        %                  0                $            $             $             $               $
        %                  0                $            $             $             $               $
        %                  0                $            $             $             $               $
  LESS THAN __%            0                0            0             0             0               0
</Table>

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

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