Document:

EXHIBIT 10.4

                      [LOGO OF AMERICAN EXPRESS COMPANY]

                           AMERICAN EXPRESS COMPANY
                         1989 LONG-TERM INCENTIVE PLAN
                               MASTER AGREEMENT
                            DATED FEBRUARY 27, 1995

             Nonqualified Stock Options, Restricted Stock Awards, UK Stock
Options and Letter of Intent Awards ("Awards") are issued pursuant to the 1989
Long-Term Incentive 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
February 27, 1995 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.

Section I

                    MASTER AGREEMENT PROVISIONS RELATING TO
                     A GRANT OF NONQUALIFIED STOCK OPTION
                        (WITH STOCK APPRECIATION RIGHT)

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 common shares of the Company
subject to the Option, the date of Option 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.

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

         (a)      Unless otherwise determined by the Committee, 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
                  above;

         (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
                  one-third (33 1/3 %) 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
                  two-thirds (66 2/3 %) of the total number of shares covered
                  hereby; and

         (d)      At any time or times on or after the third Option Exercise
                  Date listed in the Award Schedule and thereafter through the
                  tenth year after the Date of Grant hereof, 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 common share of the
Company.

3. A Participant may not exercise this Option and the stock appreciation right
included herein, as applicable, 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 or promissory note,
                  if permissible under Paragraph 8 below), (ii) tendering
                  common 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) tendering a combination of
                  the forms of payment provided for in Subparagraphs 3(b)(i)
                  and 3(b)(ii) above; 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 Affiliate (as defined in the Plan) or
                  have been engaged in a period of Related Employment (as
                  defined in the Plan), except that 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, any time within
                  three years of the date of the onset of such disability or
                  retirement (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 expiration under Paragraph
                  4 below with respect to one year after the date of death),
                  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 the 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 cancelled 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 cancelled by the Company.

4. Except as otherwise determined by the Committee, a Participant may not
assign, transfer, pledge, hypothecate or otherwise dispose of this Option (and
the 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 one year 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
Paragraph 3(c) above with respect to three years from the onset of disability
or retirement), 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 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 common 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 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
number and kind of shares for which this Option may then be exercised and the
Option Exercise Price per share may or may not be adjusted so as to reflect
such change, all as determined by the Committee in its sole discretion. 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) Subject to the conditions specified in Subparagraph 6(b) below,
            within such time or times as the 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 the Option or any portion
            thereof which is then exercisable to the Company and receive
            from the Company in exchange therefor that number of common
            shares of the Company 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 the Option
            then is exercisable or (ii) the number of shares as to which
            the Option is surrendered to the Company. This right to
            surrender unexercised the 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) The stock appreciation right may be exercised only if, and to the
extent that,

                  (i)      the Option is at the time exercisable, and

                  (ii)     on the date of exercise (1) the Option will, in
                           accordance with Subparagraph 2(a) above, expire
                           within 30 days (or within 90 days if the
                           Participant is at that time an Insider, as
                           hereinafter defined), or (2) by reason of the
                           Participant's disability or retirement (as defined
                           in the Plan), the Participant has ceased to be an
                           employee of the Company or an Affiliate thereof or
                           terminated a period of Related Employment, or (3)
                           the Participant has died.

                  Notwithstanding Subparagraph 6(b)(ii) above but subject to
                  the conditions of Subparagraph 6(b)(i) above, if the
                  Participant is on the date of exercise an officer of the
                  Company who is required to file reports pursuant to Section
                  l6(a) of the Securities Exchange Act of 1934, as amended (an
                  "Insider"), the stock appreciation right may, subject to the
                  approval of the Committee, be exercised (but only with
                  respect to a maximum of 50 % of the shares subject to the
                  option granted hereunder), on or after the third Option
                  Exercise Date listed in the Award Schedule, at any time
                  during the period beginning on the third business day after,
                  and ending on the twelfth business day after, the date on
                  which the Company makes publicly available quarterly or
                  annual summary statements of sales and earnings; such period
                  of exercise may be further limited to the extent, if any,
                  determined by the Committee as necessary or desirable to
                  comply with applicable provisions of United States federal,
                  state, local or foreign law or regulation.

         (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 common shares it
                  otherwise would be obligated to deliver or partly by the
                  payment of cash and partly by the delivery of common shares.

         (d)      For all purposes under this Paragraph 6, the value of a
                  common share of the Company 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 common share as of the day
                  preceding the date on which the notice of election is
                  received, and provided, further, that as to Insiders,
                  in no event will such valuation date be outside the ten-day
                  period referred to in Subparagraph 6(b) above.

7. It shall be a condition to the obligation of the Company to furnish common
shares upon exercise of an Option or settlement of a stock appreciation right
by delivery of common 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 the 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 common
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 the 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 common shares upon exercise of
the Option or common shares and/or cash upon settlement of the stock
appreciation right.

8. In accordance with the provisions of the Plan, if the Participant is or
becomes a member of senior management and meets the eligibility requirements
on the date of the Option exercise, as defined by the Committee, upon request,
the Company will assist the Participant in obtaining financing from the
Company or one of its Affiliates, or from a bank or other third party, in such
amount as is required to permit the exercise of this Option and/or the payment
of any taxes required to be withheld by the Company in respect thereof.

Section II

                    MASTER AGREEMENT PROVISIONS RELATING TO
                          AWARDS OF RESTRICTED STOCK

             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 common shares of
the Company awarded, the date of the Award, the Expiration Date (as defined
below) 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.

1. An RSA consists of the number of common shares of the Company having a par
value of $.60 per share (the "common 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 common
                  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 specified in an Award
                  Schedule (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 common shares free of any legend
                  relating to the terms, conditions and restrictions provided
                  for in this Master Agreement. If a Participant or anyone
                  claiming under or through such Participant attempts to
                  violate this Subparagraph 1(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 Subparagraph 1(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 3 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
                  Subparagraph l(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

                  (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 1(c) above, unless
                  otherwise determined by the Committee.

2. In the event of any change in the outstanding common 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 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 common shares which have been awarded to a
participant (including, but not limited to, by way of a dividend or other
distribution on such common shares), any such shares, securities or other
property received by a participant (or a Participant's designated beneficiary)
in respect of the common shares awarded to such Participant shall 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 Subparagraph l(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 2 shall be final, binding
and conclusive.

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 making of the Award to a Participant, the transfer
of common shares to a Participant (or the Participant's designated
beneficiary) pursuant thereto or the lapse or release of the termination
provisions contained in Subparagraph l(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.

<PAGE>

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 common shares of
the company subject to the option, the date of option 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.

2. Subject to the provisions of this 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 above;

         (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 one-third (33 1/3 %) 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 two-thirds
                  (66 2/3 %) of the total number of shares covered hereby; and

         (d)      At any time or times after the third 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.

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

(Section III, 3. omitted)

4. 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 paying in cash in United States dollars (which may be in
                  the form of a check or promissory note, if permissible under
                  Paragraph 8 below); and

         (c)      The Participant must, at all times during the period
                  beginning with the Date of Grant of this UK Option
                  specified above 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), except that
                  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 three years of the date of the onset of such
                  disability or retirement (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 Paragraph 5 below with respect to one year after the
                  date of death), 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 cancelled 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 4(c) or death as described in Paragraph 5
                  below, this UK Option shall be cancelled by the Company.

5. 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 5, such attempted violation
shall be null and void and 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 one year 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 Paragraph
4(c) above with respect to three years), 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 cancelled by the Company. The
applicable requirements of Paragraph 4 above must be satisfied at the time of
such exercise.

6. In the event of any change in the outstanding common shares of the Company
by reason of any stock split, stock dividend, split-up, recapitalization,
merger, consolidation, rights offering, reorganization, combination 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 number and kind of shares for
which this UK Option may then be exercised and the subscription price per
share may or may not be adjusted so as to reflect such change, all as
determined by the Committee in its sole discretion subject to the prior
approval of the Inland Revenue in writing. 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 UK Option for this UK Option.

7. It shall be a condition to the obligation of the Company to furnish common
shares upon exercise of a UK Option (a) that a Participant (or any person
acting under Paragraph 5 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 5
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 common shares upon exercise of this UK
Option.

8. In accordance with the provisions of the Scheme, if a Participant is or
becomes a member of senior management and meets the eligibility requirements
on the date of the UK Option exercise, as defined by the Committee, upon a
Participant's request, the Company will assist a Participant in obtaining
financing from the Company or one of its Affiliates or from a bank or other
third party, in such amount as is required to permit the exercise of this UK
Option and/or the payment of any taxes required to be withheld by the Company
in respect thereof.

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

10. 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

                            Dated February 27, 1995

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 common shares of the Company to be awarded, the
date of the Award (the "LOI Date"), the Expiration Date (as defined below) 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.

1. 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 common shares of the Company having a par value
of $.60 per share (the "common 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
                  a 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 common shares free of
                  any legend 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 l(a), such
                  attempted violation shall be null and void and without
                  effect, and the Company's obligations hereunder shall
                  terminate.

         (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 Subparagraph l(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 3
                  below, then, unless the Committee determines otherwise, the
                  Participant's 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 Subparagraph 1(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 Subparagraph 1(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 common shares of the Company equal to the number
                  of common 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 common shares at such time as the
                  Company's right becomes exercisable with respect thereto
                  pursuant to Subparagraph 1(b) or 1(c) above.

2. In the event of any change in the outstanding common 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 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 terms of this LOI may be adjusted in
such manner, if any, as the Committee in its sole discretion determines is
equitably required, and any such determination by the Committee shall be
final, binding and conclusive.

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 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 common 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 common 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 Agreement to the contrary (except for the
provision dealing with a limitation under Section 280G of the Internal Revenue
Code of 1986, as amended), upon a Change in Control (as defined below), 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 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 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 Agreement; and

         (c)      with respect to any LOI issued pursuant to the LOI
                  provisions of this 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 Agreement.

The Committee may not amend or delete this section of this 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 (a "Person") (within the
         meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
         Act of 1934, as amended (the "Exchange Act")) becomes the beneficial
         owner (within the meaning of Rule 13d-3 promulgated under the
         Exchange Act) of 25 % or more of either (i) the then outstanding
         common shares of the Company (the "Outstanding Company Common
         Shares") or (ii) the combined voting power of the then outstanding
         voting securities of the Company entitled to vote generally in the
         election of directors (the "Outstanding Company Voting Securities");
         provided, however, that such beneficial ownership shall not
         constitute a Change in Control if it occurs as a result of any of
         the following acquisitions of securities: (i) any acquisition
         directly from the Company, (ii) any acquisition by the Company or
         any corporation, partnership, trust or other entity controlled by
         the Company (a "Subsidiary"), (iii) any acquisition by any employee
         benefit plan (or related trust) sponsored or maintained by the
         Company or any Subsidiary or (iv) any acquisition by any corporation
         pursuant to a reorganization, merger or consolidation, if, following
         such reorganization, merger or consolidation, the conditions
         described in clauses (i), (ii) and (iii) of subsection (c) of this
         Change in Control Section are satisfied. Notwithstanding the
         foregoing, a Change in Control shall not be deemed to occur solely
         because any Person (the "Subject Person") became the beneficial
         owner of 25 % or more of the Outstanding Company Common Shares or
         Outstanding Company Voting Securities as a result of the acquisition
         of Outstanding Company Common Shares or Outstanding Company Voting
         Securities by the Company which, by reducing the number of
         Outstanding Company Common Shares or Outstanding Company Voting
         Securities, increases the proportional number of shares beneficially
         owned by the Subject Person; provided, that if a Change in Control
         would be deemed to have occurred (but for the operation of this
         sentence) as a result of the acquisition of Outstanding Company
         Common Shares or Outstanding Company Voting Securities by the
         Company, and after such share acquisition by the Company, the
         Subject Person becomes the beneficial owner of any additional
         Outstanding Company Common Shares or Outstanding Company Voting
         Securities which increases the percentage of the Outstanding Company
         Common Shares or Outstanding Company Voting Securities beneficially
         owned by the Subject Person, then a Change in Control shall then be
         deemed to have occurred; or

     (b) Individuals who, as of the date hereof, constitute the
         Board (the "Incumbent Board") cease for any reason to constitute at
         least a majority of the Board; provided, however, that any
         individual becoming a director subsequent to the date hereof whose
         election, or nomination for election by the Company's shareholders,
         was approved by a vote of at least a majority of the directors then
         comprising the Incumbent Board shall be considered as though such
         individual were a member of the Incumbent Board, but excluding, for
         this purpose, any such individual whose initial assumption of office
         occurs as a result of either an actual or threatened election
         contest or other actual or threatened solicitation of proxies or
         consents by or on behalf of a Person other than the Board, including
         by reason of agreement intended to avoid or settle any such actual
         or threatened contest or solicitation; or

     (c) Approval by the shareholders of the Company of a
         reorganization, merger or consolidation, in each case, unless,
         following such reorganization, merger or consolidation, (i) more
         than 60 % of, respectively, the then outstanding shares of common
         stock of the corporation resulting from such reorganization, merger
         or consolidation and the combined voting power of the then
         outstanding voting securities of such corporation entitled to vote
         generally in the election of directors is then beneficially owned,
         directly or indirectly, by all or substantially all of the
         individuals and entities who were the beneficial owners,
         respectively, of the Outstanding Company Common Shares and
         Outstanding Company Voting Securities immediately prior to such
         reorganization, merger or consolidation, (ii) no Person (excluding
         the Company, any employee benefit plan (or related trust) of the
         Company, a Subsidiary or such corporation resulting from such
         reorganization, merger or consolidation or any subsidiary thereof,
         and any Person beneficially owning, immediately prior to such
         reorganization, merger or consolidation, directly or indirectly, 25
         % or more of the Outstanding Company Common Shares or Outstanding
         Company Voting Securities, as the case may be) beneficially owns,
         directly or indirectly, 25 % or more of, respectively, the then
         outstanding shares of common stock of the corporation resulting from
         such reorganization, merger or consolidation or the combined voting
         power of the then outstanding voting securities of such corporation
         entitled to vote generally in the election of directors and (iii) at
         least a majority of the members of the board of directors of the
         corporation resulting from such reorganization, merger or
         consolidation were members of the Incumbent Board at the time of the
         execution of the initial agreement providing for such
         reorganization, merger or consolidation; or

     (d) Approval by the shareholders of the Company of (i) a
         complete liquidation or dissolution of the Company or (ii) the sale,
         lease, exchange or other disposition of all or substantially all of
         the assets of the Company, other than to a corporation, with respect
         to which following such sale, lease, exchange or other disposition
         (A) more than 60% of, respectively, the then outstanding shares of
         common stock of such corporation and the combined voting power of
         the then outstanding voting securities of such corporation entitled
         to vote generally in the election of directors is then beneficially
         owned, directly or indirectly, by all or substantially all of the
         individuals and entities who were the beneficial owners,
         respectively, of the Outstanding Company Common Shares and
         Outstanding Company Voting Securities immediately prior to such
         sale, lease, exchange or other disposition, (B) no Person (excluding
         the Company and any employee benefit plan (or related trust) of the
         Company or a Subsidiary or such corporation or a subsidiary thereof
         and any Person beneficially owning, immediately prior to such sale,
         lease, exchange or other disposition, directly or indirectly, 25% or
         more of the Outstanding Company Common Shares or Outstanding Company
         Voting Securities, as the case may be) beneficially owns, directly
         or indirectly, 25% or more of, respectively, the then outstanding
         shares of common stock of such corporation and the combined voting
         power of the then outstanding voting securities of such corporation
         entitled to vote generally in the election of directors and (C) at
         least a majority of the members of the board of directors of such
         corporation were members or 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.

3. Notwithstanding any other provision of this Agreement to the contrary, if
all or any portion of the payments or benefits to which the participant will
be entitled under this Agreement, either alone or together with other payments
or benefits which the participant receives or is entitled to receive directly
or indirectly from the Company or any of its subsidiaries or any other person
or entity that would be treated as a payor of parachute payments as
hereinafter defined, under any other plan, agreement or arrangement, would
constitute a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") or any successor
provision thereto and the regulations thereunder (except that "2.95" shall be
used instead of "3" under Section 280G(b)(2)(A)(ii) of the Code or any
successor provision thereto), such payment or benefits provided to the
participant under this Agreement, and any other payments or benefits which the
participant receives or is entitled to receive directly or indirectly from the
Company or any of its subsidiaries or any other person or entity that would be
treated as a payor of parachute payments as hereinafter defined, under any
other plan, agreement or arrangement which would constitute a parachute
payment, shall be reduced (but not below zero) as described below to the
extent necessary so that no portion thereof would constitute such a parachute
payment as previously defined (except that "2.95" shall be used instead of "3"
under Section 280G(b)(2)(A)(ii) of the Code or any successor provision
thereto).

Whether payments or benefits to the participant are to be reduced pursuant to
the first sentence of this paragraph, and the extent to which they are to be
so reduced, will be determined by the firm serving, immediately prior to the
Change in Control, as the Company's independent auditors, or if that firm
refuses to serve, by another qualified firm, whether or not serving as
independent auditors, designated by the Administration Committee under the
American Express Senior Executive Severance Plan (the "Firm"). The Firm will
be paid reasonable compensation by the Company for such services. If the Firm
concludes that its determination is inconsistent with a final determination of
a court or the Internal Revenue Service, the Firm shall, based on such final
determination, redetermine whether the amount payable to the participant
should have been reduced and, if applicable, the amount of any such reduction.
If the Firm determines that a lesser payment should have been made to the
participant, then an amount equal to the amount of the excess of the earlier
payment over the redetermined amount (the "Excess Amount") will be deemed for
all purposes to be a loan to the participant made on the date of the
participant's receipt of such Excess Amount, which the participant will have
an obligation to repay to the Company on the fifth business day after demand,
together with interest on such amount at the lowest applicable Federal rate
(as defined in Section 1274(d) of the Code or any successor provision
thereto), compounded semi-annually (the "Section 1274 Rate") from the date of
the participant's receipt of such Excess Amount until the date of such
repayment (or such lesser rate (including zero) as may be designated by the
Firm such that the Excess Amount and such interest will not be treated as a
parachute payment as previously defined). If the Firm determines that a
greater payment should have been made to the participant, within five business
days of such determination, the Company will pay to the participant the amount
of the deficiency, together with interest thereon from the date such amount
should have been paid to the date of such payment, at the Section 1274 Rate
(or such lesser rate (including zero) as may be designated by the Firm such
that the amount of such deficiency and such interest will not be treated as a
parachute payment as previously defined). If a reduction is to be made
pursuant to this paragraph, the Firm will have the right to determine which
payments and benefits will be reduced as described below based on the
following hierarchy from the first to be reduced to the last (or on such other
hierarchy chosen by the Firm in its sole discretion), either those under this
Agreement alone or such other payments or benefits which the participant
receives or is entitled to receive directly or indirectly from the Company or
any of its subsidiaries or any other person or entity that would be treated as
a payor of parachute payments as previously defined, under any other plan,
agreement or arrangement:

         (I)      nonqualified stock option awards;

         (II)     restricted stock awards, awards in lieu of restricted stock
                  awards, and restricted stock units;

         (III)    amounts payable under deferred compensation (including,
                  but not limited to, base salary, cash bonus or annual
                  incentive awards, and long-term incentive awards) programs;

         (IV)     any other awards or amounts not described in (I), (II) or
                  (III) above that would be payable or provided upon a Change
                  in Control;

         (V)      amounts payable under severance benefit plans;

         (VI)     amounts payable under annual incentive (e.g., cash bonus)
                  plans;

         (VII)    portfolio grant awards and performance grant awards;

         (VIII)   amounts payable under employee welfare benefit plans, such
                  as life insurance plans (including, but not limited to, the
                  American Express Key Executive Life Insurance Plan);

         (IX)     amounts payable under nonqualified employee pension benefit
                  plans; and

         (X)      any other awards or amounts not described in (V), (VI),
                  (VII), (VIII) or (IX) above that would be payable or
                  provided upon a termination of employment that occurs within
                  two years after a Change in Control as described in the
                  Change in Control provision above.

The payments and benefits subject to reduction pursuant to this paragraph
include one or more attributes thereof, including, but not limited to,
acceleration of the time for the vesting or payment thereof and the crediting
of additional interest equivalents thereunder. Such reduction may be effected
by the reduction or elimination, in whole or in part, of any such payment or
benefit (including any or all attributes thereof). If a payment or benefit
(including any or all attributes thereof) is reduced in part, the remaining
portion of the payment or benefit (including any or all attributes thereof)
will continue in full force and effect under the provisions of such payment or
benefit (including any or all attributes thereof) as if the Change in Control
did not occur and without regard to such reduction or elimination. Nothing in
the preceding three sentences of this paragraph is intended or should be
interpreted to change the calculated reduction amounts and procedure of this
paragraph.

4. The terms of any RSA, Option or LOI (including terms under the applicable
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
so that the amount of compensation an executive officer could receive is not
based solely on an increase in the value of common shares of the Company, 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 Internal Revenue Code of 1986, as amended (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 common shares to be
delivered pursuant to an Award is necessary or desirable, delivery of such
shares shall not be made in common shares until such listing, registration or
qualification shall have been completed. Until a certificate for some or all
of the common 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 common 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. As used in this Section V, "Award" shall mean any long-term incentive
award issued under the Plan and subject to the terms of this Master Agreement.Director NQ Stock Option Agreement

EXHIBIT 10.1

NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

(NON-QUALIFYING STOCK OPTION)

AFLAC INCORPORATED

Columbus, Georgia 31999

(Hereinafter called "the Company")

<FirstName> <MiddleName> <LastName>

Pursuant to Section 12 of the 2004 AFLAC Incorporated Long-Term Incentive Plan (the "Plan"), adopted by the Company's Board of Directors on February 10, 2004, and approved by the shareholders of the Company on May 3, 2004, <FirstName> <MiddleName> <LastName> (the "Grantee") is hereby granted by action of the Board of Directors an option (the "Option") to purchase <SharesGranted> shares (the "Option Shares") of common stock of the Company, par value $0.10 per share ("Company Stock"), at the price of <OptionPrice> per share, subject to the terms and conditions of this Stock Option Agreement (this "Agreement") and subject to the terms of the Plan.

1.   Grant of the Option.  The Option is granted as of <LongOptionDate>, (the "Date of Grant").  The number of Option Shares and the exercise price per share of the Option are subject to adjustment from time to time as provided in Section 3 of the Plan.

2.   Status of the Option.  The Option is not intended to qualify as an "Incentive Stock Option" within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the "Code").

3.   Expiration of the Option.  The Option shall expire and may no longer be exercised on or after the date ten (10) years after the Date of Grant (the "Expiration Date").

4.   Non-assignability.  Except under the laws of descent and distribution, the Grantee shall not be permitted to sell, transfer, pledge or assign the Option or this Agreement[; provided that, subject to such terms and conditions as the Board of Directors may establish, the Grantee shall be permitted to transfer the Option in accordance with Section 20(b) of the Plan].  [Unless transferred pursuant to the foregoing sentence,] the Option shall be exercisable, during the Grantee's lifetime, only by the Grantee.  Without limiting the generality of the foregoing, except as otherwise provided herein, the Option may not be assigned, transferred, pledged or hypothecated in any way, shall not be assignable by operation of law, and shall not be subject to execution, attachment or similar process.  Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the Option shall be null and void and without effect.

5.   Exercisability and Duration of the Option.

          (a)   Right to Exercise.  Unless otherwise determined by the Committee and set forth upon the attached Notice of Grant of Stock Options and Stock Option Agreement, this option shall be exercisable immediately on the Date of Option Grant; provided however, that upon the Grantee's cessation of service by reason of retirement (i.e., following the completion of a minimum of five (5) years of service on the Board of Directors), the Option shall be one hundred percent (100%) vested and immediately exercisable.  

          (b)   Duration of the Option.  Upon the cessation of the Grantee's membership on the Board of Directors for any reason except retirement as described in Section 5(a), the Option, to the extent not then exercisable, shall expire, and to the extent then exercisable, shall remain exercisable until the Expiration Date.  Upon the cessation of the Grantee's membership on the Board of Directors by reason of retirement as described in Section 5(a), the Option shall become fully exercisable and remain exercisable until the Expiration Date.

          (c)   Method of Exercise.  To exercise the Option as to all or any part of the Option Shares with respect to which the Option is vested and exercisable, the Grantee (or after the Grantee's death, the person authorized to exercise the Option as provided in Section 20 of the Plan) shall deliver written notice of such exercise to the Company official designated by the Committee (or, in absence of such designation, the Secretary of the Company).  The notice shall be in such form as the Committee may require from time to time and identify the number of Option Shares with respect to which the Option is being exercised, provided that the Option may not be exercised for a fraction of an Option Share.  The date of receipt of such notice shall be deemed the date of exercise.  If someone other than the Grantee exercises the Option, then such person must submit documentation reasonably acceptable to the Company verifying that such person has the legal right to exercise the Option.

          (d)   Payment.  Payment in full of the purchase price for the Option Shares purchased pursuant to the exercise of the Option shall be made upon exercise of the Option in accordance with Section 7(c)(iii) of the Plan in cash or by tender of previously held Company Stock with a Fair Market Value as of the date of exercise equal to the exercise price, in each case under procedures established by the Committee pursuant to Section 7(c)(iii) of the Plan.

          (e)   Delivery of Option Shares.  The Secretary of the Company shall have full authority to direct the proper officers of the Company to issue or transfer shares of Company Stock pursuant to the exercise of the Option.  As soon as practicable after its receipt of such notice and payment, the Company shall cause the shares so purchased to be issued to the Grantee or to the person authorized to exercise the Option after the Grantee's death, as the case may be, and shall promptly thereafter cause one or more certificates for such shares to be delivered to the Grantee or other person.

6.   Certain Securities Law and Other Requirements.  The Option shall not be exercisable to any extent, and the Company shall not be obligated to transfer any Option Shares to the Grantee upon exercise of the Option, if such exercise, in the opinion of counsel for the Company, would violate the Securities Act of 1933 (the "Securities Act") or any other federal or state statutes having similar requirements as may be in effect at that time.  The Company shall be under no obligation to register the Option Shares pursuant to the Securities Act or any other federal or state securities laws.  Unless the Company has filed an effective registration statement pursuant to the Securities Act covering the exercise of the Option, the Grantee, upon purchasing the Option Shares shall be required to represent to the Company that the Grantee is acquiring such shares for investment purposes and not with a view to their sale or distribution, and each certificate for such shares shall have printed or stamped thereon appropriate language, as determined by the Secretary of the Company.  The Secretary of the Company may, in his or her discretion, require the Grantee, as a condition to the Company's obligation to deliver Option Shares hereunder, take such action as is necessary or advisable to ensure that issuance of the Option Shares will be in compliance with applicable law.

7.   No Additional Rights.  Neither this Agreement nor any of the transactions contemplated hereby shall affect any right of the Grantee to continue as a director of the Company or otherwise to provide services to the Company or any of its Affiliates.

8.   Notices.  Except as otherwise provided in Section 5(c) hereof, all notices or other communications here under shall be in writing and shall be deemed to have been duly given (a) when delivered personally, (b) upon confirmation of receipt when such notice or other communication is sent by facsimile or telex, (c) one day after timely delivery to an overnight delivery courier, or (d) on the fifth day following the date of deposit in the United States mail if sent first class, postage prepaid, by registered or certified mail.  The addresses for such notices shall be as follows:

 

	 	
If to the Company:
	
_________________________________

	
 
	 	
_________________________________

	
 
	 	
_________________________________

	
 
	 	
Facsimile: ________________________

	
 
	 	
Attn: ____________________________

	 	 	 
	
 
	
If to the Participant: 
	
_________________________________

	
 
	 	
_________________________________

	
 
	 	
_________________________________

	
 
	 	
Facsimile: ________________________

Either party hereto may change such party's address for notices by notice duly given pursuant hereto.

9.   Failure to Enforce Not a Waiver.  The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

10.   Incorporation of Plan.  The Plan is hereby incorporated by reference into this Agreement and made a part hereof, and the Option and this Agreement shall be subject to all terms and conditions of the Plan.

11.   Amendments.  The Board of Directors may amend the terms of this Agreement prospectively or retroactively at any time, but no such amendment shall impair the rights of the Grantee hereunder without the Grantee's consent.

12.   Protections Against Violations of Agreement.  No purported sale, assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any of the Option Shares by any holder thereof in violation of the provisions of this Agreement or the Certificate of Incorporation or the Bylaws of the Company will be valid, and the Company will not transfer any of said Option Shares on its books nor will any of said Option Shares be entitled to vote, nor will any dividends be paid thereon, unless and until there has been full compliance with said provisions to the satisfaction of the Company.  The foregoing restrictions are in addition to and not in lieu of any other remedies, legal or equitable, available to enforce said provisions.

13.   Survival of Terms.  This Agreement shall apply to and bind the Grantee and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors.

14.   Rights as a Stockholder.  Neither the Grantee nor any of the Grantee's successors in interest shall have any rights as a stockholder of the Company with respect to any shares of Company Stock subject to the Option until the date of issuance of a stock certificate for such shares of Company Stock.

15.   Authority of the Board.  The Board of Directors shall have full authority to interpret and construe the terms of the Plan and this Agreement.  The determination of the Board of Directors as to any such matter of interpretation or construction shall be final, binding and conclusive.

16.   Representations.  The Grantee hereby acknowledges that the Grantee has reviewed with the Grantee's own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement.  The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.  The Grantee understands that the Grantee (and not the Company) shall be responsible for any tax liability that may arise as a result of the transactions contemplated by this Agreement.

17.   Acceptance.  The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors upon any questions arising under this Agreement. 

18.   Authorization.  The Grantee hereby authorizes and directs the Secretary of the Company, or such other person designated by the Company, to take such steps as may be necessary to carry out any of the transactions contemplated by this Agreement.

19.   Certain Defined Terms.  Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Plan.

20.   Interpretation.  Headings to provisions of this Agreement are intended for convenience of reference only and shall have no effect on the interpretation of this Agreement.

21.   Severability.  If any provision of this Agreement is held to be invalid or unenforceable, the other provisions of this Agreement shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in this Agreement.

22.   Applicable Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia, except to the extent that federal law is controlling.

 

	 	
AFLAC INCORPORATED

	 	
By:
	
DANIEL P. AMOS

	 	
Title:
	
Chairman and Chief Executive Officer

Acknowledgment:

The Grantee acknowledges by his or her signature on the attached Notice of Grant of Stock Options and Option Agreement that the Grantee has received a copy of the 2004 AFLAC Incorporated Long-Term Incentive Plan Prospectus, has read the same, and is familiar with its provisions and understands and agrees that they, as well as the terms stated herein and upon the attached notice, are part of this Stock Option Agreement.

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